Federal Register / Vol. 60, No. 76 / Thursday, April 20, 1995 / Proposed Rules 19695

(1) For Model BAe 146–100A airplanes:

Perform the inspection within 6 months after

the effective date of this AD, or prior to the

accumulation of 30,000 total landings,

whichever occurs later. Repeat the inspection

thereafter at intervals not to exceed 6,000

landings.

(2) For Model BAe 146–200A airplanes,

and for Model BAe 146–300A airplanes other

than those airplanes identified in paragraph

(a)(3) of this AD: Perform the inspection

within 6 months after the effective date of

this AD, or prior to the accumulation of

24,000 total landings, whichever occurs later.

Repeat the inspection thereafter at intervals

not to exceed 6,000 landings.

(3) For Model BAe 146–300A airplanes

having serial numbers E3207, E3212, E3214,

E3216, E3218, E3219, and E3222: Perform the

inspection within 6 months after the effective

date of this AD, or prior to the accumulation

of 13,000 total landings, whichever occurs

later. Repeat the inspection thereafter at

intervals not to exceed 4,000 landings.

(b) If any cracking is found during any

inspection required by paragraph (a) of this

AD, prior to further flight, repair in

accordance with a method approved by the

Manager, Standardization Branch, ANM–113,

FAA, Transport Airplane Directorate.

(c) Accomplishment of the modification of

each affected bolt position in accordance

with Avro International Aerospace

Inspection Service Bulletin S.B. 53–130,

dated May 10, 1994, prior to the embodiment

times shown in Table ’A’ of that service

bulletin, constitutes terminating action for

the repetitive inspections required by

paragraph (a) of this AD.

Note 2: Repair Instruction Leaflet (RIL)

HC536H9159 provides detailed instructions

for modification of all bolt positions in the

affected areas of frame 29.

(d) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager,

Standardization Branch, ANM–113, FAA

Transport Airplane Directorate. Operators

shall submit their requests through an

appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Standardization

Branch, ANM–113.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Standardization Branch,

ANM–113.

(e) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Issued in Renton, Washington, on April 14,

1995.

John J. Hickey,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 95–9770 Filed 4–19–95; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

Office of the Assistant Secretary for

Housing-Federal Housing

Commissioner

24 CFR Part 811

[Docket No. R–95–1779; FR–3692–P–01]

RIN 2502–AG33

Refunding of Tax-Exempt Obligations

Issued to Finance Section 8 Housing

AGENCY: Office of the Assistant

Secretary for Housing-Federal Housing

Commissioner, HUD.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

amend the Department’s regulations to

provide the policy and procedural

guidelines for Section 8 bond

refundings under which local agency

issuers of Section 11(b) tax-exempt

bonds are encouraged to refinance

projects at lower interest rates.

DATES: Comments due date June 19,

1995.

ADDRESSES: Interested persons are

invited to submit comments regarding

this proposed rule to the Office of

General Counsel, Rules Docket Clerk,

room 10276, Department of Housing and

Urban Development, 451 Seventh Street,

SW., Washington, DC, 20410. Facsimile

(FAX) are not acceptable. A copy of

each communication submitted will be

available for public inspection and

copying on weekdays between 7:30 a.m.

and 5:30 p.m. at the above address.

FOR FURTHER INFORMATION CONTACT:

James B. Mitchell, Director, Financial

Services Division, Department of

Housing and Urban Development, 470

L’Enfant Plaza East, room 3120,

Washington, DC 20024; telephone (202)

755–7450, ext. 125 (TDD number for the

hearing- and speech-impaired (202)

708–4594).

SUPPLEMENTARY INFORMATION:

I. Background

Since May 1989, the Department has

conducted on an ad hoc basis a program

of Section 8 assisted housing bond

refundings, under which local agency

issuers of Section 11(b) tax-exempt

bonds (24 CFR part 811, subpart A) are

encouraged to refinance projects at

lower interest rates to reduce Section 8

subsidy. To date, over 400 bond

refunding transactions have closed in

which bonds issued during the interest

rate peak years of 1980–1983 are

prepaid by a new bond issue at

substantially lower interest cost,

resulting in subsidy recapture of over

$500 million.

The Section 11(b) regulations under

which HUD issues its Notification of

Tax Exemption were designed for the

original financing of new construction

or substantial rehabilitation of 100

percent or partially subsidized Section 8

rental housing. These rules do not in all

particulars fit a refinancing transaction

where construction funding is not an

element. Therefore, each refunding

closing transaction has required that

bond counsel for the issuing agency

obtain from the Assistant Secretary for

Housing-FHA Commissioner a

Notification of Tax Exemption that

waives several sections of 24 CFR part

811, subpart A. This waiver process

elevates to the Assistant Secretary level

a programmatic approval that has

become routine and perfunctory in

recent years. In addition, an Office of

Inspector General finding (Interim Audit

Report 93–HQ–119–0004) has criticized

the excessive reliance on regulatory

waivers to accomplish bond refundings.

