[Federal Register: October 24, 2005 (Volume 70, Number 204)]
[Rules and Regulations]
[Page 61366-61367]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24oc05-6]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 990
[Docket No. FR-4874-C-09]
RIN 2577-AC51
Revisions to the Public Housing Operating Fund Program;
Correction to Formula Implementation Date
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Final rule; correction.
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SUMMARY: This document corrects HUD's final rule published on September
19, 2005, that implements revisions to the public housing Operating
Fund Program. The final rule includes dates from the proposed rule that
assumed both an initial implementation of the revised formula in fiscal
year (FY) 2006 and a one-year period for PHAs to transition to the new
formula. In converting the rule from a proposed to final rule, HUD
unintentionally failed to revise certain dates to reflect the updated
schedule for implementation of the revised formula. Accordingly, the
September 19, 2005, final rule inadvertently denies PHAs the one-year
transition period. This document corrects the September 19, 2005, final
rule to provide that the revised allocation formula will be implemented
for calendar year 2007, and adjusts the related dates specified in the
rule to reflect the corrected implementation date.
EFFECTIVE DATE: The final rule is effective on November 18, 2005.
FOR FURTHER INFORMATION CONTACT: Elizabeth Hanson, Public Housing
Financial Management Division, Office of Public and Indian Housing,
Department of Housing and Urban Development, 550 12th Street SW., Suite
100, Washington, DC 20410; telephone (202) 475-7949 (this telephone
number is not toll-free). Individuals with speech or hearing
impairments may access this number through TTY by calling the toll-free
Federal Information Relay Service at 1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background
On September 19, 2005, (70 FR 54983), HUD published a final rule
amending the regulations of the Public Housing Operating Fund Program
at 24 CFR part 990, to provide a new formula for distributing operating
subsidy to public housing agencies (PHAs) and establish requirements
for PHAs to convert to asset management. More detailed information
about this rule can be found in the preamble to the September 19, 2005,
final rule.
II. This Document
The September 19, 2005, final rule establishes several requirements
and determinations connected to the calendar year in which the
distribution of operating subsidies will be made. Some of the dates in
the final rule were carried over from the proposed rule and assumed
both an initial implementation of the revised formula in FY2006, and a
one-year transition period prior to implementation of the new formula.
Given the timing of publication and the effective date of the final
rule, initial implementation of the revised formula must be deferred to
calendar year 2007 in order to provide PHAs with the necessary one year
transition period. However, in converting this rule from a proposed
rule to a final rule, HUD inadvertently failed to revise certain dates
to reflect the updated schedule for implementation of the new formula,
and unintentionally denied PHAs the one-year transition period.
This document corrects certain provisions in the September 19,
2005, final rule to appropriately reflect initial implementation of the
revised Operating Fund formula in calendar year 2007. The corrections
made by this document are necessary to assist PHAs in proper budgetary
planning and to bring their policies and procedures into compliance
with the new formula requirements. The effective date of the rule
remains November 18, 2005, and all other dates contained in the final
rule that do not affect the new formula allocation of operating
subsidies are unchanged.
The following section of this document describes the most
significant corrections being made to the September 19, 2005, final
rule.
III. Corrections to the September 19, 2005, Final Rule
Revised subpart F of 24 CFR part 990 establishes procedures to
assist PHAs in transitioning to the new funding levels under the new
Operating Fund formula. As provided in Sec. 990.225 of the final rule,
the determination of the amount and period of the transition funding
will be based on the difference in subsidy levels between the revised
formula and the formula in effect prior to implementation of the final
rule. Differences in subsidy levels will be calculated using FY 2004
data.
1. Transition Funding. Under Sec. Sec. 990.230 and 990.235 of the
final rule, PHAs that experience a decrease or increase in operating
subsidy will have that decrease phased-in over a specified number of
years following the effective date of the final rule (November 18,
2005). The phase-in period is five years for subsidy reductions and two
years for increases in operating subsidies. By specifying the date of
November 18, 2005, the final rule incorrectly connects the first year
of the phased-in reduction to initial formula implementation in FY
2006. This document corrects Sec. Sec. 990.230 and 990.235 by removing
references to specific dates.
2. Discontinuation of subsidy reduction as a result of conversion
to asset management (``stop-loss'' provision). As noted above, the
final rule provides that phased-in reductions in operating subsidy will
be discontinued if the PHA can demonstrate successful conversion to the
asset management requirements contained in revised subpart H of the
part 990 regulations. HUD will discontinue the reduction in accordance
[[Page 61367]]
with the corrected ``stop-loss'' schedule set forth in Sec. 990.230 of
the final rule that reflects initial formula implementation in calendar
year 2007. For example, the first demonstration date in the corrected
schedule is October 1, 2006, as opposed to the October 1, 2005, date
incorrectly provided in the September 19, 2005, final rule.
