[Federal Register Volume 84, Number 56 (Friday, March 22, 2019)]
[Proposed Rules]
[Pages 10738-10745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-05174]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 3280 and 3282

[Docket No. FR 6018-P-01]
RIN 2502-AJ42


Streamlining and Aligning Formaldehyde Emission Control Standards 
for Certain Wood Products in Manufactured Home Construction With Title 
VI of the Toxic Substance Control Act

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

ACTION: Proposed rule.

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SUMMARY: Through this rulemaking, HUD proposes to implement the 
Formaldehyde Standards for Composite Wood Products Act of 2010, which 
added Title VI to the Toxic Substances Control Act (TSCA). In addition, 
HUD proposes to remove certain aspects of HUD's current manufactured 
housing formaldehyde standards requirements that are not addressed by 
TSCA, including provisions for a health notice to be posted in every 
manufactured home, testing of post-treatment panels after 
certification, and testing of certain plywood materials.

DATES: Comment Due Date: April 22, 2019.

ADDRESSES: Interested persons are invited to submit comments regarding 
this Proposed Rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development via mail or 
electronic submission as indicated below. All submissions and 
communications must refer to the above docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit comments, ensures timely 
receipt by HUD, and enables HUD to make comments immediately available 
to the public. Commenters should follow the instructions provided on 
that site to submit comments electronically.
    Note: To receive consideration as public comments, comments must 
only be submitted through one of the two methods specified above. 
Again, all submissions must refer to the docket number and title of the 
rule.
    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
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). Individuals with speech or hearing impairments 
may access this number through TTY by calling the Federal Relay Service 
at 800-877-8339 (toll-free number). Copies of all comments received by 
HUD by the comment due date will be available for inspection and 
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Teresa B. Payne, Acting Administrator, 
Office of Manufactured Housing Programs, Office of Housing, Department 
of Housing and Urban Development, 451 7th Street SW, Washington, DC 
20410; telephone 202-402-5365 (this is not a toll-free number). Persons 
with hearing or speech impairments may access this number via TTY by 
calling the Federal Relay Service at 800-877-8389 (toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

    The National Manufactured Housing Construction and Safety Standards 
Act of 1974 (Pub. L. 93-383; enacted August 22, 1974), as amended by 
the Manufactured Housing Improvement Act of 2000,\1\ (42 U.S.C. 5401-
5426) (the ``Act'') provides authority to HUD to establish Federal 
manufactured home construction and safety standards. HUD issued 
regulations for manufactured home construction and safety standards in 
1975, which are codified at 24 CFR part 3280, and manufactured home 
procedural and enforcement regulations in 1976, codified at 24 CFR part 
3282. See 40 FR 58752, 41 FR 19852. On August 9, 1984, HUD amended its 
home construction and safety standards regulations to include 
formaldehyde emission levels for composite wood products used in 
manufactured homes, product certification and qualifications for 
composite wood products, panel identification requirements, testing 
requirements for formaldehyde emissions, and a required formaldehyde 
emissions health notice for manufactured homes. See 49 FR 32011, 24 CFR 
3280.308, 24 CFR 3280.309, and 24 CFR 3280.406.
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    \1\ The Manufactured Housing Improvement Act of 2000 (Title VI 
of Pub. L. 106-569) created the Manufactured Housing Consensus 
Committee (MHCC) to develop proposed revisions to the Federal 
manufactured home construction and safety standards.
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Formaldehyde Standards for Composite Wood Products Act of 2010

    In 2007, the California Air Resources Board (CARB) issued an 
Airborne Toxic Control Measure (ATCM) to reduce formaldehyde emissions 
from hardwood plywood, medium-density fiberboard, and particleboard, 
products referred to collectively as composite wood products. The CARB 
ATCM requires manufacturers to meet formaldehyde emission standards for 
the covered composite wood products that are sold, offered for sale, 
supplied, or manufactured for use or sale in California. While 
suppliers of composite wood products in California must meet CARB 
standards, the CARB ATCM does not directly apply to plywood and 
particleboard materials when installed in manufactured homes subject to 
regulations promulgated by HUD.
    The Formaldehyde Standards for Composite Wood Products Act of 2010, 
which added TSCA Title VI (Pub. L. 111-199, enacted on July 7, 2010) 
(``Formaldehyde Act of 2010''), established new formaldehyde emissions 
standards for all hardwood plywood, medium-density fiberboard, and 
particleboard, including when incorporated into finished goods, that 
are sold, supplied, offered for sale, or manufactured (including 
imported) in the United States. The Act created Federal emissions 
standards to align with the CARB ATCM Phase 2

[[Page 10739]]

standards for hardwood plywood, medium-density fiberboard, and 
particleboard sold, supplied, offered for sale, or manufactured in the 
United States, thus alleviating increased burden on the regulated 
community. TSCA Title VI also requires EPA to issue regulations 
implementing those emissions standards and provides that EPA 
regulations cover the following subjects: (a) Labeling, (b) chain of 
custody requirements, (c) sell-through provisions, (d) ultra low-
emitting formaldehyde resins, (e) no-added formaldehyde-based resins, 
(f) finished goods, (g) third-party testing and certification, (h) 
auditing and reporting of Third-Party Certification Program, TPCs,\2\ 
(i) recordkeeping, (j) enforcement, (k) laminated products, and (l) 
exceptions from the requirements of regulations promulgated for 
products and components containing de minimis amounts of composite wood 
products (but not exceptions to the emission standards). TSCA Title VI 
also directs HUD to update its regulation addressing formaldehyde 
emission standards to ensure consistency with the standards in TSCA not 
later than 180 days after EPA promulgates regulations.
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    \2\ 40 CFR 770.7 describes EPA's Third-Party Certification 
Program and establishes qualifications to be recognized by EPA as an 
EPA TSCA Title VI Product AB.
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EPA Regulations on ``Formaldehyde Emission Standards for Composite Wood 
Products''

