[Federal Register Volume 63, Number 191 (Friday, October 2, 1998)]
[Notices]
[Pages 53084-53085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26387]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4170-N-18]
RIN 2577-AB74
Indian Housing Block Grant Program: Notice of Additional
Transition Requirements--Cost Limits for Former 1937 Act Development
Projects
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Notice of additional transition requirements--Cost limits for
former 1937 Act development projects.
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SUMMARY: This notice provides a grace period, up to January 1, 1999, in
which a tribe or tribally designated housing entity (TDHE) may choose
to use the Dwelling Construction and Equipment costs under the Indian
Housing Block Grant (IHBG) Program or a calculated Total Development
Cost (TDC) limitation. The purpose of this grace period is to allow for
a smooth transition and avoid hardship for tribes and TDHEs that have
progressed substantially in developing housing designs under the United
States Housing Act of 1937 (1937 Act) and are nearing construction
start.
EFFECTIVE DATE: October 2, 1998.
FOR FURTHER INFORMATION CONTACT: Bruce Knott, National Office of Native
American Programs, Department of Housing and Urban Development, 1999
Broadway, Suite 3390, Denver, CO; telephone (303) 675-1600 (this is not
a toll-free number). Hearing or speech-impaired individuals 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 Native American Housing Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) was enacted on October 26,
1996, and took effect on October 1, 1997. NAHASDA requires HUD to make
grants on behalf of Indian tribes to carry out affordable housing
activities. A final rule to implement NAHASDA and establish the IHBG
Program was
[[Page 53085]]
published on March 12, 1998, (63 FR 12334), with an effective date of
April 13, 1998.
In the final NAHASDA regulations, the committee that crafted the
portion on limitation of construction costs wanted to design as much
flexibility into the program as possible, yet still ensure that
affordable housing standards were being maintained. Because of this,
the decision was made to discontinue Total Development Cost (TDC)
limits, used under the 1937 Act development program, as TDCs limited
soft costs as well as the actual construction costs. Historically, the
TDCs were developed by first determining the actual costs of
construction (hard costs) and then multiplying by a factor to include
funds for soft costs. These hard costs, known as Dwelling Construction
and Equipment (DC&E) costs, were what the committee chose as a standard
of ensuring that construction costs remained within a modest design and
gave the tribes flexibility in other costs associated with development
of housing. This standard is established at 24 CFR 1000.156 of the
NAHASDA regulations.
Under the 1937 Act program, there are some instances where tribes
may have realized savings in the planning or administration of
developing housing, permitting them to utilize a portion of these soft
cost funds for construction purposes. If tribes have progressed
substantially in developing housing designs under the 1937 Act and are
nearing construction start, changing to a DC&E cost limitation under
NAHASDA may pose a hardship. This was not the intent of the committee
and therefore, HUD is implementing a ``grace'' period, up to January 1,
1999, in which a tribe or TDHE may elect to use TDC limits rather than
DC&E costs, to allow for a smooth transition in these situations.
II. Transition Development Cost Questions and Answers
The following questions and answers are designed to assist in
understanding these development cost transition provisions.
Question #1: My project, funded under the 1937 Act, is almost ready
to go to bid. Must I use the new DC&Es?
Answer #1: No. You may choose to use either the DC&Es, or a
calculated TDC limitation. To determine a calculated TDC, multiply the
applicable DC&E amount, determined pursuant to 24 CFR 1000.156, by
1.75. Apply this figure in the same manner that previous TDC limits
were utilized, that is, all hard and soft costs combined must come in
within the TDC limit. This method does not require that a variance
request be submitted to the Area Office of Native American Programs
(AONAP), but documentation showing that this procedure was followed
must be maintained in your files for at least three years.
Question #2: We were able to save money on planning and
administration and designed plans under the 1937 Act development
program that allocated more funds into the actual construction. Because
of this we don't fit within the NAHASDA DC&Es. May we use calculated
TDCs?
Answer #2: Assuming that these designs are within modest standards
and the intent of NAHASDA and that the project is out to bid or reached
construction start by January 1, 1999, you may use calculated TDC
maximums.
Question 3#: My project is under construction right now. Must I
change to DC&E cost limits?
Answer #3: No. The documents that were approved prior to
construction start are still in effect.
Question #4: We haven't designed the project that we want to build
with funds that were originally made available under 1937 Act. Which
system do we use, DC&Es or calculated TDCs?
Answer #4: You will use the DC&Es. The calculated TDCs are to be
used only in circumstances where a tribe has substantially completed
work toward construction start or work start under force account and
will be out for bid solicitation or have started construction by
January 1, 1999.
Question #5: We are planning our project with NAHASDA funds that
are not former 1937 Act funds. Which system of cost limits should we
use?
Answer #5: All projects utilizing such NAHASDA funds use the DC&E
cost limits and guidelines outlined in Notice PIH 98-29 (HA).
Authority: 25 U.S.C. 4116(a).
Dated: September 25, 1998.
Deborah Vincent,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 98-26387 Filed 10-1-98; 8:45 am]
BILLING CODE 4210-33-P
