<CHAPTER> <PART> <EAR>Pt. 0</EAR> <PRTPAGE P="7"/> <HD SOURCE="HED">PART 0—STANDARDS OF CONDUCT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>0.1</SECTNO> <SUBJECT>Cross-reference to employees ethical conduct standards and financial disclosure regulations.</SUBJECT> <SECTNO>0.2</SECTNO> <SUBJECT>Outside employment and other activities.</SUBJECT> <SECTNO>0.3</SECTNO> <SUBJECT>Financial interests.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 7301; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 15350, Apr. 5, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 0.1</SECTNO> <SUBJECT>Cross-reference to employees ethical conduct standards and financial disclosure regulations.</SUBJECT> Employees of the Department of Housing and Urban Development (Department) are subject to the executive branch-wide standards of ethical conduct at 5 CFR part 2635, the Department's regulation at 5 CFR part 7501 which supplements the executive branch-wide standards, and the executive branch-wide financial disclosure regulation at 5 CFR part 2634. <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 301, 7301; 42 U.S.C. 3535(d). </AUTH> <CITA>[61 FR 36251, July 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 0.2</SECTNO> <SUBJECT>Outside employment and other activities.</SUBJECT> (a) Reference in this section to outside employment and outside activities is not intended to cover employee investments. That subject is covered in § 0.735-204. (b) An employee shall not engage in outside employment or other outside activity not compatible with the full and proper discharge of the employee's official duties and responsibilities. Incompatible activities include, but are not limited to: (1) Outside activities which tend to impair the employee's ability or capacity to perform official duties and responsibilities. (2) Outside activities that may be construed by the public to be the official acts of the Department; (3) Outside activities that establish relationships or property interests that may result in a conflict between private interests and official duties; (4) Active participation in, or conduct of, a business dealing with, or related to, real estate or manufactured housing including, but not limited to, real estate brokerage, management and sales, architecture, engineering, mortgage lending, property insurance, appraisal services, construction, construction financing, land planning, and real estate development; (5) Serving as an officer or director of any organization which engages in lobbying activities concerning Department programs; (6) Serving as an officer or director of a Department-approved mortgagee, lending institution or organization which services mortgages or other securities for the Department; (7) Accepting employment, with or without compensation, with any person or business entity doing business with the Department; (c) An employee shall not receive any salary or any thing of monetary value from a private source as compensation for his or her services to the Government (18 U.S.C. 209). (d) An employee must obtain the prior approval of the appropriate Deputy Counselor: (1) Before using his or her title or reference to his or her government employment or experience in connection with a commercial enterprise, or (2) Before accepting employment, with or without compensation (i) With a State or local government, or (ii) In the same professional field as that of the employee's official position. (e) Employees are encouraged to engage in teaching, lecturing, and writing that is not prohibited by law, Executive order, Office of Personnel Management regulations, or this part, except that (1) An employee may not receive compensation for any lecture, writing, or consultation, the subject matter of which is substantially related to the responsibilities, programs, or operations of the Department; (2) An employee may not, either with or without compensation, engage in teaching, lecturing or writing that is dependent on information obtained as a result of his or her Government employment, except when that information has been made available to the general public, or will be made available on request, or when the appropriate Assistant Secretary or his or her <PRTPAGE P="8"/>designee gives written authorization for the use of nonpublic information on the basis that the use is in the public interest. (3) An employee may use his or her title in connection with writing for publication only if: (i) The writing contains a statement indicating that the views contained therein are those of the employee as an individual and do not necessarily represent the views of the Department of Housing and Urban Development; or (ii) Such use of the employee's title is approved in advance by the appropriate Assistant Secretary or equivalent, or his or her designee. (4) An employee may not accept any honorarium of more than $2,000 for any appearance, speech or article (2 U.S.C. 441i), except if the honorarium is paid directly to a charitable organization at the request of the employee and selected by the payor from a list of 5 or more charitable organizations provided by the employee. In computing the $2,000 amount, the following may be excluded: (i) Actual travel and subsistence expenses for the employee and the employee's spouse or aide; and (ii) Amounts paid or incurred for any agent's fees or commissions. (f) Any employee who is compensated at an amount equal to or above GS-16 in the General Schedule and who occupies a full-time position, appointment to which must be made by the President by and with the advice and consent of the Senate, may not have in any calendar year outside earned income attributable to such calendar year which is in excess of 15 per cent of the employee's salary (Pub. L. 95-521, section 210, 5 U.S.C. App.). (g) An employee may not directly or indirectly seek or receive compensation for services, rendered by himself or others, in connection with any proceeding, application, request for ruling, contract, claim, or other particular matter in which the United States is a party or has a direct and substantial interest and which is before any Federal or District of Columbia department or agency (18 U.S.C. 203). (h) An employee may not act, with or without compensation, as agent or attorney for another: (1) In prosecuting a claim against the United States; or (2) In connection with any proceeding, application, request for ruling, contract or other particular matter in which the United States is a party or has a direct and substantial interest and which is before any Federal or District of Columbia department, agency, or court (18 U.S.C. 205). (i) Permissible exceptions to the prohibitions set forth in paragraphs (g) and (h) of this section include: (1) Representation without compensation in connection with a disciplinary, loyalty, or personnel proceeding; (2) Representation with or without compensation of parents, spouse, child, or those to whom the employee owes a fiduciary duty except in those matters in which the employee has participated personally and substantially as a Government employee or which are the subject of his official responsibility; and (3) Statements required to be made under penalty for perjury or contempt. <FP>An employee seeking to engage in one of these excepted activities is encouraged to consult in advance with a Deputy Counselor.</FP> (j) The prohibitions set forth in paragraphs (g) and (h) of this section are in addition to, and not in lieu of, any other restrictions contained in this subpart. (k) This section does not prohibit an employee from serving in an individual capacity as an officer or a member of the Board of Directors of: (1) A Federal Credit Union, or (2) A cooperative or condominium association for a housing project which is not subject to regulation by the Department or, if so regulated, in which the employee personally resides. (l) When participating in any activity permitted by this section, an employee shall make certain that his or her official title or Department connection is not shown or used in a manner which implies that the employee is acting in an official capacity. <CITA>[52 FR 27113, July 17, 1987. Redesignated at 61 FR 19188, May 1, 1996]</CITA> <EFFDNOT> <HD SOURCE="HED">Effective Date Note:</HD> At 63 FR 15268, Mar. 30, 1998, § 0.2 was removed, effective Apr. 29, 1998. </EFFDNOT> </SECTION> <SECTION> <PRTPAGE P="9"/> <SECTNO>§ 0.3</SECTNO> <SUBJECT>Financial interests.</SUBJECT> (a) An employee shall not have a direct or indirect financial interest that conflicts, or appears to conflict, with his or her official duties and responsibilities. Such interests include, but are not limited to, the voluntary acceptance, acquisition or holding of: (1) Securities issued by the Federal National Mortgage Association and securities collateralized by FNMA securities. (2) FHA debentures or certificates of claim. (3) Stock or other interest in a Department-owned, insured or subsidized multifamily project or single family dwelling, cooperative unit, or condominium unit, except to the extent that the stock or other interest represents the employee's principal residence. Employees who wish to purchase a Department-held property as a principal residence must adhere to the procedures established by the Assistant Secretary for Housing for the administration of the property disposition program set forth in Handbook 4310.5. (4) Any Department subsidy provided pursuant to section 8 of the United States Housing Act of 1937, as amended, to or on behalf of a tenant of property owned by the employee. However, an employee may accept the benefit of such a subsidy when: (i) The employee involuntarily acquires a property which at the time of acquisition has a tenant receiving such a subsidy but only as long as that tenant continues to reside in the property, or (ii) An incumbent tenant who has not previously received such a subsidy becomes the beneficiary thereof but only if there is no increase in that tenant's rent upon the commencement of subsidy payments other than normal annual adjustments. (5) Any direct creditor interest in a mortgage insured by the Department. (b) Notwithstanding paragraph (a) of this section, an employee may accept, acquire or hold (1) An interest in a mutual or money market fund which has holdings listed in paragraph (a) of this section, and which: (i) Has a broadly diversified portfolio not specializing in any particular industry; (ii) Is widely held; and (iii) Is not under the employee's control. (2) A limited partnership interest in a large public partnership (i.e. one which has at least 5,000 partnership interests) less than 25% of the assets of which are Department insured or subsidized projects; (3) Mortgage insurance provided pursuant to section 203 of the National Housing Act on any one single family residence in addition to the employee's current principal residence. (c) If an employee acquires an interest prior to the commencement of employment with the Department which is prohibited under paragraph (a) of this section, or involuntarily acquires such a prohibited interest after the commencement of employment with the Department, the matter must be reported promptly to a Deputy Counselor. The Deputy Counselor will then determine whether retention of the interest is permissible or whether divestment or other appropriate remedial action is required. (d)(1) An employee must not participate in his or her capacity as a Government employee in any matter in which, to his or her knowledge, the employee, his or her spouse, minor child, any organization in which the employee is serving as an officer, director, trustee, partner, or staff member, or a partner of the employee has a financial interest. In addition, an employee must not participate in his or her capacity as a Government employee in any matter in which, to the employee's knowledge, a person, business, or nonprofit organization with whom the employee is negotiating, or has an arrangement for, employment has a financial interest. For purposes of this paragraph a <E T="03">matter</E> includes an application, contract, claim, request for a ruling, controversy, charge, accusation, arrest, judicial or other proceeding, or other particular matter. (18 U.S.C. 208(a)). (2) Paragraph (d)(1) of this section does not apply: (i) If a Deputy Counselor first determines that the financial interest is not so substantial as to be deemed likely to <PRTPAGE P="10"/>affect the integrity of the services which the Government may expect from the employee; or (ii) If the financial interest is within one of the following categories which are hereby exempted from the requirements of section 208(a) of title 18, United States Code, as being too remote or too inconsequential to affect the integrity of an employee's service: (A) Any holding in a widely held mutual or money market fund, or regulated investment company, which is not under the employee's control and which has a broadly diversified portfolio not specializing in any particular industry; (B) Participation in a bona fide employee benefit plan, other than a profit-sharing or stock-bonus plan, that is maintained by a former employer to the extent that the employee's rights in the plan are vested and require no additional services by him or her or further payment to the plan by the former employer with respect to the services of the employee. <CITA>[52 FR 27113, July 17, 1987. Redesignated at 61 FR 19188, May 1, 1996]</CITA> <EFFDNOT> <HD SOURCE="HED">Effective Date Note:</HD> At 63 FR 15268, Mar. 30, 1998, § 0.3 was removed, effective Apr. 29, 1998. </EFFDNOT> </SECTION> </PART> <PART> <EAR>Pt. 1</EAR> <HD SOURCE="HED">PART 1—NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—EFFECTUATION OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>1.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>1.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>1.3</SECTNO> <SUBJECT>Application of Part 1.</SUBJECT> <SECTNO>1.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> <SECTNO>1.5</SECTNO> <SUBJECT>Assurances required.</SUBJECT> <SECTNO>1.6</SECTNO> <SUBJECT>Compliance information.</SUBJECT> <SECTNO>1.7</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> <SECTNO>1.8</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> <SECTNO>1.9</SECTNO> <SUBJECT>Hearings.</SUBJECT> <SECTNO>1.10</SECTNO> <SUBJECT>Effect on other regulations; forms and instructions.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 2000d-1 and 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 38 FR 17949, July 5, 1973, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 1.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> The purpose of this part 1 is to effectuate the provisions of title VI of the Civil Rights Act of 1964 (hereafter referred to as the <E T="03">Act</E>) to the end that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving Federal financial assistance from the Department of Housing and Urban Development. </SECTION> <SECTION> <SECTNO>§ 1.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part 1— (a) The term <E T="03">Department</E> means the Department of Housing and Urban Development. (b) The term <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. (c) The term <E T="03">responsible Department official</E> means the Secretary or, to the extent of any delegation of authority by the Secretary to act under this part 1, any other Department official to whom the Secretary may hereafter delegate such authority. (d) The term <E T="03">United States</E> means the States of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, the Canal Zone, and the territories and possessions of the United States, and the term <E T="03">State</E> means any one of the foregoing. (e) The term <E T="03">Federal financial assistance</E> includes: (1) Grants, loans, and advances of Federal funds, (2) the grant or donation of Federal property and interests in property, (3) the detail of Federal personnel, (4) the sale and lease of, and the permission to use (on other than a casual or transient basis), Federal property or any interest in such property without consideration or at a nominal consideration, or at a consideration which is reduced for the purpose of assisting the recipient, or in recognition of the public interest to be served by such sale or lease to the recipient, and (5) any Federal agreement, arrangement, or other contract which has as one of its purposes the provision of assistance. The term <E T="03">Federal financial assistance</E> does not include a contract of insurance or guaranty.<PRTPAGE P="11"/> (f) The term <E T="03">recipient</E> means any State, political subdivision of any State, or instrumentality of any State or political subdivision, any public or private agency, institution, organization, or other entity, or any individual, in any State, to whom Federal financial assistance is extended, directly or through another recipient, for any program or activity, or who otherwise participates in carrying out such program or activity (such as a redeveloper in the Urban Renewal Program), including any successor, assign, or transferee thereof, but such term does not include any ultimate beneficiary under any such program or activity. (g) The term <E T="03">applicant</E> means one who submits an application, contract, request, or plan requiring Department approval as a condition to eligibility for Federal financial assistance, and the term <E T="03">application</E> means such an application, contract, request, or plan. </SECTION> <SECTION> <SECTNO>§ 1.3</SECTNO> <SUBJECT>Application of Part 1.</SUBJECT> This part 1 applies to any program or activity for which Federal financial assistance is authorized under a law administered by the Department, including any program or activity assisted under the statutes listed in appendix A of this part 1. It applies to money paid, property transferred, or other Federal financial assistance extended to any such program or activity on or after January 3, 1965. This part 1 does not apply to: (a) Any Federal financial assistance by way of insurance or guaranty contracts, (b) money paid, property transferred, or other assistance extended to any such program or activity before January 3, 1965, (c) any assistance to any person who is the ultimate beneficiary under any such program or activity, or (d) any employment practice, under any such program or activity, of any employer, employment agency, or labor organization, except to the extent described in § 1.4(c). The fact that certain financial assistance is not listed in appendix A shall not mean, if title VI of the Act is otherwise applicable, that such financial assistance is not covered. Other financial assistance under statutes now in force or hereinafter enacted may be added to this list by notice published in the <E T="04">Federal Register</E>. </SECTION> <SECTION> <SECTNO>§ 1.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> (a) <E T="03">General.</E> No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity to which this part 1 applies. (b) <E T="03">Specific discriminatory actions prohibited.</E> (1) A recipient under any program or activity to which this part 1 applies may not, directly or through contractual or other arrangements, on the ground of race, color, or national origin: (i) Deny a person any housing, accommodations, facilities, services, financial aid, or other benefits provided under the program or activity; (ii) Provide any housing, accommodations, facilities, services, financial aid, or other benefits to a person which are different, or are provided in a different manner, from those provided to others under the program or activity; (iii) Subject a person to segregation or separate treatment in any matter related to his receipt of housing, accommodations, facilities, services, financial aid, or other benefits under the program or activity; (iv) Restrict a person in any way in access to such housing, accommodations, facilities, services, financial aid, or other benefits, or in the enjoyment of any advantage or privilege enjoyed by others in connection with such housing, accommodations, facilities, services, financial aid, or other benefits under the program or activity; (v) Treat a person differently from others in determining whether he satisfies any occupancy, admission, enrollment, eligibility, membership, or other requirement or condition which persons must meet in order to be provided any housing, accommodations, facilities, services, financial aid, or other benefits provided under the program or activity; (vi) Deny a person opportunity to participate in the program or activity through the provision of services or otherwise, or afford him an opportunity to do so which is different from that afforded others under the program or activity (including the opportunity <PRTPAGE P="12"/>to participate in the program or activity as an employee but only to the extent set forth in paragraph (c) of this section). (vii) Deny a person the opportunity to participate as a member of a planning or advisory body which is an integral part of the program. (2)(i) A recipient, in determining the types of housing, accommodations, facilities, services, financial aid, or other benefits which will be provided under any such program or activity, or the class of persons to whom, or the situations in which, such housing, accommodations, facilities, services, financial aid, or other benefits will be provided under any such program or activity, or the class of persons to be afforded an opportunity to participate in any such program or activity, may not, directly or through contractual or other arrangements, utilize criteria or methods of administration which have the effect of subjecting persons to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program or activity as respect to persons of a particular race, color, or national origin. (ii) A recipient, in operating low-rent housing with Federal financial assistance under the United States Housing Act of 1937, as amended (42 U.S.C. 1401 <E T="03">et seq</E>.), shall assign eligible applicants to dwelling units in accordance with a plan, duly adopted by the recipient and approved by the responsible Department official, providing for assignment on a community-wide basis in sequence based upon the date and time the application is received, the size or type of unit suitable, and factors affecting preference or priority established by the recipient's regulations, which are not inconsistent with the objectives of title VI of the Civil Rights Act of 1964 and this part 1. The plan may allow an applicant to refuse a tendered vacancy for good cause without losing his standing on the list but shall limit the number of refusals without cause as prescribed by the responsible Department official. (iii) The responsible Department official is authorized to prescribe and promulgate plans, exceptions, procedures, and requirements for the assignment and reassignment of eligible applicants and tenants consistent with the purpose of paragraph (b)(2)(ii) of this section, this part 1, and title VI of the Civil Rights Act of 1964, in order to effectuate and insure compliance with the requirements imposed thereunder. (3) In determining the site or location of housing, accommodations, or facilities, an applicant or recipient may not make selections with the purpose or effect of excluding individuals from, denying them the benefits of, or subjecting them to discrimination under any program to which this part 1 applies, on the ground of race, color, or national origin; or with the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the Act or this part 1. (4) As used in this part 1 the housing, accommodations, facilities, services, financial aid, or other benefits provided under a program or activity receiving Federal financial assistance shall be deemed to include any housing, accommodations, facilities, services, financial aid, or other benefits provided in or through a facility provided with the aid of Federal financial assistance. (5) The enumeration of specific forms of prohibited discrimination in paragraphs (b) and (c) of this section does not limit the generality of the prohibition in paragraph (a) of this section. (6)(i) In administering a program regarding which the recipient has previously discriminated against persons on the ground of race, color, or national origin, the recipient must take affirmative action to overcome the effects of prior discrimination. (ii) Even in the absence of such prior discrimination, a recipient in administering a program should take affirmative action to overcome the effects of conditions which resulted in limiting participation by persons of a particular race, color, or national origin. <FP>Where previous discriminatory practice or usage tends, on the ground of race, color, or national origin, to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program or activity to which this part 1 applies, the applicant or recipient has an obligation to take reasonable action <PRTPAGE P="13"/>to remove or overcome the consequences of the prior discriminatory practice or usage, and to accomplish the purpose of the Act.</FP> (c) <E T="03">Employment practices.</E> (1) Where a primary objective of the Federal financial assistance to a program or activity to which this part 1 applies is to provide employment, a recipient may not, directly or through contractual or other arrangements, subject a person to discrimination on the ground of race, color, or national origin in its employment practices under such program or activity (including recruitment or recruitment advertising, employment, layoff, termination, upgrading, demotion, transfer, rates of pay or other forms of compensation and use of facilities). The requirements applicable to construction employment under such program or activity shall be those specified in or pursuant to part III of Executive Order 11246 or any executive order which supersedes or amends it. (2) Where a primary objective of the Federal financial assistance is not to provide employment, but discrimination on the ground of race, color, or national origin in the employment practices of the recipient or other persons subject to this part 1 tends, on the ground of race, color, or national origin, to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program to which this part 1 applies, the provisions of this paragraph (c) shall apply to the employment practices of the recipient or other persons subject to this part 1 to the extent necessary to assure equality of opportunity to, and nondiscriminatory treatment of, beneficiaries. </SECTION> <SECTION> <SECTNO>§ 1.5</SECTNO> <SUBJECT>Assurances required.</SUBJECT> (a) <E T="03">General.</E> (1) Every contract for Federal financial assistance to carry out a program or activity to which this part 1 applies, executed on or after January 3, 1965, and every application for such Federal financial assistance submitted on or after January 3, 1965, shall, as a condition to its approval and the extension of any Federal financial assistance pursuant to such contract or application, contain or be accompanied by an assurance that the program or activity will be conducted and the housing, accommodations, facilities, services, financial aid, or other benefits to be provided will be operated and administered in compliance with all requirements imposed by or pursuant to this part 1. In the case of a contract or application where the Federal financial assistance is to provide or is in the form of personal property or real property or interest therein or structures thereon, the assurance shall obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits, or for as long as the recipient retains ownership or possession of the property, whichever is longer. In all other cases the assurance shall obligate the recipient for the period during which Federal financial assistance is extended pursuant to the contract or application. The responsible Department official shall specify the form of the foregoing assurance for such program or activity, and the extent to which like assurances will be required of subgrantees, contractors and subcontractors, transferees, successors in interest, and other participants in the program or activity. Any such assurance shall include provisions which give the United States a right to seek its judicial enforcement. (2) In the case of real property, structures or improvements thereon, or interests therein, acquired through a program of Federal financial assistance the instrument effecting any disposition by the recipient of such real property, structures or improvements thereon, or interests therein, shall contain a covenant running with the land assuring nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. In the case where Federal financial assistance is provided in the form of a transfer of real property or interests therein from the Federal Government, the instrument effecting or recording the transfer shall contain such a covenant.<PRTPAGE P="14"/> (3) In program receiving Federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, to the extent that rights to space on, over, or under any such property are included as part of the program receiving such assistance, the nondiscrimination requirements of this part 1 shall extend to any facility located wholly or in part in such space. (b) <E T="03">Preexisting contracts—funds not disbursed.</E> In any case where a contract for Federal financial assistance, to carry out a program or activity to which this part 1 applies, has been executed prior to January 3, 1965, and the funds have not been fully disbursed by the Department, the responsible Department official shall, where necessary to effectuate the purposes of this part 1, require an assurance similar to that provided in paragraph (a) of this section as a condition to the disbursement of further funds. (c) <E T="03">Preexisting contracts—periodic payments.</E> In any case where a contract for Federal financial assistance, to carry out a program or activity to which this part 1 applies, has been executed prior to January 3, 1965, and provides for periodic payments for the continuation of the program or activity, the recipient shall, in connection with the first application for such periodic payments on or after January 3, 1965: (1) Submit a statement that the program or activity is being conducted in compliance with all requirements imposed by or pursuant to this part 1 and (2) provide such methods of administration for the program or activity as are found by the responsible Department official to give reasonable assurance that the recipient will comply with all requirements imposed by or pursuant to this part 1. (d) <E T="03">Assurances from institutions.</E> (1) In the case of any application for Federal financial assistance to an institution of higher education, the assurance required by this section shall extend to admission practices and to all other practices relating to the treatment of students. (2) The assurance required with respect to an institution of higher education, hospital, or any other institution, insofar as the assurance relates to the institution's practices with respect to admission or other treatment of persons as students, patients, or clients of the institution or to the opportunity to participate in the provision of services or other benefits to such persons, shall be applicable to the entire institution unless the applicant establishes, to the satisfaction of the responsible Department official, that the institution's practices in designated parts or programs of the institution will in no way affect its practices in the program of the institution for which Federal financial assistance is sought, or the beneficiaries of or participants in such program. If in any such case the assistance sought is for the construction of a facility or part of a facility, the assurance shall in any event extend to the entire facility and to facilities operated in connection therewith. (e) <E T="03">Elementary and secondary schools.</E> The requirements of this section with respect to any elementary or secondary school or school system shall be deemed to be satisfied if such school or school system (1) is subject to a final order of a court of the United States for the desegregation of such school or school system, and provides an assurance that it will comply with such order, including any future modification of such order, or (2) submits a plan for the desegregation of such school or school system which the responsible official of the Department of Health and Human Services determines is adequate to accomplish the purposes of the Act and this part 1 within the earliest practicable time, and provides reasonable assurance that it will carry out such plan. <CITA>[38 FR 17949, July 5, 1973, as amended at 50 FR 9269, Mar. 7, 1985]</CITA> </SECTION> <SECTION> <SECTNO>§ 1.6</SECTNO> <SUBJECT>Compliance information.</SUBJECT> (a) <E T="03">Cooperation and assistance.</E> The responsible Department official and each Department official who by law or delegation has the principal responsibility within the Department for the administration of any law extending financial assistance subject to this part 1 shall to the fullest extent practicable seek the cooperation of recipients in obtaining compliance with this part 1 and shall provide assistance and guidance to recipients to help them comply voluntarily with this part 1.<PRTPAGE P="15"/> (b) <E T="03">Compliance reports.</E> Each recipient shall keep such records and submit to the responsible Department official or his designee timely, complete, and accurate compliance reports at such times, and in such form and containing such information, as the responsible Department official or his designee may determine to be necessary to enable him to ascertain whether the recipient has complied or is complying with this part 1. In general, recipients should have available for the department racial and ethnic data showing the extent to which members of minority groups are beneficiaries of federally assisted programs. (c) <E T="03">Access to sources of information.</E> Each recipient shall permit access by the responsible Department official or his designee during normal business hours to such of its books, records, accounts, and other sources of information, and its facilities as may be pertinent to ascertain compliance with this part 1. Where any information required of a recipient is in the exclusive possession of any other agency, institution, or person and this agency, institution, or person shall fail or refuse to furnish this information, the recipient shall so certify in its report and shall set forth what efforts it has made to obtain the information. (d) <E T="03">Information to beneficiaries and participants.</E> Each recipient shall make available to participants, beneficiaries, and other interested persons such information regarding the provisions of this part 1 and its applicability to the program or activity under which the recipient receives Federal financial assistance, and make such information available to them in such manner, as the responsible Department official finds necessary to apprise such persons of the protections against discrimination assured them by the Act and this part 1. </SECTION> <SECTION> <SECTNO>§ 1.7</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> (a) <E T="03">Periodic compliance reviews.</E> The responsible Department official or his designee shall from time to time review the practices of recipients to determine whether they are complying with this part 1. (b) <E T="03">Complaints.</E> Any person who believes himself or any specific class of persons to be subjected to discrimination prohibited by this part 1 may by himself or by a representative file with the responsible Department official or his designee a written complaint. A complaint must be filed not later than 180 days from the date of the alleged discrimination, unless the time for filing is extended by the responsible Department official or his designee. (c) <E T="03">Investigations.</E> The responsible Department official or his designee shall make a prompt investigation whenever a compliance review, report, complaint, or any other information indicates a possible failure to comply with this part 1. The investigation should include, where appropriate, a review of the pertinent practices and policies of the recipient, the circumstances under which the possible noncompliance with this part 1 occurred, and other factors relevant to a determination as to whether the recipient has failed to comply with this part . (d) <E T="03">Resolution of matters.</E> (1) If an investigation pursuant to paragraph (c) of this section indicates a failure to comply with this part 1, the responsible Department official or his designee will so inform the recipient and the matter will be resolved by informal means whenever possible. If it has been determined that the matter cannot be resolved by informal means, action will be taken as provided for in § 1.8. (2) If an investigation does not warrant action pursuant to paragraph (d)(1) of this section the responsible Department official or his designee will so inform the recipient and the complainant, if any, in writing. (e) <E T="03">Intimidatory or retaliatory acts prohibited.</E> No recipient or other person shall intimidate, threaten, coerce, or discriminate against any person for the purpose of interfering with any right or privilege secured by title VI of the Act or this part 1, or because he has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. The identity of complainants shall be kept confidential except to the extent necessary to carry out the purposes of this part, including the conduct of any investigation, hearing, or judicial proceeding arising thereunder. </SECTION> <SECTION> <PRTPAGE P="16"/> <SECTNO>§ 1.8</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> (a) <E T="03">General.</E> If there appears to be a failure or threatened failure to comply with this part 1, and if the noncompliance or threatened noncompliance cannot be corrected by informal means, compliance with this part 1 may be effected by the suspension or termination of or refusal to grant or to continue Federal financial assistance, or by any other means authorized by law. Such other means may include, but are not limited to: (1) A reference to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States (including other titles of the Act), or any assurance or other contractual undertaking, and (2) any applicable proceeding under State or local law. (b) <E T="03">Noncompliance with § 1.5.</E> If an applicant fails or refuses to furnish an assurance required under § 1.5 or otherwise fails or refuses to comply with the requirement imposed by or pursuant to that section, Federal financial assistance may be refused in accordance with the procedures of paragraph (c) of this section. The Department shall not be required to provide assistance in such a case during the pendency of the administrative proceedings under such paragraph, except that the Department shall continue assistance during the pendency of such proceedings where such assistance is due and payable pursuant to a contract therefor approved prior to January 3, 1965. (c) <E T="03">Termination of or refusal to grant or to continue Federal financial assistance.</E> No order suspending, terminating, or refusing to grant or continue Federal financial assistance shall become effective until (1) the responsible Department official has advised the applicant or recipient of his failure to comply and has determined that compliance cannot be secured by voluntary means, (2) there has been an express finding on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed by or pursuant to this part 1, (3) the action has been approved by the Secretary, and (4) the expiration of 30 days after the Secretary has filed with the committees of the House and Senate having legislative jurisdiction over the program or activity involved a full written report of the circumstances and the grounds for such action. Any action to suspend or terminate or to refuse to grant or to continue Federal financial assistance shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding has been made and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found. (d) <E T="03">Other means authorized by law.</E> No action to effect compliance by any other means authorized by law shall be taken until (1) the responsible Department official has determined that compliance cannot be secured by voluntary means, (2) the recipient or other person has been notified of its failure to comply and of the action to be taken to effect compliance, and (3) the expiration of at least 10 days from the mailing of such notice to the applicant or recipient. During this period of at least 10 days additional efforts shall be made to persuade the applicant or recipient to comply with this part 1 and to take such corrective action as may be appropriate. </SECTION> <SECTION> <SECTNO>§ 1.9</SECTNO> <SUBJECT>Hearings.</SUBJECT> (a) <E T="03">Opportunity for hearing.</E> Whenever an opportunity for a hearing is required by § 1.8(c), reasonable notice shall be given by registered or certified mail, return receipt requested, to the affected applicant or recipient. This notice shall advise the applicant or recipient of the action proposed to be taken, the specific provision under which the proposed action against it is to be taken, and the matters of fact or law asserted as the basis for this action, and either: (1) Fix a date not less than 20 days after the date of such notice within which the applicant or recipient may request of the responsible Department official that the matter be scheduled for hearing, or (2) advise the applicant or recipient that the matter in question has been set down for hearing at a stated time and place. The time and place so fixed shall be reasonable and shall be subject to change for cause. <PRTPAGE P="17"/>The complainant, if any, shall be advised of the time and place of the hearing. An applicant or recipient may waive a hearing and submit written information and argument for the record. The failure of an applicant or recipient to request a hearing under this paragraph (a) or to appear at a hearing for which a date has been set shall be deemed to be a waiver of the right to a hearing under section 602 of the Act and § 1.8(c) and consent to the making of a decision on the basis of such information as is available. (b) <E T="03">Hearing procedures.</E> Hearings shall be conducted in accordance with 24 CFR part 180. <EXTRACT> <FP>38 FR 17949, July 5, 1973, as amended at 61 FR 52217, Oct. 4, 1996]</FP> </EXTRACT> </SECTION> <SECTION> <SECTNO>§ 1.10</SECTNO> <SUBJECT>Effect on other regulations; forms and instructions.</SUBJECT> (a) <E T="03">Effect on other regulations.</E> All regulations, orders, or like directions heretofore issued by any officer of the Department which impose requirements designed to prohibit any discrimination against persons on the ground of race, color, or national origin under any program or activity to which this part applies, and which authorize the suspension or termination of or refusal to grant or to continue Federal financial assistance to any applicant or recipient for failure to comply with such requirements, are hereby superseded to the extent that such discrimination is prohibited by this part, except that nothing in this part shall be deemed to relieve any person of any obligation assumed or imposed under any such superseded regulation, order, instruction, or like direction prior to January 3, 1965. Nothing in this part, however, shall be deemed to supersede any of the following (including future amendments thereof): (1) Executive Orders 11246 and 11375 and regulations issued thereunder, or (2) Executive Order 11063 and regulations issued thereunder, or any other order, regulations or instructions, insofar as such order, regulations, or instructions, prohibit discrimination on the ground of race, color, or national origin in any program or activity or situation to which this part is inapplicable, or prohibit discrimination on any other ground. (b) <E T="03">Forms and instructions.</E> The responsible Department official shall assure that forms and detailed instructions and procedures for effectuating this part are issued and promptly made available to interested persons. (c) <E T="03">Supervision and coordination.</E> The Secretary may from time to time assign to officials of the Department, or to officials of other departments or agencies of the Government with the consent of such department or agency, responsibilities in connection with the effectuation of the purposes of title VI of the Act and this part (other than responsibility for final decision as provided in § 1.10), including the achievement of effective coordination and maximum uniformity within the Department and within the Executive Branch of the Government in the application of title VI and this part to similar programs or activities and in similar situations. Any action taken, determination made, or requirement imposed by an official of another department or agency acting pursuant to an assignment of responsibility under this paragraph shall have the same effect as though such action had been taken by the responsible official of this Department. <CITA>[38 FR 17949, July 5, 1973. Redesignated at 61 FR 52217, Oct. 4, 1996]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 4</EAR> <HD SOURCE="HED">PART 4—HUD REFORM ACT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Accountability in the Provision of HUD Assistance</HD> <SECHD>Sec.</SECHD> <SECTNO>4.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>4.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>4.5</SECTNO> <SUBJECT>Notice and documentation of assistance subject to section 102(a).</SUBJECT> <SECTNO>4.7</SECTNO> <SUBJECT>Notice of funding decisions.</SUBJECT> <SECTNO>4.9</SECTNO> <SUBJECT>Disclosure requirements for assistance subject to section 102(b).</SUBJECT> <SECTNO>4.11</SECTNO> <SUBJECT>Updating of disclosure.</SUBJECT> <SECTNO>4.13</SECTNO> <SUBJECT>Limitation of assistance subject to section 102(d).</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Prohibition of Advance Disclosure of Funding Decisions</HD> <SECTNO>4.20</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>4.22</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>4.24</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>4.26</SECTNO> <SUBJECT>Permissible and impermissible disclosures.</SUBJECT> <SECTNO>4.28</SECTNO> <SUBJECT>Civil penalties.<PRTPAGE P="18"/> </SUBJECT> <SECTNO>4.30</SECTNO> <SUBJECT>Procedure upon discovery of a violation.</SUBJECT> <SECTNO>4.32</SECTNO> <SUBJECT>Investigation by Office of Inspector General.</SUBJECT> <SECTNO>4.34</SECTNO> <SUBJECT>Review of Inspector General's report by the Ethics Law Division.</SUBJECT> <SECTNO>4.36</SECTNO> <SUBJECT>Action by the Ethics Law Division.</SUBJECT> <SECTNO>4.38</SECTNO> <SUBJECT>Administrative remedies.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d), 3537a, 3545. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 14449, Apr. 1, 1996, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Accountability in the Provision of HUD Assistance</HD> <SECTION> <SECTNO>§ 4.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> The provisions of this subpart A are authorized under section 102 of the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a) (hereinafter, Section 102). Both the provisions of Section 102 and this subpart A apply for the purposes of Section 102. Section 102 contains a number of provisions designed to ensure greater accountability and integrity in the way in which the Department makes assistance available under certain of its programs. </SECTION> <SECTION> <SECTNO>§ 4.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Applicant</E> includes a person whose application for assistance must be submitted to HUD for any purpose including approval, environmental review, or rent determination. <E T="03">Assistance under any program or discretionary fund administered by the Secretary</E> is subject to Section 102(a), and means any assistance, under any program administered by the Department, that provides by statute, regulation or otherwise for the competitive distribution of funding. <E T="03">Assistance within the jurisdiction of the Department</E> is subject to Section 102(b), and means any contract, grant, loan, cooperative agreement, or other form of assistance, including the insurance or guarantee of a loan or mortgage, that is provided with respect to a specific project or activity under a program administered by the Department, whether or not it is awarded through a competitive process. <E T="03">Assistance within the jurisdiction of the Department to any housing project</E> is subject to Section 102(d), and means: (1) Assistance which is provided directly by HUD to any person or entity, but not to subrecipients. It includes assistance for the acquisition, rehabilitation, operation conversion, modernization, renovation, or demolition of any property containing five or more dwelling units that is to be used primarily for residential purposes. It includes assistance to independent group residences, board and care facilities, group homes and transitional housing but does not include primarily nonresidential facilities such as intermediate care facilities, nursing homes and hospitals. It also includes any change requested by a recipient in the amount of assistance previously provided, except changes resulting from annual adjustments in Section 8 rents under Section 8(c)(2)(A) of the United States Housing Act of 1937 (42 U.S.C. 1437f); (2) Assistance to residential rental property receiving a tax credit under Federal, State or local law. (3) For purposes of this definition, assistance includes assistance resulting from annual adjustments in Section 8 rents under Section 8(c)(2)(A) of the United States Housing Act of 1937, unless the initial assistance was made available before April 15, 1991, and no other assistance subject to this subpart A was made available on or after that date. <E T="03">Housing project</E> means: (1) Property containing five or more dwelling units that is to be used for primarily residential purposes, including (but not limited to) living arrangements such as independent group residences, board and care facilities, group homes, and transitional housing, but excluding facilities that provide primarily non-residential services, such as intermediate care facilities, nursing homes, and hospitals. (2) Residential rental property receiving a tax credit under Federal, State, or local law. <E T="03">Interested party</E> means any person involved in the application for assistance, or in the planning, development or implementation of the project or activity for which assistance is sought and any other person who has a pecuniary interest exceeding the lower of $50,000 or 10 percent in the project or activity for which assistance is sought.<PRTPAGE P="19"/> <E T="03">Selection criteria</E> includes, in addition to any objective measures of housing and other need, project merit, or efficient use of resources, the weight or relative importance of each published selection criterion as well as any other factors that may affect the selection of recipients. </SECTION> <SECTION> <SECTNO>§ 4.5</SECTNO> <SUBJECT>Notice and documentation of assistance subject to section 102(a).</SUBJECT> (a) <E T="03">Notice.</E> Before the Department solicits an application for assistance subject to Section 102(a), it will publish a Notice in the <E T="04">Federal Register</E> describing application procedures. Not less than 30 calendar days before the deadline by which applications must be submitted, the Department will publish selection criteria in the <E T="04">Federal Register</E>. (b) <E T="03">Documentation of decisions.</E> HUD will make available for public inspection, for at least five (5) years, and beginning not less than 30 calendars days after it provides the assistance, all documentation and other information regarding the basis for the funding decision with respect to each application submitted to HUD for assistance. HUD will also make available any written indication of support that it received from any applicant. Recipients of HUD assistance must ensure, in accordance with HUD guidance, the public availability of similar information submitted by subrecipients of HUD assistance. </SECTION> <SECTION> <SECTNO>§ 4.7</SECTNO> <SUBJECT>Notice of funding decisions.</SUBJECT> HUD will publish a Notice in the <E T="04">Federal Register</E> at least quarterly to notify the public of all decisions made by the Department to provide: (a) Assistance subject to Section 102(a); and (b) Assistance that is provided through grants or cooperative agreements on a discretionary (non-formula, non-demand) basis, but that is not provided on the basis of a competition. </SECTION> <SECTION> <SECTNO>§ 4.9</SECTNO> <SUBJECT>Disclosure requirements for assistance subject to section 102(b).</SUBJECT> (a) <E T="03">Receipt and reasonable expectation of receipt.</E> (1) In determining the threshold of applicability of Section 102(b), an applicant will be deemed to have received or to have a reasonable expectation of receiving: (i) The total amount of assistance received during the Federal fiscal year during which the application was submitted; (ii) The total amount of assistance requested for the fiscal year in which any pending application, including the current application, was submitted; and (iii) For the fiscal year described in paragraph (a)(1)(ii) of this section, the total amount of assistance from the Department or any other entity that is likely to be made available on a formula basis or in the form of program income as defined in 24 CFR part 85. (2) In the case of assistance that will be provided pursuant to contract over a period of time (such as project-based assistance under Section 8 of the United States Housing Act of 1937), all amounts that are to be provided over the term of the contract, irrespective of when they are to be received. (b) <E T="03">Content of disclosure.</E> Applicants that receive or can reasonably be expected to receive, as defined in paragraph (a) of this section, an aggregate amount of assistance that is in excess of $200,000 must disclose the following information: (1) Other governmental assistance that is or is expected to be made available, based upon a reasonable assessment of the circumstances, with respect to the project or activities for which the assistance is sought; (2) The name and pecuniary interest of any interested party; and (3) A report of the expected sources and uses of funds for the project or activity which is the subject of the application, including governmental and non-governmental sources of funds and private capital resulting from tax benefits. (c) In the case of mortgage insurance under 24 CFR subtitle B, chapter II, the mortgagor is responsible for making the disclosures required under Section 102(b) and this section, and the mortgagee is responsible for furnishing the mortgagor's disclosures to the Department. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0011)</APPRO> </SECTION> <SECTION> <PRTPAGE P="20"/> <SECTNO>§ 4.11</SECTNO> <SUBJECT>Updating of disclosure.</SUBJECT> (a) During the period in which an application for assistance covered under Section 102(b) is pending, or in which such assistance is being provided, the applicant must report to the Department, or to the State or unit of general local government, as appropriate: (1) Any information referred to in Section 102(b) that the applicant should have disclosed with respect to the application, but did not disclose; (2) Any information referred to in Section 102(b) that initially arose after the time for making disclosures under that subsection, including the name and pecuniary interest of any person who did not have a pecuniary interest in the project or activity that exceeded the threshold in Section 102(b) at the time of the application, but that subsequently exceeded the threshold. (b) With regard to changes in information that was disclosed under Sections 102(b) or 102(c): (1) For programs administered by the Assistant Secretary for Community Planning and Development: (i) Any change in other government assistance covered by Section 102(b) that exceeds the amount of all assistance that was previously disclosed by the lesser of $250,000 or 10 percent of the assistance; (ii) Any change in the expected sources or uses of funds that exceed the amount of all previously disclosed sources or uses by the lesser of $250,000 or 10 percent of previously disclosed sources; (2) For all other programs: (i) Any change in other government assistance under Section 102(b)(1) that exceeds the amount of assistance that was previously disclosed; (ii) Any change in the pecuniary interest of any person under Section 102(b)(2) that exceeds the amount of all previously disclosed interests by the lesser of $50,000 or 10 percent of such interest; (iii) For all projects receiving a tax credit under Federal, Sate or local law, any change in the expected sources or uses of funds that were previously disclosed; (iv) For all other projects: (A) Any change in the expected source of funds from a single source that exceeds the lesser of the amount previously disclosed for that source of funds by $250,000 or 10 percent of the funds previously disclosed for that source; (B) Any change in the expected sources of funds from all sources previously disclosed that exceeds the lesser of $250,000 or 10 percent of the amounts previously disclosed from all sources of funds; (C) Any change in a single expected use of funds that exceeds the lesser of $250,000 or 10 percent of the previously disclosed use; (D) Any change in the use of all funds that exceeds the lesser of $250,000 or 10 percent of the previously disclosed uses for all funds. (c) <E T="03">Period of coverage.</E> For purposes of updating of Section 102(c), an application for assistance will be considered to be pending from the time the application is submitted until the Department communicates its decision with respect to the selection of the applicant. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0011)</APPRO> </SECTION> <SECTION> <SECTNO>§ 4.13</SECTNO> <SUBJECT>Limitation of assistance subject to section 102(d).</SUBJECT> (a) In making the certification for assistance subject to Section 102(d), the Secretary will consider the aggregate amount of assistance from the Department and from other sources that is necessary to ensure the feasibility of the assisted activity. The Secretary will take into account all factors relevant to feasibility, which may include, but are not limited to, past rates of returns for owners, sponsors, and investors; the long-term needs of the project and its tenants; and the usual and customary fees charged in carrying out the assisted activity. (b) If the Department determines that the aggregate of assistance within the jurisdiction of the Department to a housing project from the Department and from other governmental sources exceeds the amount that the Secretary determines is necessary to make the assisted activity feasible, the Department will consider all options available to enable it to make the required certification, including reductions in the <PRTPAGE P="21"/>amount of Section 8 subsidies. The Department also may impose a dollar-for-dollar, or equivalent, reduction in the amount of HUD assistance to offset the amount of other government assistance. In grant programs, this could result in a reduction of any grant amounts not yet drawn down. The Department may make these adjustments immediately, or in conjunction with servicing actions anticipated to occur in the near future (<E T="03">e.g.,</E> in conjunction with the next annual adjustment of Section 8 rents). (c) If an applicant does not meet the $200,000 disclosure requirement in § 4.7(b), an applicant must certify whether there is, or is expected to be made, available with respect to the housing project any other governmental assistance. The Department may also require any applicant subject to this subpart A to submit such a certification in conjunction with the Department's processing of any subsequent servicing action on that project. If there is other government assistance for purposes of the two preceding sentences, the applicant must submit such information as the Department deems necessary to make the certification and subsequent adjustments under Section 102(d). (d) The certification under Section 102(d) shall be retained in the official file for the housing project. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Prohibition of Advance Disclosure of Funding Decisions</HD> <SECTION> <SECTNO>§ 4.20</SECTNO> <SUBJECT>Purpose.</SUBJECT> The provisions of this subpart B are authorized under section 103 of the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a) (hereinafter, Section 103). Both the provisions of Section 103 and this subpart B apply for the purposes of Section 103. Section 103 proscribes direct or indirect communication of certain information during the selection process by HUD employees to persons within or outside of the Department who are not authorized to receive that information. The purpose of the proscription is to preclude giving an unfair advantage to applicants who would receive information not available to other applicants or to the public. Section 103 also authorizes the Department to impose a civil money penalty on a HUD employee who knowingly discloses protected information, if such a violation of Section 103 is material, and authorizes the Department to sanction the person who received information improperly by, among other things, denying assistance to that person. </SECTION> <SECTION> <SECTNO>§ 4.22</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Application</E> means a written request for assistance regardless of whether the request is in proper form or format. <E T="03">Assistance</E> does not include any contract (e.g., a procurement contract) that is subject to the Federal Acquisition Regulation (FAR) (48 CFR ch. 1). <E T="03">Disclose</E> means providing information directly or indirectly to a person through any means of communication. <E T="03">Employee</E> includes persons employed on a full-time, part-time, or temporary basis, and special government employees as defined in 18 U.S.C. 202. The term applies whether or not the employee is denoted as an officer of the Department. “Employee” is to be construed broadly to include persons who are retained on a contractual or consultative basis under an Office of Human Resources appointment. However, “employee” does not include an independent contractor, e.g., a firm or individual working under the authority of a procurement contract. <E T="03">Material or materially</E> means in some influential or substantial respect or having to do more with substance than with form. <E T="03">Person</E> means an individual, corporation, company, association, authority, firm, partnership, society, State, local government, or any other organization or group of people. <E T="03">Selection process</E> means the period with respect to a selection for assistance that begins when the HUD official responsible for awarding the assistance involved, or his or her designee, makes a written request (which includes the selection criteria to be used in providing the assistance) to the Office of General Counsel (OGC) to prepare the <PRTPAGE P="22"/>NOFA, solicitation, or request for applications for assistance for publication in the <E T="04">Federal Register</E>. The period includes the evaluation of applications, and concludes with the announcement of the selection of recipients of assistance. </SECTION> <SECTION> <SECTNO>§ 4.24</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) <E T="03">Coverage.</E> The prohibitions against improper disclosure of covered selection information apply to any person who is an employee of the Department. In addition, the Department will require any other person who participates at the invitation of the Department in the selection process to sign a certification that he or she will be bound by the provisions of this part. (b) <E T="03">Applicability.</E> The prohibitions contained in this part apply to conduct occurring on or after June 12, 1991. </SECTION> <SECTION> <SECTNO>§ 4.26</SECTNO> <SUBJECT>Permissible and impermissible disclosures.</SUBJECT> (a) Notwithstanding the provisions of Section 103, an employee is permitted to disclose information during the selection process with respect to: (1) The requirements of a HUD program or programs, including unpublished policy statements and the provision of technical assistance concerning program requirements, provided that the requirements or statements are disclosed on a uniform basis to any applicant or potential applicant. For purposes of this part, the term “technical assistance” includes such activities as explaining and responding to questions about program regulations, defining terms in an application package, and providing other forms of technical guidance that may be described in a NOFA. The term “technical assistance” also includes identification of those parts of an application that need substantive improvement, but this term does not include advising the applicant how to make those improvements. (2) The dates by which particular decisions in the selection process will be made; (3) Any information which has been published in the <E T="04">Federal Register</E> in a NOFA or otherwise; (4) Any information which has been made public through means other than the <E T="04">Federal Register</E>; (5) An official audit, inquiry or investigation, if the disclosure is made to an auditor or investigator authorized by the HUD Inspector General to conduct the audit or investigation; (6) Legal activities, including litigation, if the disclosure is made to an attorney who is representing or is otherwise responsible to the Department in connection with the activities; or (7) Procedures that are required to be performed to process an application, e.g., environmental or budget reviews, and technical assistance from experts in fields who are regularly employed by other government agencies, provided that the agency with which the expert is employed or associated is not an applicant for HUD assistance during the pending funding cycle. (b) An authorized employee, during the selection process, may contact an applicant for the purpose of: (1) Communication of the applicant's failure to qualify, after a preliminary review for eligibility and completeness with respect to his or her application, and the reasons for the failure to qualify, or the fact of the applicant's failure to be determined to be technically acceptable after a full review; or (2) Clarification of the terms of the applicant's application. A clarification, for the purpose of this paragraph (b), may include a request for additional information consistent with regulatory requirements. (c) Prohibition of advance disclosure of funding decisions. During the selection process an employee shall not knowingly disclose any covered selection information regarding the selection process to any person other than an employee authorized to receive that information. (1) The following disclosures of information are, at any time during the selection process, a violation of Section 103: (i) Information regarding any applicant's relative standing; (ii) The amount of assistance requested by any applicant; (iii) Any information contained in an application;<PRTPAGE P="23"/> (2) The following disclosures of information, before the deadline for the submission of applications, shall be a violation of Section 103: (i) The identity of any applicant; and (ii) The number of applicants. </SECTION> <SECTION> <SECTNO>§ 4.28</SECTNO> <SUBJECT>Civil penalties.</SUBJECT> Whenever any employee knowingly and materially violates the prohibition in Section 103, the Department may impose a civil money penalty on the employee in accordance with the provisions of 24 CFR part 30. </SECTION> <SECTION> <SECTNO>§ 4.30</SECTNO> <SUBJECT>Procedure upon discovery of a violation.</SUBJECT> (a) <E T="03">In general.</E> When an alleged violation of Section 103 or this subpart B comes to the attention of any person, including an employee, he or she may either: (1) Contact the HUD Ethics Law Division to provide information about the alleged violation; or (2) Contact the HUD Office of Inspector General to request an inquiry or investigation into the matter. (b) <E T="03">Ethics Law Division.</E> When the Ethics Law Division receives information concerning an alleged violation of Section 103, it shall refer the matter to the Inspector General stating the facts of the alleged violation and requesting that the Inspector General make an inquiry or investigation into the matter. (c) <E T="03">Inspector General.</E> When the Inspector General receives information concerning an alleged violation of Section 103 or this subpart B, he or she shall notify the Ethics Law Division when the Inspector General begins an inquiry or investigation into the matter. (d) <E T="03">Protection of employee complainants.</E> (1) No official of the Ethics Law Division, after receipt of information from an employee stating the facts of an alleged violation of this part, shall disclose the identity of the employee without the consent of that employee. The Inspector General, after receipt of information stating the facts of an alleged violation of this part, shall not disclose the identity of the employee who provided the information without the consent of that employee, unless the Inspector General determines that disclosure of the employee's identity is unavoidable during the course of an investigation. However, any employee who knowingly reports a false alleged violation of this part is not so protected and may be subject to disciplinary action. (2) Any employee who has authority to take, direct others to take, recommend or approve a personnel action is prohibited from threatening, taking, failing to take, recommending, or approving any personnel action as reprisal against another employee for providing information to investigating officials. </SECTION> <SECTION> <SECTNO>§ 4.32</SECTNO> <SUBJECT>Investigation by Office of Inspector General.</SUBJECT> The Office of Inspector General shall review every alleged violation of Section 103. If after a review the Office of Inspector General determines that further investigation is not warranted, it shall notify the Ethics Law Division of that determination. If, after a review, the Office of Inspector General determines that additional investigation is warranted, it shall conduct the investigation and upon completion issue a report of the investigation to the Ethics Law Division as to each alleged violation. </SECTION> <SECTION> <SECTNO>§ 4.34</SECTNO> <SUBJECT>Review of Inspector General's report by the Ethics Law Division.</SUBJECT> After receipt of the Inspector General's report, the Ethics Law Division shall review the facts and circumstances of the alleged violations. In addition, the Ethics Law Division may: (a) Return the report to the Inspector General with a request for further investigation; (b) Discuss the violation with the employee alleged to have committed the violation; or (c) Interview any other person, including employees who it believes will be helpful in furnishing information relevant to the inquiry. </SECTION> <SECTION> <SECTNO>§ 4.36</SECTNO> <SUBJECT>Action by the Ethics Law Division.</SUBJECT> (a) After review of the Inspector General's report, the Ethics Law Division shall determine whether or not there is <PRTPAGE P="24"/>sufficient information providing a reasonable basis to believe that a violation of Section 103 or this subpart B has occurred. (b) If the Ethics Law Division determines that there is no reasonable basis to believe that a violation of Section 103 or this subpart B has occurred, it shall close the matter and send its determination to the Office of Inspector General. (c) If the Ethics Law Division determines that there is sufficient information to provide a reasonable basis to believe that a violation of Section 103 or this subpart B has occurred, it shall: (1) Send its determination to the Office of Inspector General; and (2) Refer the matter to the appropriate official for review as to whether to impose a civil money penalty in accordance with 24 CFR part 30; provided, however, that the Ethics Law Division shall not make a civil money penalty recommendation unless it finds the violation to have been knowing and material. The decision to impose a civil money penalty in a particular matter may be made only upon referral from the Ethics Law Division. (d) In determining whether a violation is material, the Ethics Law Division shall consider the following factors, as applicable: (1) The content of the disclosure and its significance to the person to whom the disclosure was made; (2) The time during the selection process when the disclosure was made; (3) The person to whom the disclosure was made; (4) The dollar amount of assistance requested by the person to whom the disclosure was made; (5) The dollar amount of assistance available for a given competition or program; (6) The benefit, if any, received or expected by the employee, the employee's relatives or friends, or any other person with whom the employee is affiliated; (7) The potential injury to the Department. (e) If the Ethics Law Division determines that there is sufficient information to provide a reasonable basis to believe that a violation of Section 103 or this subpart B has occurred, it may, in addition to referring the matter under 24 CFR part 30, refer the matter to an appropriate HUD official for consideration of any other available disciplinary action. Any referral authorized by this paragraph (e) shall be reported to the Inspector General and may be reported to the employee's supervisor. </SECTION> <SECTION> <SECTNO>§ 4.38</SECTNO> <SUBJECT>Administrative remedies.</SUBJECT> (a) If the Department receives or obtains information providing a reasonable basis to believe that a violation of Section 103 has occurred, the Department may impose a sanction, as determined to be appropriate, upon an applicant for or a recipient of assistance who has received covered selection information. (b) In determining whether a sanction is appropriate and if so which sanction or sanctions should be sought, the Secretary shall give consideration to the applicant's conduct with respect to the violation. In so doing, the Secretary shall consider the factors listed at § 4.36(d), as well as any history of prior violations in any HUD program, the benefits received or expected, deterrence of future violations and the extent of any complicity in the violation. (c) The Secretary may impose a sanction authorized by this section whether or not the Ethics Law Division refers a case under 24 CFR part 30, and whether or not a civil money penalty is imposed. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 5</EAR> <HD SOURCE="HED">PART 5—GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Generally Applicable Definitions and Federal Requirements; Waivers</HD> <SECHD>Sec.</SECHD> <SECTNO>5.100</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.105</SECTNO> <SUBJECT>Other Federal requirements.</SUBJECT> <SECTNO>5.107</SECTNO> <SUBJECT>Audit requirements for non-profit organizations.</SUBJECT> <SECTNO>5.110</SECTNO> <SUBJECT>Waivers.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Disclosure and Verification of Social Security Numbers and Employer Identification Numbers; Procedures for Obtaining Income Information</HD> <SECTNO>5.210</SECTNO> <SUBJECT>Purpose, applicability, and Federal preemption.</SUBJECT> <SECTNO>5.212</SECTNO> <SUBJECT>Compliance with the Privacy Act and <PRTPAGE P="25"/>other requirements.</SUBJECT> <SECTNO>5.214</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SUBJGRP> <HD SOURCE="HED">Disclosure and Verification of Social Security Numbers and Employer Identification Numbers for Applicants and Participants in Certain HUD Programs</HD> <SECTNO>5.216</SECTNO> <SUBJECT>Disclosure and verification of Social Security and Employer Identification Numbers.</SUBJECT> <SECTNO>5.218</SECTNO> <SUBJECT>Penalties for failing to disclose and verify Social Security and Employer Identification Numbers.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Obtaining Income Information About Applicants and Participants</HD> <SECTNO>5.230</SECTNO> <SUBJECT>Consent by assistance applicants and participants.</SUBJECT> <SECTNO>5.232</SECTNO> <SUBJECT>Penalties for failing to sign consent forms.</SUBJECT> <SECTNO>5.234</SECTNO> <SUBJECT>Requests for information from SWICAs and Federal agencies; restrictions on use.</SUBJECT> <SECTNO>5.236</SECTNO> <SUBJECT>Procedures for termination, denial, suspension, or reduction of assistance based on information obtained from a SWICA or Federal agency.</SUBJECT> <SECTNO>5.238</SECTNO> <SUBJECT>Criminal and civil penalties.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Pet Ownership for the Elderly or Persons With Disabilities</HD> <SUBJGRP> <HD SOURCE="HED">General Requirements</HD> <SECTNO>5.300</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>5.303</SECTNO> <SUBJECT>Exclusion for animals that assist persons with disabilities.</SUBJECT> <SECTNO>5.306</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.309</SECTNO> <SUBJECT>Prohibition against discrimination.</SUBJECT> <SECTNO>5.312</SECTNO> <SUBJECT>Notice to tenants.</SUBJECT> <SECTNO>5.315</SECTNO> <SUBJECT>Content of pet rules: general requirements.</SUBJECT> <SECTNO>5.318</SECTNO> <SUBJECT>Discretionary pet rules.</SUBJECT> <SECTNO>5.321</SECTNO> <SUBJECT>Lease provisions.</SUBJECT> <SECTNO>5.324</SECTNO> <SUBJECT>Implementation of lease provisions.</SUBJECT> <SECTNO>5.327</SECTNO> <SUBJECT>Nuisance or threat to health or safety.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Housing Programs</HD> <SECTNO>5.350</SECTNO> <SUBJECT>Mandatory pet rules for housing programs.</SUBJECT> <SECTNO>5.353</SECTNO> <SUBJECT>Housing programs: Procedure for development of pet rules.</SUBJECT> <SECTNO>5.356</SECTNO> <SUBJECT>Housing programs: Pet rule violation procedures.</SUBJECT> <SECTNO>5.359</SECTNO> <SUBJECT>Housing programs: Rejection of units by applicants for tenancy.</SUBJECT> <SECTNO>5.360</SECTNO> <SUBJECT>Housing programs: Additional lease provisions.</SUBJECT> <SECTNO>5.363</SECTNO> <SUBJECT>Housing programs: Protection of the pet.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Public Housing Programs</HD> <SECTNO>5.380</SECTNO> <SUBJECT>Public housing programs: Procedure for development of pet rules.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Definitions and Other General Requirements for Assistance Under the United States Housing Act of 1937</HD> <SECTNO>5.400</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>5.403</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.405</SECTNO> <SUBJECT>Basic eligibility; preference over single persons; and housing assistance limitation for single persons.</SUBJECT> <SECTNO>5.410</SECTNO> <SUBJECT>Selection preferences.</SUBJECT> <SECTNO>5.415</SECTNO> <SUBJECT>Federal preferences: general.</SUBJECT> <SECTNO>5.420</SECTNO> <SUBJECT>Federal preference: involuntary displacement.</SUBJECT> <SECTNO>5.425</SECTNO> <SUBJECT>Federal preference: substandard housing.</SUBJECT> <SECTNO>5.430</SECTNO> <SUBJECT>Federal preference: rent burden.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Restrictions on Assistance to Noncitizens</HD> <SECTNO>5.500</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>5.501</SECTNO> <SUBJECT>PHA election whether to comply with this subpart.</SUBJECT> <SECTNO>5.502</SECTNO> <SUBJECT>Requirements concerning documents.</SUBJECT> <SECTNO>5.504</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.506</SECTNO> <SUBJECT>General provisions.</SUBJECT> <SECTNO>5.508</SECTNO> <SUBJECT>Submission of evidence of citizenship or eligible immigration status.</SUBJECT> <SECTNO>5.510</SECTNO> <SUBJECT>Documents of eligible immigration status.</SUBJECT> <SECTNO>5.512</SECTNO> <SUBJECT>Verification of eligible immigration status.</SUBJECT> <SECTNO>5.514</SECTNO> <SUBJECT>Delay, denial, reduction or termination of assistance.</SUBJECT> <SECTNO>5.516</SECTNO> <SUBJECT>Availability of preservation assistance to mixed families and other families.</SUBJECT> <SECTNO>5.518</SECTNO> <SUBJECT>Types of preservation assistance available to mixed families and other families.</SUBJECT> <SECTNO>5.520</SECTNO> <SUBJECT>Proration of assistance.</SUBJECT> <SECTNO>5.522</SECTNO> <SUBJECT>Prohibition of assistance to noncitizen students.</SUBJECT> <SECTNO>5.524</SECTNO> <SUBJECT>Compliance with nondiscrimination requirements.