    After undergoing notice and comment, on December 12, 2016, EPA 
promulgated its final rule, ``Formaldehyde Emission Standards for 
Composite Wood Products.'' 81 FR 89674. The final rule implements TSCA 
Title VI to reduce formaldehyde emissions from composite wood products, 
which will reduce exposure to formaldehyde and decrease potential 
adverse health effects. The final rule became effective May 22, 2017 
and had multiple compliance dates for different provisions.\3\ On 
September 25, 2017, EPA extended all the compliance dates: The 
manufactured-by compliance date for composite wood products from 
December 12, 2017 to December 12, 2018; the compliance date for import 
certification provisions from December 12, 2018 to March 22, 2019; the 
manufactured-by compliance date for laminated products from December 
12, 2023 to March 22, 2024; and the transitional period for needing an 
EPA accreditation from December 12, 2018 to March 22, 2019.\4\
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    \3\ The EPA final rule, published on December 12, 2016, had an 
effective date of February 10, 2017 (81 FR 89674). EPA published a 
delay of the effective date from February 10, 2017 until March 21, 
2017, in the Federal Register notice on January 26, 2017 (82 FR 
8499). The effective date was further delayed until May 22, 2017, in 
the Federal Register notice on March 20, 2017 (82 FR 14324). On May 
24, 2017, EPA issued a notice of proposed rulemaking seeking public 
comment on extending the compliance dates in the EPA final rule (82 
FR 23769).
    \4\ On September 25, 2017, EPA proceeded with a final rule 
extending the compliance dates in the EPA final rule (82 FR 44533).
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    On April 4, 2018, EPA published a Federal Register notice that 
announced a March 13, 2018, court order. The court order addressed 
litigation over the December 12, 2018, compliance date, that resulted 
in the compliance date for emission standards, recordkeeping, and 
labeling (i.e., the manufactured by date or import date) being reduced 
from December 12, 2018 to June 1, 2018. EPA also described the status 
of compliance dates and stated that composite wood products 
manufactured or imported until March 22, 2019 must be labeled as 
compliant with either the TSCA Title VI or CARB ATCM Phase II emission 
standards, and regulated products manufactured or imported after March 
22, 2019 may not rely on the CARB reciprocity of 40 CFR 770.15(e) and 
must be certified and labeled as TSCA Title VI compliant by an EPA TSCA 
Title VI TPC with all of the required accreditations.\5\
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    \5\ On April 4, 2018, EPA issued an Announcement of Court Order 
and Compliance Date rule amending the compliance dates extended in 
the September 25, 2017 rule (83 FR 14375).
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    Specifically, EPA created a new 40 CFR part 770 entitled 
``Formaldehyde Standards for Composite Wood Products'' with four 
subparts: Subpart A--General Provisions, Subpart B--EPA TSCA Title VI 
Third-Party Certification Program, Subpart C--Composite Wood Products, 
and Subpart D--Incorporation by Reference.
    Subpart A provides the scope of EPA regulations, which includes 
whether provisions apply to panels, component parts, or finished goods, 
or all three; effective dates for the standards for different products; 
a definition section; exemptions from the hardwood plywood definition 
for certain laminated products; and references the penalties for 
failing to comply with EPA requirements at 15 U.S.C. 2697.
    Subpart B provides the necessary requirements for manufacturers 
that plan to participate in the EPA TSCA Title VI Third-Party 
Certification Program as an EPA TSCA Title VI product accreditation 
body, laboratory accreditation body, or a third-party certifier; and 
directions to entities on providing applications, notifications, and 
reports to EPA.
    Subpart C establishes, among other things, formaldehyde emission 
standards for composite wood products offered for sale or manufacture 
in the United States. These standards apply regardless of whether the 
product is in the form of a panel, a component part, or incorporated 
into a finished good. 40 CFR 770.12 prohibits the sale of stockpiled 
inventory of composite wood products and establishes standards to 
determine whether stockpiling has occurred. 40 CFR 770.15 establishes 
certification requirements for composite wood products, providing that 
unless exempt, only certified composite wood products, whether in the 
form of panels or incorporated into component parts or finished goods 
are permitted to be sold, supplied, offered for sale, or manufactured 
in the United States. 40 CFR 770.17 and 770.18 establish, respectively, 
certification and application requirements for no-added formaldehyde-
based resins and ultra low-emitting formaldehyde resins. Testing 
requirements for products with formaldehyde are established in 40 CFR 
770.20. 40 CFR 770.21 establishes requirements for panel producers to 
have a quality control manual, a designated quality control facility 
for conducting quality control formaldehyde testing, and a quality 
control manager responsible for emissions quality control. The balance 
of subpart C addressees testing and isolating of non-complying lots, 
handling composite wood products shipped into the United States for 
sample testing, and a requirement for importers, fabricators, 
distributors, and retailers to take reasonable precautions to ensure 
that the wood product that they sell comply with the emission 
requirements under the regulations. Finally, 40 CFR 770.40 and 770.45 
establish reporting and recordkeeping requirements for panel producers; 
and labeling of panels or bundles of panels sold, supplied, or offered 
for sale in the United States, respectively.
    Subpart D sets forth the standards that were approved by the 
Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 
51 for incorporation by reference standards, which are necessary for 
testing in EPA regulations.

