Federal Register / Vol. 80, No. 24 / Thursday, February 5, 2015 / Proposed Rules 6469 

1The 2014 HUD Appropriations Act is Title II of 

Division L of Public Law 113–73, approved January 

17, 2014. 

ACTION: Notice of petition. 

SUMMARY: The Food and Drug 

Administration (FDA or we) is 

announcing that we have filed a 

petition, submitted by Signature Brands, 

LLC, proposing that the color additive 

regulations be amended to provide for 

the safe use of mica-based pearlescent 

pigments in egg decorating kits for 

coloring shell eggs. 

DATES: The color additive petition was 

filed on December 22, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Ellen Anderson, Center for Food Safety 

and Applied Nutrition (HFS–265), Food 

and Drug Administration, 5100 Paint 

Branch Pkwy., College Park, MD 20740– 

3835, 240–402–1309. 

SUPPLEMENTARY INFORMATION: Under 

section 721(d)(1) of the Federal Food, 

Drug, and Cosmetic Act (21 U.S.C. 

379e(d)(1)), we are giving notice that we 

have filed a color additive petition (CAP 

5C0301), submitted by Signature 

Brands, LLC, c/o Keller and Heckman, 

LLP, 1001 G Street NW., Suite 500 West, 

Washington, DC 20001. The petition 

proposes to amend the color additive 

regulations in § 73.350 Mica-based 

pearlescent pigments (21 CFR 73.350), 

to provide for the safe use of mica-based 

pearlescent pigments in egg decorating 

kits for coloring shell eggs. 

We have determined under 21 CFR 

25.32(r) that this action is of a type that 

does not individually or cumulatively 

have a significant effect on the human 

environment. Therefore, neither an 

environmental assessment nor an 

environmental impact statement is 

required. 

Dated: January 30, 2015. 

Dennis M. Keefe, 

Director, Office of Food Additive Safety, 

Center for Food Safety and Applied Nutrition. 

[FR Doc. 2015–02239 Filed 2–4–15; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 570 

[Docket No. FR–5767–N–02] 

RIN 2506–AC35 

Section 108 Loan Guarantee Program: 

Announcement of Proposed Fee To 

Cover Credit Subsidy Costs and 

Solicitation of Comment 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, HUD. 

ACTION: Notice. 

SUMMARY: This notice announces and 

solicits public comment on the fee that 

HUD proposes to collect from borrowers 

of loans guaranteed under the HUD’s 

Section 108 Loan Guarantee Program 

(Section 108 Program) for the purpose of 

covering the credit subsidy costs of 

operating the program. Elsewhere in 

today’s Federal Register, HUD is 

publishing a proposed rule that would 

amend its regulations for the Section 

108 Program to permit HUD to collect a 

fee for the Section 108 Program. 

DATES: Comment Due Date: March 9, 

2015. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule to the Regulations 

Division, Office of General Counsel, 

Department of Housing and Urban 

Development, 451 7th Street SW., Room 

10276, Washington, DC 20410–0500. 

Communications must refer to the above 

docket number and title. There are two 

methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street SW., Room 10276, 

Washington, DC 20410–0500. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt by HUD, and enables HUD to 

make them immediately available to the 

public. Comments submitted 

electronically through the 

www.regulations.gov Web site can be 

viewed by other commenters and 

interested members of the public. 

Commenters should follow the 

instructions provided on that site to 

submit comments electronically. 

Note: To receive consideration as public 

comments, comments must be submitted 

through one of the two methods specified 

above. Again, all submissions must refer to 

the docket number and title of the notice. 

No Facsimile Comments. Facsimile 

(FAX) comments are not acceptable. 

