[Federal Register Volume 74, Number 90 (Tuesday, May 12, 2009)]
[Proposed Rules]
[Pages 22145-22147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11079]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 36

RIN 2900-AN26


Loan Guaranty: Assistance to Eligible Individuals in Acquiring 
Specially Adapted Housing; Cost-of-Construction Index

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Department of Veterans 
Affairs' (VA's) Loan Guaranty regulations concerning assistance to 
eligible individuals in acquiring specially adapted housing. The 
proposed change would implement provisions of the Housing and Economic 
Recovery Act of 2008, which authorized VA to provide for automatic 
annual increases in the dollar amounts available to certain Specially 
Adapted Housing grant recipients.

DATES: Comments must be received on or before June 11, 2009.

ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand-delivery to Director, Regulations 
Management (02REG), Department of Veterans Affairs, 810 Vermont Ave., 
NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AN26--Loan Guaranty: Assistance to Eligible Individuals in 
Acquiring Specially Adapted Housing; Cost-of-Construction Index.'' 
Copies of comments received will be available for public inspection in 
the Office of Regulation Policy and Management, Room 1063B, between the 
hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays). 
Please call (202) 461-4902 (this is not a toll-free number) for an 
appointment. In addition, during the comment period, comments may be 
viewed online through the Federal Docket Management System (FDMS) at 
http://www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Katherine Faliski, Assistant Director 
for Loan Policy and Valuation, Loan Guaranty Service (26), Veterans 
Benefits Administration, Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420, (202) 461-9527. (This is not a toll-
free telephone number.)

SUPPLEMENTARY INFORMATION: The Housing and Economic Recovery Act of 
2008, Public Law 110-289, directed the Secretary of Veterans Affairs to 
establish a residential home cost-of-construction index for the purpose 
of increasing certain Specially Adapted Housing (SAH) grant amounts. 
The law left it to the Secretary's discretion to determine whether to 
develop a new index or to select one from the private sector. It 
required that any index selected, however, must reflect a uniform, 
national average change in the cost of residential home construction, 
determined on a calendar-year basis. This proposed rule identifies the 
index the Secretary plans to select, explains how the increase would be 
calculated, and requires the Secretary to publish annually in the 
Federal Register the aggregate amounts of assistance available.

Selection of a Cost-of-Construction Index

    The Department of Veterans Affairs (VA) believes that an existing 
private sector index is appropriate for the purposes of 38 U.S.C. 
2102(d). VA

[[Page 22146]]

believes this is preferable to establishing a VA-specific index because 
VA does not have the necessary resources and expertise to continuously 
monitor the costs of construction nationwide.
    This proposed rule identifies the Turner Building Cost Index (TBCI) 
as the index the Secretary plans to adopt. The TBCI has been prepared 
for more than 80 years. It tracks building costs and price trends 
nationwide. The factors considered in calculating the index include 
labor rates, productivity, material prices, and market conditions. As a 
result of TBCI's emphasis on the costs of labor and materials, rather 
than property values or sales prices, it is best suited to reflect the 
cost of acquiring the adaptations needed by the veterans and 
servicemembers served by the SAH program.
    VA considered a number of alternatives to the TBCI. These 
alternatives included three indices computed by the United States 
Census Bureau: (1) The Laspeyres Price Index, which tracks increases in 
the sales price of homes while keeping housing quality constant; (2) 
the Paasche Index, which also measures changes in sales prices over 
time; and (3) the Fisher Ideal Index, which is a geometric average of 
the Laspeyres and Paasche Indices. Because all three Census Bureau 
indices track home sales prices, rather than construction costs, VA 
does not believe that they are as well suited for use with the SAH 
program as the TBCI. Home sales prices have little bearing on the cost 
of making adaptations to an eligible individual's home. Although SAH 
grants may be used to acquire a suitably adapted home, they are more 
often used to adapt an existing home.
    VA also considered the Residential Cost Index published by 
Whitestone Research. The Whitestone Research Residential Cost Index 
(WRRCI) is based on multiple cost factors. Because the WRRCI tracks 
many cost factors that are not related to the labor and materials costs 
of making adaptations to an eligible individual's home, VA does not 
believe the WRRCI is as well suited to the SAH program as the TBCI.