HUD's Manufactured Housing Consensus Committee Consultation

    On October 25-27, 2016, HUD held a meeting with its Manufactured 
Housing Consensus Committee (MHCC). See 81 FR 66288. During the 
meeting, HUD shared a preliminary working draft of a rule to amend and 
reduce its current requirements for formaldehyde emissions from certain 
composite wood

[[Page 10740]]

products, consistent with TSCA and EPA requirements. See Minutes MHCC 
Meeting October 25-27, 2016, https://portal.hud.gov/hudportal/documents/huddoc?id=mhcc-oct2016-meetminsfinal.pdf. After discussions, 
the MHCC voted to accept the working draft as presented, which cross-
referenced EPA's requirements in HUD's regulations and removed the 
health hazard warning requirement in 24 CFR 3280.309, but recommended 
that HUD add the EPA required provision for labeling each manufactured 
home as being ``TSCA Title VI compliant'' to the data plate of each 
manufactured home in 24 CFR 3280.5.

II. Proposed Rule

    HUD proposes to revise HUD's current formaldehyde emission 
standards for composite wood products used in manufactured housing at 
24 CFR part 3280 and 3282 to ensure consistency with the requirements 
established by section 601 of TSCA. HUD also proposes to update its 
existing formaldehyde emission levels for composite wood products used 
in manufactured homes; the certification, qualifications, panel 
identification, and testing requirements for formaldehyde emissions; 
and third-party certification requirements. HUD, through this proposed 
rulemaking, also seeks to revise its recordkeeping requirements, which 
reduce the time a producer needs to maintain records; requires 
inclusion of a statement indicating compliance with TSCA Title VI on 
the data plate; and adds requirements on non-complying lots and 
stockpiling, consistent with TSCA Title VI and EPA regulations. Lastly, 
HUD proposes to remove the requirement for a formaldehyde emissions 
health notice for manufactured homes and remove HUD's existing 
requirements in 24 CFR 3280.308(d) for treatment after certification of 
plywood and particleboard with substances containing formaldehyde.
    HUD believes that the intent of TSCA Title VI was for HUD to align 
its requirements in 24 CFR 3280.308 with EPA requirements, including 
the scope of products tested and process for testing. The Senate Report 
on TSCA noted that in place of defining ``manufactured housing'' as a 
``finished product'' under EPA regulations, HUD would be required to 
``ensure that the regulation [24 CFR 3280.308] reflects the standards 
established by section 601 of TSCA'' and specifically referenced HUD's 
plywood and particleboard standards needing to be consistent with EPA's 
formaldehyde emissions standard.\6\ The statute itself notes that 
following EPA's regulations, HUD shall update its regulations for 
consistency with section 601 of TSCA. Both the statute and 
congressional intent support HUD's alignment of its regulations with 
EPA's regarding the scope of testing and products covered. Therefore, 
HUD proposes to no longer use its current scope of regulations that 
covered ``plywood and particleboard materials bonded with a resin 
system or coated with a surface finish containing formaldehyde'' and 
instead adopt EPA regulations coverage of ``composite wood products in 
the form of a panel, or composite wood products incorporated into a 
component part or finished good,'' as defined by EPA. Composite wood 
product means hardwood plywood made with a veneer or composite core, 
medium-density fiberboard, and particleboard.
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    \6\ S. Rep. No. 111-169 (2010) at 6 and 8.
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    In addition to changing the scope of HUD's regulations, HUD 
proposes the following specific changes consistent with EPA regulations 
and the recommendations on the working draft provided by the MHCC:

Section 3280.5 Data Plate

    HUD proposes to include on the manufactured home data plate a 
notification that as a finished good that incorporates composite wood 
product(s), the finished good is TSCA Title VI compliant. This 
certification is construed to cover all products that are incorporated 
into the manufactured home, including laminated products not exempted 
under 40 CFR 770.4. This change would ensure consistency with the 
current product certification scheme that already requires several 
other certifications on the manufactured home data plate. It would also 
ensure that manufacturers are certifying that all materials, 
components, and products used in manufactured homes are TSCA Title VI 
compliant and provide public awareness of compliance in place of the 
health notice on formaldehyde emissions currently required by 24 CFR 
3280.309.

Section 3280.308 Formaldehyde Emission Controls for Composite Wood 
Products

    In paragraph (a), HUD seeks to adopt, in addition to the 
definitions already applicable to this section, EPA definitions at 40 
CFR 770.3. HUD's definitions at 24 CFR 3280.2 and 3280.302 covering 
manufactured home regulations, including formaldehyde emission 
controls, do not conflict with EPA regulations, and incorporation of 
EPA's definitions ensures consistency between EPA regulations and HUD 
regulations. The relevant terms for which EPA definitions are used 
include: Composite core, Component part, Composite wood product, EPA 
TSCA Title VI Laboratory Accreditation Body or EPA TSCA Title VI 
Laboratory AB, EPA TSCA Title VI Product Accreditation Body or EPA TSCA 
Title VI Product AB, EPA TSCA Title VI Third-Party Certifier or EPA 
TSCA Title VI TPC, Finished good, Hardwood plywood, Laboratory 
Accreditation Body or Laboratory AB, Lot, Medium-density fiberboard, 
Non-complying lot, Panel, Panel producer, Particleboard, Product 
Accreditation Body or Product AB, Stockpiling, Thin medium-density 
fiberboard, Third-party certifier or TPC, Veneer, and Veneer core.
    In paragraph (b), HUD proposes to adopt maximum formaldehyde 
emission standards that are in TSCA Title VI and EPA regulations at 40 
CFR 770.10. This proposed rule, if adopted, would replace HUD's 
codified standards that currently apply to all plywood and 
particleboard materials bonded with a resin system or coated with a 
surface finish containing formaldehyde. The currently codified 
regulations set the level for formaldehyde emissions as follows: 
Plywood materials shall not emit formaldehyde in excess of 0.2 parts 
per million (ppm); and particleboard materials shall not emit 
formaldehyde in excess of 0.3 ppm.
    This proposed rule covers hardwood plywood made with a veneer core 
or composite core, medium density fiberboard, thin medium density 
fiberboard, and particleboard. The proposed new maximum levels for 
formaldehyde emissions of these composite wood products and component 
parts or finished goods incorporating these composite wood products 
would be, if adopted, as follows: Hardwood plywood made with a veneer 
core or composite core is 0.05 ppm; medium density fiberboard is 0.11 
ppm; thin medium density fiberboard is 0.13 ppm; and particleboard is 
0.09 ppm. These maximum emission levels would be applicable whether the 
composite wood product is in the form of a panel or if composite wood 
products are incorporated into component parts or finished goods.
    In paragraph (c), HUD proposes to require that as of the effective 
date of the final rule, only TSCA Title VI certified composite wood 
products, whether in the form of panels or finished goods, must be used 
in manufactured homes, consistent with EPA regulations at 40 CFR 
770.15. HUD currently requires that manufactured

