[Federal Register: August 1, 2003 (Volume 68, Number 148)]
[Rules and Regulations]
[Page 45729-45731]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01au03-17]
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Part V
Department of Housing and Urban Development
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24 CFR Part 905
Public Housing Capital Fund Program Obligation and Expenditure of
Funds; Final Rule
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 905
[Docket No. FR-4507-F-02]
RIN 2577-AC16
Public Housing Capital Fund Program Obligation and Expenditure of
Funds
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule.
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SUMMARY: This final rule promulgates HUD's regulation for section 9(j)
of the United States Housing Act of 1937, which deals with the
obligation and expenditure of Capital Fund Program funds by public
housing agencies, in accordance with congressional direction.
DATES: Effective Date: September 2, 2003.
FOR FURTHER INFORMATION CONTACT: William Thorson, Director, Office of
Capital Improvements, Public and Indian Housing, Room 4134, Department
of Housing and Urban Development, 451 Seventh Street, SW, Washington,
DC 20410-5000; telephone (202) 708-1640, ext. 4999 (this is not a toll-
free number). Individuals with speech or hearing impairments may access
this number via TTY by calling the toll-free Federal Information Relay
Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION: Section 519 of the Quality Housing and Work
Responsibility Act of 1998 (Pub.L. 105-276, approved October 21, 1998)
(QHWRA) amends section 9 of the United States Housing Act of 1937 (1937
Act) (42 U.S.C. 1437g) to provide a ``Capital Fund,'' to be established
by HUD for the purpose of making assistance available to public housing
agencies (PHAs) to carry out capital and management improvement
activities. Among other things, section 9 requires HUD to develop a
formula for determining the amount of assistance provided on an annual
basis to PHAs from the Capital Fund, including a mechanism to reward
performance. The statute also requires the Capital Fund Formula (CFF)
be developed through negotiated rulemaking procedures. The CFF is the
subject of a separate final rule, published on March 16, 2000 (65 FR
14422), and amended on May 2, 2000 (65 FR 25446). HUD will also publish
a proposed rule that would provide additional Capital Fund Program
(CFP) requirements.
Section 9(j) of the 1937 Act establishes time limits for the
obligation and expenditure of CFP funds, and penalties for violations
of those limits. Under section 9(j), unless HUD grants an extension, a
PHA has 24 months for obligation and four years for expenditure of CFP
funds, which are received pursuant to section 9(d), before the
statutory penalties may be imposed.
HUD's Fiscal Year 2003 Appropriations Act, Title II of Division K
of the Consolidated Appropriations Resolution, 2003 (Pub. L. 108-7, 117
Stat. 11, approved February 20, 2003) (FY 2003 Appropriations Act)
includes a requirement ``That the Secretary shall issue final
regulations to carry out section 9(j) of the United States Housing Act
of 1937 (42 U.S.C. 1437g(j)) not later than August 1, 2003.'' HUD is
issuing this final rule to address that requirement. This rule places
the obligation and expenditure requirements at 24 CFR 905.120 of HUD's
regulations. The rule basically follows the statutory language of
section 9(j) without addition except to conform the statutory language
to a regulatory format as noted in this preamble.
The addition made by this rule consists of explicitly stating at
Sec. 905.120(b)(1) that a PHA may request an extension of the time
period for obligation, as permitted under section 9(j)(2). Section
9(j)(2) permits HUD to grant an extension, and it follows that a PHA
must be allowed to request an extension.
Findings and Certifications
Justification for Final Rulemaking
In general, HUD publishes a rule for public comment before issuing
a rule for effect, in accordance with HUD's own regulations on
rulemaking at 24 CFR part 10. Part 10, however, does provide for
exceptions for that general rule where HUD finds good cause to omit
advance notice and public participation. The good cause requirement is
satisfied when prior public procedure is determined to be
``impracticable, unnecessary, or contrary to the public interest.'' HUD
finds that good cause exists to publish this final rule for effect
without first soliciting public comment in that prior public procedure
would be unnecessary. Section 905.120 only repeats the statutory
requirements of section 9(j) of the 1937 Act, which do not need
rulemaking to be effective and which HUD may not, in any event, change
through a regulation in response to public comment.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
was made for this rule 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). The Finding of No
Significant Impact is available for public inspection between the hours
of 7:30 a.m. and 5:30 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 Planning and Review
The Office of Management and Budget (OMB) has reviewed this rule
under Executive Order 12866 (Regulatory Planning and Review). OMB
determined that this rule is a ``significant regulatory action'' as
defined in section 3(f) of the Order (although not economically
significant as provided in section 3(f)(1) of the Order). Any changes
made to the rule as a result of that review are identified in the
docket file, which is available for public inspection in the
Regulations Division, Office of the General Counsel, Room 10276,
Department of Housing and Urban Development, 451 Seventh Street SW.,
Washington, DC 20410-0500.
Regulatory Flexibility Act
The Secretary has reviewed this rule before publication and by
approving it certifies, in accordance with the Regulatory Flexibility
Act (5 U.S.C. 605(b)), that this rule would not have a significant
economic impact on a substantial number of small entities. The rule
only includes statutory requirements that the Department may not alter
by regulation and all entities are treated as required by the statute.
