This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

23864

Vol. 66, No. 91

Thursday, May 10, 2001

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 951

[No. 2001–08]

RIN 3069–AB04

Affordable Housing Program

Amendments

AGENCY: Federal Housing Finance

Board.

ACTION: Proposed rule.

SUMMARY: The Federal Housing Finance

Board (Finance Board) is proposing to

amend its regulation governing the

operation of the Affordable Housing

Program (AHP) to improve the operation

and effectiveness of the AHP. The

proposed changes include: increasing

the maximum amount of money that

may be set aside annually, in the

aggregate, under a Federal Home Loan

Bank’s (Bank) homeownership set-aside

programs to the greater of $3.0 million

or 25 percent of the Bank’s annual

required AHP contribution; removing

one of the criteria for use of

homeownership set-aside funds to pay

for counseling costs in order to equalize

the criteria with that of the competitive

AHP application program; permitting

members drawn from community and

not-for-profit organizations actively

involved in providing or promoting

community lending in a Bank’s District

to serve on the Bank’s Advisory

Council; making the reconciliation of

AHP fund requirements applicable to

any reduction or increase in the amount

of AHP subsidy approved for a project,

regardless of whether a direct subsidy

writedown is involved; removing the

requirement for annual project sponsor

certifications on household income

eligibility for owner-occupied projects;

and removing the requirement for

member certifications on habitability

and tenant income and rent targeting

commitments within the first year of

completion of a rental project.

DATES: The Finance Board will accept

written comments on the proposed rule

that are received on or before June 11,

2001.

ADDRESSES: Send written comments to:

Elaine L. Baker, Secretary to the Board,

at the Federal Housing Finance Board,

1777 F Street, NW., Washington, DC

20006. Comments will be available for

inspection at this address.

FOR FURTHER INFORMATION CONTACT:

Charles E. McLean, Deputy Director,

(202) 408–2537, Melissa L. Allen,

Program Analyst, (202) 408–2524, Office

of Policy, Research and Analysis; or

Sharon B. Like, Senior AttorneyAdvisor, (202) 408–2930, Office of

General Counsel, Federal Housing

Finance Board, 1777 F Street, NW.,

Washington, DC 20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

Section 10(j)(1) of the Federal Home

Loan Bank Act (Bank Act) requires each

Bank to establish a program to subsidize

the interest rate on advances to

members of the Bank System engaged in

lending for long-term, low- and

moderate-income, owner-occupied and

affordable rental housing at subsidized

interest rates. See 12 U.S.C. 1430(j)(1).

The Finance Board is required to

promulgate regulations governing the

AHP. See id. The Finance Board’s

existing regulation governing the

operation of the AHP, which made

comprehensive revisions to the AHP,

was adopted in August 1997 and

became effective January 1, 1998. See 62

FR 41812 (Aug. 4, 1997) (now codified

at 12 CFR part 951).

Various amendments have been made

to the AHP regulation since 1998 in

order to clarify AHP requirements and

improve the operation and effectiveness

of the AHP. The Banks and Finance

Board staff have, over the course of

implementation of the AHP, identified

additional amendments that it is

believed would improve the operation

and effectiveness of the AHP. The

proposed amendments are discussed

further below. The Finance Board

welcomes written comments on all

aspects of the proposed rule.

II. Analysis of Proposed Rule

A. Homeownership Set-Aside

Programs—§§ 951.3(a), 951.5(a)(7)(iii)

1. Increase in Maximum Allowable

Annual Homeownership Set-Aside

Amount—§ 951.3(a)

Section 951.3(a)(1) of the existing

AHP regulation provides that each

Bank, after consultation with its

Advisory Council, may set aside

annually, in the aggregate, up to the

greater of $1.5 million or 15 percent of

its annual required AHP contribution to

provide funds to members participating

in the Bank’s homeownership set-aside

programs. 12 CFR 951.3(a)(1). In cases

where the amount of homeownership

set-aside funds applied for by members

in a given year exceeds the amount

available for that year, a Bank may

allocate up to the greater of $1.5 million

or 15 percent of its annual required AHP

contribution for the subsequent year to

the current year’s homeownership setaside programs. Id.

The AHP homeownership set-aside

programs have proven to be an efficient

and effective means for the Banks and

their members to provide

homeownership opportunities for lowand moderate-income households,

consistent with the goals of the Bank

System and the AHP. Ten Banks

currently offer homeownership set-aside

programs, eight of which set aside the

maximum amount allowable under the

current AHP regulation.