[[Page 10741]]

homes with installed plywood and particleboard comply with and certify 
that formaldehyde emissions meet standards. Exclusively using phenol-
formaldehyde resins or finishes are excluded from this requirement. 
EPA's regulations at 40 CFR 770.15 require a certification that the 
composite wood products meet the new formaldehyde emission standards by 
June 1, 2018. EPA's regulations at 40 CFR part 770 also provides a 
narrow list of exceptions and alternative product certification 
procedures for producers of composite wood product panels made with no-
added formaldehyde-based resins and for producers of composite wood 
product panels made with ultra low-emitting formaldehyde resins. HUD 
proposes to adopt 40 CFR 770.15 certification requirements and the same 
limited exemptions and alternative certification procedures for 
consistency with EPA's requirements.
    In paragraph (d), HUD proposes that composite wood panels used by 
entities covered under HUD's regulations must be labeled by a panel 
producer consistent with EPA labeling requirements at 40 CFR 770.45. 
HUD currently requires that each plywood and particleboard panel that 
is installed in manufactured homes is stamped or labeled to identify 
the product manufacturer, date of production and/or lot number, and the 
testing laboratory certifying compliance with this section. In place of 
HUD's current requirements, 40 CFR 770.45 of the EPA final rule 
requires that panels or bundles of panels that are used in the United 
States are labeled with the panel producer's name, the lot number, the 
EPA TSCA Title VI TPC number, and a statement that the products are 
TSCA Title VI certified. EPA also sets forth at 40 CFR 770.45 the 
process for labeling composite wood panels that are bundled and not 
individually labeled.
    In paragraph (e), HUD proposes to require that each manufactured 
home include certification labeling indicating that the home, as a 
finished good, has been produced with panels or products that comply 
with formaldehyde emission requirements set by HUD and 40 CFR part 770. 
EPA regulations require that each composite wood product, whether in 
the form of panels or incorporated into component parts or finished 
goods that are sold in the United States, must include a product 
certification, with a few minor exemptions. Exemptions are included for 
producers of composite wood product panels made with no-added 
formaldehyde-based resins (40 CFR 770.17) and for producers of 
composite wood product panels made with ultra low-emitting formaldehyde 
resins (40 CFR 770.18). This certification requirement would be 
consistent with EPA requirements. HUD is also proposing to remove the 
health notice on formaldehyde emissions, recognizing the reduced 
formaldehyde emissions levels of composite wood products incorporated 
as panels or component parts of manufactured homes as a finished good 
that is required to be TSCA Title VI compliant evidenced by the 
certification label.
    In paragraphs (f) and (g), HUD proposes to incorporate EPA's 
limitation on the sale, supply or offering of composite wood products 
from non-complying lots in the United States; and the prohibition of 
the sale of inventory determined to be stockpiled inventory (see 40 CFR 
770.12) of composite wood products.\7\ HUD currently addresses the 
handling, use, and certification of non-complying plywood and 
particleboard materials at 24 CFR 3280.308(b)(6) but does not address 
stockpiling requirements for manufacturers. Incorporating EPA 
provisions would make clear that restrictions and certification 
requirements authorized by TSCA Title VI, and included in EPA 
regulations, are applicable to manufactured housing.
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    \7\ See, 83 FR 14375 (April 4, 2018).
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Section 3280.309 Health Notice on Formaldehyde Emissions

    HUD is proposing to remove the requirement for providing a Health 
Notice on formaldehyde emissions in each manufactured home, 24 CFR 
3283.309, given the increase in ventilation standards and decrease in 
formaldehyde levels. The ventilation standards have changed 
significantly since the health warning was required in 1984. In 1984, 
HUD required ventilation only by openable glazed areas equal to 4 
percent of each habitable room's floor area (40 FR 40270). As part of a 
set of changes that affected energy conservation and indoor air 
quality, Federal standards were changed, effective in October 1994, to 
require whole house ventilation (58 FR 55003). This change increased 
ventilation requirements beyond the ventilation provided by openable 
glazed areas in each habitable room. The change required mechanical 
and/or natural ventilation capable of providing 0.35 air changes per 
hour continuously, or at an equivalent hourly rate. This standard 
allowed 0.25 air changes per hour to be provided by natural 
infiltration/exfiltration. The remaining 0.10 air changes per hour are 
to be provided by mechanical ventilation. In 2005, the standards were 
changed again to include the whole house ventilation requirement from 
an air changes per hour requirement to a cubic feet per minute 
requirement sized based upon interior floor area. The change in 
standards removed consideration of natural infiltration/exfiltration as 
a factor in ventilation systems while retaining provisions for openable 
glazed areas in each habitable room in addition to the whole house 
ventilation requirements (70 FR 72042).
    HUD believes the change to ventilation standards, coupled with the 
new lower compliance levels required in this proposed rule, supports 
the removal of the health notice from manufactured homes. This is 
because the decreased maximum formaldehyde emission levels will reduce 
exposure to formaldehyde that will result in avoided adverse health 
effects, such as eye irritation and nasopharyngeal cancer, and reduce 
the risk of asthma and allergic conditions in young children (see 
discussion at 81 FR 89677-78, December 12, 2016 and Economic Analysis 
of the Formaldehyde Standards for Composite Wood Products Act Final 
Rule, July 2016, EPA-HQ-OPPT-2016-0461-0029, www.regulations.gov). 
Further, conventional homes have no similar requirement for a health 
notice and HUD has not received consumer complaints in recent years 
that identify or otherwise indicate formaldehyde emissions are an 
appreciable concern based on complaint data, a basis for HUD's initial 
rulemaking (46 FR 43466). Additionally, the inclusion of the compliance 
requirement on the home data plate that the home is TSCA Title VI 
compliant is a more permanent notification that identifies that the 
materials used in the manufactured home meets the national standards.