Calculating the Aggregate Amounts of Assistance Available

    On October 1 of each year, beginning with 2009, the Secretary must 
increase the aggregate amounts of assistance available for SAH grants 
authorized under 38 U.S.C. 2101(a) and (b). In accordance with 38 
U.S.C. 2101(e), the increase will equal the percentage by which the 
cost-of-construction index increased between the two preceding calendar 
years. In other words, for the adjustment effective October 1, 2009, 
the Secretary must calculate the percentage by which the TBCI increased 
between calendar years 2007 and 2008. On October 1, the Secretary must 
increase the grant amounts by that amount. If, in any given calendar 
year, the TBCI remains flat or decreases, the aggregate amounts of 
assistance available will not change.

Publication in the Federal Register

    Section 2102(e) of title 38, U.S.C., requires that the annual 
increase in the aggregate amounts of assistance available occur on 
October 1 of each year. The proposed rule would require that the 
Secretary publish the resulting figures in the Federal Register by 
September 30. VA believes that this would provide adequate notice to 
the public of the new aggregate amounts of assistance available each 
year. (Note: After publication, the figures also would be available on 
the Loan Guaranty Web site at http://www.homeloans.va.gov/sah.htm.)

Administrative Procedure Act

    The Secretary has determined that there is good cause to limit the 
public comment period on this rule to 30 days. This proposed rule is 
necessary to implement Congress' directive to establish a cost-of-
construction index to implement statutorily mandated increases by 
October 1, 2009. Therefore, in order to comply with this statute, the 
Secretary has provided a 30-day comment period for this rule.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any year. This proposed rule would have no such effect on 
State, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This document contains no provisions constituting collections of 
information.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Executive 
Order classifies a regulatory action as a ``significant regulatory 
action,'' requiring review by the Office of Management and Budget (OMB) 
unless OMB waives such a review, if it is a regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    The economic, interagency, budgetary, legal, and policy 
implications of this proposed rule have been examined, and it has been 
determined not to be a significant regulatory action under Executive 
Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601 et seq. This proposed rule will directly affect only 
individuals and will not directly affect small entities. Therefore, 
pursuant to 5 U.S.C. 605(b), this proposed rule is exempt from the 
initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this document are 64.106, Specially Adapted 
Housing for Disabled Veterans; and 64.118, Veterans Housing--Direct 
Loans for Certain Disabled Veterans.

Lists of Subjects in 38 CFR Part 36

    Condominiums, Housing, Indians, Individuals with disabilities, Loan 
programs--housing and community development, Loan programs--Indians, 
Loan programs--veterans, Manufactured homes, Mortgage insurance, 
Reporting and recordkeeping requirements, Veterans.


[[Page 22147]]


    Approved: April 17, 2009.
John R. Gingrich,
Chief of Staff, Department of Veterans Affairs.

    For the reasons set out in the preamble, VA proposes to amend 38 
CFR part 36 (Subpart C) as set forth below.

PART 36--LOAN GUARANTY

Subpart C--Assistance to Certain Disabled Veterans in Acquiring 
Specially Adapted Housing

    1. The authority citation for part 36 continues to read as follows:

    Authority:  38 U.S.C. 501 and as otherwise noted.

    2. Add Sec.  36.4412 to read as follows:


Sec.  36.4412  Annual adjustments to the aggregate amount of assistance 
available.

    (a) On October 1 of each year, the Secretary will increase the 
aggregate amounts of assistance available for grants authorized under 
38 U.S.C. 2101(a) and 2101(b). Such increase will be equal to the 
percentage by which the Turner Building Cost Index for the most recent 
calendar year exceeds that of the next preceding calendar year.
    (b) Notwithstanding paragraph (a) of this section, if the Turner 
Building Cost Index for the most recent full calendar year is equal to 
or less than the next preceding calendar year, the percentage increase 
will be zero.
    (c) No later than September 30 of each year, the Secretary will 
publish in the Federal Register the aggregate amounts of assistance 
available for the upcoming fiscal year.

(Authority: 38 U.S.C. 2102(e))

[FR Doc. E9-11079 Filed 5-11-09; 8:45 am]
BILLING CODE 8320-01-P