Public Inspection of Public 

Comments. All properly submitted 

comments and communications 

submitted to HUD will be available for 

public inspection and copying between 

8 a.m. and 5 p.m., weekdays, at the 

above address. Due to security measures 

at the HUD Headquarters building, an 

appointment to review the public 

comments must be scheduled in 

advance by calling the Regulations 

Division at 202–708–3055 (this is not a 

toll-free number). Individuals with 

speech or hearing impairments may 

access this number via TTY by calling 

the Federal Relay Service at 800–877– 

8339. Copies of all comments submitted 

are available for inspection and 

downloading at www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: Paul 

Webster, Director, Financial 

Management Division, Office of Block 

Grant Assistance, Office of Community 

Planning and Development, Department 

of Housing and Urban Development, 

451 7th Street SW., Room 7180, 

Washington, DC 20410; telephone 

number 202–708–1871 (this is not a tollfree number). Individuals with speech 

or hearing impairments may access this 

number through TTY by calling the tollfree Federal Relay Service at 800–877– 

8339. FAX inquiries (but not comments) 

may be sent to Mr. Webster at 202–708– 

1798 (this is not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

I. Background 

HUD’s proposed rule, published 

elsewhere in today’s Federal Register, 

describes the current Congressional 

funding status of the Section 108 

Program. HUD’s Fiscal Year (FY) 2014 

Appropriations Act 1 authorized HUD in 

FY 2014 to impose a fee to eliminate the 

need for credit subsidy appropriations. 

As discussed in more detail in the 

preamble to the proposed rule, 

imposition of a fee, as statutorily 

authorized, will permit the Section 108 

guaranteed loan financing to remain 

available. 

II. Proposed 2015 Fee: 2.42 Percent of 

the Principal Obligation of the Loan 

As described in the proposed rule, 

when determining the appropriate level 

of fee to charge, HUD took into 

consideration the amount required to 

fully offset the credit subsidy cost to the 

Federal Government associated with 

making a loan guarantee. Credit subsidy 

cost calculations incorporate 

assumptions based on: (i) Data on 

default frequency for municipal debt 

where such debt is comparable to loans 

in the Section 108 loan portfolio; (ii) 

data on recovery rates on collateral 

security for comparable municipal debt; 

(iii) the expected composition of the 

Section 108 portfolio by end users of the 

guaranteed loan funds (e.g., third party 


rljohnson on DSK3VPTVN1PROD with PROPOSALS
6470 Federal Register / Vol. 80, No. 24 / Thursday, February 5, 2015 / Proposed Rules 

2U.S. Department of Housing and Urban 

Development, Study of HUD’s Section 108 Loan 

Guarantee Program, (prepared by Econometrica, Inc. 

and The Urban Institute), September 2012. 

borrowers and public entities); and (iv) 

other factors that HUD determines may 

be relevant to this calculation. 

Taking these factors into 

consideration, HUD determined that the 

initial fee to be imposed on the program 

is 2.42 percent, which percentage will 

be applied to guaranteed loan 

disbursements as they occur in fiscal 

year 2015. The fee will be effective after 

available credit subsidy appropriations 

are depleted, which HUD anticipates 

will occur around May 2015. Note that 

future notices may provide for a 

combination of up-front and periodic 

fees. 

The expected cost of a Section 108 

loan guarantee is difficult to estimate 

accurately using historical program 

data, because there have been no 

defaults in the history of the program. 

HUD has never had to invoke its full 

faith and credit guarantee, nor has it 

paid out on any guarantee from the 

credit subsidy reserved each year for 

future losses.2 This is due to a variety 

of factors, including the availability of 

CDBG funds as security. Borrowers may 

plan to make payments on Section 108 

loans from CDBG grant funds. However, 

when a borrower plans to make Section 

108 loan payments from other 

anticipated sources, it has been able to 

repay the Section 108 loan using CDBG 

funds when there are shortfalls in 

anticipated repayment sources, as 

authorized by Section 108 of the 

Housing and Community Development 

Act of 1974, as amended (42 U.S.C. 

5308). 

The proposed fee of 2.42 percent 

offsets the expected cost to the 

government due to default, financing 

costs, and other relevant factors. To 

arrive at this measure, HUD analyzed 

data on comparable municipal debt over 

an extended 16- to 23-year period. The 

estimated rate is based on the default 

and recovery rates for general purpose 

municipal debt and industrial 

development bonds. The cumulative 

default rates on industrial development 

bonds were higher than the default rates 

on general purpose municipal debt 

during the period from which the data 

were taken. These two subsectors of 

municipal debt were chosen because 

their purposes and loan terms most 

closely resemble those of Section 108 

loans. In this regard, Section 108 loans 

can be broken down into two categories: 

