Allocation of Funds Under the Capital Fund; Capital Fund Formula; Amendment

AGENCY:

Office of the Assistant Secretary for Public and Indian Housing, HUD.

ACTION:

Final rule; amendment.

SUMMARY:

On March 16, 2000, HUD published its final rule to implement the new formula system for allocation of funds to public housing agencies for their capital needs. This rule makes one amendment to the March 16, 2000 final rule to correct the regulatory provision concerning performance awards for high performing PHAs.

DATES:

Effective Date. June 1, 2000.

FOR FURTHER INFORMATION CONTACT:

William Flood, Director, Office of Capital Improvements, Public and Indian Housing, Room 4134, Department of Housing and Urban Development, 451 Seventh Street, SW, Washington, DC 20410-0500; telephone (202) 708-1640 ext. 4185 (this telephone number is not toll-free). Hearing or speech-impaired individuals may access this number via TTY by calling the toll-free federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

On March 16, 2000 (65 FR 14422), HUD issued its final rule to implement the new formula system for allocation of funds to public housing agencies for their capital needs, as required by statute. The March 16, 2000 final rule followed publication of a September 14, 1999 proposed rule which was developed through the negotiated rulemaking process, and which took into consideration public comment received on the proposed rule. This rule amends the March 16, 2000 final rule to correct an error concerning performance awards for high performing PHAs.

In the preamble to the final rule, HUD stated that § 905.10(j) of the proposed rule, which addresses the performance reward factor, was revised at the final rule stage to reflect the status of implementation of the Public Housing Assessment System (PHAS). (See 65 FR 14423, first column.)

Section 905.10(j)(3) of the rule text provided as follows:

The first performance awards will be given based upon PHAS scores for PHA fiscal years ending December 31, 2000, March 31, 2001, June 30, 2001, and September 30, 2001, with PHAs typically having received those PHAS scores within approximately 3 months after the end of those fiscal years. (See 65 FR 14429, third column)

The regulatory text, however, did not accurately reflect the status of implementation of PHAS. The final rule that made amendments to the PHAS was published on January 11, 2000 (65 FR 1712), and took effect on February 10, 2000. The PHAS final rule provides that the first PHAS scores will be issued for PHAs with fiscal years ending on or after March 31, 2000, and therefore these PHAs will be the first to be eligible for a performance award. Given the January 11, 2000 PHAS final rule, § 905.10(j)(3) of the Capital Fund final rule did not reflect the status of implementation of PHAS, as the preamble to the Capital Fund rule advised that this section would.

To correct the inconsistency between the preamble and the regulatory text in the March 16, 2000 final rule, HUD is amending the March 16, 2000 final rule to remove paragraph (3) of § 902.10(j). On further consideration, HUD determined that there is no need for the rule to list the dates when PHAs will be eligible for performance awards under the Capital Fund Formula based on PHAS scores. As noted in the preamble, PHAs are eligible for a performance award upon receipt of their PHAS scores (whenever the PHAS scores are issued) and if they are designated high performers under PHAS.

II. Justification for Final Rulemaking

In general, HUD publishes a rule for public comment before issuing a rule for effect, in accordance with its own regulations on rulemaking at 24 CFR part 10. Part 10, however, provides for exceptions from that general rule where HUD finds good cause to omit advance notice and public participation. The good cause requirement is satisfied when the prior public procedure is “impracticable, unnecessary, or contrary to the public interest” (24 CFR 10.1). HUD finds that good cause exists to publish this rule for effect without first soliciting public comment, in that prior public procedure is unnecessary. The purpose of this rule is limited to amending an error in the March 16, 2000 Capital Fund final rule. The preamble explained how the rule would address implementation of the performance award factor of the Capital Fund Formula. As explained in the preamble, implementation of the performance award factor would coincide with implementation of PHAS. The regulatory text of the Capital Fund final rule, however, inadvertently failed to accurately reflect implementation of PHAS, as provided in the January 11, 2000 PHAS final rule. This rule therefore amends the March 16, 2000 final rule to correct this inconsistency.

III. Findings and Certifications

Environmental Impact

A Finding of No Significant Impact with respect to the environment was prepared in connection with the September 14, 1999 proposed rule in accordance with the HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4223). That Finding is applicable to this final rule, and is available for public inspection between the hours of 7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk, Office of General Counsel, Room 10276, Department of Housing and Urban Development, 451 Seventh Street, SW, Washington, DC.

Regulatory Flexibility Act

This rule will not have a significant impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act (5 U.S.C. 605(b)). The final rule is limited to amending the March 16, 2000 Capital Fund final rule to correct an error in the rule concerning implementation of the performance award factor. The regulatory flexibility analysis provided in the March 16, 2000 final rule is applicable to this rule.

Federalism Impact

This final rule does not have federalism implications. The rule does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of Executive Order 13132 (entitled “Federalism”).

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. This final 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.

Catalog

The Catalog of Federal Domestic Assistance number for the program affected by this rule is 14.850

List of Subjects in 24 CFR Part 905

• Grant programs—housing and community development
• Modernization
• Public housing
• Reporting and recordkeeping requirements

For the reasons discussed in the preamble, part 905 of title 24 of the Code of Federal Regulations is amended as follows:

PART 905—THE PUBLIC HOUSING CAPITAL FUND PROGRAM

1. The authority citation for part 905 continues to read as follows:

Authority: 42 U.S.C. 1437g and 3535(d).

2. Section 905.10 is amended by removing paragraph (j)(3).