In view of the relatively low interest

rate environment that has prevailed

since 1987, HUD has determined that

bond refundings should be treated as an

operational program, rather than a

temporary market intervention

dependent upon the economic cycle.

The proposed rule would codify the

policy and procedural guidelines that

have governed Section 8 bond

refundings since 1989, and would

provide a self-contained refunding

regulation intended to dispense with the

need for most waivers.

II. Other Matters

A. Environmental Impact

In accordance with 40 CFR 1508.4 of

the regulations of the Council on

Environmental Quality and 24 50.20(k)

of the HUD regulations, the policies and

procedures contained in this proposed

rule relate only to HUD administrative

procedures and, therefore, are

categorically excluded from the

requirements of the National

Environmental Policy Act.

B. 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 proposed rule will not have

federalism implications and, thus, are

not subject to review under that order.

C. Executive Order 12606, The Family

The General Counsel, as the

Designated Official under Executive

Order 12606, The Family, has
19696 Federal Register / Vol. 60, No. 76 / Thursday, April 20, 1995 / Proposed Rules

determined that this proposed rule does

not have potential for 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 proposed rule, as

those policies and programs relate to

family concerns.

D. Regulatory Flexibility Act

The Secretary, in accordance with the

Regulatory Flexibility Act has reviewed

and approved this proposed rule, and in

so doing certifies that this proposed rule

will not have a significant economic

impact on a substantial number of small

entities. There are no anti-competitive

discriminatory aspects of the rule with

regard to small entities, and there are

not any unusual procedures that would

need to be complied with by small

entities.

E. Regulatory Agenda

This proposed rule was listed as

sequence number 1779 in the

Department’s Semiannual Agenda of

Regulations published on November 14,

1994 (59 FR 57632, 57634) in

accordance with Executive Order 12866

and the Regulatory Flexibility Act.

List of Subjects in 24 CFR Part 811

Public housing, Securities, Taxes.

Accordingly, 24 CFR part 811 would

be amended as follows:

PART 811—TAX EXEMPTION OF

OBLIGATIONS OF PUBLIC HOUSING

AGENCIES AND RELATED

AMENDMENTS

1. The authority citation for 24 CFR

part 811 would be revised to read as

follows:

Authority: 42 U.S.C. 1437, 1437a, 1437c,

1437f, and 3535(d).

2. A new § 811.119 would be added

to subpart A, to read as follows:

§ 811.119 Refunding of obligations issued

to finance Section 8 projects.

(a) This section states the terms and

conditions under which HUD will

approve tax-exempt financing or

defeasance of outstanding permanent

obligations issued under Section 11(b)

of the Act or the Internal Revenue Code

to refund outstanding permanent

obligations which financed new

construction or substantial

rehabilitation of Section 8 projects,

including fully and partially assisted

projects.

(b) Other sections of part 811, subpart

A, shall not apply to bond refundings

except that compliance with the

following is required: §§ 811.101,

811.102, 811.103, 811.104, 811.105,

811.106(d), 811.108(a)(2)(ii),

811.108(a)(2)(iii), 811.108(b)(3)(ii),

811.108(b)(3)(iii), and 811.114(d),

except as applicable provisions are

modified in this section.

(c) Compliance with §§ 811.104 and

811.105 shall not be required for

refunding obligations which derive tax

exemption from authority other than

Section 11(b) of the Act. In the case of

bonds issued by State Agencies

qualified under 24 CFR part 883 to

refund bonds which financed projects

assisted pursuant to 24 CFR part 883,

compliance with the provisions of 24

CFR part 883 shall be required to the

extent bond counsel finds such

provisions applicable to a bond

refunding transaction, as distinguished

from requirements related to original

financing of new construction or

substantial rehabilitation of Section 8

housing. HUD requires compliance with

the prohibition on duplicative fees

contained in § 883.606 of this chapter.

(d) No agency shall issue obligations

to refund outstanding 11(b) obligations

until the Office of the Assistant

Secretary for Housing sends the

financing agency a Notification of Tax

Exemption based on approval of the

proposed refunding’s terms and

conditions as conforming to this subpart

A’s requirements, including continued

operation of the project as housing for

low-income families, and where

possible, reduction of Section 8

assistance payments through lower

contract rents or equivalent means. The

agency shall submit such

documentation as HUD determines is

necessary for review and approval of the

refunding transaction. Upon conclusion

of the sale of refunding bonds, the

results must be certified to HUD by

bond counsel, including a schedule of

the specific amount of savings in

Section 8 assistance where applicable,

and a final statement of Sources and

Uses.