Experience with the homeownership

set-aside programs over the past two

years has shown that the demand for

homeownership set-aside funds for lowand moderate-income families is such

that an increase in the maximum

allowable annual homeownership setaside amount is warranted. The Banks

have demonstrated that there is market

demand and member demand for

financing for low- and moderate-income

homeownership, with most

homeownership set-aside programs

being oversubscribed within the first

three to seven months of the year. In

2000, the Finance Board approved a

waiver request from one Bank to

increase its maximum allowable

homeownership set-aside amount to 25

percent of its total annual AHP

contribution, a similar waiver request

for 2001 is pending, and additional

waiver requests of a similar nature from

other Banks are anticipated.

Federal Register / Vol. 66, No. 91 / Thursday, May 10, 2001 / Proposed Rules 23865

The homeownership set-aside

programs also are consistent with the

cooperative structure of the Bank

System, by involving members in

financing the mortgages of low- and

moderate-income households receiving

downpayment assistance with

homeownership set-aside funds. The

homeownership set-aside programs can

provide an important Bank service for

members by enabling a greater number

of members to become involved in the

AHP, by helping members to establish

banking relationships with new

customers, and by exposing more

members to opportunities to help meet

low- and moderate-income housing

needs in their markets.

The homeownership set-aside

programs also are consistent with the

goals of the Bank System and the AHP

to help finance affordable housing in

underserved areas and for underserved

households. Homeownership set-aside

funds often are the only way to

effectively meet scattered-site,

affordable housing needs in rural areas

or tribal areas, which have difficulty

scoring well under the competitive AHP

application program and where rental

projects are not feasible. In addition,

homeownership set-aside funds often

are the only way to meet the need for

homeownership opportunities for very

low-income families, which require

larger per-unit subsidies and, therefore,

may not score well under the

competitive AHP application program.

Homeownership set-aside programs also

allow a member to use AHP funds to

finance housing for individual eligible

households on an as-needed basis, even

if it is only for one household in the

member’s market area. These are

households that the competitive AHP

application program might not

otherwise reach.

The decision whether or not to

establish homeownership set-aside

programs is within the discretion of

each Bank. Thus, a Bank, in

consultation with its Advisory Council,

may decide not to establish

homeownership set-aside programs if it

determines that such programs are

inappropriate for its district, or, if a

Bank decides to establish such

programs, it need not allocate to the

programs the maximum amount

allowable under the regulation.

Accordingly, for the reasons

discussed above, the proposed rule

would revise § 951.3(a)(1) to allow a

Bank, after consultation with its

Advisory Council, to set aside annually,

in the aggregate, up to the greater of $3.0

million or 25 percent of its annual

required AHP contribution for its

homeownership set-aside programs. In

addition, in cases where the amount of

homeownership set-aside funds applied

for by members in a given year exceeds

the amount available for that year, the

proposed rule would allow a Bank to

allocate up to the greater of $3.0 million

or 25 percent of its annual required AHP

contribution for the subsequent year to

the current year’s homeownership setaside programs.

A higher allowable annual

homeownership set-aside amount

increases the possibility that demand for

such funds may not exhaust the

available funds by the end of the year.

Under section 10(j)(7) of the Bank Act,

90 percent of such uncommitted or

unused AHP funds generally would be

required to be deposited by the Bank in

an Affordable Housing Reserve Fund

established and administered by the

Finance Board. See 12 U.S.C. 1430(j)(7);

12 CFR 951.15(a). No such Reserve

Fund has been established to date. In

order to minimize the possibility of

having to create such a Reserve Fund,

the proposed rule would provide in

§ 951.3(a) that any homeownership setaside funds that are not committed or

used by the end of the year in which

they were set aside shall be committed

or used by the end of such year to fund

project modifications or the next highest

scoring AHP applications in the Bank’s

final funding period of the year for its

competitive AHP application program.

The proposed rule also would provide

that, beginning in 2002 and for

subsequent years, the maximum

homeownership set-aside dollar limits

shall be adjusted annually by the

Finance Board to reflect any percentage

increase in the preceding year’s

Consumer Price Index (CPI) for all urban

consumers, as published by the

Department of Labor. Each year, as soon

as practicable after the publication of

the previous year’s CPI, the Finance

Board would be required to publish

notice by Federal Register, distribution

of a memorandum, or otherwise, of the

CPI-adjusted limits on the maximum

set-aside dollar amount.

