38710 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

24 CFR Parts 25 and 30

[Docket No. FR–4308–F–02]

RIN 2501–AC44

Amendments to HUD’s Mortgagee

Review Board and Civil Money Penalty

Regulations

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

SUMMARY: This final rule makes

conforming changes to HUD’s

regulations to reflect statutory changes

made by the Multifamily Assisted

Housing Reform and Affordability Act

of 1997. These amendments are

designed to strengthen HUD’s

enforcement authority under its insured

housing programs. The final rule also

makes several clarifying, nonsubstantive amendments to these

regulations. This final rule follows

publication of a February 23, 2000

interim rule. No public comments were

received on the interim rule.

Accordingly, HUD is adopting the

February 23, 2000 interim rule without

change.

DATES: Effective Date: July 21, 2000.

FOR FURTHER INFORMATION CONTACT:

Dane Narode, Deputy Chief Counsel for

Administrative Proceedings,

Departmental Enforcement Center,

Room B–133, Department of Housing

and Urban Development, 451 Seventh

Street, SW, Washington, DC 20410;

telephone (202) 708–2350 (this is not a

toll-free number). Hearing or speechimpaired persons may access this

number via TTY by calling the toll-free

Federal Information Relay Service at 1–

800–877–8339.

SUPPLEMENTARY INFORMATION:

I. Background—The February 23, 2000

Interim Rule

On February 23, 2000 (65 FR 9084),

HUD published an interim rule

amending its regulations at 24 CFR part

25 (which establishes the procedures

governing HUD’s Mortgagee Review

Board) and 24 CFR part 30 (which

implements HUD’s civil money penalty

provisions). The February 23, 2000

interim rule updated these regulations

to reflect statutory amendments made

by sections 551 and 553 of the

Multifamily Assisted Housing Reform

and Affordability Act of 1997 (Title V of

the Fiscal Year 1998 HUD

Appropriations Act; Pub.L. 105–65,

approved October 27, 1997) (referred to

as the ‘‘Multifamily Reform Act’’ or the

‘‘Act’’).

The Multifamily Reform Act made

several amendments to strengthen

HUD’s enforcement authority under the

National Housing Act (12 U.S.C. 1701 et

seq.), which establishes the statutory

framework for HUD’s insured housing

programs. Section 551 of the Act

provides that suspensions issued by the

HUD Mortgagee Review Board are

effective, without previous 30-day

written notice of violation to the

mortgagee, if there is sufficient evidence

that immediate action is required to

protect the financial interests of HUD or

the public. Section 553 of the

Multifamily Reform Act expands the list

of persons and types of violations

subject to a civil money penalty under

HUD’s insured housing programs.

In addition to implementing sections

551 and 553 of the Multifamily Reform

Act, the February 23, 2000 interim rule

also made several clarifying, nonsubstantive, amendments to HUD’s

regulations at 24 CFR parts 25 and 30.

The first amendment clarified under

what conditions HUD’s Mortgagee

Review Board may issue a suspension.

The second amendment clarified the

effect of a suspension or withdrawal

issued by the Board. The third

amendment clarified that the Assistant

Secretary for Public and Indian Housing

may initiate a civil money penalty

under the section 184 Indian housing

loan guarantee program.

A complete description of the

amendments to 24 CFR parts 25 and 30

was provided in the preamble to the

February 23, 2000 interim rule.

II. This Final Rule

This final rule adopts the policies and

procedures contained in the February

23, 2000 interim rule. The public

comment period on the interim rule

closed on April 24, 2000. HUD did not

receive any public comments on the

interim rule. Accordingly, this final rule

adopts the February 23, 2000 interim

rule without change.

III. Other Enforcement-Related

Amendments Made by the Multifamily

Reform Act

In addition to the statutory

amendments described above, the

Multifamily Reform Act made several

other revisions to HUD’s enforcement

authority under its programs. For

example, section 561 of the Multifamily

Reform Act expands the list of persons

and types of violations subject to a civil

money penalty under section 537 of the

National Housing Act. Further, section

563 of the Multifamily Reform Act

amends the United States Housing Act

of 1937 (the statutory authority for

HUD’s public and assisted housing

programs) to provide for the imposition

of civil money penalties for

noncompliance with Section 8 Housing

Assistance Payment contracts. The

Multifamily Reform Act directs that

HUD implement these statutory

amendments using notice and comment

rulemaking procedures. Accordingly,

the amendments made by sections 561

and 563 of the Multifamily Reform Act

will be the subject of a separate HUD

proposed rule.

IV. Small Entities and HUD

Enforcement Actions

The Small Business Regulatory

Enforcement Fairness Act of 1996 (Pub.

L. 104–121, 110 Stat. 847, approved

March 29, 1996) (‘‘SBREFA’’) provides,

among other things, for agencies to

establish specific policies or programs

to assist small entities. Small entities

include small businesses, nonprofit

organizations, and small governmental

jurisdictions. On May 21, 1998 (63 FR

28214), HUD published a Federal

Register notice describing HUD’s

actions on implementation of SBREFA.

