[Federal Register Volume 78, Number 83 (Tuesday, April 30, 2013)]
[Rules and Regulations]
[Pages 25184-25185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10060]

[[Page 25184]]



24 CFR Parts 5, 200, 207, and 232

[Docket No. FR-5465-F-03]

Federal Housing Administration (FHA): Section 232 Healthcare 
Facility Insurance Program--Strengthening Accountability and Regulatory 
Revisions Update Final Rule Amendment--Revision of Date of 

AGENCY: Federal Housing Commissioner, Office of the Assistant Secretary 
for Housing, HUD.

ACTION: Final rule amendment.


SUMMARY: On September 7, 2012, HUD published a final rule that revised 
the regulations governing the insurance of healthcare facilities under 
section 232 of the National Housing Act (Section 232). HUD's Section 
232 program insures mortgage loans to facilitate the construction, 
substantial rehabilitation, purchase, and refinancing of nursing homes, 
intermediate care facilities, board and care homes, and assisted-living 
facilities. The amendments made by the September 7, 2012, final rule 
updated the Section 232 regulations to reflect current policy and 
practices, improve accountability and strengthen risk management in the 
program. The final rule provided an applicability date of April 9, 
2013, for certain of the updated requirements. This final rule 
amendment changes the applicability date to July 12, 2013, for the 
purpose of allowing more time to transition to the new requirements.

DATES: Effective date: May 30, 2013.

FOR FURTHER INFORMATION CONTACT: Kelly Haines, Director, Office of 
Residential Care Facilities, Office of Healthcare Programs, Office of 
Housing, Department of Housing and Urban Development, 451 7th Street 
SW., Room 6264, Washington, DC 20410-8000; telephone number 202-708-
0599 (this is not a toll-free number). Persons with hearing- or speech-
impairments may access this number through TTY by calling the toll-free 
Federal Relay Service at 1-800-877-8339.


I. Background

    On September 7, 2012, at 77 FR 55120, HUD published in the Federal 
Register a final rule that revised its Section 232 program regulations 
to bring the regulations up-to-date to reflect current policy and 
practices in healthcare facility transactions and to strengthen risk 
management and improve accountability in the program. The September 7, 
2012, final rule followed a proposed rule published in the Federal 
Register on May 3, 2012, at 77 FR 26218, in which HUD submitted its 
proposed revisions for public comment. The final rule took effect on 
October 9, 2012. However, to allow time to transition to the updated 
requirements, the final rule established an applicability date of April 
9, 2013 for certain of the requirements.
    On May 3, 2012, at 77 FR 26304, HUD also published a notice that 
proposed revisions to documents used in the insurance of healthcare 
facilities, and solicited public comment for a period of 60 days. This 
notice was issued in accordance with the Paperwork Reduction Act of 
1995, and was followed by a second notice, published on November 21, 
2012, at 77 FR 69870, that solicited public comment for a period of 30 
days. The Office of Management and Budget approved the Section 232 
documents under the Paperwork Reduction Act in March 2013, and the 
approval was announced by notice published in the Federal Register on 
March 14, 2013, at 78 FR 16279.
    Following issuance of the March 14, 2013, notice, lenders and other 
parties that would be involved in upcoming Section 232 program 
transactions stated that the delayed approval presented barriers to 
full compliance with some of the requirements in the revised Section 
232 regulations that would become applicable on April 9, 2013. The 
affected parties involved in upcoming financing or refinancing of a 
loan to be insured under Section 232 advised that they have already 
expended substantial time and expense in preparing the transaction 
based on reasonable reliance on the previously applicable Section 232 

II. This Final Rule

    Given that the delayed approval of the Section 232 documents has 
caused difficulties for parties involved in upcoming Section 232 
healthcare facility transactions to comply with the updated 
requirements in the Section 232 regulations because of the April 9, 
2013, applicability date, this final rule changes the applicability 
date to July 12, 2013. An additional delayed applicability date of over 
90 days following publication of this final rule should allow parties 
involved in Section 232 healthcare facility transactions to prepare for 
such transactions based on the new Section 232 regulations and related 
Section 232 documents.

