Statutorily Mandated Designation of Difficult Development Areas for Section 42 of the Internal Revenue Code of 1986-Technical Correction

AGENCY:

Office of the Secretary for Policy Development and Research, HUD.

ACTION:

Notice.

SUMMARY:

On November 30, 2004, HUD published a notice that designated “Difficult Development Areas” for purposes of the Low-Income Housing Tax Credit (LIHTC) under Section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42). HUD makes new Difficult Development Area designations annually. This notice published in today's Federal Register advises of two corrections to the November 30, 2004, publication.

FOR FURTHER INFORMATION CONTACT:

For questions on how areas are designated and on geographic definitions: Alastair McFarlane, Senior Economist, Economic Development and Public Finance Division, Office of Policy Development and Research, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-6000, telephone (202) 708-0426, e-mail Alastair_McFarlane@hud.gov. For specific legal questions pertaining to Section 42: Branch 5, Office of the Associate Chief Counsel, Passthroughs & Special Industries, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC 20224, telephone (202) 622-3040, fax (202) 622-4524. For questions about the “HUB Zones” program: Michael P. McHale, Assistant Administrator for Procurement Policy, Office of Government Contracting, Suite 8800, Small Business Administration, 409 Third Street, SW., Washington, DC 20416, telephone (202) 205-8885, fax (202) 205-7167, e-mail hubzone@sba.gov. A text telephone is available for persons with hearing or speech impairments at (202) 708-9300. (These are not toll-free telephone numbers.) Additional copies of this notice are available through HUD User at (800) 245-2691 for a small fee to cover duplication and mailing costs.

Copies Available Electronically: This notice and additional information about Difficult Development Areas and Qualified Census Tracts, including the November 30, 2004, publication are available electronically on the Internet (World Wide Web) at http://www.huduser.org/datasets/qct.html .

SUPPLEMENTARY INFORMATION:

Background

On November 30, 2004 (69 FR 69730), HUD published a notice in the Federal Register at 69 FR 69730 that designated Difficult Development Areas for each of the 50 states, the District of Columbia, Puerto Rico, American Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands. The designations of Difficult Development Areas in the November 30, 2004, notice are based on final fiscal year 2004 Fair Market Rents (FMRs), 2004 very-low income limits (VLILs), and 2000 Census population counts as explained in the November 30, 2004, notice. The November 30, 2004, notice advised that designations of Qualified Census Tracts under Section 42 of the Internal Revenue Code published December 12, 2002 (67 FR 76451), as supplemented on December 19, 2003 (68 FR 70982), remain in effect.

This Notice

HUD identified two technical errors in the November 30, 2004, publication, in FR Doc 04-26328, which are corrected by this notice published in today's edition of the Federal Register.

First, the following language was inadvertently included in the “Explanation of HUD Designation Methodology section,” under the heading C. Exceptions to OMB Definitions of MSAs/PMSAs and Other Geographic Matters (See 69 FR 69732 at end of first column continuing to second column.):

Certain nonmetropolitan county equivalent areas in Alaska for which FMRs and VLILs are calculated and thus form the basis of Difficult Development Area determinations are no longer recognized as geographic entities by the Bureau of the Census. Therefore, no 2000 Census population counts are produced for these areas. HUD estimated the 2000 population of these areas as follows:

1. The 2000 Population of Denali Borough (1,893) was allocated entirely to the Yukon-Koyukuk Census Area. The part of Denali Borough created from the Southeast Fairbanks Census Area was deemed uninhabited after examination of Census Block data for, and maps of, the area of Denali Borough formerly in the Southeast Fairbanks Census Area.

2. The population of Yakutat City and Borough (808) was allocated to the former Skagway-Yakutat-Angoon Census Area (680) and the Valdez-Cordova Census Area (128). The populations of Yakutat City and Borough Census Blocks located east of 141° west longitude were allocated to the Skagway-Yakutat-Angoon Census Area. The populations of Yakutat City and Borough Census Blocks located west of 141° west longitude were allocated to the Valdez-Cordova Census Area.

The above language was in error because in fact, HUD computed and published FY2004 Fair Market Rents and Very-Low Income Limits for all of the nonmetropolitan county equivalent areas in Alaska as demarcated in the 2000 Census. HUD used the FY2004 Fair Market Rents and Very-Low Income Limits to designate the 2005 Difficult Development Areas. Therefore, HUD did not use the above population allocation procedure in the designation of the 2005 Difficult Development Areas.

Second, in the table enumerating the 2005 Metropolitan Difficult Development Areas, the name of one of the towns in the Massachusetts part of the Boston, MA-NH PMSA did not appear due to a formatting error. The list of cities and towns in the Massachusetts part of the Boston, MA-NH PMSA should also include “Manchester-by-the-Sea town.” (See 69 FR 69735.)