Executive Order 13132, Federalism
Executive Order 13132 (Federalism) prohibits an agency from
publishing any rule that has federalism implications if the rule either
(1) imposes substantial direct compliance costs on state and local
governments and is not required by statute, or (2) the rule preempts
state law, unless the agency meets the consultation and funding
requirements of section 6 of the Executive Order. This final rule does
not have federalism implications and does not impose substantial direct
compliance costs on state and local governments within the meaning of
Executive Order 13132.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538) (UMRA) requires federal agencies to assess the effects of
their regulatory actions on state, local, and tribal governments and on
the private sector.
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This rule does not impose, within the meaning of the UMRA, any federal
mandates on any state, local, or tribal governments or on the private
sector.
List of Subjects in 24 CFR Part 905
Grant programs--housing and community development, Modernization,
Public housing, Reporting and recordkeeping requirements.
Catalog
The Catalog of Federal Domestic Assistance number for the program
affected by this rule is 14.850.
0
For the reasons discussed in the preamble, chapter IX of title 24 of
the Code of Federal Regulations is amended as follows:
PART 905--THE PUBLIC HOUSING CAPITAL FUND PROGRAM
0
1. The authority citation for 24 CFR part 905 continues to read as
follows:
Authority: 42 U.S.C. 1437g and 3535(d).
0
2. Add a new Sec. 905.120 to read as follows:
Sec. 905.120 Penalties for slow obligation or expenditure of CFP
assistance.
In addition to any other statutory, regulatory, or contractual
sanctions available to HUD, the penalties for slow obligation or
expenditure of CFP assistance will be applied as follows:
(a) Obligation of amounts. (1) Except as provided in paragraph (b)
of this section, a PHA must obligate any assistance received under this
part not later than 24 months after, as applicable:
(i) The date on which the funds become available to the PHA for
obligation in the case of modernization; or
(ii) The date on which the PHA accumulates adequate funds to
undertake modernization, substantial rehabilitation, or new
construction of units.
(2) Notwithstanding paragraph (a)(1) of this section, any funds
appropriated to a PHA for Fiscal Year 1997 or prior fiscal years shall
be fully obligated by the PHA not later than September 30, 1999.
(b) Exceptions to obligation requirement. (1) Extension before
expiration of obligation period. A PHA may request and HUD may approve
a longer timeframe or HUD may, by prior approval granted before the
expiration of the time period in paragraph (a) of this section, extend
the time period under paragraph (a) of this section for an additional
period not to exceed 12 months, based on:
(i) The size of the PHA;
(ii) The complexity of the capital program of the PHA;
(iii) Any limitation on the ability of the PHA to obligate the
amounts allocated for the PHA from the Capital Fund in a timely manner
as a result of state or local law; or
(iv) Such other factors as HUD determines to be relevant.
(2) Extension of obligation period. HUD may extend the time period
under paragraph (a) of this section for a PHA, for such period as HUD
determines to be necessary, if HUD determines that the failure of the
agency to obligate assistance in a timely manner is attributable to:
(i) Litigation;
(ii) Obtaining approvals of the federal government or a state or
local government;
(iii) Complying with environmental assessment and abatement
requirements;
(iv) Relocating residents;
(v) An event beyond the control of the PHA; or
(vi) Any other reason established by HUD by notice published in the
Federal Register.
(3) Disregard of minimal unobligated amounts. HUD will disregard
the requirements of paragraph (a) of this section with respect to any
unobligated amounts made available to a PHA, to the extent that the
total of such amounts does not exceed 10 percent of the original amount
made available to the PHA.
(c) Effect of failure to comply. (1) Prohibition of new assistance.
A PHA will not be awarded CFP assistance for any month during any
fiscal year in which the PHA has funds unobligated in violation of
paragraph (a) or (b) of this section.
(2) Withholding of assistance. During any fiscal year described in
paragraph (c)(1) of this section, HUD will withhold all assistance that
would otherwise be provided to the PHA. If the PHA cures its failure to
comply during the year, it shall be provided with the share
attributable to the months remaining in the year.
(3) Redistribution. The total amount of any funds not provided PHAs
by operation of this section shall be allocated for PHAs determined to
be high-performing under the Public Housing Assessment System (at 24
CFR part 902) (or the applicable performance evaluation program for
public housing).
(d) Expenditure of amounts. (1) In general. A PHA must spend any
assistance received under this part not later than four years (plus the
period of any extension approved by HUD under paragraph (b) of this
section) after the date on which funds become available to the PHA for
obligation.
(2) Enforcement. HUD will enforce the requirement of paragraph
(d)(1) of this section through default remedies up to and including
withdrawal of the CFP funding.
(e) Right of recapture. Any obligation entered into by a PHA is
subject to the HUD's right to recapture the obligated amounts for
violation by the PHA of the requirements of this section.
Dated: July 28, 2003.
Michael Liu,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 03-19613 Filed 7-31-03; 8:45 am]
BILLING CODE 4210-33-P