Performance Funding System: Unit Months Available

SUMMARY: The Department is revising the Performance Funding System to

permit payment of operating subsidies for scattered-site units as they

become occupied.

EFFECTIVE DATE: December 14, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. John T. Comerford, Director,

Financial Management Division, Office of Management Operations, Public

and Indian Housing, Room 4212, Department of Housing and Urban

Development, 451 Seventh Street SW., Washington, DC 20410, telephone

(202) 708-1872; or with respect to the Indian Housing programs, Ms.

Joann A. Teiken, Financial Management Specialist, Office of Native

American Programs, Public and Indian Housing, Room B-133, Department of

Housing and Urban Development, 451 Seventh Street SW., Washington, DC

20410, telephone (202) 708-2980. Hearing or speech impaired individuals

may call HUD's TDD number, (202) 708-0850. (These telephone numbers are

not toll-free.)

SUPPLEMENTARY INFORMATION: On May 9, 1995 (60 FR 24597), the Department

published a proposed rule which would revise the definition of unit

months available (Secs. 950.102 and 990.102) and provide an explanation

of the alternate method for calculating unit months available upon

acquisition of units in a scattered-site project (Secs. 950.705 and

990.104(b)). The change in procedure would be applicable to scattered-

site developments acquired by Indian Housing Authorities.

Only five public comments were received. All supported the

Department's proposed rule. However, one commenter requested a

clarification of the regulatory reference to amending the Development

Cost Budget to reflect units occupied in the previous six months. The

commenter asked: ``Does the PHA claim the unit months available through

an amendment every six months until all units are occupied, do we

project the occupancy when the annual budget is proposed or can this be

a year-end adjustment item?''

The Department will not permit revisions to the Department Cost

Budget or to the calculation of operating subsidy based on projections.

The regulations state that the development budget revision will reflect

the number of units that were occupied and that subsidy shall be

revised to include units that are actually occupied. The reference to

previous six months in the regulations is intended to ensure that

revisions are not processed more often than once every six months. The

rule does not require housing authorities to request these revisions

and the Department would certainly allow housing agencies to submit a

revision that reflects activity for the previous twelve months at the

end of the year.

Findings and Certifications

Environmental Impact

The subject matter of this final rule is categorically excluded

from HUD's environmental clearance procedures under 24 CFR 50.20(k). It

relates to internal administrative procedures whose content does not

constitute a development decision or affect the physical condition of

project areas or building sites.

Executive Order 12866

The Office of Management and Budget reviewed this final rule under

Executive Order 12866, Regulatory Planning and Review. Any changes made

to the rule as a result of that review are clearly identified in the

docket file, which is available for public inspection at the Office of

General Counsel, room 10276, Department and Housing and Urban

Development, 451 Seventh Street SW., Washington, DC 20410-0500.

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed this final rule before publication and by

approving it certifies that this final rule does not have a significant

economic impact on substantial number of small entities. The final rule

will recognize that homes that are part of scattered-site developments

become ready for occupancy at varying times, and removes a potential

penalty to housing authorities who would otherwise have to wait for all

units in a scattered-site development to be occupied before they can

receive subsidy.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that the policies

contained in this final rule would not have federalism implications

and, thus, are not subject to review under the Order. The final rule

refines an established formula under which HUD calculates operating

subsidies for low-income housing developments, but contains no

requirement for explicit action by local officials and does not

interfere with State or local governmental functions.

Executive Order 12606

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this final rule does not

have potential significant impact on family formation, maintenance, and

general well-being, and, thus, is not subject to review under the

Order. No significant change in existing HUD policies or programs will

result from promulgation of this final rule, as those policies and

programs relate to family concerns.

The Catalog of Federal Domestic Assistance number is 14.850.

List of Subjects

24 CFR Part 950

Aged, Grant programs--housing and community development, Grant

programs--Indians, Indians, Individuals with disabilities, Low and

moderate income housing, Public housing, Reporting and recordkeeping

requirements.

24 CFR Part 990

Grant programs--housing and community development, Public housing,

Reporting and recordkeeping requirements.

Accordingly, in title 24 of the Code of Federal Regulations, parts

950 and 990 are amended, as follows:

PART 950--INDIAN HOUSING PROGRAMS

1. The authority citation for part 950 continues to read as

follows:

Authority: 25 U.S.C. 450e(b), 1437aa-1437ee, and 3535(d).

2. Section 950.102 is amended by revising the definition of ``Unit

months available'' to read as follows:

Sec. 950.102 Definitions.

* * * * *

Unit months available. Units multiplied by the number of months the

project units are available for occupancy during a given IHA fiscal

year. See also Sec. 950.705(b).

* * * * *

[[Page 57305]]

3. The existing text in Sec. 950.705 is redesignated as paragraph

(a), and a new paragraph (b) is added, to read as follows:

Sec. 950.705 Determination of amount of operating subsidy under PFS.

* * * * *

(b) For purposes of this part, a unit is considered available for

occupancy from the date on which the End of Initial Operating Period

(EIOP) is established for the project with which it is asso- ciated

until the time it is approved by HUD for deprogramming and is vacated

or is approved for non-dwelling use, except that, on or after July 1,

1991, a unit shall not be considered available for occupancy in any IHA

Requested Budget Year if the unit is located in a vacant building in a

project that HUD has determined to be nonviable. In the case of an IHA

development involving the acquisition of scattered site housing, the

IHA may submit, and HUD shall review and can approve, a revised

Development Cost Budget reflecting the number of units that were

occupied during the previous six months, and the Unit Months Available

used in the calculation of operating subsidy eligibility shall be

revised to include the number of months the new/acquired units are

actually occupied.

PART 990--ANNUAL CONTRIBUTIONS FOR OPERATING SUBSIDY

4. The authority citation for part 990 continues to read as

follows:

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

5. Section 990.102 is amended by revising the definition of ``Unit

Months Available'', to read as follows:

Sec. 990.102 Definitions.

* * * * *

Unit months available. Units multiplied by the number of months the

project units are available for occupancy during a given PHA fiscal

year. See also Sec. 990.104(b).

* * * * *

6. In Sec. 990.104, paragraph (b) is revised, to read as follows:

Sec. 990.104 Determination of amount of operating subsidy under PFS.

* * * * *

(b) For purposes of this part, a unit is considered available for

occupancy from the date on which the End of Initial Operating Period

(EIOP) is established for the project with which it is associated until

the time it is approved by HUD for deprogramming and is vacated or is

approved for non-dwelling use, except that, on or after July 1, 1991, a

unit shall not be considered available for occupancy in any PHA

Requested Budget Year if the unit is located in a vacant building in a

project that HUD has determined to be nonviable. In the case of a PHA

development involving the acquisition of scattered site housing, the

PHA may submit, and HUD shall review and can approve, a revised

Development Cost Budget reflecting the number of units that were

occupied during the previous six months, and the Unit Months Available

used in the calculation of operating subsidy eligibility shall be

revised to include the number of months the new/acquired units are

actually occupied.

Dated: August 30, 1995.

Joseph Shuldiner,

Assistant Secretary for Public and Indian Housing.

[FR Doc. 95-28033 Filed 11-13-95; 8:45 am]

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