Section 3280.406 Air Chamber Test Method for Certification and 
Qualification of Formaldehyde Emission Levels

    HUD currently requires that all plywood and particleboard 
materials, if bonded with a resin system or coated with a surface 
finish containing formaldehyde--except for phenol-formaldehyde resin 
systems or finish--be tested in a large air chamber, ASTM E 1333-96. 
The test is required for initial certification and thereafter, at least 
quarterly. The testing must be certified by a nationally recognized 
testing laboratory (24 CFR 3280.406).
    In paragraph (a), HUD proposes to adopt all EPA definitions at 40 
CFR 770.3 for the HUD revised 24 CFR 3280.406. Incorporation of EPA's

[[Page 10742]]

definitions ensures consistency between EPA's regulations and HUD's 
regulations for purposes of test methods for certifying and qualifying 
formaldehyde emission levels.
    In paragraph (b), HUD seeks to adopt EPA's testing standards at 40 
CFR 770.20(a). EPA's 40 CFR 770.20(a) requires testing of unfinished 
panels within 30 days of the panel's production. HUD also seeks to 
adopt EPA's timing requirements at 40 CFR 770.20(b) for testing panels. 
Particleboard and medium-density fiberboard would be tested at least 
once per shift (8 or 12 hours, plus or minus 1 hour of production) for 
each production line for each product type. Particleboard and medium-
density fiberboard panel producers are eligible for reduced quality 
control testing if they demonstrate consistent operations and low 
variability of test values. Hardwood plywood would be tested at a 
frequency determined by the weekly production levels of the product. 
The EPA regulations also include quarterly testing requirements at 40 
CFR 770.20(c). The EPA testing requirements also provide an additional 
option for small air chamber testing, ASTM D6007-14, consistent with 
EPA regulations, and updates the requirements for testing to the ASTM E 
1333-14 edition. The proposed rule, if adopted, would continue to 
require quarterly testing and that such testing be supervised by EPA 
TSCA Title VI TPCs and performed by TPC laboratories. In paragraph (c), 
HUD proposes to require that samples for testing that are not produced 
in the United States but are shipped into and transported across the 
United States for quality control or quarterly testing, must comply 
with 40 CFR 770.24, requires that such panels must not be sold, offered 
for sale or supplied to any entity other than a TPC laboratory before 
testing and if test results for such products demonstrate compliance 
with the emission standards in this subpart, the panels may be 
relabeled in accordance and sold, offered for sale, or supplied.
    HUD's current testing qualification requirements cover but do not 
specifically address imported products. HUD is proposing to update 
HUD's requirements to reflect the testing of products that are shipped 
into and transported across the United States, to make clear that such 
products if used must be tested in accordance with the new testing 
procedures proposed by HUD.

Section 3280.407 Quality Control Testing, Manuals, and Facilities

    In paragraph (a), HUD proposes to adopt the EPA definitions at 40 
CFR 770.3. Incorporation of EPA's definitions ensures consistency 
between EPA's regulations and HUD's regulations with respect to quality 
control testing and qualifying formaldehyde emission levels.
    In paragraph (b), HUD proposes to require EPA's quality control 
testing and frequency of testing for hardwood plywood made with a 
veneer core or composite core, medium density fiberboard, and 
particleboard at 40 CFR 770.20(a) and (b). Consistent with EPA's 
regulations, HUD would also adopt EPA's additional quality control 
testing procedures. EPA's 40 CFR 770.20(a) requires testing of 
unfinished panels within 30 days of the panel's production. In 
accordance with 40 CFR 770.20(b), particleboard and medium-density 
fiberboard must be tested at least once per shift (8 or 12 hours, plus 
or minus 1 hour of production) for each production line for each 
product type. Particleboard and medium-density fiberboard panel 
producers are eligible for reduced quality control testing if they 
demonstrate consistent operations and low variability of test values. 
Hardwood plywood must be tested at a frequency determined by the weekly 
production levels of the product.
    In paragraph (c), HUD proposes to adopt the requirement that a 
panel producer have a written quality control manual, designate a 
quality control facility for conducting quality control formaldehyde 
testing under 24 CFR 3280.406, and designate a person as quality 
control manager with adequate experience or training to be responsible 
for formaldehyde emissions quality control consistent with 40 CFR 
770.21.

24 CFR Part 3282 Manufactured Home Procedural and Enforcement 
Regulations

    HUD seeks to adopt the definition for ``finished good'' at 40 CFR 
770.3 for purposes of clarifying the scope of what is subject to the 
recordkeeping requirements consistent with EPA requirements. The 
adoption of the term ``finished good'' in HUD's definition section, 24 
CFR 3282.7, will identify goods that must comply with recordkeeping 
requirements in 24 CFR 3282.212 and 3282.257. Recordkeeping 
requirements in 24 CFR 3282.212 and 3282.257 use the terms 
``Component'', ``Distributor'', ``Purchaser'', and ``Retailer'' that 
are already in HUD's current definition section. While EPA has 
different definitions for those terms, HUD believes that its existing 
definitions are broad enough to capture the scope of EPA's 
recordkeeping requirements. Therefore, HUD is not proposing to adopt 
those EPA definitions in 24 CFR part 3282 but maintains its own 
definitions for those terms.