</SUBJECT> <SECTNO>5.526</SECTNO> <SUBJECT>Protection from liability for responsible entities and State and local government agencies and officials.</SUBJECT> <SECTNO>5.528</SECTNO> <SUBJECT>Liability of ineligible tenants for reimbursement of benefits.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Income Limits, Annual Income, Adjusted Income, Rent, and Examinations for the Public Housing and Section 8 Programs</HD> <SECTNO>5.601</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> <SECTNO>5.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.605</SECTNO> <SUBJECT>Overall income eligibility for assistance.</SUBJECT> <SECTNO>5.607</SECTNO> <SUBJECT>Income limits for admission.</SUBJECT> <SECTNO>5.609</SECTNO> <SUBJECT>Annual income.</SUBJECT> <SECTNO>5.611</SECTNO> <SUBJECT>Adjusted income.</SUBJECT> <SECTNO>5.613</SECTNO> <SUBJECT>Total tenant payment.</SUBJECT> <SECTNO>5.615</SECTNO> <SUBJECT>Utility reimbursements.</SUBJECT> <SECTNO>5.617</SECTNO> <SUBJECT>Reexamination and verification.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <PRTPAGE P="26"/> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d), unless otherwise noted. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 5202, Feb. 9, 1996, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Generally Applicable Definitions and Federal Requirements; Waivers</HD> <SECTION> <SECTNO>§ 5.100</SECTNO> <SUBJECT>Definitions.</SUBJECT> The following definitions apply as noted in the respective program regulations: <E T="03">1937 Act</E> means the United States Housing Act of 1937 (42 U.S.C. 1437 <E T="03">et seq.</E>) <E T="03">ADA</E> means the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 <E T="03">et seq.</E>). <E T="03">ALJ</E> means an administrative law judge appointed to HUD pursuant to 5 U.S.C. 3105 or detailed to HUD pursuant to 5 U.S.C. 3344. <E T="03">Department</E> means the Department of Housing and Urban Development. <E T="03">Elderly Person</E> means an individual who is at least 62 years of age. <E T="03">Fair Housing Act</E> means title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988 (42 U.S.C. 3601 <E T="03">et seq.</E>). <E T="03">Fair Market Rent (FMR)</E> means the rent that would be required to be paid in the particular housing market area in order to obtain privately owned, decent, safe and sanitary rental housing of modest (non-luxury) nature with suitable amenities. This Fair Market Rent includes utilities (except telephone). Separate Fair Market Rents will be established by HUD for dwelling units of varying sizes (number of bedrooms) and will be published in the <E T="04">Federal Register</E> in accordance with part 888 of this title. <E T="03">General Counsel</E> means the General Counsel of HUD. <E T="03">Grantee</E> means the person or legal entity to which a grant is awarded and that is accountable for the use of the funds provided. <E T="03">HUD</E> means the same as <E T="03">Department.</E> <E T="03">Indian</E> means a person who is recognized as being an Indian or Alaska Native by an Indian Tribe, the Federal government, or any State. <E T="03">Indian Housing Authority (IHA)</E> means an entity that: (1) Is authorized to engage or assist in the development or operation of low-income housing for Indians under the 1937 Act; and (2) Is established: (i) By exercise of the power of self-government of an Indian Tribe independent of State law; or (ii) By operation of State law providing specifically for housing authorities for Indians, including regional housing authorities in the State of Alaska. <E T="03">NAHA</E> means the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 <E T="03">et seq.</E>). <E T="03">NEPA</E> means the National Environmental Policy Act of 1969 (42 U.S.C. 4321). <E T="03">NOFA</E> means Notice of Funding Availability. <E T="03">OMB</E> means the Office of Management and Budget. <E T="03">Organizational Unit</E> means the jurisdictional area of each Assistant Secretary, and each office head or field administrator reporting directly to the Secretary. <E T="03">Public Housing Agency (PHA)</E> means any State, county, municipality, or other governmental entity or public body, or agency or instrumentality of these entities, that is authorized to engage or assist in the development or operation of low-income housing under the 1937 Act. <E T="03">Section 8</E> means section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f). <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. <E T="03">URA</E> means the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4201-4655). </SECTION> <SECTION> <SECTNO>§ 5.105</SECTNO> <SUBJECT>Other Federal requirements.</SUBJECT> The following Federal requirements apply as noted in the respective program regulations: (a) <E T="03">Nondiscrimination and equal opportunity.</E> The Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 <E T="03">et seq.</E>; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107; title VI of the Civil <PRTPAGE P="27"/>Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8; section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and implementing regulations at 24 CFR part 135; Executive Order 11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 (3 CFR, 1964-1965 Comp., p. 339; 3 CFR, 1966-1970 Comp., p. 684; 3 CFR, 1966-1970 Comp., p. 803; 3 CFR, 1978 Comp., p. 230; and 3 CFR, 1978 Comp., p. 264, respectively) (Equal Employment Opportunity Programs) and implementing regulations at 41 CFR chapter 60; Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise). (b) <E T="03">Disclosure requirements.</E> The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR part 87; and the requirements for funding competitions established by the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3531 <E T="03">et seq.</E>). (c) <E T="03">Debarred, suspended or ineligible contractors.</E> The prohibitions at 24 CFR part 24 on the use of debarred, suspended or ineligible contractors. (d) <E T="03">Drug-Free Workplace.</E> The Drug-Free Workplace Act of 1988 (41 U.S.C. 701 <E T="03">et seq.</E>) and HUD's implementing regulations at 24 CFR part 24. </SECTION> <SECTION> <SECTNO>§ 5.107</SECTNO> <SUBJECT>Audit requirements for non-profit organizations.</SUBJECT> Non-profit organizations subject to regulations in the part 200 and part 800 series of title 24 of the CFR shall comply with the audit requirements of revised OMB Circular A-133, “Audits of States, Local Governments, and Non-profit Organizations” (see 24 CFR 84.26). For HUD programs, a non-profit organization is the mortgagor or owner (as these terms are defined in the regulations in the part 200 and part 800 series) and not a related or affiliated organization or entity. <CITA>[62 FR 61617, Nov. 18, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.110</SECTNO> <SUBJECT>Waivers.</SUBJECT> Upon determination of good cause, the Secretary may, subject to statutory limitations, waive any provision of this title and delegate this authority in accordance with section 106 of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)). </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Disclosure and Verification of Social Security Numbers and Employer Identification Numbers; Procedures for Obtaining Income Information</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d), 3543, 3544, and 11901 <E T="03">et seq.</E> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 11113, Mar. 18, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 5.210</SECTNO> <SUBJECT>Purpose, applicability, and Federal preemption.</SUBJECT> (a) <E T="03">Purpose.</E> This subpart B requires applicants for and participants in covered HUD programs to disclose, and submit documentation to verify, their Social Security Numbers (SSNs). This subpart B also enables HUD and HAs to obtain income information about applicants and participants in the covered programs through computer matches with State Wage Information Collection Agencies (SWICAs) and Federal agencies, in order to verify an applicant's or participant's eligibility for or level of assistance. The purpose of this subpart B is to enable HUD to decrease the incidence of fraud, waste, and abuse in the covered programs. (b) <E T="03">Applicability.</E> (1) This subpart B applies to mortgage and loan insurance and coinsurance and housing assistance programs contained in chapter II, subchapter B, and chapters VIII and IX of this title. (2) The information covered by consent forms described in this subpart involves income information from <PRTPAGE P="28"/>SWICAs, and wages, net earnings from self-employment, payments of retirement income, and unearned income as referenced at 26 U.S.C. 6103. In addition, consent forms may authorize the collection of other information from applicants and participants to determine eligibility or level of benefits, as provided in parts 813 and 913 of this title. (c) <E T="03">Federal preemption.</E> This subpart B preempts any State law, including restrictions and penalties, that governs the collection and use of income information to the extent State law is inconsistent with this subpart. </SECTION> <SECTION> <SECTNO>§ 5.212</SECTNO> <SUBJECT>Compliance with the Privacy Act and other requirements.</SUBJECT> (a) <E T="03">Compliance with the Privacy Act.</E> The collection, maintenance, use, and dissemination of SSNs, EINs, any information derived from SSNs and Employer Identification Numbers (EINs), and income information under this subpart shall be conducted, to the extent applicable, in compliance with the Privacy Act (5 U.S.C. 552a) and all other provisions of Federal, State, and local law. (b) <E T="03">Privacy Act notice.</E> All assistance applicants shall be provided with a Privacy Act notice at the time of application. All participants shall be provided with a Privacy Act notice at each annual income recertification. </SECTION> <SECTION> <SECTNO>§ 5.214</SECTNO> <SUBJECT>Definitions.</SUBJECT> In addition to the definitions in § 5.100, the following definitions apply to this subpart B: <E T="03">Assistance applicant.</E> Except as excluded pursuant to 42 U.S.C. 3543(b) and 3544(a)(2), this term means the following: (1) For any program under 24 CFR parts 215, 221, 236, 290, 880, 882, 886, 887, 891: A family or individual that seeks rental assistance under the program. (2) For any program under 24 CFR parts 904, 950, and 960: A prospective tenant or homebuyer seeking the benefit of the program. (3) For any program under 24 CFR part 235: A homeowner or cooperative member seeking homeownership assistance (including where the individual seeks to assume an existing mortgage). <E T="03">Computer match</E> means the automated comparison of data bases containing records about individuals. <E T="03">Computer matching agreement</E> means the agreement that describes the responsibilities and obligations of the parties participating in a computer match. <E T="03">Consent form</E> means any consent form approved by HUD to be signed by assistance applicants and participants for the purpose of obtaining income information from employers and SWICAs; return information from the Social Security Administration (including wages, net earnings from self-employment, and payments of retirement income), as referenced at 26 U.S.C. 6103(l)(7)(A); and return information for unearned income from the Internal Revenue Service, as referenced at 26 U.S.C. 6103(l)(7)(B). The consent forms expire after a certain time and may authorize the collection of other information from assistance applicants or participants to determine eligibility or level of benefits as provided in §§ 813.109, 913.109, and 950.315 of this title. <E T="03">Employer Identification Number (EIN)</E> means the nine-digit taxpayer identifying number that is assigned to an individual, trust, estate, partnership, association, company, or corporation pursuant to sections 6011(b), or corresponding provisions of prior law, or 6109 of the Internal Revenue Code. <E T="03">Entity applicant.</E> (1) Except as excluded pursuant to 42 U.S.C. 3543(b), 3544(a)(2), and paragraph (2) of this definition, this term means a partnership, corporation, or any other association or entity, other than an individual owner applicant, that seeks to participate as a private owner in any of the following: (i) The project-based assistance programs in 24 CFR parts 880, 882, 886, or 891; (ii) The programs in 24 CFR parts 215, 221, or 236; or (iii) The other mortgage and loan insurance programs in 24 CFR parts 201 through 267, except that the term “entity applicant” does not include a mortgagee or lender. (2) The term does not include a public entity, such as a PHA, IHA, or State Housing Finance Agency.<PRTPAGE P="29"/> <E T="03">Federal agency</E> means a department of the executive branch of the Federal Government. <E T="03">HA</E> is the collective term for PHAs and IHAs. <E T="03">Income information</E> means information relating to an individual's income, including: (1) All employment income information known to current or previous employers or other income sources that HUD or the processing entity determines is necessary for purposes of determining an assistance applicant's or participant's eligibility for, or level of assistance in, a covered program; (2) All information about wages, as defined in the State's unemployment compensation law, including any Social Security Number; name of the employee; quarterly wages of the employee; and the name, full address, telephone number, and, when known, Employer Identification Number of an employer reporting wages under a State unemployment compensation law; (3) With respect to unemployment compensation: (i) Whether an individual is receiving, has received, or has applied for unemployment compensation; (ii) The amount of unemployment compensation the individual is receiving or is entitled to receive; and (iii) The period with respect to which the individual actually received such compensation; (4) Unearned IRS income and self-employment, wages and retirement income as described in the Internal Revenue Code, 26 U.S.C. 6103(l)(7); and (5) Wage, social security (Title II), and supplemental security income (Title XVI) data obtaied from the Social Security Administration. <E T="03">Individual owner applicant.</E> Except as excluded pursuant to 42 U.S.C. 3543(b), 3544(a)(2), or paragraph (2) of this definition, this term means: (1) An individual who seeks to participate as a private owner in any of: (i) The project-based assistance programs in 24 CFR parts 880, 882, 886, 887, or 891; or (ii) The programs in 24 CFR parts 215, 221, 235 (without homeownership assistance), or 236, including where the individual seeks to assume an existing mortgage; or (2) An individual who: (i) Either: (A) Applies for a mortgage or loan insured or coinsured under any of the programs referred to in paragraph (1)(iii) of the definition of “entity applicant” in this section; or (B) Seeks to assume an existing mortgage or loan; and (ii) Intends to hold the mortgaged property in his or her individual right. <E T="03">IRS</E> means the Internal Revenue Service. <E T="03">Owner</E> means the person or entity (or employee of an owner) that leases an assisted dwelling unit to an eligible family and includes, when applicable, a mortgagee. <E T="03">Participant.</E> Except as excluded pursuant to 42 U.S.C. 3543(b) and 3544(a)(2), this term has the following meaning: (1) For 24 CFR parts 880, 882, 886, 887, and 891: A family receiving rental assistance under the program; (2) For 24 CFR parts 904, 950, 960: A tenant or homebuyer under the program; (3) For 24 CFR parts 215, 221, 236, and 290: A tenant or qualified tenant under any of the programs; and (4) For 24 CFR part 235: A homeowner or a cooperative member receiving homeownership assistance. <E T="03">Processing entity</E> means the person or entity that, under any of the programs covered under this subpart B, is responsible for making eligibility and related determinations and any income reexamination. <E T="03">Social Security Number (SSN)</E> means the nine-digit number that is assigned to a person by the Social Security Administration and that identifies the record of the person's earnings reported to the Social Security Administration. The term does not include a number with a letter as a suffix that is used to identify an auxiliary beneficiary. <E T="03">SSA</E> means the Social Security Administration. <E T="03">State Wage Information Collection Agency (SWICA)</E> means the State agency, including any Indian tribal agency, receiving quarterly wage reports from employers in the State, or an alternative system that has been determined by the Secretary of Labor to be <PRTPAGE P="30"/>as effective and timely in providing employment-related income and eligibility information. </SECTION> <SUBJGRP> <HD SOURCE="HED">Disclosure and Verification of Social Security Numbers and Employer Identification Numbers for Applicants and Participants in Certain HUD Programs</HD> <SECTION> <SECTNO>§ 5.216</SECTNO> <SUBJECT>Disclosure and verification of Social Security and Employer Identification Numbers.</SUBJECT> (a) <E T="03">Disclosure: assistance applicants.</E> Each assistance applicant must submit the following information to the processing entity when the assistant applicant's eligibility under the program involved is being determined: (1)(i) The complete and accurate SSN assigned to the assistant applicant and to each member of the assistant applicant's household who is at least six years of age; and (ii) The documentation referred to in paragraph (f)(1) of this section to verify each such SSN; or (2) If the assistance applicant or any member of the assistance applicant's household who is at least six years of age has not been assigned an SSN, a certification executed by the individual involved that meets the requirements of paragraph (j) of this section. (b) <E T="03">Disclosure: individual owner applicants.</E> Each individual owner applicant must submit the following information to the processing entity when the individual owner applicant's eligibility under the program involved is being determined: (1)(i) The complete and accurate SSNs assigned to the individual owner applicant and to each member of the individual owner applicant's household who will be obligated to pay the debt evidenced by the mortgage or loan documents; and (ii) The documentation referred to in paragraph (f)(1) of this section to verify the SSNs; or (2) If any person referred to in paragraph (b)(1)(i) of this section has not been assigned an SSN, a certification executed by the individual involved that meets the requirements of paragraph (j) of this section. (c) <E T="03">Disclosure: certain officials of entity applicants.</E> As explained more fully in HUD administrative instructions, each officer, director, principal stockholder, or other official of an entity applicant must submit the following information to the processing entity when the entity applicant's eligibility under the program involved is being determined: (1) The complete and accurate SSN assigned to each such individual; and (2) The documentation referred to in paragraph (f)(1) of this section to verify each SSN. (d) <E T="03">Disclosure: participants—</E>(1) <E T="03">Initial disclosure.</E> Each participant whose initial determination of eligibility under the program involved was begun before November 6, 1989, must submit the following information to the processing entity at the next regularly scheduled income reexamination for the program involved: (i)(A) The complete and accurate SSN assigned to the participant and to each member of the participant's family who is at least six years of age; and (B) The documentation referred to in paragraph (f)(1) of this section to verify each such SSN; or (ii) If the participant or any member of the participant's household who is at least six years of age has not been assigned an SSN, a certification executed by the individual(s) involved that meets the requirements of paragraph (j) of this section. (2) <E T="03">Subsequent disclosure.</E> Once a participant has disclosed and verified every SSN, or submitted any certification that an SSN has not been assigned, as provided by paragraph (a) of this section (for an assistance applicant) or paragraph (d)(1) (for a preexisting participant) of this section, the following rules apply: (i) If the participant's household adds a new member who is at least six years of age, the participant must submit to the processing entity, at the next interim or regularly scheduled income reexamination that includes the new members: (A) The complete and accurate SSNs assigned to each new member and the documentation referred to in paragraph (f)(1) of this section to verify the SSNs for each new member; or (B) If the new member has not been assigned an SSN, a certification executed by the individual involved that <PRTPAGE P="31"/>meets the requirements of paragraph (j) of this section. (ii) If the participant or any member of the participant's household who is at least six years of age obtains a previously undisclosed SSN, or has been assigned a new SSN, the participant must submit the following to the processing entity at the next regularly scheduled income reexamination: (A) The complete and accurate SSN assigned to the participant or household member involved; and (B) The documentation referred to in paragraph (f)(1) of this section to verify the SSN of each such individual. (iii) Additional SSN disclosure and verification requirements, including the nature of the disclosure and the verification required and the time and manner for making the disclosure and verification, may be specified in administrative instructions by: (A) HUD; and (B) In the case of the public housing program or the programs under parts 882 and 887 of this title, the HA. (e) <E T="03">Disclosure: entity applicants.</E> Each entity applicant must submit the following information to the processing entity when the entity applicant's eligibility under the program involved is being determined: (1) Any complete and accurate EIN assigned to the entity applicant; and (2) The documentation referred to in paragraph (f)(2) of this section to verify the EIN. (f) <E T="03">Required documentation</E>—(1) <E T="03">Social Security Numbers.</E> The documentation necessary to verify the SSN of an individual who is required to disclose his or her SSN under paragraphs (a) through (d) of this section is a valid SSN card issued by the SSA, or such other evidence of the SSN as HUD and, where applicable, the HA may prescribe in administrative instructions. (2) <E T="03">Employer Identification Numbers.</E> The documentation necessary to verify any EIN of an entity applicant that is required to disclose its EIN under paragraph (e) of this section is the official, written communication from the IRS assigning the EIN to the entity applicant, or such other evidence of the EIN as HUD may prescribe in administrative instructions. (g) <E T="03">Special documentation rules for assistance applicants and participants</E>—(1) <E T="03">Certification of inability to meet documentation requirements.</E> If an individual who is required to disclose his or her SSN under paragraph (a) (assistance applicants) of this section or paragraph (d) (participants) of this section is able to disclose the SSN, but cannot meet the documentation requirements of paragraph (f)(1) of this section, the assistance applicant or participant must submit to the processing entity the individual's SSN and a certification executed by the individual that the SSN submitted has been assigned to the individual, but that acceptable documentation to verify the SSN cannot be provided. (2) <E T="03">Acceptance or certification by processing entity.</E> Except as provided by paragraph (h) of this section, the processing entity must accept the certification referred to in paragraph (g)(1) of this section and continue to process the assistant applicant's or participant's eligibility to participate in the program involved. (3) <E T="03">Effect on assistance applicants.</E> If the processing entity determines that the assistance applicant is otherwise eligible to participate in the program, the assistance applicant may not become a participant in the program, unless it submits to the processing entity the documentation required under paragraph (f)(1) of this section within the time period specified in paragraph (g)(5) of this section. During such period, the assistance applicant will retain the position that it occupied in the program at the time the determination of eligibility was made, including its place on any waiting list maintained for the program, if applicable. (4) <E T="03">Effect on participants.</E> If the processing entity determines that the participant otherwise continues to be eligible to participate in the program, participation will continue, provided that the participant submits to the processing entity the documentation required under paragraph (f)(1) of this section within the time period specified in paragraph (g)(5) of this section. (5) <E T="03">Time for submitting documentation.</E> The time period referred to in paragraphs (g)(4) and (5) of this section is 60 <PRTPAGE P="32"/>calendar days from the date on which the certification referred to in paragraph (g)(1) of this section is executed, except that the processing entity may, in its discretion, extend this period for up to an additional 60 days if the individual is at least 62 years of age and is unable to submit the required documentation within the initial 60-day period. (h) <E T="03">Rejection of documentation or certification.</E> The processing entity may reject documentation referred to in paragraph (f) of this section, or a certification provided under paragraphs (a)(2), (b)(2), (d), or (g)(1) of this section, only for such reasons as HUD and the HA may prescribe in applicable administrative instructions. (i) <E T="03">Information on SSNs and EINs.</E> (1) Information regarding SSNs and SSN cards may be obtained by contacting the local SSA Office or consulting the SSA regulations at 20 CFR chapter III (see, particularly, part 422). (2) Information regarding EINs may be obtained by contacting the local office of the IRS or consulting the appropriate regulations for the IRS. (j) <E T="03">Form and manner of certifications.</E> The certifications referred to in paragraphs (a)(2), (b)(2), (d), and (g)(1) of this section must be in the form and manner that HUD and the HA prescribe in applicable administrative instructions. If an individual who is required to execute a certification is less than 18 years of age, the certification must be executed by his or her parent or guardian or, in accordance with administrative instructions, by the individual or another person. <APPRO>(Approved by the Office of Management and Budget under control number 2502-0204)</APPRO> </SECTION> <SECTION> <SECTNO>§ 5.218</SECTNO> <SUBJECT>Penalties for failing to disclose and verify Social Security and Employer Identification Numbers.</SUBJECT> (a) <E T="03">Denial of eligibility: assistance applicants and individual owner applicants.</E> The processing entity must deny the eligibility of an assistance applicant or individual owner applicant in accordance with the provisions governing the program involved, if the assistance or individual owner applicant does not meet the applicable SSN disclosure, documentation and verification, and certification requirements specified in § 5.216. (b) <E T="03">Denial of eligibility: entity applicants.</E> The processing entity must deny the eligibility of an entity applicant in accordance with the provisions governing the program involved; if: (1) The entity applicant does not meet the applicable EIN disclosure and verification requirements specified in § 5.216; or (2) Any of the officials of the entity applicant referred to in § 5.216(c) does not meet the applicable SSN disclosure, and documentation and verification requirements specified in § 5.216. (c) <E T="03">Termination of assistance or tenancy: participants.</E> The processing entity must terminate the assistance or tenancy, or both, of a participant, in accordance with the provisions governing the program involved, if the participant does not meet the applicable SSN disclosure, documentation and verification, and certification requirements specified in § 5.216. (d) <E T="03">Cross reference.</E> Individuals should consult the regulations and administrative instructions for the programs covered under this subpart B for further information on the use of SSNs and EINs in determinations regarding eligibility. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Obtaining Income Information About Applicants and Participants</HD> <SECTION> <SECTNO>§ 5.230</SECTNO> <SUBJECT>Consent by assistance applicants and participants.</SUBJECT> (a) <E T="03">Required consent by assistance applicants and participants.</E> Each member of the family of an assistance applicant or participant who is at least 18 years of age, and each family head and spouse regardless of age, shall sign one or more consent forms. (b) <E T="03">Consent authorization</E>—(1) <E T="03">To whom and when.</E> The assistance applicant shall submit the signed consent forms to the processing entity when eligibility under a covered program is being determined. A participant shall sign and submit consent forms at the next regularly scheduled income reexamination. Assistance applicants and participants shall be responsible for the signing and submitting of consent forms by each applicable family member.<PRTPAGE P="33"/> (2) <E T="03">Subsequent consent forms—special cases.</E> Participants are required to sign and submit consent forms at the next interim or regularly scheduled income reexamination under the following circumstances: (i) When any person 18 years or older becomes a member of the family; (ii) When a member of the family turns 18 years of age; and (iii) As required by HUD or the HA in administrative instructions. (c) <E T="03">Consent form—contents.</E> The consent form required by this section shall contain, at a minimum, the following: (1) A provision authorizing HUD and HAs to obtain from SWICAs any information or materials necessary to complete or verify the application for participation and to maintain continued assistance under a covered program; and (2) A provision authorizing HUD, HAs, or the owner responsible for determining eligibility for or the level of assistance to verify with previous or current employers income information pertinent to the assistance applicant's or participant's eligibility for or level of assistance under a covered program; (3) A provision authorizing HUD to request income return information from the IRS and the SSA for the sole purpose of verifying income information pertinent to the assistance applicant's or participant's eligibility or level of benefits; and (4) A statement that the authorization to release the information requested by the consent form expires 15 months after the date the consent form is signed. </SECTION> <SECTION> <SECTNO>§ 5.232</SECTNO> <SUBJECT>Penalties for failing to sign consent forms.</SUBJECT> (a) <E T="03">Denial or termination of benefits.</E> In accordance with the provisions governing the program involved, if the assistance applicant or participant, or any member of the assistance applicant's or participant's family, does not sign and submit the consent form as required in § 5.230, then: (1) The processing entity shall deny assistance to and admission of an assistance applicant; (2) Assistance to, and the tenancy of, a participant may be terminated. (b) <E T="03">Cross references.</E> Individuals should consult the regulations and administrative instructions for the programs covered under this subpart B for further information on the use of income information in determinations regarding eligibility. </SECTION> <SECTION> <SECTNO>§ 5.234</SECTNO> <SUBJECT>Requests for information from SWICAs and Federal agencies; restrictions on use.</SUBJECT> (a) <E T="03">Information available from SWICAs and Federal agencies—to whom and what.</E> Income information will generally be obtained through computer matching agreements between HUD and a SWICA or Federal agency, or between a HA and a SWICA, as described in paragraph (c) of this section. Certification that the applicable assistance applicants and participants have signed appropriate consent forms and have received the necessary Privacy Act notice is required, as follows: (1) When HUD requests the computer match, the processing entity shall certify to HUD; and (2) When the HA requests the computer match, the HA shall certify to the SWICA. (b) <E T="03">Restrictions on use of information.</E> The restrictions of 42 U.S.C. 3544(c)(2)(A) apply to the use by HUD or a HA of income information obtained from a SWICA. The restrictions of 42 U.S.C. 3544(c)(2)(A) and of 26 U.S.C. 6103(l)(7) apply to the use by HUD or a HA of income information obtained from the IRS or SSA. (c) <E T="03">Computer matching agreements.</E> Computer matching agreements shall specify the purpose and the legal authority for the match, and shall include a description of the records to be matched, a statement regarding disposition of information generated through the match, a description of the administrative and technical safeguards to be used in protecting the information obtained through the match, a description of the use of records, the restrictions on duplication and redisclosure, a certification, and the amount that will be charged for processing a request. <APPRO>(Approved by the Office of Management and Budget under control number 2508-0008)</APPRO> </SECTION> <SECTION> <PRTPAGE P="34"/> <SECTNO>§ 5.236</SECTNO> <SUBJECT>Procedures for termination, denial, suspension, or reduction of assistance based on information obtained from a SWICA or Federal agency.</SUBJECT> (a) <E T="03">Termination, denial, suspension, or reduction of assistance.</E> The provisions of 42 U.S.C. 3544(c)(2)(B) and (C) shall govern the termination, denial, suspension, or reduction of benefits for an assistance applicant or participant based on income information obtained from a SWICA or a Federal agency. Procedures necessary to comply with these provisions are provided in paragraph (b) of this section. (b) <E T="03">Procedures for independent verification.</E> (1) Any determination or redetermination of family income made on the basis of information verified in accordance with paragraph (b) of this section shall be carried out in accordance with the requirements and procedures applicable to the individual covered program. Independent verification of information obtained from a SWICA or a Federal agency may be: (i) By HUD; and (ii) By a HA, when the benefit to be provided to the assistance applicant or participant is under a program in parts 880, 882, 886, 887, 891, 904, 950, or 960 of this title, including when the HA is the contract administrator for the owner. (2) Upon receiving income information from a SWICA or a Federal agency, HUD or, when applicable, the HA shall compare the information with the information about a family's income that was: (i) Provided by the assistance applicant or participant to the HA; or (ii) Obtained by the owner (or mortgagee, as applicable) from the assistance applicant or participant or from his or her employer. (3) When the income information reveals an employer or other income source that was not disclosed by the assistance applicant or participant, or when the income information differs substantially from the information received from the assistance applicant or participant or from his or her employer: (i) HUD or, as applicable or directed by HUD, the HA shall request the undisclosed employer or other income source to furnish any information necessary to establish an assistance applicant's or participant's eligibility for or level of assistance in a covered program. This information shall be furnished in writing, as directed to: (A) HUD, with respect to programs under parts 215, 221, 235, 236, or 290 of this title; (B) The HA, with respect to programs under parts 880, 882, 886, 887, 891, 904, 950, or 960 of this title for which the HA is responsible for determining eligibility or level of benefits; or (C) The owner (or mortgagee, as applicable), with respect to programs under parts 215, 221, 235, 236, or 290 of this title, or when the owner is responsible under parts 880, 882, 886, 887, 891, 904, 950, or 960 of this title for determining eligibility or the level of assistance; or (ii) HUD or the HA may verify the income information directly with an assistance applicant or participant. Such verification procedures shall not include any disclosure of income information prohibited under paragraph (b)(6) of this section. (4) HUD and the HA shall not be required to pursue these verification procedures when the sums of money at issue are too small to raise an inference of fraud or justify the expense of independent verification and the procedures related to termination, denial, suspension, or reduction of assistance. (5) Based on the income information received from a SWICA or Federal agency, HUD or the HA, as appropriate, may inform an owner (or mortgagee) that an assistance applicant's or participant's eligibility for or level of assistance is uncertain and needs to be verified. The owner (or mortgagee) shall then confirm the assistance applicant's or participant's income information by checking the accuracy of the information with the employer or other income source, or directly with the family. (6) Nondisclosure of Income information. Neither HUD nor the HA may disclose income information obtained from a SWICA directly to an owner (unless a HA is the owner). Disclosure of income information obtained from the SSA or IRS is restricted under 26 U.S.C. § 6103(l)(7) and 42 U.S.C. 3544.<PRTPAGE P="35"/> (c) <E T="03">Opportunity to contest.</E> HUD, the HA, or the owner (or mortgagee, as applicable) shall promptly notify any assistance applicant or participant in writing of any adverse findings made on the basis of the information verified in accordance with paragraph (b) of this section. The assistance applicant or participant may contest the findings in the same manner as applies to other information and findings relating to eligibility factors under the applicable program. Termination, denial, suspension, or reduction of assistance shall be carried out in accordance with requirements and procedures applicable to the individual covered program, and shall not occur until the expiration of any notice period provided by the statute or regulations governing the program. </SECTION> <SECTION> <SECTNO>§ 5.238</SECTNO> <SUBJECT>Criminal and civil penalties.</SUBJECT> Persons who violate the provisions of 42 U.S.C. 3544 or 26 U.S.C. 6103(l)(7) with respect to the use and disclosure of income information may be subject to civil or criminal penalties under 42 U.S.C. 3544(c)(3), 26 U.S.C. 7213(a), or 18 U.S.C. 1905. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Pet Ownership for the Elderly or Persons With Disabilities</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1701r-1 and 3535(d). </AUTH> <SUBJGRP> <HD SOURCE="HED">General Requirements</HD> <SECTION> <SECTNO>§ 5.300</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) This subpart implements section 227 of the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701r-1) as it pertains to projects for the elderly or persons with disabilities under: (1) The housing programs administered by the Assistant Secretary for Housing-Federal Housing Commissioner; (2) Projects assisted under the programs contained in chapter VIII of this title 24; and (3) The public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the United States Housing Act of 1937 (42 U.S.C. 1437, <E T="03">et seq</E>.). This part does not apply to Indian housing administered under title II of that Act. (b) [Reserved] </SECTION> <SECTION> <SECTNO>§ 5.303</SECTNO> <SUBJECT>Exclusion for animals that assist persons with disabilities.</SUBJECT> (a) This subpart C does not apply to animals that are used to assist persons with disabilities. Project owners and PHAs may not apply or enforce any pet rules developed under this subpart against individuals with animals that are used to assist persons with disabilities. This exclusion applies to animals that reside in projects for the elderly or persons with disabilities, as well as to animals that visit these projects. (1) A project owner may require resident animals to qualify for this exclusion. Project owners must grant this exclusion if: (i) The tenant or prospective tenant certifies in writing that the tenant or a member of his or her family is a person with a disability; (ii) The animal has been trained to assist persons with that specific disability; and (iii) The animal actually assists the person with a disability. (2) [Reserved] (b) Nothing in this subpart C: (1) Limits or impairs the rights of persons with disabilities; (2) Authorizes project owners or PHAs to limit or impair the rights of persons with disabilities; or (3) Affects any authority that project owners or PHAs may have to regulate animals that assist persons with disabilities, under Federal, State, or local law. </SECTION> <SECTION> <SECTNO>§ 5.306</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Common household pet</E> means: (1) <E T="03">For purposes of Housing programs:</E> A domesticated animal, such as a dog, cat, bird, rodent (including a rabbit), fish, or turtle, that is traditionally kept in the home for pleasure rather than for commercial purposes. Common household pet does not include reptiles (except turtles). If this definition conflicts with any applicable State or local law or regulation defining the pets that may be owned or kept in dwelling accommodations, the State or local law or regulation shall apply. This definition shall not include animals that are used to assist persons with disabilities.<PRTPAGE P="36"/> (2) <E T="03">For purposes of Public Housing programs:</E> PHAs may define the term “common household pet” under § 5.318. <E T="03">Elderly or disabled family</E> means: (1) <E T="03">For purposes of Housing programs:</E> An elderly person, a person with a disability, or an elderly or disabled family for purposes of the program under which a project for the elderly or persons with disabilities is assisted or has its mortgage insured. (2) <E T="03">For purposes of Public Housing programs:</E> (i) An elderly person, a person with a disability, or an elderly or disabled family as defined in § 5.403 in subpart A of this part. (ii) [Reserved] <E T="03">Housing programs</E> means: (1) The housing programs administered by the Assistant Secretary for Housing-Federal Housing Commissioner; and (2) The programs contained in chapter VIII of this title 24 that assist rental projects that meet the definition of project for the elderly or persons with disabilities in this subpart C. <E T="03">Project for the elderly or persons with disabilities</E> means: (1) <E T="03">For purposes of Housing programs:</E> (i) A specific rental or cooperative multifamily property that, unless currently owned by HUD, is subject to a first mortgage, and: (A) That is assisted under statutory authority identified by HUD through notice; (B) That was designated for occupancy by elderly or disabled families when funds for the project were reserved, or when the commitment to insure the mortgage was issued or, of not then so designated, that is designated for such occupancy in an effective amendment to the regulatory agreement covering the project, made pursuant to the project owner's request, and that is assisted or insured under one of the programs identified by HUD through notice; or (C) For which preference in tenant selection is given for all units in the project to elderly or disabled families and that is owned by HUD or assisted under one of the programs identified by HUD through notice. (ii) This term does not include health and care facilities that have mortgage insurance under the National Housing Act. This term also does not include any of the project owner's other property that does not meet the criteria contained in any one of paragraphs (1)(i)(A) through (C) of this definition, even if the property is adjacent to or under joint or common management with such specific property. (2) <E T="03">For purposes of Public Housing programs:</E> Any project assisted under title I of the United States Housing Act of 1937 (other than under section 8 or 17 of the Act), including any building within a mixed-use project, that was designated for occupancy by the elderly or persons with disabilities at its inception or, although not so designated, for which the PHA gives preference in tenant selection (with HUD approval) for all units in the project (or for a building within a mixed-use project) to elderly or disabled families. For purposes of this part, this term does not include projects assisted the Low-Rent Housing Homeownership Opportunity program or under title II of the United States Housing Act of 1937. <E T="03">Project owner</E> means an owner (including HUD, where HUD is the owner) or manager of a project for the elderly or persons with disabilities, or an agent authorized to act for an owner or manager of such housing. <E T="03">Public Housing Agency (PHA)</E> is defined in § 5.100. <E T="03">Public Housing programs</E> means the public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the United States Housing Act of 1937. </SECTION> <SECTION> <SECTNO>§ 5.309</SECTNO> <SUBJECT>Prohibition against discrimination.</SUBJECT> Except as otherwise specifically authorized under this subpart no project owner or PHA that owns or manages a project for the elderly or persons with disabilities may: (a) As a condition of tenancy or otherwise, prohibit or prevent any tenant of such housing from owning common household pets or having such pets living in the tenant's dwelling unit; or (b) Restrict or discriminate against any person in connection with admission to, or continued occupancy of, such housing by reason of the person's ownership of common household pets <PRTPAGE P="37"/>or the presence of such pets in the person's dwelling unit. </SECTION> <SECTION> <SECTNO>§ 5.312</SECTNO> <SUBJECT>Notice to tenants.</SUBJECT> (a) During the development of pet rules as described in §§ 5.353 or 5.380, the project owner or PHA shall serve written notice on all tenants of projects for the elderly or persons with disabilities in occupancy at the time of service, stating that: (1) Tenants are permitted to own and keep common household pets in their dwelling units, in accordance with the pet rules (if any) promulgated under this subpart C; (2) Animals that are used to assist persons with disabilities are excluded from the requirements of this subpart C, as provided in § 5.303; (3) Tenants may, at any time, request a copy of any current pet rule developed under this subpart C (as well as any current proposed rule or proposed amendment to an existing rule); and (4) Tenants may request that their leases be amended under § 5.321 to permit common household pets. (b) The project owner or PHA shall provide to each applicant for tenancy when he or she is offered a dwelling unit in a project for the elderly or persons with disabilities, the written notice specified in paragraphs (a) (1), (2), and (3) of this section. (c) If a PHA chooses not to promulgate pet rules, the notice shall be served within 60 days of the effective date of this part. PHAs shall serve notice under this section in accordance with their normal service of notice procedures. </SECTION> <SECTION> <SECTNO>§ 5.315</SECTNO> <SUBJECT>Content of pet rules: general requirements.</SUBJECT> (a) <E T="03">Housing programs.</E> The project owner shall prescribe reasonable rules to govern the keeping of common household pets. The pet rules must include the mandatory rules described in § 5.350 and may, unless otherwise noted in this subpart C, include other discretionary provisions as provided in § 5.318. (b) <E T="03">Public Housing programs.</E> (1) PHAs may choose not to promulgate rules governing the keeping of common household pets or may include rules as provided in § 5.318. PHAs may elect to include provisions based on those in § 5.350. If they so choose, the PHAs may modify the provisions in § 5.350 in any manner consistent with this subpart C. (2) If PHAs choose to promulgate pet rules, tenants must be permitted to own and keep pets in their units in accordance with the terms and conditions of their leases, the provisions of this subpart C, and any applicable State or local law or regulation governing the owning or keeping of pets in dwelling accommodations. (3) PHAs that choose not to promulgate pet rules, shall not impose, by lease modification or otherwise, any requirement that is inconsistent with the provisions of this subpart C. (c) <E T="03">Use of discretion.</E> (1) This subpart C does not define with specificity the limits of the project owners’ or PHAs’ discretion to promulgate pet rules. Where a project owner or PHA has discretion to prescribe pet rules under this subpart C, the pet rules should be: (i) Reasonably related to furthering a legitimate interest of the project owner or PHA, such as the owner's or PHA's interest in providing a decent, safe, and sanitary living environment for existing and prospective tenants and in protecting and preserving the physical condition of the project and the owner's or PHA's financial interest in it; and (ii) Drawn narrowly to achieve the owner's or PHA's legitimate interests, without imposing unnecessary burdens and restrictions on pet owners and prospective pet owners. (2) Where a project owner or PHA has discretion to prescribe pet rules under this subpart C, the owner or PHA may vary the rules’ content among projects and within individual projects, based on factors such as the size, type, location, and occupancy of the project or its units, provided that the applicable rules are reasonable and do not conflict with any applicable State or local law or regulation governing the owning or keeping of pets in dwelling accommodations. (d) <E T="03">Conflict with State or local law.</E> The pet rules adopted by the project owner or PHA shall not conflict with applicable State or local law or regulations. If such a conflict may exist, the State <PRTPAGE P="38"/>and local law or regulations shall apply. </SECTION> <SECTION> <SECTNO>§ 5.318</SECTNO> <SUBJECT>Discretionary pet rules.</SUBJECT> Pet rules promulgated by project owners and PHAs may include, but are not limited to, consideration of the following factors: (a) <E T="03">Definitions of “common household pet”</E>—(1) <E T="03">For Public Housing programs.</E> The pet rules established by a PHA may contain a reasonable definition of a common household pet. (2) <E T="03">For Housing programs.</E> Project owners wishing to define “common household pet” in their pet rules must use the Housing programs definition of the term in § 5.306. (b) <E T="03">Density of tenants and pets.</E> (1)(i) The pet rules established under this section may take into account tenant and pet density. The pet rules may place reasonable limitations on the number of common household pets that may be allowed in each dwelling unit. In the case of group homes, the pet rules may place reasonable limitations on the number of common household pets that may be allowed in each home. (ii) <E T="03">For Housing programs.</E> Under these rules, project owners may limit the number of four-legged, warm-blooded pets to one pet in each dwelling unit or group home. (iii) Other than the limitations described in this paragraph (b)(1), the pet rules may not limit the total number of pets allowed in the project. (2) As used in paragraph (b)(1) of this section, the term “group home” means: (i) <E T="03">For purposes of Housing programs.</E> A small, communal living arrangement designed specifically for individuals who are chronically mentally ill, developmentally disabled, or physically disabled who require a planned program of continual supportive services or supervision (other than continual nursing, medical or psychiatric care). (ii) <E T="03">For purposes of Public Housing programs.</E> A dwelling or dwelling unit for the exclusive residential use of elderly persons or persons with disabilities who are not capable of living completely independently and who require a planned program of continual supportive services or supervision (other than continual nursing, medical or psychiatric care). (c) <E T="03">Pet size and pet type.</E> The pet rules may place reasonable limitations on the size, weight, and type of common household pets allowed in the project. (d) <E T="03">Potential financial obligations of tenants</E>—(1) <E T="03">Pet deposits.</E> The pet rules may require tenants who own or keep pets in their units to pay a refundable pet deposit. In the case of project owners, this pet deposit shall be limited to those tenants who own or keep cats or dogs in their units. This deposit is in addition to any other financial obligation generally imposed on tenants of the project. The project owner or PHA may use the pet deposit only to pay reasonable expenses directly attributable to the presence of the pet in the project, including (but not limited to) the cost of repairs and replacements to, and fumigation of, the tenant's dwelling unit and, for project owners, the cost of animal care facilities under § 5.363. The project owner or PHA shall refund the unused portion of the pet deposit to the tenant within a reasonable time after the tenant moves from the project or no longer owns or keeps a pet (or a cat or dog in the case of project owners) in the dwelling unit. (2) <E T="03">Housing programs: Maximum pet deposit.</E> (i) Pet deposits for the following tenants shall not exceed an amount periodically fixed by HUD through notice. (A) Tenants whose rents are subsidized (including tenants of a HUD-owned project, whose rents were subsidized before HUD acquired it) under one of the programs identified by HUD through notice. (B) Tenants who live in a project assisted (including tenants who live in a HUD-owned project that was assisted before HUD acquired it) under one of the programs identified by HUD through notice. (C) For all other tenants of projects for the elderly or persons with disabilities, the pet deposit shall not exceed one month's rent at the time the pet is brought onto the premises. (ii) In establishing the maximum amount of pet deposit under paragraph (d)(2)(i) of this section, HUD will consider factors such as: (A) Projected, estimated expenses directly attributable to the presence of pets in the project;<PRTPAGE P="39"/> (B) The ability of project owners to offset such expenses by use of security deposits or HUD-reimbursable expenses; and (C) The low income status of tenants of projects for the elderly or persons with disabilities. (iii) For pet deposits subject to paragraph (d)(2)(i)(A) of this section, the pet rules shall provide for gradual accumulation of the deposit by the pet owner through an initial payment not to exceed $50 when the pet is brought onto the premises, and subsequent monthly payments not to exceed $10 per month until the amount of the deposit is reached. (iv) For pet deposits subject to paragraphs (d)(2)(i)(B) and (C) of this section, the pet rules may provide for gradual accumulation of the deposit by the pet owner. (v) The project owner may (subject to the HUD-prescribed limits) increase the amount of the pet deposit by amending the house pet rules in accordance with § 5.353. (A) For pet deposits subject to paragraph (d)(2)(i)(A) of this section, the house pet rules shall provide for gradual accumulation of any such increase not to exceed $10 per month for all deposit amounts that are being accumulated. (B) [Reserved] (vi) Any pet deposit that is established within the parameters set forth by paragraph (d)(2) of this section shall be deemed reasonable for purposes of this subpart C. (3) <E T="03">Public Housing programs: Maximum pet deposit.</E> The maximum amount of pet deposit that may be charged by the PHA, on a per dwelling unit basis, shall not exceed the higher of the Total Tenant Payment (as defined in 24 CFR 913.102) or such reasonable fixed amount as the PHA may require. The pet rules may permit gradual accumulation of the pet deposit by the pet owner. (4) <E T="03">Housing programs: Waste removal charge.</E> The pet rules may permit the project owner to impose a separate waste removal charge of up to five dollars ($5) per occurrence on pet owners that fail to remove pet waste in accordance with the prescribed pet rules. Any pet waste removal charge that is within this five dollar ($5) limitation shall be deemed to be a reasonable amount for the purposes of this subpart C. (5) The pet deposit (for Housing and Public Housing programs) and waste removal charge (for Housing programs) are not part of the rent payable by the tenant. Except as provided in paragraph (d) of this section for Housing programs and, paragraph (d) of this section and 24 CFR 966.4(b) for Public Housing programs, project owners or PHAs may not prescribe pet rules that impose additional financial obligations on pet owners that are designed to compensate the project owner or PHA for costs associated with the presence of pets in the project, including (but not limited to) requiring pet owners: (i) To obtain liability or other insurance to cover damage caused by the pet; (ii) To agree to be strictly liable for all damages caused by the pet where this liability is not otherwise imposed by State or local law, or (iii) To indemnify the project owner for pet-related litigation and attorney's fees. (e) <E T="03">Standards of pet care.</E> The pet rules may prescribe standards of pet care and handling, but must be limited to those necessary to protect the condition of the tenant's unit and the general condition of the project premises, or to protect the health or safety of present tenants, project employees, and the public. The pet rules may not require pet owners to have any pet's vocal cords removed. Permitted rules may: (1) Bar pets from specified common areas (such as lobbies, laundry rooms, and social rooms), unless the exclusion will deny a pet reasonable ingress and egress to the project or building. (2) Require the pet owner to control noise and odor caused by a pet. (3) Housing programs: Project owners may also: (i) Require pet owners to have their dogs and cats spayed or neutered; and (ii) Limit the length of time that a pet may be left unattended in a dwelling unit. (f) <E T="03">Pet licensing.</E> The pet rules may require pet owners to license their pets in accordance with applicable State <PRTPAGE P="40"/>and local laws and regulations. (Failure of the pet rules to contain this requirement does not relieve the pet owner of responsibility for complying with applicable State and local pet licensing requirements.) (g) <E T="03">Public Housing programs: Designated pet areas.</E> (1) PHAs may designate buildings, floors of buildings, or sections of buildings as no-pet areas where pets generally may not be permitted. Similarly, the pet rules may designate buildings, floors of buildings, or sections of buildings for residency generally by pet-owning tenants. The PHA may direct such initial tenant moves as may be necessary to establish pet and no-pet areas. The PHA may not refuse to admit (or delay admission of) an applicant for tenancy on the grounds that the applicant's admission would violate a pet or no-pet area. The PHA may adjust the pet and no-pet areas or may direct such additional moves as may be necessary (or both) to accommodate such applicants for tenancy or to meet the changing needs of existing tenants. (2) Project owners may not designate pet areas in buildings in their pet rules. (h) <E T="03">Pets temporarily on the premises.</E> The pet rules may exclude from the project pets not owned by a tenant that are to be kept temporarily on the project premises. For the purposes of paragraph (h) of this section, pets are to be kept “temporarily” if they are to be kept in the tenant's dwelling accommodations for a period of less than 14 consecutive days and nights. HUD, however, encourages project owners and PHAs to permit the use of a visiting pet program sponsored by a humane society, or other nonprofit organization. </SECTION> <SECTION> <SECTNO>§ 5.321</SECTNO> <SUBJECT>Lease provisions.</SUBJECT> (a) <E T="03">Lease provisions.</E> (1) PHAs which have established pet rules and project owners shall ensure that the leases for all tenants of projects for the elderly or persons with disabilities: (i) State that tenants are permitted to keep common household pets in their dwelling units (subject to the provisions of this subpart and the pet rules); (ii) Shall incorporate by reference the pet rules promulgated by the project owner or PHA; (iii) Shall provide that the tenant agrees to comply with these rules; and (iv) Shall state that violation of these rules may be grounds for removal of the pet or termination of the pet owner's tenancy (or both), in accordance with the provisions of this subpart and applicable regulations and State or local law. (2) [Reserved] (b) Where a PHA has not established pet rules, the leases of all tenants of such projects shall not contain any provisions prohibiting the owning or keeping of common household pets, and shall state that owning and keeping of such pets will be subject to the general obligations imposed on the PHA and tenants in the lease and any applicable State or local law or regulation governing the owning or keeping of pets in dwelling accommodations. </SECTION> <SECTION> <SECTNO>§ 5.324</SECTNO> <SUBJECT>Implementation of lease provisions.</SUBJECT> The lease for each tenant of a project for the elderly or persons with disabilities who is admitted on or after the date on which this subpart C is implemented shall contain the lease provisions described in § 5.321 and, if applicable, § 5.360. The lease for each tenant who occupies a unit in such a project under lease on the date of implementation of this part shall be amended to include the provisions described in § 5.321 and, if applicable, § 5.360: (a) For Housing programs: (1) Upon renewal of the lease and in accordance with any applicable regulation; and (2) When a Housing program tenant registers a common household pet under § 5.350 (b) For Public Housing programs: (1) Upon annual reexamination of tenant income in accordance with any applicable regulation; and (2) When a Public Housing program tenant wishes to own or keep a common household pet in his or her unit. </SECTION> <SECTION> <SECTNO>§ 5.327</SECTNO> <SUBJECT>Nuisance or threat to health or safety.</SUBJECT> Nothing in this subpart C prohibits a project owner, PHA, or an appropriate <PRTPAGE P="41"/>community authority from requiring the removal of any pet from a project, if the pet's conduct or condition is duly determined to constitute, under the provisions of State or local law, a nuisance or a threat to the health or safety of other occupants of the project or of other persons in the community where the project is located. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Housing Programs</HD> <SECTION> <SECTNO>§ 5.350</SECTNO> <SUBJECT>Mandatory pet rules for housing programs.</SUBJECT> <E T="03">Mandatory rules.</E> The project owner must prescribe the following pet rules: (a) <E T="03">Inoculations.</E> The pet rules shall require pet owners to have their pets inoculated in accordance with State and local laws. (b) <E T="03">Sanitary standards.</E> (1) The pet rules shall prescribe sanitary standards to govern the disposal of pet waste. These rules may: (i) Designate areas on the project premises for pet exercise and the deposit of pet waste; (ii) Forbid pet owners from exercising their pets or permitting their pets to deposit waste on the project premises outside the designated areas; (iii) Require pet owners to remove and properly dispose of all removable pet waste; and (iv) Require pet owners to remove pets from the premises to permit the pet to exercise or deposit waste, if no area in the project is designated for such purposes. (2) In the case of cats and other pets using litter boxes, the pet rules may require the pet owner to change the litter (but not more than twice each week), may require pet owners to separate pet waste from litter (but not more than once each day), and may prescribe methods for the disposal of pet waste and used litter. (c) <E T="03">Pet restraint.</E> The pet rules shall require that all cats and dogs be appropriately and effectively restrained and under the control of a responsible individual while on the common areas of the project. (d) <E T="03">Registration.</E> (1) The pet rules shall require pet owners to register their pets with the project owner. The pet owner must register the pet before it is brought onto the project premises, and must update the registration at least annually. The project owner may coordinate the annual update with the annual reexamination of tenant income, if applicable. The registration must include: (i) A certificate signed by a licensed veterinarian or a State or local authority empowered to inoculate animals (or designated agent of such an authority) stating that the pet has received all inoculations required by applicable State and local law; (ii) Information sufficient to identify the pet and to demonstrate that it is a common household pet; and (iii) The name, address, and phone number of one or more responsible parties who will care for the pet if the pet owner dies, is incapacitated, or is otherwise unable to care for the pet. (2) The project owner may require the pet owner to provide additional information necessary to ensure compliance with any discretionary rules prescribed under § 5.318, and shall require the pet owner to sign a statement indicating that he or she has read the pet rules and agrees to comply with them. (3) The pet rules shall permit the project owner to refuse to register a pet if: (i) The pet is not a common household pet; (ii) The keeping of the pet would violate any applicable house pet rule; (iii) The pet owner fails to provide complete pet registration information or fails annually to update the pet registration; or (iv) The project owner reasonably determines, based on the pet owner's habits and practices, that the pet owner will be unable to keep the pet in compliance with the pet rules and other lease obligations. The pet's temperament may be considered as a factor in determining the prospective pet owner's ability to comply with the pet rules and other lease obligations. (4) The project owner may not refuse to register a pet based on a determination that the pet owner is financially unable to care for the pet or that the pet is inappropriate, based on the therapeutic value to the pet owner or the interests of the property or existing tenants.<PRTPAGE P="42"/> (5) The pet rules shall require the project owner to notify the pet owner if the project owner refuses to register a pet. The notice shall state the basis for the project owner's action and shall be served on the pet owner in accordance with the requirements of § 5.353(f)(1)(i) or (ii). The notice of refusal to register a pet may be combined with a notice of pet violation as required in § 5.356. </SECTION> <SECTION> <SECTNO>§ 5.353</SECTNO> <SUBJECT>Housing programs: Procedure for development of pet rules.</SUBJECT> (a) <E T="03">General.</E> Project owners shall use the procedures specified in this section to promulgate the pet rules referred to in §§ 5.318 and 5.350. (b) <E T="03">Development and notice of proposed pet rules.</E> Project owners shall develop proposed rules to govern the owning or keeping of common household pets in projects for the elderly or persons with disabilities. Notice of the proposed pet rules shall be served on each tenant of the project as provided in paragraph (f) of this section. The notice shall: (1) Include the text of the proposed rules; (2) State that tenants or tenant representatives may submit written comments on the rules; and (3) State that all comments must be submitted to the project owner no later than 30 days from the effective date of the notice of the proposed rules. (4) The notice may also announce the date, time, and place for a meeting to discuss the proposed rules (as provided in paragraph (c) of this section). (c) <E T="03">Tenant consultation.</E> Tenants or tenant representatives may submit written comments on the proposed pet rules to the project owner by the date specified in the notice of proposed rules. In addition, the owner may schedule one or more meetings with tenants during the comment period to discuss the proposed rules. Tenants and tenant representatives may make oral comments on the proposed rules at these meetings. The project owner must consider comments made at these meetings only if they are summarized, reduced to writing, and submitted to the project owner before the end of the comment period. (d) <E T="03">Development and notice of final pet rules.</E> The project owner shall develop the final rules after reviewing tenants’ written comments and written summaries of any owner-tenant meetings. The project owner may meet with tenants and tenant representatives to attempt to resolve issues raised by the comments. Subject to this subpart C, the content of the final pet rules, however, is within the sole discretion of the project owner. The project owner shall serve on each tenant of the project, a notice of the final pet rules as provided in paragraph (f) of this section. The notice must include the text of the final pet rules and must specify the effective date of the final pet rules. (e) <E T="03">Amendment of pet rules.</E> The project owner may amend the pet rules at any time by following the procedure for the development of pet rules specified in paragraphs (b) through (d) of this section. (f) <E T="03">Service of notice.</E> (1) The project owner must serve the notice required under this section by: (i) Sending a letter by first class mail, properly stamped and addressed to the tenant at the dwelling unit, with a proper return address; or (ii) Serving a copy of the notice on any adult answering the door at the tenant's leased dwelling unit, or if no adult responds, by placing the notice under or through the door, if possible, or else by attaching the notice to the door; or (iii) For service of notice to tenants of a high-rise building, posting the notice in at least three conspicuous places within the building and maintaining the posted notices intact and in legible form for 30 days. For purposes of paragraph (f) of this section, a high-rise building is a structure that is equipped with an elevator and has a common lobby. (2) For purposes of computing time periods following service of the notice, service is effective on the day that all notices are delivered or mailed, or in the case of service by posting, on the day that all notices are initially posted. </SECTION> <SECTION> <SECTNO>§ 5.356</SECTNO> <SUBJECT>Housing programs: Pet rule violation procedures.</SUBJECT> (a) <E T="03">Notice of pet rule violation.</E> If a project owner determines on the basis of objective facts, supported by written <PRTPAGE P="43"/>statements, that a pet owner has violated a rule governing the owning or keeping of pets; the project owner may serve a written notice of pet rule violation on the pet owner in accordance with § 5.353(f)(1)(i) or (ii). The notice of pet rule violation must: (1) Contain a brief statement of the factual basis for the determination and the pet rule or rules alleged to be violated; (2) State that the pet owner has 10 days from the effective date of service of the notice to correct the violation (including, in appropriate circumstances, removal of the pet) or to make a written request for a meeting to discuss the violation; (3) State that the pet owner is entitled to be accompanied by another person of his or her choice at the meeting; and (4) State that the pet owner's failure to correct the violation, to request a meeting, or to appear at a requested meeting may result in initiation of procedures to terminate the pet owner's tenancy. (b)(1) <E T="03">Pet rule violation meeting.</E> If the pet owner makes a timely request for a meeting to discuss an alleged pet rule violation, the project owner shall establish a mutually agreeable time and place for the meeting but no later than 15 days from the effective date of service of the notice of pet rule violation (unless the project owner agrees to a later date). At the pet rule violation meeting, the pet owner and project owner shall discuss any alleged pet rule violation and attempt to correct it. The project owner may, as a result of the meeting, give the pet owner additional time to correct the violation. (2) <E T="03">Notice for pet removal.</E> If the pet owner and project owner are unable to resolve the pet rule violation at the pet rule violation meeting, or if the project owner determines that the pet owner has failed to correct the pet rule violation within any additional time provided for this purpose under paragraph (b)(1) of this section, the project owner may serve a written notice on the pet owner in accordance with § 5.353(f)(1) (i) or (ii) (or at the meeting, if appropriate), requiring the pet owner to remove the pet. The notice must: (i) Contain a brief statement of the factual basis for the determination and the pet rule or rules that have been violated; (ii) State that the pet owner must remove the pet within 10 days of the effective date of service of the notice of pet removal (or the meeting, if notice is served at the meeting); and (iii) State that failure to remove the pet may result in initiation of procedures to terminate the pet owner's tenancy. (c) <E T="03">Initiation of procedures to remove a pet or terminate the pet owner's tenancy.</E> (1) The project owner may not initiate procedures to terminate a pet owner's tenancy based on a pet rule violation, unless: (i) The pet owner has failed to remove the pet or correct a pet rule violation within the applicable time period specified in this section (including any additional time permitted by the owner); and (ii) The pet rule violation is sufficient to begin procedures to terminate the pet owner's tenancy under the terms of the lease and applicable regulations. (2) The project owner may initiate procedures to remove a pet under § 5.327 at any time, in accordance with the provisions of applicable State or local law. </SECTION> <SECTION> <SECTNO>§ 5.359</SECTNO> <SUBJECT>Housing programs: Rejection of units by applicants for tenancy.</SUBJECT> (a) An applicant for tenancy in a project for the elderly or persons with disabilities may reject a unit offered by a project owner if the unit is in close proximity to a dwelling unit in which an existing tenant of the project owns or keeps a common household pet. An applicant's rejection of a unit under this section shall not adversely affect his or her application for tenancy in the project, including (but not limited to) his or her position on the project waiting list or qualification for any tenant selection preference. (b) Nothing in this subpart C imposes a duty on project owners to provide alternate dwelling units to existing or prospective tenants because of the proximity of common household pets to a particular unit or the presence of such pets in the project. </SECTION> <SECTION> <PRTPAGE P="44"/> <SECTNO>§ 5.360</SECTNO> <SUBJECT>Housing programs: Additional lease provisions.</SUBJECT> (a) <E T="03">Inspections.</E> In addition to other inspections permitted under the lease, the leases for all Housing program tenants of projects for the elderly or persons with disabilities may state that the project owner may, after reasonable notice to the tenant and during reasonable hours, enter and inspect the premises. The lease shall permit entry and inspection only if the project owner has received a signed, written complaint alleging (or the project owner has reasonable grounds to believe) that the conduct or condition of a pet in the dwelling unit constitutes, under applicable State or local law, a nuisance or a threat to the health or safety of the occupants of the project or other persons in the community where the project is located. (b) <E T="03">Emergencies.</E> (1) If there is no State or local authority (or designated agent of such an authority) authorized under applicable State or local law to remove a pet that becomes vicious, displays symptoms of severe illness, or demonstrates other behavior that constitutes an immediate threat to the health or safety of the tenancy as a whole, the project owner may place a provision in tenant leases permitting the project owner to enter the premises (if necessary), remove the pet, and take such action with respect to the pet as may be permissible under State and local law, which may include placing it in a facility that will provide care and shelter for a period not to exceed 30 days. (2) The lease shall permit the project owner to enter the premises and remove the pet or take such other permissible action only if the project owner requests the pet owner to remove the pet from the project immediately, and the pet owner refuses to do so, or if the project owner is unable to contact the pet owner to make a removal request. The lease may not contain a provision relieving the project owner from liability for wrongful removal of a pet. The cost of the animal care facility shall be paid as provided in § 5.363. (3) The project owner may place a provision in tenant leases permitting the project owner to enter the premises, remove the pet, and place the pet in a facility that will provide care and shelter, in accordance with the provisions of § 5.363. The lease may not contain a provision relieving the project owner from liability for wrongful removal of a pet. </SECTION> <SECTION> <SECTNO>§ 5.363</SECTNO> <SUBJECT>Housing programs: Protection of the pet.</SUBJECT> (a) If the health or safety of a pet is threatened by the death or incapacity of the pet owner, or by other factors that render the pet owner unable to care for the pet, the project owner may contact the responsible party or parties listed in the pet registration required under § 5.350(d)(1)(iii). (b) If the responsible party or parties are unwilling or unable to care for the pet, or the project owner, despite reasonable efforts, has been unable to contact the responsible party or parties, the project owner may contact the appropriate State or local authority (or designated agent of such an authority) and request the removal of the pet. (c) If there is no State or local authority (or designated agent of such an authority) authorized to remove a pet under these circumstances and the project owner has placed a provision in the lease agreement (as described in § 5.360(c)(2)), the project owner may enter the pet owner's unit, remove the pet, and place the pet in a facility that will provide care and shelter until the pet owner or a representative of the pet owner is able to assume responsibility for the pet, but not longer than 30 days. (d) The cost of the animal care facility provided under this section shall be borne by the pet owner. If the pet owner (or the pet owner's estate) is unable or unwilling to pay, the cost of the animal care facility may be paid from the pet deposit, if imposed under the pet rules. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Public Housing Programs</HD> <SECTION> <SECTNO>§ 5.380</SECTNO> <SUBJECT>Public housing programs: Procedure for development of pet rules.</SUBJECT> PHAs that choose to promulgate pet rules shall consult with tenants of projects for the elderly or persons with disabilities administered by them with <PRTPAGE P="45"/>respect to their promulgation and subsequent amendment. PHAs shall develop the specific procedures governing tenant consultation, but these procedures must be designed to give tenants (or, if appropriate, tenant councils) adequate opportunity to review and comment upon the pet rules before they are issued for effect. PHAs are solely responsible for the content of final pet rules, but must give consideration to tenant comments. PHAs shall send to the responsible HUD field office, copies of the final (or amended) pet rules, as well as summaries or copies of all tenant comments received in the course of the tenant consultation. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Definitions and Other General Requirements for Assistance Under the United States Housing Act of 1937</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1437a and 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 5665, Feb. 13, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 5.400</SECTNO> <SUBJECT>Applicability.