0
Accordingly, FR Doc. 05-18624, Revisions to the Public Housing
Operating Fund Program; Final Rule, (FR-4874-F-08), published in the
Federal Register on September 19, 2005 (70 FR 54984), is corrected as
follows:
PART 990--[AMENDED]
0
1. On page 55003, in the second column, correct Sec. 990.195(c) to
read as follows:
Sec. 990.195 Calculation of formula income.
* * * * *
(c) Frozen at 2004 level. After a PHA's formula income is
calculated as described in paragraph (a) of this section, it will not
be recalculated or inflated for fiscal years 2007 through 2009, unless
a PHA can show a severe local economic hardship that is impacting the
PHA's ability to maintain some semblance of its formula income (see
subpart G of this part--Appeals). A PHA's formula income may be
recalculated if the PHA appeals to HUD for an adjustment in its
formula.
* * * * *
0
2. In Sec. 990.225, on page 55004, in the second column, correct the
first sentence to read as follows:
Sec. 990.225 Transition determination.
The determination of the amount and period of the transition
funding shall be based on the difference in subsidy levels between the
formula set forth in this part and the formula in effect prior to
implementation of the formula set forth in this part. * * *
* * * * *
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3. In Sec. 990.230, on page 55004, in the third column, correct
paragraphs (a), (b), (c), and (e) to read as follows:
Sec. 990.230 PHAs that will experience a subsidy reduction.
(a) For PHAs that will experience a reduction in their operating
subsidy, as determined in Sec. 990.225, such reductions will have a
limit of:
(1) 24 percent of the difference between the two funding levels in
the first year following implementation of the formula contained in
this part;
(2) 43 percent of the difference between the two funding levels in
the second year following implementation of the formula contained in
this part;
(3) 62 percent of the difference between the two levels in the
third year following implementation of the formula contained in this
part; and
(4) 81 percent of the difference between the two levels in the
fourth year following implementation of the formula contained in this
part.
(b) The full amount of the reduction in the operating subsidy level
shall be realized in the fifth year following implementation of the
formula contained in this part.
(c) For example, a PHA has a subsidy reduction from $1 million
under the formula in effect prior to implementation of the formula
contained in this part to $900,000 under the formula contained in this
part using FY 2004 data. The difference would be calculated at $100,000
($1 million-$900,000 = $100,000). In the first year, the subsidy
reduction would be limited to $24,000 (24 percent of the difference).
Thus, the PHA will receive an operating subsidy amount of this rule
plus a transition-funding amount of $76,000 (the $100,000 difference
between the two subsidy amounts minus the $24,000 reduction limit).
* * * * *
(e) The schedule of reductions for a PHA that will experience a
reduction in subsidy is reflected in the table below.
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Demonstration dated
Funding period by Reduction limited to
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Prior to year 1................. October 1, 2006.... 5 percent of the difference between
the two funding levels.
Year 1.......................... October 1, 2007.... 24 percent of the difference.
Year 2.......................... October 1, 2008.... 43 percent of the difference.
Year 3.......................... October 1, 2009.... 62 percent of the difference.
Year 4.......................... October 1, 2010.... 81 percent of the difference.
Year 5.......................... October 1, 2011.... Full reduction reached.
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* * * * *
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4. In Sec. 990.235, on page 55005, in the first and second columns,
correct paragraphs (a), (b), and (c) to read as follows:
Sec. 990.235 PHAs that will experience a subsidy increase.
(a) For PHAs that will experience a gain in their operating
subsidy, as determined in Sec. 990.225, such increases will have a
limit of 50 percent of the difference between the two funding levels in
the first year following implementation of the formula contained in
this part.
(b) The full amount of the increase in the operating subsidy level
shall be realized in the second year following implementation of the
formula contained in this part.
(c) For example, a PHA's subsidy increased from $900,000 under the
formula in effect prior to implementation of the formula contained in
this part to $1 million under the formula contained in this part using
FY 2004 data. The difference would be calculated at $100,000 ($1
million-$900,000 = $100,000). In the first year, the subsidy increase
would be limited to $50,000 (50 percent of the difference). Thus, in
this example the PHA will receive the operating subsidy amount of this
rule minus a transition-funding amount of $50,000 (the $100,000
difference between the two subsidy amounts minus the $50,000 transition
amount).
* * * * *
Dated: October 19, 2005.
Paula O. Blunt,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 05-21268 Filed 10-21-05; 8:45 am]
BILLING CODE 4210-33-P