Section 223 of SBREFA requires

agencies that regulate the activities of

small entities to establish a policy or

program to reduce or, under appropriate

circumstances, waive civil penalties

when a small entity violates a statute or

regulation. Where penalties are

determined appropriate, HUD’s policy is

to consider: (1) The nature of the

violation (the violation must not be one

that is repeated or multiple, willful,

criminal or poses health or safety risks),

(2) whether the entity has shown a good

faith effort to comply with the

regulations; and (3) the resources of the

regulated entity.

With respect to the imposition of civil

money penalties, HUD is cognizant that

section 222 of the SBREFA requires the

Small Business and Agriculture

Regulatory Enforcement Ombudsman to

‘‘work with each agency with regulatory

authority over small businesses to

ensure that small business concerns that

receive or are subject to an audit, on-site

inspection, compliance assistance effort

or other enforcement related

communication or contact by agency

personnel are provided with a means to

comment on the enforcement activity

conducted by this personnel.’’ To

implement this statutory provision, the

Small Business Administration has

requested that agencies include the

following language on agency

publications and notices which are

provided to small businesses concerns

at the time the enforcement action is

undertaken. The language is as follows:

Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations 38711

Your Comments Are Important

The Small Business and Agriculture

Regulatory Enforcement Ombudsman and 10

Regional Fairness Boards were established to

receive comments from small businesses

about federal agency enforcement actions.

The Ombudsman will annually evaluate the

enforcement activities and rate each agency’s

responsiveness to small business. If you wish

to comment on the enforcement actions of

[insert agency name], call 1–888–REG–FAIR

(1–888–734–3247).

As HUD stated in its May 21, 1998

Federal Register notice, HUD intends to

work with the Small Business

Administration to provide small entities

with information on the Fairness Boards

and National Ombudsman program, at

the time enforcement actions are taken,

to ensure that small entities have the

full means to comment on the

enforcement activity conducted by

HUD.

V. Findings and Certifications

Environmental Impact

In accordance with 24 CFR 50.19(c)(1)

of the Department’s regulations, this

final rule does not direct, provide for

assistance or loan and mortgage

insurance for, or otherwise govern or

regulate, real property acquisition,

disposition, leasing, rehabilitation,

alteration, demolition, or new

construction, or establish, revise, or

provide for standards for construction or

construction materials, manufactured

housing, or occupancy. Therefore, this

final rule is categorically excluded from

the requirements of the National

Environmental Policy Act (42 U.S.C.

4321 et seq.).

Federalism Impact

Executive Order 13132 (entitled

‘‘Federalism’’) prohibits an agency from

publishing any rule that has federalism

implications if the rule either imposes

substantial direct compliance costs on

State and local governments and is not

required by statute, or 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 or preempt

State law within the meaning of the

Executive Order.

Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.

605(b)) has reviewed and approved this

rule, and in so doing certifies that this

final rule is not anticipated to have a

significant economic impact on a

substantial number of small entities. As

discussed in this preamble, the rule

makes conforming changes to HUD

regulations in 24 CFR parts 25 and 30

to reflect statutory changes made to the

National Housing Act by the

Multifamily Reform Act. These changes

are not discretionary on the part of

HUD. These changes are applicable

regardless of whether HUD revises its

regulations to reflect these statutory

amendments.

The purpose of the legislation is to

grant additional enforcement tools to

HUD to use against those who violate

agreements and program requirements.

The Multifamily Reform Act expanded

the list of persons and the types of

violations subject to civil money

penalties under HUD’s insured housing

programs for the purpose of protecting

the FHA insurance fund. To the extent

that these statutory changes impact

small entities it will be as a result of

actions taken by small entities

themselves—that is, violation of

applicable program regulations and

requirements.

The rule also makes three clarifying,

non-substantive amendments to these

regulations. These amendments do not

impose new regulatory requirements,

but codify existing HUD practice.

Accordingly, HUD has determined that

this final rule will have no adverse or

disproportionate economic impact on

small entities.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 establishes

requirements for Federal agencies to

assess the effects of their regulatory

actions on State, local, and tribal

governments and the private sector.

This rule does not impose a Federal

mandate that will result in the

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million or more

in any one year.

List of Subjects

24 CFR Part 25

Administrative practice and

procedure, Loan programs—housing

and community development,

Organization and functions

(Government agencies).

24 CFR Part 30

Administrative practice and

procedure, Loan programs—housing

and community development,

Mortgages, Penalties.

PARTS 24 AND 30—[AMENDED]

For the reasons discussed in the

preamble, the interim rule amending 24

CFR part 25 and 24 CFR part 30, which

was published at 65 FR 9084, is adopted

as a final rule without change.

Dated: June 14, 2000.

Andrew Cuomo,

Secretary.

[FR Doc. 00–15683 Filed 6–20–00; 8:45 am]

BILLING CODE 4210–32–P