</SUBJECT> This part applies to public housing (other than Indian housing under 24 CFR part 950) and Section 8 programs. </SECTION> <SECTION> <SECTNO>§ 5.403</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) The terms <E T="03">displaced person, elderly person, near-elderly person, and person with disabilities</E> are defined at paragraph 3 of section 3(b) of the 1937 Act (42 U.S.C. 1437a(b)(3)). (b) In addition to the terms listed in paragraph (a) of this section, the following definitions apply: <E T="03">Applicant</E> means a person or a family that has applied for housing assistance. <E T="03">Disabled family</E> means a family whose head, spouse, or sole member is a person with disabilities; or two or more persons with disabilities living together; or one or more persons with disabilities living with one or more live-in aides. <E T="03">Displaced family</E> means a family in which each member, or whose sole member, is a person displaced by governmental action, or a person whose dwelling has been extensively damaged or destroyed as a result of a disaster declared or otherwise formally recognized pursuant to Federal disaster relief laws. <E T="03">Elderly family</E> means a family whose head, spouse, or sole member is a person who is at least 62 years of age; or two or more persons who are at least 62 years of age living together; or one or more persons who are at least 62 years of age living with one or more live-in aides. <E T="03">Family</E> includes but is not limited to: (1) A family with or without children (the temporary absence of a child from the home due to placement in foster care shall not be considered in determining family composition and family size); (2) An elderly family; (3) A near-elderly family; (4) A disabled family; (5) A displaced family; (6) The remaining member of a tenant family; and (7) A single person who is not an elderly or displaced person, or a person with disabilities, or the remaining member of a tenant family. <E T="03">Live-in aide</E> means a person who resides with one or more elderly persons, or near-elderly persons, or persons with disabilities, and who: (1) Is determined to be essential to the care and well-being of the persons; (2) Is not obligated for the support of the persons; and (3) Would not be living in the unit except to provide the necessary supportive services. <E T="03">Near-elderly family</E> means a family whose head, spouse, or sole member is a person who is at least 50 years of age but below the age of 62; or two or more persons, who are at least 50 years of age but below the age of 62, living together; or one or more persons who are at least 50 years of age but below the age of 62 living with one or more live-in aides. </SECTION> <SECTION> <SECTNO>§ 5.405</SECTNO> <SUBJECT>Basic eligibility; preference over single persons; and housing assistance limitation for single persons.</SUBJECT> (a) <E T="03">Basic eligibility</E>. An applicant must meet all of the eligibility requirements of the housing assistance for which an application is made in order to obtain the housing assistance. At a minimum, the applicant must be a family, and <PRTPAGE P="46"/>must be income-eligible. Eligible applicants include single persons who are not elderly persons, or displaced persons, or persons with disabilities. (b) <E T="03">Preference over single persons</E>. An applicant that is a one- or two-person elderly, disabled or displaced family, must be given a preference over an applicant that is a single person who is not an elderly or displaced person, or a person with disabilities, regardless of the applicant's Federal or local preferences. (c) <E T="03">Housing assistance limitation for single persons</E>. A single person who is not an elderly or displaced person, or a person with disabilities, or the remaining member of a tenant family may not be provided: (1) For public housing and other project-based assistance, a housing unit with two or more bedrooms; or (2) For tenant-based assistance, housing assistance for which the family unit size as determined by the HA subsidy standard exceeds the one bedroom level. (d) This section shall not apply to the Section 8 Moderate Rehabilitation Program for Single Room Occupancy Dwellings for Homeless Individuals set forth at 24 CFR part 882, subpart H. <CITA>[61 FR 5665, Feb. 13, 1996, as amended at 61 FR 13616, Mar. 27, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.410</SECTNO> <SUBJECT>Selection preferences.</SUBJECT> (a) <E T="03">Applicability.</E> The selection preferences that are described in this part are applicable to public housing and housing assisted under the Section 8 Housing Assistance Payments program. (Corresponding provisions applicable to the Indian housing program are found in 24 CFR part 950.) These preferences are administered by the entity responsible for admission functions in the programs covered (“responsible entity”), i.e., the public housing agency (“HA”) in the public housing and Section 8 Certificate/Voucher and Moderate Rehabilitation programs and the owner in all other Section 8 programs. (b) <E T="03">Types of preference.</E> There are three types of admission preferences: (1) “Federal preferences” are admission preferences for three categories of families, as prescribed in 42 U.S.C. 1437d(c)(4)(A), 1437f(d)(1)(A), 1437f(o)(3), and 1437f note. Federal preference is given for selection of families that are: (i) Involuntarily displaced; (ii) Living in substandard housing (including families that are homeless or living in a shelter for the homeless); or (iii) Paying more than 50 percent of family income for rent. (2) “Ranking preferences” are preferences that may be established by the responsible entity to use in selecting among applicants that qualify for federal preferences. (3) “Local preferences” are preferences for use in selecting among applicants without regard to their federal preference status. (See 42 U.S.C. 1437d(c)(4)(A), 1437f(d)(1)(A), 1437f(o)(3), and 1437f note.) (c) <E T="03">System.</E> In the Section 8 programs other than the Certificate/Voucher and Moderate Rehabilitation programs, the owner must establish a system for selection of applicants from the waiting list that includes the following: (1) How the federal preferences will be used; (2) How any ranking preferences will be used; (3) How any local preferences will be used; and (4) How any residency preference will be used. (d) <E T="03">Use of preference in selection process</E>—(1) <E T="03">Factors other than federal and local preferences</E>—(i) <E T="03">Characteristics of the unit.</E> For developments administered under the Section 8 programs and for public housing, the responsible entity may, in selecting a family for a particular unit, match other characteristics of the applicant family with the type of unit available, e.g., number of bedrooms. In selection of a family for a unit that has special accessibility features, the responsible entity must give preference to families that include persons with disabilities who can benefit from those features of the unit (see 24 CFR 8.27 and 24 CFR 100.202(c)(3)). Also, in selection of a family for a unit in a mixed population project, the responsible entity will give preference to elderly families and disabled families (see subpart D of part 960 or § 880.612a or § 881.612a of this title). (ii) <E T="03">Singles preference.</E> See § 5.405.<PRTPAGE P="47"/> (2) <E T="03">Local preference admissions.</E> (i) Local preferences may be adopted or amended by an HA to respond to local housing needs and priorities after the HA has conducted a public hearing. (ii) For Section 8 programs other than the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs operated under 24 CFR part 982, 983, and 882, respectively, if the owner wants to use preferences to select among applicants without regard to their federal preference status, it must use the local preference system adopted for use in the Section 8 Certificate/Voucher programs by the housing agency for the jurisdiction. If there is more than one HA for the jurisdiction, the owner shall use the local preference system of the HA for the lowest level of government that has jurisdiction where the project is located. For the public housing program, the HA may use a local preference system it adopts for that program. (iii) In the Section 8 programs other than the Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs operated under 24 CFR parts 982, 983 and 882, respectively, before an owner implements the HA's local preferences, the owner must receive approval from the HUD Field Office. HUD shall review these preferences to ensure that they are applicable to any tenant eligibility limitations for the subject housing and that they are consistent with HUD requirements pertaining to nondiscrimination and the Affirmative Fair Housing Marketing objectives. If HUD determines that the local preferences are in violation of those requirements, the owner will not be permitted to admit applicants on the basis of any local preferences. (iv) In any year, the number of families given preference in admission pursuant to a local preference over families with a federal preference may not exceed the local preference limit. “Local preference limit” means the following: (A) For an HA's Section 8 Certificate/Voucher program operated under 24 CFR part 982, ten percent of annual waiting list admissions; (B) For an HA's public housing program, fifty percent of annual admissions; (C) For an HA's Section 8 Moderate Rehabilitation program, thirty percent of annual admissions; (D) For Section 8 New Construction, Substantial Rehabilitation, and Loan Management/Property Disposition projects, thirty percent of annual admissions to each project; and (E) For the Section 8 Project-Based Certificate program, thirty percent of total annual waiting list admissions to the HA's Project-Based Certificate program (including admissions pursuant to 24 CFR 983.203(c)(3)). (3) <E T="03">Prohibition of preference if applicant was evicted for drug-related criminal activity.</E> With respect to the Section 8 Certificate, Voucher, Loan Management, and Property Disposition programs and the public housing program, the HA may not give a preference (federal preference, local preference, or ranking preference) to an applicant if any member of the family is a person who was evicted during the past three years from housing assisted under a 1937 Housing Act program because of drug-related criminal activity. However, the HA may give an admission preference in any of the following cases: (i) If the HA determines that the evicted person has successfully completed a rehabilitation program approved by the HA; (ii) If the HA determines that the evicted person clearly did not participate in or know about the drug-related criminal activity; or (iii) If the HA determines that the evicted person no longer participates in any drug-related criminal activity. (4) <E T="03">Retention of federal preference status.</E> With respect to determining the preference status of an applicant for the Section 8 Certificate/Voucher programs, an applicant who is receiving tenant-based assistance under the HOME program (24 CFR part 92) and an applicant who resides in public or Indian housing of the same HA (and was on the tenant-based program waiting list when admitted to the HA's public or Indian housing on or after April 26, 1993), the HA determines whether the <PRTPAGE P="48"/>applicant qualifies for federal preference based on the situation of the applicant at the time the applicant began to receive tenant-based assistance under the HOME program or was admitted to the HA's public or Indian housing program (beginning of initial public or Indian housing lease). (e) <E T="03">Income-based admission.</E> (1) In public housing, the HA may only give preference to select a relatively higher income family for admission if the preference is pursuant to a “local preference” admission. (For other income-related restrictions on selection, see 24 CFR 913.105.) (2) In Section 8 programs, the responsible entity may not select a family for admission in an order different from the order on the waiting list for the purpose of selecting a relatively higher income family for admission. (f) <E T="03">Informing applicants about admission preferences.</E> (1) The responsible entity must inform all applicants about available preferences and must give applicants an opportunity to show that they qualify for available preferences (federal preference, ranking preference, or local preference). (2) If the responsible entity determines that the notification to all applicants on a waiting list required by paragraph (f)(1) of this section is impracticable because of the length of the list, the responsible entity may provide this notification to fewer than all applicants on the list at any given time. The responsible entity must, however, have notified a sufficient number of applicants at any given time that, on the basis of the entity's determination of the number of applicants on the waiting list who already claim a federal preference and the anticipated number of project admissions: (i) There is an adequate pool of applicants who are likely to qualify for a federal preference; and (ii) It is unlikely that, on the basis of the responsible entity's framework for applying the preferences under paragraph (c) of this section and the federal preferences claimed by those already on the waiting list, any applicant who has not been so notified would receive assistance before those who have received notification. (g) <E T="03">Notice and opportunity for a meeting where preference is denied.</E> (1) If the responsible entity determines that an applicant does not qualify for a federal preference, ranking preference, or local preference claimed by the applicant, the responsible entity must promptly give the applicant written notice of the determination. The notice must contain a brief statement of the reasons for the determination, and state that the applicant has the right to meet with a representative of the responsible entity to review the determination. The meeting may be conducted by any person or persons designated by the responsible entity, who may be an officer or employee of the responsible entity, including the person who made or reviewed the determination or a subordinate employee. (2) The applicant may exercise other rights if the applicant believes that the applicant has been discriminated against on the basis of race, color, religion, sex, national origin, age, disability or familial status. (h) <E T="03">Residency preferences.</E> A “residency preference” is a preference for admission of families that reside anywhere in a specified “residency preference area.” A residency preference may be used as a ranking or local preference. (1) <E T="03">Section 8 programs other than Certificate/Voucher and Project-Based Certificate.</E> In these developments, local residency requirements are prohibited. (2) <E T="03">Section 8 Certificate/Voucher and Project-Based Certificate programs.</E> Any residency preference must be approved by HUD. (i) A county or municipality may be used as a residency preference area. (ii) An area smaller than a county or municipality may not be used as a residency preference area. (3) <E T="03">All projects.</E> With respect to any residency preference, applicants who are working or who have been notified that they are hired to work in the residency preference area shall be treated as residents of the residency preference area. A residency preference may not be based on how long the applicant has resided in or worked in the residency preference area. (i) <E T="03">Nondiscrimination.</E> (1) Any selection preferences must be established <PRTPAGE P="49"/>and administered in accordance with the following authorities: (i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and the implementing regulations at 24 CFR part 1; (ii) The Fair Housing Act (42 U.S.C. 3601-3619) and the implementing regulations at 24 CFR parts 100, 108, 109, and 110; (iii) Executive Order 11063 on Equal Opportunity in Housing and the implementing regulations at 24 CFR part 107; (iv) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the implementing regulations at 24 CFR part 8; (v) The Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and the implementing regulations at 24 CFR part 146; and (vi) The Americans with Disabilities Act (42 U.S.C. 12101-12213) to the extent applicable. (2) Such preferences also must be consistent with HUD's affirmative fair housing objectives and (where applicable) the owner's HUD-approved affirmative fair housing marketing plan. <APPRO>(Approved by the Office of Management and Budget under OMB control numbers 2577-0105 and 2502-0372)</APPRO> <CITA>[61 FR 9041, Mar. 6, 1996, as amended at 62 FR 27125, May 16, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.415</SECTNO> <SUBJECT>Federal preferences: general.</SUBJECT> (a) <E T="03">Definitions.</E> The definitions of these preference categories stated in §§ 5.420, 5.425, and 5.430 must be used by the responsible entity, except that an HA may use its own alternative definitions if they have been approved by HUD. (b) <E T="03">Ranking preferences: selection among federal preference holders.</E> The responsible entity's system of administering the federal preferences (its admission policy, in the case of the Section 8 Certificate/Voucher programs) may provide for use of ranking preference for selecting among applicants who qualify for federal preference. (1) The responsible entity may give preference to working families—so long as the prohibition of § 5.410 against selection based on income and the nondiscrimination provisions that protect against discrimination on the basis of age or disability are not violated. (If a responsible entity adopts such a preference, it may not give greater weight to an applicant based on the amount of employment income, and an applicant household shall be given the benefit of the preference if the head and spouse, or sole member, are age 62 or older or are receiving social security disability, supplemental security income disability benefits, or any other payments based on an individual's inability to work.) A responsible entity may give preference to graduates of, as well as active participants in, educational and training programs that are designed to prepare individuals for the job market. The responsible entity also may use the housing agency's “local preferences” for the Section 8 Certificate and Voucher programs to rank federal preference holders. (2) The ranking preferences may give different weight to the federal preferences, through such means as: (i) Aggregating the federal preferences (e.g., provide that two federal preferences outweigh one); (ii) Giving greater weight to holders of a particular category of federal preference; or (iii) Giving greater weight to a federal preference holder who fits a particular category of federal preference. (c) <E T="03">Qualifying for a federal preference</E>—(1) <E T="03">Certification of preference.</E> An applicant may claim qualification for a federal preference by certifying to the responsible entity that the family qualifies for federal preference. The responsible entity must accept this certification, unless the responsible entity verifies that the applicant is not qualified for federal preference. (2) <E T="03">Verification of preference.</E> (i) Before admitting an applicant on the basis of a federal preference, the responsible entity must require the applicant to provide information needed by the responsible entity to verify that the applicant qualifies for a federal preference because of the applicant's current status. The applicant's current status must be determined without regard to whether there has been a change in the applicant's qualification for a federal preference between the time of application and selection for admission, including a change from one federal preference category to another.<PRTPAGE P="50"/> (ii) In the case of Section 8 programs other than the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs, the owner must use the verification procedures specified in § 5.420(c) (involuntary displacement); § 5.425(c) (substandard housing); and § 5.430(b) (rent burden). In the case of the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs and the public housing program, the HA may adopt its own verification procedure. (iii) Once the responsible entity has verified an applicant's qualification for a federal preference, the responsible entity need not require the applicant to provide information needed by the responsible entity to verify such qualification again unless: (A) The responsible entity determines reverification is desirable because a long time has passed since verification; or (B) The responsible entity has reasonable grounds to believe that the applicant no longer qualifies for a federal preference. (3) <E T="03">Effect of current residence in assisted housing.</E> No applicant is to be denied a federal preference for which the family otherwise qualifies on the basis that the applicant already resides in assisted housing; for example, the actual condition of the housing unit must be considered, or the possibility of involuntary displacement resulting from domestic violence must be evaluated. (d) <E T="03">Approval of special conditions satisfying preference definitions.</E> With respect to Section 8 programs other than the Section 8 Certificate/Voucher, Project-Based Certificate and Moderate Rehabilitation programs, HUD may specify additional conditions under which the federal preferences, as described in §§ 5.420, 5.425, and 5.430, can be satisfied. In such cases, appropriate certification of qualification must be provided. (See HUD Handbook 4350.3, which is available at HUD field offices.) <APPRO>(Approved by the Office of Management and Budget under OMB control number 2502-0372 and 2577-0105)</APPRO> <CITA>[61 FR 9043, Mar. 6, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.420</SECTNO> <SUBJECT>Federal preference: involuntary displacement.</SUBJECT> (a) <E T="03">How applicant qualifies for displacement preference.</E> (See § 5.415(a)(2) and (c)(2)(ii) for applicability of this section to the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs and the public housing program.) (1) An applicant qualifies for a federal preference on the basis of involuntary displacement if either of the following apply: (i) The applicant has been involuntarily displaced and is not living in standard, permanent replacement housing; or (ii) The applicant will be involuntarily displaced within no more than six months from the date of preference status certification by the family or verification by the responsible entity. (2)(i) “Standard, permanent replacement housing” is housing: (A) That is decent, safe, and sanitary; (B) That is adequate for the family size; and (C) That the family is occupying pursuant to a lease or occupancy agreement. (ii) “Standard, permanent replacement housing” does not include: (A) Transient facilities, such as motels, hotels, or temporary shelters for victims of domestic violence or homeless families; or (B) In the case of domestic violence, the housing unit in which the applicant and the applicant's spouse or other member of the household who engages in such violence live. (b) <E T="03">Meaning of involuntary displacement.</E> An applicant is or will be involuntarily displaced if the applicant has vacated or will have to vacate the unit where the applicant lives because of one or more of the following: (1) <E T="03">Displacement by disaster.</E> An applicant's unit is uninhabitable because of a disaster, such as a fire or flood. (2) <E T="03">Displacement by government action.</E> Activity carried on by an agency of the United States or by any State or local governmental body or agency in connection with code enforcement or a public improvement or development program.<PRTPAGE P="51"/> (3) <E T="03">Displacement by action of housing owner.</E> (i) Action by a housing owner forces the applicant to vacate its unit. (ii) An applicant does not qualify as involuntarily displaced because action by a housing owner forces the applicant to vacate its unit unless: (A) The applicant cannot control or prevent the owner's action; (B) The owner action occurs although the applicant met all previously imposed conditions of occupancy; and (C) The action taken by the owner is other than a rent increase. (iii) To qualify as involuntarily displaced because action by a housing owner forces the applicant to vacate its unit, reasons for an applicant's having to vacate a housing unit include, but are not limited to, conversion of an applicant's housing unit to non-rental or non-residential use; closing of an applicant's housing unit for rehabilitation or for any other reason; notice to an applicant that the applicant must vacate a unit because the owner wants the unit for the owner's personal or family use or occupancy; sale of a housing unit in which an applicant resides under an agreement that the unit must be vacant when possession is transferred; or any other legally authorized act that results or will result in the withdrawal by the owner of the unit or structure from the rental market. (iv) Such reasons do not include the vacating of a unit by a tenant as a result of actions taken by the owner because the tenant refuses: (A) To comply with HUD program policies and procedures for the occupancy of under-occupied or overcrowded units; or (B) To accept a transfer to another housing unit in accordance with a court decree or in accordance with policies and procedures under a HUD-approved desegregation plan. (4) <E T="03">Displacement by domestic violence.</E> (i) An applicant is involuntarily displaced if: (A) The applicant has vacated a housing unit because of domestic violence; or (B) The applicant lives in a housing unit with a person who engages in domestic violence. (ii) “Domestic violence” means actual or threatened physical violence directed against one or more members of the applicant family by a spouse or other member of the applicant's household. (iii) To qualify as involuntarily displaced because of domestic violence: (A) The responsible entity must determine, in accordance with HUD's administrative instructions, that the domestic violence occurred recently or is of a continuing nature; and (B) The applicant must certify that the person who engaged in such violence will not reside with the applicant family unless the responsible entity has given advance written approval. If the family is admitted, the responsible entity may deny or terminate assistance to the family for breach of this certification. (5) <E T="03">Displacement to avoid reprisals.</E> (i) An applicant family is involuntarily displaced if: (A) Family members provided information on criminal activities to a law enforcement agency; and (B) Based on a threat assessment, a law enforcement agency recommends rehousing the family to avoid or minimize a risk of violence against family members as a reprisal for providing such information. (ii) The responsible entity may establish appropriate safeguards to conceal the identity of families requiring protection against such reprisals. (6) <E T="03">Displacement by hate crimes.</E> (i) An applicant is involuntarily displaced if: (A) One or more members of the applicant's family have been the victim of one or more hate crimes; and (B) The applicant has vacated a housing unit because of such crime, or the fear associated with such crime has destroyed the applicant's peaceful enjoyment of the unit. (ii) “Hate crime” means actual or threatened physical violence or intimidation that is directed against a person or his or her property and that is based on the person's race, color, religion, sex, national origin, handicap, or familial status. (iii) The responsible entity must determine, in accordance with HUD's administrative instructions, that the <PRTPAGE P="52"/>hate crime involved occurred recently or is of a continuing nature. (7) <E T="03">Displacement by inaccessibility of unit.</E> An applicant is involuntarily displaced if: (i) A member of the family has a mobility or other impairment that makes the person unable to use critical elements of the unit; and (ii) The owner is not legally obligated to make the changes to the unit that would make critical elements accessible to the disabled person as a reasonable accommodation. (8) <E T="03">Displacement because of HUD disposition of multifamily project.</E> Involuntary displacement includes displacement because of disposition of a multifamily rental housing project by HUD under section 203 of the Housing and Community Development Amendments of 1978. (c) <E T="03">Involuntary displacement preference: Verification.</E> A private owner's verification of an applicant's involuntary displacement is established by the following documentation: (1) <E T="03">Displacement by disaster.</E> Certification, in a form prescribed by the Secretary, from a unit or agency of government that an applicant has been or will be displaced as a result of a disaster that results in the uninhabitability of an applicant's unit. (2) <E T="03">Displacement by government action.</E> Certification, in a form prescribed by the Secretary, from a unit or agency of government that an applicant has been or will be displaced by activity carried on by an agency of the United States or by any State or local governmental body or agency in connection with code enforcement or a public improvement or development program. (3) <E T="03">Displacement by owner action.</E> Certification, in a form prescribed by the Secretary, from an owner or owner's agent that an applicant had to or will have to vacate a unit by a date certain because of owner action. (4) <E T="03">Displacement because of domestic violence.</E> Certification, in a form prescribed by the Secretary, of displacement because of domestic violence from the local police department, social services agency, or court of competent jurisdiction, or a clergyman, physician, or public or private facility that provides shelter or counseling to the victims of domestic violence. (5) <E T="03">Displacement to avoid reprisals.</E> A threat assessment by a law enforcement agency. (6) <E T="03">Displacement by hate crime.</E> Certification by a law enforcement agency or other reliable information. (7) <E T="03">Displacement by inaccessibility of unit.</E> Certification by a health care professional that a family member has a mobility or other impairment that makes critical elements of the current unit inaccessible, and statement by the owner that it is unable to make necessary changes to the unit to make it accessible. (8) <E T="03">Displacement by HUD disposition of multifamily project.</E> Certification by HUD with respect to the disposition. <CITA>[61 FR 9044, Mar. 6, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.425</SECTNO> <SUBJECT>Federal preference: substandard housing.</SUBJECT> (a) <E T="03">When unit is substandard.</E> (See § 5.415(a)(2) and (c)(2)(ii) for applicability of this section to the Section 8 Certificate/Voucher, Project-Based Certificate, Moderate Rehabilitation programs and the public housing program.) A unit is substandard if it: (1) Is dilapidated; (2) Does not have operable indoor plumbing; (3) Does not have a usable flush toilet inside the unit for the exclusive use of a family; (4) Does not have a usable bathtub or shower inside the unit for the exclusive use of a family; (5) Does not have electricity, or has inadequate or unsafe electrical service; (6) Does not have a safe or adequate source of heat; (7) Should, but does not, have a kitchen; or (8) Has been declared unfit for habitation by an agency or unit of government. (b) <E T="03">Other definitions—</E>(1) <E T="03">Dilapidated unit.</E> A housing unit is dilapidated if: (i) The unit does not provide safe and adequate shelter, and in its present condition endangers the health, safety, or well-being of a family; or (ii) The unit has one or more critical defects, or a combination of intermediate defects in sufficient number or extent to require considerable repair or <PRTPAGE P="53"/>rebuilding. The defects may involve original construction, or they may result from continued neglect or lack of repair or from serious damage to the structure. (2) <E T="03">Homeless family.</E> (i) An applicant that is a “homeless family” is considered to be living in substandard housing. (ii) A “homeless family” includes: (A) Any person or family that lacks a fixed, regular, and adequate nighttime residence; and (B) Any person or family that has a primary nighttime residence that is: (<E T="03">1</E>) A supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing); (<E T="03">2</E>) An institution that provides a temporary residence for individuals intended to be institutionalized; or (<E T="03">3</E>) A public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings. (iii) A “homeless family” does not include any person imprisoned or otherwise detained pursuant to an Act of Congress or a State law. (3) <E T="03">Status of SRO housing.</E> In determining whether an individual living in single room occupancy (SRO) housing qualifies for federal preference, SRO housing is not considered substandard solely because it does not contain sanitary or food preparation facilities. (c) <E T="03">Substandard housing preference: verification.</E> The following provisions are applicable to private owners: (1) Verification that an applicant is living in substandard housing consists of certification, in a form prescribed by the Secretary, from a unit or agency of government or from an applicant's present landlord that the applicant's unit is “substandard housing” (as described in this section). (2) In the case of a “homeless family” (as described in this section), verification consists of certification, in a form prescribed by the Secretary, of this status from a public or private facility that provides shelter for such individuals, or from the local police department or social services agency. <CITA>[61 FR 9045, Mar. 6, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.430</SECTNO> <SUBJECT>Federal preference: rent burden.</SUBJECT> (a) <E T="03">Rent burden preference: how determined. (See § 5.415(a)(2) and (c)(2)(ii) for applicability of this section to the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs and the public housing program.)</E> (1) “Rent burden preference” means the federal preference for admission of applicants that pay more than 50 percent of family income for rent. (2) For purposes of determining whether an applicant qualifies for the rent burden preference: (i) “Family income” means Monthly Income, as defined in 24 CFR 813.102. (ii) “Rent” means: (A) The actual monthly amount due under a lease or occupancy agreement between a family and the family's current landlord; and (B) For utilities purchased directly by tenants from utility providers: (<E T="03">1</E>) The utility allowance for family-purchased utilities and services that is used in the HA tenant-based program; or (<E T="03">2</E>) If the family chooses, the average monthly payments that the family actually made for these utilities and services for the most recent 12-month period or, if information is not obtainable for the entire period, for an appropriate recent period. (iii) Amounts paid to or on behalf of a family under any energy assistance program must be subtracted from the otherwise applicable rental amount, to the extent that they are not included in the family's income. (iv) For purposes of the Section 8 Certificate/Voucher programs, rent for an applicant who owns a manufactured home, but rents the space upon which it is located, includes the monthly payment to amortize the purchase price of the home, calculated in accordance with HUD's requirements. In addition, for this program, rent for members of a cooperative means the charges under the occupancy agreement between the members and the cooperative. (3) An applicant does not qualify for a rent burden preference if either of the following is applicable: (i) The applicant has been paying more than 50 percent of income for rent for less than 90 days.<PRTPAGE P="54"/> (ii) The applicant is paying more than 50 percent of family income to rent a unit because the applicant's housing assistance for occupancy of the unit under any of the following programs has been terminated because of the applicant's refusal to comply with applicable program policies and procedures on the occupancy of underoccupied and overcrowded units: (A) The Section 8 programs or public and Indian housing programs under the United States Housing Act of 1937; (B) The rent supplement program under section 101 of the Housing and Urban Development Act of 1965; or (C) Rental assistance payments under section 236(f)(2) of the National Housing Act. (b) <E T="03">Rent burden preference: verification of income and rent.</E> The owner must verify that an applicant is paying more than 50 percent of family income for rent, as follows: (1) <E T="03">How to verify income.</E> The owner must verify a family's income by using the standards and procedures that it uses to verify family income under 24 CFR part 813. (2) <E T="03">How to verify rent.</E> The owner must verify the amount due to the family's landlord (or cooperative) under the lease or occupancy agreement: (i) By requiring the family to furnish copies of its most recent rental (or cooperative charges) receipts (which may include canceled checks or money order receipts) or a copy of the family's current lease or occupancy agreement; or (ii) By contacting the landlord (or cooperative) or its agent directly. (3) <E T="03">Utilities.</E> To verify the actual amount that a family paid for utilities and other housing services, the owner must require the family to provide copies of the appropriate bills or receipts, or must obtain the information directly from the utility or service supplier. <CITA>[61 FR 9045, Mar. 6, 1996]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Restrictions on Assistance to Noncitizens</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1436a and 3535(d). </AUTH> <SECTION> <SECTNO>§ 5.500</SECTNO> <SUBJECT>Applicability.</SUBJECT> (a) <E T="03">Covered programs/assistance.</E> This subpart E implements Section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214 prohibits HUD from making financial assistance available to persons who are not in eligible status with respect to citizenship or noncitizen immigration status. This subpart E is applicable to financial assistance provided under: (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program); and (4) The United States Housing Act of 1937 (42 U.S. C. 1437 <E T="03">et seq.</E>) which covers: (i) HUD's Public Housing Programs; (ii) The Section 8 Housing Assistance Programs; and (iii) The Housing Development Grant Programs (with respect to low income units only). (b) <E T="03">Covered individuals and entities</E>—(1) <E T="03">Covered individuals/persons and families.</E> The provisions of this subpart E apply to both applicants for assistance and persons already receiving assistance covered under this subpart E. (2) <E T="03">Covered entities.</E> The provisions of this subpart E apply to Public Housing Agencies (PHAs), project (or housing) owners, and mortgagees under the Section 235 Program. The term “responsible entity” is used in this subpart E to refer collectively to these entities, and is further defined in § 5.504. </SECTION> <SECTION> <SECTNO>§ 5.501</SECTNO> <SUBJECT>PHA election whether to comply with this subpart.</SUBJECT> (a) <E T="03">PHA opt-out.</E> A PHA that is a responsible entity under this subpart may elect not to comply with (“opt-out” of) the requirements of this subpart. (b) <E T="03">PHA compliance.</E> If the PHA elects to comply with this subpart, the PHA: (1) May initiate procedures to affirmatively establish or verify the eligibility of a family under this section at <PRTPAGE P="55"/>any time at which the PHA determines that such eligibility is in question, without regard to position of the family member's family on the waiting list of the PHA; (2) May affirmatively establish or verify the eligibility of a family member in accordance with the procedures set forth in section 274A(b)(1) of the Immigration and Nationality Act; and (3) Shall have access to any relevant information contained in the INS SAVE system (or any successor thereto) that relates to any family member applying for financial assistance. (c) <E T="03">HUD not responsible due to PHA opt-out.</E> HUD shall not bear any responsibility in connection with compliance with the requirements of Section 214 if a PHA elects not to comply with this subpart under paragraph (a) of this section. <CITA>[61 FR 60538, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.502</SECTNO> <SUBJECT>Requirements concerning documents.</SUBJECT> For any notice or document (decision, declaration, consent form, etc.) that this subpart E requires the responsible entity to provide to an individual, or requires the responsible entity to obtain the signature of an individual, the responsible entity, where feasible, must arrange for the notice or document to be provided to the individual in a language that is understood by the individual if the individual is not proficient in English. (See 24 CFR 8.6 of HUD's regulations for requirements concerning communications with persons with disabilities.) </SECTION> <SECTION> <SECTNO>§ 5.504</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) The definitions <E T="03">1937 Act, HUD, Public Housing Agency (PHA),</E> and <E T="03">Section 8</E> are defined in subpart A of this part. (b) As used in this subpart E: <E T="03">Child</E> means a member of the family other than the family head or spouse who is under 18 years of age. <E T="03">Citizen</E> means a citizen or national of the United States. <E T="03">Evidence of citizenship or eligible status</E> means the documents which must be submitted to evidence citizenship or eligible immigration status. (See § 5.508(b).) <E T="03">Family</E> has the same meaning as provided in the program regulations of the relevant Section 214 covered program. <E T="03">Head of household</E> means the adult member of the family who is the head of the household for purposes of determining income eligibility and rent. <E T="03">Housing covered programs</E> means the following programs administered by the Assistant Secretary for Housing: (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); and (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program). <E T="03">INS</E> means the U.S. Immigration and Naturalization Service. <E T="03">Mixed family</E> means a family whose members include those with citizenship or eligible immigration status, and those without citizenship or eligible immigration status. <E T="03">National</E> means a person who owes permanent allegiance to the United States, for example, as a result of birth in a United States territory or possession. <E T="03">Noncitizen</E> means a person who is neither a citizen nor national of the United States. <E T="03">Project owner</E> means the person or entity that owns the housing project containing the assisted dwelling unit. <E T="03">Public Housing covered programs</E> means the public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the 1937 Act. This definition does not encompass HUD's Indian Housing programs administered under title II of the 1937 Act. Further, this term does not include those programs providing assistance under section 8 of the 1937 Act. (See definition of “Section 8 Covered Programs” in this section.) <E T="03">Responsible</E> entity means the person or entity responsible for administering the restrictions on providing assistance to noncitizens with ineligible immigrations status. The entity responsible for administering the restrictions on providing assistance to noncitizens with <PRTPAGE P="56"/>ineligible immigration status under the various covered programs is as follows: (1) For the Section 235 Program, the mortgagee. (2) For Public Housing, the Section 8 Rental Certificate, the Section 8 Rental Voucher, and the Section 8 Moderate Rehabilitation programs, the PHA administering the program under an ACC with HUD. (3) For all other Section 8 programs, the Section 236 Program, and the Rent Supplement Program, the owner. <E T="03">Section 8 covered programs</E> means all HUD programs which assist housing under Section 8 of the 1937 Act, including Section 8-assisted housing for which loans are made under section 202 of the Housing Act of 1959. <E T="03">Section 214</E> means section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). <E T="03">Section 214 covered programs</E> is the collective term for the HUD programs to which the restrictions imposed by Section 214 apply. These programs are set forth in § 5.500. <E T="03">Tenant</E> means an individual or a family renting or occupying an assisted dwelling unit. For purposes of this subpart E, the term tenant will also be used to include a homebuyer, where appropriate. </SECTION> <SECTION> <SECTNO>§ 5.506</SECTNO> <SUBJECT>General provisions.</SUBJECT> (a) <E T="03">Restrictions on assistance.</E> Financial assistance under a Section 214 covered program is restricted to: (1) <E T="03">Citizens;</E> or (2) <E T="03">Noncitizens</E> who have eligible immigration status under one of the categories set forth in Section 214 (see 42 U.S.C. 1436a(a)). (b) <E T="03">Family eligibility for assistance.</E> (1) A family shall not be eligible for assistance unless every member of the family residing in the unit is determined to have eligible status, as described in paragraph (a) of this section, or unless the family meets the conditions set forth in paragraph (b)(2) of this section. (2) Despite the ineligibility of one or more family members, a mixed family may be eligible for one of the three types of assistance provided in §§ 5.516 and 5.518. A family without any eligible members and receiving assistance on June 19, 1995 may be eligible for temporary deferral of termination of assistance as provided in §§ 5.516 and 5.518. </SECTION> <SECTION> <SECTNO>§ 5.508</SECTNO> <SUBJECT>Submission of evidence of citizenship or eligible immigration status.</SUBJECT> (a) <E T="03">General.</E> Eligibility for assistance or continued assistance under a Section 214 covered program is contingent upon a family's submission to the responsible entity of the documents described in paragraph (b) of this section for each family member. If one or more family members do not have citizenship or eligible immigration status, the family members may exercise the election not to contend to have eligible immigration status as provided in paragraph (e) of this section, and the provisions of §§ 5.516 and 5.518 shall apply. (b) <E T="03">Evidence of citizenship or eligible immigration status.</E> Each family member, regardless of age, must submit the following evidence to the responsible entity. (1) For citizens, the evidence consists of a signed declaration of U.S. citizenship. The responsible entity may request verification of the declaration by requiring presentation of a United States passport, resident alien card, registration card, social security card, or other appropriate documentation. (2) For noncitizens who are 62 years of age or older or who will be 62 years of age or older and receiving assistance under a Section 214 covered program on September 30, 1996 or applying for assistance on or after that date, the evidence consists of: (i) A signed declaration of eligible immigration status; and (ii) Proof of age document. (3) For all other noncitizens, the evidence consists of: (i) A signed declaration of eligible immigration status; (ii) One of the INS documents referred to in § 5.510; and (iii) A signed verification consent form. (c) <E T="03">Declaration.</E> (1) For each family member who contends that he or she is a U.S. citizen or a noncitizen with eligible immigration status, the family must submit to the responsible entity a written declaration, signed under <PRTPAGE P="57"/>penalty of perjury, by which the family member declares whether he or she is a U.S. citizen or a noncitizen with eligible immigration status. (i) For each adult, the declaration must be signed by the adult. (ii) For each child, the declaration must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. (2) <E T="03">For Housing covered programs:</E> The written declaration may be incorporated as part of the application for housing assistance or may constitute a separate document. (d) <E T="03">Verification consent form</E>—(1) <E T="03">Who signs.</E> Each noncitizen who declares eligible immigration status (except certain noncitizens who are 62 years of age or older as described in paragraph (b)(2) of this section) must sign a verification consent form as follows. (i) For each adult, the form must be signed by the adult. (ii) For each child, the form must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. (2) <E T="03">Notice of release of evidence by responsible entity.</E> The verification consent form shall provide that evidence of eligible immigration status may be released by the responsible entity without responsibility for the further use or transmission of the evidence by the entity receiving it, to: (i) HUD, as required by HUD; and (ii) The INS for purposes of verification of the immigration status of the individual. (3) <E T="03">Notice of release of evidence by HUD.</E> The verification consent form also shall notify the individual of the possible release of evidence of eligible immigration status by HUD. Evidence of eligible immigration status shall only be released to the INS for purposes of establishing eligibility for financial assistance and not for any other purpose. HUD is not responsible for the further use or transmission of the evidence or other information by the INS. (e) <E T="03">Individuals who do not contend that they have eligible status.</E> If one or more members of a family elect not to contend that they have eligible immigration status, and other members of the family establish their citizenship or eligible immigration status, the family may be eligible for assistance under §§ 5.516 and 5.518, or § 5.520, despite the fact that no declaration or documentation of eligible status is submitted for one or more members of the family. The family, however, must identify in writing to the responsible entity, the family member (or members) who will elect not to contend that he or she has eligible immigration status. (f) <E T="03">Notification of requirements of Section 214—</E>(1) <E T="03">When notice is to be issued.</E> Notification of the requirement to submit evidence of citizenship or eligible immigration status, as required by this section, or to elect not to contend that one has eligible status as provided by paragraph (e) of this section, shall be given by the responsible entity as follows: (i) <E T="03">Applicant's notice.</E> The notification described in paragraph (f)(1) of this section shall be given to each applicant at the time of application for assistance. Applicants whose applications are pending on June 19, 1995, shall be notified of the requirement to submit evidence of eligible status as soon as possible after June 19, 1995. (ii) <E T="03">Notice to tenants.</E> The notification described in paragraph (f)(1) of this section shall be given to each tenant at the time of, and together with, the responsible entity's notice of regular reexamination of income, but not later than one year following June 19, 1995. (iii) <E T="03">Timing of mortgagor's notice.</E> A mortgagor receiving Section 235 assistance must be provided the notification described in paragraph (f)(1) of this section and any additional requirements imposed under the Section 235 Program. (2) <E T="03">Form and content of notice.</E> The notice shall: (i) State that financial assistance is contingent upon the submission and verification, as appropriate, of evidence of citizenship or eligible immigration status as required by paragraph (a) of this section; (ii) Describe the type of evidence that must be submitted, and state the time period in which that evidence must be submitted (see paragraph (g) of this section concerning when evidence must be submitted); and<PRTPAGE P="58"/> (iii) State that assistance will be prorated, denied or terminated, as appropriate, upon a final determination of ineligibility after all appeals have been exhausted (see § 5.514 concerning INS appeal, and informal hearing process) or, if appeals are not pursued, at a time to be specified in accordance with HUD requirements. Tenants also shall be informed of how to obtain assistance under the preservation of families provisions of §§ 5.516 and 5.518. (g) <E T="03">When evidence of eligible status is required to be submitted.</E> The responsible entity shall require evidence of eligible status to be submitted at the times specified in paragraph (g) of this section, subject to any extension granted in accordance with paragraph (h) of this section. (1) <E T="03">Applicants.</E> For applicants, responsible entities must ensure that evidence of eligible status is submitted not later than the date the responsible entity anticipates or has knowledge that verification of other aspects of eligibility for assistance will occur (see § 5.512(a)). (2) <E T="03">Tenants.</E> For tenants, evidence of eligible status is required to be submitted as follows: (i) For financial assistance under a Section 214 covered program, with the exception of Section 235 assistance payments, the required evidence shall be submitted at the first regular reexamination after June 19, 1995, in accordance with program requirements. (ii) For financial assistance in the form of Section 235 assistance payments, the mortgagor shall submit the required evidence in accordance with requirements imposed under the Section 235 Program. (3) <E T="03">New occupants of assisted units.</E> For any new occupant of an assisted unit (e.g., a new family member comes to reside in the assisted unit), the required evidence shall be submitted at the first interim or regular reexamination following the person's occupancy. (4) <E T="03">Changing participation in a HUD program.</E> Whenever a family applies for admission to a Section 214 covered program, evidence of eligible status is required to be submitted in accordance with the requirements of this subpart unless the family already has submitted the evidence to the responsible entity for a Section 214 covered program. (5) <E T="03">One-time evidence requirement for continuous occupancy.</E> For each family member, the family is required to submit evidence of eligible status only one time during continuously assisted occupancy under any Section 214 covered program. (h) <E T="03">Extensions of time to submit evidence of eligible status—</E>(1) <E T="03">When extension must be granted.</E> The responsible entity shall extend the time, provided in paragraph (g) of this section, to submit evidence of eligible immigration status if the family member: (i) Submits the declaration required under § 5.508(a) certifying that any person for whom required evidence has not been submitted is a noncitizen with eligible immigration status; and (ii) Certifies that the evidence needed to support a claim of eligible immigration status is temporarily unavailable, additional time is needed to obtain and submit the evidence, and prompt and diligent efforts will be undertaken to obtain the evidence. (2) <E T="03">Thirty-day extension period.</E> Any extension of time, if granted, shall not exceed thirty (30) days. The additional time provided should be sufficient to allow the individual the time to obtain the evidence needed. The responsible entity's determination of the length of the extension needed shall be based on the circumstances of the individual case. (3) <E T="03">Grant or denial of extension to be in writing.</E> The responsible entity's decision to grant or deny an extension as provided in paragraph (h)(1) of this section shall be issued to the family by written notice. If the extension is granted, the notice shall specify the extension period granted (which shall not exceed thirty (30) days). If the extension is denied, the notice shall explain the reasons for denial of the extension. (i) <E T="03">Failure to submit evidence or to establish eligible status.</E> If the family fails to submit required evidence of eligible immigration status within the time period specified in the notice, or any extension granted in accordance with paragraph (h) of this section, or if the evidence is timely submitted but fails <PRTPAGE P="59"/>to establish eligible immigration status, the responsible entity shall proceed to deny, prorate or terminate assistance, or provide continued assistance or temporary deferral of termination of assistance, as appropriate, in accordance with the provisions of §§ 5.514, 5.516, and 5.518. (ii) [Reserved] <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60538, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.510</SECTNO> <SUBJECT>Documents of eligible immigration status.</SUBJECT> (a) <E T="03">General.</E> A responsible entity shall request and review original documents of eligible immigration status. The responsible entity shall retain photocopies of the documents for its own records and return the original documents to the family. (b) <E T="03">Acceptable evidence of eligible immigration status.</E> Acceptable evidence of eligible immigration status shall be the original of a document designated by INS as acceptable evidence of immigration status in one of the six categories mentioned in § 5.506(a) for the specific immigration status claimed by the individual. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.512</SECTNO> <SUBJECT>Verification of eligible immigration status.</SUBJECT> (a) <E T="03">General.</E> Except as described in §§ 5.501 and 5.514, no individual or family applying for assistance may receive such assistance prior to the verification of the eligibility of at least the individual or one family member. Verification of eligibility consistent with § 5.514 occurs when the individual or family members have submitted documentation to the responsible entity in accordance with § 5.508. (b) <E T="03">Primary verification—</E>(1) <E T="03">Automated verification system.</E> Primary verification of the immigration status of the person is conducted by the responsible entity through the INS automated system (INS Systematic Alien Verification for Entitlements (SAVE)). The INS SAVE system provides access to names, file numbers and admission numbers of noncitizens. (2) <E T="03">Failure of primary verification to confirm eligible immigration status.</E> If the INS SAVE system does not verify eligible immigration status, secondary verification must be performed. (c) <E T="03">Secondary verification—</E>(1) <E T="03">Manual search of INS records.</E> Secondary verification is a manual search by the INS of its records to determine an individual's immigration status. The responsible entity must request secondary verification, within 10 days of receiving the results of the primary verification, if the primary verification system does not confirm eligible immigration status, or if the primary verification system verifies immigration status that is ineligible for assistance under a Section 214 covered program. (2) <E T="03">Secondary verification initiated by responsible entity.</E> Secondary verification is initiated by the responsible entity forwarding photocopies of the original INS documents required for the immigration status declared (front and back), attached to the INS document verification request form G-845S (Document Verification Request), or such other form specified by the INS to a designated INS office for review. (Form G-845S is available from the local INS Office.) (3) <E T="03">Failure of secondary verification to confirm eligible immigration status.</E> If the secondary verification does not confirm eligible immigration status, the responsible entity shall issue to the family the notice described in § 5.514(d), which includes notification of the right to appeal to the INS of the INS finding on immigration status (see § 5.514(d)(4)). (d) <E T="03">Exemption from liability for INS verification.</E> The responsible entity shall not be liable for any action, delay, or failure of the INS in conducting the automated or manual verification. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.514</SECTNO> <SUBJECT>Delay, denial, reduction or termination of assistance.</SUBJECT> (a) <E T="03">General.</E> Assistance to a family may not be delayed, denied, reduced or terminated because of the immigration status of a family member except as provided in this section. (b) <E T="03">Restrictions on delay, denial, reduction or termination of assistance</E>—(1) <E T="03">Restrictions on reduction, denial or termination of assistance for applicants and tenants.</E> Assistance to an applicant or <PRTPAGE P="60"/>tenant shall not be delayed, denied, reduced, or terminated, on the basis of ineligible immigration status of a family member if: (i) The primary and secondary verification of any immigration documents that were timely submitted has not been completed; (ii) The family member for whom required evidence has not been submitted has moved from the assisted dwelling unit; (iii) The family member who is determined not to be in an eligible immigration status following INS verification has moved from the assisted dwelling unit; (iv) The INS appeals process under § 5.514(e) has not been concluded; (v) Assistance is prorated in accordance with § 5.520; or (vi) Assistance for a mixed family is continued in accordance with §§ 5.516 and 5.518; or (vii) Deferral of termination of assistance is granted in accordance with §§ 5.516 and 5.518. (2) <E T="03">Restrictions on delay, denial, reduction or termination of assistance pending fair hearing for tenants.</E> In addition to the factors listed in paragraph (b)(1) of this section, assistance to a tenant cannot be delayed, denied, reduced or terminated until the completion of the informal hearing described in paragraph (f) of this section. (c) <E T="03">Events causing denial or termination of assistance</E>—(1) <E T="03">General.</E> Assistance to an applicant shall be denied, and a tenant's assistance shall be terminated, in accordance with the procedures of this section, upon the occurrence of any of the following events: (i) Evidence of citizenship (i.e., the declaration) and eligible immigration status is not submitted by the date specified in § 5.508(g) or by the expiration of any extension granted in accordance with § 5.508(h); (ii) Evidence of citizenship and eligible immigration status is timely submitted, but INS primary and secondary verification does not verify eligible immigration status of a family member; and (A) The family does not pursue INS appeal or informal hearing rights as provided in this section; or (B) INS appeal and informal hearing rights are pursued, but the final appeal or hearing decisions are decided against the family member; or (iii) The responsible entity determines that a family member has knowingly permitted another individual who is not eligible for assistance to reside (on a permanent basis) in the public or assisted housing unit of the family member. Such termination shall be for a period of not less than 24 months. This provision does not apply to a family if the ineligibility of the ineligible individual was considered in calculating any proration of assistance provided for the family. (2) <E T="03">Termination of assisted occupancy.</E> For termination of assisted occupancy, see paragraph (i) of this section. (d) <E T="03">Notice of denial or termination of assistance.</E> The notice of denial or termination of assistance shall advise the family: (1) That financial assistance will be denied or terminated, and provide a brief explanation of the reasons for the proposed denial or termination of assistance; (2) That the family may be eligible for proration of assistance as provided under § 5.520; (3) In the case of a tenant, the criteria and procedures for obtaining relief under the provisions for preservation of families in §§ 5.514 and 5.518; (4) That the family has a right to request an appeal to the INS of the results of secondary verification of immigration status and to submit additional documentation or a written explanation in support of the appeal in accordance with the procedures of paragraph (e) of this section; (5) That the family has a right to request an informal hearing with the responsible entity either upon completion of the INS appeal or in lieu of the INS appeal as provided in paragraph (f) of this section; (6) For applicants, the notice shall advise that assistance may not be delayed until the conclusion of the INS appeal process, but assistance may be delayed during the pendency of the informal hearing process. (e) <E T="03">Appeal to the INS</E>—(1) <E T="03">Submission of request for appeal.</E> Upon receipt of notification by the responsible entity that <PRTPAGE P="61"/>INS secondary verification failed to confirm eligible immigration status, the responsible entity shall notify the family of the results of the INS verification, and the family shall have 30 days from the date of the responsible entity's notification, to request an appeal of the INS results. The request for appeal shall be made by the family communicating that request in writing directly to the INS. The family must provide the responsible entity with a copy of the written request for appeal and proof of mailing. (2) <E T="03">Documentation to be submitted as part of appeal to INS.</E> The family shall forward to the designated INS office any additional documentation or written explanation in support of the appeal. This material must include a copy of the INS document verification request form G-845S (used to process the secondary verification request) or such other form specified by the INS, and a cover letter indicating that the family is requesting an appeal of the INS immigration status verification results. (3) <E T="03">Decision by INS—</E>(i) <E T="03">When decision will be issued.</E> The INS will issue to the family, with a copy to the responsible entity, a decision within 30 days of its receipt of documentation concerning the family's appeal of the verification of immigration status. If, for any reason, the INS is unable to issue a decision within the 30 day time period, the INS will inform the family and responsible entity of the reasons for the delay. (ii) <E T="03">Notification of INS decision and of informal hearing procedures.</E> When the responsible entity receives a copy of the INS decision, the responsible entity shall notify the family of its right to request an informal hearing on the responsible entity's ineligibility determination in accordance with the procedures of paragraph (f) of this section. (4) <E T="03">No delay, denial, reduction, or termination of assistance until completion of INS appeal process; direct appeal to INS.</E> Pending the completion of the INS appeal under this section, assistance may not be delayed, denied, reduced or terminated on the basis of immigration status. (f) <E T="03">Informal hearing</E>—(1) <E T="03">When request for hearing is to be made.</E> After notification of the INS decision on appeal, or in lieu of request of appeal to the INS, the family may request that the responsible entity provide a hearing. This request must be made either within 30 days of receipt of the notice described in paragraph (d) of this section, or within 30 days of receipt of the INS appeal decision issued in accordance with paragraph (e) of this section. (2) <E T="03">Informal hearing procedures—</E>(i) <E T="03">Tenants assisted under a Section 8 covered program:</E> For tenants assisted under a Section 8 covered program, the procedures for the hearing before the responsible entity are set forth in: (A) <E T="03">For Section 8 Moderate Rehabilitation assistance:</E> 24 CFR part 882; (B) <E T="03">For Section 8 tenant-based assistance:</E> 24 CFR part 982; or (C) <E T="03">For Section 8 project-based certificate program:</E> 24 CFR part 983. (ii) <E T="03">Tenants assisted under any other Section 8 covered program or a Public Housing covered program:</E> For tenants assisted under a Section 8 covered program not listed in paragraph (f)(3)(i) of this section or a Public Housing covered program, the procedures for the hearing before the responsible entity are set forth in 24 CFR part 966. (iii) <E T="03">Families under Housing covered programs and applicants for assistance under all covered programs.</E> For all families under Housing covered programs (applicants as well as tenants already receiving assistance) and for applicants for assistance under all covered programs, the procedures for the informal hearing before the responsible entity are as follows: (A) <E T="03">Hearing before an impartial individual.</E> The family shall be provided a hearing before any person(s) designated by the responsible entity (including an officer or employee of the responsible entity), other than a person who made or approved the decision under review, and other than a person who is a subordinate of the person who made or approved the decision; (B) <E T="03">Examination of evidence.</E> The family shall be provided the opportunity to examine and copy at the individual's expense, at a reasonable time in advance of the hearing, any documents in the possession of the responsible entity pertaining to the family's eligibility status, or in the possession of the INS <PRTPAGE P="62"/>(as permitted by INS requirements), including any records and regulations that may be relevant to the hearing; (C) <E T="03">Presentation of evidence and arguments in support of eligible status.</E> The family shall be provided the opportunity to present evidence and arguments in support of eligible status. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings; (D) <E T="03">Controverting evidence of the responsible entity.</E> The family shall be provided the opportunity to controvert evidence relied upon by the responsible entity and to confront and cross-examine all witnesses on whose testimony or information the responsible entity relies; (E) <E T="03">Representation.</E> The family shall be entitled to be represented by an attorney, or other designee, at the family's expense, and to have such person make statements on the family's behalf; (F) <E T="03">Interpretive services.</E> The family shall be entitled to arrange for an interpreter to attend the hearing, at the expense of the family, or responsible entity, as may be agreed upon by the two parties to the proceeding; and (G) <E T="03">Hearing to be recorded.</E> The family shall be entitled to have the hearing recorded by audiotape (a transcript of the hearing may, but is not required to, be provided by the responsible entity). (3) <E T="03">Hearing decision.</E> The responsible entity shall provide the family with a written final decision, based solely on the facts presented at the hearing, within 14 days of the date of the informal hearing. The decision shall state the basis for the decision. (g) <E T="03">Judicial relief.</E> A decision against a family member, issued in accordance with paragraphs (e) or (f) of this section, does not preclude the family from exercising the right, that may otherwise be available, to seek redress directly through judicial procedures. (h) <E T="03">Retention of documents.</E> The responsible entity shall retain for a minimum of 5 years the following documents that may have been submitted to the responsible entity by the family, or provided to the responsible entity as part of the INS appeal or the informal hearing process: (1) The application for financial assistance; (2) The form completed by the family for income reexamination; (3) Photocopies of any original documents (front and back), including original INS documents; (4) The signed verification consent form; (5) The INS verification results; (6) The request for an INS appeal; (7) The final INS determination; (8) The request for an informal hearing; and (9) The final informal hearing decision. (i) <E T="03">Termination of assisted occupancy.</E> (1) Under Housing covered programs, and in the Section 8 covered programs other than the Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation programs, assisted occupancy is terminated by: (i) If permitted under the lease, the responsible entity notifying the tenant that because of the termination of assisted occupancy the tenant is required to pay the HUD-approved market rent for the dwelling unit. (ii) The responsible entity and tenant entering into a new lease without financial assistance. (iii) The responsible entity evicting the tenant. While the tenant continues in occupancy of the unit, the responsible entity may continue to receive assistance payments if action to terminate the tenancy under an assisted lease is promptly initiated and diligently pursued, in accordance with the terms of the lease, and if eviction of the tenant is undertaken by judicial action pursuant to State and local law. Action by the responsible entity to terminate the tenancy and to evict the tenant must be in accordance with applicable HUD regulations and other HUD requirements. For any jurisdiction, HUD may prescribe a maximum period during which assistance payments may be continued during eviction proceedings and may prescribe other standards of reasonable diligence for the prosecution of eviction proceedings. (2) In the Section 8 Rental Certificate, Rental Voucher, and Moderate <PRTPAGE P="63"/>Rehabilitation programs, assisted occupancy is terminated by terminating assistance payments. (See provisions of this section concerning termination of assistance.) The PHA shall not make any additional assistance payments to the owner after the required procedures specified in this section have been completed. In addition, the PHA shall not approve a lease, enter into an assistance contract, or process a portability move for the family after those procedures have been completed. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.516</SECTNO> <SUBJECT>Availability of preservation assistance to mixed families and other families.</SUBJECT> (a) <E T="03">Assistance available for tenant mixed families—</E>(1) <E T="03">General.</E> Preservation assistance is available to tenant mixed families, following completion of the appeals and informal hearing procedures provided in § 5.514. There are three types of preservation assistance: (i) Continued assistance (see paragraph (a) of § 5.518); (ii) Temporary deferral of termination of assistance (see paragraph (b) of § 5.518); or (iii) Prorated assistance (see § 5.520, a mixed family must be provided prorated assistance if the family so requests). (2) <E T="03">Availability of assistance—</E>(i) <E T="03">For Housing covered programs:</E> One of the three types of assistance described is available to tenant mixed families assisted under a National Housing Act or 1965 HUD Act covered program, depending upon the family's eligibility for such assistance. Continued assistance must be provided to a mixed family that meets the conditions for eligibility for continued assistance. (ii) <E T="03">For Section 8 or Public Housing covered programs.</E> One of the three types of assistance described may be available to tenant mixed families assisted under a Section 8 or Public Housing covered program. (b) <E T="03">Assistance available for applicant mixed families.</E> Prorated assistance is also available for mixed families applying for assistance as provided in § 5.520. (c) <E T="03">Assistance available to other families in occupancy.</E> Temporary deferral of termination of assistance may be available to families receiving assistance under a Section 214 covered program on June 19, 1995, and who have no members with eligible immigration status, as set forth in paragraphs (c) (1) and (2) of this section. (1) <E T="03">For Housing covered programs:</E> Temporary deferral of termination of assistance is available to families assisted under a Housing covered program. (2) <E T="03">For Section 8 or Public Housing covered programs:</E> The responsible entity may make temporary deferral of termination of assistance to families assisted under a Section 8 or Public Housing covered program. (d) <E T="03">Section 8 covered programs: Discretion afforded to provide certain family preservation assistance—</E>(1) <E T="03">Project owners.</E> With respect to assistance under a Section 8 Act covered program administered by a project owner, HUD has the discretion to determine under what circumstances families are to be provided one of the two statutory forms of assistance for preservation of the family (continued assistance or temporary deferral of assistance). HUD is exercising its discretion by specifying the standards in this section under which a project owner must provide one of these two types of assistance to a family. However, project owners and PHAs must offer prorated assistance to eligible mixed families. (2) <E T="03">PHAs.</E> The PHA, rather than HUD, has the discretion to determine the circumstances under which a family will be offered one of the two statutory forms of assistance (continued assistance or temporary deferral of termination of assistance). The PHA must establish its own policy and criteria to follow in making its decision. In establishing the criteria for granting continued assistance or temporary deferral of termination of assistance, the PHA must incorporate the statutory criteria, which are set forth in paragraphs (a) and (b) of § 5.518. However, the PHA must offer prorated assistance to eligible families. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <PRTPAGE P="64"/> <SECTNO>§ 5.518</SECTNO> <SUBJECT>Types of preservation assistance available to mixed families and other families.</SUBJECT> (a) <E T="03">Continued assistance</E>—(1) <E T="03">General.</E> A mixed family may receive continued housing assistance if all of the following conditions are met (a mixed family assisted under a Housing covered program must be provided continued assistance if the family meets the following conditions): (i) The family was receiving assistance under a Section 214 covered program on June 19, 1995; (ii) The family's head of household or spouse has eligible immigration status as described in § 5.506; and (iii) The family does not include any person (who does not have eligible immigration status) other than the head of household, any spouse of the head of household, any parents of the head of household, any parents of the spouse, or any children of the head of household or spouse. (2) <E T="03">Proration of continued assistance.</E> A family entitled to continued assistance before November 29, 1996 is entitled to continued assistance as described in paragraph (a) of this section. A family entitled to continued assistance after November 29, 1996 shall receive prorated assistance as described in § 5.520. (b) <E T="03">Temporary deferral of termination of assistance—</E>(1) <E T="03">Eligibility for this type of assistance.</E> If a mixed family qualifies for prorated assistance (and does not qualify for continued assistance), but decides not to accept prorated assistance, or if a family has no members with eligible immigration status, the family may be eligible for temporary deferral of termination of assistance if necessary to permit the family additional time for the orderly transition of those family members with ineligible status, and any other family members involved, to other affordable housing. Other affordable housing is used in the context of transition of an ineligible family from a rent level that reflects HUD assistance to a rent level that is unassisted; the term refers to housing that is not substandard, that is of appropriate size for the family and that can be rented for an amount not exceeding the amount that the family pays for rent, including utilities, plus 25 percent. (2) <E T="03">Housing covered programs: Conditions for granting temporary deferral of termination of assistance.</E> The responsible entity shall grant a temporary deferral of termination of assistance to a mixed family if the family is assisted under a Housing covered program and one of the following conditions is met: (i) The family demonstrates that reasonable efforts to find other affordable housing of appropriate size have been unsuccessful (for purposes of this section, reasonable efforts include seeking information from, and pursuing leads obtained from the State housing agency, the city government, local newspapers, rental agencies and the owner); (ii) The vacancy rate for affordable housing of appropriate size is below five percent in the housing market for the area in which the project is located; or (iii) The consolidated plan, as described in 24 CFR part 91 and if applicable to the covered program, indicates that the local jurisdiction's housing market lacks sufficient affordable housing opportunities for households having a size and income similar to the family seeking the deferral. (3) <E T="03">Time limit on deferral period.