24 CFR Part 3282.212 TSCA Title VI Requirements

    HUD proposes that consistent with EPA, manufacturers maintain bills 
of lading, invoices or comparable documents that include a written 
statement from the supplier that the components or finished goods are 
TSCA Title VI compliant consistent with 40 CFR 770.30(c) and that 
manufacturers must maintain such records for a minimum of 3 years from 
the date of purchase, consistent with 40 CFR 770.40.

24 CFR Part 3282.257 TSCA Title VI Requirements

    HUD proposes that consistent with EPA, retailers and distributors 
maintain bills of lading, invoices or comparable documents that include 
a written statement from the supplier that the component or finished 
goods are TSCA Title VI compliant consistent with 40 CFR 770.30(c) and 
retailers and distributors must maintain such records for a minimum of 
3 years from the import date or the date of purchase or shipment, 
consistent with 40 CFR 770.40.

III. 30-Day Public Comment Period

    In accordance with HUD's regulations on rulemaking at 24 CFR part 
10, it is HUD's policy that the 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 for the following reasons:
    First, HUD is proposing to implement the standards in Title VI of 
TSCA as required by the Formaldehyde Standards for Composite Wood 
Products Act of 2010 consistent with EPA's rule. Title VI requires that 
``after the date of promulgation of regulations pursuant to section 
601(d) of the Toxic Substances Control Act (as amended by section 2), 
the Secretary of Housing and Urban Development shall update the 
regulation contained in section 3280.308 of title 24, Code of Federal 
Regulations (as in effect on the date of enactment of this Act), to 
ensure that the regulations reflects the standards established by 
Section 301 of the Toxic Substances Control Act.'' HUD believes that 
the intent of the statute is for HUD's

[[Page 10743]]

regulations to mirror EPA's regulation. If the statute intended HUD to 
implement its regulations in a different way, HUD would have been 
required to implement Title VI of TSCA upon its passage and not after 
EPA issued regulations. Given the lack of discretion HUD is provided in 
implementing Title VI of TSCA, HUD believes that a longer comment 
period is unnecessary.
    Second, EPA in its rulemaking took comment on how to harmonize 
EPA's regulatory program under TSCA Title VI with HUD's manufactured 
home program, and what steps should be taken so that the programs are 
complementary. 78 FR 34820 at 34841. The majority of commenters agreed 
that HUD and EPA should ensure that the regulations are consistent and 
clear, while one commenter stated that the Formaldehyde Standards for 
Composite Wood Products Act of 2010 was unnecessary given HUD's 
existing regulations.\8\ EPA received minimal comments on this 
question, all of which recommended streamlining the rule. EPA also 
addressed many other comments in its rule in order to come up with the 
current standards. Given HUD is adopting EPA's standards that have 
already been subject to notice-and-comment rulemaking and the feedback 
from commenters on how HUD and EPA should ensure consistency across 
agencies, HUD believes that a shortened time frame for public comment 
is appropriate.
---------------------------------------------------------------------------

    \8\ See U.S. EPA Formaldehyde Emission Standards to Composite 
Wood Products--Response to Comments. 2016. Docket #EPA-HQ-OPPT-2016-
0461-0034, at http://www.regulations.gov.
---------------------------------------------------------------------------

    Lastly, maintaining a separate set of standards for compliance, 
reporting, recordkeeping and labeling for the manufactured housing 
industry is unnecessary. EPA has set a national standard for all 
products, and maintaining separate, different HUD standards is 
inconsistent with the intent of the Formaldehyde Standards for 
Composite Wood Products Act of 2010. EPA's regulations, which are 
compliant with Title VI of TSCA, has stricter standards than HUD's 
current regulations and, thus, all available products will need to 
comply with those stricter standards. Maintaining HUD's current 
formaldehyde emissions standards would also be inconsistent with the 
statutory requirement that HUD's regulations reflect the standards 
required to be developed by EPA under Title VI of TSCA. The longer HUD 
delays issuance of its final rule, the longer the manufactured housing 
industry will be subject to two conflicting Federal regulations which 
is burdensome and confusing.
    Given the statutory requirement and above justifications, HUD 
believes that good cause exists to reduce the public comment period to 
30 days. All comments received during the 30-day public comment period 
will be considered in the development of the final rule.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects; distributive impacts; and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility.
    Under Executive Order 12866 (Regulatory Planning and Review), a 
determination must be made whether a regulatory action is significant 
and, therefore, subject to review by the Office of Management and 
Budget (OMB) in accordance with the requirements of the order. This 
proposed rule was determined to be a ``significant regulatory action'' 
as defined in section 3(f) of the Executive order, but not an 
economically significant regulatory action, as provided under section 
3(f)(1) of Executive Order 12866. Any changes made to the proposed rule 
subsequent to its submission to OMB are identified in the docket file, 
which is available for public inspection in the Regulations Division, 
Room 10276, Office of General Counsel, Department of Housing and Urban 
Development, 451 Seventh Street SW, Washington, DC 20410-0500.

Executive Order 13771

    Executive Order 13771, entitled ``Reducing Regulation and 
Controlling Regulatory Costs,'' was issued on January 30, 2017. Section 
2(a) of Executive Order 13771 requires an Agency, unless prohibited by 
law, to identify at least two existing regulations to be repealed when 
the Agency publicly proposes for notice and comment or otherwise 
promulgates a new regulation. In furtherance of this requirement, 
section 2(c) of Executive Order 13771 requires that the new incremental 
costs associated with new regulations shall, to the extent permitted by 
law, be offset by the elimination of existing costs associated with at 
least two prior regulations. For the reasons discussed in the 
Regulatory Impact Analysis (RIA), this proposed rule has been 
determined to be an Executive Order 13771 deregulatory action.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520), 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 valid control number. The Office of Management 
and Budget (OMB) has issued HUD control number 2502-0253 for the 
information collection requirements under the Manufactured Home 
Construction and Safety Standards Act Reporting Requirements. HUD will 
update the existing OMB control number to include the minimum time 
required for entities to maintain bills of lading, invoices or 
comparable documents that include a written statement from the supplier 
that the component or finished goods are TSCA Title VI compliant for a 
minimum of 3 years from the date of purchase, consistent with 40 CFR 
770.30(c).