2. Removal of Criterion For Funding of

Counseling Costs—§ 951.5(a)(7)(iii)

Section 951.5(a)(7) of the existing

AHP regulation provides that

homeownership set-aside funds may be

used to pay for counseling costs only

where:

(i) Such costs are incurred in

connection with counseling of

homebuyers who actually purchase an

AHP-assisted unit;

(ii) The cost of the counseling has not

been covered by another funding source,

including the member; and

(iii) The homeownership set-aside

funds are used to pay only for the

amount of such reasonable and

customary costs that exceeds the highest

amount the member has spent annually

on homebuyer counseling costs within

the preceding three years. 12 CFR

951.5(a)(7).

By contrast, § 951.5(b)(5) of the

existing AHP regulation requires

satisfaction of only the first two of the

above three criteria in authorizing the

use of AHP subsidies to pay for

counseling costs under the competitive

AHP application program. 12 CFR

951.5(b)(5). The Banks maintain that the

criterion in paragraph (a)(7)(iii) above

should be removed so that the criteria

applicable to the use of AHP funds for

counseling costs are the same under

both the homeownership set-aside and

competitive AHP application programs.

The criterion in paragraph (a)(7)(iii)

was intended to prevent

homeownership set-aside funds from

being used to pay for counseling costs

that, in the absence of such funds,

customarily would be funded by

members participating in a

homeownership set-aside program. In

this way, AHP funds would be used to

expand the pool of resources available

to pay for counseling costs, rather than

simply replace existing sources of

funding for counseling costs.

The Banks maintain that this

requirement is difficult and costly to

enforce. Moreover, the requirement may

actually reduce potential participation

by members in homeownership setaside programs because of members’

concerns about liability if the

accounting for costs is not accurate. In

addition, since the competitive AHP

application program does not have a

comparable requirement, it is possible

that AHP subsidies are already being

used under that program to pay for

counseling costs that the member,

sponsor or another funding source

would otherwise have funded.

The Finance Board recognizes that

homebuyer counseling is vital to

ensuring that AHP subsidies are used

successfully to provide homeownership

opportunities for low- and moderateincome households. The Finance Board

is persuaded that assurance that

homebuyers will get such counseling,

regardless of how it is funded,

outweighs concerns that AHP subsidies

may be funding counseling costs that

would otherwise be paid for by another

funding source. Accordingly, for the

reasons discussed above, the proposed

rule would remove the additional

homeownership set-aside counseling

criterion contained in § 951.5(a)(7)(iii).

23866 Federal Register / Vol. 66, No. 91 / Thursday, May 10, 2001 / Proposed Rules

1Section 940.2 states that ‘‘[t]he mission of the

Banks is to provide to their members and associates

financial products and services, including but not

limited to advances, that assist and enhance such

members’ and associates’ financing of:

(a) Housing, including single-family and multifamily housing serving consumers at all income

levels; and

(b) Community lending.’’

12 CFR 940.2 (emphasis added).

B. Advisory Council Membership—

§ 951.4

Section 951.4(f) of the existing AHP

regulation uses two terms—‘‘community

investment’’ and ‘‘community

development’’—in describing the role of

the Advisory Councils in this area.

Specifically, § 951.4(f)(1) provides that

representatives of the board of directors

of each Bank shall meet with the

Advisory Council at least quarterly to

obtain the Advisory Council’s advice on

ways in which the Bank can better carry

out its housing finance and community

investment mission, including advice

on the low- and moderate-income

housing and community investment

programs and needs in the Bank’s

District. Section 951.4(f)(3) provides

that each Advisory Council shall submit

to the Finance Board annually by March

1 its analysis of the low- and moderateincome housing and community

development activity of the Bank by

which it is appointed.

The proposed rule would replace the

terms community investment and

community development, wherever they

appear, with the term community

lending, which encompasses both terms

and is the term used in the Finance

Board’s recently adopted mission

statement for the Banks. See 12 CFR

940.2.1 Community lending is defined

in part 900 of the Finance Board’s

existing regulations as ‘‘providing

financing for economic development

projects for targeted beneficiaries, and,

for community financial institutions,

purchasing or funding small business

loans, small farm loans or small agribusiness loans, as defined in § 950.1 of

this chapter.’’ 12 CFR 900.1.