</E> If temporary deferral of termination of assistance is granted, the deferral period shall be for an initial period not to exceed six months. The initial period may be renewed for additional periods of six months, but the aggregate deferral period for deferrals provided after November 29, 1996 shall not exceed a period of eighteen months. The aggregate deferral period for deferrals granted prior to November 29, 1996 shall not exceed 3 years. These time periods do not apply to a family which includes a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act. (4) <E T="03">Notification requirements for beginning of each deferral period.</E> At the beginning of each deferral period, the responsible entity must inform the family of its ineligibility for financial assistance and offer the family information concerning, and referrals to assist in finding, other affordable housing. (5) <E T="03">Determination of availability of affordable housing at end of each deferral <PRTPAGE P="65"/>period.</E> (i) Before the end of each deferral period, the responsible entity must satisfy the applicable requirements of either paragraph (b)(5)(i) (A) or (B) of this section. Specifically, the responsible entity must: (A) <E T="03">For Housing covered programs:</E> Make a determination that one of the two conditions specified in paragraph (b)(2) of this section continues to be met (note: affordable housing will be determined to be available if the vacancy rate is five percent or greater), the owner's knowledge and the tenant's evidence indicate that other affordable housing is available; or (B) <E T="03">For Section 8 or Public Housing covered programs:</E> Make a determination of the availability of affordable housing of appropriate size based on evidence of conditions which when taken together will demonstrate an inadequate supply of affordable housing for the area in which the project is located, the consolidated plan (if applicable, as described in 24 CFR part 91), the responsible entity's own knowledge of the availability of affordable housing, and on evidence of the tenant family's efforts to locate such housing. (ii) The responsible entity must also: (A) Notify the tenant family in writing, at least 60 days in advance of the expiration of the deferral period, that termination will be deferred again (provided that the granting of another deferral will not result in aggregate deferral periods that exceeds the maximum deferral period). This time period does not apply to a family which includes a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act, and a determination was made that other affordable housing is not available; <E T="03">or</E> (B) Notify the tenant family in writing, at least 60 days in advance of the expiration of the deferral period, that termination of financial assistance will not be deferred because either granting another deferral will result in aggregate deferral periods that exceed the maximum deferral period (unless the family includes a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act), or a determination has been made that other affordable housing is available. (c) <E T="03">Option to select proration of assistance at end of deferral period.</E> A family who is eligible for, and receives temporary deferral of termination of assistance, may request, and the responsible entity shall provide proration of assistance at the end of the deferral period if the family has made a good faith effort during the deferral period to locate other affordable housing. (d) <E T="03">Notification of decision on family preservation assistance.</E> A responsible entity shall notify the family of its decision concerning the family's qualification for family preservation assistance. If the family is ineligible for family preservation assistance, the notification shall state the reasons, which must be based on relevant factors. For tenant families, the notice also shall inform the family of any applicable appeal rights. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.520</SECTNO> <SUBJECT>Proration of assistance.</SUBJECT> (a) <E T="03">Applicability.</E> This section applies to a mixed family other than a family receiving continued assistance, or other than a family who is eligible for and requests and receives temporary deferral of termination of assistance. An eligible mixed family who requests prorated assistance must be provided prorated assistance. (b) <E T="03">Method of prorating assistance for Housing covered programs—</E>(1) <E T="03">Proration under Rent Supplement Program.</E> If the household participates in the Rent Supplement Program, the rent supplement paid on the household's behalf shall be the rent supplement the household would otherwise be entitled to, multiplied by a fraction, the denominator of which is the number of people in the household and the numerator of which is the number of eligible persons in the household; (2) <E T="03">Proration under Section 235 Program.</E> If the household participates in the Section 235 Program, the interest reduction payments paid on the household's behalf shall be the payments the household would otherwise be entitled to, multiplied by a fraction the denominator of which is the number of people in the household and the numerator of <PRTPAGE P="66"/>which is the number of eligible persons in the household; (3) <E T="03">Proration under Section 236 Program without the benefit of additional assistance.</E> If the household participates in the Section 236 Program without the benefit of any additional assistance, the household's rent shall be increased above the rent the household would otherwise pay by an amount equal to the difference between the market rate rent for the unit and the rent the household would otherwise pay multiplied by a fraction the denominator of which is the number of people in the household and the numerator of which is the number of ineligible persons in the household; (4) <E T="03">Proration under Section 236 Program with the benefit of additional assistance.</E> If the household participates in the Section 236 Program with the benefit of additional assistance under the rent supplement, rental assistance payment or Section 8 programs, the household's rent shall be increased above the rent the household would otherwise pay by: (i) An amount equal to the difference between the market rate rent for the unit and the basic rent for the unit multiplied by a fraction, the denominator of which is the number of people in the household, and the numerator of which is the number of ineligible persons in the household, plus; (ii) An amount equal to the rent supplement, housing assistance payment or rental assistance payment the household would otherwise be entitled to multiplied by a fraction, the denominator of which is the number of people in the household and the numerator of which is the number of ineligible persons in the household. (c) <E T="03">Method of prorating assistance for Section 8 covered programs—</E>(1) <E T="03">Section 8 assistance other than Section 8 rental voucher assistance.</E> For Section 8 assistance other than assistance provided under the Section 8 Rental Voucher Program, the PHA shall prorate the family's assistance as follows: (i) <E T="03">Step 1.</E> Determine gross rent for the unit. (Gross rent is contract rent plus any allowance for tenant paid utilities). (ii) <E T="03">Step 2.</E> Determine total tenant payment in accordance with 24 CFR 813.107(a). (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (iii) <E T="03">Step 3.</E> Subtract amount determined in paragraph (c)(1)(ii), (Step 2), from amount determined in paragraph (c)(1)(i), (Step 1). (iv) <E T="03">Step 4.</E> Multiply the amount determined in paragraph (c)(1)(iii), (Step 3) by a fraction for which: (A) The numerator is the number of family members who have established eligible immigration status; and (B) The denominator is the total number of family members. (v) <E T="03">Prorated housing assistance.</E> The amount determined in paragraph (c)(1)(iv), (Step 4) is the prorated housing assistance payment for a mixed family. (vi) <E T="03">No effect on contract rent.</E> Proration of the housing assistance payment does not affect contract rent to the owner. The family must pay as rent the portion of contract rent not covered by the prorated housing assistance payment. (2) <E T="03">Section 8 Rental Voucher assistance.</E> For assistance under the Section 8 Rental Voucher Program, the PHA shall prorate the family's assistance as follows: (i) <E T="03">Step 1.</E> Determine the amount of the pre-proration voucher housing assistance payment in accordance with 24 CFR part 887. (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (ii) <E T="03">Step 2.</E> Multiply the amount determined in paragraph (c)(2)(i), (Step 1) by a fraction for which: (A) The numerator is the number of family members who have established eligible immigration status; and (B) The denominator is the total number of family members. (iii) <E T="03">Prorated housing assistance.</E> The amount determined in paragraph (c)(2)(ii), (Step 2) is the prorated housing assistance payment for a mixed family. (iv) <E T="03">No effect on rent to owner.</E> Proration of the voucher housing assistance payment does not affect rent to the owner. The family must pay as rent the portion of rent not covered by the prorated housing assistance payment.<PRTPAGE P="67"/> (d) <E T="03">Method of prorating assistance for Public Housing covered programs.</E> The PHA shall prorate the family's assistance by: (1) <E T="03">Step 1.</E> Determining total tenant payment in accordance with 24 CFR 913.107(a). (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (2) <E T="03">Step 2.</E> Subtracting the total tenant payment from a HUD-supplied “public housing maximum rent” applicable to the unit or the PHA. (This “maximum rent” shall be determined by HUD using the 95th percentile rent for the PHA.) The result is the maximum subsidy for which the family could qualify if all members were eligible (“family maximum subsidy”). (3) <E T="03">Step 3.</E> Dividing the family maximum subsidy by the number of persons in the family (all persons) to determine the maximum subsidy per each family member who has citizenship or eligible immigration status (“eligible family member”). The subsidy per eligible family member is the “member maximum subsidy”. (4) <E T="03">Step 4.</E> Multiplying the member maximum subsidy by the number of family members who have citizenship or eligible immigration status (“eligible family members”). (5) <E T="03">Step 5.</E> The product of steps 1 through 4, as set forth in paragraph (d)(2) of this section is the amount of subsidy for which the family is eligible (“eligible subsidy”). The family's rent is the “public housing maximum rent” minus the amount of the eligible subsidy. </SECTION> <SECTION> <SECTNO>§ 5.522</SECTNO> <SUBJECT>Prohibition of assistance to noncitizen students.</SUBJECT> (a) <E T="03">General.</E> The provisions of §§ 5.516 and 5.518 permitting continued assistance or temporary deferral of termination of assistance for certain families do not apply to any person who is determined to be a noncitizen student as in paragraph (c)(2)(A) of Section 214 (42 U.S.C. 1436a(c)(2)(A)). The family of a noncitizen student may be eligible for prorated assistance, as provided in paragraph (b)(2) of this section. (b) <E T="03">Family of noncitizen students.</E> (1) The prohibition on providing assistance to a noncitizen student as described in paragraph (a) of this section extends to the noncitizen spouse of the noncitizen student and minor children accompanying the student or following to join the student. (2) The prohibition on providing assistance to a noncitizen student does not extend to the citizen spouse of the noncitizen student and the children of the citizen spouse and noncitizen student. </SECTION> <SECTION> <SECTNO>§ 5.524</SECTNO> <SUBJECT>Compliance with nondiscrimination requirements.</SUBJECT> The responsible entity shall administer the restrictions on use of assisted housing by noncitizens with ineligible immigration status imposed by this part in conformity with all applicable nondiscrimination and equal opportunity requirements, including, but not limited to, title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-5) and the implementing regulations in 24 CFR part 1, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the implementing regulations in 24 CFR part 8, the Fair Housing Act (42 U.S.C. 3601-3619) and the implementing regulations in 24 CFR part 100. </SECTION> <SECTION> <SECTNO>§ 5.526</SECTNO> <SUBJECT>Protection from liability for responsible entities and State and local government agencies and officials.</SUBJECT> (a) <E T="03">Protection from liability for responsible entities.</E> Responsible entities are protected from liability as set forth in Section 214(e) (42 U.S.C 1436a(e)). (b) <E T="03">Protection from liability for State and local government agencies and officials.</E> State and local government agencies and officials shall not be liable for the design or implementation of the verification system described in § 5.512, as long as the implementation by the State and local government agency or official is in accordance with prescribed HUD rules and requirements. <CITA>[61 FR 60540, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.528</SECTNO> <SUBJECT>Liability of ineligible tenants for reimbursement of benefits.</SUBJECT> Where a tenant has received the benefit of HUD financial assistance to <PRTPAGE P="68"/>which the tenant was not entitled because the tenant intentionally misrepresented eligible status, the ineligible tenant is responsible for reimbursing HUD for the assistance improperly paid. If the amount of the assistance is substantial, the responsible entity is encouraged to refer the case to the HUD Inspector General's office for further investigation. Possible criminal prosecution may follow based on the False Statements Act (18 U.S.C. 1001 and 1010). </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Income Limits, Annual Income, Adjusted Income, Rent, and Examinations for the Public Housing and Section 8 Programs</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, and 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 54498, Oct. 18, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 5.601</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> (a) This subpart establishes definitions and requirements concerning income limits for admission, annual income, adjusted income, total tenant payment, utility allowances and reimbursements, and reexamination of income and family composition for: (1) HUD's public housing programs, including its public housing homeownership programs. (2) Housing assisted under section 8 of the United States Housing Act of 1937 (the 1937 Act) (42 U.S.C. 1437f). (i) Section 5.613 (Total tenant payment) and the definitions of “<E T="03">tenant rent</E>” and “<E T="03">total tenant payment</E>” found in § 5.603 do not apply to the Section 8 Rental Voucher Program. (ii) Section 5.615 (Utility reimbursement) and the definition of <E T="03">utility reimbursement</E> found in § 5.603 also do not apply to the Section 8 Rental Voucher Program. For the Voucher Program, in cases where the amount of the HAP payment exceeds the rent to owner, the excess will be paid to the family. (iii) Section 5.607 (Income limits for admission) does not apply to the Section 8 Rental Voucher and Rental Certificate Programs. (3) Applicants and tenants assisted under sections 10(c) and 23 of the 1937 Act as in effect before amendment by the Housing and Community Development Act of 1974 (42 U.S.C. 1410 and 1421b (1970 ed.)). (b) This subpart does not apply to HUD's Indian housing programs. The analogous rule that applies to Indian housing is located at 24 CFR part 950. </SECTION> <SECTION> <SECTNO>§ 5.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this subpart: (a) The terms <E T="03">elderly person, low-income family, person with disabilities, State,</E> and <E T="03">very low-income family</E> are defined in section 3(b) of the 1937 Act (42 U.S.C. 1437a(b)). (b) The terms <E T="03">1937 Act</E> and <E T="03">public housing agency (PHA)</E> are defined in § 5.100. (c) The terms <E T="03">disabled family, elderly family, family,</E> and <E T="03">live-in aide</E> are defined in § 5.403. (d) The following terms shall have the meanings set forth below: <E T="03">Adjusted income.</E> See § 5.611. <E T="03">Annual income.</E> See § 5.609. <E T="03">Child care expenses.</E> Amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income. <E T="03">Dependent.</E> A member of the family (except foster children and foster adults) other than the family head or spouse, who is under 18 years of age, or is a person with a disability, or is a full-time student. <E T="03">Disability assistance expenses.</E> Reasonable expenses that are anticipated, during the period for which annual income is computed, for attendant care and auxiliary apparatus for a disabled family member and that are necessary to enable a family member (including the disabled member) to be employed, provided that the expenses are neither <PRTPAGE P="69"/>paid to a member of the family nor reimbursed by an outside source. <E T="03">Full-time student.</E> A person who is carrying a subject load that is considered full-time for day students under the standards and practices of the educational institution attended. An educational institution includes a vocational school with a diploma or certificate program, as well as an institution offering a college degree. <E T="03">Medical expenses.</E> Medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance. <E T="03">Monthly adjusted income.</E> One twelfth of adjusted income. <E T="03">Monthly income.</E> One twelfth of annual income. <E T="03">Net family assets.</E> (1) Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded. (2) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. Any income distributed from the trust fund shall be counted when determining annual income under § 5.609. (3) In determining net family assets, PHAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. <E T="03">Owner</E> has the meaning provided in the relevant program regulations. As used in this subpart, where appropriate, the term “owner” shall also include a “borrower” as defined in 24 CFR part 885. <E T="03">Tenant rent.</E> The amount payable monthly by the family as rent to the PHA or owner, as applicable. Where all utilities (except telephone) and other essential housing services are supplied by the PHA or owner, tenant rent equals total tenant payment. Where some or all utilities (except telephone) and other essential housing services are supplied by the PHA or owner and the cost thereof is not included in the amount paid as rent, tenant rent equals total tenant payment less the utility allowance. <E T="03">Total tenant payment.</E> See § 5.613. <E T="03">Utility allowance.</E> If the cost of utilities (except telephone) and other housing services for an assisted unit is not included in the tenant rent but is the responsibility of the family occupying the unit, an amount equal to the estimate made or approved by a PHA or HUD of the monthly cost of a reasonable consumption of such utilities and other services for the unit by an energy-conservative household of modest circumstances consistent with the requirements of a safe, sanitary, and healthful living environment. <E T="03">Utility reimbursement.</E> The amount, if any, by which the utility allowance for the unit, if applicable, exceeds the total tenant payment for the family occupying the unit. <E T="03">Welfare assistance</E>. Welfare or other payments to families or individuals, based on need, that are made under programs funded, separately or jointly, by Federal, State or local governments. </SECTION> <SECTION> <SECTNO>§ 5.605</SECTNO> <SUBJECT>Overall income eligibility for assistance.</SUBJECT> No family other than a low-income family shall be eligible for admission to a program covered by this part. </SECTION> <SECTION> <SECTNO>§ 5.607</SECTNO> <SUBJECT>Income limits for admission.</SUBJECT> (a) <E T="03">General</E>—(1) <E T="03">Admission to units available before October 1, 1981</E>. Not more than 25 percent of the dwelling units that were available for occupancy under Annual Contributions Contracts <PRTPAGE P="70"/>(ACC) and Section 8 Housing Assistance Payments (HAP) Contracts taking effect before October 1, 1981 and that are leased on or after that date shall be available for leasing by low-income families other than very low-income families. HUD reserves the right to limit the admission of low-income families other than very low-income families to these units. (2) <E T="03">Admission to units available on or after October 1, 1981</E>. Not more than 15 percent of the dwelling units that initially become available for occupancy under Annual Contributions Contracts (ACC) and Section 8 Housing Assistance Payments (HAP) Contracts on or after October 1, 1981 shall be available for leasing by low-income families other than very low-income families. Except with the prior approval of HUD under paragraphs (b) and (c) of this section, no low-income family, other than a very low-income family shall be admitted to these units. (b) <E T="03">Request for exception</E>. A request by a PHA or owner for approval of admission of low-income families other than very low-income families to units described in paragraph (a)(2) of this section must state the basis for requesting the exception and provide supporting data. Bases for exceptions that may be considered include the following: (1) <E T="03">For Section 8 Programs.</E> (i) Low-income families that would otherwise be displaced from Section 8 Substantial Rehabilitation or Moderate Rehabilitation projects; (ii) Low-income families that are displaced as a result of Rental Rehabilitation or Development activities assisted under section 17 of the 1937 Act (42 U.S.C. 1437o), or as a result of activities under the Rental Rehabilitation Demonstration Program; (iii) Need for admission of a broader range of tenants to preserve the financial or management viability of a project because there is an insufficient number of potential applicants who are very low-income families; (iv) Commitment of an owner to attaining occupancy by families with a broad range of incomes, as evidenced in the application for development. An application citing this basis should be supported by evidence that the owner is pursuing this goal throughout its assisted projects in the community; and (v) Project supervision by a State Housing Finance Agency having a policy of occupancy by families with a broad range of incomes, supported by evidence that the Agency is pursuing this goal throughout its assisted projects in the community, or a project with financing through Section 11(b) of the 1937 Act (42 U.S.C. 1437i) or under Section 103 of the Internal Revenue Code (26 U.S.C. 103). (2) <E T="03">For public housing only</E>. (i) Need for admission of a broader range of tenants to obtain full occupancy; (ii) Local commitment to attaining occupancy by families with a broad range of incomes. An application citing this basis should be supported by evidence that the PHA is pursuing this goal throughout its housing program in the community; (iii) Need for higher incomes to sustain homeownership eligibility in a homeownership project; and (iv) Need to avoid displacing low-income families from a project acquired by the PHA for rehabilitation. (c) <E T="03">Action on request for exception</E>. Whether to grant any request for exception is a matter committed by law to HUD's sole discretion, and no implication is intended to be created that HUD will seek to grant approvals up to the maximum limits permitted by statute, nor is any presumption of an entitlement to an exception created by the specification of certain grounds for exception that HUD may consider. HUD will review exceptions granted to owners and PHAs at regular intervals. HUD may withdraw permission to exercise those exceptions for program applicants at any time that exceptions are not being used or after a periodic review, based on the findings of the review. (d) <E T="03">Reporting</E>. PHAs and owners shall comply with HUD-prescribed reporting requirements that will permit HUD to maintain the reasonably current data necessary to monitor compliance with the income eligibility restrictions described in paragraph (a) of this section. (e) <E T="03">Inapplicability to certain scattered site housing</E>. The income eligibility restrictions described in paragraph (a) of this section do not apply to scattered <PRTPAGE P="71"/>site public housing dwelling units sold or intended to be sold to public housing tenants under section 5(h) of the 1937 Act (42 U.S.C. 1437c(h)). (f) <E T="03">Inapplicability to the Section 8 Rental Voucher and Rental Certificate Programs</E>. The provisions of this section do not apply to the Section 8 Rental Voucher and Section 8 Rental Certificate Programs. <APPRO>(Approved by the Office of Management and Budget under Control number 2502-0204.)</APPRO> </SECTION> <SECTION> <SECTNO>§ 5.609</SECTNO> <SUBJECT>Annual income.</SUBJECT> (a) <E T="03">Annual income</E> means all amounts, monetary or not, which: (1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or (2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3) Which are not specifically excluded in paragraph (c) of this section. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. (b) Annual income includes, but is not limited to: (1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (2) The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family; (3) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD; (4) The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); (5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section); (6) <E T="03">Welfare assistance</E>. If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: (i) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus (ii) The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph (b)(6)(ii) shall be the amount resulting from one application of the percentage;<PRTPAGE P="72"/> (7) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling; (8) All regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section). (c) Annual income does not include the following: (1) Income from employment of children (including foster children) under the age of 18 years; (2) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); (3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (except as provided in paragraph (b)(5) of this section); (4) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; (5) Income of a live-in aide, as defined in § 5.403; (6) The full amount of student financial assistance paid directly to the student or to the educational institution; (7) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire; (8)(i) Amounts received under training programs funded by HUD; (ii) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); (iii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (iv) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, and resident initiatives coordination. No resident may receive more than one such stipend during the same period of time; (v) Incremental earnings and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program; (9) Temporary, nonrecurring or sporadic income (including gifts); (10) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; (11) Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse); (12) Adoption assistance payments in excess of $480 per adopted child; (13) <E T="03">For public housing only:</E> (i) The earnings and benefits to any family member resulting from the participation in a program providing employment training and supportive services in accordance with the Family Support Act of 1988, section 22 of the 1937 Act (42 U.S.C. 1437t), or any comparable Federal, State, or local law during the exclusion period. (ii) For purposes of this paragraph, the following definitions apply: (A) <E T="03">Comparable Federal, State or local law</E> means a program providing employment training and supportive services that—<PRTPAGE P="73"/> (<E T="03">1</E>) Is authorized by a Federal, State or local law; (<E T="03">2</E>) Is funded by the Federal, State or local government; (<E T="03">3</E>) Is operated or administered by a public agency; and (<E T="03">4</E>) Has as its objective to assist participants in acquiring employment skills. (B) <E T="03">Exclusion period</E> means the period during which the family member participates in a program described in this section, plus 18 months from the date the family member begins the first job acquired by the family member after completion of such program that is not funded by public housing assistance under the 1937 Act. If the family member is terminated from employment with good cause, the exclusion period shall end. (C) <E T="03">Earnings and benefits</E> means the incremental earnings and benefits resulting from a qualifying employment training program or subsequent job; (14) Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts. (15) Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit; (16) Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or (17) Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the <E T="04">Federal Register</E> and distributed to PHAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. (d) <E T="03">For public housing only.</E> In addition to the exclusions from annual income covered in paragraph (c) of this section, a PHA may adopt additional exclusions for earned income pursuant to an established written policy. (1) In establishing such a policy, a PHA must adopt one or more of the following types of earned income exclusions, including variations thereof: (i) Exclude all or part of the family's earned income; (ii) Apply the exclusion only to new sources of earned income or only to increases in earned income; (iii) Apply the exclusion to the earned income of the head, the spouse, or any other family member age 18 or older; (iv) Apply the exclusion only to the earned income of persons other than the primary earner; (v) Apply the exclusion to applicants, newly admitted families, existing tenants, or persons joining the family; (vi) Make the exclusion temporary or permanent, for the PHA, the family, or the affected family member; (vii) Make the exclusion graduated, so that more earned income is excluded at first and less earned income is excluded after a period of time; (viii) Exclude any or all of the costs that are incurred in order to go to work but are not compensated, such as the cost of special tools, equipment, or clothing; (ix) Exclude any or all of the costs that result from earning income, such as social security taxes or other items that are withheld in payroll deductions; (x) Exclude any portion of the earned income that is not available to meet the family's own needs, such as amounts that are paid to someone outside the family for alimony or child support; and (xi) Exclude any portion of the earned income that is necessary to replace benefits lost because a family member becomes employed, such as amounts that the family pays for medical costs or to obtain medical insurance. (2) Any amounts that are excluded from annual income under this paragraph (d) may not also be deducted in determining adjusted income, as defined in § 5.611. (3) Housing agencies do not need HUD approval to adopt optional earned income exclusions.<PRTPAGE P="74"/> (4) In the calculation of Performance Funding System operating subsidy eligibility, housing agencies will have to absorb any loss in rental income that results from the adoption of any of the optional earned income exclusions discussed in paragraph (d)(1) of this section, including any variations of the listed options. (e) If it is not feasible to anticipate a level of income over a 12-month period, the income anticipated for a shorter period may be annualized, subject to a redetermination at the end of the shorter period. </SECTION> <SECTION> <SECTNO>§ 5.611</SECTNO> <SUBJECT>Adjusted income.</SUBJECT> Adjusted income means annual income less the following deductions: (a) $480 for each dependent; (b) $400 for any elderly family or disabled family; (c) For any family that is not an elderly family or disabled family but has a member (other than the head of household or spouse) who is a person with a disability, disability assistance expenses in excess of three percent of annual income, but this allowance may not exceed the employment income received by family members who are 18 years of age or older as a result of the assistance to the person with disabilities; (d) For any elderly family or disabled family: (1) That has no disability assistance expenses, an allowance for medical expenses equal to the amount by which the medical expenses exceed three percent of annual income; (2) That has disability assistance expenses greater than or equal to three percent of annual income, an allowance for disability assistance expenses computed in accordance with paragraph (c) of this section, plus an allowance for medical expenses that is equal to the family's medical expenses; (3) That has disability assistance expenses that are less than three percent of annual income, an allowance for combined disability assistance expenses and medical expenses that is equal to the amount by which the sum of these expenses exceeds three percent of annual income; and (e) Child care expenses. </SECTION> <SECTION> <SECTNO>§ 5.613</SECTNO> <SUBJECT>Total tenant payment.</SUBJECT> (a) <E T="03">Total tenant payment for families whose initial lease is effective on or after August 1, 1982.</E> (1) Total tenant payment is the amount calculated under section 3(a)(1) of the 1937 Act (42 U.S.C. 1437a(a)(1)). If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under paragraph (C) of section 3(a)(1) of the 1937 Act (42 U.S.C. 1437a(a)(1)(C)) shall be the amount resulting from one application of the percentage. (2) <E T="03">For public housing only.</E> Total tenant payment for families residing in public housing does not include charges for excess utility consumption or other miscellaneous charges (see § 966.4 of this chapter). (b) <E T="03">Total tenant payment for families residing in public housing whose initial lease was effective before August 1, 1982.</E> Paragraphs (b) and (c) of 24 CFR 913.107, as it existed immediately before November 18, 1996 (contained in the April 1, 1995 edition of 24 CFR, parts 900 to 1699), will continue to govern the total tenant payment of families, under a public housing program, whose initial lease was effective before August 1, 1982. (c) <E T="03">Inapplicability to the Section 8 Rental Voucher Program.</E> The provisions of this section do not apply to the Section 8 Rental Voucher Program. </SECTION> <SECTION> <SECTNO>§ 5.615</SECTNO> <SUBJECT>Utility reimbursements.</SUBJECT> (a) <E T="03">General.</E> Where applicable, the utility reimbursement shall be paid to the family in the manner provided in the pertinent program regulations. If the family and the utility company consent, a PHA or owner may pay the utility reimbursement jointly to the family and the utility company, or directly to the utility company. (b) <E T="03">Inapplicability to the Section 8 Rental Voucher Program.</E> The provisions of this section do not apply to the Section 8 Rental Voucher Program. For the Voucher Program, in cases where the amount of the HAP payment exceeds the rent to owner, the excess will be paid to the family. </SECTION> <SECTION> <PRTPAGE P="75"/> <SECTNO>§ 5.617</SECTNO> <SUBJECT>Reexamination and verification.</SUBJECT> (a) <E T="03">Responsibility for initial determination and reexamination.</E> The PHA or owner, as applicable, must conduct a reexamination of family income and composition at least annually. The “effective date” of an examination or reexamination refers to: (1) In the case of an examination for admission, the effective date of the lease; and (2) In the case of a reexamination of an existing participant, the effective date of the redetermined housing assistance payment with respect to the Rental Voucher program and the effective date of the redetermined total tenant payment in all other cases. (b) <E T="03">Verification.</E> (1) As a condition of admission to, or continued occupancy of, any assisted unit, the PHA or owner, as applicable, shall require the family head and other such family members as it designates to execute a HUD-approved release and consent form (including any release and consent as required under 24 CFR part 760) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the PHA or owner, as applicable, and to HUD such information as the HA or owner, as applicable, and HUD determines to be necessary. (2) The PHA or owner shall also require the family to submit directly documentation determined to be necessary. Information or documentation shall be considered necessary if it is required for purposes of determining or auditing a family's eligibility to receive housing assistance, for determining the family's annual income, adjusted income or total tenant payment. (3) The use or disclosure of information obtained from a family or from another source pursuant to this release and consent shall be limited to purposes directly connected with administration of this subpart or applying for assistance. <APPRO>(Approved by the Office of Management and Budget under control numbers 2502-0204 and 2577-0083.)</APPRO> <CITA>[61 FR 54498, Oct. 18, 1996, as amended at 62 FR 27125, May 16, 1997]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 7</EAR> <HD SOURCE="HED">PART 7—EQUAL EMPLOYMENT OPPORTUNITY; POLICY AND PROCEDURES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Equal Employment Opportunity Without Regard to Race, Color, Religion, Sex, National Origin, Age, or Disability</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>7.1</SECTNO> <SUBJECT>Policy.</SUBJECT> <SECTNO>7.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>7.3</SECTNO> <SUBJECT>Designations.</SUBJECT> <SECTNO>7.4</SECTNO> <SUBJECT>Affirmative employment programs.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Responsibilities</HD> <SECTNO>7.10</SECTNO> <SUBJECT>Responsibilities of the Director and Deputy Director of EEO.</SUBJECT> <SECTNO>7.11</SECTNO> <SUBJECT>Responsibilities of the EEO Officers.</SUBJECT> <SECTNO>7.12</SECTNO> <SUBJECT>Responsibilities of the EEO Counselors.</SUBJECT> <SECTNO>7.13</SECTNO> <SUBJECT>Responsibilities of the Assistant Secretary for Administration.</SUBJECT> <SECTNO>7.14</SECTNO> <SUBJECT>Responsibilities of Human Resources Officers.</SUBJECT> <SECTNO>7.15</SECTNO> <SUBJECT>Responsibilities of managers and supervisors.</SUBJECT> <SECTNO>7.16</SECTNO> <SUBJECT>Responsibilities of employees.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Precomplaint Processing</HD> <SECTNO>7.25</SECTNO> <SUBJECT>Precomplaint processing.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Complaints</HD> <SECTNO>7.30</SECTNO> <SUBJECT>Presentation of complaint.</SUBJECT> <SECTNO>7.31</SECTNO> <SUBJECT>Who may file a complaint, with whom filed, and time limits.</SUBJECT> <SECTNO>7.32</SECTNO> <SUBJECT>Contents.</SUBJECT> <SECTNO>7.33</SECTNO> <SUBJECT>Acceptability.</SUBJECT> <SECTNO>7.34</SECTNO> <SUBJECT>Processing.</SUBJECT> <SECTNO>7.35</SECTNO> <SUBJECT>Hearing.</SUBJECT> <SECTNO>7.36</SECTNO> <SUBJECT>Decision by Director of EEO.</SUBJECT> <SECTNO>7.37</SECTNO> <SUBJECT>Rights of appeal.</SUBJECT> <SECTNO>7.38</SECTNO> <SUBJECT>Relationship to other HUD appellate procedures.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B [Reserved]</HD> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d); E.O. 11478, 3 CFR, 1969 Comp. p. 306; 42 U.S.C. 2000e note. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 14228, Mar. 29, 1996, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Equal Employment Opportunity Without Regard to Race, Color, Religion, Sex, National Origin, Age, or Disability</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 7.1</SECTNO> <SUBJECT>Policy.</SUBJECT> In conformity with the policy expressed in Executive Order 11478 (34 FR <PRTPAGE P="76"/>12985, 3 CFR, 1966-1970 Comp., p. 803) and with implementing regulations of the Equal Employment Opportunity Commission, codified under 29 CFR part 1614, it is the policy and the intent of the Department of Housing and Urban Development to provide equality of opportunity in employment in the Department for all persons; to prohibit discrimination because of race, color, religion, sex, national origin, age or disability in all aspects of its personnel policies, program, practices, and operations and in all its working conditions and relationships with employees and applicants for employment; and to promote the full realization of equal opportunity in employment through continuing programs of affirmative employment at every management level within the Department. </SECTION> <SECTION> <SECTNO>§ 7.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart A— <E T="03">AE</E> means Affirmative Employment. <E T="03">EEO</E> means Equal Employment Opportunity. <E T="03">Organizational unit</E> means the jurisdictional area of the Office of the Secretary, the Assistant to the Deputy Secretary for Field Management, each Assistant Secretary, the General Counsel, the Inspector General, the President of the Government National Mortgage Association, the Chief Financial Officer, the Director of Lead-Based Paint Abatement and Poisoning Prevention, and the Office of Federal Housing Enterprise Oversight. <E T="03">Person with a disability</E> means the same as handicap under EEOC's regulations at 29 CFR part 1614. </SECTION> <SECTION> <SECTNO>§ 7.3</SECTNO> <SUBJECT>Designations.</SUBJECT> (a) <E T="03">Director of Equal Employment Opportunity.</E> The Director of the Office of Departmental Equal Employment Opportunity is designated the Director of EEO, except that with respect to complaints naming the Director and/or Deputy Director of Departmental EEO as the alleged discriminating official(s) and complaints arising in the Office of Departmental EEO, the Chief of Staff shall be Director of EEO. (b) <E T="03">Deputy Director of Equal Employment Opportunity.</E> The Deputy Director of the Office of Departmental Equal Employment Opportunity is designated as the Deputy Director of Equal Employment Opportunity and acts for the Director of EEO. (c) <E T="03">Equal Employment Opportunity Officers.</E> The Director of Equal Employment Opportunity shall designate appropriate HUD officials to be Equal Employment Opportunity Officers for their respective organizational units. </SECTION> <SECTION> <SECTNO>§ 7.4</SECTNO> <SUBJECT>Affirmative employment programs.</SUBJECT> The Office of the Secretary, the Assistant to the Deputy Secretary for Field Management, each Assistant Secretary, the General Counsel, the Inspector General, the President of the Government National Mortgage Association, the Chief Financial Officer, the Director of Lead-Based Paint Abatement and Poisoning Prevention, and the Director, Office of Federal Housing Enterprise Oversight shall establish, maintain and carry out a plan of affirmative employment to promote equal opportunity in every aspect of employment policy and practice. Each plan shall identify instances of under-representation of minorities, women and persons with disabilities, recognize situations or barriers that impede equality of opportunity, and include objectives and action items targeted to eliminate any employment, training, advancement, and retention issues which adversely affect minorities, women and persons with disabilities. Each plan must be consistent with 29 CFR part 1614 and the governing Management Directive issued by the Equal Employment Opportunity Commission, and is subject to approval by the Director of Equal Employment Opportunity and shall be developed within the framework of Departmentwide guidelines published by the Director of EEO. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Responsibilities</HD> <SECTION> <SECTNO>§ 7.10</SECTNO> <SUBJECT>Responsibilities of the Director and Deputy Director of EEO.</SUBJECT> The Director and Deputy Director of EEO are assigned the functions of: (a) Advising the Secretary with respect to the preparation of plans, procedures, regulations, reports, and other matters pertaining to the Government's equal employment opportunity <PRTPAGE P="77"/>policy and the Department's EEO/AE programs; (b) In coordination with other officials, developing and maintaining plans, procedures, and regulations necessary to carry out the Department's EEO programs, including a Departmentwide program of affirmative employment developed in coordination with other officials; approving programs of affirmative employment established throughout the Department; (c) Evaluating from time to time the sufficiency of the Department's EEO/AE programs and reporting thereon to the Secretary with recommendations as to any improvement or correction needed, including remedial or disciplinary action with respect to managerial or supervisory employees who have failed in their responsibility; (d) Appraising the Department's personnel operations at regular intervals to insure their conformity with the policy of the Government and the Department's equal employment opportunity program; (e) Making changes in programs and procedures designed to eliminate discriminatory practices and improve the Department's EEO/AE programs; (f) Selecting EEO Counselors; (g) Providing for counseling by an EEO Counselor of an aggrieved employee or applicant for employment who believes that he or she has been discriminated against because of race, color, religion, sex, national origin, age or disability and for attempting to resolve on an informal basis or through a formal alternative dispute resolution process, the matter raised by the employee or applicant before a complaint of discrimination may be filed under § 7.31; (h) Providing for the prompt, fair and impartial processing of individual complaints involving issues of discrimination within the Department subject to 29 CFR part 1614; (i) Making the final decision on discrimination complaints and ordering such corrective measures as may be necessary, including disciplinary action as is warranted by the circumstances when an employee has been found to have engaged in a discriminatory practice; and (j) Executing settlement agreements to resolve EEO complaints. </SECTION> <SECTION> <SECTNO>§ 7.11</SECTNO> <SUBJECT>Responsibilities of the EEO Officers.</SUBJECT> Each EEO Officer shall: (a) Advise the Director of EEO on all matters affecting the implementation of the Department's EEO/AE policies and programs in the organizational unit; (b) Develop and maintain a program of affirmative employment for the organizational unit and insure that it is carried out in an exemplary manner; (c) Publicize to all employees of the organizational unit the name and address of the Director of EEO, the EEO Officer, and the EEO Counselor(s), the EEO Discrimination Complaint Manager, the Affirmative Employment Program (AEP) Manager, the Diversity Program Manager, and the EEO complaint procedures; (d) Inform all supervisors in the organizational unit of the responsibilities and objectives of the EEO Counselors and the EEO complaint process and the importance of cooperating with the Counselors to informally find solutions to problems brought to the officer's attention by employees and applicants; (e) Evaluate the performance by the managers and supervisors in the organizational unit in carrying out their responsibilities under this subpart and taking appropriate action; (f) Seek a resolution of EEO matters alleging discrimination within their organization brought to their attention; (g) Designate a high level Affirmative Employment Program (AEP) Manager in Headquarters responsible for the preparation of the AEP plan; the management of the plan; providing advice and guidance to managers and supervisors in removing barriers to EEO/AE and in implementing all their EEO/AE responsibilities; and reviewing all recruitment and personnel actions taken by managers and supervisors to ensure the achievement of AEP objectives; (h) Designate a senior level EEO Discrimination Complaint Manager in Headquarters to manage and direct the organization's EEO responsibilities; and<PRTPAGE P="78"/> (i) Designate a senior level Diversity Program Manager in Headquarters to manage and direct the organization's Diversity Program and provide resources for Diversity activities for its employees. </SECTION> <SECTION> <SECTNO>§ 7.12</SECTNO> <SUBJECT>Responsibilities of the EEO Counselors.</SUBJECT> The EEO Counselors are responsible for counseling and attempting resolution of matters brought to the counselor's attention pursuant to § 7.26 and 29 CFR part 1614 by any employee or applicant for employment who believes that he or she has been discriminated against because of race, color, religion, sex, national origin, age, or disability. </SECTION> <SECTION> <SECTNO>§ 7.13</SECTNO> <SUBJECT>Responsibilities of the Assistant Secretary for Administration.</SUBJECT> The Assistant Secretary for Administration shall: (a) Provide leadership in developing and maintaining personnel management policies, programs, automated systems and procedures which will promote continuing affirmative employment to insure equal opportunity in the recruitment, selection, placement, training, awards, recognition and promotion of employees, including an applicant flow tracking system; (b) Provide positive assistance and guidance to organizational units and personnel offices to insure the effective implementation of the personnel management policies, programs, automated systems, and procedures on equal employment opportunity; (c) Participate at the national level with other Government departments and agencies, other employers, and other public and private groups, in cooperative action to improve employment opportunities and community conditions which effect employability; (d) Prepare and implement plans for recruitment and reports in accordance with the Federal Equal Opportunity Recruitment Program and the Disabled Veterans Affirmative Action Program; (e) Make reasonable accommodation to the known physical or mental limitations of qualified applicants and employees with disabilities unless the accommodation would impose an undue hardship on the operation of the agency's program; and (f) Designate a senior level Disability Program Manager to promote EEO/AE for persons with disabilities; to assure the accessibility of all HUD facilities and programs; and to manage the resources for providing reasonable accommodation. </SECTION> <SECTION> <SECTNO>§ 7.14</SECTNO> <SUBJECT>Responsibilities of Human Resources Officers.</SUBJECT> In conformity with guidelines issued by the Assistant Secretary for Administration, Human Resources Officers shall: (a) Appraise job structure and employment practices to insure genuine equality of opportunity for all employees to participate fully on the basis of merit in all occupations and levels of responsibility; (b) Communicate the Department's equal employment opportunity policy and program and its employment needs to all sources of job candidates without regard to race, color, religion, sex, national origin, disability or age and solicit their recruitment assistance on a continuing basis; (c) As appropriate, provide personnel information to EEO counselors and others who are involved in the decision on a discrimination complaint; (d) Evaluate hiring methods and practices to insure impartial consideration for all job applicants; (e) Ensure that new employee orientation programs contain appropriate references to the Department's EEO/AE policies and programs; (f) Participate in the preparation and distribution of such educational materials as may be necessary to inform adequately all employees of their rights and responsibilities as described in this part, including the Department's directives issued to carry out the Equal Employment Opportunity Program; (g) In coordination with the Director of the Training Academy, develop an on-going training program for various levels of administration and supervision, to ensure understanding of the Departmental EEO/AE programs, policy and requirements which fosters effective teamwork and high morale, and provide communication with employees on any matter related to equal employment opportunity;<PRTPAGE P="79"/> (h) Decide all personnel actions on merit principles in a manner which will demonstrative affirmative equal employment opportunity for the organization; (i) Ensure the greatest possible utilization and development of the skills and potential ability of all employees; (j) Track applicant flow and promptly take or recommend appropriate action to overcome any impediment to the achievement of the objectives of the EEO/AE programs; and (k) Provide recognition to employees, supervisors, managers and units demonstrating superior accomplishment in equal employment opportunity. </SECTION> <SECTION> <SECTNO>§ 7.15</SECTNO> <SUBJECT>Responsibilities of managers and supervisors.</SUBJECT> All managers and supervisors of the Department are responsible for: (a) Removing barriers to EEO and ensuring that Affirmative Employment objectives are accomplished in their areas of responsibility; (b) Evaluating subordinate managers and supervisors on their performance of EEO/AE responsibilities; (c) Encouraging and taking positive steps to ensure respect for and acceptance of minorities, women and persons with disabilities, veterans and others of diverse characteristics in the work force; (d) Providing for the non-discriminatory treatment of all employees and for providing full and fair opportunity for all employees in obtaining employment and career advancement, including support for F.A.I.R., the Upward Mobility Program, the Mentoring Program and the Individual Development Plan; (e) Encouraging and authorizing staff participation in the various Diversity Program observances; (f) Being proactive in addressing EEO/AE issues, and for work environments that encourage and support complaint avoidance through sound management and personnel practices; (g) Resolving complaints of discrimination early in the EEO process either independently, or through the use of alternate dispute resolution techniques, when it is the right thing to do and when it represents a sound business decision; and (h) Making reasonable accommodation to the religious and disability needs of applicants and employees when those accommodations can be made without undue hardship on the business of the agency. </SECTION> <SECTION> <SECTNO>§ 7.16</SECTNO> <SUBJECT>Responsibilities of employees.</SUBJECT> All employees of the Department are responsible for: (a) Being informed as to the Department's EEO/AE programs; (b) Adopting an attitude of full acceptance of minority, female and disabled group associates, and support of F.A.I.R.; (c) Providing equality of treatment of, and service to, all citizens with whom they come in contact in carrying out their job responsibilities; and (d) Providing assistance to supervisors and managers in carrying out their responsibilities in the EEO/AE programs. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Precomplaint Processing</HD> <SECTION> <SECTNO>§ 7.25</SECTNO> <SUBJECT>Precomplaint processing.</SUBJECT> The regulations in 29 CFR 1614.105, concerning precomplaint processing shall apply. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Complaints</HD> <SECTION> <SECTNO>§ 7.30</SECTNO> <SUBJECT>Presentation of complaint.</SUBJECT> At any stage in the presentation of a complaint, including the counseling stage, the Complainant shall be free from restraint, interference, coercion, discrimination, or reprisal and shall have the right to be accompanied, represented, and advised by a representative of the Complainant's own choosing, except as limited by 29 CFR 1614.605. If the Complainant is an employee of the Department, the employee shall have a reasonable amount of official time to present the complaint if the employee is otherwise in an active duty status. If the Complainant is an employee of the Department and designates another employee of the Department as Complainant's representative, the representative shall be free from restraint, interference, coercion, discrimination, or reprisal, and <PRTPAGE P="80"/>shall have a reasonable amount of official time, if the representative is otherwise in an active duty status, to present the complaint. </SECTION> <SECTION> <SECTNO>§ 7.31</SECTNO> <SUBJECT>Who may file a complaint, with whom filed, and time limits.</SUBJECT> Any aggrieved person (hereafter referred to as the Complainant) who has observed the provisions of § 7.25 may file a complaint if the matter of discrimination was not resolved to the complainant's satisfaction. The complaint must be filed with the Director of EEO within fifteen (15) days of receipt of the Notice of Right to File a Complaint issued by the EEO Counselor. The Department may accept a complaint only if the Complainant has met the appropriate requirements contained in 29 CFR 1614.605. </SECTION> <SECTION> <SECTNO>§ 7.32</SECTNO> <SUBJECT>Contents.</SUBJECT> (a) The complaint filed should include the following information: (1) The specific action or personnel matter which is alleged to be discriminatory; (2) The date the act or matter occurred; (3) The protected basis or bases on which the alleged discrimination occurred; (4) Facts and other pertinent information to support the allegation of discrimination; and (5) The relief desired. (b) To expedite the processing of complaints of discrimination, the Complainant should use HUD EEO-1 form to file the complaint. </SECTION> <SECTION> <SECTNO>§ 7.33</SECTNO> <SUBJECT>Acceptability.</SUBJECT> The Director of EEO shall determine whether the complaint comes within the purview of the EEO regulations at 29 CFR part 1614 and shall advise the Complainant and Complainant's representative in writing of the acceptance or dismissal of the allegation(s) of the complaint. Should the Director of EEO dismiss the complaint or any allegations contained in the complaint, the written decision to the Complainant shall inform Complainant of the complainant's right to appeal the decision and of the time limit applicable to the right of appeal, if Complainant believes the dismissal improper. </SECTION> <SECTION> <SECTNO>§ 7.34</SECTNO> <SUBJECT>Processing.</SUBJECT> (a) The Director of EEO will process complaints filed under 29 CFR part 1614 for the Department. The Director or the Director's designee has jurisdiction of any case. (b) The Director of EEO shall provide for the development of a complete and impartial record on which to decide the merits of the allegations accepted for investigation. (1) The person assigned to develop the factual record for the complaint shall occupy a position in the Department which is not, directly or indirectly, under the jurisdiction of the head of the part of the Department in which the complaint arose, or the person shall develop the record under a contract with the Department. (2) The Department will develop a complete and impartial factual record, subject to the requirements of 29 CFR part 1614, upon which to make findings on the matters raised in the complaint and accepted for processing. (3) The Director of EEO will provide the Complainant and the EEO Officer a copy of the record developed. </SECTION> <SECTION> <SECTNO>§ 7.35</SECTNO> <SUBJECT>Hearing.</SUBJECT> (a) The Director of EEO will notify the Complainant of the Complainant's right to request an administrative hearing before the Equal Employment Opportunity Commission or a Final Agency Decision from the Department and the timeframes for executing the right to request an administrative hearing. (b) The Director of EEO will notify the appropriate EEOC office of Complainant's timely request for a hearing and request the appointment of an administrative judge to conduct the hearing pursuant to 29 CFR 1614.109. </SECTION> <SECTION> <SECTNO>§ 7.36</SECTNO> <SUBJECT>Decision by Director of EEO.</SUBJECT> Following consultation with the General Counsel and the Assistant Secretary for Administration, the Director of EEO shall make the final agency decision for the Department based on the record developed through the processing of the complaint. The decision shall require the remedial and corrective action necessary to ensure that the Department is in compliance with the EEO statutes and to promote the <PRTPAGE P="81"/>Department's policy of equal employment opportunity. </SECTION> <SECTION> <SECTNO>§ 7.37</SECTNO> <SUBJECT>Rights of appeal.</SUBJECT> The provisions of 29 CFR part 1614, subpart D, shall govern rights of appeal. </SECTION> <SECTION> <SECTNO>§ 7.38</SECTNO> <SUBJECT>Relationship to other HUD appellate procedures.</SUBJECT> (a) An aggrieved individual covered by a collective bargaining agreement that permits allegations of discrimination to be raised in a negotiated grievance procedure can file a complaint under these procedures or a negotiated grievance, but not both. An election to proceed under this part is indicated only by filing of a written complaint. An election to proceed under a negotiated grievance procedure is indicated by the filing of a timely grievance. (b) An aggrieved individual alleging discrimination on the basis of race, color, religion, sex, national origin, age or disability related to or stemming from an action that can be appealed to the Merit Systems Protection Board (MSPB) can file a complaint under these procedures, or an appeal with the MSPB, but not both. Whichever is filed first, the complaint or the appeal, is considered an election to proceed in that forum. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B [Reserved]</HD> </SUBPART> </PART> <PART> <EAR>Pt. 8</EAR> <HD SOURCE="HED">PART 8—NONDISCRIMINATION BASED ON HANDICAP IN FEDERALLY ASSISTED PROGRAMS AND ACTIVITIES OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>8.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>8.2</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>8.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>8.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> <SECTNO>8.5</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>8.6</SECTNO> <SUBJECT>Communications.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Employment</HD> <SECTNO>8.10</SECTNO> <SUBJECT>General prohibitions against employment discrimination.</SUBJECT> <SECTNO>8.11</SECTNO> <SUBJECT>Reasonable accommodation.</SUBJECT> <SECTNO>8.12</SECTNO> <SUBJECT>Employment criteria.</SUBJECT> <SECTNO>8.13</SECTNO> <SUBJECT>Preemployment inquiries.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Program Accessibility</HD> <SECTNO>8.20</SECTNO> <SUBJECT>General requirement concerning program accessibility.</SUBJECT> <SECTNO>8.21</SECTNO> <SUBJECT>Non-housing facilities.</SUBJECT> <SECTNO>8.22</SECTNO> <SUBJECT>New construction—housing facilities.</SUBJECT> <SECTNO>8.23</SECTNO> <SUBJECT>Alterations of existing housing facilities.</SUBJECT> <SECTNO>8.24</SECTNO> <SUBJECT>Existing housing programs.</SUBJECT> <SECTNO>8.25</SECTNO> <SUBJECT>Public housing and multi-family Indian housing.</SUBJECT> <SECTNO>8.26</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> <SECTNO>8.27</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> <SECTNO>8.28</SECTNO> <SUBJECT>Housing certificate and housing voucher programs.</SUBJECT> <SECTNO>8.29</SECTNO> <SUBJECT>Homeownership programs (sections 235(i) and 235(j), Turnkey III and Indian Housing Mutual Self-Help Programs).</SUBJECT> <SECTNO>8.30</SECTNO> <SUBJECT>Rental rehabilitation program.</SUBJECT> <SECTNO>8.31</SECTNO> <SUBJECT>Historic properties.</SUBJECT> <SECTNO>8.32</SECTNO> <SUBJECT>Accessibility standards.</SUBJECT> <SECTNO>8.33</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Enforcement</HD> <SECTNO>8.50</SECTNO> <SUBJECT>Assurances required.</SUBJECT> <SECTNO>8.51</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> <SECTNO>8.52</SECTNO> <SUBJECT>Remedial and affirmative action.</SUBJECT> <SECTNO>8.53</SECTNO> <SUBJECT>Designation of responsible employee and adoption of grievance procedures.</SUBJECT> <SECTNO>8.54</SECTNO> <SUBJECT>Notice.</SUBJECT> <SECTNO>8.55</SECTNO> <SUBJECT>Compliance information.</SUBJECT> <SECTNO>8.56</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> <SECTNO>8.57</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> <SECTNO>8.58</SECTNO> <SUBJECT>Hearings.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 29 U.S.C. 794; 42 U.S.C. 3535(d) and 5309. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 20233, June 2, 1988, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 8.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) The purpose of this part is to effectuate section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C 794), to the end that no otherwise qualified individual with handicaps in the United States shall, solely by reason of his or her handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance from the Department of Housing and Urban Development. This part also implements section 109 of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5309). This part does not effectuate section 504 as <PRTPAGE P="82"/>it applies to any program or activity conducted by the Department. Compliance with this part does not assure compliance with requirements for accessibility by physically-handicapped persons imposed under the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157; 24 CFR part 40). (b) The policies and standards for compliance established by this part are established in contemplation of, and with a view to enforcement through, the Department's administration of programs or activities receiving Federal financial assistance and the administrative procedures described in subparts D and E (including, without limitation, judicial enforcement under § 8.57(a)). </SECTION> <SECTION> <SECTNO>§ 8.2</SECTNO> <SUBJECT>Applicability.</SUBJECT> This part applies to all applicants for, and recipients of, HUD assistance in the operation of programs or activities receiving such assistance. Such assistance includes, but is not limited to, that which is listed in appendix A of this part. </SECTION> <SECTION> <SECTNO>§ 8.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part: <E T="03">Accessible</E>, when used with respect to the design, construction, or alteration of a facility or a portion of a facility other than an individual dwelling unit, means that the facility or portion of the facility when designed, constructed or altered, can be approached, entered, and used by individuals with physical handicaps. The phrase <E T="03">accessible to and usable by</E> is synonomous with accessible. <E T="03">Accessible</E>, when used with respect to the design, construction, or alteration of an individual dwelling unit, means that the unit is located on an accessible route and when designed, constructed, altered or adapted can be approached, entered, and used by individuals with physical handicaps. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in § 8.32 is <E T="03">accessible</E> within the meaning of this paragraph. When a unit in an existing facility which is being made accessible as a result of alterations is intended for use by a specific qualified individual with handicaps (e.g., a current occupant of such unit or of another unit under the control of the same recipient, or an applicant on a waiting list), the unit will be deemed accessible if it meets the requirements of applicable standards that address the particular disability or impairment of such person. <E T="03">Accessible route</E> means a continuous unobstructed path connecting accessible elements and spaces in a building or facility that complies with the space and reach requirements of applicable standards prescribed by § 8.32. An accessible route that serves only accessible units occupied by persons with hearing or vision impairments need not comply with those requirements intended to effect accessibility for persons with mobility impairments. <E T="03">Adaptability</E> means the ability of certain elements of a dwelling unit, such as kitchen counters, sinks, and grab bars, to be added to, raised, lowered, or otherwise altered, to accommodate the needs of persons with or without handicaps, or to accommodate the needs of persons with different types or degrees of disability. For example, in a unit adaptable for a hearing-impaired person, the wiring for visible emergency alarms may be installed but the alarms need not be installed until such time as the unit is made ready for occupancy by a hearing-impaired person. <E T="03">Alteration</E> means any change in a facility or its permanent fixtures or equipment. It includes, but is not limited to, remodeling, renovation, rehabilitation, reconstruction, changes or rearrangements in structural parts and extraordinary repairs. It does not include normal maintenance or repairs, reroofing, interior decoration, or changes to mechanical systems. <E T="03">Applicant for assistance</E> means one who submits an application, request, plan, or statement required to be approved by a Department official or by a primary recipient as a condition of eligibility for Federal financial assistance. An application means such a request, plan or statement. <E T="03">Auxiliary aids</E> means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities receiving <PRTPAGE P="83"/>Federal financial assistance. For example, auxiliary aids for persons with impaired vision may include readers, Brailled materials, audio recordings, and other similar services and devices. Auxiliary aids for persons with impaired hearing may include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD's), interpreters, notetakers, written materials, and other similar services and devices. <E T="03">Department</E> or <E T="03">HUD</E> means the Department of Housing and Urban Development. <E T="03">Facility</E> means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other real or personal property or interest in the property. <E T="03">Federal financial assistance</E> means any assistance provided or otherwise made available by the Department through any grant, loan, contract or any other arrangement, in the form of: (a) Funds; (b) Services of Federal personnel; or (c) Real or personal property or any interest in or use of such property, including: (1) Transfers or leases of the property for less than fair market value or for reduced consideration; and (2) Proceeds from a subsequent transfer or lease of the property if the Federal share of its fair market value is not returned to the Federal Government. <E T="03">Federal financial assistance</E> includes community development funds in the form of proceeds from loans guaranteed under section 108 of the Housing and Community Development Act of 1974, as amended, but does not include assistance made available through direct Federal procurement contracts or payments made under these contracts or any other contract of insurance or guaranty. <E T="03">Handicap</E> means any condition or characteristic that renders a person an individual with handicaps. <E T="03">Historic preservation programs or activities</E> means programs or activities receiving Federal financial assistance that have preservation of historic properties as a primary purpose. <E T="03">Historic properties</E> means those properties that are listed or are eligible for listing in the National Register of Historic Places, or such properties designated as historic under a statute of the appropriate State or local government body. <E T="03">Individual with handicaps</E> means any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such an impairment; or is regarded as having such an impairment. For purposes of employment, this term does not include: Any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents the individual from performing the duties of the job in question, or whose employment, by reason of current alcohol or drug abuse, would constitute a direct threat to property or the safety of others; or any individual who has a currently contagious disease or infection and who, by reason of such disease or infection, would constitute a direct threat to the health or safety of other individuals or who, by reason of the currently contagious disease or infection, is unable to perform the duties of the job. For purposes of other programs and activities, the term does not include any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents the individual from participating in the program or activity in question, or whose participation, by reason of such current alcohol or drug abuse, would constitute a direct threat to property or the safety of others. As used in this definition, the phrase: (a) <E T="03">Physical or mental impairment</E> includes: (1) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or (2) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term <E T="03">physical or mental impairment</E> includes, but is not limited <PRTPAGE P="84"/>to, such diseases and conditions as orthopedic, visual, speech and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, drug addiction and alcoholism. (b) <E T="03">Major life activities</E> means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working. (c) <E T="03">Has a record of such an impairment</E> means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities. (d) <E T="03">Is regarded as having an impairment</E> means: (1) Has a physical or mental impairment that does not substantially limit one or more major life activities but that is treated by a recipient as constituting such a limitation; (2) Has a physical or mental impairment that substantially limits one or more major life activities only as a result of the attitudes of others toward such impairment; or (3) Has none of the impairments defined in paragraph (a) of this section but is treated by a recipient as having such an impairment. <E T="03">Multifamily housing project</E> means a project containing five or more dwelling units. <E T="03">Primary recipient</E> means a person, group, organization, State or local unit of government that is authorized or required to extend Federal financial assistance to another recipient for the purpose of carrying out a program or activity. <E T="03">Program or activity</E> means all of the operations of: (a)(1) A department, agency, special purpose district, or other instrumentality of a State or of a local government; or (2) The entity of such State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government; (b)(1) A college, university, or other post-secondary institution, or a public system of higher education; or (2) A local educational agency (as defined in section 198(a)(10) of the Elementary and Secondary Education Act of 1965), system of vocational education, or other school system; (c)(1) An entire corporation, partnership, or other private organization, or an entire sole proprietorship— (i) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or (ii) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or (2) The entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or (d) Any other entity which is established by two or more of the entities described in paragraphs (a), (b), or (c) of this section; <FP>any part of which is extended Federal financial assistance.</FP> <E T="03">Project</E> means the whole of one or more residential structures and appurtenant structures, equipment, roads, walks, and parking lots which are covered by a single contract for Federal financial assistance or application for assistance, or are treated as a whole for processing purposes, whether or not located on a common site. <E T="03">Qualified individual with handicaps</E> means: (a) With respect to employment, an individual with handicaps who, with reasonable accommodation, can perform the essential functions of the job in question; and (b) With respect to any non-employment program or activity which requires a person to perform services or to achieve a level of accomplishment, an individual with handicaps who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the recipient can demonstrate would result in a fundamental alteration in its nature; or<PRTPAGE P="85"/> (c) With respect to any other non-employment program or activity, an individual with handicaps who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity. <E T="03">Essential eligibility requirements</E> include stated eligibility requirements such as income as well as other explicit or implicit requirements inherent in the nature of the program or activity, such as requirements that an occupant of multifamily housing be capable of meeting the recipient's selection criteria and be capable of complying with all obligations of occupancy with or without supportive services provided by persons other than the recipient. For example, a chronically metally ill person whose particular condition poses a significant risk of substantial interference with the safety or enjoyment of others or with his or her own health or safety in the absence of necessary supportive services may be <E T="03">qualified</E> for occupancy in a project where such supportive services are provided by the recipient as part of the assisted program. The person may not be <E T="03">qualified</E> for a project lacking such services. <E T="03">Recipient</E> means any State or its political subdivision, any instrumentality of a State or its political subdivision, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance is extended for any program or activity directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance. An entity or person receiving housing assistance payments from a recipient on behalf of eligible families under a housing assistance payments program or a voucher program is not a recipient or subrecipient merely by virtue of receipt of such payments. <E T="03">Replacement cost of the completed facility</E> means the current cost of construction and equipment for a newly constructed housing facility of the size and type being altered. Construction and equipment costs do not include the cost of land, demolition, site improvements, non-dwelling facilities and administrative costs for project development activities. <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. <E T="03">Section 504</E> means section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794, as it applies to programs or activities receiving Federal financial assistance. <E T="03">Substantial impairment</E> means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration. <CITA>[53 FR 20233, June 2, 1988; 54 FR 8188, Feb. 27, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> (a) No qualified individual with handicaps shall, solely on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity that receives Federal financial assistance from the Department. (b)(1) A recipient, in providing any housing, aid, benefit, or service in a program or activity that receives Federal financial assistance from the Department may not, directly or through contractual, licensing, or other arrangements, solely on the basis of handicap: (i) Deny a qualified individual with handicaps the opportunity to participate in, or benefit from, the housing, aid, benefit, or service; (ii) Afford a qualified individual with handicaps an opportunity to participate in, or benefit from, the housing, aid, benefit, or service that is not equal to that afforded to others; (iii) Provide a qualified individual with handicaps with any housing, aid, benefit, or service that is not as effective in affording the individual an equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others; (iv) Provide different or separate housing, aid, benefits, or services to individuals with handicaps or to any class of individuals with handicaps from that provided to others unless such action is necessary to provide qualified individuals with handicaps with housing, aid, benefits, or services that are as effective as those provided to others.