III. Justification for Final Rulemaking

    In general, HUD publishes a rule for public comment before issuing 
a rule for effect, in accordance with HUD's regulations on rulemaking 
at 24 CFR part 10. Part 10, however, provides in Sec.  10.1 for 
exceptions from that general rule where HUD finds good cause to omit 
advance notice and public participation. The good cause requirement is 
satisfied when the prior public procedure is ``impracticable, 
unnecessary or contrary to the public interest.''
    HUD finds that good cause exists to publish this rule for effect 
without first soliciting public comment because prior public comment 
would be contrary to the public interest. HUD's Section 232 program 
plays an important role in today's economy as the need for residential 
care facilities has increased and requests to FHA to provide mortgage 
insurance for such facilities also increased. By reducing the cost of 
capital needed by residential care facilities to finance the 
construction, renovation, acquisition, or refinancing of facilities, 
the Section 232 program helps to improve access to quality healthcare 
and decrease overall healthcare costs.
    Affected parties involved in upcoming Section 232 transactions have 
advised that efforts to comply with the April 9, 2013, applicability 
date would result in a delay in completion of a Section 232 transaction 
and considerable increased expense due to delay. Given the need for 
quality and affordable care in many communities across the country, HUD 
recognizes that a delay in completion of a Section 232 transaction 
whether for acquisition or refinancing for a healthcare facility not 
only affects the parties involved in the transaction but the community 
in which the healthcare facility would be purchased, constructed, or 
refinanced. For this reason, HUD extends the applicability date in the 
September 7, 2012, final rule from April 9, 2013, to July 12, 2013.

IV. Findings and Certifications

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory

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flexibility analysis of any rule subject to notice and comment 
rulemaking requirements, unless the agency certifies that the rule will 
not have a significant economic impact on a substantial number of small 
entities. HUD's rulemaking for the Section 232 program, which commenced 
with a May 3, 2012, proposed rule and concluded with a September 7, 
2012, final rule did not result in a significant economic impact on a 
substantial number of small entities, and the lack of such impact was 
addressed in the two prior published rules. Because this rule is issued 
as a final rule amendment, without prior public comment, the Regulatory 
Flexibility Act is not applicable.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made, in accordance with HUD regulations at 24 CFR part 50, which 
implement section 102(2)(C) of the National Environmental Policy Act of 
1969 (42 U.S.C. 4332(2)(C)) at issuance of the May 3, 2012, proposed 
rule. That finding remains applicable to this final rule amendment, and 
is available for public inspection as provided in the September 7, 
2012, final rule.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either: (1) Imposes substantial direct compliance costs on state and 
local governments and is not required by statute, or (2) preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This rule does not have federalism 
implications and does not impose substantial direct compliance costs on 
state and local governments or preempt state law within the meaning of 
the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and on the private sector. This rule does not 
impose any federal mandates on any state, local, or tribal governments, 
or on the private sector, within the meaning of UMRA.

List of Subjects in 24 CFR Part 232

    Fire prevention, Health facilities, Loan programs--health, Loan 
programs--housing and community development, Mortgage insurance, 
Nursing homes, Reporting and recordkeeping requirements.

    Accordingly, part 232 of title 24 of the Code of Federal 
Regulations is amended as follows:


1. The authority citation for 24 CFR part 232 continues to read as 

    Authority: 12 U.S.C. 1715b, 1715w; 42 U.S.C. 3535(d).

Sec.  232.1  [Amended].

2. In Sec.  232.1, amend paragraph (b) by removing ``April 9, 2013'' 
and adding in its place ``July 12, 2013''.

    Dated: April 24, 2013.
Carol J. Galante,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2013-10060 Filed 4-29-13; 8:45 am]