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4; approved March 22, 1995) (UMRA) establishes requirements for Federal 
agencies to assess the effects of their regulatory actions on state, 
local, and tribal governments, and on the private sector. This proposed 
rule does not impose any Federal mandates on any state, local, or 
tribal government, or on the private sector, within the meaning of the 
UMRA.

Environmental Review

    A Finding of No Significant Impact with respect to the environment 
has been 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 (42 U.S.C. 4332(2)(C)). The Finding of No Significant 
Impact is available for public inspection between the hours of 8 a.m. 
and 5 p.m. weekdays in the Regulations Division, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street SW, Washington, DC 20410-0500.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking

[[Page 10744]]

requirements unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule would regulate establishments primarily engaged in 
making manufactured homes (NAICS 32991). The Small Business 
Administration defines a small manufactured homes manufacturing 
business as one that does not exceed 1,250 employees. Of the 222 firms 
included under this NAICS definition, approximately 35 produce 
manufactured homes subject to HUD's Manufactured Housing Construction 
and Safety Standards. Other entities covered by this NAICS code build 
non HUD-code prefabricated buildings. Of the 35 manufacturers subject 
to HUD's Manufactured Housing Construction and Safety Standards, 31 are 
considered to be small businesses based on the threshold of 1,250 
employees or less.
    HUD believes the de minimis cost of adopting this proposed rule, 
specifically the change to the data plate, will be offset by the 
savings that result from the changes in materials subject to testing 
and the removal of the health notice. Therefore, HUD has determined the 
impact of this proposed rule, if adopted, on all entities, to include 
small entities, will not be significant.
    As required by statute, EPA published a final rule that established 
new formaldehyde emission standards for composite wood products. As 
also required by statute, HUD's proposed rule would update HUD's 
existing formaldehyde requirements to align with and reflect those 
issued by EPA. Despite the new requirements, as discussed in HUD's 
regulatory impact analysis, HUD anticipates there will not be any new 
or additional cost impacts resulting from implementation of this 
proposed rule--other than de minimis costs to change the template used 
to create the data plate. Initially, composite wood products at EPA 
reduced formaldehyde levels are currently the majority of products 
available in the marketplace. This circumstance exists because of 
similar requirements currently in effect in California under CARB ATCM. 
CARB ATCM requires composite wood products used in manufactured housing 
shipped to California to already comply with CARB requirements. As with 
many industries, rather than procuring special products for different 
final destinations, manufactured housing producers are likely to 
procure products that can be used in homes that it can ship anywhere.
    This impact analysis includes all segments--manufacturers, 
retailers, and consumers, including small entities. In EPA's final 
rule, which affected a much broader number and type of small entities, 
for example, EPA determined in Table 2 of its final rule, that 99 
percent of small business firms with cost impacts of more than 1 
percent of revenues will have annualized costs of less than $250 per 
year.
    In addition, this proposed rule, if adopted, would provide cost 
savings for HUD's manufactured housing manufacturers covered by this 
rule by eliminating the burden of placing the health notice 
(approximately $270,270 a year), testing structural plywood and 
retesting panels after a finishing is added. Therefore, while the 
proposed rule, if adopted, would affect a substantial number of small 
entities, 31 out of the 35 affected entities (86 percent), it would 
likely result in a reduction of costs or a de minimis cost. For the 
reasons stated above, HUD knows of no instance of a manufacturer with 
fewer than 1,250 employees that would be significantly affected 
economically by this rule. Therefore, although this proposed rule, if 
adopted, would affect a substantial number of small entities, HUD has 
determined that it would not have a significant economic impact on 
them.
    Notwithstanding HUD's determination that this rule would not have a 
significant economic effect on a substantial number of small entities, 
HUD specifically invites comments on its RIA, this certification, and 
any less burdensome alternatives to this rule that will meet HUD's 
objectives as described in this preamble.

Executive Order 13132, 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 or 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 proposed rule would not have 
Federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive Order.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance (CFDA) Program number 
for Manufactured Housing Construction and Safety Standards is 14.171.

List of Subjects

24 CFR Part 3280

    Housing standards, Manufactured homes.

24 CFR Part 3282

    Consumer protection, Manufactured homes.

    Accordingly, for the reasons stated above, HUD proposes to amend 24 
CFR parts 3280 and 3282 as follows:

PART 3280--MANUFACTURED HOME CONSTRUCTION AND SAFETY STANDARDS

0
1. The authority citation for part 3280 is revised to read as follows:

    Authority: 15 U.S.C. 2697, 42 U.S.C. 3535(d), 5403, and 5424.

0
2. In Sec.  3280.5, add paragraph (i) to read as follows:


Sec.  3280.5  Data plate.

* * * * *
    (i) The statement: The manufacturer certifies this home is TSCA 
Title VI Compliant.
0
3. Revise Sec.  3280.308 to read as follows:


Sec.  3280.308  Formaldehyde emission controls for composite wood 
products.

