Low income housing: Housing assistance payments (Section 8)— market program), etc.; correction,

[Federal Register: December 28, 1998 (Volume 63, Number 248)]

[Rules and Regulations]

[Page 71372-71374]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr28de98-3]

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 401 and 402

[Docket No. FR-4298-C-05]

RIN 2502-AH09

Multifamily Housing Mortgage and Housing Assistance Restructuring Program (Mark-to-Market) and Renewal of Expiring Section 8 Project- Based Assistance Contracts; Technical Corrections

AGENCY: Office of the Secretary, HUD.

ACTION: Interim rule; technical corrections.

SUMMARY: On September 11, 1998, HUD published an interim rule implementing the Mark-to-Market Program and the statutory provisions for renewals of section 8 project-based assistance contracts expiring in Fiscal Year 1999 or later. On October 15, 1998, HUD published a first correction to the interim rule to correct the Internet address given for submitting public comments. This second correction to the interim rule addresses additional matters that were in error when the interim rule was published and in need of correction. This document also corrects one provision of the interim rule as well as preamble language that needs correction because of a change in authorizing legislation since issuance of the interim rule.

EFFECTIVE DATE: December 28, 1998.

FOR FURTHER INFORMATION CONTACT: Dan Sullivan, Department of Housing and Urban Development, 451 7th St., Washington DC 20410. Telephone: 202-708-3555. (This is not a toll-free number.) For hearing- and speech-impaired persons, this number may be accessed via TTY by calling the Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: On September 11, 1998 (63 FR 48926), HUD published an interim rule implementing the Mark-to-Market Program and the statutory provisions for renewals of section 8 project-based assistance contracts expiring in Fiscal Year 1999 or later. The purpose of this program is to preserve low-income rental housing affordability while reducing the long-term costs of Federal rental assistance, including project-based assistance, and minimizing the adverse effect on the FHA insurance funds. The program is authorized by the Multifamily Assisted Housing Reform and Affordability Act of 1997, title V of Pub. L. 105-65 (approved October 27, 1997) (MAHRA).

Corrections Based on Original Legislation (MAHRA)

HUD is making the following corrections based on the MAHRA:

‹bullet› Several changes are made to the preamble and the rule to eliminate conflicts between the preamble description of the rule and the actual rule text (see corrections 2, 3, and 24).

‹bullet› Several erroneous or incomplete cross-references in the preamble and the interim rule are corrected (see corrections 3, 7, 12, 17, 19, 20, 21, 22, 25, and 28).

‹bullet› Repetitive or erroneous extraneous language is removed in various places in the preamble and the interim rule text to provide simplicity and clarity (see corrections 5, 6, 8, 10, and 13).

‹bullet› One incorrect date in the rule text is corrected (see correction 16).

Corrections Based on Recent Legislation (Pub. L. 105-276)

In addition to the corrections described above, other provisions of the interim rule, although correct when published, now require correction because of the subsequent enactment of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999, Pub.L. 105-276 (approved October 21, 1998). Section 597(a)(2) of Pub.L. 105-276 amended MAHRA to change the required methodology for determining restructured rents for certain section 8 moderate rehabilitation projects under the Mark-to-Market Program. This statutory change therefore requires a corresponding change to Sec. 402.5(b)(3) of the interim rule and the applicable preamble discussion. We have made this correction (see corrections 13 and 27).

In the preamble to the interim rule, HUD referred to one pending provision of MAHRA which ultimately was not included in Pub.L. 105-276. The pending provision would have amended section 515(h) of MAHRA to limit the exclusion of projects with State or local primary financing from the Mark-to-Market program. We have corrected the preamble by removing the two sentences that contained reference to the pending provision (see correction 1).

Other relevant provisions of the Pub.L. 105-276 will require corrective rule changes in the future. These changes, however, are not appropriate for a technical correction. Those provisions are as follows.