(e) (1) HUD approval of the terms and

conditions of a Section 8 refunding

proposal requires evaluation by HUD

Central Office of the reasonableness of

the terms of the Agency’s proposed

financing plan, including projected

reductions in project debt service where

warranted by market conditions and

bond yields. This evaluation shall

determine that the proposed amount of

refunding obligations is the amount

needed to pay off outstanding bonds,

fund a debt service reserve to the extent

required by bond rating agencies which

rate the credit quality of the refunding

bonds, pay credit enhancement fees

acceptable to HUD and pay transaction

costs as approved by HUD according to

a sliding scale ceiling based on par

amount of refunding bond principal.

Exceptions may be approved by HUD, if

consistent with applicable statutes, in

the event that an additional issue

amount is required for project purposes.

(2) The repayment term of the

refunding bonds may not exceed the

remaining term of the project mortgage,

or in the absence of a mortgage, the

remaining term of the Housing

Assistance Payments Contract (the

‘‘HAPC’’).

(3) The bond yield may not exceed by

more than 75 basis points the 20 Bond

General Obligation Index published by

the Daily Bond Buyer for the week

immediately preceding the sale of the

bonds. An amount not to exceed onefourth of one percent annually of the

bonds may be allowed for servicing and

trustee fees.

(f) For projects placed under HAPC

between January 1, 1979, and December

31, 1984 (otherwise known as

‘‘McKinney Act Projects’’), for which a

State or local agency initiates a

refunding, the Secretary shall make

available to an eligible issuing agency

50 percent of the Section 8 savings of a

refunding, as determined by HUD on a

project-by-project basis, to be used by

the agency in accordance with the terms

of a Refunding Agreement executed by

the Agency and HUD which

incorporates the Agency’s Housing Plan

for use of savings to provide decent,

safe, and sanitary housing for very lowincome households. The Housing Plans

submitted for HUD review and approval

shall address the physical condition of

the projects participating in the

refunding which generate the McKinney

Act savings and, if necessary, provide

for correction of existing deficiencies

which cannot be funded completely by

existing project replacement reserves

and/or by a portion of refunding bond

proceeds (including reserves released

from the refunded bond’s indenture), as

approved by HUD.

(g) For refundings of Section 8

projects other than McKinney Act

Projects, and for all transactions which

substitute collateral for, but do not

redeem, outstanding obligations, the

Office of Housing in consultation with

HUD Field Office Counsel will review

the HAPC, the Trust Indenture for the

outstanding obligations, and the

applicable part 811 Regulations to

determine what HUD approvals are

required. In particular, HUD approval

must be obtained for the release of

reserves from the trust indenture of the

bonds that are being refunded, defeased,

or pre-paid. If the proposal

contemplates distribution to a non-
Federal Register / Vol. 60, No. 76 / Thursday, April 20, 1995 / Proposed Rules 19697

Federal entity of benefits of the

refinancing, such as debt service savings

and/or balances in reserves held under

the original Trust Indenture, such

proposal shall be referred to the Office

of the Assistant Secretary for Housing

for further review. HUD will consent to

release reserves, as provided by the

Trust Indenture, in an amount

remaining after correction of project

physical deficiencies and/or

replenishment of replacement reserves,

where needed, upon execution by the

project owner of a use agreement, and

amendment of a regulatory agreement, if

applicable, to extend low-income tenant

occupancy for ten years after expiration

of the HAPC. Proposed use of benefits

shall be consistent with applicable

appropriations law, the HAPC, and

other requirements applicable to the

original project financing, and the

proposed financing terms must be

reasonable in relation to bond market

yields and transaction fees, as approved

by HUD Central Office.

(h) Agencies shall have wide latitude

in the design of specific delivery

vehicles for use of McKinney Act

savings, subject to HUD audit of each

Agency’s performance in serving the

targeted income eligible population.

Savings shall be used for shelter costs of

providing housing, rental, or owneroccupied, to very low-income

households through new construction,

rehabilitation, repairs, and acquisition

with or without rehab, including

assistance to very low-income units in

mixed-income developments. Selfsufficiency services in support of very

low-income housing are also eligible,

specifically, homeownership

counseling, additional security

measures in high-crime areas,

construction job training for residents’

repair of housing units occupied by very

low-income families, and empowerment

activities designed to support formation

and growth of resident entities. Except

for the cost of providing third-party

program audit reports to HUD, eligible

costs exclude consultant fees or

reimbursement of Agency staff

expenses, even though the services may

involve programs of assistance to very

low-income families.