<PRTPAGE P="86"/> (v) Aid or perpetuate discrimination against a qualified individual with handicaps by providing significant assistance to an agency, organization, or person that discriminates on the basis of handicap in providing any housing, aid, benefit, or service to beneficiaries in the recipient's federally assisted program or activity; (vi) Deny a qualified individual with handicaps the opportunity to participate as a member of planning or advisory boards; (vii) Deny a dwelling to an otherwise qualified buyer or renter because of a handicap of that buyer or renter or a person residing in or intending and eligible to reside in that dwelling after it is sold, rented or made available; or (viii) Otherwise limit a qualified individual with handicaps in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by other qualified individuals receiving the housing, aid, benefit, or service. (2) For purposes of this part, housing, aids, benefits, and services, to be equally effective, are not required to produce the identical result or level of achievement for individuals with handicaps and non-handicapped persons, but must afford individuals with handicaps equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement. (3) A recipient may not deny a qualified individual with handicaps the opportunity to participate in any federally assisted program or activity that is not separate or different despite the existence of permissibly separate or different programs or activities. (4) In any program or activity receiving Federal financial assistance from the Department, a recipient may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would: (i) Subject qualified individuals with handicaps to discrimination solely on the basis of handicap; (ii) Defeat or substantially impair the accomplishment of the objectives of the recipient's federally assisted program or activity for qualified individuals with a particular handicap involved in the program or activity, unless the recipient can demonstrate that the criteria or methods of administration are manifestly related to the accomplishment of an objective of a program or activity; or (iii) Perpetuate the discrimination of another recipient if both recipients are subject to common administrative control or are agencies of the same State. (5) In determining the site or location of a federally assisted facility, an applicant for assistance or a recipient may not make selections the purpose or effect of which would: (i) Exclude qualified individuals with handicaps from, deny them the benefits of, or otherwise subject them to discrimination under, any program or activity that receives Federal financial assistance from the Department, or (ii) Defeat or substantially impair the accomplishment of the objectives of the program or activity with respect to qualified individuals with handicaps. (6) As used in this section, the housing, aid, benefit, or service provided under a program or activity receiving Federal financial assistance includes any housing, aid, benefit, or service provided in or through a facility that has been constructed, altered, leased or rented, or otherwise acquired, in whole or in part, with Federal financial assistance. (c)(1) Non-handicapped persons may be excluded from the benefits of a program if the program is limited by Federal statute or executive order to individuals with handicaps. A specific class of individuals with handicaps may be excluded from a program if the program is limited by Federal statute or Executive order to a different class of individuals. (2) Certain Department programs operate under statutory definitions of <E T="03">handicapped person</E> that are more restrictive than the definition of <E T="03">individual with handicaps</E> contained in § 8.3 (see appendix B). Those definitions are not superseded or otherwise affected by this regulation. (d) Recipients shall administer programs and activities receiving Federal financial assistance in the most integrated setting appropriate to the needs of qualified individuals with handicaps. (e) The obligation to comply with this part is not obviated or alleviated <PRTPAGE P="87"/>by any State or local law or other requirement that, based on handicap, imposes inconsistent or contradictory prohibitions or limits upon the eligibility of qualified individuals with handicaps to receive services or to practice any occupation or profession. (f) The enumeration of specific forms of prohibited discrimination in paragraphs (b) through (e) of this section does not limit the general prohibition in paragraph (a) of this section. <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]</CITA> <SECTNO>§ 8.5</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 8.6</SECTNO> <SUBJECT>Communications.</SUBJECT> (a) The recipient shall take appropriate steps to ensure effective communication with applicants, beneficiaries, and members of the public. (1) The recipient shall furnish appropriate auxiliary aids where necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity receiving Federal financial assistance. (i) In determining what auxiliary aids are necessary, the recipient shall give primary consideration to the requests of the individual with handicaps. (ii) The recipient is not required to provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature. (2) Where a recipient communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf persons (TDD's) or equally effective communication systems shall be used. (b) The recipient shall adopt and implement procedures to ensure that interested persons (including persons with impaired vision or hearing) can obtain information concerning the existence and location of accessible services, activities, and facilities. (c) This section does not require a recipient to take any action that the recipient can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. If an action would result in such an alteration or burdens, the recipient shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with handicaps receive the benefits and services of the program or activity receiving HUD assistance. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Employment</HD> <SECTION> <SECTNO>§ 8.10</SECTNO> <SUBJECT>General prohibitions against employment discrimination.</SUBJECT> (a) No qualified individual with handicaps shall, solely on the basis of handicap, be subjected to discrimination in employment under any program or activity that receives Federal financial assistance from the Department. (b) A recipient may not limit, segregate, or classify applicants or employees in any way that adversely affects their opportunities or status because of handicap. (c) The prohibition against discrimination in employment applies to the following activities: (1) Recruitment, advertising, and the processing of applications for employment; (2) Hiring, upgrading, promotion, award of tenure, demotion, transfer, layoff, termination, right of return from layoff, injury or illness, and rehiring; (3) Rates of pay or any other form of compensation and changes in compensation; (4) Job assignments, job classifications, organizational structures, position descriptions, lines of progression, and seniority lists; (5) Leaves of absence, sick leave, or any other leave; (6) Fringe benefits available by virtue of employment, whether or not administered by the recipient; (7) Selection and financial support for training, including apprenticeship, professional meetings, conferences, and other related activities, and selection for leaves of absence for training; (8) Employer sponsored activities, including social or recreational programs; and (9) Any other term, condition, or privilege of employment. (d) A recipient may not participate in a contractual or other relationship <PRTPAGE P="88"/>that has the effect of subjecting qualified applicants with handicaps or employees with handicaps to discrimination prohibited by this subpart. The relationships referred to in this paragraph (d) include relationships with employment and referral agencies, labor unions, organizations providing or administering fringe benefits to employees of the recipient, and organizations providing training and apprenticeship programs. </SECTION> <SECTION> <SECTNO>§ 8.11</SECTNO> <SUBJECT>Reasonable accommodation.</SUBJECT> (a) A recipient shall make reasonable accommodation to the known physical or mental limitations of an otherwise qualified applicant with handicaps or employee with handicaps, unless the recipient can demonstrate that the accommodation would impose an undue hardship on the operation of its program. (b) Reasonable accommodation may include: (1) Making facilities used by employees accessible to and usable by individuals with handicaps and (2) Job restructuring, job relocation, part-time or modified work schedules, acquisitions or modification of equipment or devices, the provision of readers or interpreters, and other similar actions. (c) In determining, under paragraph (a) of this section, whether an accommodation would impose an undue hardship on the operation of a recipient's program, factors to be considered include: (1) The overall size of the recipient's program with respect to number of employees, number and type of facilities, and size of budget; (2) The type of the recipient's operation, including the composition and structure of the recipient's workforce; and (3) The nature and cost of the accommodation needed. (d) A recipient may not deny any employment opportunity to a qualified handicapped employee or applicant if the basis for the denial is the need to make reasonable accommodation to the physical or mental limitations of the employee or applicant. </SECTION> <SECTION> <SECTNO>§ 8.12</SECTNO> <SUBJECT>Employment criteria.</SUBJECT> (a) A recipient may not use any employment test or other selection criterion that screens out or tends to screen out individuals with handicaps or any class of individuals with handicaps unless: (1) The recipient demonstrates that the test score or other selection criterion, as used by the recipient, is job-related for the position in question; and (2) The appropriate HUD official demonstrates that alternative job-related tests or criteria that tend to screen out fewer individuals with handicaps are unavailable. (b) A recipient shall select and administer tests concerning employment to ensure that, when administered to an applicant or employee who has a handicap that impairs sensory, manual, or speaking skills, the test results accurately reflect the applicant's or employee's job skills, aptitude, or whatever other factor the test purports to measure, rather than the applicant's or employee's impaired sensory, manual, or speaking skills (except where those skills are the factors that the test purports to measure). </SECTION> <SECTION> <SECTNO>§ 8.13</SECTNO> <SUBJECT>Preemployment inquiries.</SUBJECT> (a) Except as provided in paragraphs (b) and (c) of this section, a recipient may not make a preemployment inquiry or conduct a preemployment medical examination of an applicant to determine whether the applicant is an individual with handicaps or the nature or severity of a handicap. A recipient may, however, make preemployment inquiry into an applicant's ability to perform job-related functions. (b) When a recipient is undertaking affirmative action efforts, voluntary or otherwise, the recipient may invite applicants for employment to indicate whether and to what extent they are handicapped, if the following conditions are met: (1) The recipient states clearly on any written questionnaire used for this purpose, or makes clear orally if no written questionnaire is used, that the information requested is intended for <PRTPAGE P="89"/>use solely in connection with its remedial action obligations, or its voluntary or affirmative action efforts; and (2) The recipient states clearly that the information is being requested on a voluntary basis, that it will be kept confidential (as provided in paragraph (d) of this section), that refusal to provide the information will not subject the applicant or employee to any adverse treatment, and that the information will be used only in accordance with this part. (c) Nothing in this section shall prohibit a recipient from conditioning an offer of employment on the results of a medical examination conducted before the employee's entrance on duty if all entering employees in that category of job classification must take such an examination regardless of handicap, and the results of such examination are used only in accordance with the requirements of this part. (d) Information obtained under this section concerning the medical condition or history of the applicant is to be collected and maintained on separate forms that are accorded confidentiality as medical records, except that: (1) Supervisors and managers may be informed of restrictions on the work or duties of individuals with handicaps and informed of necessary accommodations; (2) First aid and safety personnel may be informed if the condition might require emergency treatment; and (3) Government officials investigating compliance with section 504 shall be provided relevant information upon request. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Program Accessibility</HD> <SECTION> <SECTNO>§ 8.20</SECTNO> <SUBJECT>General requirement concerning program accessibility.</SUBJECT> Except as otherwise provided in §§ 8.21(c)(1), 8.24(a), 8.25, and 8.31, no qualified individual with handicaps shall, because a recipient's facilities are inaccessible to or unusable by individuals with handicaps, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity that receives Federal financial assistance. </SECTION> <SECTION> <SECTNO>§ 8.21</SECTNO> <SUBJECT>Non-housing facilities.</SUBJECT> (a) <E T="03">New construction.</E> New non-housing facilities shall be designed and constructed to be readily accessible to and usable by individuals with handicaps. (b) <E T="03">Alterations to facilities.</E> Alterations to existing non-housing facilities shall, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with handicaps. For purposes of this paragraph, the phrase <E T="03">to the maximum extent feasible</E> shall not be interpreted as requiring that a recipient make a non-housing facility, or element thereof, accessible if doing so would impose undue financial and administrative burdens on the operation of the recipient's program or activity. (c) <E T="03">Existing non-housing facilities</E>—(1) <E T="03">General</E>. A recipient shall operate each non-housing program or activity receiving Federal financial assistance so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not— (i) Necessarily require a recipient to make each of its existing non-housing facilities accessible to and usable by individuals with handicaps; (ii) In the case of historic preservation programs or activities, require the recipient to take any action that would result in a substantial impairment of significant historic features of an historic property; or (iii) Require a recipient to take any action that it can demonstrate would result in a fundamental alteration in the nature of its program or activity or in undue financial and administrative burdens. If an action would result in such an alteration or such burdens, the recipient shall take any action that would not result in such an alteration or such burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity. (2) <E T="03">Methods</E>—(i) <E T="03">General</E>. A recipient may comply with the requirements of this section in its programs and activities receiving Federal financial assistance through such means as location of programs or services to accessible facilities or accessible portions of facilities, assignment of aides to beneficiaries, home visits, the addition or redesign of equipment (e.g., appliances <PRTPAGE P="90"/>or furnishings) changes in management policies or procedures, acquisition or construction of additional facilities, or alterations to existing facilities on a selective basis, or any other methods that result in making its program or activity accessible to individuals with handicaps. A recipient is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. In choosing among available methods for meeting the requirements of this section, the recipient shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate. (ii) <E T="03">Historic preservation programs or activities.</E> In meeting the requirements of § 8.21(c) in historic preservation programs or activities, a recipient shall give priority to methods that provide physical access to individuals with handicaps. In cases where a physical alteration to an historic property is not required because of § 8.21(c)(1)(ii) or (iii), alternative methods of achieving program accessibility include using audio-visual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible; assigning persons to guide individuals with handicaps into or through portions of historic properties that cannot otherwise be made accessible; or adopting other innovative methods. (3) <E T="03">Time period for compliance</E>. The recipient shall comply with the obligations established under this section within sixty days of July 11, 1988, except that where structural changes in facilities are undertaken, such changes shall be made within three years of July 11, 1988, but in any event as expeditiously as possible. (4) <E T="03">Transition plan</E>. If structural changes to non-housing facilities will be undertaken to achieve program accessibility, a recipient shall develop, within six months of July 11, 1988, a transition plan setting forth the steps necessary to complete such changes. The plan shall be developed with the assistance of interested persons, including individuals with handicaps or organizations representing individuals with handicaps. A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum— (i) Identify physical obstacles in the recipient's facilities that limit the accessibility of its programs or activities to individuals with handicaps; (ii) Describe in details the methods that will be used to make the facilities accessible; (iii) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; (iv) Indicate the official responsible for implementation of the plan; and (v) Identify the persons or groups with whose assistance the plan was prepared. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 FR 37645, Sept. 12, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.22</SECTNO> <SUBJECT>New construction—housing facilities.</SUBJECT> (a) New multifamily housing projects (including public housing and Indian housing projects as required by § 8.25) shall be designed and constructed to be readily accessible to and usable by individuals with handicaps. (b) Subject to paragraph (c) of this section, a minimum of five percent of the total dwelling units or at least one unit in a multifamily housing project, whichever is greater, shall be made accessible for persons with mobility impairments. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in § 8.32 is accessible for purposes of this section. An additional two percent of the units (but not less than one unit) in such a project shall be accessible for persons with hearing or vision impairments. (c) HUD may prescribe a higher percentage or number than that prescribed in paragraph (b) of this section for any area upon request therefor by any affected recipient or by any State or local government or agency thereof <PRTPAGE P="91"/>based upon demonstration to the reasonable satisfaction of HUD of a need for a higher percentage or number, based on census data or other available current data (including a currently effective Housing Assistance Plan or Comprehensive Homeless Assistance Plan), or in response to evidence of a need for a higher percentage or number received in any other manner. In reviewing such request or otherwise assessing the existence of such needs, HUD shall take into account the expected needs of eligible persons with and without handicaps. <CITA>[53 FR 20233, June 2, 1988, as amended at 56 FR 920, Jan. 9, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.23</SECTNO> <SUBJECT>Alterations of existing housing facilities.</SUBJECT> (a) <E T="03">Substantial alteration.</E> If alterations are undertaken to a project (including a public housing project as required by § 8.25(a)(2)) that has 15 or more units and the cost of the alterations is 75 percent or more of the replacement cost of the completed facility, then the provisions of § 8.22 shall apply. (b) <E T="03">Other alterations.</E> (1) Subject to paragraph (b)(2) of this section, alterations to dwelling units in a multifamily housing project (including public housing) shall, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with handicaps. If alterations of single elements or spaces of a dwelling unit, when considered together, amount to an alteration of a dwelling unit, the entire dwelling unit shall be made accessible. Once five percent of the dwelling units in a project are readily accessible to and usable by individuals with mobility impairments, then no additional elements of dwelling units, or entire dwelling units, are required to be accessible under this paragraph. Alterations to common areas or parts of facilities that affect accessibility of existing housing facilities shall, to the maximum extent feasible, be made to be accessible to and usable by individuals with handicaps. For purposes of this paragraph, the phrase <E T="03">to the maximum extent feasible</E> shall not be interpreted as requiring that a recipient (including a PHA) make a dwelling unit, common area, facility or element thereof accessible if doing so would impose undue financial and administrative burdens on the operation of the multifamily housing project. (2) HUD may prescribe a higher percentage or number than that prescribed in paragraph (b)(1) of this section for any area upon request therefor by any affected recipient or by any State or local government or agency thereof based upon demonstration to the reasonable satisfaction of HUD of a need for a higher percentage or number, based on census data or other available current data (including a currently effective Housing Assistance Plan or Comprehensive Homeless Assistance Plan), or in response to evidence of a need for a higher percentage or number received in any other manner. In reviewing such request or otherwise assessing the existence of such needs, HUD shall take into account the expected needs of eligible persons with and without handicaps. </SECTION> <SECTION> <SECTNO>§ 8.24</SECTNO> <SUBJECT>Existing housing programs.</SUBJECT> (a) <E T="03">General.</E> A recipient shall operate each existing housing program or activity receiving Federal financial assistance so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not— (1) Necessarily require a recipient to make each of its existing facilities accessible to and usable by individuals with handicaps; (2) Require a recipient to take any action that it can demonstrate would result in a fundamental alteration in the nature of its program or activity or in undue financial and administrative burdens. If an action would result in such an alteration or such burdens, the recipient shall take any action that would not result in such an alteration or such burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity. (b) <E T="03">Methods.</E> A recipient may comply with the requirements of this section through such means as reassignment of services to accessible buildings, assignment of aides to beneficiaries, provision of housing or related services at alternate accessible sites, alteration of <PRTPAGE P="92"/>existing facilities and construction of new facilities, or any other methods that result in making its programs or activities readily accessible to and usable by individuals with handicaps. A recipient is not required to make structural changes in existing housing facilities where other methods are effective in achieving compliance with this section or to provide supportive services that are not part of the program. In choosing among available methods for meeting the requirements of this section, the recipient shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate. (c) <E T="03">Time period for compliance.</E> The recipient shall comply with the obligations established under this section within sixty days of July 11, 1988 except that— (1) In a public housing program where structural changes in facilities are undertaken, such changes shall be made within the timeframes established in § 8.25(c). (2) In other housing programs, where structural changes in facilities are undertaken, such changes shall be made within three years of July 11, 1988, but in any event as expeditiously as possible. (d) <E T="03">Transition plan and time period for structural changes.</E> Except as provided in § 8.25(c), in the event that structural changes to facilities will be undertaken to achieve program accessibility, a recipient shall develop, within six months of July 11, 1988, a transition plan setting forth the steps necessary to complete such changes. The plan shall be developed with the assistance of interested persons, including individuals with handicaps or organizations representing individuals with handicaps. A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum— (1) Identify physical obstacles in the recipient's facilities that limit the accessibility of its programs or activities to individuals with handicaps; (2) Describe in detail the methods that will be used to make the facilities accessible; (3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; (4) Indicate the official responsible for implementation of the plan; and (5) Identify the persons or groups with whose assistance the plan was prepared. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 FR 37645, Sept. 12, 1989] </CITA> </SECTION> <SECTION> <SECTNO>§ 8.25</SECTNO> <SUBJECT>Public housing and multi-family Indian housing.</SUBJECT> (a) <E T="03">Development and alteration of public housing and multi-family Indian housing.</E> (1) The requirements of § 8.22 shall apply to all newly constructed public housing and multi-family Indian housing. (2) The requirements of § 8.23 shall apply to public housing and multi-family Indian housing developed through rehabilitation and to the alteration of public housing and multi-family Indian housing. (3) In developing public housing and multi-family Indian housing through the purchase of existing properties PHAs and IHAs shall give priority to facilities which are readily accessible to and usable by individuals with handicaps. (b) <E T="03">Existing public housing and multi-family Indian housing—general.</E> The requirements of § 8.24(a) shall apply to public housing and multi-family Indian housing programs. (c) <E T="03">Existing public housing and multi-family Indian housing—needs assessment and transition plan.</E> As soon as possible, each PHA (for the purpose of this paragraph, this includes an Indian Housing Authority) shall assess, on a PHA-wide basis, the needs of current tenants and applicants on its waiting list for accessible units and the extent to which such needs have not been met or cannot reasonably be met within four years through development, alterations otherwise contemplated, or other programs administered by the PHA (e.g., Section 8 Moderate Rehabilitation or <PRTPAGE P="93"/>Section 8 Existing Housing or Housing Vouchers). If the PHA currently has no accessible units or if the PHA or HUD determines that information regarding the availability of accessible units has not been communicated sufficiently so that, as a result, the number of eligible qualified individuals with handicaps on the waiting list is not fairly representative of the number of such persons in the area, the PHA's assessment shall include the needs of eligible qualified individuals with handicaps in the area. If the PHA determines, on the basis of such assessment, that there is no need for additional accessible dwelling units or that the need is being or will be met within four years through other means, such as new construction, Section 8 or alterations otherwise contemplated, no further action is required by the PHA under this paragraph. If the PHA determines, on the basis of its needs assessment, that alterations to make additional units accessible must be made so that the needs of eligible qualified individuals with handicaps may be accommodated proportionally to the needs of non-handicapped individuals in the same categories, then the PHA shall develop a transition plan to achieve program accessibility. The PHA shall complete the needs assessment and transition plan, if one is necessary, as expeditiously as possible, but in any event no later than two years after July 11, 1988. The PHA shall complete structural changes necessary to achieve program accessibility as soon as possible but in any event no later than four years after July 11, 1988. The Assistant Secretary for Fair Housing and Equal Opportunity and the Assistant Secretary for Public and Indian Housing may extend the four year period for a period not to exceed two years, on a case-by-case determination that compliance within that period would impose undue financial and administrative burdens on the operation of the recipient's public housing and multi-family Indian housing program. The Secretary or the Undersecretary may further extend this time period in extraordinary circumstances, for a period not to exceed one year. The plan shall be developed with the assistance of interested persons including individuals with handicaps or organizations representing individuals with handicaps. A copy of the needs assessment and transition plan shall be made available for public inspection. The transition plan shall, at a minimum— (1) Identify physical obstacles in the PHA's facilities (e.g., dwelling units and common areas) that limit the accessibility of its programs or activities to individuals with handicaps; (2) Describe in detail the methods that will be used to make the PHA's facilities accessible. A PHA may, if necessary, provide in its plan that it will seek HUD approval, under 24 CFR part 968, of a comprehensive modernization program to meet the needs of eligible individuals with handicaps; (3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; (4) Indicate the official responsible for implementation of the plan; and (5) Identify the persons or groups with whose assistance the plan was prepared. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989; 56 FR 920, Jan. 9, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.26</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> Accessible dwelling units required by § 8.22, 8.23, 8.24 or 8.25 shall, to the maximum extent feasible and subject to reasonable health and safety requirements, be distributed throughout projects and sites and shall be available in a sufficient range of sizes and amenities so that a qualified individual with handicaps’ choice of living arrangements is, as a whole, comparable to that of other persons eligible for housing assistance under the same program. This provision shall not be construed to require provision of an elevator in any multifamily housing project solely for the purpose of permitting location of accessible units above or below the accessible grade level. </SECTION> <SECTION> <PRTPAGE P="94"/> <SECTNO>§ 8.27</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> (a) Owners and managers of multifamily housing projects having accessible units shall adopt suitable means to assure that information regarding the availability of accessible units reaches eligible individuals with handicaps, and shall take reasonable nondiscriminatory steps to maximize the utilization of such units by eligible individuals whose disability requires the accessibility features of the particular unit. To this end, when an accessible unit becomes vacant, the owner or manager before offering such units to a non-handicapped applicant shall offer such unit: (1) First, to a current occupant of another unit of the same project, or comparable projects under common control, having handicaps requiring the accessibility features of the vacant unit and occupying a unit not having such features, or, if no such occupant exists, then (2) Second, to an eligible qualified applicant on the waiting list having a handicap requiring the accessibility features of the vacant unit. (b) When offering an accessible unit to an applicant not having handicaps requiring the accessibility features of the unit, the owner or manager may require the applicant to agree (and may incorporate this agreement in the lease) to move to a non-accessible unit when available. </SECTION> <SECTION> <SECTNO>§ 8.28</SECTNO> <SUBJECT>Housing certificate and housing voucher programs.</SUBJECT> (a ) In carrying out the requirements of this subpart, a recipient administering a Section 8 Existing Housing Certificate program or a housing voucher program shall: (1) In providing notice of the availability and nature of housing assistance for low-income families under program requirements, adopt suitable means to assure that the notice reaches eligible individuals with handicaps; (2) In its activities to encourage participation by owners, include encouragement of participation by owners having accessible units; (3) When issuing a Housing Certificate or Housing Voucher to a family which includes an individual with handicaps include a current listing of available accessible units known to the PHA and, if necessary, otherwise assist the family in locating an available accessible dwelling unit; (4) Take into account the special problem of ability to locate an accessible unit when considering requests by eligible individuals with handicaps for extensions of Housing Certificates or Housing Vouchers; and (5) If necessary in order to achieve compliance with this subpart, request under 24 CFR part 882, an exception to the Fair Market Rents to allow section 8 certificate holders to rent accessible units. (b) In order to ensure that participating owners do not discriminate in the recipient's federally assisted program, a recipient shall enter into a HUD-approved contract with participating owners, which contract shall include necessary assurances of nondiscrimination. </SECTION> <SECTION> <SECTNO>§ 8.29</SECTNO> <SUBJECT>Homeownership programs (sections 235(i) and 235(j), Turnkey III and Indian Housing Mutual Self-Help programs).</SUBJECT> Any housing units newly constructed or rehabilitated for purchase or single family (including semi-attached and attached) units to be constructed or rehabilitated in a program or activity receiving Federal financial assistance shall be made accessible upon request of the prospective buyer if the nature of the handicap of an expected occupant so requires. In such case, the buyer shall consult with the seller or builder/sponsor regarding the specific design features to be provided. If accessibility features selected at the option of the homebuyer are ones covered by the standards prescribed by § 8.32, those features shall comply with the standards prescribed in § 8.32. The buyer shall be permitted to depart from particular specifications of these standards in order to accommodate his or her specific handicap. The cost of making a facility accessible under this paragraph may be included in the mortgage amount within the allowable mortgage limits, where applicable. To the extent such costs exceed allowable mortgage limits, they may be passed <PRTPAGE P="95"/>on to the prospective homebuyer, subject to maximum sales price limitations (see 24 CFR 235.320.) </SECTION> <SECTION> <SECTNO>§ 8.30</SECTNO> <SUBJECT>Rental rehabilitation program.</SUBJECT> Each grantee or state recipient in the rental rehabilitation program shall, subject to the priority in 24 CFR 511.10(l) and in accordance with other requirements in 24 CFR part 511, give priority to the selection of projects that will result in dwelling units being made readily accessible to and usable by individuals with handicaps. <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.31</SECTNO> <SUBJECT>Historic properties.</SUBJECT> If historic properties become subject to alterations to which this part applies the requirements of § 4.1.7 of the standards of § 8.32 of this part shall apply, except in the case of the Urban Development Action Grant (UDAG) program. In the UDAG program the requirements of 36 CFR part 801 shall apply. Accessibility to historic properties subject to alterations need not be provided if such accessibility would substantially impair the significant historic features of the property or result in undue financial and administrative burdens. </SECTION> <SECTION> <SECTNO>§ 8.32</SECTNO> <SUBJECT>Accessibility standards.</SUBJECT> (a) Effective as of July 11, 1988, design, construction, or alteration of buildings in conformance with sections 3-8 of the Uniform Federal Accessibility Standards (UFAS) shall be deemed to comply with the requirements of §§ 8.21, 8.22, 8.23, and 8.25 with respect to those buildings. Departures from particular technical and scoping requirements of the UFAS by the use of other methods are permitted where substantially equivalent or greater access to and usability of the building is provided. The alteration of housing facilities shall also be in conformance with additional scoping requirements contained in this part. Persons interested in obtaining a copy of the UFAS are directed to § 40.7 of this title. (b) For purposes of this section, section 4.1.6(1)(g) of UFAS shall be interpreted to exempt from the requirements of UFAS only mechanical rooms and other spaces that, because of their intended use, will not require accessibility to the public or beneficiaries or result in the employment or residence therein of individuals with physical handicaps. (c) This section does not require recipients to make building alterations that have little likelihood of being accomplished without removing or altering a load-bearing structural member. (d) For purposes of this section, section 4.1.4(11) of UFAS may not be used to waive or lower the minimum of five percent accessible units required by § 8.22(b) or to apply the minimum only to projects of 15 or more dwelling units. (e) Except as otherwise provided in this paragraph, the provisions of §§ 8.21 (a) and (b), 8.22 (a) and (b), 8.23, 8.25(a) (1) and (2), and 8.29 shall apply to facilities that are designed, constructed or altered after July 11, 1988. If the design of a facility was commenced before July 11, 1988, the provisions shall be followed to the maximum extent practicable, as determined by the Department. For purposes of this paragraph, the date a facility is constructed or altered shall be deemed to be the date bids for the construction or alteration of the facility are solicited. For purposes of the Urban Development Action Grant (UDAG) program, the provisions shall apply to the construction or alteration of facilities that are funded under applications submitted after July 11, 1988. If the UDAG application was submitted before July 11, 1988, the provisions shall apply, to the maximum extent practicable, as determined by the Department. <CITA>[53 FR 20233, June 2, 1988, as amended at 61 FR 5203, Feb. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.33</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> A recipient shall modify its housing policies and practices to ensure that these policies and practices do not discriminate, on the basis of handicap, against a qualified individual with handicaps. The recipient may not impose upon individuals with handicaps other policies, such as the prohibition of assistive devices, auxiliary alarms, or guides in housing facilities, that have the effect of limiting the participation of tenants with handicaps in the recipient's federally assisted housing <PRTPAGE P="96"/>program or activity in violation of this part. Housing policies that the recipient can demonstrate are essential to the housing program or activity will not be regarded as discriminatory within the meaning of this section if modifications to them would result in a fundamental alteration in the nature of the program or activity or undue financial and administrative burdens. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Enforcement</HD> <SECTION> <SECTNO>§ 8.50</SECTNO> <SUBJECT>Assurances required.</SUBJECT> (a) <E T="03">Assurances.</E> An applicant for Federal financial assistance for a program or activity to which this part applies shall submit an assurance to HUD, or in the case of a subrecipient to a primary recipient, on a form specified by the responsible civil rights official, that the program or activity will be operated in compliance with this part. An applicant may incorporate these assurances by reference in subsequent applications to the Department. (b) <E T="03">Duration of obligation.</E> (1) In the case of Federal financial assistance extended in the form of real property or to provide real property or structures on the property, the assurance will obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used for the purpose for which Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. (2) In the case of Federal financial assistance extended to provide personal property, the assurance will obligate the recipient for the period during which it retains ownership or possession of the property. (3) In all other cases the assurance will obligate the recipient for the period during which Federal financial assistance is extended. (c) <E T="03">Covenants.</E> (1) Where Federal financial assistance is provided in the form of real property or interest in the property from the Department, the instrument effecting or recording this transfer shall contain a covenant running with the land to assure nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. (2) Where no transfer of property is involved but property is purchased or improved with Federal financial assistance, the recipient shall agree to include the covenant described in paragraph (b)(2) of this section in the instrument effecting or recording any subsequent transfer of the property. (3) Where Federal financial assistance is provided in the form of real property or interest in the property from the Department, the covenant shall also include a condition coupled with a right to be reserved by the Department to revert title to the property in the event of a breach of the covenant. If a transferee of real property proposes to mortgage or otherwise encumber the real property as security for financing construction of new, or improvement of existing, facilities on the property for the purposes for which the property was transferred, the Secretary may, upon request of the transferee and if necessary to accomplish such financing and upon such conditions as he or she deems appropriate, agree to forbear the exercise of such right to revert title for so long as the lien of such mortgage or other encumbrance remains effective. </SECTION> <SECTION> <SECTNO>§ 8.51</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> (a) Each recipient shall, within one year of July 11, 1988, and after consultation with interested persons, including individuals with handicaps or organizations representing individuals with handicaps: (1) Evaluate its current policies and practices to determine whether, in whole or in part, they do not or may not meet the requirements of this part; (2) Modify any policies and practices that do not meet the requirements of this part; and (3) Take appropriate corrective steps to remedy the discrimination revealed by the self-evaluation. (b) A recipient that employs fifteen or more persons shall, for at least three years following completion of the evaluation required under paragraph (a)(1) of this section, maintain on file, make available for public inspection, and provide to the responsible civil rights <PRTPAGE P="97"/>official, upon request: (1) A list of the interested persons consulted; (2) a description of areas examined and any problems identified; and (3) a description of any modifications made and of any remedial steps taken. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.52</SECTNO> <SUBJECT>Remedial and affirmative action.</SUBJECT> (a) <E T="03">Remedial action.</E> (1) If the responsible civil rights official finds that a recipient has discriminated against persons on the basis of handicap in violation of section 504 or this part, the recipient shall take such remedial action as the responsible civil rights official deems necessary to overcome the effects of the discrimination. (2) The responsible civil rights official may, where necessary to overcome the effects of discrimination in violation of section 504 or this part, require a recipient to take remedial action— (i) With respect to individuals with handicaps who are no longer participants in the program but who were participants in the program when such discrimination occurred or (ii) With respect to individuals with handicaps who would have been participants in the program had the discrimination not occurred. (b) <E T="03">Voluntary action.</E> A recipient may take nondiscriminatory steps, in addition to any action that is required by this part, to overcome the effects of conditions that resulted in limited participation in the recipient's program or activity by qualified individuals with handicaps. </SECTION> <SECTION> <SECTNO>§ 8.53</SECTNO> <SUBJECT>Designation of responsible employee and adoption of grievance procedures.</SUBJECT> (a) <E T="03">Designation of responsible employee.</E> A recipient that employs fifteen or more persons shall designate at least one person to coordinate its efforts to comply with this part. (b) <E T="03">Adoption of grievance procedures.</E> A recipient that employees fifteen or more persons shall adopt grievance procedures that incorporate appropriate due process standards and that provide for the prompt and equitable resolution of complaints alleging any action prohibited by this part. Such procedures need not be established with respect to complaints from applicants for employment or from applicants for admission to housing covered by this part. </SECTION> <SECTION> <SECTNO>§ 8.54</SECTNO> <SUBJECT>Notice.</SUBJECT> (a) A recipient that employs fifteen or more persons shall take appropriate initial and continuing steps to notify participants, beneficiaries, applicants, and employees, including those with impaired vision or hearing, and unions or professional organizations holding collective bargaining or professional agreements with the recipient that it does not discriminate on the basis of handicap in violation of this part. The notification shall state, where appropriate, that the recipient does not discriminate in admission or access to, or treatment or employment in, its federally assisted programs and activities. The notification shall also include an identification of the responsible employee designated pursuant to § 8.53. A recipient shall make the initial notification required by this paragraph within 90 days of July 11, 1988. Methods of initial and continuing notification may include the posting of notices, publication in newspapers and magazines, placement of notices in recipients’ publications, and distribution of memoranda or other written communications. (b) If a recipient publishes or uses recruitment materials or publications containing general information that it makes available to participants, beneficiaries, applicants, or employees, it shall include in those materials or publications a statement of the policy described in paragraph (a) of this section. A recipient may meet the requirement of this paragraph either by including appropriate inserts in existing materials and publications or by revising and reprinting the materials and publications. (c) The recipient shall ensure that members of the population eligible to be served or likely to be affected directly by a federally assisted program <PRTPAGE P="98"/>who have visual or hearing impairments are provided with the information necessary to understand and participate in the program. Methods for ensuring participation include, but are not limited to, qualified sign language and oral interpreters, readers, or the use of taped and Braille materials. </SECTION> <SECTION> <SECTNO>§ 8.55</SECTNO> <SUBJECT>Compliance information.</SUBJECT> (a) <E T="03">Cooperation and assistance.</E> The responsible civil rights official and the award official shall, to the fullest extent practicable, seek the cooperation of recipients in obtaining compliance with this part and shall provide assistance and guidance to recipients to help them comply voluntarily with this part. (b) <E T="03">Compliance reports.</E> Each recipient shall keep such records and submit to the responsible civil rights official or his or her designee timely, complete, and accurate compliance reports at such times, and in such form and containing such information, as the responsible civil rights official or his or her designee may determine to be necessary to enable him or her to ascertain whether the recipient has complied or is complying with this part. In general, recipients should have available for the Department data showing the extent to which individuals with handicaps are beneficiaries of federally assisted programs. (c) <E T="03">Access to sources of information.</E> Each recipient shall permit access by the responsible civil rights official during normal business hours to such of its books, records, accounts, and other sources of information, and its facilities, as may be pertinent to ascertain compliance with this part. Where any information required of a recipient is in the exclusive possession of any other agency, institution, or person and this agency, institution, or person shall fail or refuse to furnish this information, the recipient shall so certify in its report and shall set forth what efforts it has made to obtain the information. (d) <E T="03">Information to beneficiaries and participants.</E> Each recipient shall make available to participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the program or activity under which the recipient receives Federal financial assistance, and make such information available to them in such manner as the responsible civil rights official finds necessary to apprise such persons of the protections against discrimination assured them by this part. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.56</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> (a) <E T="03">Periodic compliance reviews.</E> The responsible civil rights official or designee may periodically review the practices of recipients to determine whether they are complying with this part and where he or she has a reasonable basis to do so may conduct on-site reviews. Such basis may include any evidence that a problem exists or that programmatic matters exist that justify on-site investigation in selected circumstances. The responsible civil rights official shall initiate an on-site review by sending to the recipient a letter advising the recipient of the practices to be reviewed; the programs affected by the review; and the opportunity, at any time prior to receipt of a final determination, to make a documentary or other submission that explains, validates, or otherwise addresses the practices under review. In addition, each award official shall include in normal program compliance reviews and monitoring procedures appropriate actions to review and monitor compliance with general or specific program requirements designed to effectuate the requirements of this part. (b) <E T="03">Investigations.</E> The responsible civil rights official shall make a prompt investigation whenever a compliance review, report, complaint or any other information indicates a possible failure to comply with this part. (c) <E T="03">Filing a complaint—</E>(1) <E T="03">Who may file.</E> Any person who believes that he or she has been subjected to discrimination prohibited by this part may by himself or herself or by his or her authorized representative file a complaint with the responsible civil rights official. Any person who believes that any specific class of persons has been subjected to discrimination prohibited <PRTPAGE P="99"/>by this part and who is a member of that class or who is the authorized representative of a member of that class may file a complaint with the responsible civil rights official. (2) <E T="03">Confidentiality.</E> The responsible civil rights official shall hold in confidence the identity of any person submitting a complaint, unless the person submits written authorization otherwise, and except to the extent necessary to carry out the purposes of this part, including the conduct of any investigation, hearing, or proceeding under this part. (3) <E T="03">When to file.</E> Complaints shall be filed within 180 days of the alleged act of discrimination, unless the responsible civil rights official waives this time limit for good cause shown. For purposes of determining when a complaint is filed under this paragraph, a complaint mailed to the Department shall be deemed filed on the date it is postmarked. Any other complaint shall be deemed filed on the date it is received by the Department. (4) <E T="03">Where to file complaints.</E> Complaints may be filed by mail with the Office of Fair Housing and Equal Opportunity, Department of Housing and Urban Development, Washington, DC 20410, or any Regional or Field Office of the Department. (5) <E T="03">Contents of complaints.</E> Each complaint should contain the complainant's name and address, the name and address of the recipient alleged to have violated this part, and a description of the recipient's alleged discriminatory action in sufficient detail to inform the Department of the nature and date of the alleged violation of this part. (6) <E T="03">Amendments of complaints.</E> Complaints may be reasonably and fairly amended at any time. Amendments to complaints such as clarification and amplification of allegations in a complaint or the addition of other recipients may be made at any time during the pendency of the complaint and any amendment shall be deemed to be made as of the original filing date. (d) <E T="03">Notification.</E> The responsible civil rights official will notify the complainant and the recipient of the agency's receipt of the complaint within ten (10) calendar days. (e) <E T="03">Complaint processing procedures.</E> After acknowledging receipt of a complaint, the responsible civil rights official will immediately initiate complaint processing procedures. (1) Preliminary investigation. (i) Within twenty (20) calendar days of acknowledgement of the complaint, the responsible civil rights official will review the complaint for acceptance, rejection, or referral to the appropriate Federal agency. (ii) If the complaint is accepted, the responsible civil rights official will notify the complainant and the award official. The responsible civil righs official will also notify the applicant or recipient complained against of the allegations and give the applicant or recipient an opportunity to make a written submission responding to, rebutting, or denying the allegations raised in the complaint. (iii) The party complained against may send the responsible civil rights official a response to the notice of complaint within thirty (30) calendar days of receiving it. With leave of the responsible civil rights official, an answer may be amended at any time. The responsible civil rights official will permit answers to be amended for good cause shown. (2) Informal resolution. In accordance with paragraph (j) of this section, the responsible civil rights official shall attempt to resolve complaints informally whenever possible. (f) <E T="03">Dismissal of complaint.</E> If the investigation reveals no violation of this part, the responsible civil rights offical will dismiss the complaint and notify the complainant and recipient. (g) <E T="03">Letter of findings.</E> If an informal resolution of the complaint is not reached the responsible civil rights official or his or her designee shall, within 180 days of receipt of the complaint, notify the recipient and the complainant (if any) of the results of the investigation in a letter sent by certified mail, return receipt requested, containing the following: (1) Preliminary findings of fact and a preliminary finding of compliance or noncompliance; (2) A description of an appropriate remedy for each violation believed to exist;<PRTPAGE P="100"/> (3) A notice that a copy of the Final Investigative Report of the Department will be made available, upon request, to the recipient and the complainant (if any); and (4) A notice of the right of the recipient and the complainant (if any) to request a review of the letter of findings by the reviewing civil rights official. (h) <E T="03">Right to review of the letter of findings.</E> (1) A complainant or recipient may request that a complete review be made of the letter of findings within 30 days of receipt, by mailing or delivering to the reviewing civil rights official, Office of Fair Housing and Equal Opportunity, Washington, DC 20410, a written statement of the reasons why the letter of findings should be modified in light of supplementary information. (2) The reviewing civil rights official shall send by certified mail, return receipt requested, a copy of the request for review to the other party, if any. Such other party shall have 20 days to respond to the request for review. (3) The reviewing civil rights official shall either sustain or modify the letter of findings within 60 days of the request for review. The reviewing civil rights official's decision shall constitute the formal determination. (4) If neither party requests that the letter of findings be reviewed, the responsibile civil rights official shall, within fourteen (14) calendar days of the expiration of the time period in paragraph (h)(1) of this section, send a formal written determination of compliance or noncompliance to the recipient and copies to the award official. (i) <E T="03">Voluntary compliance time limits.</E> The recipient will have ten (10) calendar days from receipt of the formal determination of noncompliance within which to come into voluntary compliance. If the recipient fails to meet this deadline, HUD shall proceed under § 8.57. (j) <E T="03">Informal resolution/voluntary compliance—</E>(1) <E T="03">General</E>. It is the policy of the Department to encourage the informal resolution of matters. The responsible civil rights official may attempt to resolve a matter through informal means at any stage of processing. A matter may be resolved by informal means at any time. If a letter of findings making a preliminary finding of noncompliance is issued, the responsible civil rights official shall attempt to resolve the matter by informal means. (2) <E T="03">Objectives of informal resolution/voluntary compliance.</E> In attempting informal resolution, the responsible civil rights official shall attempt to achieve a just resolution of the matter and to obtain assurances where appropriate, that the recipient will satisfactorily remedy any violations of the rights of any complainant and will take such action as will assure the elimination of any violation of this part or the prevention of the occurrence of such violation in the future. The terms of such an informal resolution shall be reduced to a written voluntary compliance agreement, signed by the recipient and the responsible civil rights official, and be made part of the file for the matter. Such voluntary compliance agreements shall seek to protect the interests of the complainant (if any), other persons similary situated, and the public interest. (k) <E T="03">Intimidatory or retaliatory acts prohibited.</E> No recipient or other person shall intimidate, threaten, coerce, or discriminate against any person for the purpose of interfering with any right or privilege secured by this part, or because he or she has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. The identity of complainants shall be kept confidential except to the extent necessary to carry out the purposes of this part, including the conduct of investigation, hearing or judicial proceeding arising thereunder. <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988; 53 FR 34634, Sept. 7, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.57</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> (a) <E T="03">General.</E> If there appears to be a failure or threatened failure to comply with this part and if the noncompliance or threatened noncompliance cannot be corrected by informal means, compliance with this part may be effected by the suspension or termination of or refusal to grant or to continue Federal financial assistance, or by other means authorized by law. <PRTPAGE P="101"/>Such other means may include, but are not limited to: (1) A referral to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States, or any assurance or other contractual undertaking; (2) The initiation of debarment proceedings pursuant to part 24 of this title; and (3) Any applicable proceeding under State or local law. (b) <E T="03">Noncompliance with § 8.50.</E> If an applicant or a recipient of assistance under a contract which is extended or amended on or after July 11, 1988, fails or refuses to furnish an assurance required under § 8.50 or otherwise fails or refuses to comply with the requirements imposed by that section, Federal financial assistance may be refused under paragraph (c) of this section. The Department is not required to provide assistance during the pendency of the administrative proceeding under such paragraph (c), except where the assistance is due and payable under a contract approved before July 11, 1988. (c) <E T="03">Termination of or refusal to grant or to continue Federal financial assistance.</E> No order suspending, terminating, or refusing to grant or continue Federal financial assistance shall become effective until: (1) The responsible civil rights official has advised the applicant or recipient of its failure to comply and has determined that compliance cannot be secured by voluntary means; (2) There has been an express finding on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed under this part; (3) The action has been approved by the Secretary; and (4) The expiration of 30 days after the Secretary has filed with the committees of the House and Senate having legislative jurisdiction over the program or activity involved a full written report of the circumstances and the grounds for such action. Any action to suspend or terminate, or to refuse to grant or to continue Federal financial assistance shall be limited to the particular political entity, or part thereof, or other applicant or recipient as to whom such a finding has been made and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found. (d) <E T="03">Notice to State or local government.</E> Whenever the Secretary determines that a State or unit of general local government which is a recipient of Federal financial assistance under title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301-5318) has failed to comply with a requirement of this part with respect to a program or activity funded in whole or in part with such assistance, the Secretary shall notify the Governor of the State or the chief executive officer of the unit of general local government of the noncompliance and shall request the Governor or the chief executive officer to secure compliance. The notice shall be given at least sixty days before: (1) An order suspending, terminating, or refusing to grant or continue Federal financial assistance becomes effective under paragraph (c) of this section; or (2) Any action to effect compliance by any other means authorized by law is taken under paragraph (a) of this section. (e) <E T="03">Other means authorized by law.</E> No action to effect compliance by any other means authorized by law shall be taken until: (1) The responsible civil rights official has determined that compliance cannot be secured by voluntary means; (2) The recipient or other person has been notified of its failure to comply and of the action to be taken to effect compliance; and (3) At least 10 days have elapsed since the mailing of such notice to the applicant or recipient. During this period, additional efforts shall be made to persuade the applicant or recipient to comply with this part and to take such corrective action as may be appropriate. <FP>However, this paragraph shall not be construed to prevent an award official from utilizing appropriate procedures and sanctions established under the program to assure or secure compliance with a specific requirement of the <PRTPAGE P="102"/>program designed to effectuate the objectives of this part.</FP> <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.58</SECTNO> <SUBJECT>Hearings.</SUBJECT> (a) <E T="03">Opportunity for hearing.</E> Whenever an opportunity for a hearing is required by § 8.57(c), reasonable notice shall be given by registered or certified mail, return receipt requested, to the affected applicant or recipient. This notice shall advise the applicant or recipient of the action proposed to be taken, the specific provision under which the proposed action against it is to be taken, and the matters of fact or law asserted as the basis for this action. The notice shall: (1) Fix a date not less than 20 days after the date of the notice for the applicant or recipient to request the administrative law judge to schedule a hearing, or (2) Advise the applicant or recipient that the matter has been scheduled for hearing at a stated time and place. The time and place so fixed shall be reasonable and shall be subject to change for cause. The complainant, if any, shall be advised of the time and place of the hearing. An applicant or recipient may waive a hearing and submit written information and argument for the record. The failure of an applicant or recipient to request a hearing under this paragraph or to appear at a hearing for which a date has been set is a waiver of the right to a hearing under § 8.57(c) and consent to the making of a decision on the basis of available information. (b) <E T="03">Hearing procedures.</E> Hearings shall be conducted in accordance with 24 CFR part 180. <CITA>[53 FR 20233, June 2, 1988, as amended at 61 FR 52218, Oct. 4, 1996]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 9</EAR> <HD SOURCE="HED">PART 9—ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF DISABILITY IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>9.101</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>9.102</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>9.103</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>9.110</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> <SECTNO>9.111</SECTNO> <SUBJECT>Notice.</SUBJECT> <SECTNO>9.112—9.129</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>9.130</SECTNO> <SUBJECT>General prohibitions against discrimination.</SUBJECT> <SECTNO>9.131</SECTNO> <SUBJECT>Direct threat.</SUBJECT> <SECTNO>9.132—9.139</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>9.140</SECTNO> <SUBJECT>Employment.</SUBJECT> <SECTNO>9.141—9.148</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>9.149</SECTNO> <SUBJECT>Program accessibility: discrimination prohibited.</SUBJECT> <SECTNO>9.150</SECTNO> <SUBJECT>Program accessibility: existing facilities.</SUBJECT> <SECTNO>9.151</SECTNO> <SUBJECT>Program accessibility: new construction and alterations.</SUBJECT> <SECTNO>9.152</SECTNO> <SUBJECT>Program accessibility: alterations of Property Disposition Program multifamily housing facilities.</SUBJECT> <SECTNO>9.153</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> <SECTNO>9.154</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> <SECTNO>9.155</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> <SECTNO>9.160</SECTNO> <SUBJECT>Communications.</SUBJECT> <SECTNO>9.170</SECTNO> <SUBJECT>Compliance procedures.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 29 U.S.C. 794; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 59 FR 31047, June 16, 1994, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 9.101</SECTNO> <SUBJECT>Purpose.</SUBJECT> The purpose of this part is to effectuate section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of disability in programs or activities conducted by Executive agencies or the United States Postal Service. </SECTION> <SECTION> <SECTNO>§ 9.102</SECTNO> <SUBJECT>Applicability.</SUBJECT> This part applies to all programs or activities conducted by the agency, except for programs or activities conducted outside the United States that do not involve individuals with disabilities in the United States. </SECTION> <SECTION> <SECTNO>§ 9.103</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this part: <E T="03">Accessible:</E> (1) When used with respect to the design, construction, or alteration of a facility or a portion of a facility other than an individual dwelling unit, means that the facility or portion of the facility when designed, constructed or altered, complies with applicable accessibility standards and can be approached, entered, and used <PRTPAGE P="103"/>by individuals with physical disabilities. The phrase “accessible to and usable by” is synonymous with accessible. (2) When used with respect to the design, construction, or alteration of an individual dwelling unit, means that the unit is located on an accessible route and, when designed, constructed, altered or adapted, complies with applicable accessibility standards, and can be approached, entered, and used by individuals with physical disabilities. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in § 9.151 is “accessible” within the meaning of this definition. When a unit in an existing facility which is being made accessible as a result of alterations is intended for use by a specific qualified individual with disabilities (e.g., a current occupant of such unit or of another unit under the control of the same agency, or an applicant on a waiting list), the unit will be deemed accessible if it meets the requirements of applicable standards that address the particular disability or impairment of such person. <E T="03">Accessible route</E> means a continuous unobstructed path connecting accessible elements and spaces of a building or facility. Interior accessible routes may include corridors, floors, ramps, elevators, lifts, and clear floor space at fixtures. Exterior accessible routes may include parking access aisles, curb ramps, crosswalks at vehicular ways, walks, ramps and lifts. <E T="03">ADA</E> means the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 through 12213) <E T="03">ADA Accessibility Guidelines (ADAAG)</E> means the Accessibility Guidelines issued under the ADA, and which are codified in the Appendix to 39 CFR part 1191. <E T="03">Adaptability</E> means the ability of certain building, spaces and elements, such as kitchen counters, sinks, and grab bars, to be added or altered, to accommodate the needs of persons with or without disabilities, or to accommodate the needs of persons with different types or degrees of disability. For example, in a unit adaptable for a person with impaired hearing, the wiring for visible emergency alarms may be installed but the alarms need not be installed until such time as the unit is made ready for occupancy by a person with impaired hearing. <E T="03">Agency</E> means the Department of Housing and Urban Development. <E T="03">Alteration</E> means a change to a building or facility or its permanent fixtures or equipment that affects or could affect the usability of the building or facility or part thereof. Alterations include, but are not limited to, remodeling, renovation, rehabilitation, reconstruction, historic restoration, changes or rearrangements of the structural parts and changes or rearrangements in the plan configuration of walls and full-height partitions. Normal maintenance, re-roofing, painting, or wallpapering or changes to mechanical and electrical systems are not alterations unless they affect the usability of the building or facility. <E T="03">Assistant Attorney General</E> means the Assistant Attorney General, Civil Rights Division, United States Department of Justice. <E T="03">Assistant Secretary</E> means the Assistant Secretary of Housing and Urban Development for Fair Housing and Equal Opportunity. <E T="03">Auxiliary aids</E> means services or devices that enable persons with impaired sensory, manual, or communication skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the agency. For example, auxiliary aids useful for persons with impaired vision include readers, Brailled materials, audio recordings, and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD's), interpreters, note takers, written materials, and other similar services and devices. <E T="03">Complete complaint</E> means a written statement that contains the complainant's name and address and describes the agency's alleged discriminatory action in sufficient detail to inform the agency of the nature and date of the alleged violation of section 504. It shall be signed by the complainant or by someone authorized to do so on his or <PRTPAGE P="104"/>her behalf. Complaints filed on behalf of classes or third parties shall describe or identify (by name, if possible) the alleged victims of discrimination. <E T="03">Current illegal use of drugs</E> means illegal use of drugs that occurred recently enough to justify a reasonable belief that a person's drug use is current or that continuing use is a real and ongoing problem. <E T="03">Drug</E> means a controlled substance, as defined in schedules I through V of section 202 of the Controlled Substances Act (21 U.S.C. 812). <E T="03">Facility</E> means all or any portion of buildings, structures, site improvements, complexes, equipment, roads, walks, passageways, parking lots, rolling stock or other conveyances, or other real or personal property located on a site. <E T="03">Historic properties</E> means those properties that are listed or are eligible for listing in the National Register of Historic Places, or such properties designated as historic under a statute of the appropriate State or local government body. <E T="03">Illegal use of drugs</E> means the use of one or more drugs, the possession or distribution of which is unlawful under the Controlled Substances Act (21 U.S.C. 812). The term “illegal use of drugs” does not include the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law. <E T="03">Individual with disabilities</E> means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. As used in this definition, the phrase: (1) “Physical or mental impairment” includes: (i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or (ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term “physical or mental impairment” includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, Human Immunodeficiency Virus disease (symptomatic or asymptomatic), mental retardation, emotional illness, drug addiction and alcoholism. (2) The term “individual with disabilities” does not include: (i) An individual who is currently engaging in the illegal use of drugs, when the agency acts on the basis of such use. This exclusion, however, does not exclude an individual with disabilities who— (A) Has successfully completed a supervised drug rehabilitation program, and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully, and is no longer engaging in such use; (B) Is participating in a supervised rehabilitation program, and is no longer engaging in such use; or (C) Is erroneously regarded as engaging in such use, but is not engaging in such use. (ii) Except that it shall not violate this part for the agency to adopt or administer reasonable policies and procedures, including but not limited to drug testing, designed to ensure than an individual described in paragraphs (2)(i) (A) and (B) of this definition is no longer engaging in the illegal use of drugs. (iii) Nothing in paragraph (2) of this definition shall be construed to encourage, prohibit, restrict or authorize the conduct of testing for illegal use of drugs. (iv) The agency shall not deny health services provided under titles I, II and III of the Rehabilitation Act of 1973 (29 U.S.C. 701 through 777f) to an individual with disabilities on the basis of that individual's current illegal use of drugs, if the individual is otherwise entitled to such services. (3) For purposes of employment, the term “individual with disabilities” does not include:<PRTPAGE P="105"/> (i) An individual who has a currently contagious disease or infection and who, by reason of such disease or infection— (A) Has been determined, in accordance with the provisions of § 9.131, to pose a direct threat to the health or safety of other individuals, which threat cannot be eliminated or reduced by reasonable accommodation, or (B) Is unable to perform the essential duties of the job, with or without reasonable accommodation; or (ii) An individual who is an alcoholic and whose current use of alcohol prevents him or her from performing the duties of the job in question or whose employment would constitute a direct threat to the property or the safety of others by reason of his or her current alcohol abuse. (4) “Major life activities” means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working. (5) “Has a record of such an impairment” means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities. (6) “Is regarded as having an impairment” means— (i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the agency as constituting such a limitation; (ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or (iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the agency as having such an impairment. <E T="03">Multifamily housing project</E> means a project containing five or more dwelling units. <E T="03">Official or Responsible Official</E> means the Assistant Secretary of HUD for Fair Housing and Equal Opportunity. <E T="03">PDP housing facility</E> means a housing facility administered under HUD's Property Disposition Program. <E T="03">Project</E> means the whole of one or more residential structures and appurtenant structures, equipment, roads, walks, and parking lots which are covered by a single mortgage or contract or otherwise treated as a whole by the agency for processing purposes, whether or not located on a common site. <E T="03">Property Disposition Program (PDP)</E> means the HUD program which administers the housing facilities that are either owned by the Secretary or where, even though the Secretary has not obtained title, the Secretary is mortgagee-in-possession. Such properties are deemed to be in the possession or control of the agency. <E T="03">Qualified individual with disabilities</E> means: (1) With respect to any agency non-employment program or activity under which a person is required to perform services or to achieve a level of accomplishment, an individual with disabilities who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the agency can demonstrate would result in a fundamental alteration in its nature; or (2) With respect to any other agency non-employment program or activity, an individual with disabilities who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity. (3) “Essential eligibility requirements” include stated eligibility requirements such as income, as well as other explicit or implicit requirements inherent in the nature of the program or activity, such as requirements that an occupant of a PDP multifamily housing facility be capable of meeting selection criteria and be capable of complying with all obligations of occupancy with or without supportive services provided by persons other than the agency. (4) “Qualified person with disabilities” as that term is defined for purposes of employment in 29 CFR 1613.702(f), which is made applicable to this part by § 9.140. <E T="03">Replacement cost of the completed facility</E> means the current cost of construction and equipment for a newly constructed housing facility of the size and type being altered. Construction <PRTPAGE P="106"/>and equipment costs do not include the cost of land, demolition, site improvements, non-dwelling facilities and administrative costs for project development activities. <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. <E T="03">Section 504</E> means section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794). As used in this part, section 504 applies only to programs or activities conducted by the agency and not to federally assisted programs. <E T="03">Substantial impairment</E> means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration. <E T="03">UFAS</E> means the Uniform Federal Accessibility Standards, which implement the accessibility standards required by the Architectural Barriers Act (42 U.S.C. 4151 through 4157), and which are established at 24 CFR part 40, Appendix A for residential structures, and 41 CFR 101-19.600 through 101-19.607, and Appendix A to these sections, for non-residential structures. </SECTION> <SECTION> <SECTNO>§ 9.110</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> (a) The agency shall, within one year of the effective date of this part, evaluate its current policies and practices, and the effects of those policies and practices, including regulations, handbooks, notices and other written guidance, that do not or may not meet the requirements of this part. To the extent modification of any such policies is required, the agency shall take the necessary corrective actions. (b) The agency shall provide an opportunity to interested persons, including individuals with disabilities or organizations representing individuals with disabilities, to participate in the self-evaluation process by submitting comments (both oral and written). (c) The agency shall, for at least three years following the completion of the self-evaluation, maintain on file and make available for public inspection: (1) A list of interested persons; (2) A description of the areas examined and any problems identified; and (3) A description of any modifications made or to be made. </SECTION> <SECTION> <SECTNO>§ 9.111</SECTNO> <SUBJECT>Notice.