1. Section 549(a) and (b) of Pub.L. 105-276 removed the requirement of section 8(c)(8) of the United States Housing Act of 1937 (``the 1937 Act'') for owner notice to tenants of rent

   [[Page 71373]]

   increases, and amended the requirement of section 8(c)(9) of that Act (now redesignated as section 8(c)(8) for owner notice to tenants and HUD of section 8 contract termination. Both provisions are referenced in Secs. 401.602 and 402.8 of the interim rule and discussed in the preamble. Rule references to the notice required by former section 8(c)(8) should be considered superseded by section 549. Rule changes will be needed to respond to the amendment of former section 8(c)(9) (now section 8(c)(8)) but the subject is too complex to be addressed fully in this correction. We will make appropriate changes in the final rule. In this document, we remove some preamble discussion that is incorrect under the current law (see corrections 11 and 15).

2. Section 549(c) of Pub.L. 105-276 added a new final sentence to section 514(d) of MAHRA regarding an additional owner notice requirement and restrictions on rent increases or evictions. This matter is also complicated and will be addressed in the final rule instead of this correction.

3. Section 599 of Pub.L. 105-276 amended section 202 of the Housing and Community Amendments of 1978, concerning tenant participation in certain multifamily housing projects, to apply to all projects with project-based assistance or section 8 enhanced (``sticky'') vouchers under the Mark-to-Market Program. Tenant participation under section 202 is the subject of 24 part 245. We have begun a separate proposed rulemaking procedure to amend part 245 to reflect section 599 and to make other changes.

   Accordingly, FR Doc. 98-242840, Multifamily Housing Mortgage and Housing Assistance Restructuring Program (Mark-to-Market) and Renewal of Expiring Section 8 Project-Based Assistance Contracts (FR-4298-I- 01), published in the Federal Register on September 11, 1998 (63 FR 48926), is corrected as follows:

   1. Corrections to the Preamble

1. On page 48929, first column, the second and third sentences of the first full paragraph are removed.

2. On page 48931, second column, the second to the last sentence of the first full paragraph, the following language is added immediately after the reference to Sec. 401.453--``and the poor condition of the project is not likely to be remedied in a cost-effective manner through the Restructuring Plan.''

3. On page 48932, the last sentence in the first column, which continues to the second column, is corrected to read ``An owner should also follow this guidance when making a preliminary certification of eligibility under Sec. 401.99 and a comparable market analysis under Sec. 402.6(a)(1).''

4. On page 48933, first column, in the first sentence of the first full paragraph, the words ``covered by a PRA'' are added immediately after the word ``units''.

5. On page 48933, second column, the fourth full sentence is removed, and the third full sentence is revised to read as follows: ``In addition, the PAE must consider the other matters listed in section 515(c)(2)(B) of MAHRA to be assessed as part of the Plan, and the applicable Consolidated Plan developed under 24 CFR part 91.''

6. On page 48933, third column, in the fourth sentence of the first full paragraph, the number ``35'' is removed.

7. On page 48934, second column, in the second sentence of the third full paragraph, the reference to ``517(b)(3)'' is corrected to read ``517(b)(2)''. On page 48934, second column, in the first sentence of the fourth full paragraph, the reference to ``401.700'' is corrected to read ``401.310''.

8. On page 48935, first column, in the first sentence under the heading ``Section 401.471 HUD Payment of Section 541(b) Claim,'' the words ``or HUD-held'' are removed.

9. On page 48935, second column, in the first full sentence, the word ``than'' is corrected to read ``that''.

10. On page 48937 in the preamble, first column, in the fourth sentence under the heading ``Section 401.500 Required Notices to Third Parties; Section 401.501 Who Is Entitled to Receive Notices Under Sec. 401.500?'', the term ``by the owner'' is removed .

11. On page 48937 in the preamble, second column, the second sentence in the second full paragraph which begins with the phrase ``In particular * * *'' is removed.

12. On page 48938 in the preamble, second column, in the first paragraph under the heading ``Section 401.602 Tenant Protections if an Expiring Contract is Not Renewed,'' the regulatory references in the last sentence of that paragraph are corrected as follows: ``Sec. 401.101 or 401.403'' is corrected to read ``Secs. 401.101, 401.403, or 401.405''.