In addition, since the Advisory

Councils are required to give advice on

community lending, as well as housing

finance, matters, the proposed rule

would revise § 951.4(a) to provide that

members may be drawn from

community and not-for-profit

organizations actively involved in

providing or promoting community

lending in the Bank’s District, and

would revise § 951.4(b) to provide that,

in appointing Advisory Council

members, a Bank may give

consideration to the diversity of

community lending needs and activities

within the Bank’s District.

C. Reconciliation of AHP Fund—

§ 951.8(c)(3)(ii)

Section 951.8(c)(3)(ii) of the existing

AHP regulation provides that if a Bank

reduces the amount of AHP subsidy

approved for a project, the amount of

such reduction shall be returned to the

Bank’s AHP fund. 12 CFR 951.8(c)(3)(ii).

Section 951.8(c)(3)(ii) further provides

that if a Bank increases the amount of

AHP subsidy approved for a project, the

amount of such increase shall be drawn

first from any currently uncommitted or

repaid AHP subsidies and then from the

Bank’s required AHP contribution for

the next year. Id. This section is

included under the overall heading for

paragraph (c)(3), which addresses

changes in the approved AHP subsidy

amount where a direct subsidy is used

to write down prior to closing the

principal amount or interest rate on a

loan. Therefore, the requirements in

paragraph (c)(3)(ii) would appear to

apply only in cases where a direct

subsidy is used to write down prior to

closing the principal amount or interest

rate on a loan.

In practice, the Banks have returned

to the AHP fund the amount of any

reduction in AHP subsidy approved for

a project under the competitive AHP

application program, regardless of the

reason for the reduction, such as a

project modification or a change in a

project’s sources and uses of funds. The

question has arisen whether the

provision in paragraph (c)(3)(ii)

regarding the funding of a subsidy

increase should apply to an increase in

approved AHP subsidy for a project

modification that does not involve a

direct subsidy writedown. A Bank has

indicated that, in its district, demand for

increases in approved AHP subsidies for

project modifications not involving

direct subsidy writedowns is now

exceeding the amount of repaid or decommitted AHP subsidies available to

fund such modifications. Therefore, the

Bank would like to be able to fund such

subsidy increases from the Bank’s

required AHP contribution for the next

year.

If a Bank is permitted to use

uncommitted AHP funds from the

following year, before such funds are

made available under the competitive

AHP application program for that year,

there will be fewer AHP funds available

for new projects to be approved under

the competitive AHP application

program for that year. However, the

overall effect on the amount of AHP

funds available for the following year is

not likely to be significant. Moreover,

funding a new project in the next year,

as opposed to funding a modification of

an existing project from a prior year,

would not necessarily result in

producing more affordable housing, as

there is no assurance that the new

project ultimately will go forward. It is

important that AHP funding be made

available for modifications of existing

projects that are meeting the goals of the

AHP. The ability of an approved project

to continue arguably should not be

jeopardized simply because

uncommitted AHP funds are not

available for modifications in the

current year. Since the existing AHP

regulation already allows the Banks to

commit funds from the following year’s

homeownership set-aside allocation to

fund current year needs under the

Banks’ homeownership set-aside

programs, the Banks arguably should

have similar flexibility in funding

subsidy increases for project

modifications approved under the

competitive AHP application program.

Finally, the decision whether to approve

an increase in AHP subsidy for a project

modification is within the discretion of

each Bank. See 12 CFR 951.7. If a Bank

does not want to fund project

modifications with subsidies from the

next year’s AHP allocation, it does not

have to approve the project

modifications.

Accordingly, for the reasons

discussed above, the proposed rule

would make § 951.8(c)(3)(ii) applicable

to any reduction or increase in the

amount of AHP subsidy approved for a

project, regardless of whether a direct

subsidy writedown is involved, by

redesignating this paragraph as

§ 951.8(c)(4). The Banks, therefore,

would be able to fund subsidy increases

for project modifications using subsidies

drawn first from any currently

uncommitted or repaid AHP subsidies,

and then from the Bank’s required AHP

contribution for the next year.