</SUBJECT> The agency shall make available to employees, applicants, participants, beneficiaries, and other interested persons information regarding the provisions of this part and its applicability to the programs or activities conducted by the agency. The agency shall make such information available to such persons in such manner as the Secretary finds necessary to apprise them of the protections against discrimination assured them by section 504 and this part. All publications and recruitment materials distributed to participants, beneficiaries, applicants or employees shall include a statement that the agency does not discriminate on the basis of disability. The notice shall include the name of the person or office responsible for the implementation of section 504. </SECTION> <SECTION> <SECTNO>§§ 9.112-9.129</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 9.130</SECTNO> <SUBJECT>General prohibitions against discrimination.</SUBJECT> (a) No qualified individual with disabilities shall, on the basis of disability, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the agency. (b)(1) The agency, in providing any housing, aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of disability— (i) Deny a qualified individual with disabilities the opportunity to participate in or benefit from the housing, aid, benefit, or service; (ii) Afford a qualified individual with disabilities an opportunity to participate in or benefit from the housing, aid, benefit, or service that is not equal to that afforded others; (iii) Provide a qualified individual with disabilities with any housing, aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others; (iv) Provide different or separate housing, aid, benefits, or services to individuals with disabilities or to any <PRTPAGE P="107"/>class of individuals with disabilities than is provided to others unless such action is necessary to provide qualified individuals with disabilities with housing, aid, benefits, or services that are as effective as those provided to others; (v) Deny a qualified individual with disabilities the opportunity to participate as a member of planning or advisory boards; (vi) Deny a dwelling to an otherwise qualified buyer or renter because of a disability of that buyer or renter or a person residing in or intending to reside in that dwelling after it is sold, rented or made available; or (vii) Otherwise limit a qualified individual with disabilities in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the housing, aid, benefit, or service. (2) For purposes of this part, housing, aids, benefits, and services, to be equally effective, are not required to produce the identical result or level of achievement for individuals with disabilities and for persons without disabilities, but must afford individuals with disabilities equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement. (3) The agency may not deny a qualified individual with disabilities the opportunity to participate in programs or activities that are not separate or different, despite the existence of programs or activities that are permissibly separate or different for persons with disabilities. (4) The agency may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would: (i) Subject qualified individuals with disabilities to discrimination on the basis of disability; or (ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to individuals with disabilities. (5) The agency may not, in determining the site or location of a facility, make selections the purpose or effect of which would: (i) Exclude individuals with disabilities from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the agency; or (ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to individuals with disabilities. (6) The agency, in the selection of procurement contractors, may not use criteria that subject qualified individuals with disabilities to discrimination on the basis of disability. (7) The agency may not administer a licensing or certification program in a manner that subjects qualified individuals with disabilities to discrimination on the basis of disability, nor may the agency establish requirements for the programs or activities of licensees or certified entities that subject qualified individuals with disabilities to discrimination on the basis of disability. However, the programs or activities of entities that are licensed or certified by the agency are not, themselves, covered by this part. (c)(1) Notwithstanding any other provision of this part, persons without disabilities may be excluded from the benefits of a program if the program is limited by Federal statute or Executive order to individuals with disabilities. A specific class of individuals with disabilities may be excluded from a program if the program is limited by Federal statute or Executive order to a different class of individuals. (2) Certain agency programs operate under statutory definitions of “persons with disabilities” that are more restrictive than the definition of “individual with disabilities” contained in § 9.103. Those definitions are not superseded or otherwise affected by this regulation. (d) The agency shall administer programs and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities. (e) The obligation to comply with this part is not obviated or alleviated by any State or local law or other requirement that, based on disability, imposes inconsistent or contradictory prohibitions or limits upon the eligibility of qualified individuals with disabilities to receive services or to practice any occupation or profession.<PRTPAGE P="108"/> (f) The enumeration of specific forms of prohibited discrimination in paragraphs (b) and (d) of this section does not limit the general prohibition in paragraph (a) of this section. <SECTNO>§ 9.131</SECTNO> <SUBJECT>Direct threat.</SUBJECT> (a) This part does not require the agency to permit an individual to participate in, or benefit from the goods, services, facilities, privileges, advantages and accommodations of that agency when that individual poses a direct threat to the health or safety of others. (b) “Direct threat” means a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices, or procedures, or by the provision of auxiliary aids or services. (c) In determining whether an individual poses a direct threat to the health or safety of others, the agency must make an individualized assessment, based on reasonable judgment that relies on current medical knowledge or on the best available objective evidence to ascertain: the nature, duration, and severity of the risk; the probability that the potential injury will actually occur; and whether reasonable modifications of policies, practices, or procedures will mitigate the risk. </SECTION> <SECTION> <SECTNO>§§ 9.132—9.139</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 9.140</SECTNO> <SUBJECT>Employment.</SUBJECT> No qualified individual with disabilities shall, on the basis of disability, be subjected to discrimination in employment under any program or activity conducted by the agency. The definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1613 (subpart G), shall apply to employment in federally conducted programs or activities. </SECTION> <SECTION> <SECTNO>§§ 9.141—9.148</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 9.149</SECTNO> <SUBJECT>Program accessibility: discrimination prohibited.</SUBJECT> Except as otherwise provided in § 9.150, no qualified individual with disabilities shall, because the agency's facilities are inaccessible to or unusable by individuals with disabilities, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the agency. </SECTION> <SECTION> <SECTNO>§ 9.150</SECTNO> <SUBJECT>Program accessibility: existing facilities.</SUBJECT> (a) <E T="03">General.</E> Except as otherwise provided in paragraph (e) of this section, the agency shall operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with disabilities. This section does not— (1) Necessarily require the agency to make each of its existing facilities accessible to and usable by individuals with disabilities; (2) In the case of historic properties, require the agency to take any action that would result in a substantial impairment of significant historic features of an historic property; or (3) Require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 9.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the Secretary or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that individuals with disabilities receive the benefits and services of the program or activity.<PRTPAGE P="109"/> (b) <E T="03">Methods.</E> The agency may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any other methods that result in making its programs or activities readily accessible to and usable by individuals with disabilities. The agency is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. The agency, in making alterations to existing buildings, also shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151 through 4157), and any regulations implementing it. In choosing among available methods for meeting the requirements of this section, the agency shall give priority to those methods that offer programs and activities to qualified individuals with disabilities in the most integrated setting appropriate. (c) <E T="03">Time period for compliance.</E> The agency shall comply with the obligations established under this section within sixty days of July 18, 1994 except that where structural changes in facilities are undertaken, such changes shall be made within three years of July 18, 1994, but in any event as expeditiously as possible. (d) <E T="03">Transition plan.</E> In the event that structural changes to facilities will be undertaken to achieve program accessibility, the agency shall develop, within six months of July 18, 1994, a transition plan setting forth the steps necessary to complete such changes. The agency shall provide an opportunity to interested persons, including individuals with disabilities or organizations representing individuals with disabilities, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum— (1) Identify physical obstacles in the agency's facilities that limit the accessibility of its programs or activities to individuals with disabilities; (2) Describe in detail the methods that will be used to make the facilities accessible; (3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and (4) Indicate the official responsible for implementation of the plan. (e) The requirements of paragraphs (a), (b), and (c) of this section shall apply to the Property Disposition Programs. However, this section does not require HUD to make alterations to existing facilities that are part of the Property Disposition Programs unless such alterations are necessary to meet the needs of a current or prospective tenant during the time when HUD expects to retain legal possession of the facilities, and there is no alternative method to meet the needs of that current or prospective tenant. Nothing in this section shall be construed to require alterations to make facilities accessible to persons with disabilities who are expected to occupy the facilities only after HUD relinquishes legal possession. </SECTION> <SECTION> <SECTNO>§ 9.151</SECTNO> <SUBJECT>Program accessibility: new construction and alterations.</SUBJECT> Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the agency shall be designed, constructed, or altered and provide emergency egress so as to be readily accessible to and usable by individuals with disabilities. The definitions, requirements, and accessibility standards that apply to buildings covered by this section are those contained in the UFAS, except where the ADAAG provides for greater accessibility for the type of construction or alteration being undertaken, and in this case, the definitions, requirements and standards of the ADAAG shall apply. </SECTION> <SECTION> <PRTPAGE P="110"/> <SECTNO>§ 9.152</SECTNO> <SUBJECT>Program accessibility: alterations of Property Disposition Program multifamily housing facilities.</SUBJECT> (a) <E T="03">Substantial alteration.</E> If the agency undertakes alterations to a PDP multifamily housing project that has 15 or more units and the cost of the alterations is 75 percent or more of the replacement cost of the completed facility, then the project shall be designed and altered to be readily accessible to and usable by individuals with disabilities. Subject to paragraph (c) of this section, a minimum of five percent of the total dwelling units, or at least one unit, whichever is greater, shall be made accessible for persons with mobility impairments. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in paragraph (d) of this section is accessible for purposes of this section. An additional two percent of the units (but not less that one unit) in such a project shall be accessible for persons with hearing or vision impairments. If state or local requirements for alterations require greater action than this paragraph, those requirements shall prevail. (b) <E T="03">Other alteration.</E> (1) Subject to paragraph (c) of this section, alterations to dwelling units in a PDP multifamily housing project shall, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with disabilities. If alterations of single elements or spaces of a dwelling unit, when considered together, amount to an alteration of a dwelling unit, the entire dwelling unit shall be made accessible. Once five percent of the dwelling units in a project are readily accessible to and usable by individuals with mobility impairments, then no additional elements of dwelling units, or entire dwelling units, are required to be accessible under this paragraph. Once two percent of the dwelling units in a project are readily accessible to or usable by individuals with hearing or vision impairments, then no additional elements of dwelling units, or entire dwelling units, are required to be accessible under this paragraph. (2) Alterations to common areas or parts of facilities that affect accessibility of existing housing facilities, shall, to the maximum extent feasible, be made to be accessible to and usable by individuals with disabilities. (c) The agency may establish a higher percentage or number of accessible units than that prescribed in paragraphs (a) or (b) of this section if the agency determines that there is a need for a higher percentage or number, based on census data or other available current data. In making such a determination, HUD shall take into account the expected needs of eligible persons with and without disabilities. (d) The definitions, requirements, and accessibility standards that apply to PDP multifamily housing projects covered by this section are those contained in the UFAS, except where the ADAAG provides for greater accessibility for the type of alteration being undertaken, and, in this case, the definitions, requirements and standards of the ADAAG shall apply. (e) With respect to multifamily housing projects operated by HUD, but in which HUD does not have an ownership interest, alterations under this section need not be made if doing so would impose undue financial and administrative burdens on the operation of the multifamily housing project. </SECTION> <SECTION> <SECTNO>§ 9.153</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> Accessible dwelling units required by § 9.152 shall, to the maximum extent feasible, be distributed throughout projects and sites and shall be available in a sufficient range of sizes and amenities so that a qualified individual with disabilities’ choice of living arrangements is, as a whole, comparable to that of other persons eligible for housing assistance under the same agency conducted program. This provision shall not be construed to require (but does allow) the provision of an elevator in any multifamily housing project solely for the purpose of permitting location of accessible units above or below the accessible grade level. </SECTION> <SECTION> <SECTNO>§ 9.154</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> (a) The agency shall adopt suitable means to assure that information regarding the availability of accessible <PRTPAGE P="111"/>units in PDP housing facilities reaches eligible individuals with disabilities, and shall take reasonable nondiscriminatory steps to maximize the utilization of such units by eligible individuals whose disability requires the accessibility features of the particular unit. To this end, when an accessible unit becomes vacant, the agency (or its management agent) before offering such units to an applicant without disabilities shall offer such unit: (1) First, to a current occupant of another unit of the same project, or comparable projects under common control, having disabilities requiring the accessibility features of the vacant unit and occupying a unit not having such features, or, if no such occupant exists, then (2) Second, to an eligible qualified applicant on the waiting list having a disability requiring the accessibility features of the vacant unit. (b) When offering an accessible unit to an applicant not having disabilities requiring the accessibility features of the unit, the agency may require the applicant to agree (and may incorporate this agreement in the lease) to move to a non-accessible unit when available. </SECTION> <SECTION> <SECTNO>§ 9.155</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> (a) The agency shall modify its housing policies and practices as they relate to PDP housing facilities to ensure that these policies and practices do not discriminate, on the basis of disability, against a qualified individual with disabilities. The agency may not impose upon individuals with disabilities other policies, such as the prohibition of assistive devices, auxiliary aids, alarms, or guides in housing facilities, that have the effect of limiting the participation of tenants with disabilities in any agency conducted housing program or activity in violation of this part. Housing policies that the agency can demonstrate are essential to the housing program or activity will not be regarded as discriminatory within the meaning of this section if modifications would result in a fundamental alteration in the nature of the program or activity or undue financial and administrative burdens. (b) The decision that compliance would result in such alteration or burdens must be made by the Secretary or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with disabilities receive the benefits and services of the program or activity. </SECTION> <SECTION> <SECTNO>§ 9.160</SECTNO> <SUBJECT>Communications.</SUBJECT> (a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public. (1) The agency shall furnish appropriate auxiliary aids where necessary to afford an individual with disabilities an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency. (i) In determining what type of auxiliary aid is necessary, the agency shall give primary consideration to the requests of the individual with disabilities. (ii) The agency need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature. (2) Where the agency communicates with applicants and beneficiaries or members of the public by telephone, telecommunication devices for deaf persons (TDD's) or equally effective telecommunication systems shall be used to communicate with persons with impaired hearing. (b) The agency shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities. (c) The agency shall provide signage at a primary entrance to each of its inaccessible facilities, directing users to <PRTPAGE P="112"/>a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility. (d) This section does not require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with this section would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the Secretary or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with § 9.160 would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with disabilities receive the benefits and services of the program or activity. </SECTION> <SECTION> <SECTNO>§ 9.170</SECTNO> <SUBJECT>Compliance procedures.</SUBJECT> (a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of disability in programs or activities conducted by the agency. (b) The agency shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1613 under section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791). (c) The Responsible Official shall coordinate implementation of this section. (d) Persons may submit complete complaints to the Assistant Secretary for Fair Housing and Equal Opportunity, 451 Seventh St., SW., Washington, DC 20410, or to any HUD Area Office. The agency shall accept and investigate all complete complaints for which the agency has jurisdiction. All complete complaints shall be filed within 180 days of the alleged act of discrimination. The agency may extend this time period for good cause. For purposes of determining when a complaint is filed, a complaint mailed to the agency shall be deemed filed on the date it is postmarked. Any other complaint shall be deemed filed on the date it is received by the agency. The agency shall acknowledge all complaints, in writing, within ten (10) working days of receipt of the complaint. (e) If the agency receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate Government entity. (f) The agency shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151 through 4157), is not readily accessible to and usable by individuals with disabilities. The agency shall delete the identity of the complainant from the copy of the complaint. (g)(1) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the Office of Fair Housing and Equal Opportunity shall complete the investigation of the complaint, attempt informal resolution, and if no informal resolution is achieved, issue a letter of findings. If a complaint is filed against the Office of Fair Housing and Equal Opportunity, the Secretary or a designee of the Secretary shall investigate and resolve the complaint through informal agreement or letter of findings. (2) If a complaint is resolved informally, the terms of the agreement shall be reduced to writing and made part of the complaint file, with a copy of the agreement provided to the complainant and the agency. The written agreement may include a finding on the issue of discrimination and shall describe any corrective action to which <PRTPAGE P="113"/>the complainant and the respondent have agreed. (3) If a complaint is not resolved informally, the Office of Fair Housing and Equal Opportunity or a person designated under this paragraph shall notify the complainant of the results of the investigation in a letter containing— (i) Findings of fact and conclusions of law; (ii) A description of a remedy for each violation found; (iii) A notice of the right to appeal to the Secretary; (h)(1) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the agency of the letter required by § 9.170(g). The Assistant Secretary or the person designated by the Secretary to decide an appeal of a complaint filed against the Office of Fair Housing and Equal Opportunity may extend this time for good cause. (2) Timely appeals shall be accepted and processed by the Assistant Secretary. Decisions on an appeal shall not be issued by the person who made the initial determination. (i) The Assistant Secretary or the person designated by the Secretary to decide an appeal of a complaint filed against the Office of Fair Housing and Equal Opportunity shall notify the complainant of the results of the appeal within 60 days of the receipt of the request. If the agency determines that it needs additional information from the complainant, it shall have 60 days from the date it receives the additional information to make its determination on the appeal. (j) The time limits cited in paragraphs (g) and (i) of this section may be extended with the permission of the Assistant Attorney General. (k) The agency may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated to another agency. </SECTION> </PART> <PART> <EAR>Pt. 10</EAR> <HD SOURCE="HED">PART 10—RULEMAKING: POLICY AND PROCEDURES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>10.1</SECTNO> <SUBJECT>Policy.</SUBJECT> <SECTNO>10.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>10.3</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>10.4</SECTNO> <SUBJECT>Rules docket.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Procedures</HD> <SECTNO>10.6</SECTNO> <SUBJECT>Initiation of rulemaking.</SUBJECT> <SECTNO>10.7</SECTNO> <SUBJECT>Advance Notice of Proposed Rulemaking.</SUBJECT> <SECTNO>10.8</SECTNO> <SUBJECT>Notice of proposed rulemaking.</SUBJECT> <SECTNO>10.10</SECTNO> <SUBJECT>Participation by interested persons.</SUBJECT> <SECTNO>10.12</SECTNO> <SUBJECT>Additional rulemaking proceedings.</SUBJECT> <SECTNO>10.14</SECTNO> <SUBJECT>Hearings.</SUBJECT> <SECTNO>10.16</SECTNO> <SUBJECT>Adoption of a final rule.</SUBJECT> <SECTNO>10.18</SECTNO> <SUBJECT>Petitions for reconsideration.</SUBJECT> <SECTNO>10.20</SECTNO> <SUBJECT>Petition for rulemaking.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 44 FR 1606, Jan. 5, 1979, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 10.1</SECTNO> <SUBJECT>Policy.</SUBJECT> It is the policy of the Department of Housing and Urban Development to provide for public participation in rulemaking with respect to all HUD programs and functions, including matters that relate to public property, loans, grants, benefits, or contracts even though such matters would not otherwise be subject to rulemaking by law or Executive policy. The Department therefore publishes notices of proposed rulemaking in the <E T="04">Federal Register</E> and gives interested persons an opportunity to participate in the rulemaking through submission of written data, views, and arguments with or without opportunity for oral presentation. It is the policy of the Department that its notices of proposed rulemaking are to afford the public not less than sixty days for submission of comments. For some rules the Secretary will employ additional methods of inviting public participation. These methods include, but are not limited to, publishing Advance Notices of Proposed Rulemaking (ANPR), conducting public surveys, and convening public forums or panels. <PRTPAGE P="114"/>An ANPR will be used to solicit public comment early in the rulemaking process for significant rules unless the Secretary grants an exception based upon legitimate and pressing time constraints. Unless required by statute, notice and public procedure will be omitted if the Department determines in a particular case or class of cases that notice and public procedure are impracticable, unnecessary or contrary to the public interest. In a particular case, the reasons for the determination shall be stated in the rulemaking document. Notice and public procedure may also be omitted with respect to statements of policy, interpretative rules, rules governing the Department's organization or its own internal practices or procedures, or if a statute expressly so authorizes. A final substantive rule will be published not less than 30 days before its effective date, unless it grants or recognizes an exemption or relieves a restriction or unless the rule itself states good cause for taking effect upon publication or less than 30 days thereafter. Statements of policy and interpretative rules will usually be made effective on the date of publication. <CITA>[44 FR 1606, Jan. 5, 1979, as amended at 47 FR 56625, Dec. 20, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 10.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) <E T="03">Rule</E> or <E T="03">Regulation</E> means all or part of any Departmental statement of general or particular applicability and future effect designed to: (1) Implement, interpret, or prescribe law or policy, or (2) describe the Department's organization, or its procedure or practice requirements. The term <E T="03">regulation</E> is sometimes applied to a rule which has been published in the <E T="03">Code of Federal Regulations</E>. (b) <E T="03">Rulemaking</E> means the Departmental process for considering and formulating the issuance, modification, or repeal of a rule. (c) <E T="03">Secretary</E> means the Secretary or the Under Secretary of Housing and Urban Development, or an official to whom the Secretary has expressly delegated authority to issue rules. </SECTION> <SECTION> <SECTNO>§ 10.3</SECTNO> <SUBJECT>Applicability.</SUBJECT> (a) This part prescribes general rulemaking procedures for the issuance, amendment, or repeal of rules in which participation by interested persons is required by 5 U.S.C. or by Department policy. (b) The authority to issue rules, delegated by the Secretary, may not be redelegated unless expressly permitted. (c) This part is not applicable to a determination by HUD under 24 CFR part 966 (public housing) or 24 CFR part 950 (Indian housing) that the law of a jurisdiction requires that, prior to eviction, a tenant be given a hearing in court which provides the basic elements of due process (“due process determination”). <CITA>[44 FR 1606, Jan. 5, 1979, as amended at 61 FR 13273, Mar. 26, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 10.4</SECTNO> <SUBJECT>Rules docket.</SUBJECT> (a) All documents relating to rulemaking procedures including but not limited to advance notices of proposed rulemaking, notices of proposed rulemaking, written comments received in response to notices, withdrawals or terminations of proposed rulemaking, petitions for rulemaking, requests for oral argument in public participation cases, requests for extension of time, grants or denials of petitions or requests, transcripts or minutes of informal hearings, final rules and general notices are maintained in the Rules Docket Room (Room 5218), Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. All public rulemaking comments should refer to the docket number which appears in the heading of the rule and should be addressed to the Rules Docket Clerk, Room 5218, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. (b) Documents relating to rulemaking proceedings are public records. After a docket is established, any person may examine docketed material at any time during regular business hours, and may obtain a copy of any docketed material upon payment of the prescribed fee. (See part 15 of this title). </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="115"/> <HD SOURCE="HED">Subpart B—Procedures</HD> <SECTION> <SECTNO>§ 10.6</SECTNO> <SUBJECT>Initiation of rulemaking.</SUBJECT> Rulemaking proceedings may be initiated on the Secretary's motion, or on the recommendation of a Federal, State, or local government or government agency, or on the petition of any interested person. </SECTION> <SECTION> <SECTNO>§ 10.7</SECTNO> <SUBJECT>Advance Notice of Proposed Rulemaking.</SUBJECT> An Advance Notice of Proposed Rulemaking issued in accordance with § 10.1 of this part is published in the <E T="04">Federal Register</E> and briefly outlines: (a) The proposed new program or program changes, and why they are needed; (b) The major policy issues involved; (c) A request for comments, both specific and general, as to the need for the proposed rule and the provisions that the rule might include; (d) If appropriate, a list of questions about the proposal that will elicit detailed comments; (e) If known, an estimate of the reporting or recordkeeping requirements, if any, that the rule would impose; and (f) Where comments should be addressed and the time within which they must be submitted. </SECTION> <SECTION> <SECTNO>§ 10.8</SECTNO> <SUBJECT>Notice of proposed rulemaking.</SUBJECT> Each notice of proposed rulemaking required by statute or by § 10.1 is published in the <E T="04">Federal Register</E> and includes: (a) The substance or terms of the proposed rule or a description of the subject matter and issues involved; (b) A statement of how and to what extent interested persons may participate in the proceeding; (c) Where participation is limited to written comments, a statement of the time within which such comments must be submitted; (d) A reference to the legal authority under which the proposal is issued; and (e) In a proceeding which has provided Advance Notice of Proposed Rulemaking, an analysis of the principal issues and recommendations raised by the comments, and the manner in which they have been addressed in the proposed rulemaking. </SECTION> <SECTION> <SECTNO>§ 10.10</SECTNO> <SUBJECT>Participation by interested persons.</SUBJECT> (a) Unless the notice otherwise provides, any interested person may participate in rulemaking proceedings by submitting written data, views or arguments within the comment time stated in the notice. In addition, the Secretary may permit the filing of comments in response to original comments. (b) In appropriate cases, the Secretary may provide for oral presentation of views in additional proceedings described in § 10.12. </SECTION> <SECTION> <SECTNO>§ 10.12</SECTNO> <SUBJECT>Additional rulemaking proceedings.</SUBJECT> The Secretary may invite interested persons to present oral arguments, appear at informal hearings, or participate in any other procedure affording opportunity for oral presentation of views. The transcript or minutes of such meetings, as appropriate, will be kept and filed in the Rules Docket. </SECTION> <SECTION> <SECTNO>§ 10.14</SECTNO> <SUBJECT>Hearings.</SUBJECT> (a) The provisions of 5 U.S.C. 556 and 557, which govern formal hearings in adjudicatory proceedings, do not apply to informal rule making proceedings described in this part. When opportunity is afforded for oral presentation, such informal <E T="03">hearing</E> is a nonadversary, fact-finding proceeding. Any rule issued in a proceeding under this part in which a hearing is held is not based exclusively on the record of such hearing. (b) When a hearing is provided, the Secretary will designate a representative to conduct the hearing, and if the presence of a legal officer is desirable, the General Counsel will designate a staff attorney to serve as the officer. </SECTION> <SECTION> <SECTNO>§ 10.16</SECTNO> <SUBJECT>Adoption of a final rule.</SUBJECT> All timely comments are considered in taking final action on a proposed rule. Each preamble to a final rule will contain a short analysis and evaluation of the relevant significant issues set forth in the comments submitted, and a clear concise statement of the basis and purpose of the rule. </SECTION> <SECTION> <PRTPAGE P="116"/> <SECTNO>§ 10.18</SECTNO> <SUBJECT>Petitions for reconsideration.</SUBJECT> Petitions for reconsideration of a final rule will not be considered. Such petitions, if filed, will be treated as peitions for rulemaking in accordance with § 10.20. </SECTION> <SECTION> <SECTNO>§ 10.20</SECTNO> <SUBJECT>Petition for rulemaking.</SUBJECT> (a) Any interested person may petition the Secretary for the issuance, amendment, or repeal of a rule. Each petition shall: (1) Be submitted to the Rules Docket Clerk, Room 5218, Department of Housing and Urban Development, Washington, DC 20410; (2) Set forth the text of substance of the rule or amendment proposed or specify the rule sought to be repealed; (3) Explain the interest of the petitioner in the action sought; and (4) Set forth all data and arguments available to the petitioner in support of the action sought. (b) No public procedures will be held directly on the petition before its disposition. If the Secretary finds that the petition contains adequate justification, a rulemaking proceeding will be initiated or a final rule will be issued as appropriate. If the Secretary finds that the petition does not contain adequate justification, the petition will be denied by letter or other notice, with a brief statement of the ground for denial. The Secretary may consider new evidence at any time; however, repetitious petitions for rulemaking will not be considered. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 13</EAR> <HD SOURCE="HED">PART 13—USE OF PENALTY MAIL IN THE LOCATION AND RECOVERY OF MISSING CHILDREN</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>13.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>13.2</SECTNO> <SUBJECT>Procedures for obtaining and disseminating data.</SUBJECT> <SECTNO>13.3</SECTNO> <SUBJECT>Withdrawal of data.</SUBJECT> <SECTNO>13.4</SECTNO> <SUBJECT>Reports.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 39 U.S.C. 3220(a)(2); 5 U.S.C. 301. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 51 FR 19830, June 3, 1986, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 13.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> To support the national effort to locate and recover missing children, the Department of Housing and Urban Development (HUD) joins other executive departments and independent establishments of the Government of the United States in using penalty mail to disseminate photographs and biographical information on hundreds of missing children. <CITA>[51 FR 19830, June 3, 1986; 51 FR 43608, Dec. 3, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 13.2</SECTNO> <SUBJECT>Procedures for obtaining and disseminating data.</SUBJECT> (a) HUD shall insert, manually and via automated inserts, pictures and biographical data related to missing children in domestic penalty mail directed to members of the public in the United States, its territories and possessions. These include: (1) Standard letter-size envelopes (4<FR>1/2</FR> <E T="61">″</E> X 9<FR>1/2</FR> <E T="61">″</E>); (2) Document-size envelopes (9<FR>1/2</FR> <E T="61">″</E> X 12<E T="61">″</E>, 9<FR>1/2</FR> <E T="61">″</E> X 11<FR>1/2</FR> <E T="61">″</E>, 10<E T="61">″</E> X 13<E T="61">″</E>); and (3) Other envelopes (miscellaneous size). (b) Missing children information shall not be placed on the <E T="03">Penalty Indicia</E>, <E T="03">OCR Read Area</E>, <E T="03">Bar Code Read Area</E>, and <E T="03">Return Address</E> areas of letter-size envelopes. (c) Posters containing pictures and biographical data shall be placed on bulletin boards in Headquarters and Field offices. (d) HUD shall accept camera-ready and other photographic and biographical materials solely from the National Center for Missing and Exploited Children (National Center). Photographs that were reasonably current as of the time of the child's disappearance shall be the only acceptable form of visual media or pictorial likeness used in penalty mail or posters. </SECTION> <SECTION> <SECTNO>§ 13.3</SECTNO> <SUBJECT>Withdrawal of data.</SUBJECT> HUD shall remove all printed penalty mail envelopes and other materials from circulation or other use within a three month period from the date the National Center receives information or notice that a child, whose picture and biographical information have been made available to HUD, has been recovered or that the parent or guardian's permission to use the child's photograph and biographical information has been withdrawn. The HUD contact person shall be notified immediately <PRTPAGE P="117"/>and in writing by the National Center of the need to withdraw from circulation penalty mail envelopes and other materials related to a particular child. </SECTION> <SECTION> <SECTNO>§ 13.4</SECTNO> <SUBJECT>Reports.</SUBJECT> HUD shall compile and submit to Office of Juvenile Justice and Deliquency Prevention (OJJDP), by June 30, 1987, a consolidated report on its experience in implementing S. 1195 <E T="03">Official Mail Use in the Location and Recovery of Missing Children</E> along with recommendations for future Departmental action. </SECTION> </PART> <PART> <EAR>Pt. 14</EAR> <HD SOURCE="HED">PART 14—IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN ADMINISTRATIVE PROCEEDINGS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>14.50</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>14.100</SECTNO> <SUBJECT>Time computation.</SUBJECT> <SECTNO>14.105</SECTNO> <SUBJECT>Purpose of these rules.</SUBJECT> <SECTNO>14.110</SECTNO> <SUBJECT>When the Act applies.</SUBJECT> <SECTNO>14.115</SECTNO> <SUBJECT>Proceedings covered.</SUBJECT> <SECTNO>14.120</SECTNO> <SUBJECT>Eligibility of applicants.</SUBJECT> <SECTNO>14.125</SECTNO> <SUBJECT>Standards for awards.</SUBJECT> <SECTNO>14.130</SECTNO> <SUBJECT>Allowable fees and expenses.</SUBJECT> <SECTNO>14.135</SECTNO> <SUBJECT>Rulemaking on maximum rates for attorney fees.</SUBJECT> <SECTNO>14.140</SECTNO> <SUBJECT>Awards against other agencies.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Information Required From Applicants</HD> <SECTNO>14.200</SECTNO> <SUBJECT>Contents of application.</SUBJECT> <SECTNO>14.205</SECTNO> <SUBJECT>Net worth exhibit.</SUBJECT> <SECTNO>14.210</SECTNO> <SUBJECT>Documentation of fees and expenses.</SUBJECT> <SECTNO>14.215</SECTNO> <SUBJECT>When an application may be filed.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for Considering Applications</HD> <SECTNO>14.300</SECTNO> <SUBJECT>Jurisdiction of adjudicative officer.</SUBJECT> <SECTNO>14.305</SECTNO> <SUBJECT>Filing and service of documents.</SUBJECT> <SECTNO>14.310</SECTNO> <SUBJECT>Answer to application.</SUBJECT> <SECTNO>14.315</SECTNO> <SUBJECT>Comments by other parties.</SUBJECT> <SECTNO>14.320</SECTNO> <SUBJECT>Settlement.</SUBJECT> <SECTNO>14.325</SECTNO> <SUBJECT>Extensions of time and further proceedings.</SUBJECT> <SECTNO>14.330</SECTNO> <SUBJECT>Decision.</SUBJECT> <SECTNO>14.335</SECTNO> <SUBJECT>Departmental review.</SUBJECT> <SECTNO>14.340</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>14.345</SECTNO> <SUBJECT>Payment of award.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Sec. 504(c)(1) of the Equal Access to Justice Act (5 U.S.C. 504(c)(1); sec. 7(d) of the Department of Housing and Urban Development Act (42 U.S.C. 3535(d)). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 52 FR 27126, July 17, 1987, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 14.50</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Act</E>. The Equal Access to Justice Act, 5 U.S.C. 504, title II of Pub. L. 96-481, as amended by Pub. L. 99-80. <E T="03">Adjudicative officer</E>. The hearing examiner, administrative law judge, administrative judge of the HUD Board of Contract Appeals, or other officer designated by the Secretary or other responsible Department official, who presided at the adversary adjudication. <E T="03">Adversary adjudication</E>. (a) An adjudication under 5 U.S.C. 554 in which the position of the United States is represented by counsel or otherwise, but not including an adjudication for the purpose of establishing or fixing a rate or for the purpose of granting or renewing a license; and (b) Appeals of decisions of contracting officers made pursuant to section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before agency boards of contract appeals as provided in section 8 of that Act (41 U.S.C. 607). <E T="03">Agency counsel</E> (a) When the position of the Department is being represented, the attorney or attorneys designated by the Department's General Counsel to represent the Department in a proceeding covered by this part, and (b) When the position of another agency of the United States is being represented, the representative as designated by that agency. <E T="03">Department</E>. The Department of Housing and Urban Development, or the organizational unit within the Department responsible for conducting an adversary adjudication subject to this part. <E T="03">Proceeding</E>. An adversary adjudication as defined above. <E T="03">Secretary</E>. The Secretary of Housing and Urban Development. </SECTION> <SECTION> <SECTNO>§ 14.100</SECTNO> <SUBJECT>Time computation.</SUBJECT> Time periods stated in this part shall be computed in accordance with the Department's rules with respect to computation of time which apply to the underlying proceeding. </SECTION> <SECTION> <SECTNO>§ 14.105</SECTNO> <SUBJECT>Purpose of these rules.</SUBJECT> The Act provides for the award of attorney fees and other expenses to eligible individuals and entities who are <PRTPAGE P="118"/>parties to certain administrative proceedings (<E T="03">adversary adjudications</E>) before the Department. An eligible party may receive an award when it prevails over an agency, unless the agency's position was substantially justified or special circumstances make an award unjust. The rules in this part described the parties eligible for awards and the proceedings that are covered. They also explain how to apply for awards and the procedures and standards that the Department will use to make them. </SECTION> <SECTION> <SECTNO>§ 14.110</SECTNO> <SUBJECT>When the Act applies.</SUBJECT> The Act applies to any adversary adjudication pending or commenced before this Department on or after August 5, 1985. It also applies to any adversary adjudication commenced on or after October 1, 1984, and finally disposed of before August 5, 1985, provided that an application for fees and expenses, as described in subpart B of these rules, has been filed with the Department no later than 30 days after August 5, 1985, and to any adversary adjudication pending on or commenced on or after October 1, 1981, in which an application for fees and other expenses was timely filed and was dismissed for lack of jurisdiction. </SECTION> <SECTION> <SECTNO>§ 14.115</SECTNO> <SUBJECT>Proceedings covered.</SUBJECT> (a) The proceedings to which this part applies are adversary adjudications conducted by the Department under: (1) The Interstate Land Sales Full Disclosure Act, as amended, 15 U.S.C. 1701 <E T="03">et seq.,</E> pursuant to 15 U.S.C. 1715 and 24 CFR part 1720; (2) Section 602 of the Civil Rights Act of 1964, 42 U.S.C. 2000d-1, and 24 CFR parts 1 and 2; (3) Section 505(a) of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794a, 28 CFR part 41, and any applicable HUD regulations; (4) Section 305(a) of the Age Discrimination Act of 1975, 42 U.S.C. 6104(a), 45 CFR part 90 and any applicable HUD regulations; (5) Section 3 of the HUD Act of 1968, 12 U.S.C. 170lu (Employment Opportunities for Business and Lower Income Persons in Connection with Assisted Projected), and 24 CFR part 135; (6) Debt Collection Act of 1982 (Salary Offset), 5 U.S.C. 5514, and 24 CFR 17.125-.140; (7) Manufactured Home Construction and Safety Standards Act of 1974, 42 U.S.C. 5401 <E T="03">et seq.</E>, and 24 CFR part 3280; (8) Section 111 of title I of the Housing and Community Development Act of 1974, 42 U.S.C. 5311, and 24 CFR 570.913; (9) Appeals of decisions of contracting officers made pursuant to section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before the HUD Board of Contract Appeals as provided in section 8 of that Act (41 U.S.C. 607); or (10) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3600-3620) and 24 CFR part 104. (b) The Department's failure to identify a type of proceeding as an adversary adjudication shall not preclude the filing of an application by a party who believes the proceeding is covered by the Act; whether the proceeding is covered will then be an issue for resolution in proceedings on the application. (c) If a proceeding includes both matters covered by the Act and matters specifically excluded from coverage, any award made will include only fees and expenses related to covered issues. <CITA>[52 FR 27126, July 17, 1987, as amended at 54 FR 3283, Jan. 23, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 14.120</SECTNO> <SUBJECT>Eligibility of applicants.</SUBJECT> (a) To be eligible for an award of attorney fees and other expenses under the Act, the applicant must be a party to the adversary adjudication for which it seeks an award. The term <E T="03">party</E> is defined in 5 U.S.C. 551(3). The applicant must show that it meets all conditions of eligibility set out in this subpart and in subpart B. (b) The types of eligible applicants are as follows: (1) An individual with a net worth of not more than $2 million; (2) The sole owner of an unincorporated business who has a net worth of not more than $7 million, including both personal and business interests, and not more than 500 employees; (3) A charitable or other tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), with not more than 500 employees;<PRTPAGE P="119"/> (4) A cooperative association as defined in section 15(a) of the Agricultural Marketing Act, 12 U.S.C. 1141j(a), with not more than 500 employees; or (5) Any other partnership, corporation, association, unit of local government, or organization with a net worth of not more than $7 million and not more than 500 employees. (c) For the purpose of eligibility, the net worth and number of employees of an applicant shall be determined as of the date the proceeding was initiated. For the purpose of eligibility of applicants before the HUD Board of Contract Appeals, the net worth and number of employees of an applicant shall be determined as of the date the applicant filed its appeal under 41 U.S.C. 606. (d) An applicant who owns an unincorporated business will be considered as an <E T="03">individual</E> rather than a <E T="03">sole owner of an unincorporated business</E> if the issues on which the application prevails are related primarily to personal interests rather than to business interests. (e) The employees of an applicant include all persons who regularly perform services for remuneration for the applicant, under the applicant's direction and control. Part-time employees shall be included on a proportional basis. (f) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. Any individual, corporation or other entity that directly or indirectly controls or owns a majority of the voting shares or other interests of the applicant, or any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interest, will be considered an affiliate for purposes of this part, unless the adjudicative officer determines that such treatment would be unjust and contrary to the purposes of the Act in light of the actual relationship between the affiliated entities. In addition, the adjudicative officer may determine that financial relationshsips of the applicant other than those described in this paragraph constitute special circumstances that would make an award unjust. (g) An applicant that participates in a proceeding primarily on behalf of one or more other persons or entities that would be ineligible is not itself eligible for an award. </SECTION> <SECTION> <SECTNO>§ 14.125</SECTNO> <SUBJECT>Standards for awards.</SUBJECT> (a) A prevailing applicant may receive an award for fees and expenses incurred in connection with a proceeding, or in a significant and discrete substantive portion of the proceeding, unless the position of the agency over which the applicant has prevailed was substantially justified. The position of the agency includes, in addition to the position taken by the agency in the adversary adjudication, the action or failure to act by the agency upon which the adversary adjudication is based. The burden of proof that an award should not be made to an ineligible prevailing applicant because the agency's position was substantially justified is on the agency counsel, who may avoid an award by showing that its position was reasonable in law and fact. (b) An award will be reduced or denied if the applicant has unduly or unreasonably protracted the proceeding, if the applicant has falsified the application (including documentation) or net worth exhibit or if special circumstances make the award sought unjust. </SECTION> <SECTION> <SECTNO>§ 14.130</SECTNO> <SUBJECT>Allowable fees and expenses.</SUBJECT> (a) No award for the fee of an attorney or agent under these rules may exceed $75.00 per hour. However, an award may also include the reasonable expenses of the attorney, agent or witness as a separate item, if the attorney, agent or witness ordinarily charges clients separately for such expenses. (b) In determining the reasonableness of the fee sought for an attorney, agent or expert witness, the adjudicative officer shall consider the following: (1) If the attorney, agent or witness is in private practice, his or her customary fee for similar services, or, if an employee of the applicant, the fully allocated cost of the services; (2) The prevailing rate for the kind and quality of services furnished in the community in which the attorney, <PRTPAGE P="120"/>agent or witness ordinarily performs services; (3) The time actually spent in the representation of the applicant; (4) The time reasonably spent in the light of the difficulty or complexity of the issues in the proceeding; and (5) Such other factors as may bear on the value of the services provided. (c) The reasonable cost of any study, analysis, engineering report, test, project, or similar matter prepared on behalf of a party may be awarded, to the extent that the charge for the services does not exceed the prevailing rate for similar services, and the study or other matter was necessary for preparation of the applicant's case. </SECTION> <SECTION> <SECTNO>§ 14.135</SECTNO> <SUBJECT>Rulemaking on maximum rates for attorney fees.</SUBJECT> Any person may file with the Department a petition for rulemaking to increase the maximum rate for attorney fees as provided in 5 U.S.C. 504(b)(1)(A)(ii), in accordance with 24 CFR part 10. The petition should identify the rate the petitioner believes the Department should establish and the types of proceedings in which the rate should be used. It should also explain fully the reasons why the higher rate is warranted. The Department will respond to the petition in accordance with 24 CFR 10.20(b). </SECTION> <SECTION> <SECTNO>§ 14.140</SECTNO> <SUBJECT>Awards against other agencies.</SUBJECT> If an applicant is entitled to an award because it prevails over another agency of the United States that participates in a proceeding before the Department and takes a position that is not substantially justified, the award or an appropriate portion of the award shall be made against that agency. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Information Required From Applicants</HD> <SECTION> <SECTNO>§ 14.200</SECTNO> <SUBJECT>Contents of application.</SUBJECT> (a) An application for an award of fees and expenses under the Act shall identify the applicant and the proceeding for which an award is sought. The application shall show that the applicant has prevailed and identify the position of the Department or other agencies that the applicant alleges was not substantially justified. Unless the applicant is an individual, the application shall also state the number of employees of the applicant and describe briefly the type and purpose of its organization or business. (b) The application shall also include a statement that the applicant's net worth does not exceed $2 million (if an individual) or $7 million (for all other applicants, including their affiliates). However, an applicant may omit this statement if: (1) It attaches a copy of a ruling by the Internal Revenue Service that it qualifies as an organization described in section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), or, in the case of a tax-exempt organization not required to obtain a ruling from the Internal Revenue Service on its exempt status, a statement that describes the basis for the applicant's belief that it qualifies under such section; or (2) It states that it is a cooperative association as defined in section 15(a) of the Agricultural Marketing Act, 12 U.S.C. 1141j(a). (c) If the applicant is a partnership, corporation, association, or organization, or a sole owner of an unincorporated business, the applicant shall state that it did not have more than 500 employees at the time the proceeding was initiated, giving the number of its employees and describing briefly the type and purpose of its organization or business. (d) The application shall also itemize the amount of fees and expenses for which an award is sought. (e) The application also may include any other matters that the applicant wishes the Department to consider in determining whether and in what amount an award should be made. (f) The application shall be signed by the applicant or an authorized officer with respect to the eligibility of the applicant and by the attorney of the applicant with respect to fees and expenses sought. The application shall contain or be accompanied by a written verification under oath or affirmation under penalty of perjury that the information provided in the application and all accompanying material is true and complete to the best of the applicant's <PRTPAGE P="121"/>or authorized officer's information and belief. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0001)</APPRO> </SECTION> <SECTION> <SECTNO>§ 14.205</SECTNO> <SUBJECT>Net worth exhibit.</SUBJECT> (a) Each applicant except a qualified tax-exempt organization or a qualified cooperative association must submit with its application a detailed exhibit showing the net worth of the applicant and any affiliates (as defined in § 14.120(f) of this part) when the proceeding was initiated. The exhibit may be in any form convenient to the applicant that provides full disclosure of the applicant's and its affiliates’ assets and liabilities, and is sufficient to determine whether the applicant qualifies under the standards of the Act and this part. The adjudicative officer may require an applicant to file additional information to determine its eligibility for an award. (b) The net worth exhibit shall describe any transfers of assets from, or obligations incurred by, the applicant or any affiliate, occurring in the one-year period before the date on which the proceeding was initiated, that reduced the net worth of the applicant and its affiliates below the applicable net worth ceiling. If there were no such transactions, the applicant shall so state. (c) Ordinarily, the net worth exhibit will be included in the public record of the proceeding. However, an applicant that objects to public disclosure of information in any portion of the exhibit and believes there are legal grounds for withholding it from disclosure may submit that portion of the exhibit directly to the adjudicative officer in a sealed envelope labeled “Confidential Financial Information,” accompanied by a motion to withhold the information from public disclosure. The motion shall describe the information sought to be withheld and explain, in detail, why it falls within one or more of the specific exemptions from mandatory disclosure under the Freedom of Information Act (5 U.S.C. 552(b) (1)-(9)), why public disclosure of the information would adversely affect the applicant, and why disclosure is not required in the public interest. The material in question shall be served on counsel representing the agency against which the applicant seeks an award, but need not be served on any other party to the proceeding. If the adjudicative officer finds that the information should not be withheld from disclosure, it shall be placed in the public record of the proceeding. Otherwise, any request to inspect or copy the exhibit shall be disposed of in accordance with the Department's established procedures under the Freedom of Information Act, 24 CFR part 15. In either case, disclosure shall be subject to the provisions of the Privacy Act of 1974, 5 U.S.C. 552a, and the Department's procedures implementing the Privacy Act of 1974 at 24 CFR part 16. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0001)</APPRO> </SECTION> <SECTION> <SECTNO>§ 14.210</SECTNO> <SUBJECT>Documentation of fees and expenses.</SUBJECT> (a) The application shall be accompanied by full and itemized documentation of the fees and expenses, including the cost of any study, analysis, engineering report, test, project or similar matter, for which an award is sought. (b) The documentation shall include an affidavit from any attorney, agent or expert witness representing or appearing in behalf of the party, stating the actual time expended and the rate at which fees and other expenses were computed and describing the specific services performed. (c) The documentation shall also include a description of any expenses for which reimbursement is sought and a statement of the amounts paid and payable by the applicant or by any other person or entity for the services provided. Vouchers, receipts, logs, or other substantiation for any expenses paid or payable shall be provided. (d) The adjudicative officer may require the applicant to provide additional substantiation for any expenses claimed. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0001)</APPRO> </SECTION> <SECTION> <SECTNO>§ 14.215</SECTNO> <SUBJECT>When an application may be filed.</SUBJECT> (a) An application may be filed whenever the applicant has prevailed in the <PRTPAGE P="122"/>proceeding or in a significant and discrete substantive portion of the proceeding, but in no case later than 30 days after the Department's final disposition of the proceeding. (b) For purposes of this rule, final disposition means the date on which a decision or order disposing of the merits of the proceeding or any other complete resolution of the proceeding, such as a settlement of voluntary dismissal, become final and unappealable, both within the Department and to the courts. (c) If review or reconsideration (under HUD Board of Contract Appeals Rule 29, 24 CFR 20.10) is sought or taken of a decision as to which an applicant believes it has prevailed, proceedings for the award of fees shall be stayed pending final disposition of the underlying controversy. When the United States appeals the underlying merits of an adversary adjudication to a court, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made until a final and unreviewable decision is rendered by the court on the appeal or until the underlying merits of the case have been finally determined pursuant to the appeal. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for Considering Applications</HD> <SECTION> <SECTNO>§ 14.300</SECTNO> <SUBJECT>Jurisdiction of adjudicative officer.</SUBJECT> Any provision in the Department's rules and regulations other than this part which limits or terminates the jurisdiction of an adjudicative officer upon the effective date of his or her decision in the underlying proceeding shall not in any way affect his or her jurisdiction to render a decision under this part. </SECTION> <SECTION> <SECTNO>§ 14.305</SECTNO> <SUBJECT>Filing and service of documents.</SUBJECT> Any application for an award or other pleading or document related to an application shall be filed and served on all parties to the proceeding in the same manner as other pleadings in the proceeding, except as provided in § 14.205(c) for confidential financial information. </SECTION> <SECTION> <SECTNO>§ 14.310</SECTNO> <SUBJECT>Answer to application.</SUBJECT> (a) Within 30 days after service of an application, agency counsel may file an answer to the application. Agency counsel may request an extension of time for filing. If agency counsel fails to answer or otherwise fails to contest or settle the application, the adjudicative officer, upon a satisfactory showing of entitlement by the applicant, may make an award for the applicant's fees and other expenses under the Act. (b) If agency counsel and the applicant believe that the issues in the fee application can be settled, they may jointly file a statement of their intent to negotiate a settlement. The filing of this statement shall extend the time for filing an answer for an additional 30 days, and further extensions may be granted by the adjudicative officer upon request by agency counsel and the applicant. (c) The answer shall explain in detail any objections to the award requested and identify the facts relied on in support of agency counsel's position. If the answer is based on any alleged facts not already in the record of the proceeding, agency counsel shall include with the answer either supporting affidavits or a request for further proceedings under § 14.325. </SECTION> <SECTION> <SECTNO>§ 14.315</SECTNO> <SUBJECT>Comments by other parties.</SUBJECT> Any party to a proceeding other than the applicant and agency counsel may file comments on an application within 30 days after it is served, or on an answer within 15 days after it is served. A commenting party may not participate further in proceedings on the application unless the adjudicative officer determines that the public interest requires such participation in order to permit full exploration of matters raised in the comments. </SECTION> <SECTION> <SECTNO>§ 14.320</SECTNO> <SUBJECT>Settlement.</SUBJECT> The applicant and agency counsel may agree on a proposed settlement of the award before final action on the application, either in connection with a settlement of the underlying proceeding, or after the underlying proceeding has been concluded, in accordance with the settlement procedure applicable to the underlying proceeding. If a prevailing party and agency counsel agree on <PRTPAGE P="123"/>a proposed settlement of an award before an application has been filed, the application shall be filed with the proposed settlement. </SECTION> <SECTION> <SECTNO>§ 14.325</SECTNO> <SUBJECT>Extensions of time and further proceedings.</SUBJECT> (a) The adjudicative officer on motion and for good cause shown may grant extensions of time other than for filing an application for fees and expenses after final disposition in the adversary adjudication. (b) Ordinarily, the determination of an award will be made on the basis of the written record. However, on request of either the applicant or agency counsel, or on his or her own initiative, the adjudicative officer may order further proceedings, such as an informal conference, oral argument, additional written submissions, or as to issues other than substantial justification (such as the applicant's eligibility or substantiation of fees and expenses), pertinent discovery or an evidentiary hearing. Such further proceedings shall be held only when necessary for full and fair resolution of the issues arising from the application, and shall be conducted as promptly as possible. Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought. (c) A request that the adjudicative officer order further proceedings under this section shall specifically identify the information sought or the disputed issues and shall explain why the additional proceedings are necessary to resolve the issues. </SECTION> <SECTION> <SECTNO>§ 14.330</SECTNO> <SUBJECT>Decision.</SUBJECT> The adjudicative officer shall issue an initial decision on the application within 30 days after completion of proceedings on the application. The decision shall include written findings and conclusions on such of the following as are relevant to the decision: (a) The applicant's status as a prevailing party; (b) The applicant's qualification as a <E T="03">party</E> under 5 U.S.C. 504(b)(1)(B); (c) Whether the agency's position was substantially justified; (d) Whether special circumstances make an award unjust; (e) Whether the applicant during the course of the proceedings engaged in conduct that unduly and unreasonably protracted the final resolution of the matter in controversy; and (f) The amounts, if any, awarded for fees and other expenses, with reasons for any difference between the amount requested and the amount awarded. <FP>If the applicant has sought an award against more than one agency, the decision shall allocate responsibility for payment of any award made among the agencies, and shall explain the reasons for the allocation made.</FP> </SECTION> <SECTION> <SECTNO>§ 14.335</SECTNO> <SUBJECT>Departmental review.</SUBJECT> (a) Either the applicant or agency counsel may seek review of the initial decision on the fee application, or the Secretary (or his or her delegate, if any) may decide to review the decision on his or her own initiative, in accordance with the Department's review or appeals procedures applicable to the underlying proceeding. If neither the applicant nor agency counsel seeks review and the Secretary (or his or her delegate, if any) does not take review on his or her own initiative, the initial decision on the application shall become a final decision of the Department in the same manner as a decision in the underlying proceeding becomes final. Whether to review a decision is a matter within the discretion of the Secretary (or his or her delegate, if any). If review is taken, the Department will issue a final decision on the application or remand the application to the adjudicative officer for further proceedings. (b) Either party may seek reconsideration of the decision on the fee application in accordance with Rule 29, 24 CFR 20.10. </SECTION> <SECTION> <SECTNO>§ 14.340</SECTNO> <SUBJECT>Judicial review.</SUBJECT> Judicial review of final departmental decisions on awards may be sought as provided in 5 U.S.C. 504(c)(2). </SECTION> <SECTION> <SECTNO>§ 14.345</SECTNO> <SUBJECT>Payment of award.</SUBJECT> An applicant seeking payment of an award shall submit a copy of the final <PRTPAGE P="124"/>decision granting the award to: Director, Office of Finance and Accounting, Room 2202, Department of Housing and Urban Development, Washington, DC 20410, with a copy to: Associate General Counsel for Equal Opportunity and Administrative Law, Room 10244, Department of Housing and Urban Development, Washington, DC 20410. A statement that review of the underlying decision is not being sought in the United States courts, or that the process for seeking review of the award, if initiated, has been completed, must also be included. The agency will pay the amount awarded to the applicant within 60 days, unless judicial review of the award or of the underlying decision of the adversary adjudication has been sought by the applicant or any other party to the proceeding. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 15</EAR> <HD SOURCE="HED">PART 15—TESTIMONY, PRODUCTION AND DISCLOSURE OF MATERIAL OR INFORMATION BY HUD EMPLOYEES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Purpose and Policy</HD> <SECHD>Sec.</SECHD> <SECTNO>15.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>15.2</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> <SECTNO>15.3</SECTNO> <SUBJECT>Statement of policy.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Production and Disclosure of Records</HD> <SECTNO>15.11</SECTNO> <SUBJECT>Publication in the Federal Register.</SUBJECT> <SECTNO>15.12</SECTNO> <SUBJECT>Materials not published in Federal Register.</SUBJECT> <SECTNO>15.13</SECTNO> <SUBJECT>Records produced upon request when reasonably described.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Exemptions</HD> <SECTNO>15.14</SECTNO> <SUBJECT>Fees.</SUBJECT> <SECTNO>15.15</SECTNO> <SUBJECT>Fees to be charged—categories of requesters.</SUBJECT> <SECTNO>15.16</SECTNO> <SUBJECT>Review of records, aggregating requests and waiving or reducing fees.</SUBJECT> <SECTNO>15.17</SECTNO> <SUBJECT>Charges for interest and for unsuccessful searches; Utilization of Debt Collection Act.</SUBJECT> <SECTNO>15.18</SECTNO> <SUBJECT>Advance payments.</SUBJECT> <SECTNO>15.21</SECTNO> <SUBJECT>Exemptions authorized by 5 U.S.C. 552.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D [Reserved]</HD> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Procedures for Requesting Access to Records</HD> <SECTNO>15.41</SECTNO> <SUBJECT>Requests for records.</SUBJECT> <SECTNO>15.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Disclosure of Records and Refusal To Disclose</HD> <SECTNO>15.51</SECTNO> <SUBJECT>Authority to release records or copies.</SUBJECT> <SECTNO>15.52</SECTNO> <SUBJECT>Authority to deny requests for -records.</SUBJECT> <SECTNO>15.54</SECTNO> <SUBJECT>Business information.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Administrative Review of Denial of Requests for Records</HD> <SECTNO>15.61</SECTNO> <SUBJECT>Administrative appeal.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Production in Response to Subpenas or Demands of Courts or Other Authorities</HD> <SECTNO>15.71</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>15.72</SECTNO> <SUBJECT>Production or disclosure prohibited unless approved by the Secretary.</SUBJECT> <SECTNO>15.73</SECTNO> <SUBJECT>Procedure in the event of a demand for production or disclosure.</SUBJECT> <SECTNO>15.74</SECTNO> <SUBJECT>Procedure in the event of an adverse ruling.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart I—Testimony of Employees of the Department in Legal Proceedings</HD> <SECTNO>15.81</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>15.82</SECTNO> <SUBJECT>Testimony in proceedings in which the United States is a party.</SUBJECT> <SECTNO>15.83</SECTNO> <SUBJECT>Legal proceedings among private litigants; general rule.</SUBJECT> <SECTNO>15.84</SECTNO> <SUBJECT>Legal proceedings among private litigants; subpoenas.</SUBJECT> <SECTNO>15.85</SECTNO> <SUBJECT>Legal proceedings among private litigants; expert or opinion testimony.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart J—Processing Request for Declassification and Release of Classified Material</HD> <SECTNO>15.91</SECTNO> <SUBJECT>Authority for release or denial of classified material.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 552; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 40 FR 48123, Oct. 14, 1975, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Purpose and Policy</HD> <SECTION> <SECTNO>§ 15.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part. <EDNOTE> <HD SOURCE="HED">Editorial Note:</HD> At 61 FR 5203, Feb. 9, 1996, in § 15.1, the following introductory text was added; however, introductory text already exists. </EDNOTE> The terms <E T="03">Department</E>, <E T="03">Secretary</E>, and <E T="03">Organizational unit</E> are defined in 24 CFR part 5. <E T="03">Act</E> means section 552 of title 5 U.S.C., as amended by Pub. L. 90-23, 81 Stat. 54, June 5, 1967, and Pub. L. 93-502, 88 Stat. 1561, November 21, 1974.<PRTPAGE P="125"/> <E T="03">Person</E> means <E T="03">person</E> as defined in 5 U.S.C. 551(2) to include corporations and organizations as well as individuals. <E T="03">Information center</E> means library, reading room, desk, or other facility, or any combination of places established and maintained by the Department, where the public may request and obtain information and records concerning the Department's operations and business. <E T="03">Legal proceeding</E> includes any proceeding before a court of law or other authority, i.e., administrative board or commission, hearing officer, arbitrator or other body conducting a quasi-judicial or legislative proceeding. <E T="03">Legal proceeding in which the United States is a party</E> means any legal proceeding including as a named party the United States, the Department of Housing and Urban Development, or any other Federal executive or administrative agency or department, or any official thereof in his official capacity. <E T="03">Legal proceeding among private litigants</E> means any legal proceeding in which the United States is not a party. <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 52 FR 12160, Apr. 15, 1987; 60 FR 11903, Mar. 3, 1995; 61 FR 5203, Feb. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.2</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> (a) This part contains the regulations of the Department implementing 5 U.S.C. 552 and prescribing the Department's policies and procedures with respect to testimony of its employees as witnesses in legal proceedings. It informs the public about where and how the Department's records and information may be obtained from its organizational units as defined in § 15.1(d), and about the Department's policy concerning allowing its employees to testify in legal proceedings. (b) All subparts of part 15, other than subpart I, apply to all organizational units, except that their applicability to the Office of Inspector General is subject to the provisions of parts 2002 and 2004 of this title, and their applicability to the Office of Interstate Land Sales Registration is subject to the provisions of § 1700.30 of this title. Subpart I applies to all organizational units other than the Office of Inspector General. <CITA>[52 FR 12160, Apr. 15, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.3</SECTNO> <SUBJECT>Statement of policy.</SUBJECT> The Department's policy is one of full and responsible disclosure of its identifiable records and information consistent with such competing public interests concerning the national security, personal privacy, and obligations of confidentiality as are recognized by 5 U.S.C. 552. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Production and Disclosure of Records</HD> <SECTION> <SECTNO>§ 15.11</SECTNO> <SUBJECT>Publication in the Federal Register.</SUBJECT> Subject to the exemptions in § 15.21, the Department shall separately state and currently publish in the <E T="04">Federal Register</E> for the guidance of the public: (a) Descriptions of its central and field organization and the established places at which, the employees from whom and the methods whereby, the public may obtain information, make submittals or requests, or obtain decisions; (b) Statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures available; (c) Rules of procedure, descriptions of forms available or the places at which forms may be obtained, and instructions as to the scope and contents of all papers, reports, or examinations; (d) Substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the Department; and (e) Each amendment, revision, or repeal of the foregoing. <FP>Except to the extent that a person has actual and timely notice of the terms thereof, no person shall in any manner be required to resort to or be adversely affected by any matter required to be published in the <E T="04">Federal Register</E> and not so published. For purposes of this section, matter which is reasonably available to the class of persons <PRTPAGE P="126"/>affected thereby shall be deemed published in the <E T="04">Federal Register</E> when incorporated by reference therein with the approval of the Director of the Office of the Federal Register, as provided in 1 CFR part 51.</FP> </SECTION> <SECTION> <SECTNO>§ 15.12</SECTNO> <SUBJECT>Materials not published in Federal Register.</SUBJECT> (a) Subject to the exemptions in § 15.21, the Department, in accordance with this part, shall make available for public inspection and copying: (1) Final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases; (2) Statements of policy and interpretations which have been adopted by the Department and are not published in the <E T="04">Federal Register</E>; and (3) Administrative staff manuals and instructions to staff that affect a member of the public. (b) To prevent a clearly unwarranted invasion of personal privacy, the Department may delete identifying details when it makes available or publishes any material. Whenever such deletions are required, the record or copy will be made available with the space formerly occupied by such identifying details left blank, and the justification for the deletion shall be explained fully in writing. (c) The Department shall also maintain and make available for public inspection and copying current indexes providing identifying information for the public as to any matter issued, adopted, or promulgated after July 4, 1967, and required by this section to be made available or published. The Department shall promptly publish quarterly and distribute (by sale or otherwise) copies of each index or supplements thereto unless it determines by order published in the <E T="04">Federal Register</E> that the publication would be unnecessary and impracticable, in which case the Department shall nonetheless provide copies of such index on request at a cost not to exceed the direct cost of duplication. </SECTION> <SECTION> <SECTNO>§ 15.13</SECTNO> <SUBJECT>Records produced upon request when reasonably described.