13. On page 48939 in the preamble, third column, the parenthetical statement that follows numbered paragraph (5) is corrected by removing the phrase ``as explained in Part II of this Supplementary Information under Sec. 401.100''.

14. On page 48940 in the preamble, first column, the language in the first partial paragraph that follows the designation ``(3)'' is corrected to read as follows: ``(3) in the case of a contract under the section 8 moderate rehabilitation program (other than for a single room occupancy dwelling), the lesser of existing rents adjusted by an OCAF, fair market rents (less any amounts allowed for tenant-purchased utilities), or comparable market rents.''

15. On page 48940 of the preamble, second column, the entire discussion under the heading ``Section 402.8 Tenant Protections if an Expiring Contract is not Renewed'' is corrected to read as follows: ``Section 402.8 discusses notices that an owner must give when an expiring contract is not renewed, and the consequences of failure to give notice, in a manner similar to Sec. 402.6. Both sections will be revised in the final rule to reflect recent legislation that deleted former section 8(c)(8) of the United States Housing Act of 1937 and amended section 8(c)(9) of that Act (now redesignated as section 8(c)(8)).''

    2. Corrections to the Rule

    Sec. 401.99 [Corrected]

16. On page 48944, third column, in Sec. 401.99(b), introductory text, ``January 1'' is corrected to read ``January 13''.

    Sec. 401.100 [Corrected]

17. On page 48944, third column, in Sec. 401.100, the heading-- ``General eligibility.''--for the introductory paragraph is removed.

    Sec. 401.201 [Corrected]

18. On page 48945, first column, in Sec. 401.201, the term ``State Housing Finance Agencies'' in Sec. 401.201(b) is corrected to read ``State housing finance agencies''.

    Sec. 401.301 [Corrected]

19. On page 48945, first column, in Sec. 401.300, the reference to ``401.309'' is corrected to read ``401.314''.

    Sec. 401.400 [Corrected]

20. On page 48947, first column, in Sec. 401.400(b), ``Section 514'' is corrected to read ``section 514(e)''.

    Sec. 401.403 [Corrected]

21. On page 48947, second column, in Sec. 401.403(b)(2), the words ``and (b)'' are removed.

    Sec. 401.411 [Corrected]

22. On page 48948, second column, in Sec. 401.411(a), the reference to ``514(g)'' is corrected to read ``514(g)(2)''.

    Sec. 401.461 [Corrected]

23. On page 48950, second column, in Sec. 401.461(b)(4), the phrase ``or the owner'' is corrected to read ``or if the owner''.

    [[Page 71374]]

    Sec. 401.472 [Corrected]

24. On page 48950, third column, in Sec. 401.472(a)(1), the phrase ``residual receipts account, surplus cash account, residual receipts account'' is corrected to read ``residual receipts account, surplus cash account, replacement reserve account''.

    Sec. 401.552 [Corrected]

25. On page 48952, second column, in Sec. 401.552, the reference to ``401.461(b)(2)'' is corrected to read ``401.461(b)(3)(ii)(A)''.

    Sec. 402.1 [Corrected]

26. On page 48954, first column, in Sec. 402.1, the word ``eligible'' is added immediately before the word ``projects'' in the second sentence of that section.

    Sec. 402.5 [Corrected]

27. On page 48954, second column, Sec. 402.5(c)(3) is corrected to read: ``In the case of a contract under the section 8 moderate rehabilitation program (other than single room occupancy dwellings under section 441 of the Stewart B. McKinney Homeless Assistance Act), the lesser of existing rents adjusted by an OCAF, fair market rents (less any amounts allowed for tenant-purchased utilities), or comparable market rents.''

    Sec. 402.6 [Corrected]

28. On page 48954, third column, in Sec. 402.6(b), the reference to ``Sec. 401.4 or Sec. 401.5(b)(2)'' is corrected to read ``Sec. 402.4 or Sec. 402.5(b)(2)''.

    Dated: December 21, 1998. Camille E. Acevedo, Assistant General Counsel for Regulations.

    [FR Doc. 98-34314Filed12-24-98; 8:45 am]

    BILLING CODE 4210-32-P