D. Initial Monitoring Requirements—

§ 951.10

1. Owner-Occupied Project Sponsor

Annual Certifications—§ 951.10(a)(1)(ii)

Section 951.10(a)(1)(ii) of the existing

AHP regulation provides that where

AHP subsidies are used to finance the

purchase of owner-occupied units, the

project sponsor must certify annually to

the member and the Bank, until all

approved AHP subsidies are provided to

eligible households in the project, that

those households receiving AHP

subsidies during the year were eligible

households, and such certifications

shall be supported by household income

verification documentation maintained

by the project sponsor and available for

Federal Register / Vol. 66, No. 91 / Thursday, May 10, 2001 / Proposed Rules 23867

review by the member or the Bank. 12

CFR 951.10(a)(1)(ii).

The Banks maintain that this project

sponsor certification requirement is not

necessary because the certification

merely reiterates more extensive

documentation of income eligibility

previously provided by the project

sponsor to the Bank and member at the

time of each request for disbursement of

AHP funds from the Bank. Under the

existing AHP regulation, a Bank is

required to verify prior to each

disbursement of AHP subsidies for an

approved project that the project meets

the eligibility requirements of § 951.5(b)

and all obligations committed to in the

approved AHP application. See 12 CFR

951.5(b), 951.8(c)(2). Because the project

sponsor’s annual certification is based

on the information provided to the Bank

at the time of disbursement requests, the

certification requirement in

§ 951.10(a)(1)(ii) does not add any new

information or independent verification

to the monitoring process.

Accordingly, for the reasons

discussed above, the proposed rule

would remove the project sponsor

certification requirement from

§ 951.10(a)(1)(ii).

Section 951.10(b)(1)(ii) of the existing

AHP regulation also requires the

member, within one year after

disbursement to a project of all

approved AHP subsidies, to review the

project documentation and make

certifications to the Bank on the use of

the AHP subsidies and the existence of

deed restrictions or other legally

enforceable retention agreements and

mechanisms. See 12 CFR

951.10(b)(1)(ii). Section 951.10(c)(1) of

the existing AHP regulation requires

each Bank to review the documentation

for a sample of projects and units to

determine income-eligibility, eligible

uses, reasonable and customary costs,

financial feasibility and the existence of

deed restrictions or other legally

enforceable retention agreements or

mechanisms. See 12 CFR 951.10(c)(1).

Therefore, in order for the member

and Bank to be able to continue

reviewing project documentation

pursuant to these sections, the proposed

rule would retain the requirement in

§ 951.10(a)(1)(ii) that the project sponsor

maintain household income verification

documentation available for review by

the member or the Bank.

2. Member Certification Within the First

Year of Rental Project Completion—

§ 951.10(b)(2)(ii)

Section 951.10(b)(2)(ii) of the existing

AHP regulation provides that within the

first year after completion of an AHPassisted rental project, the member must

review the project documentation and

make a certification to the Bank on

project habitability, and tenant rents

and income targeting commitments. See

12 CFR 951.10(b)(2)(ii). The Banks

maintain that this member certification

requirement is essentially redundant

with the requirement in

§ 951.10(a)(2)(ii) that the owners of

rental projects make a certification to

the member on the same items. See 12

CFR 951.10(a)(2)(ii).

Since the member is essentially

duplicating the certification already

made by the project owner, and the

project owner is also certifying to the

Bank, it seems reasonable to eliminate

the member certification requirement

and simply retain the project owner

certification to the Bank. Accordingly,

the proposed rule would remove the

member certification requirement of

§ 951.10(b)(2)(ii), as well as the

references to the member contained in

§ 951.10(a)(2)(ii).

III. Paperwork Reduction Act

The current information collection

contained in the existing AHP

regulation has been approved by the

Office of Management and Budget

(OMB) and assigned OMB control

number 3069–0006, with an expiration

date of January 31, 2003. The Finance

Board has submitted to OMB for its

approval an analysis of the proposed

revisions to the collection of

information contained in §§ 951.3(a)(1),

951.10(a)(1)(ii), and 951.10(b)(2)(ii) of

the proposed rule, described more fully

in part II of the SUPPLEMENTARY

INFORMATION. The proposed increase in

the maximum allowable annual

homeownership set-aside amount under

§ 951.3(a)(1) of the proposed rule is

expected to result in an increase in

applications for such funds. The

proposed elimination of the project

sponsor and member certification

requirements in §§ 951.10(a)(1)(ii) and

951.10(b)(2)(ii) of the proposed rule

would reduce the information collection

requirement for such parties. The Banks

use the information collection in the

AHP regulation to determine whether

respondents satisfy statutory and

regulatory requirements under the AHP.