(i) Refunding bonds, including

interest thereon, approved under this

Section shall be exempt from all

taxation now or hereafter imposed by

the United States, and the notification of

approval of tax exemption shall not be

subject to revocation by HUD. Such

bonds shall be prepaid during the HAPC

term only under such conditions as

HUD shall require.

Dated: March 20, 1995.

Nicolas P. Retsinas,

Assistant Secretary for Housing-Federal

Housing Commissioner.

[FR Doc. 95–9727 Filed 4–19–95; 8:45 am]

BILLING CODE 4210–27–P

DEPARTMENT OF THE INTERIOR

Office of Surface Mining Reclamation

and Enforcement

30 CFR Part 913

[IL–091]

Illinois Abandoned Mine Land

Reclamation Plan

AGENCY: Office of Surface Mining

Reclamation and Enforcement (OSM),

Interior.

ACTION: Proposed rule; public comment

period and opportunity for public

hearing.

SUMMARY: OSM is announcing receipt of

a proposed amendment to the Illinois

Abandoned Mine Land Reclamation

Plan (hereinafter referred to as the

‘‘Illinois plan’’) under the Surface

Mining Control and Reclamation Act of

1977 (SMCRA). The proposed

amendment pertains to the merger of the

Illinois Abandoned Mined Lands

Reclamation Council into the newly

created Illinois Department of Natural

Resources, Office of Mines and

Minerals. The Amendment is intended

to provide formal notification to OSM of

this pending reorganization.

DATES: Written comments must be

received by 4:00 p.m., C.D.T., May 22,

1995. If requested, a public hearing on

the proposed amendment will be held

on May 15, 1995. Requests to speak at

the hearing must be received by 4:00

p.m., C.D.T., on May 5, 1995.

ADDRESSES: Written comments and

requests to speak at the hearing should

be mailed or hand delivered to James F.

Fulton, Director, at the addresses listed

below.

Copies of the Illinois plan, the

proposed amendment, a listing of any

scheduled public hearings, and all

written comments received in response

to this document will be available for

public review at the addresses listed

below during normal business hours,

Monday through Friday, excluding

holidays. Each requester may receive

one free copy of the proposed

amendment by contacting OSM’s

Springfield Field Office.

James F. Fulton, Director, Springfield

Field Office, Office of Surface Mining

Reclamation and Enforcement, 511

West Capitol, Suite 202, Springfield,

Illinois 62704, Telephone: (217) 492–

4495.

Illinois Abandoned Mined Lands

Reclamation Council, 928 South

Spring Street, Springfield, Illinois

62704, Telephone: (217) 782–0588.

FOR FURTHER INFORMATION CONTACT:

James F. Fulton, Director, Springfield

Field Office, Telephone: (217) 492–

4495.

SUPPLEMENTARY INFORMATION:

I. Background on the Illinois Plan

Title IV of SMCRA established an

Abandoned Mine Land Reclamation

(AMLR) program for the purposes of

reclaiming and restoring lands and

water resources adversely affected by

past mining. This program is funded by

a reclamation fee imposed upon the

production of coal. As enacted in 1977,

lands and waters eligible for

reclamation were those that were mined

or affected by mining and abandoned or

left in an inadequate reclamation status

prior to August 3, 1977, and for which

they were no continuing reclamation

responsibility under State or Federal

law. The AML Reclamation Act of 1990

(Pub. L. 101–508, Title VI, Subtitle A,

Nov. 5, 1990, effective Oct. 1, 1991)

amended SMCRA, 30 U.S.C. 1231 et.

seq., to provide changes in the eligibility

of project sites for abandoned mine land

expenditures. Title IV of SMCRA now

provides for reclamation of certain mine

sites where the mining occurred after

August 3, 1977. These include interim

program sites where bond forfeiture

proceeds were insufficient for adequate

reclamation and sites affected any time

between August 4, 1977, and November

5, 1990, for which there were

insufficient funds for adequate

reclamation due to the insolvency of the

bond surety. Title IV provides that a

State with an approved AMLR plan has

the responsibility and primary authority

to implement the program.

On June 1, 1982, the Secretary of the

Interior approved the Illinois plan.

Background information on the Illinois

plan, including the Secretary’s findings,

the disposition of comments, and the

approval of the plan can be found in the

June 1, 1982, Federal Register (47 FR

23886). Subsequent actions concerning

the conditions of approval and

amendments to the plan can be found at

30 CFR 913.25.

The Secretary adopted regulations at

30 CFR Part 884 that specify the content

requirements of a State reclamation plan

and the criteria for plan approval. The

regulations provide that a State may

submit to the Director proposed

amendments or revisions to the