(i) Loans that finance public 

infrastructure and activities to support 

subsidized housing (other than 

financing new construction) and (ii) 

development projects (e.g., retail, 

commercial, industrial). The 2.42 

percent fee was derived by weighting 

the default and recovery data for general 

purpose municipal debt and the data for 

industrial development bonds according 

to the expected composition of the 

Section 108 portfolio by corresponding 

project type. Based on dollar amount of 

Section 108 commitments awarded 

during the period 2005—2013, HUD 

expects that 27 percent of the Section 

108 portfolio will be similar to general 

purpose municipal debt and 73 percent 

of the portfolio will be similar to 

industrial development bonds. In 

determining the appropriate level of fee, 

HUD will consider the amount required 

to fully offset the cost to the Federal 

Government associated with making a 

loan guarantee. Credit subsidy cost 

calculations incorporate assumptions 

based on: (i) data on default frequency 

for municipal debt where such debt is 

comparable to loans in the Section 108 

portfolio; (ii) data on recovery rates on 

collateral security for comparable 

municipal debt; (iii) the expected 

composition of the Section 108 cohort 

by end users of the guaranteed loan 

funds (e.g., third party borrowers and 

public entities); and (iv) other relevant 

information (e.g., statutory changes) that 

would affect the applicability of the 

default and recovery data on 

comparable municipal debt. 

III. Solicitation of Comment 

HUD solicits comment on the initial 

fee to be imposed on the Section 108 

Program. 

Dated: December 17, 2014. 

Clifford Taffet, 

General Deputy Assistant Secretary for 

Community Planning and Development. 

[FR Doc. 2015–02261 Filed 2–4–15; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT 

24 CFR Part 570 

[Docket No. FR–5767–P–01] 

RIN 2506–AC35 

Section 108 Loan Guarantee Program: 

Payment of Fees To Cover Credit 

Subsidy Costs 

AGENCY: Office of the Assistant 

Secretary for Community Planning and 

Development, HUD. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend HUD’s Section 108 Loan 

Guarantee Program (Section 108 

Program) regulations to permit HUD, in 

accordance with statutory authority, to 

collect fees from Section 108 borrowers 

to offset the costs of Section 108 loan 

guarantees. HUD is proposing this rule 

to ensure that it can begin to make 

Section 108 loan guarantee 

commitments without appropriated 

subsidy. The Department of Housing 

and Urban Development Appropriations 

Act, 2014, authorizes HUD to collect 

fees from borrowers for this program. In 

anticipation of further appropriations 

acts authorizing the collection of fees for 

Section 108 loan guarantees, HUD 

proposes to add a new section to its 

current regulations to reflect that when 

appropriations for credit subsidy costs 

as authorized by Congress are either not 

available or insufficient and HUD has 

statutory authority to collect fees, HUD 

will impose a fee on Section 108 

Program borrowers and explain the 

basis for the fee imposed. The proposed 

new regulatory section would provide 

for HUD to set the fee by notice. 

Elsewhere in today’s Federal Register, 

HUD is publishing the notice that would 

propose the fee to be established for the 

fiscal year 2015, subject to statutory 

authorization. 

DATES: Comment Due Date: March 9, 

2015. 

ADDRESSES: Interested persons are 

invited to submit comments regarding 

this proposed rule to the Regulations 

Division, Office of General Counsel, 

Department of Housing and Urban 

Development, 451 7th Street SW., Room 

10276, Washington, DC 20410–0500. 

Communications must refer to the above 

docket number and title. There are two 

methods for submitting public 

comments. All submissions must refer 

to the above docket number and title. 

1. Submission of Comments by Mail. 

Comments may be submitted by mail to 

the Regulations Division, Office of 

General Counsel, Department of 

Housing and Urban Development, 451 

7th Street SW., Room 10276, 

Washington, DC 20410–0500. 

2. Electronic Submission of 

Comments. Interested persons may 

submit comments electronically through 

the Federal eRulemaking Portal at 

www.regulations.gov. HUD strongly 

encourages commenters to submit 

comments electronically. Electronic 

submission of comments allows the 

commenter maximum time to prepare 

and submit a comment, ensures timely 

receipt by HUD, and enables HUD to 

make them immediately available to the 

public. Comments submitted 

electronically through the 

www.regulations.gov Web site can be 


rljohnson on DSK3VPTVN1PROD with PROPOSALS