Responses are mandatory and are

required to obtain or retain a benefit.

See 12 U.S.C. 1426.

Likely respondents and/or record

keepers are Banks, Bank members,

project sponsors, and project owners.

Potential respondents are not required

to respond to the collection of

information unless the regulation

collecting the information displays a

currently valid control number assigned

by OMB. See 44 U.S.C. 3512(a).

The estimated annual reporting and

recordkeeping hour burden for the AHP

regulation with the proposed changes is:

a. Number of respondents—7,720

b. Total annual responses—10,749

Percentage of these responses collected

electronically—0

c. Total annual hours requested—65,461

d. Current OMB inventory—64,274

e. Difference—1,187

The estimated annual reporting and

recordkeeping cost burden for the AHP

regulation with the proposed changes is:

a. Total annualized capital/startup costs—

0

b. Total annual costs (O&M)—0

c. Total annualized cost requested—

$2,169,795

d. Current OMB inventory—$2,118,170

e. Difference—$51,625

The Finance Board will accept written

comments concerning the accuracy of

the burden estimates and suggestions for

reducing the burden at the address

listed above.

Comments regarding the proposed

collection of information may be

submitted in writing to the Office of

Information and Regulatory Affairs of

OMB, Attention: Desk Officer for

Federal Housing Finance Board,

Washington, DC 20503 by July 9, 2001.

IV. Regulatory Flexibility Act

The proposed rule would apply only

to the Banks, which do not come within

the meaning of ‘‘small entities,’’ as

defined in the Regulatory Flexibility Act

(RFA). See 5 U.S.C. 601(6). Thus, in

accordance with section 605(b) of the

RFA, 5 U.S.C. 605(b), the Finance Board

hereby certifies that the proposed rule,

if promulgated as a final rule, will not

have a significant economic impact on

a substantial number of small entities.

List of Subjects in 12 CFR Part 951

Community development, Credit,

Federal home loan banks, Housing,

Reporting and recordkeeping

requirements.

Accordingly, the Finance Board

hereby proposes to amend part 951, title

12, chapter IX, Code of Federal

Regulations, as follows:

PART 951—AFFORDABLE HOUSING

PROGRAM

1. The authority citation for part 951

continues to read as follows:

Authority: 12 U.S.C. 1430(j).

2. Amend § 951.3(a)(1) to read as

follows:

§ 951.3 Operation of Program and

adoption of AHP implementation plan.

(a) Allocation of AHP contributions—

(1) Homeownership set-aside programs.

23868 Federal Register / Vol. 66, No. 91 / Thursday, May 10, 2001 / Proposed Rules

Each Bank, after consultation with its

Advisory Council, may set aside

annually, in the aggregate, up to the

greater of $3.0 million or 25 percent of

its annual required AHP contribution to

provide funds to members participating

in the Bank’s homeownership set-aside

programs, pursuant to the requirements

of this part. Any homeownership setaside funds that are not committed or

used by the end of the year in which

they were set aside shall be committed

or used by the end of such year to fund

project modifications or the next highest

scoring AHP applications in the Bank’s

final funding period of the year for its

competitive application program. In

cases where the amount of

homeownership set-aside funds applied

for by members in a given year exceeds

the amount available for that year, a

Bank may allocate up to the greater of

$3.0 million or 25 percent of its annual

required AHP contribution for the

subsequent year to the current year’s

homeownership set-aside programs

pursuant to written policies adopted by

the Bank’s board of directors. Beginning

in 2002 and for subsequent years, the

maximum dollar limits set forth in this

paragraph shall be adjusted annually by

the Finance Board to reflect any

percentage increase in the preceding

year’s Consumer Price Index (CPI) for all

urban consumers, as published by the

Department of Labor. Each year, as soon

as practicable after the publication of

the previous year’s CPI, the Finance

Board shall publish notice by Federal

Register, distribution of a

memorandum, or otherwise, of the CPIadjusted limits on the maximum setaside dollar amount. A Bank may

establish one or more homeownership

set-aside programs pursuant to written

policies adopted by the Bank’s board of

directors. A Bank’s board of directors

shall not delegate to Bank officers or

other Bank employees the responsibility

for adopting such policies.