</SUBJECT> (a) The procedures for requesting access to records are set forth in subpart E of this part. (b) When a request is made that reasonably describes a record of the Department that has been stored in a record center of the National Archives and Record Administration, this record will be requested from the Records Center by the Department and made available to the requester if the record would otherwise be available under this part. Records accessioned by the National Archives will not be made available by the Department, but may be requested directly from the National Archives. (c) Every effort will be made to make a record in use by the staff of the Department available when requested, and such availability will be deferred only to the extent necessary to avoid serious interference with the business of the Department. (d) Copies of a requested record need not be furnished if the record is published in the <E T="04">Federal Register</E> or is available for purchase from the Superintendent of Documents of the Government Printing Office. Such records may, however, be examined in one of the Department's information centers. <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 60 FR 11903, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Exemptions</HD> <SECTION> <SECTNO>§ 15.14</SECTNO> <SUBJECT>Fees.</SUBJECT> (a) <E T="03">Copies of records.</E> HUD will charge $0.15 per page for photocopies of documents. For copies prepared by computer, HUD will charge the actual cost of the tape or disk plus $25.00 per minute for central processing unit (CPU) time, so as to recoup reasonable direct costs of duplicating. For other methods of reproduction or duplication of documents, HUD will charge the actual direct costs of producing the documents. (b) <E T="03">Manual searches for records.</E> HUD will charge $16.35 per hour per person <PRTPAGE P="127"/>for searches/reviews performed by clerical staff, and $37.00 per hour per person for searches/reviews performed by professional staff. Charges for search/review time will be billed in 1/2 hour segments. (c) <E T="03">Computer searches for records.</E> HUD will charge $35.00 per hour for computer programming relating to a search, plus $25.00 per minute for central processing unit (CPU) time. (d) <E T="03">Contract services.</E> HUD will contract with private sector sources to locate, reproduce and disseminate records in response to FOIA requests when that is the most efficient and least costly method. When doing so, however, HUD will ensure that the ultimate cost to the requester is no greater than it would be if HUD itself had performed these tasks. In no case will HUD contract out responsibilities which the FOIA provides that HUD alone may discharge, such as determining the applicability of an exemption, or determining whether to waive or reduce fees. HUD will ensure that when documents that would be responsive to a request are maintained for distribution by agencies operating statutory-based fee schedule programs such as the National Technical Information Service, HUD will inform requesters of the steps necessary to obtain records from those sources. Information provided routinely in the normal course of business will be provided at no charge. (e) <E T="03">Restrictions on assessing fees.</E> HUD will provide the first 100 pages of duplication and the first two hours of search time, manual or computer, free of charge to noncommercial use requesters. There is no charge to noncommercial use requesters for time needed for review, as defined in paragraph (g)(4) of this section. Review time is chargeable only to commercial use requesters. HUD will only assess fees for amounts in excess of $25.00. (f) <E T="03">Payment of fees.</E> Payment of fees under this section and under § 15.16(a) shall be made by check or money order, payable to the Treasurer of the United States. Cash payments may be made in person at Headquarters or the Field Offices. The fees shall be sent to the Office of Executive Secretariat at Headquarters or to the appropriate Field Office. (g) <E T="03">Definitions.</E> As used in this subpart: (1) <E T="03">Direct costs</E> means those expenditures which HUD actually incurs in searching for and duplicating (and, in the case of commercial requesters, reviewing) documents to respond to a FOIA request. Direct costs include, for example, the salary of the employee performing work (the basic rate of pay for the employee plus 16 percent of that rate to cover benefits) and the cost of operating duplicating machinery. Not included in direct costs are overhead expenses such as costs of space, and heating or lighting the facility in which the records are stored. (2) <E T="03">Search</E> includes all time spent looking for material that is responsive to a request, including page-by-page or line-by-line identification of material within documents. Such activity is distinguished from <E T="03">review</E> of material in order to determine whether the material is exempt from disclosure. (3) <E T="03">Duplication</E> means the process of making a copy of a document necessary to respond to a FOIA request. Such copies can take the form of paper copy, microform, audio-visual materials, or machine readable documentation (e.g., magnetic tape or disk), among others. (4) <E T="03">Review</E> means the process of examining a document located in response to a request that is for a commercial use to determine whether any portion of it may be withheld, excising portions to be withheld and otherwise preparing the document for release. <E T="03">Review</E> does not include time spent resolving general legal or policy issues regarding the application of exemptions. <CITA>[53 FR 37547, Sept. 27, 1988, as amended at 60 FR 11903, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.15</SECTNO> <SUBJECT>Fees to be charged—categories of requesters.</SUBJECT> There are four categories of FOIA requesters: Commercial use requesters; educational and non-commercial scientific institutions; representatives of the news media; and all other requesters. Specific levels of fees are prescribed for each of these categories: (a) <E T="03">Commercial use requesters.</E> (1) HUD will assess charges which recover the <PRTPAGE P="128"/>full direct costs of searching for, reviewing for release, and duplicating records sought for commercial use. Requesters must reasonably describe the records sought. Commercial use requesters are not entitled to two hours of free search time or 100 free pages of reproduction of documents. (2) <E T="03">Commercial use</E> refers to a request from or on behalf of one who seeks information for a use or purpose that furthers the commercial, trade, or profit interests of the requester or the person on whose behalf the request is made. In determining whether a requester properly belongs in this category, HUD must determine the use to which a requester will put the documents requested. Moreover, where HUD has reasonable cause to doubt the use to which a requester will put the records sought, or where that use is not clear from the request itself, HUD will seek additional clarification before assigning the request to a specific category. (b) <E T="03">Educational and non-commercial scientific institution requesters.</E> (1) HUD will provide documents to educational and non-commercial scientific institutions for the cost of reproduction alone, excluding charges for the first 100 pages. To be eligible for inclusion in this category, requesters must show that the request is being made as authorized by and under the auspices of a qualifying institution and that the records are not sought for a commercial use, but are sought for furtherance of scholarly (if the request is from an educational institution) or scientific (if the request is from a non-commerical scientific institution) research. Requesters must reasonably describe the records sought. (2) <E T="03">Educational institution</E> means a preschool, a public or private elementary or secondary school, an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, and an institution of vocational education, which operates a program or programs of scholarly research. (3) <E T="03">Non-commercial scientific institution</E> means an institution that is not operated on a <E T="03">commercial</E> basis as that term is referenced in § 15.15(a) and which is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry. (c) <E T="03">Requesters who are representatives of the news media.</E> (1) HUD will provide documents to representatives of the news media for the cost of reproduction alone, excluding charges for the first 100 pages. In reference to this class of requester, a request for records supporting the news dissemination function of the requester shall not be considered to be a request that is for a commercial use. Requesters must reasonable describe the records sought. (2) <E T="03">Representative of the news media</E> means any person actively gathering news for an entity that is organized and operated to publish or broadcast news to the public. The term <E T="03">news</E> means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large, and publishers of periodicals (but only in those instances when they can qualify as disseminators of <E T="03">news</E>) who make their products available for purchase or subscription by the general public. <E T="03">Freelance</E> journalists may be regarded as working for a news organization if they can demonstrate a solid basis for expecting publication through that organization, even though not actually emloyed by it. A publication contract would be the clearest proof, but HUD may also look to the past publication record of a requester in making this determination. (d) <E T="03">All other requesters.</E> HUD will charge requesters who do not fit into any of the categories above fees which recover the full reasonable direct cost of searching for and reproducing records that are responsive to the request, except that the first 100 pages of reproduction and the first two hours of search time shall be furnished without charge. Requests from subjects for records about themselves filed in agencies’ systems of records will continue to be treated under the fee provisions of the Privacy Act of 1974 which permit fees only for reproduction. Requesters must reasonably describe the records sought. <CITA>[53 FR 37548, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <PRTPAGE P="129"/> <SECTNO>§ 15.16</SECTNO> <SUBJECT>Review of records, aggregating requests and waiving or reducing fees.</SUBJECT> (a) <E T="03">Review of records.</E> Only requesters who are seeking documents for commercial use may be charged for time HUD spends reviewing records to determine whether they are exempt from mandatory disclosure. Charges may be assessed only for the <E T="03">initial</E> review; <E T="03">i.e.,</E> the review undertaken the first time HUD analyzes the applicability of a specific exemption to a particular record or portion of a record. HUD will not charge for review at the administrative appeal level of an exemption already applied. However, records or portions of records withheld in full under an exemption which is subsequently determined not to apply may be reviewed again to determine the applicability of other exemptions not previously considered. The costs for such a subsequent review would be properly assessable. Review time will be assessed at the same rates established for search time in § 15.14. (b) <E T="03">Aggregating requests.</E> A requester may not file multiple requests at the same time, each seeking portions of a document or documents, solely in order to avoid payment of fees. When HUD reasonably believes that a requester or a group of requesters acting in concert, is attempting to break a request down into a series of requests for the purpose of evading the assessment of fees, HUD may aggregate any such requests and charge accordingly. (c) <E T="03">Waiving or reducing fees.</E> HUD will furnish documents without charge or at reduced charge if disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester. The official authorized to grant access to records may waive or reduce the applicable fee where requested. The determination not to waive or reduce the fee will be subject to administrative review as provided in § 15.61 after the decision on the request for access has been made. Six factors shall be used in determining whether the requirements for a fee waiver or reduction are met. These factors are as follows: (1) <E T="03">The subject of the request:</E> Whether the subject of the requested records concerns <E T="03">the operations or activities of the government</E>; (2) <E T="03">The informative value of the information to be disclosed:</E> Whether the disclosure is <E T="03">likely to contribute</E> to an understanding of government operations or activities; (3) <E T="03">The contribution to an understanding of the subject by the general public likely to result from disclosure:</E> Whether disclosure of the requested information will contribute to <E T="03">public understanding</E>; (4) <E T="03">The significance of the contribution to public understanding:</E> Whether the disclosure is likely to contribute <E T="03">significantly</E> to public understanding of government operations or activities; (5) <E T="03">The existence and magnitude of a commercial interest:</E> Whether the requester has a commercial interest that would be furthered by the requested disclosure; and, if so (6) <E T="03">The primary interest in disclosure:</E> Whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is <E T="03">primarily in the commercial interest of the requester.</E> <CITA>[53 FR 37549, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.17</SECTNO> <SUBJECT>Charges for interest and for unsuccessful searches; Utilization of Debt Collection Act.</SUBJECT> (a) <E T="03">Charging interest.</E> HUD will begin assessing interest charges on an upaid bill starting on the 31st day following the day on which the billing was sent. A fee received by HUD, even if not processed, will suffice to stay the accrual of interest. Interest will be at the rate prescribed in section 3717 of title 31 U.S.C. and will accrue from the date of the billing. (b) <E T="03">Charge for unsuccessful search.</E> Ordinarily no charge for search time will be assessed when the records requested are not found or when the records located are withheld as exempt. However, if the requester has been notified of the esimated cost of the search time and has been advised specifically that the requested records may not exist or may be withheld as exempt, fees shall be charged. (c) <E T="03">Use of Debt Collection Act of 1982.</E> When a requester has failed to pay a <PRTPAGE P="130"/>fee charged in a timely fashion (<E T="03">i.e.,</E> within 30 days of the date of the billing), HUD may, under the authority of the Debt Collection Act and part 17, subpart C of this title, use consumer reporting agencies and collection agencies, where appropriate, to recover the indebtedness owed the Department. <CITA>[53 FR 37549, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.18</SECTNO> <SUBJECT>Advance payments.</SUBJECT> (a) HUD may not require a requester to make an advance payment, <E T="03">i.e.,</E> payment before work is commenced or continued on a request, unless: (1) HUD estimates or determines that allowable charges that a requester may be required to pay are likely to exceed $250. Then, HUD will notify the requester of the likely cost and obtain satisfactory assurance of full payment where the requester has a history of prompt payment of FOIA fees, or require an advance payment of an amount up to the full estimated charges in the case of requesters with no history of payment; or (2) Where a requester has previously failed to pay a fee charged in a timely fashion (<E T="03">i.e.,</E> within 30 days of the date of the billing), HUD may require the requester to pay the full amount owed plus any applicable interest as provided by § 15.17(a) or demonstrate that he has, in fact, paid the fees, and to make an advance payment of the full amount of the estimated fee before HUD begins to process a new request or a pending request from that requester. (b) When HUD acts under paragraphs (a)(1) or (a)(2) of this section, the administrative time limits prescribed in subsection (a)(6) of the FOIA (<E T="03">i.e.,</E> 10 working days from receipt of initial requests and 20 working days from receipt of appeals from initial denial, plus permissible extensions of these time limits) will begin only after HUD has received fee payments described above. (c) Where it is anticipated that either the duplication fee individually, the search fee individually, or a combination of the two exceeds $25.00 over and above the free search time and duplication costs, where applicable, and the requesting party has not indicated in advance a willingness to pay so high a fee, the requesting party shall be promptly informed of the amount of the anticipated fee or such portion thereof as can readily be estimated. The notification shall offer the requesting party the opportunity to confer with agency representatives for the purpose of reformulating the request so as to meet that party's needs at a reduced cost. <CITA>[53 FR 37549, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.21</SECTNO> <SUBJECT>Exemptions authorized by 5 U.S.C. 552.</SUBJECT> A requested record shall not be withheld from inspection or copying unless it both: Comes within one of the classes of records exempted by 5 U.S.C. 552; and there is need in the public interest to withhold it. In determining the scope of the classes of records described in paragraph (a) of this section, the Attorney General's Memorandum on the Public Information Act, June 1967, will be used as a guide. (a) The classes of records authorized to be exempted from disclosure by 5 U.S.C. 552 are those which concern matters that are: (1) Specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and are in fact properly classified pursuant to such Executive order; (2) Related solely to the internal personnel rules and practices of the Department; (3) Specifically exempted from disclosure by statute; (4) Except as otherwise provided in paragraph (c) of this section, trade secrets and commercial or financial information obtained from a person and privileged or confidential; (5) Interagency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the Department; (6) Personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy; (7) Records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information:<PRTPAGE P="131"/> (i) Could reasonably be expected to interfere with enforcement proceedings; (ii) Would deprive a person of a right to a fair trial or an impartial adjudication; (iii) Could reasonably be expected to constitute an unwarranted invasion of personal privacy; (iv) Could reasonably be expected to disclose the identity of a confidential source, including a state, local or foreign agency or authority or any private institution which furnished information on a confidential basis, and, in the case of a record or information compiled by a criminal law enforcement authority in the course of a criminal investigation or by an agency conducting a lawful national security intelligence investigation, information furnished by a confidential source; (v) Would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law; or (vi) Could reasonably be expected to endanger the life or physical safety of any individual. (8) Contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of the Department in connection with its responsibility for the regulation or supervision of financial institutions; or (9) Geological and geophysical information and data, including maps, concerning wells. (b) Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this section. (c) Subject to the following conditions, financial and related information submitted by a mortgagor and contained in Form HUD-92410 (Statement of Profit and Loss), or a HUD-approved substitute form that the mortgagor may have submitted, may be disclosed to eligible potential purchasers of HUD-held multifamily mortgages. (1) Information from Form HUD-92410 concerning a project may be made available in conjunction with the sale of a HUD-held mortgage covering that project conducted under the authority of sections 207 (k) and (<E T="03">l</E>) of the National Housing Act, 12 U.S.C. 1713 (k) and (<E T="03">l</E>), or section 7(i)(3) of the Department of Housing and Urban Development Act, 42 U.S.C. 3535(i)(3). (2) The release of this information by HUD to eligible potential purchasers shall be limited to the period specified by HUD for the mortgage sale. (3) Eligible potential purchasers who have received this information shall agree to keep the information confidential, to disclose the information only to potential investors in the mortgage, to use the information for the sole purpose of their evaluation of the mortgage in connection with the mortgage sale, and to follow disclosure procedures for that sale that have been established by the Secretary. (4) Any disclosure by eligible potential purchasers to potential investors in the mortgage shall be limited to the period specified by HUD for the mortgage sale. Similar, potential investors in the mortgage shall agree to keep the information confidential and to use the information for the sole purpose of their evaluation of the mortgage in connection with their investment decision. In addition, potential investors in the mortgage may not disclose the information to other entities, unless the disclosure is necessary for the investor's evaluation of the mortgage, is in accordance with disclosure procedures for the specific sale that have been established by the Secretary, and is limited to the period specified by HUD for the mortgage sale. Any potential purchaser is responsible for notifying potential investors in the mortgage who receive this information from that entity of the investors’ obligations under this section. (5) Disclosure of information from Form HUD-92410 by an eligible potential purchaser or by a potential investor (who has received the information from a potential purchaser and has been notified by that entity of its obligations under paragraph (c)(3) of this section) that is not in accordance with <PRTPAGE P="132"/>this section is a violation of this regulation and may subject the entity making the unauthorized disclosure to administrative sanctions under 24 CFR part 24. <APPRO>(Approved by the Office of Management and Budget under control number 2502-0052)</APPRO> <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 51 FR 44286, Dec. 9, 1986; 60 FR 11903, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D [Reserved]</HD> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Procedures for Requesting Access to Records</HD> <SECTION> <SECTNO>§ 15.41</SECTNO> <SUBJECT>Requests for records.</SUBJECT> (a) Requests for copies of records may be made in person during normal business hours at information centers listed in § 15.31 or by mail addressed to such centers. Although oral requests may be honored, a requester may be asked to submit his request in writing. (b) Each request must reasonably describe the desired record including the name, subject matter, and number or date, where possible, so that the record may be identified and located. In order to enable the Department to comply with the time limitations set forth in § 15.42, the envelope containing a written request and the letter itself should both clearly indicate that the subject is a Freedom of Information Act request. (c) The request shall be accompanied by an agreement to pay a fee to be determined in accordance with § 15.14. Under the circumstances enumerated in § 15.18, the Department may refuse to furnish records before receipt of the appropriate fee. A requester may specify a limit for fees, above which the requester is not willing to pay without advance consultation with the Department. (d) Copies of available records shall be made as promptly as possible. Copying service shall be limited to not more than 10 copies of any single page. Records which are published or available for sale need not be reproduced. <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> (a) Upon receipt of a request for records, the appropriate office will determine within ten working days whether to comply with such requests. The office will either agree to provide the requested documents, or will notify the requester, in writing, of an adverse determination, the reasons therefor, and the right to appeal the denial to the: (1) General Counsel, with respect to a denial issued by the Office of the Executive Secretariat or by the offices in which there is a Field Assistant General Counsel; or (2) Field Assistant General Counsel, with respect to a denial issued by the Field Offices. (b) When a request for records is misdirected by the requester, the office receiving the request shall: (1) Promptly refer it to the appropriate office; and (2) Advise the requester that the time of receipt by the appropriate office will be the time of receipt for processing purposes. (c) A determination by the General Counsel or the Field Assistant General Counsel with respect to an appeal under § 15.61 shall be made within 20 working days after receipt of the appeal, and shall be communicated to the appellant, in writing. (d) In unusual circumstances, the General Counsel, or the appropriate Field Assistant General Counsel, may extend the time limits prescribed in paragraphs (a) and (c) of this section, by written notice to the requester setting forth the reasons for the extension and the date on which a determination is expected to be dispatched. An extension shall not exceed ten working days. As used in this paragraph, unusual circumstances means that there is a need: (1) To search for and collect the requested records from field facilities or other establishments that are separate from the office processing the request; (2) To search for, collect, and examine appropriately a voluminous amount of separate and distinct records that are demanded in a single request; or (3) For consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the determination of <PRTPAGE P="133"/>the request, or among two or more organizational units of the Department having a substantial interest in the subject matter of the request. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Disclosure of Records and Refusal To Disclose</HD> <SECTION> <SECTNO>§ 15.51</SECTNO> <SUBJECT>Authority to release records or copies.</SUBJECT> The Office of the Executive Secretariat in Headquarters and the FOIA liaisons in each Field Office are authorized to release copies of any Department records upon written request unless disclosure is clearly not appropriate under this part. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.52</SECTNO> <SUBJECT>Authority to deny requests for records.</SUBJECT> The officers described in § 15.51, or other official designated by the Secretary's Representative, may deny a request for a record only with the concurrence of the appropriate program counsel in Headquarters or counsel in the Field Offices. Any denial shall: (a) Be made in writing, describing the documents denied and, if fewer than 21, listing them specifically; (b) Contain a simple reason for the denial, stating the appropriate exemption used; and (c) Advise of the right to appeal the adverse determination, in accordance with § 15.61, to the: (1) General Counsel, with respect to a denial issued by the Office of Executive Secretariat or by offices in which there is a Field Assistant General Counsel; and (2) Field Assistant General Counsel, with respect to a denial issued by Field Offices. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.54</SECTNO> <SUBJECT>Business information.</SUBJECT> (a) <E T="03">In general.</E> Business information provided to the Department by a submitter shall not be disclosed pursuant to a FOIA request except in accordance with this section. (b) <E T="03">Definitions.</E> As used in this section: <E T="03">Business information</E> means commercial or financial information provided to the Department by a submitter that arguably is protected from disclosure under Exemption 4 (42 U.S.C. 552(b)(4)) of the Act. <E T="03">Submitter</E> means any person or entity who provides business information, directly or indirectly, to the Department. The term includes, but is not limited to, corporations, State governments, and foreign governments. (c) <E T="03">Designation of business information.</E> A submitter's claim that certain information is confidential or proprietary should be supported by a statement or certification by an officer or authorized representative of the submitter that the information is, in fact, confidential or proprietary and has not been disclosed to the public. All information considered confidential or proprietary by a submitter should be clearly designated with a prominent stamp, typed legend, or other suitable form of notice, stating “Confidential Treatment Requested by [insert name of submitter]”, which should appear on each page or segregable portion of the page. If such marking is impractical, a cover sheet prominently marked “Confidential Treatment Requested by [insert name of submitter]” should be securely attached to the information for which confidential treatment is requested. These designations shall be deemed to have expired 10 years after the date of the submission, unless the submitter requests, and provides reasonable justification for, a longer period of designation. (d) <E T="03">Notice to submitter.</E> To the extent permitted by law, the Department shall provide a submitter with prompt written notice of a FOIA request or administrative appeal encompassing its business information, unless notice is excused under paragraph (h) of this section. Such notice shall afford the submitter an opportunity to object to disclosure pursuant to paragraph (f) of this section. The notice shall either describe the exact nature of the business information requested or provide copies of the records or portions thereof containing the business information. The Department will provide this notice whenever: (1) The information has been designated in good faith by the submitter <PRTPAGE P="134"/>as information deemed protected under Exemption 4; or (2) The Department has reason to believe that the information may be protected from disclosure under Exemption 4. (e) <E T="03">Notice to requester.</E> At the same time the Department notifies the submitter, the Department shall also notify the requester that the request is subject to the provisions of this section and that the submitter is being afforded an opportunity to object to disclosure of the information. (f) <E T="03">Opportunity to object to disclosure.</E> Through the notice described in paragraph (d) of this section, the Department shall afford a submitter or its designee 10 Federal working days to provide the Department a detailed written statement of the submitter's objection to disclosure of any portion of the information it submitted to the Department. Such statement shall specify all grounds for withholding any of the information and shall demonstrate why the information is a trade secret or commercial or financial information that is privileged or confidential. Conclusory statements that particular information would be useful to competitors or would impair sales, or similar statements, generally will not be considered sufficient to justify confidential treatment. Information provided by a submitter or its designee pursuant to this paragraph may itself be subject to disclosure under the FOIA. (g) <E T="03">Notice of intent to disclose.</E> The Department shall consider carefully a submitter's objections and specific grounds for nondisclosure, before determining whether to disclose business information. If the Department decides to disclose business information over the objection of a submitter, the Department shall forward to both the submitter and the requester a written notice of intent to disclose. The written notice shall be forwarded 10 Federal working days before the specified disclosure date and shall include: (1) A statement of the reasons for which the submitter's disclosure objections were not sustained; (2) A description of the business information to be disclosed; and (3) A specified disclosure date. (h) <E T="03">Exceptions to the notice requirement.</E> The notice requirements of paragraphs (d) and (g) of this section shall not apply if: (1) The Department determines that the information should not be disclosed; (2) The information has been published lawfully or has been made available officially to the public; (3) Disclosure of the information is required by law (other than the Act); (4) Disclosure of the information is required by a departmental regulation that: (i) Was adopted pursuant to notice and public comment; (ii) Specifies narrow classes of records submitted to the Department that are to be released under the FOIA; and (iii) Provides for notice in exceptional circumstances when the submitter provides, at the time the information is submitted or a reasonable time thereafter, written justification that disclosure of the information could reasonably be expected to cause substantial competitive harm; (5) The information requested was not designated by the submitter as exempt from disclosure in accordance with paragraph (c) of this section at the time of the submission of the information or a reasonable time thereafter, unless the Department has substantial reason to believe that the disclosure of the information would cause competitive harm; or (6) The designation made by the submitter in accordance with paragraph (c) of this section appears obviously frivolous. In such circumstances, the Department shall forward to the submitter, 10 Federal working days before a specified disclosure date, written notice of any final administrative decision to disclose business information. (i) <E T="03">Notice of FOIA lawsuit.</E> Whenever a requester brings suit seeking to compel disclosure of business information, the Department shall promptly notify the submitter. (j) <E T="03">Determination of confidentiality.</E> HUD will make no determination as to the validity of any request for confidentiality until a request for disclosure of the information is received.<PRTPAGE P="135"/> (k) <E T="03">Current mailing address for the submitter.</E> Each submitter shall provide to the Department: (1) A mailing address for receipt of any notices under this section; and (2) Notice of any change of address. (l) <E T="03">Treatment of confidential information by HUD employees.</E> (1) HUD officers and employees shall not, directly or indirectly, use or allow the use of business information obtained through or in connection with Government employment that has not been made available to the general public. (2) Except as otherwise provided in this section, HUD officers and employees may not disclose business information, except to other HUD officers or employees who are properly entitled to such information for the performance of their official duties. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Administrative Review of Denial of Requests for Records</HD> <SECTION> <SECTNO>§ 15.61</SECTNO> <SUBJECT>Administrative appeal.</SUBJECT> (a) Appeal shall be available only from a written denial of a request issued under § 15.52, and only when the appeal is filed within 30 days of issuance of the denial. An appeal from a denial issued by the Office of Executive Secretariat or by offices in which there is a Field Assistant General Counsel must be mailed to the Assistant General Counsel for Training and Administrative Law, Room 10246, 451 Seventh Street, SW, Washington, DC, 20410. An appeal from a denial issued by a Field Office must be mailed to the appropriate Field Assistant General Counsel. An appeal must include a copy of the original request for records; a copy of the written denial of access to those records, and a statement of the reasons, circumstances, or arguments advanced in support of, or in opposition to, disclosure of the records. The envelope containing the appeal should be clearly marked as a Freedom of Information Act appeal, so that the Department can comply with the time limitations set forth in § 15.42. (b) When an appeal is misdirected by the requester, the Office receiving the appeal shall: (1) Promptly refer it to the: (i) Assistant General Counsel for Training and Administrative Law, if the denial was issued by the Office of Executive Secretariat or by an office in which there is a Field Assistant General Counsel, or (ii) Appropriate Field Assistant General Counsel, if the denial was issued by a Field Office; and (2) Advise the appellant that the time of receipt for processing purposes will be the time the appeal is received by the appropriate office. (c) The appeal determination shall be in writing; constitute final administrative action by the Department; and, if the denial is upheld in full or in part, include notification of the right to judicial review. <CITA>[60 FR 11905, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Production in Response to Subpenas or Demands of Courts or Other Authorities</HD> <SECTION> <SECTNO>§ 15.71</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> This subpart contains the regulations of the Department concerning procedures to be followed when a subpoena, order, or other demand (hereinafter referred to in this subpart as a <E T="03">demand</E>) of a court or other authority is issued for the production or disclosure of: (a) Any material contained in the files of the Department, (b) any information relating to material contained in the files of the Department, or (c) any information or material acquired by any person while such person was an employee of the Department as a part of the performance of his or her official duties or because of his or her official status. For purposes of this subpart, the term <E T="03">employee of the Department</E> includes current and former officers and employees of the United States appointed by or subject to the supervision of the Secretary, but does not include officers and employees covered by part 2004 of this title. Also for purposes of this subpart, <E T="03">files of the Department</E> do not include files of the Office of Inspector General covered by part 2004 of this title. <CITA>[49 FR 11160, Mar. 26, 1984, as amended at 60 FR 58456, Nov. 27, 1995]</CITA> </SECTION> <SECTION> <PRTPAGE P="136"/> <SECTNO>§ 15.72</SECTNO> <SUBJECT>Production or disclosure prohibited unless approved by the Secretary.</SUBJECT> (a) Any demand of a court or other authority or any request to an employee of the Department to produce any material contained in the files of the Department, or to disclose any information relating to material contained in the files of the Department, or to disclose any information or produce any material acquired as a part of the performance of the employee's official duties or because of the employee's official status for use in a legal proceeding, shall state with particularity the material sought to be obtained or the information sought to be disclosed. (b) No employee of the Department shall comply with any such demand or request without the prior approval of the Secretary. (c) In determining whether to grant approval for an employee of the Department to testify in a legal proceeding, the Secretary shall follow the standards set forth in subpart I. (d) Where the demand or request seeks only the production of documents, the Department's procedure for authentricating documents by a keeper of the records shall be the Department's method for response. That authentication shall be evidence that the documents are true copies of documents in the Department's files. <CITA>[52 FR 12160, Apr. 15, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.73</SECTNO> <SUBJECT>Procedure in the event of a demand for production or disclosure.</SUBJECT> (a) Whenever a demand is made upon an employee of the Department for the production of material or the disclosure of information described in § 15.71, the employee shall immediately notify the Secretary and either the General Counsel or the appropriate Regional Counsel. The <E T="03">appropriate Regional Counsel</E> shall mean the Regional Counsel for the Regional Office having delegated authority over the project or activity with respect to which the information is sought. If possible, the Secretary shall be notified before the employee concerned replies to or appears before the court or other authority. (b) If response to the demand is required before the instructions from the Secretary are received, the U.S. Attorney or such other attorney as may be designated for the purpose, will appear with the employee of the Department upon whom the demand has been made, and will furnish the court or other authority with a copy of the regulations contained in this subpart and inform the court or other authority that the demand has been or is being, as the case may be, referred for prompt consideration of the Secretary. The court or other authority shall be requested respectfully to stay the demand pending receipt of the requested instructions from the Secretary. <CITA>[52 FR 12160, Apr. 15, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.74</SECTNO> <SUBJECT>Procedure in the event of an adverse ruling.</SUBJECT> If the court or other authority declines to stay the effect of the demand in response to a request made in accordance with § 15.73(b) pending receipt of instructions from the Secretary, or if the court or other authority rules that the demand must be complied with irrespective of the instructions from the Secretary not to produce the material or disclose the information sought, the employee upon whom the demand has been made shall respectfully decline to comply with the demand (<E T="03">United States ex rel. Toughy</E> v. <E T="03">Ragen,</E> 340 U.S. 462). <CITA>[52 FR 12161, Apr. 15, 1987]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart I—Testimony of Employees of the Department in Legal Proceedings</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 52 FR 12161, Apr. 15, 1987, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 15.81</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) This subpart prescribes the policies and procedures of the Department with respect to testimony of its employees as witnesses in legal proceedings with respect to material contained in the files of the Department or information learned as part of the performance of the their official duties or because of their official status. (b) For purposes of this subpart, the term <E T="03">employee of the Department</E> includes current and former officers and <PRTPAGE P="137"/>employees of the United States appointed by or subject to the supervision of the Secretary, but does not include officers and employees covered by part 2004 of this title. <CITA>[52 FR 12161, Apr. 15, 1987, as amended at 60 FR 58457, Nov. 27, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.82</SECTNO> <SUBJECT>Testimony in proceedings in which the United States is a party.</SUBJECT> (a) In any legal proceeding in which the United States is a party, an employee of the Department may not be called to testify as an expert or opinion witness by any party other than the United States, but may be called by such non-federal party to testify as to facts. (b) Whenever, in any legal proceeding in which the United States is a party, the attorney in charge of presenting the case for the United States requests it, the Secretary shall arrange for an employee of the Department to testify as a witness for the United States. </SECTION> <SECTION> <SECTNO>§ 15.83</SECTNO> <SUBJECT>Legal proceedings among private litigants; general rule.</SUBJECT> In any legal proceeding exclusively among private litigants, no employee of the Department may testify as an expert or opinion witness as to any matter related to his or her duties or the functions of the Department, including the meaning of Departmental documents. </SECTION> <SECTION> <SECTNO>§ 15.84</SECTNO> <SUBJECT>Legal proceedings among private litigants; subpoenas.</SUBJECT> Whenever, in a legal proceeding exclusively among private litigants, an employee of the Department is served with a subpoena or is requested to testify, the procedures set forth in §§ 15.72—15.74 shall be applicable. </SECTION> <SECTION> <SECTNO>§ 15.85</SECTNO> <SUBJECT>Legal proceedings among private litigants; expert or opinion testimony.</SUBJECT> If, while testifying in a legal proceeding exclusively among private litigants, an employee of the Department is asked for expert or opinion testimony, the employee shall decline to answer on the grounds that he or she is forbidden to do so by this part. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart J—Processing Request for Declassification and Release of Classified Material</HD> <SECTION> <SECTNO>§ 15.91</SECTNO> <SUBJECT>Authority for release or denial of classified material.</SUBJECT> (a) All requests by the public, Government employees, or other Government agencies, for the release of classified information shall be directed to the Inspector General, who will ensure that: (1) All requests are acknowledged within 10 working days. (2) The request is immediately coordinated with the original classification authority to determine whether the association of that authority with the classification of the information requires protection. (3) In those instances when the answer to paragraph (a)(2) of this section is <E T="03">no,</E> requests will be referred, along with the requested document and if appropriate any recommendations to withhold, for direct handling by the original classification authority. The requester shall be advised in writing of this action. (4) Whenever it is necessary, by either the original classification authority or HUD to deny the declassification and release, in whole or part, of the requested information, the requester shall be notified, in accordance with Executive Order 12356, of: (i) The reason for the denial, (ii) The requesters’ right to appeal the denial, and (iii) The name, title, and address of the appellate authority. <CITA>[44 FR 54478, Sept. 20, 1979, as amended at 48 FR 15895, Apr. 13, 1983. Redesignated at 52 FR 12161, Apr. 15, 1987]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 16</EAR> <HD SOURCE="HED">PART 16—IMPLEMENTATION OF THE PRIVACY ACT OF 1974</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>16.1</SECTNO> <SUBJECT>Purpose and statement of policy.</SUBJECT> <SECTNO>16.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>16.3</SECTNO> <SUBJECT>Procedures for inquiries.</SUBJECT> <SECTNO>16.4</SECTNO> <SUBJECT>Requests for access; requirements.</SUBJECT> <SECTNO>16.5</SECTNO> <SUBJECT>Disclosure of requested information to individuals.</SUBJECT> <SECTNO>16.6</SECTNO> <SUBJECT>Initial denial of access.</SUBJECT> <SECTNO>16.7</SECTNO> <SUBJECT>Administrative review of initial denial of access.</SUBJECT> <SECTNO>16.8</SECTNO> <SUBJECT>Request for correction or amendment to record.<PRTPAGE P="138"/> </SUBJECT> <SECTNO>16.9</SECTNO> <SUBJECT>Agency procedures upon request for correction or amendment of record.</SUBJECT> <SECTNO>16.10</SECTNO> <SUBJECT>Appeal of initial adverse agency determination on correction or amendment.</SUBJECT> <SECTNO>16.11</SECTNO> <SUBJECT>Disclosure of record to person other than the individual to whom it pertains.</SUBJECT> <SECTNO>16.12</SECTNO> <SUBJECT>Fees.</SUBJECT> <SECTNO>16.13</SECTNO> <SUBJECT>Penalties.</SUBJECT> <SECTNO>16.14</SECTNO> <SUBJECT>General exemptions.</SUBJECT> <SECTNO>16.15</SECTNO> <SUBJECT>Specific exemptions.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 552(a); 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 40 FR 39729, Aug. 28, 1975, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 16.1</SECTNO> <SUBJECT>Purpose and statement of policy.</SUBJECT> (a) The purpose of this part is to establish policies and procedures for implementing the Privacy Act of 1974 (Pub. L. 93-579), 5 U.S.C. 552(a). The main objectives are to facilitate full exercise of rights conferred on individuals under the Act and to insure the protection of privacy as to individuals about whom the Department maintains records in systems of records under the Act. The Department accepts the responsibility to act promptly and in accordance with the Act upon receipt of any inquiry, request or appeal from a citizen of the United States or an alien lawfully admitted for permanent residence into the United States, regardless of the age of the individual. (b) Further, the Department accepts the obligations to maintain only such information on individuals as is relevant and necessary to the performance of its lawful functions, to maintain that information with such accuracy, relevancy, timeliness and completeness as is reasonably necessary to assure fairness in determinations made by the Department about the individual, to obtain information from the individual to the extent practicable, and to take every reasonable step to protect that information from unwarranted disclosure. The Department will maintain no record describing how an individual exercises rights guaranteed by the First Amendment unless expressly authorized by statute or by the individual about whom the record is maintained or unless pertinent to and within the scope of an authorized law enforcement activity. (c) This part applies to all organizational components in the Department in order to assure the maximum amount of uniformity and consistency within the Department in its implementation of the Act. (d) The Assistant Secretary for Administration shall be responsible for carrying out the requirements of this part, for issuing such orders and directives internal to the Department as are necessary for full compliance with the Act, and for effecting publication of all required notices concerning systems of records. (e) Requests involving information pertaining to an individual which is in a record or file but not within the scope of a System of Records Notice published in the <E T="04">Federal Register</E> are outside the scope of this part. Requests for departmental records will be considered to determine whether processing under this part, part 15, or both is most appropriate, notwithstanding the requester's characterization of the request, as follows: (1) <E T="03">A Privacy Act request from an individual for records about that individual and not contained in a Privacy Act Records System</E> shall be considered a Freedom of Information Act request and processed under HUD Freedom of Information Act regulations (24 CFR part 15) to the extent that the requester has provided the Department a reasonable description of the documents requested. When a request for records is so considered as a Freedom of Information Act request, the Privacy Act Officer shall promptly refer it to the head of the appropriate organizational unit in accordance with HUD FOIA Regulations and shall advise the requester that time of receipt for processing purposes will be the time when it is received by the appropriate official. (2) <E T="03">A Freedom of Information Act request from an individual for records about that individual contained in a Privacy Act Records System</E> shall be processed as follows: (i) If the request in whole or in part contains a reasonable description of any HUD document, processing shall be carried out pursuant to HUD FOIA Regulations. (ii) If the request in whole or in part does not contain a reasonable description of any HUD document, but does provide sufficient information under <PRTPAGE P="139"/>HUD Privacy Act Regulations to undertake a Privacy Act Records System search, the Department will provide full access under HUD Privacy Act Regulations. In this situation, the Department will comply with the deadlines for response set forth in the Privacy Act and HUD implementing regulations. In that event, an explanation will be provided to the requester advising that the request did not contain a reasonable description of a particular document as required under the FOIA and offering to process the request under FOIA procedures upon receipt of additional information sufficient to constitute a <E T="03">reasonable description.</E> (3) <E T="03">A Freedom of Information Act request from an individual for records about another individual contained in a Privacy Act Records System</E> shall be processed as follows: When an exemption under subsection (b) of FOIA is available, the Privacy Act governs the public interest determination under HUD FOIA Regulations (24 CFR 15.21) and compels the withholding of such documents unless: (i) The subject of those records consents to their release or (ii) disclosure comes within one of the subsections of 5 U.S.C. § 552a(b). (4) <E T="03">A Privacy Act request from an individual for records about another individual</E> shall be processed as follows: Except as expressly permitted in this part, requests by persons who are not the subject of a record contained in a Privacy Act Records System shall be outside the scope of this part. If the request satisfies the Freedom of Information Act requirement that requested records be reasonably described, the Privacy Act Officer shall consider the requests as a Freedom of Information Act request and shall proceed as in § 16.1(e)(1) of this section. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) The definitions of 5 U.S.C. 552a apply in this part. (b) As used in this part: (1) <E T="03">Act</E> means the <E T="03">Privacy Act of 1974,</E> Pub. L. 93-579. (2) <E T="03">Privacy Act Officer</E> means those officials, identified in Appendix A to this part, or their designees, who are authorized to receive and act upon inquiries, requests for access, and requests for correction or amendment. (3) <E T="03">Privacy Appeals Officer</E> means the General Counsel. (4) <E T="03">Inquiry</E> means a request by an individual that the Department determine whether it has any record in a system of records which pertains to that individual. (5) <E T="03">Request for access</E> means a request by an individual or guardian to inspect and/or copy and/or obtain a copy of a record which is in a particular system of records and which pertains to that individual. (6) <E T="03">Request for correction or amendment</E> means the request by an individual or guardian that the Department change (either by correction, addition or deletion) a particular record in a system of records which pertains to that individual. (7) <E T="03">Appeal</E> means the request by an individual that an initial denial of a request for access or correction or amendment by that individual be reviewed and reversed. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976; 61 FR 5204, Feb. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.3</SECTNO> <SUBJECT>Procedures for inquiries.</SUBJECT> (a) Any individual, regardless of age, may submit an inquiry to the Department. The inquiry should be made either in person at the office of, or by mail addressed to, the appropriate Privacy Act Officer. Although oral requests may be honored, a requester may be asked to submit his request in writing. The envelope containing the request and the letter itself should both clearly indicate that the subject is a “PRIVACY ACT INQUIRY”. If an individual believes the Department maintains a record pertaining to that individual but does not know which system of records might contain such a record and/or which organizational component of the Department maintains the system of records, assistance in person or by mail will be provided at the first address listed in Appendix A to this part. (b)(1) An inquiry should contain the following information: (i) Name, address and telephone number of the individual making the request;<PRTPAGE P="140"/> (ii) Name, address and telephone number of the individual to whom the record pertains, if the requesting individual is either the parent of a minor or the legal guardian of the individual to whom the record pertains; (iii) A certified or authenticated copy of documents establishing parentage or guardianship; (iv) Whether the individual to whom the record pertains is a citizen of the United States or an alien lawfully admitted for permanent residence in to the United States; (v) Name of the system of records, as published in the <E T="04">Federal Register</E>; (vi) Location of the system of records, as published in the <E T="04">Federal Register</E>; (vii) Such additional information as the individual knows will or believes might assist the Department in responding to the inquiry (for example, the individual's past or present relationship with the Department, e.g. mortgagor, contractor, employee, including relevant dates) and in verifying the individual's identity (for example, date of birth, place of birth, names of parents, place of work, dates of employment, position title, etc.); (viii) Date of inquiry; and, (ix) Individual's signature. <FP>The Department reserves the right to require compliance with the identification procedures appearing at § 16.4(d) where circumstances warrant.</FP> (2) In compliance with 5 U.S.C. 552a (e)(3) each individual supplying the information in accordance with paragraph (b)(1) of this section hereby is informed that: (i) The authority authorizing solicitation of the information is 5 U.S.C. 552a, disclosure is voluntary, and no penalty is attached for failure to respond; (ii) The principal purpose for which the information is intended to be used is processing the inquiry under the Act; (iii) The routine uses which may be made of the information are the routine uses appearing as a prefatory statement to the Department's notice of systems of records published in the <E T="04">Federal Register</E>; and, (iv) The effects of not providing all or any part of the information may delay, or in some cases make impossible, the Department's processing of the action on the request under the Act. (3) If, having been made aware of the contents of paragraph (b)(2) of this section, an individual submits the information listed in paragraph (b)(1) of this section, he or she will be deemed to have made the submission on a purely voluntary and consentual basis. (c) When an inquiry is misdirected by the requester, or not addressed as specified in paragraph (a) of this section, the Department official receiving same shall make reasonable effort to identify, and promptly refer it to, the appropriate Privacy Act Officer and the time of receipt for processing purposes will be the time when it is received by the Privacy Act Officer. (d) When an inquiry fails to provide necessary information as set forth in paragraph (b) of this section, the requester shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the Privacy Act Officer. (e) Each inquiry received shall be acted upon promptly by the responsible Privacy Act Officer. Every effort will be made to respond within ten days (excluding Saturdays, Sundays and holidays) of the date of receipt. If a response cannot be made within ten days, the Privacy Act Officer shall send an acknowledgement during that period providing information on the status of the inquiry. The Privacy Act Officer may indicate that additional information would facilitate processing or that further information is necessary to process the inquiry. </SECTION> <SECTION> <SECTNO>§ 16.4</SECTNO> <SUBJECT>Requests for access; requirements.</SUBJECT> (a) Any individual, regardless of age, may submit to the Department a request for access to records of the Department. The request should be made either in person at the Office of, or by mail addressed to, the responsible Privacy Act Officer identified in Appendix A to this part. Although oral requests may be honored, a requester may be asked to submit his request in writing. The envelope containing the request and the letter itself should both clearly indicate that the subject is a PRIVACY <PRTPAGE P="141"/>ACT REQUEST FOR ACCESS TO RECORDS. (b) When a request for access to records is misdirected by the requester, or not addressed as specified in paragraph (a) of this section, the Department official receiving same shall promptly refer it to the appropriate Privacy Act Officer and the time of receipt for processing purposes will be the time when it is received by that official. (c) When a request for access to records fails to provide necessary information as set forth in paragraph (b) of this section the requester shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (d) The requirements for identification of individuals seeking access to records are as follows: (1) <E T="03">In person.</E> Each individual making a request in person shall be required to present satisfactory proof of identity. The means of proof, in the order of preference and priority, are: (i) A document bearing the individual's photograph (for example, passport or military or civilian identification card); (ii) A document bearing the individual's signature (for example, driver's license, social security card, unemployment insurance book, employer's identification card, national credit card and professional, craft or union membership card); and (iii) A document bearing neither the photograph nor the signature of the individual (for example, a Medicaid card). In the event the individual can provide no suitable documentation of identity, the Department will require a signed statement asserting the individual's identity and stipulating that the individual understands the penalty provision of 5 U.S.C. 552a(i)(3). That penalty provision also appears at § 16.13(a). In order to avoid any unwarranted disclosure of an individual's records, the Department reserves the right to determine to its satisfaction whether proof of identity offered by any individual is adequate. (2) <E T="03">Not in person.</E> If the individual making a request does not appear in person before a Privacy Act Officer, the information set forth in § 16.3(b)(1) and a certificate of a notary public or equivalent officer empowered to administer oaths must accompany the request. The certificate within or attached to the letter must be substantially in accord with the following text: <EXTRACT> <FP>City of ——————————</FP> <FP>County of ——————————:</FP> ss —————————— (name of individual), who affixed (his) (her) signature below in my presence, came before me, a ———————— (title), in and for the aforesaid County and State, this —————— day of ——————, 19—, and established (his) (her) identity to my satisfaction. My commission expires ——————————. <FP SOURCE="FP-1">——————————————————</FP> (signature) </EXTRACT> <FP>If the request follows inquiry under § 16.3, this should be indicated in the request for access in order to facilitate processing.</FP> (3) <E T="03">Parents of minors and legal guardians.</E> An individual acting as the parent of a minor or the legal guardian of the individual to whom a record pertains shall establish his or her personal identity in the same manner prescribed in either paragraph (d) (1) or (2) of this section. In addition, such other individual shall establish his or her representative capacity of parent or legal guardian. In the case of the parent of a minor, the proof of identity shall be a certified or authenticated copy of the minor's birth certificate. In the case of a legal guardian of an individual who has been declared incompetent due to physical or mental incapacity or age by a court of competent jurisdiction, the proof of identity shall be a certified or authenticated copy of the court's order. A parent or legal guardian may act only for a living individual, not for a decedent. A parent or legal guardian may be accompanied during personal access to a record by another individual, provided the provisions of § 16.5(e) are satisfied. (e) When the provisions of this part are alleged to have the effect of impeding an individual in exercising his or her right to access, the Department will consider alternative suggestions from an individual making a request, <PRTPAGE P="142"/>regarding proof of identity and access to records. (f) An individual shall not be required to state a reason or otherwise justify his or her request for access to a record. </SECTION> <SECTION> <SECTNO>§ 16.5</SECTNO> <SUBJECT>Disclosure of requested information to individuals.</SUBJECT> (a) Each request received shall be acted upon promptly by the responsible Privacy Act Officer. Every effort will be made to respond within ten days (excluding Saturdays, Sundays and holidays) of the date of receipt. If a response cannot be made within ten days due to unusual circumstances, the Privacy Act Officer shall send an acknowledgement during that period providing information on the status of the request and asking for such further information as may be necessary to process the request. <E T="03">Unusual circumstances</E> shall include circumstances where a search for and collection of requested records from inactive storage, field facilities or other establishments are required, cases where a voluminous amount of data is involved, instances where information on other individuals must be separated or expunged from the particular record, and cases where consultations with other agencies having a substantial interest in the determination of the request are necessary. (b) <E T="03">Grant of access</E>—(1) <E T="03">Notification.</E> An individual shall be granted access to a record pertaining to him or her, except where the provisions of § 16.6 apply. The Privacy Act Officer shall notify the individual of such determination and provide the following information: (i) The methods of access, as set forth in paragraph (b)(2) of this section; (ii) The place at which the record may be inspected; (iii) The earliest date on which the record may be inspected and the period of time that the records will remain available for inspection and/or the estimated date by which a copy of the record could be mailed and the estimate of fees pursuant to § 16.12; (iv) The fact that the individual, if he or she wishes, may be accompanied by another individual during personal access, subject to procedures set forth in paragraph (e) of this section; and (v) Any additional requirements needed to grant access to a specific record. (2) <E T="03">Methods of access.</E> The following methods of access to records by an individual may be available depending on the circumstances of a given situation: (i) Inspection in person may be had in the office specified by the Privacy Act Officer granting access during hours indicated by the Privacy Act Officer; (ii) Transfer of records to a Federal facility more convenient to the individual may be arranged, but only if the Privacy Act Officer determines that a suitable facility is available, that the individual's access can be properly supervised at the facility, and that transmittal of the records to that facility will not unduly interfere with operations of the Department or involve unreasonable costs, in terms of both money and manpower; and (iii) Copies may be mailed at the request of the individual, subject to payment of the fees prescribed in § 16.12. The Department, at its own initiative, may elect to provide a copy by mail, in which case no fee will be charged the individual. (c) The Department shall supply such other information and assistance at the time of access as to make the record intelligible to the individual. (d) The Department reserves the right to limit access to copies and abstracts of original records, rather than the original records. This election would be appropriate, for example, when the record is in an automated data media such as tape or disc, when the record contains information on other individuals, and when deletion of information is permissible under exemptions (for example, 5 U.S.C. 552a(k)(2)). In no event shall original records of the Department be made available to the individual except under the immediate supervision of the Privacy Act Officer or his designee. It is a crime to conceal, mutilate, obliterate, or destroy any record filed in a public office, or to attempt to do any of the foregoing, Title 18, United States Code, 2701(a). (e) Any individual who requests access to a record pertaining to that individual may be accompanied by another <PRTPAGE P="143"/>individual of his or her choice. <E T="03">Accompanied</E> includes discussion of the record in the presence of the other individual. The individual to whom the record pertains shall authorize the presence of the other individual by a signed and dated document which includes the name of the other individual and specifically describes the record to which access is sought. The other individual shall sign the authorization in the presence of the Privacy Act Officer. An individual shall not be required to state a reason or otherwise justify his or her decision to be accompanied by another individual during personal access to a record. </SECTION> <SECTION> <SECTNO>§ 16.6</SECTNO> <SUBJECT>Initial denial of access.</SUBJECT> (a) <E T="03">Grounds.</E> Access by an individual to a record which pertains to that individual will be denied only upon a determination by the Privacy Act Officer that: (1) The record is subject to an exemption under § 16.14, § 16.15 or to an exemption determined by another agency noticing the system of records; (2) The record is information compiled in reasonable anticipation of a civil action or proceeding; or (3) The individual unreasonably has failed to comply with the procedural requirements of this part. (b) <E T="03">Notification.</E> The Privacy Act Officer shall give notice of denial of access to records to the individual in writing and shall include the following information: (1) The Privacy Act Officer's name and title or position; (2) The date of the denial; (3) The reasons for the denial, including citation to the appropriate section of the Act and/or this part; (4) The individual's opportunities, if any, for further administrative consideration, including the identity and address of the appropriate Privacy Appeals Officer. If no further administrative consideration within the Department is available, the notice shall state that the denial is administratively final; and, (5) If stated to be administratively final; and, within the Department, the individual's right to judicial review under 5 U.S.C. 552a(g)(1), as amended by 5 U.S.C. 552a(g)(5). <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 20297, Apr. 19, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.7</SECTNO> <SUBJECT>Administrative review of initial denial of access.</SUBJECT> (a) Review shall be available only from a written denial of a request for access issued under § 16.6(a) (2) or (3) and only if a written request for review is filed within thirty calendar days after the issuance of the written denial. (b) A request for review shall be addressed to the Privacy Appeals Officer identified in the initial denial, which official is authorized to make final determinations. The envelope containing the request for review and the letter itself should both clearly indicate that the subject is a PRIVACY ACT REQUEST FOR REVIEW. (c) When a request for review is misdirected by the requester, or not addressed as specified in paragraph (b) of this section, the Department official receiving same shall promptly refer it to the Privacy Appeals Officer and the time of receipt for processing purposes will be the time when it is received by the appropriate official. (d) When a request for review fails to provide necessary information as set forth in paragraph (e) of this section, the requester shall be given reasonable opportunity to amend the request and shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (e) The filing of a request for review may be accomplished by mailing to the Privacy Appeals Officer a copy of the request for access, if in writing; a copy of the written denial issued under § 16.6; and a statement of the reasons why the initial denial is believed to be in error. The appeal shall be signed by the individual. (f) No hearing will be allowed in connection with administrative review of an initial denial of access. (g) The Privacy Appeals Officer shall act upon the appeal and issue a final determination in writing not later than thirty days (excluding Saturdays, Sundays and holidays) from the date <PRTPAGE P="144"/>on which the appeal is received; provided, that the Privacy Appeals officer may extend the thirty days upon deciding that a fair and equitable review cannot be made within that period, but only if the individual is advised in writing of the reason for the extension and the estimated date by which a final determination will issue, which estimated date should not be later than the sixtieth day (excluding Saturdays, Sundays and holidays) after receipt of the appeal unless there exist unusual circumstances, as described in § 16.5(a). (h) The decision after review will be in writing, will constitute final action of the Department on a request for access, and, if the denial of the request is in whole or part upheld, the Department shall notify the person making the request of his right to judicial review under 5 U.S.C. 552a(g)(1), as amended by 5 U.S.C. 552a(g)(5). </SECTION> <SECTION> <SECTNO>§ 16.8</SECTNO> <SUBJECT>Request for correction or amendment to record.</SUBJECT> (a) Any individual, regardless of age, may submit to the Department a request for correction or amendment of a record pertaining to that individual. The request should be made either in person at the office of, or by mail addressed to, the Privacy Act Officer who processed the individual's request for access to the record. Although an oral request may be honored, a requester may be asked to submit his or her request in writing. The envelope containing the request and the letter itself should both clearly indicate that the subject is a PRIVACY ACT REQUEST FOR CORRECTION OR AMENDMENT. (b) When a request for correction or amendment is misdirected by the requester, or not addressed as specified in paragraph (a) of this section, the Department official receiving same shall make reasonable effort to identify, and promptly refer it to, the appropriate Privacy Act Officer and the time of receipt for processing purposes will be the time when it is received by the appropriate official. (c) When a request for correction or amendment fails to provide necessary information as set forth in paragraph (e) of this section, the requester shall be given reasonable opportunity to answer the request and shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (d) Since the request, in all cases, will follow a request for access under § 16.4, the individual's identity will be established by his or her signature on the request. (e) A request for correction or amendment should include the following: (1) A specific identification of the record sought to be corrected or amended (for example, description, title, date, paragraph, sentence, line and words); (2) The specific wording to be deleted, if any; (3) The specific wording to be inserted or added, if any, and the exact place at which it is to be inserted or added; and (4) A statement of the basis for the requested correction or amendment, with all available supporting documents and materials which substantiate the statement. (f) The provisions of § 16.3(b) (2) and (3) apply to the information obtained under paragraph (e) of this section. </SECTION> <SECTION> <SECTNO>§ 16.9</SECTNO> <SUBJECT>Agency procedures upon request for correction or amendment of record.</SUBJECT> (a)(1) Not later than ten days (excluding Saturdays, Sundays and holidays) after receipt of a request to correct or amend a record, the Privacy Act Officer shall send an acknowledgment providing an estimate of time within which action will be taken on the request and asking for such further information as may be necessary to process the request. The estimate of time may take into account unusual circumstances as described in § 16.5(a). No acknowledgment will be sent if the request can be reviewed, processed, and the individual notified of the results of review (either compliance or denial) within the ten days. Requests filed in person will be acknowledged at the time submitted. (2) Promptly after acknowledging receipt of a request, or after receiving such further information as might have been requested, or after arriving at a decision within the time prescribed in <PRTPAGE P="145"/>§ 16.9(a)(1), the Privacy Act Officer shall either: (i) Make the requested correction or amendment and advise the individual in writing of such action, providing either a copy of the corrected or amended record or a statement as to the means whereby the correction or amendment was effected in cases where a copy cannot be provided; or, (ii) Inform the individual in writing that his or her request is denied and provide the following information: (A) The Privacy Act Officer's name and title and position; (B) The date of the denial; (C) The reasons for the denial, including citation to the appropriate sections of the Act and this part; and, (D) The procedures for appeal of the denial as set forth in § 16.10, including the name and address of the Privacy Appeals Officer. The term <E T="03">promptly</E> in this § 16.9 means within thirty days (excluding Saturdays, Sundays and holidays). If the Privacy Act Officer cannot make the determination within thirty days, the individual will be advised in writing of the reason therefor and of the estimated date by which the determination will be made. (b) Whenever an individual's record is corrected or amended pursuant to a request by that individual, the Privacy Act Officer shall see to the notification of all persons and agencies to which the corrected or amended portion of the record had been disclosed prior to its correction or amendment, if an accounting of such disclosure was made as required by the Act. The notification shall require a recipient agency maintaining the record to acknowledge receipt of the notification, to correct or amend the record and to appraise any agency or person to which it had disclosed the record of the substance of the correction or amendment. (c) The following criteria will be considered by the Privacy Act Officer in reviewing a request for correction or amendment: (1) The sufficiency of the evidence submitted by the individual; (2) The factual accuracy of the information; (3) The relevance and necessity of the information in terms of the purpose for which it was collected; (4) The timeliness and currency of the information in terms of the purpose for which it was collected: (5) The completeness of the information in terms of the purpose for which it was collected: (6) The possibility that denial of the request could unfairly result in determinations adverse to the individual; (7) The character of the record sought to be corrected or amended; and (8) The propriety and feasibility of complying with the specific means of correction or amendment requested by the individual. (d) The Department will not undertake to gather evidence for the individual, but does reserve the right to verify the evidence which the individual submits. (e) Correction or amendment of a record requested by an individual will be denied only upon a determination by the Privacy Act Officer that: (1) There has been a failure to establish, by the evidence presented, the propriety of the correction or amendment in light of the criteria set forth in paragraph (c) of this section; (2) The record sought to be corrected or amended was compiled in a terminated judicial, quasi-judicial, legislative or quasi-legislative proceeding to which the individual was a party or participant; (3) The information in the record sought to be corrected or amended, or the record sought to be corrected or amended, is the subject of a pending judicial, quasi-judicial or quasi-legislative proceeding to which the individual is a party or participant; (4) The correction or amendment would violate a duly enacted statute or promulgated regulation; or, (5) The individual unreasonably has failed to comply with the procedural requirements of this part. (f) If a request is partially granted and partially denied, the Privacy Act Officer shall follow the appropriate procedures of this section as to the rec-ords within the grant and the records within the denial. </SECTION> <SECTION> <PRTPAGE P="146"/> <SECTNO>§ 16.10</SECTNO> <SUBJECT>Appeal of initial adverse agency determination on correction or amendment.