    (a) Definitions. For purposes of this section, the definitions 
found in 40 CFR 770.3 apply.
    (b) Formaldehyde emission levels. The following maximum 
formaldehyde emission standards apply whether the composite wood 
product is in the form of a panel, or is incorporated into a component 
part or finished good:
    (1) For hardwood plywood made with a veneer core or composite core, 
the maximum level is 0.05 parts per million (ppm) of formaldehyde;
    (2) For medium density fiberboard, the maximum level is 0.11 ppm of 
formaldehyde;
    (3) For thin medium density fiberboard, the maximum level is 0.13 
ppm of formaldehyde; and
    (4) For particleboard, the maximum level is 0.09 ppm of 
formaldehyde.
    (c) Product certification and continuing qualification. Only 
certified composite wood products whether in the form of panels or 
incorporated into component parts or finished goods, are permitted to 
be used in manufactured homes sold, supplied, offered for sale, or 
manufactured in or imported into the United States, consistent with 
Environmental Protection Agency (EPA) product testing requirements at 
40 CFR 770.15. See Sec.  3280.406 for testing requirements for product 
certification and testing requirements for continuing

[[Page 10745]]

qualification of formaldehyde emission levels.
    (d) Panel label. Manufactured homes must use panels or bundles of 
panels that are labeled by a panel producer consistent with the 
labeling requirements at 40 CFR 770.45.
    (e) Finished good certification label. Each manufactured home must 
be provided with a finished good certification label indicating that 
the home has been produced with composite wood products, or finished 
goods that contain composite wood products, that comply with the 
formaldehyde emission requirements of this Part 3280 and 40 CFR part 
770 consistent with Sec.  3280.5(i).
    (f) Non-complying lots. Composite wood products from non-complying 
lots (i.e., lots that exceed the applicable formaldehyde ppm) are not 
certified composite wood products and may not be used in manufactured 
homes except in accordance with section 40 CFR 770.22.
    (g) Stockpiling. The use of stockpiled inventory of composite wood 
products, whether in the form of panels or incorporated into component 
parts or finished goods, in manufactured homes, is prohibited in 
accordance with EPA regulations at 40 CFR 770.12(b) through (d).
    (h) Third Party Certification. All composite wood products in 
paragraph (b) of this section must be certified by an agency or 
organization that has been recognized to participate in the EPA TSCA 
Title VI Third Party Certification Program.


Sec.  3280.309  [Removed]

0
4. Remove Sec.  3280.309.
0
5. Revise Sec.  3280.406 to read as follows:


Sec.  3280.406  Air chamber test methods for certification and 
continuing qualification of formaldehyde emission levels.

    (a) Definitions. For purposes of Sec.  3280.406, the definitions 
found in 40 CFR 770.3 apply.
    (b) Testing requirements. Testing of panels made of hardwood 
plywood made with a veneer core or composite core, medium density 
fiberboard, thin medium density fiberboard, and particleboard for 
compliance with Sec.  3280.308(b) must be performed pursuant to the 
general requirements of 40 CFR 770.20(a) and (b), for certification 
testing, pursuant to one of the air chamber test methods specified in 
40 CFR 770.15, and, for quarterly testing, pursuant to one of the air 
chamber test methods specified in 40 CFR 770.20(c).
    (c) Samples for testing. Samples for testing not produced in the 
United States, but shipped into and transported across the United 
States for quality control or quarterly testing, must comply with 40 
CFR 770.24.
0
6. Add Sec.  3280.407 to read as follows:


Sec.  3280.407  Quality control testing, manuals, facilities, and 
personnel.

    (a) Definitions. For purposes of this section, the definitions 
found in 40 CFR 770.3 apply.
    (b) Quality control testing. Quality control testing is required 
for hardwood plywood made with a veneer core or composite core, medium 
density fiberboard, thin medium density fiberboard, and particleboard 
must be performed in accordance with the general requirements in 40 CFR 
770.20(a) and by one of the test methods and at the frequency specified 
in 40 CFR 770.20(b). Panels being tested with an equivalence, 
correlation or alternative method must ensure compliance with the 
requirements of 40 CFR 770.20(d).
    (c) Quality control manuals, facilities, and personnel. A panel 
producer must have a written quality control manual, must designate a 
quality control facility for conducting quality control formaldehyde 
testing under this section, and must designate a person as quality 
control manager with adequate experience and/or training to be 
responsible for formaldehyde emissions quality control consistent with 
40 CFR 770.21. A panel producer means a manufacturing plant or other 
facility that manufactures (excluding facilities that solely import 
products) composite wood products (hardwood plywood made with a veneer 
or composite core, medium-density fiberboard and particleboard) on the 
premises.

PART 3282--MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS

0
7. The authority citation for part 3282 is revised to read as follows:

    Authority: 15 U.S.C. 2697, 42 U.S.C. 3535(d), 5403, and 5424.

0
8. In Sec.  3282.7, add the definition ``finished good'', in 
alphabetical order, to read as follows:


Sec.  3282.7  Definitions.

* * * * *
    Finished good has the meaning provided in 40 CFR 770.3.
* * * * *
0
9. Add Sec.  3282.212 to read as follows:


Sec.  3282.212  TSCA Title VI Requirements.

    Manufacturers must maintain bills of lading, invoices or comparable 
documents that include a written statement from the supplier that the 
component or finished goods are TSCA Title VI compliant for a minimum 
of 3 years from the date of import, purchase, or shipment, consistent 
with 40 CFR 770.30(c) and 40 CFR 770.40.
0
10. Add Sec.  3282.257 to read as follows:


Sec.  3282.257  TSCA Title VI Requirements.

    Retailers and distributors must maintain bills of lading, invoices 
or comparable documents that include a written statement from the 
supplier that the component or finished goods are TSCA Title VI 
compliant for a minimum of 3 years from the date of import, purchase or 
shipment, consistent with 40 CFR 770.30(c) and 40 CFR 770.40.

    Dated: March 13, 2019.
Brian D. Montgomery,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2019-05174 Filed 3-21-19; 8:45 am]
BILLING CODE 4210-67-P