* * * * *

§ 951.4 [Amended]

3. Amend § 951.4 by:

a. In paragraph (a), adding ‘‘and/or

community lending’’ after ‘‘housing’’;

b. In paragraph (b), adding ‘‘and/or

community lending’’ after ‘‘housing’’;

c. In paragraph (f)(1), removing

‘‘community investment’’ wherever it

appears and adding, in its place,

‘‘community lending’’; and

d. In paragraph (f)(3), removing

‘‘community development’’ and adding,

in its place, ‘‘community lending’’.

§ 951.5 [Amended]

4. Amend § 951.5 by removing

paragraph (a)(7)(iii).

§ 951.8 [Amended]

5. Amend § 951.8(c)(3) by:

a. Removing the heading for

paragraph (c)(3)(i);

b. Removing paragraph designation

(c)(3)(i); and

c. Redesignating paragraph (c)(3)(ii) as

paragraph (c)(4).

6. Amend § 951.10 by:

a. Revising paragraph (a)(1)(ii);

b. In paragraph (a)(2)(ii), removing

‘‘the member and’’ and ‘‘the member or’’

wherever they appear; and

c. In paragraph (b)(2), removing

paragraph (b)(2)(ii), and removing

paragraph designation (b)(2)(i).

The revision reads as follows:

§ 951.10 Initial monitoring requirements.

(a) * * *

(1) * * *

(ii) Where AHP subsidies are used to

finance the purchase of owner-occupied

units, the project sponsor must maintain

household income verification

documentation available for review by

the member or the Bank.

* * * * *

Dated: May 2, 2001.

By the Board of Directors of the Federal

Housing Finance Board.

Allan I. Mendelowitz,

Chairman.

[FR Doc. 01–11706 Filed 5–9–01; 8:45 am]

BILLING CODE 6725–01–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[REG–101739–00]

RIN–1545–AX75

Clarification of Entity Classification

Rules; Hearing Cancellation

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Cancellation of notice of public

hearing on proposed rulemaking.

SUMMARY: This document provides

notice of cancellation of a public

hearing on proposed regulations relating

to section 7701 that address the Federal

tax classification of a business entity

wholly owned by a foreign government

and provide that a nonbank entity that

is wholly owned by a foreign bank

cannot be disregarded as an entity

separate from its owner for purposes of

applying the special rules of the Internal

Revenue Code applicable to banks.

DATES: The public hearing originally

scheduled for May 16, 2001, at 10 a.m.,

is cancelled.

FOR FURTHER INFORMATION CONTACT:

Sonya M. Cruse of the Regulations Unit

at (202) 622–7180 (not a toll-free

number).

SUPPLEMENTARY INFORMATION: A notice

of proposed rulemaking and notice of

public hearing that appeared in the

Federal Register on Friday, January 12,

2001, (66 FR 2854), announced that a

public hearing was scheduled for May

16, 2001, at 10 a.m., in room 6718. The

subject of the public hearing is proposed

regulations under section 7701 of the

Internal Revenue Code. The public

comment period for these regulations

expired on April 25, 2001.

The notice of proposed rulemaking

and notice of public hearing, instructed

those interested in testifying at the

public hearing to submit a request to

speak and an outline of the topics to be

addressed. As of Friday, May 4, 2001,

no one has requested to speak.

Therefore, the public hearing scheduled

for May 16, 2001, is cancelled.

Cynthia E. Grigsby,

Chief, Regulations Unit, Office of Special

Counsel (Modernization & Strategic

Planning).

[FR Doc. 01–11842 Filed 5–9–01; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

30 CFR Part 904

[SPATS No. AR–038–FOR]

Arkansas Regulatory Program

AGENCY: Office of Surface Mining

Reclamation and Enforcement, Interior.

ACTION: Proposed rule; reopening and

extension of public comment period on

proposed amendment.

SUMMARY: The Office of Surface Mining

Reclamation and Enforcement (OSM) is

announcing receipt of revisions to a

previously proposed amendment to the

Arkansas regulatory program (Arkansas

program) under the Surface Mining

Control and Reclamation Act of 1977

(SMCRA). The revisions concern

submission and processing of requests

for valid existing rights determinations;

interpretative rule related to subsidence

due to underground coal mining in

areas designated by Act of Congress;

road systems; public notices of filing of

permit applications; and legislative

public hearings. Arkansas intends to

revise its program to be consistent with

the corresponding Federal regulations.