</SUBJECT> (a) Appeal shall be available only from a written denial of a request for correction or amendment of a record issued under § 16.9, and only if a written appeal is filed within thirty calendar days after the issuance of the written denial. (b) Each appeal shall be addressed to the Privacy Appeals Officer identified in the written denial. The envelope containing the appeal and the letter itself should both clearly indicate that the subject is PRIVACY ACT APPEAL. (c) When an appeal is misdirected by the requester, or not addressed as specified in paragraph (b) of this section, the Department official receiving same shall promptly refer it to the appropriate Privacy Appeals Officer and the time of receipt for processing purposes will be the time when it is received by the appropriate official. (d) When an appeal fails to provide the necessary information as set forth in paragraph (e) of this section, the requester shall be advised that the time for receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (e) The individual's appeal papers shall include the following: A copy of the original request for correction or amendment; a copy of the initial denial; and a statement of the reasons why the initial denial is believed to be in error. The appeal shall be signed by the individual. The record which the individual requests be corrected or amended will be supplied by the Privacy Act Officer who issued the initial denial. While the foregoing normally will comprise the entire record on appeal, the Privacy Appeals Officer may seek additional information necessary to assure that the final determination is fair and equitable and, in such instances, the additional information will be disclosed to the individual to the greatest extent possible and an opportunity provided for comment thereon. (f) No hearing on appeal will be allowed. (g) The Privacy Appeals Officer shall act upon the appeal and issue a final Department determination in writing not later than thirty days (excluding Saturdays, Sundays and holidays) from the date on which the appeal is received; provided, that the Privacy Appeals Officer may extend the thirty days upon deciding that a fair and equitable review cannot be made within that period, but only if the individual is advised in writing of the reason for the extension and the estimated date by which a final determination will issue (which estimated date should not be later than the sixtieth day (excluding Saturdays, Sundays and holidays) after receipt of the appeal unless unusual circumstances, as described in § 16.5(a), are met). (h) If the appeal is determined in favor of the individual, the final determination shall include the specific corrections or amendments to be made and a copy thereof shall be transmitted promptly both to the individual and to the Privacy Act Officer who issued the initial denial. Upon receipt of such final determination, the Privacy Act Officer promptly shall take the actions set forth in § 16.9(a)(2)(i) and § 16.9(b). (i) If the appeal is denied, the final determination shall be transmitted promptly to the individual and shall state the reasons for the denial. The notice of final determination also shall inform the individual of the following information: (1) The right of the individual to file a concise statement of reasons for disagreeing with the final determination. The statement ordinarily should not exceed one page and the Department reserves the right to reject a statement of excessive length. Such a statement shall be filed with the Privacy Appeals Officer. It should identify the date of the final determination and be signed by the individual. The Privacy Appeals Officer shall acknowledge receipt of such statement and inform the individual of the date on which it was received; (2) The fact that any such disagreement statement filed by the individual will be noted in the disputed record and that a copy of the statement will be provided to persons and agencies to which the record is disclosed subsequent to the date of receipt of such statement;<PRTPAGE P="147"/> (3) The fact that prior recipients of the disputed record will be provided a copy of any statement of the dispute to the extent that an accounting of disclosures, as required by the Act, was made; (4) The fact that the Department will append to any such disagreement statement filed by the individual, a copy of the final determination or summary thereof which also will be provided to persons and agencies to which the disagreement statement is disclosed; and, (5) The right of the individual to judicial review of the final determination under 5 U.S.C. 552a(g)(1)(A), as limited by 5 U.S.C. 552a(g)(5). (j) In making the final determination, the Privacy Appeals Officer shall employ the criteria set forth in paragraph 16.9(c) and shall deny an appeal only on the grounds set forth in § 16.9(e). (k) If an appeal is partially granted and partially denied, the Privacy Appeals Officer shall follow the appropriate procedures of this section as to the records within the grant and the rec-ords within the denial. (l) Although a copy of the final determination or a summary thereof will be treated as part of the individual's record for purposes of disclosure in instances where the individual has filed a disagreement statement, it will not be subject to correction or amendment by the individual. (m) The provisions of § 16.3(b) (2) and (3) apply to the information obtained under paragraphs (e) and (i)(1) of this section. </SECTION> <SECTION> <SECTNO>§ 16.11</SECTNO> <SUBJECT>Disclosure of record to person other than the individual to whom it pertains.</SUBJECT> (a) The Department may disclose a record pertaining to an individual to a person other than the individual only in the following instances: (1) Upon written request by the individual, including authorization under § 16.5(e); (2) With the prior written consent of the individual; (3) To a parent or legal guardian under 5 U.S.C. 552a(h); and, (4) When required by the Act and not covered explicitly by the provisions of 5 U.S.C. 552a(b); and, (5) When permitted under 5 U.S.C. 552a(b) (1) through (11), which read as follows: <EXTRACT> (1) To those officers and employees of the agency which maintains the record who have a need for the record in the performance of their duties; (2) Required under section 552 of this title; (3) For a routine use as defined in subsection (a)(7) of this section and described under subsection (e)(4)(D) of this section; (4) To the Bureau of the Census for purposes of planning or carrying out a census or survey or related activity pursuant to the provisions of title 13; (5) To a recipient who has provided the agency with advance adequate written assurance that the record will be used solely as a statistical research or reporting record, and the record is to be transferred in a form that is not individually identifiable; (6) To the National Archives of the United States as a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Administrator of General Services or his designee to determine whether the record has such value; (7) To another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency which maintains the record specifying the particular portion desired and the law enforcement activity for which the record is sought; (8) To a person pursuant to a showing of compelling circumstances affecting the health or safety of an individual if upon such disclosure notification is transmitted to the last known address of such individual; (9) To either House of Congress, or, to the extent of matter within its jurisdiction, any committee or subcommittee thereof, any joint committee of Congress or subcommittee of any such joint committee; (10) To the Comptroller General, or any of his authorized representatives, in the course of the performance of the duties of the General Accounting Office; or (11) Pursuant to the order of a court of competent jurisdiction. </EXTRACT> (b) The situations referred to in paragraph (a)(4) of this section include the following: (1) 5 U.S.C. 552a(c)(4) requires dissemination of a corrected or amended record or notation of a disagreement statement by the Department in certain circumstances:<PRTPAGE P="148"/> (2) 5 U.S.C. 552(a)(g) authorizes civil action by an individual and requires disclosure by the Department or the court; (3) Section 5(e)(2) of the Act authorizes release of any records or information by the Department to the Privacy Protection Study Commission upon request of the Chairman; and (4) Section 6 of the Act authorizes the Office of Management and Budget to provide the Department with continuing oversight and assistance in implementation of the Act. (c) The Department shall make an accounting of each disclosure of any record contained in a system of rec-ords in accordance with 5 U.S.C. 552a(c) (1) and (2). Except for a disclosure made under 5 U.S.C. 552a(b)(7), the Privacy Act Officer shall make such accounting available to any individual, insofar as it pertains to that individual, on request submitted in accordance with § 16.4. The Privacy Act Officer shall make reasonable efforts to notify any individual when any record in a system of records is disclosed to any person under compulsory legal process, promptly upon being informed that such process has become a matter of public record. </SECTION> <SECTION> <SECTNO>§ 16.12</SECTNO> <SUBJECT>Fees.</SUBJECT> (a) The only fees to be charged to or collected from an individual under the provisions of this part are for copying records at the request of the individual. (1) No fees shall be charged or collected for the following: Search for and retrieval of the records; review of the records; copying at the initiative of the Department without a request from the individual; transportation of records and personnel; and first class postage. (2) It is the policy of the Department to provide an individual with one copy of each record corrected or amended pursuant to his or her request without charge as evidence of the correction or amendment. (3) As requested by the United States Civil Service Commission in its published regulations implementing the Act, the Department will charge no fee to an individual who requests copies of a personnel record covered by that Commission's Government-wide published notice of systems of rec-ords. However, when such records are voluminous and the cost of copying would be in excess of five dollars ($5) the Department may, in its discretion, charge a fee. (b) The copying fees prescribed by paragraph (a) of this section are: <EXTRACT> <FP SOURCE="FP-1">$0.10 Each copy of each page, up to 8 <FR>1/2</FR>″ x 14″ made by photocopy or similar process.</FP> <FP SOURCE="FP-1">$0.20 Each page of computer printout without regard to the number of carbon copies concurrently printed. </FP> </EXTRACT> (c) Payment of fees under this section shall be made in cash, or preferably by check or money order payable to the “Treasurer of the United States.” Payment shall be delivered or sent to the office stated in the billing notice or, if none is stated, to the Privacy Act Officer processing the request. Payment may be required in the form of a certified check in appropriate circumstances. Postage stamps will not be accepted. (d) A copying fee totaling $1 or less shall be waived, but the copying fees for contemporaneous requests by the same individual shall be aggregated to determine the total fee. A copying fee shall not be charged or collected, or alternatively, it may be reduced when such action is determined by the Privacy Act Officer to be in the public interest. (e) Special and additional services provided at the request of the individual, such as certification or authentication, postal insurance and special mailing arrangement costs, will be charged to the individual in accordance with other published regulations of the Department pursuant to statute (for example, 31 U.S.C. 433a). (f) This section applies only to individuals making requests under this part. All other persons shall remain subject to fees and charges prescribed by other and appropriate authorities. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 29479, June 9, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.13</SECTNO> <SUBJECT>Penalties.</SUBJECT> (a) The Act provides, in pertinent part: <EXTRACT> Any person who knowingly and willfully requests or obtains any record concerning an <PRTPAGE P="149"/>individual from an agency under false pretences shall be guilty of a misdemeanor and fined not more than $5,000. (5 U.S.C. 552a(i)(3)) </EXTRACT> (b) A person who falsely or fraudulently attempts to obtain records under the Act may also be subject to prosecution under such other criminal statutes as 18 U.S.C. 494, 495 and 1001. </SECTION> <SECTION> <SECTNO>§ 16.14</SECTNO> <SUBJECT>General exemptions.</SUBJECT> (a) Individuals may not have access to records maintained by the Department but which were provided by another agency which has determined by regulation that such information is subject to general exemption under 5 U.S.C. 552a(j). If such exempt records are within a request for access, the Department will advise the individual of their existence and of the name and address of the source agency. For any further information concerning the record and the exemption, the individual must contact that source agency. (b) The Secretary of Housing and Urban Development has determined that the Office of the Assistant Inspector General for Investigation performs, as its principal function, activities pertaining to the enforcement of criminal laws. The records maintained by that office in a system identified as “HUD/DEPT-24, Investigation Files,” primarily consist of information compiled for the purpose of criminal investigations and are associated with identifiable individuals. Therefore, the Secretary has determined that this system of records shall be exempt, consistent with 5 U.S.C. 552a(j)(2), from all requirements of the Privacy Act except 5 U.S.C. 552a (b), (c) (1) and (2), (e)(4) (A) through (F), (e) (6), (7), (9), (10), and (11), and (i) unless elsewhere exempted. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 49 FR 20486, May 15, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.15</SECTNO> <SUBJECT>Specific exemptions.</SUBJECT> Whenever the Secretary of Housing and Urban Development determines it to be necessary and proper, with respect to any system of records maintained by the Department, to exercise the right to promulgate rules to exempt such systems in accordance with the provisions of 5 U.S.C. 552a(k), each specific exemption, including the parts of each system to be exempted, the provisions of the Act from which they are exempted, and the justification for each exemption shall be published in the <E T="04">Federal Register</E> as part of the Department's Notice of Systems of Records. (a) Exempt under 5 U.S.C. 552a(k)(2) from the requirements of 5 U.S.C. 552a (c)(3), (d), (e)(1), (e)(4) (G), (H), (I), and (f). This exemption allows the Department to withhold records compiled for law enforcement purposes. The reasons for adopting this exemption are to prevent individuals, who are the subjects of investigation, from frustrating the investigatory process, to ensure the integrity of the investigatory process, to ensure the integrity of law enforcement activities, to prevent disclosure of investigative techniques, and to protect the confidentiality of sources of information. The names of systems correspond to those published in the <E T="04">Federal Register</E> as part of the Department's Notice of Systems of Records. (1) HUD/DEPT-15. Equal Opportunity Housing Complaints. (2) HUD/DEPT-24. Investigation Files in the Office of the Inspector General. (3) HUD/DEPT-25. Legal Action Files. (b) Exempt under 5 U.S.C. 552(k)(5) from the requirements of 5 U.S.C. 552a (c)(3), (d), (e)(1), (e)(4), (G), (H), and (I), and (f). This exemption allows the Department to withhold records compiled solely for the purpose of determining suitability, eligibility, or qualifications for Federal contracts, or access to classified material. The reasons for adopting this exemption are to insure the proper functioning of the investigatory process, to insure effective determination of suitability, eligibility and qualification for employment and to protect the confidentiality of sources of information. The names of systems correspond to those published in the <E T="04">Federal Register</E> as part of the Department's Notice of Systems of Records. (1) HUD/DEPT-24. Investigation Files in the Office of the Inspector General. (2) HUD/DEPT-25. Legal Action Files. (c) The system of records entitled “HUD/PIH-1. Tenant Eligibility Verification Files” consists in part of investigatory material compiled for law enforcement purposes. Relevant <PRTPAGE P="150"/>records will be used by appropriate Federal, state or local agencies charged with the responsibility for investigating or prosecuting violations of law. Therefore, to the extent that information in the system falls within the coverage of subsection (k)(2) of the Privacy Act, 5 U.S.C. 552a(k)(2), the system is exempt from the requirements of the following subsections of the Privacy Act, for the reasons stated below. (1) From subsection (c)(3) because release of an accounting of disclosures to an individual who may be the subject of an investigation could reveal the nature and scope of the investigation and could result in the altering or destruction of evidence, improper influencing of witnesses, and other evasive actions that could impede or compromise the investigation. (2) From subsection (d)(1) because release of the records to an individual who may become or has become the subject of an investigation could interfere with pending or prospective law enforcement proceedings, constitute an unwarranted invasion of the personal privacy of third parties, reveal the identity of confidential sources, or reveal sensitive investigative techniques and procedures. (3) From subsection (d)(2) because amendment or correction of the records could interfere with pending or prospective law enforcement proceedings, or could impose an impossible administrative and investigative burden by requiring the office that maintains the records to continuously retrograde its verifications of tenant eligibility attempting to resolve questions of accuracy, relevance, timeliness and completeness. (4) From subsection (e)(1) because it is often impossible to determine relevance or necessity of information in pre-investigative early stages. The value of such information is a question of judgment and timing; what appears relevant and necessary when collected may ultimately be evaluated and viewed as irrelevant and unnecessary to an investigation. In addition, the Assistant Secretary for Public and Indian Housing, or investigators, may obtain information concerning the violation of laws other than those within the scope of its jurisdiction. In the interest of effective law enforcement, the Assistant Secretary for Public and Indian Housing, or investigators, should retain this information because it may aid in establishing patterns of unlawful activity and provide leads for other law enforcement agencies. Further, in obtaining the evidence, information may be provided which relates to matters incidental to the main purpose of the inquiry or investigation but which may be pertinent to the investigative jurisdiction of another agency. Such information cannot readily be identified. (d) The system of records entitled “HUD/PIH-1. Tenant Eligibility Verification Files” consists in part of material that may be used for the purpose of determining suitability, eligibility, or qualifications for Federal civilian employment or Federal contracts, the release of which would reveal the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confidence. Therefore, to the extent that information in this system falls within the coverage of subsection (k)(5) of the Privacy Act, 5 U.S.C. 552a(k)(5), the system is exempt from the requirements of the following subsection of the Privacy Act, for the reasons stated below. (1) From subsection (d)(1) because release would reveal the identity of a source who furnished information to the Government under an express promise of confidentiality. Revealing the identity of a confidential source could impede future cooperation by sources, and could result in harassment or harm to such sources. <CITA>[42 FR 49810, Sept. 28, 1977, as amended at 59 FR 9407, Feb. 28, 1994]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 17</EAR> <HD SOURCE="HED">PART 17—ADMINISTRATIVE CLAIMS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Claims Against Government Under Federal Tort Claims Act</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>17.1</SECTNO> <SUBJECT>Scope; definitions.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures</HD> <SECTNO>17.2</SECTNO> <SUBJECT>Administrative claim; when presented; appropriate HUD office.</SUBJECT> <SECTNO>17.3</SECTNO> <SUBJECT>Administrative claim; who may file.<PRTPAGE P="151"/> </SUBJECT> <SECTNO>17.4</SECTNO> <SUBJECT>Administrative claim; evidence and information to be submitted.</SUBJECT> <SECTNO>17.5</SECTNO> <SUBJECT>Investigations.</SUBJECT> <SECTNO>17.6</SECTNO> <SUBJECT>Claims investigation.</SUBJECT> <SECTNO>17.7</SECTNO> <SUBJECT>Authority to adjust, determine, compromise, and settle claims.</SUBJECT> <SECTNO>17.8</SECTNO> <SUBJECT>Limitations on authority.</SUBJECT> <SECTNO>17.9</SECTNO> <SUBJECT>Referral to Department of Justice.</SUBJECT> <SECTNO>17.11</SECTNO> <SUBJECT>Final denial of claim.</SUBJECT> <SECTNO>17.12</SECTNO> <SUBJECT>Action on approved claim.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Claims Under the Military Personnel and Civilian Employees Claims Act of 1964</HD> <SECTNO>17.40</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> <SECTNO>17.41</SECTNO> <SUBJECT>Claimants.</SUBJECT> <SECTNO>17.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> <SECTNO>17.43</SECTNO> <SUBJECT>Allowable claims.</SUBJECT> <SECTNO>17.44</SECTNO> <SUBJECT>Restrictions on certain claims.</SUBJECT> <SECTNO>17.45</SECTNO> <SUBJECT>Unallowable claims.</SUBJECT> <SECTNO>17.46</SECTNO> <SUBJECT>Claims involving carriers or insurers.</SUBJECT> <SECTNO>17.47</SECTNO> <SUBJECT>Settlement of claims.</SUBJECT> <SECTNO>17.48</SECTNO> <SUBJECT>Computation of amount of award.</SUBJECT> <SECTNO>17.49</SECTNO> <SUBJECT>Attorney's fees.</SUBJECT> <SECTNO>17.50</SECTNO> <SUBJECT>Claims procedures.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for the Collection of Claims by the Government</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTNO>17.60</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> <SECTNO>17.61</SECTNO> <SUBJECT>Incorporation of joint standards by reference.</SUBJECT> <SECTNO>17.62</SECTNO> <SUBJECT>Subdivision and joining of claims.</SUBJECT> <SECTNO>17.63</SECTNO> <SUBJECT>Authority of offices to attempt collection of claims.</SUBJECT> <SECTNO>17.64</SECTNO> <SUBJECT>Referral of claims to the Assistant Secretary for Administration.</SUBJECT> <SECTNO>17.65</SECTNO> <SUBJECT>Authority of offices to compromise claims or suspend or terminate collection action.</SUBJECT> <SECTNO>17.66</SECTNO> <SUBJECT>Department claims officer.</SUBJECT> <SECTNO>17.67</SECTNO> <SUBJECT>Claims files.</SUBJECT> <SECTNO>17.68</SECTNO> <SUBJECT>Monthly report of collection action.</SUBJECT> <SECTNO>17.69</SECTNO> <SUBJECT>Accounting control.</SUBJECT> <SECTNO>17.70</SECTNO> <SUBJECT>Record retention.</SUBJECT> <SECTNO>17.71</SECTNO> <SUBJECT>Suspension or revocation of eligibility.</SUBJECT> <SECTNO>17.72</SECTNO> <SUBJECT>Methods of collection and imposition of late charges.</SUBJECT> <SECTNO>17.73</SECTNO> <SUBJECT>Standards for compromise of claims.</SUBJECT> <SECTNO>17.74</SECTNO> <SUBJECT>Standards for suspension or termination of collection action.</SUBJECT> <SECTNO>17.75</SECTNO> <SUBJECT>Referral to GAO or Justice Department.</SUBJECT> <SECTNO>17.76</SECTNO> <SUBJECT>Disclosure to a consumer reporting agency.</SUBJECT> <SECTNO>17.77</SECTNO> <SUBJECT>Contracts for collection services.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Administrative Offset Provisions</HD> <SECTNO>17.100</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>17.101</SECTNO> <SUBJECT>Coordinating administrative offset with another Federal agency.</SUBJECT> <SECTNO>17.102</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> <SECTNO>17.103</SECTNO> <SUBJECT>Exceptions to notice requirements.</SUBJECT> <SECTNO>17.104</SECTNO> <SUBJECT>Review within the Department of a determination of indebtedness.</SUBJECT> <SECTNO>17.105</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> <SECTNO>17.106</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to administrative offset.</SUBJECT> <SECTNO>17.107</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> <SECTNO>17.108</SECTNO> <SUBJECT>Types of review.</SUBJECT> <SECTNO>17.109</SECTNO> <SUBJECT>Review procedures.</SUBJECT> <SECTNO>17.110</SECTNO> <SUBJECT>Determination of indebtedness and appeal from determination.</SUBJECT> <SECTNO>17.111</SECTNO> <SUBJECT>Procedures for administrative offset: single debt.</SUBJECT> <SECTNO>17.112</SECTNO> <SUBJECT>Procedures for administrative offset: multiple debts.</SUBJECT> <SECTNO>17.113</SECTNO> <SUBJECT>Procedures for administrative offset: interagency cooperation.</SUBJECT> <SECTNO>17.114</SECTNO> <SUBJECT>Procedures for administrative offset: time limitation.</SUBJECT> <SECTNO>17.115</SECTNO> <SUBJECT>Procedures for administrative offset: offset against amounts payable from Civil Service Retirement and Disability Fund.</SUBJECT> <SECTNO>17.116</SECTNO> <SUBJECT>Procedures for administrative offset: offset of debtor's judgment against the United States.</SUBJECT> <SECTNO>17.117</SECTNO> <SUBJECT>Procedures for administrative offset: imposition of interest.</SUBJECT> <SECTNO>17.118</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Salary Offset Provisions</HD> <SECTNO>17.125</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>17.126</SECTNO> <SUBJECT>Coordinating offset with another Federal agency.</SUBJECT> <SECTNO>17.127</SECTNO> <SUBJECT>Determination of indebtedness.</SUBJECT> <SECTNO>17.128</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> <SECTNO>17.129</SECTNO> <SUBJECT>Request for a hearing.</SUBJECT> <SECTNO>17.130</SECTNO> <SUBJECT>Result if employee fails to meet deadlines.</SUBJECT> <SECTNO>17.131</SECTNO> <SUBJECT>Written decision following a hearing.</SUBJECT> <SECTNO>17.132</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> <SECTNO>17.133</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to salary offset.</SUBJECT> <SECTNO>17.134</SECTNO> <SUBJECT>Procedures for salary offset: when deductions may begin.</SUBJECT> <SECTNO>17.135</SECTNO> <SUBJECT>Procedures for salary offset: types of collection.</SUBJECT> <SECTNO>17.136</SECTNO> <SUBJECT>Procedures for salary offset: methods of collection.</SUBJECT> <SECTNO>17.137</SECTNO> <SUBJECT>Procedures for salary offset: imposition of interest.</SUBJECT> <SECTNO>17.138</SECTNO> <SUBJECT>Non-waiver of rights.</SUBJECT> <SECTNO>17.139</SECTNO> <SUBJECT>Refunds.</SUBJECT> <SECTNO>17.140</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">IRS Tax Refund Offset Provisions</HD> <SECTNO>17.150</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>17.151</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> <SECTNO>17.152</SECTNO> <SUBJECT>Review within the Department of a determination that an amount is past-due and legally enforceable.</SUBJECT> <SECTNO>17.153</SECTNO> <SUBJECT>Determination of the Administrative Judge.<PRTPAGE P="152"/> </SUBJECT> <SECTNO>17.154</SECTNO> <SUBJECT>Postponements, withdrawals and extensions of time.</SUBJECT> <SECTNO>17.155</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> <SECTNO>17.156</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> <SECTNO>17.157</SECTNO> <SUBJECT>Application of offset funds: Single debt.</SUBJECT> <SECTNO>17.158</SECTNO> <SUBJECT>Application of offset funds: Multiple debts.</SUBJECT> <SECTNO>17.159</SECTNO> <SUBJECT>Application of offset funds: Tax refund insufficient to cover amount of debt.</SUBJECT> <SECTNO>17.160</SECTNO> <SUBJECT>Time limitation for notifying the IRS to request offset of tax refunds due.</SUBJECT> <SECTNO>17.161</SECTNO> <SUBJECT>Correspondence with the Department.</SUBJECT> </SUBJGRP> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-18, 3721, and 5 U.S.C. 5514; 42 U.S.C. 3535(d). </AUTH> <SUBPART> <HD SOURCE="HED">Subpart A—Claims Against Government Under Federal Tort Claims Act</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 5514; 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-3718, 3721; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 36 FR 24427, Dec. 22, 1971, unless otherwise noted. </SOURCE> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 17.1</SECTNO> <SUBJECT>Scope; definitions.</SUBJECT> (a) This subpart applies to claims asserted under the Federal Tort Claims Act, as amended, accruing on or after January 18, 1967, for money damages against the United States for injury to or loss of property or personal injury or death caused by the negligent or wrongful act or omission of an officer or employee of the Department while acting within the scope of his office or employment. (b) This subpart is issued subject to and consistent with applicable regulations on administrative claims under the Federal Tort Claims Act issued by the Attorney General (31 FR 16616; 28 CFR part 14). (c) The terms <E T="03">Department</E> and <E T="03">Organizational unit</E> are defined in 24 CFR part 5. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 61 FR 5204, Feb. 9, 1996]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures</HD> <SECTION> <SECTNO>§ 17.2</SECTNO> <SUBJECT>Administrative claim; when presented; appropriate HUD office.</SUBJECT> (a) For purposes of this subpart, a claim shall be deemed to have been presented when the Department receives, at a place designated in paragraph (b) of this section, an executed <E T="03">Claim for Damages or Injury,</E> Standard Form 95, or other written notification of an incident, accompanied by a claim for money damages in a sum certain for injury to or loss of property, for personal injury, or for death alleged to have occurred by reason of the incident. A claim which should have been presented to the Department, but which was mistakenly addressed to or filed with another Federal agency, is deemed to be presented to the Department as of the date that the claim is received by the Department. If a claim is mistakenly addressed to or filed with the Department, the Department shall forthwith transfer it to the appropriate Federal agency, if ascertainable, or return it to the claimant. (b) A claimant shall mail or deliver his claim to the office of employment of the Department employee or employees whose negligent or wrongful act or omission is alleged to have caused the loss or injury complained of. Where such office of employment is the Department Central Office in Washington, or is not reasonably known and not reasonably ascertainable, claimant shall file his claim with the Assistant Secretary for Administration, Department of Housing and Urban Development, 451 Seventh Street SW., Washington, DC 20410. In all other cases, claimant shall address his claim to the head of the appropriate office, the address of which will generally be found listed in the local telephone directory. </SECTION> <SECTION> <SECTNO>§ 17.3</SECTNO> <SUBJECT>Administrative claim; who may file.</SUBJECT> (a) A claim for injury to or loss of property may be presented by the owner of the property, his duly authorized agent, or his legal representative. (b) A claim for personal injury may be presented by the injured person, his duly authorized agent, or his legal representative. (c) A claim based on death may be presented by the executor or administrator of the decedent's estate, or by any other person legally entitled to assert such a claim in accordance with applicable State law.<PRTPAGE P="153"/> (d) A claim for loss wholly compensated by an insurer with the rights of a subrogee may be presented by the insurer. A claim for loss partially compensated by an insurer with the rights of a subrogee may be presented by the insurer or the insured individually, as their respective interests appear, or jointly. Whenever an insurer presents a claim asserting the rights of a subrogee, he shall present with his claim appropriate evidence that he has the rights of a subrogee. (e) A claim presented by an agent or legal representative shall be presented in the name of the claimant, be signed by the agent or legal representative, show the title or legal capacity of the person signing, and be accompanied by evidence of his authority to present a claim on behalf of the claimant as agent, executor, administrator, parent, guardian, or other representative. </SECTION> <SECTION> <SECTNO>§ 17.4</SECTNO> <SUBJECT>Administrative claim; evidence and information to be submitted.</SUBJECT> (a) <E T="03">Personal injury.</E> In support of a claim for personal injury, including pain and suffering, the claimant may be required to submit the following evidence or information: (1) A written report by his attending physician or dentist setting forth the nature and extent of the injury, nature and extent of treatment, any degree of temporary or permanent disability, the prognosis, period of hospitalization, and any diminished earning capacity. In addition, the claimant may be required to submit to a physical or mental examination by a physician employed or designated by the Department or another Federal agency. A copy of the report of the examining physician shall be made available to the claimant upon the claimant's written request provided that he has, upon request, furnished the report referred to in the first sentence of this subparagraph and has made or agrees to make available to the Department any other physician's report previously or thereafter made of the physical or mental condition which is the subject matter of his claim; (2) Itemized bills for medical, dental, and hospital expenses incurred, or itemized receipts of payment for such expenses; (3) If the prognosis reveals the necessity for future treatment, a statement of expected expenses for such treatment; (4) If a claim is made for loss of time from employment, a written statement from his employer showing actual time lost from employment, whether he is a full- or part-time employee, and wages or salary actually lost; (5) If a claim is made for loss of income and the claimant is self-employed, documentary evidence showing the amount of earnings actually lost; (6) Any other evidence or information which may have a bearing on either the responsibility of the United States for the personal injury or the damages claimed. (b) <E T="03">Death.</E> In support of a claim based on death, the claimant may be required to submit the following evidence or information: (1) An authenticated death certificate or other competent evidence showing cause of death, date of death, and age of the decedent; (2) Decedent's employment or occupation at time of death, including his monthly or yearly salary or earnings (if any), and the duration of his last employment or occupation; (3) Full names, addresses, birth dates, kinship, and marital status of the decedent's survivors, including identification of those survivors who were dependent for support upon the decedent at the time of his death; (4) Degree of support afforded by the decedent to each survivor dependent upon him for support at the time of his death; (5) Decedent's general physical and mental condition before death; (6) Itemized bills for medical and burial expenses incurred by reason of the incident causing death, or itemized receipts of payment for such expenses; (7) If damages for pain and suffering prior to death are claimed, a physician's detailed statement specifying the injuries suffered, duration of pain and suffering, any drugs administered for pain, and the decedent's physical condition in the interval between injury and death; (8) Any other evidence or information which may have a bearing on either the <PRTPAGE P="154"/>responsibility of the United States for the death or the damages claimed. (c) <E T="03">Property damage.</E> In support of a claim for injury to or loss of property, real or personal, the claimant may be required to submit the following evidence or information: (1) Proof of ownership; (2) A detailed statement of the amount claimed with respect to each item of property; (3) An itemized receipt of payment for necessary repairs or itemized written estimates of the cost of such repairs; (4) A statement listing date of purchase, purchase price, and salvage value where repair is not economical; (5) Any other evidence or information which may have a bearing on either the responsibility of the United States for the injury to or loss of property or the damages claimed. </SECTION> <SECTION> <SECTNO>§ 17.5</SECTNO> <SUBJECT>Investigations.</SUBJECT> The Department may investigate, or may request any other Federal agency to investigate, a claim filed under this subpart. </SECTION> <SECTION> <SECTNO>§ 17.6</SECTNO> <SUBJECT>Claims investigation.</SUBJECT> (a) When a claim has been filed with the Department, the head of the organizational unit concerned or his designee shall designate one employee in that unit who shall act as, and who shall be referred to herein as, the Claims Investigating Officer for that particular claim. When a claim is received by the head of an organizational unit to which this subpart applies, it shall be forwarded with or without comment to the designated Claims Investigating Officer, who shall: (1) Investigate as completely as is practicable the nature and circumstances of the occurrence causing the loss or damage of the claimant's property; (2) Ascertain the extent of loss or damage to the claimant's property; (3) Assemble the necessary forms with required data contained therein; (4) Prepare a brief statement setting forth the facts relative to the claim, a statement whether the claim satisfies the requirements of this subpart, and a recommendation as to the amount to be paid in settlement of the claim; (5) Submit such forms, statements, and all necessary supporting papers to the head of the organizational unit having jurisdiction over the employee involved, who will be responsible for assuring that all necessary data has been obtained for the file. The head of the organizational unit will transmit the entire file to the General Counsel. </SECTION> <SECTION> <SECTNO>§ 17.7</SECTNO> <SUBJECT>Authority to adjust, determine, compromise, and settle claims.</SUBJECT> The General Counsel, the Deputy General Counsel, and such employees of the Office of the General Counsel as may be designated by the General Counsel, are authorized to consider, ascertain, adjust, determine, compromise, and settle claims pursuant to the Federal Tort Claims Act, 28 U.S.C. 2671, and the regulations contained in 28 CFR part 14 and in this subpart. </SECTION> <SECTION> <SECTNO>§ 17.8</SECTNO> <SUBJECT>Limitations on authority.</SUBJECT> (a) An award, compromise, or settlement of a claim under section 2672 of Title 28, United States Code, and this subpart in excess of $25,000 may be effected only with the prior written approval of the Attorney General or his designee. For the purpose of this paragraph, a principal claim and any derivative or subrogated claim shall be treated as a single claim. (b) An administrative claim may be adjusted, determined, compromised, or settled only after consultation with the Department of Justice when, in the opinion of the General Counsel or his designee: (1) A new precedent or a new point of law is involved; or (2) A question of policy is or may be involved; or (3) The United States is or may be entitled to indemnity or contribution from a third party, and the Department is unable to adjust the third party claim; or (4) The compromise of a particular claim, as a practical matter, will or may control the disposition of a related claim in which the amount to be paid may exceed $25,000. (c) An administrative claim may be adjusted, determined, compromised, or settled only after consultation with the Department of Justice when the Department is informed or is otherwise <PRTPAGE P="155"/>aware that the United States or an officer, employee, agent, or cost-type contractor of the United States is involved in litigation based on a claim arising out of the same incident or transaction. </SECTION> <SECTION> <SECTNO>§ 17.9</SECTNO> <SUBJECT>Referral to Department of Justice.</SUBJECT> When Department of Justice approval or consultation is required under § 17.8, the referral or request shall be transmitted to the Department of Justice by the General Counsel of the Department or his designee. </SECTION> <SECTION> <SECTNO>§ 17.11</SECTNO> <SUBJECT>Final denial of claim.</SUBJECT> Final denial of an administrative claim shall be in writing, and notification of denial shall be sent to the claimant, his attorney, or legal representative by certified or registered mail. The notification of final denial may include a statement of the reasons for the denial and shall include a statement that, if the claimant is dissatisfied with the Department action, he may file suit in an appropriate U.S. District Court not later than 6 months after the date of mailing of the notification. </SECTION> <SECTION> <SECTNO>§ 17.12</SECTNO> <SUBJECT>Action on approved claim.</SUBJECT> (a) Payment of a claim approved under this subpart is contingent on claimant's execution of: (1) A <E T="03">Claim for Damage or Injury,</E> Standard Form 95; (2) a claims settlement agreement; and (3) a <E T="03">Voucher for Payment,</E> Standard Form 1145, as appropriate. When a claimant is represented by an attorney, the voucher for payment shall designate both the claimant and his attorney as payees, and the check shall be delivered to the attorney, whose address shall appear on the voucher. (b) Acceptance by the claimant, his agent, or legal representative of an award, compromise, or settlement made under section 2672 or 2677 of Title 28, United States Code, is final and conclusive on the claimant, his agent or legal representative, and any other person on whose behalf or for whose benefit the claim has been presented, and constitutes a complete release of any claim against the United States and against any officer or employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Claims Under the Military Personnel and Civilian Employees Claims Act of 1964</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Sec. 3, 78 Stat. 767 (31 U.S.C. 3721). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 36 FR 24427, Dec. 22, 1971, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.40</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> (a) This subpart applies to all claims filed by or on behalf of employees of the Department of Housing and Urban Development for loss of or damage to personal property which occurs incident to their service with HUD under the Military Personnel and Civilian Employees’ Claims Act of 1964. A claim must be substantiated and the possession of the property determined to be reasonable, useful, or proper. The maximum amount that can be paid under any claim under the Act is $25,000 and property may be replaced in kind at the option of the Government. Nothing in this subpart shall be construed to bar claims payable under statutory authority. (b) HUD is not an insurer and does not underwrite all personal property losses that an employee may sustain. Employees are encouraged to carry private insurance to the maximum extent practicable to avoid large losses or losses which may not be recoverable from HUD. The procedures set forth in this section are designed to enable the claimant to obtain the maximum amount of compensation for his loss or damage. Failure of the claimant to comply with these procedures may reduce or preclude payment of his claim under this subpart. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.41</SECTNO> <SUBJECT>Claimants.</SUBJECT> (a) A claim pursuant to this subpart may only be made by: (1) An employee of HUD. (2) A former employee of HUD whose claim arises out of an incident occurring before his separation from HUD.<PRTPAGE P="156"/> (3) Survivors of a person named in paragraph (a) (1) or (2) of this section, in the following order of precedence: (i) Spouse. (ii) Children. (iii) Father or mother, or both. (iv) Brothers or sisters, or both. (4) The authorized agent or legal representative of a person named in paragraphs (a) (1), (2), and (3) of this section. (b) A claim may not be presented by or for the benefit of a subrogee, assignee, conditional vendor, or other third party. </SECTION> <SECTION> <SECTNO>§ 17.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> A claim under this part may be allowed only if: (a) Except as provided in paragraph (b) of this section, it is filed in writing within 2 years after accrual. For purposes of this part, a claim accrues at the time of the accident or incident causing the loss or damage, or at such time as the loss or damage should have been discovered by the claimant by the exercise of due diligence. (b) It cannot be filed within the time limits of paragraph (a) of this section, because it accrues in time of war or in time of armed conflict in which any armed force of the United States is engaged or if such a war or armed conflict intervenes within 2 years after it accrues, and if good cause is shown, and if it is filed not later than 2 years after that cause ceases to exist, or 2 years after the war or armed conflict is terminated, whichever is earlier. </SECTION> <SECTION> <SECTNO>§ 17.43</SECTNO> <SUBJECT>Allowable claims.</SUBJECT> (a) A claim may be allowed only if: (1) The damage or loss was not caused wholly or partly by the negligent or wrongful act of the claimant, his agent, the members of his family, or his private employee (the standard to be applied is that of reasonable care under the circumstances); and (2) The possession of the property lost or damaged and the quantity possessed is determined to have been reasonable, useful, or proper under the circumstances; and (3) The claim is substantiated by proper and convincing evidence. (b) Claims which are otherwise allowable under this part shall not be disallowed solely because the property was not in the possession of the claimant at the time of the damage or loss, or solely because the claimant was not the legal owner of the property for which the claim is made. For example, borrowed property may be the subject of a claim. (c) Subject to the conditions in paragraph (a) of this section, and the other provisions of this subpart, any claim for damage to, or loss of, personal property incident to service with HUD may be considered and allowed. The following are examples of the principal types of claims which may be allowed, but these examples are not exclusive and other types of claims may be allowed, unless excluded by §§ 17.44 and 17.45: (1) <E T="03">Property loss or damage in quarters or other authorized places.</E> Claims may be allowed for damage to, or loss of, property arising from fire, flood, hurricane, other natural disaster, theft, or other unusual occurrence, while such property is located at: (i) Quarters within the 50 States or the District of Columbia that were assigned to the claimant or otherwise provided in kind by the United States; (ii) Quarters outside the 50 States and the District of Columbia that were occupied by the claimant, whether or not they were assigned or otherwise provided in kind by the United States, except when the claimant is a civilian employee who is a local inhabitant; or (iii) Any warehouse, office, working area, or other place (except quarters) authorized or apparently authorized for the reception or storage of property. (2) <E T="03">Transportation or travel losses.</E> Claims may be allowed for damage to, or loss of, property incident to transportation or storage pursuant to orders, or in connection with travel under orders, including property in the custody of a carrier, an agent or agency of the Government, or the claimant. (3) <E T="03">Manufactured homes.</E> Claims may be allowed for damage to, or loss of, manufactured homes and their contents under the provisions of paragraph (c)(2) of this section. Claims for structural damage to manufactured homes, other than that caused by collision, and damage to contents of manufactured homes resulting from such structural damage, must contain conclusive <PRTPAGE P="157"/>evidence that the damage was not caused by structural deficiency of the manufactured home and that it was not overloaded. Claims for damage to, or loss of, tires mounted on manufactured homes will not be allowed, except in cases of collision, theft, or vandalism. (4) <E T="03">Enemy action or public service.</E> Claims may be allowed for damage to, or loss of, property as a direct consequence of: (i) Enemy action or threat thereof, or combat, guerrilla, brigandage, or other belligerent activity, or unjust confiscation by a foreign power or its nationals; (ii) Action by the claimant to quiet a civil disturbance or to alleviate a public disaster; or (iii) Efforts by the claimant to save human life or Government property. (5) <E T="03">Property used for benefit of the Government.</E> Claims may be allowed for damage to, or loss of, property when used for the benefit of the Government at the request of, or with the knowledge and consent of, superior authority. (6) <E T="03">Clothing and accessories.</E> Claims may be allowed for damage to, or loss of, clothing or accessories customarily worn on the person, such as eyeglasses, hearing aids, or dentures. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 50 FR 9268, Mar. 7, 1985]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.44</SECTNO> <SUBJECT>Restrictions on certain claims.</SUBJECT> Claims of the type described in this section are only allowable subject to the restrictions noted: (a) <E T="03">Money or currency.</E> Claims may be allowed for loss of money or currency only when lost incident to fire, flood, hurricane, other natural disaster, or by theft from quarters (as limited by paragraph (a) of § 17.45). In instances of theft from quarters, it must be conclusively shown that the quarters were locked at the time of the theft. Reimbursement for loss of money or currency is limited to an amount which is determined to have been reasonable for the claimant to have had in his possession at the time of the loss. (b) <E T="03">Government property.</E> Claims may only be allowed for property owned by the United States for which the claimant is financially responsible to any agency of the Government other than HUD. (c) <E T="03">Estimate fees.</E> Claims may include fees paid to obtain estimates of repair only when it is clear that an estimate could not have been obtained without paying a fee. In that case, the fee may be allowed only in an amount determined to be reasonable in relation to the value of the property or the cost of the repairs. (d) <E T="03">Automobiles and other motor vehicles.</E> Claims may only be allowed for damage to, or loss of, automobiles and other motor vehicles if: (1) Such motor vehicles were required to be used for official Government business (official Government business, as used here, does not include travel, or parking incident thereto, between quarters and office, or use of vehicles for the convenience of the owner. However, it does include travel, and parking incident thereto, between quarters and assigned place of duty specifically authorized by the employee's supervisor as being more advantageous to the Government); or (2) Shipment of such motor vehicles was being furnished or provided by the Government, subject to the provisions of § 17.46. </SECTION> <SECTION> <SECTNO>§ 17.45</SECTNO> <SUBJECT>Unallowable claims.</SUBJECT> Claims are not allowable for the following: (a) <E T="03">Unassigned quarters in United States.</E> Property loss or damage in quarters occupied by the claimant within the 50 States or the District of Columbia that were not assigned to him or otherwise provided in kind by the United States. (b) <E T="03">Business property.</E> Property used for business or profit. (c) <E T="03">Unserviceable property.</E> Wornout or unserviceable property. (d) <E T="03">Illegal possession.</E> Property acquired, possessed, or transported in violation of law or in violation of applicable regulations or directives. (e) <E T="03">Articles of extraordinary value.</E> Valuable articles, such as cameras, watches, jewelry, furs, or other articles of extraordinary value, when shipped with household goods or as unaccompanied baggage (shipment includes storage). This prohibition does not apply to articles in the personal custody of the <PRTPAGE P="158"/>claimant or articles properly checked, provided that reasonable protection or security measures have been taken by claimant. (f) <E T="03">Minimum amount.</E> Loss or damage amounting to less than $10. </SECTION> <SECTION> <SECTNO>§ 17.46</SECTNO> <SUBJECT>Claims involving carriers or insurers.</SUBJECT> In the event the property which is the subject of a claim was lost or damaged while in the possession of a carrier or was insured, the following procedures will apply: (a) Whenever property is damaged, lost, or destroyed while being shipped pursuant to authorized travel orders, the owner must file a written claim for reimbursement with the last commercial carrier known or believed to have handled the goods, or the carrier known to be in possession of the property when the damage or loss occurred, according to the terms of its bill of lading or contract, before submitting a claim against the Government under this subpart. (1) If more than one bill of lading or contract was issued, a separate demand should be made against the last carrier on each such document. (2) The demand should be made within 9 months of the date that delivery was made, or within 9 months of the date that delivery should ordinarily have been made. (3) If it is apparent that the damage or loss is attributable to packing, storage, or unpacking while in the custody of the Government, no demand need be made against the carrier. (b) Whenever property which is damaged, lost, or destroyed incident to the claimant's service is insured in whole or in part, the claimant must make demand in writing against the insurer for reimbursement under the terms and conditions of the insurance coverage, prior to the filing of the concurrent claim against the Government. (c) Failure to make a demand on a carrier or insurer or to make all reasonable efforts to protect and prosecute rights available against a carrier or insurer and to collect the amount recoverable from the carrier or insurer may result in reducing the amount recoverable from the Government by the maximum amount which would have been recoverable from the carrier or insurer, had the claim been timely or diligently prosecuted. However, no deduction will be made where the circumstances of the claimant's service preclude reasonable filing of such a claim or diligent prosecution, or the evidence indicates a demand was impracticable or would have been unavailing. (d) Following the submission of the claim against the carrier or insurer, the claimant may immediately submit his claim against the Government in accordance with the provisions of this subpart, without waiting until either final approval or denial of his claim is made by the carrier or insurer. (1) Upon submitting his claim, he will certify in his claim that he has or has not gained any recovery from a carrier or insurer, and enclose all correspondence pertinent thereto. (2) If final action has not been taken by the carrier or insurer on his claim, he will immediately notify them to address all correspondence in regard to his claim to him, in care of the General Counsel of HUD. (3) The claimant shall advise the General Counsel of any action taken by the carrier or insurer on his claim and upon request shall furnish all correspondence documents, and other evidence pertinent to the matter. (e) The claimant will assign to the United States to the extent of any payment on his claim accepted by him, all his right, title and interest in any claim he may have against any carrier, insurer, or other party arising out of the incident on which the claim against the United States is based. After payment of his claim by the United States, the claimant will, upon receipt of any payment from a carrier or insurer, pay the proceeds to the United States to the extent of the payment received by him from the United States. (f) Where a claimant recovers for the loss from the carrier or insurer before his claim under this subpart is settled, the amount or recovery shall be applied to his claim as follows: (1) When the amount recovered from a carrier, insurer, or other third party is greater than or equal to the claimant's total loss as determined under <PRTPAGE P="159"/>this part, no compensation is allowable under this part. (2) When the amount recovered is less than such total loss, the allowable amount is determined by deducting the recovery from the amount of such total loss. (3) For the purpose of this paragraph (f) the claimant's total loss is to be determined without regard to the $6,500 maximum set forth above. However, if the resulting amount, after making this deduction, exceeds $6,500, the claimant will be allowed only $6,500. </SECTION> <SECTION> <SECTNO>§ 17.47</SECTNO> <SUBJECT>Settlement of claims.</SUBJECT> (a) The General Counsel, HUD, is authorized to settle (consider, ascertain, adjust, determine, and dispose of, whether by full or partial allowance or disallowance) any claim under this subpart. (b) The General Counsel may formulate such procedures and make such redelegations as may be required to fulfill the objectives of this subpart. (c) The General Counsel shall conduct such investigation as may be appropriate in order to determine the validity of a claim. (d) The General Counsel shall notify a claimant in writing of action taken on his claim, and if partial or full disallowance is made, the reasons therefor. (e) In the event a claim submitted against a carrier under § 17.46 has not been settled before settlement of the claim against the Government pursuant to this subpart, the General Counsel shall notify such carrier or insurer to pay the proceeds of the claim to HUD to the extent HUD has paid such to claimant in settlement. </SECTION> <SECTION> <SECTNO>§ 17.48</SECTNO> <SUBJECT>Computation of amount of award.</SUBJECT> (a) The amount allowed for damage to or loss of any item of property may not exceed the cost of the item (either the price paid in cash or property, or the value at the time of acquisition if not acquired by purchase or exchange); and there will be no allowance for replacement cost or for appreciation in the value of the property. Subject to these limitations, the amount allowable is either: (1) The depreciated value, immediately prior to the loss or damage, of property lost or damaged beyond economical repair, less any salvage value; or (2) The reasonable cost of repairs, when property is economically repairable, provided that the cost of repairs does not exceed the amount allowable under paragraph (a)(1) of this section. (b) Depreciation in value is determined by considering the type of article involved, its cost, its condition when damaged or lost, and the time elapsed between the date of acquisition and the date of damage or loss. (c) Replacement of lost or damaged property may be made in kind whenever appropriate. </SECTION> <SECTION> <SECTNO>§ 17.49</SECTNO> <SUBJECT>Attorney's fees.</SUBJECT> No more than 10 per centum of the amount paid in settlement of each individual claim submitted and settled under this subpart shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with that claim. </SECTION> <SECTION> <SECTNO>§ 17.50</SECTNO> <SUBJECT>Claims procedures.</SUBJECT> (a) Claims by, or on behalf of, employees of field offices shall be filed in writing with the appropriate Regional Counsel. Claims by, or on behalf of, employees of Department Headquarters shall be filed in writing with the General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. (b) Each written claim shall contain, as a minimum: (1) Name, address, place of employment of claimant. (2) Place and date of loss or damage. (3) A brief statement of the facts and circumstances surrounding loss or damage. (4) Cost, date, and place of acquisition of each piece of property lost or damaged. (5) Two itemized repair estimates, or value estimates, whichever is applicable. (6) Copies of police reports, if applicable. (7) With respect to claims involving thefts or losses in quarters or other <PRTPAGE P="160"/>places where the property was reasonably kept, a statement as to what security precautions were taken to protect the property involved. (8) With respect to claims involving property being used for the benefit of the Government, a statement by the employee's supervisor evidencing that the claimant was required to provide such property or that his providing it was in the interest of the Government. (9) Other evidence as may be required by the General Counsel. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for the Collection of Claims by the Government</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 31 U.S.C. 3711, 3716-18, and 5 U.S.C. 5514; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 36 FR 24427, Dec. 22, 1971, unless otherwise noted. Redesignated at 49 FR 32349, Aug. 14, 1984. </SOURCE> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 17.60</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> (a) <E T="03">Scope.</E> This subpart sets forth the regulations of the Secretary of Housing and Urban Development implementing the Federal Claims Collection Act of 1966, as amended by the Federal Debt Collection Act of 1982 (31 U.S.C. 3701 <E T="03">et seq</E>.) (the Act), in conformity with the standards jointly promulgated by the Attorney General and the Comptroller General in 4 CFR parts 101 through 105. The Act: (1) Requires the Secretary or his designee to attempt collection of all claims of the United States for money or property arising out of the activities of the Department; and (2) Authorizes the Secretary or his designee to compromise claims that have not been referred to another executive or legislative agency for further collection action where the claim does not exceed $100,000 exclusive of interest, or to suspend or terminate collection action where it appears that no person liable on the claim has the present or prospective financial ability to pay any significant sum thereon or that the cost of collecting the claim is likely to exceed the amount of recovery. (b) <E T="03">Definitions</E>. As used in this subpart: <E T="03">Administrative offset</E> means withholding money payable by the United States Government to, or held by the Government for, a person to satisfy a debt the person owes the Government <E T="03">Agency</E> means: (1) An Executive department, military department, Government corporation, or independent establishment as defined in 5 U.S.C. 101, 102, 103, or 104, respectively; (2) The United States Postal Service; or (3) The Postal Rate Commission. <E T="03">Claim</E> means the same as <E T="03">Debt</E>. <E T="03">Consumer Reporting Agency</E> means: (1) Any person, that for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer (individual) credit information or other information on consumers for the purpose of providing consumer reports to third parties, and that uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. (15 U.S.C. 1681a(f)); or (2) Any person who, for monetary fees, dues, or on a cooperative basis, regularly engages in whole or in part in the practice of (i) obtaining credit or other information on consumers for the purpose of furnishing such information to consumer reporting agencies (as defined in paragraph (1) of this definition), or (ii) serving as a marketing agent under arrangements enabling third parties to obtain such information from such reporting agencies. <E T="03">Debt</E> means an amount owed to the United States and past due, from sources which include loans insured or guaranteed by the United States and all other amounts due the United States from assigned mortgages or deeds of trust, direct loans, advances, repurchase demands, fees, leases, rents, royalties, services, sale of real or personal property, overpayments, penalties, damages, interest, fines and forfeitures (except those arising under the Uniform Code of Military Justice), and all other similar sources. <E T="03">Debtor</E> means the same as <E T="03">person</E>.<PRTPAGE P="161"/> <E T="03">Department</E> means the Department of Housing and Urban Development. <E T="03">Department Claims Officer:</E> (see § 17.66). <E T="03">Determination</E> means the point at which the Secretary decides that the debt is valid. <E T="03">Disposable pay</E> means that part of current basic pay, special pay, incentive pay, retired pay, retainer pay, or in the case of an employee not entitled to basic pay, other authorized pay remaining after deductions required by law. Deductions from pay include: (1) Amounts owed by the individual to the United States; (2) Amounts withheld for Federal employment taxes; (3) Amounts properly withheld for Federal, State, or local income tax purposes, if the withholding of the amount is authorized or required by law and if amounts withheld are not greater than would be the case if the individual claimed all dependent to which he or she were entitled. The withholding of additional amounts under 26 U.S.C. 3402(i) may be permitted only when the individual presents evidence of tax obligation which supports the additional withholding; (4) Amounts deducted as health insurance premiums, including, but not limited to, amounts deducted from civil service annuities for Medicare where such deductions are requested by the Health Care Financing Administration; (5) Amounts deducted as normal retirement contributions, not including amounts deducted for supplementary coverage. Amounts withheld as Survivor Benefit Plan or Retired Serviceman's Family Protection Plan payments are considered to be normal retirement contributions. Amounts voluntarily contributed toward additional civil service annuity benefits are considered to be supplementary; (6) Amounts deducted as normal life insurance premiums from salary or other remuneration for employment, not including amounts deducted for supplementary coverage. Both Servicemen's Group Life Insurance and “Basic Life” Federal Employees’ Group Life Insurance premiums are considered to be normal life insurance premiums; all optional Federal Employees’ Group Life Insurance premiums and life insurance premiums paid for by allotment, such as National Service Life Insurance, are considered to be supplementary; (7) Amounts withheld from benefits payable under title II of the Social Security Act where the withholding is required by law; (8) Amounts mandatorily withheld for the U.S. Soldiers’ and Airmen's Home; and (9) Fines and forfeitures ordered by a court-martial or by a commanding officer. <E T="03">Employee</E> means a current employee of a Federal agency, including a current member of the Armed Forces or Reserve of the Armed Forces of the United States. <E T="03">Office</E> means the organization of each Assistant Secretary, the Government National Mortgage Association (GNMA), the Solar Energy and Energy Conservation Bank and each Field Office. <E T="03">Pay</E> means basic pay, special pay, income pay, retired pay, retainer pay, or, in case of an employee not entitled to basic pay, other authorized pay. <E T="03">Person</E> means any natural person or persons, profit or nonprofit corporations, partnership, association, trust, estate, government or government subdivision or other entity which is capable of owing a debt to the Government. For purposes of the interest provisions, person does not include an agency of the United States Government, a State government, or a unit of general local government. <E T="03">Salary offset</E> means a deduction from the pay of an employee without his or her consent to satisfy a debt. Salary offset is one type of administrative offset which may be used by the Department in the collection of claims. <E T="03">Secretary</E> means the Secretary of the Department of Housing and Urban Development or his or her designee. <E T="03">United States</E> includes an <E T="03">agency</E> of the United States. <E T="03">Waiver</E> means the cancellation, remission, forgiveness, or non-recovery of a debt allegedly owed by an employee of an agency as permitted or required by 5 U.S.C. 5584, 10 U.S.C. 2774, <PRTPAGE P="162"/>32 U.S.C. 716, or 5 U.S.C. 8346(b), or any other law. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated and amended at 49 FR 32349, Aug. 14, 1984; 59 FR 34579, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.61</SECTNO> <SUBJECT>Incorporation of joint standards by reference.</SUBJECT> All administrative actions to collect claims arising out of the activities of the Department shall be performed in accordance with the applicable standards prescribed in 4 CFR parts 101 through 105, which are incorporated by reference and supplemented in this subpart. </SECTION> <SECTION> <SECTNO>§ 17.62</SECTNO> <SUBJECT>Subdivision and joining of claims.</SUBJECT> (a) A debtor's liability arising from a particular transaction or contract shall be considered as a single claim in determining whether the claim is one not exceeding $100,000 exclusive of interest for the purpose of compromise or termination of collection action. Such a claim may not be subdivided to avoid the monetary ceiling established by the Act. (b) Joining of two or more single claims in a demand upon a particular debtor for payment totaling more than $100,000 does not preclude compromise or termination of collection action with respect to any one of such claims that does not exceed $100,000 exclusive of interest. <CITA>[59 FR 34579, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.63</SECTNO> <SUBJECT>Authority of offices to attempt collection of claims.</SUBJECT> The head of each office shall designate a claims collection officer, who shall attempt to collect in full all claims of the Department for money or property arising out of the activities of such office. Each claims collection officer shall establish and currently maintain a file with regard to each claim for which collection activities are undertaken. <CITA>[40 FR 28599, July 7, 1975. Redesignated at 49 FR 32349, Aug. 14, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.64</SECTNO> <SUBJECT>Referral of claims to the Assistant Secretary for Administration.</SUBJECT> (a) <E T="03">Authority of the Assistant Secretary for Administration.</E> The Assistant Secretary for Administration shall exercise the powers and perform the duties of the Secretary to compromise, or to suspend or terminate collection action on all Department claims not exceeding $100,000 exclusive of interest, except as provided in § 17.65 and paragraph (b) of this section. When initial attempts at collection by the office having responsibility for such claims have not been fully successful, the claim file shall be forwarded to the Assistant Secretary for Administration for further administrative collection procedures. Claims shall be referred to the Assistant Secretary for Administration well within the applicable statute of limitations (28 U.S.C. 2415 and 2416), but in no event more than 2 years after the claims accrued. (b) <E T="03">Exclusions.</E> There shall be no compromised or terminated collection action with respect to any claim: (1) As to which there is an indication of fraud, the presentation of a false claim, or misrepresentation on the part of the debtor or any other party having an interest in the claim; (2) based in whole or in part on conduct in violation of the anti-trust laws; (3) based on tax statutes; or (4) arising from an exception made by the General Accounting Office in the account of an accountable officer. Such claims shall be promptly referred to the Justice Department or GAO, as appropriate. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984 (interim), as amended at 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.65</SECTNO> <SUBJECT>Authority of offices to compromise claims or suspend or terminate collection action.</SUBJECT> (a) <E T="03">Small claims.</E> The Assistant Secretary for Administration periodically shall establish and disseminate to claims collection officers a maximum dollar amount up to which claims collection officers are authorized to compromise a claim or suspend or terminate collection action on a claim. (b) <E T="03">Claims arising under certain programs.</E> (1) The office primarily responsible for the following programs of the Department is authorized, in those cases where initial collection attempts <PRTPAGE P="163"/>are not wholly successful, to compromise or to suspend or terminate collection action on claims not exceeding $100,000 with respect to: (i) A claim under title I of the National Housing Act; (ii) A claim on a rehabilitation loan account under section 312 of the Housing Act of 1964; (iii) A claim against tenants or former tenants of properties acquired by, or under the custody of, the Secretary or held by him as mortgagee in possession; or (iv) A claim arising out of the operational (nonadministrative) activities of the Government National Mortgage Association (GNMA). (2) However, no office shall undertake to compromise or terminate any collection action excluded under § 17.64(b). <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984, and amended at 52 FR 35414, Sept. 21, 1987; 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.66</SECTNO> <SUBJECT>Department claims officer.</SUBJECT> The Assistant Secretary for Administration shall designate a subordinate official as Department Claims Officer, who shall be responsible for the establishment and maintenance of procedures within the Department relating to the collection of claims and the co-ordination of all collection activities in all Department offices. <CITA>[40 FR 28599, July 7, 1975. Redesignated at 49 FR 32349, Aug. 14, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.67</SECTNO> <SUBJECT>Claims files.</SUBJECT> Each claims collection officer is responsible for obtaining current credit data about each person against whom a claim is pending in his office. The file shall be kept reasonably up to date by the Department Claims Officer for claims referred to the Assistant Secretary for Administration for collection. Such credit data may take the form of: (a) A commercial credit report, (b) an agency investigative report showing the debtor's assets and liabilities and his income and expenses, (c) the individual debtor's own financial statement executed under penalty of perjury reflecting his assets and liabilities and his income and expenses, or (d) an audited balance sheet of a corporate debtor. The file should also contain a checklist or brief summary of actions taken to collect or comprise a claim. </SECTION> <SECTION> <SECTNO>§ 17.68</SECTNO> <SUBJECT>Monthly report of collection action.</SUBJECT> The Department Claims Officer shall make a monthly report to the Assistant Secretary for Administration and all offices that have referred claims for collection. The report should contain the following information as a minimum: (a) All outstanding claims referred to the Assistant Secretary for Administration for administrative collection, including the name and address of the debtor, the amount of the claim, the date the claim accrued, the basis of the claim, the office referring the claim, and the current progress of collection activities. (b) All claims compromised or on which collection has been suspended or terminated or referred to GAO or Justice for further collection action during the month. The collection action taken and the basis for the action should be indicated. (c) All claims referred to the Department of Justice under § 17.64(a). (d) Claims returned to this Department by the Justice Department for further collection action because Justice's handling was not warranted. </SECTION> <SECTION> <SECTNO>§ 17.69</SECTNO> <SUBJECT>Accounting control.</SUBJECT> Each office and the Department Claims Officer shall process all claims collections through the appropriate accounting office and report the collection, compromise, suspension and termination of all claims to the appropriate accounting office for recording. </SECTION> <SECTION> <SECTNO>§ 17.70</SECTNO> <SUBJECT>Record retention.</SUBJECT> The file of each claim on which administrative collection action has been completed shall be retained by the appropriate office or the Assistant Secretary for Administration not less than 1 year after the applicable statute of limitations has run. </SECTION> <SECTION> <SECTNO>§ 17.71</SECTNO> <SUBJECT>Suspension or revocation of eligibility.</SUBJECT> (a) Where a contractor, grantee, or other participant in programs sponsored by the Department fails to pay <PRTPAGE P="164"/>his debts to the Department within a reasonable time after demand, the fact shall be reported by the Assistant Secretary for Administration to the Inspector General, who shall place such defaulting participant's name on the Department's list of debarred, suspended and ineligible contractors and grantees and the participant will be so advised. (b) The failure of any surety to honor its obligations in accordance with 6 U.S.C. 11 is to be reported at once to the Assistant Secretary for Administration who shall so advise the Treasury Department. The Treasury Department will notify this Department when a surety's certificate of authority to do business with the Government has been revoked or forfeited. </SECTION> <SECTION> <SECTNO>§ 17.72</SECTNO> <SUBJECT>Methods of collection and imposition of late charges.</SUBJECT> (a) <E T="03">Demand for payment.</E> Appropriate written demands shall be made upon the debtor which shall include information relating to the consequences of his failure to cooperate. (b) <E T="03">Methods of collection: Administrative and salary offset.</E> The Department may use administrative offset and salary offset procedures as alternative methods for the collection of money owed the Department from those set out in this section. For specific procedures on administrative offset see §§ 17.100 through 17.118. For specific procedures on salary offset see §§ 17.125 through 17.140. (c) <E T="03">Method of collection: Liquidation of collateral.</E> Where the Department holds security or collateral that may be liquidated and the proceeds applied on debts due it through the exercise of a power of sale in the security instrument, such procedures will be followed if the debtor fails to pay his or her debt within a reasonable time after demand, unless the cost of disposing of the collateral will be disproportionate to its value, or unless special circumstances require judicial foreclosure. (d) <E T="03">Collection in installments.</E> Claims with accrued interest should be collected in full in one lump sum whenever this is possible. However, if the debtor is financially unable to pay the indebtedness in one lump sum, payment may be accepted in regular installments. (e) <E T="03">Interest.</E> Where prejudgment interest is not mandated by statute, contract or regulation, the minimum rate of interest to be charged on delinquent debts is the Tax and Loan Account Rate for the U.S. Treasury (also known as the Current Value of Funds rate) as prescribed and published semiannually by the Secretary of the Treasury in the <E T="04">Federal Register</E>, in accordance with 31 U.S.C. 3717. Prejudgment interest may be waived as an inducement to voluntary payment. In such cases demand letters should inform the debtor that prejudgment interest will be collected if suit becomes necessary. When a debt is paid in installments and interest is collected, installment payments will first be applied to the payment of accrued interest and then to principal unless a different rule is prescribed by statute, contract or regulation. Prejudgment interest shall not be demanded or collected on civil penalty and forfeiture claim unless the statute under which the claim arises authorizes the collection of such interest. (f) <E T="03">Omission not a defense.</E> Failure of HUD to comply with any standard prescribed in 4 CFR parts 101 through 105 or in this subpart shall not be available as a defense to any debtor. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated and amended at 49 FR 32349, 32350, Aug. 14, 1984; 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.73</SECTNO> <SUBJECT>Standards for compromise of claims.</SUBJECT> (a) <E T="03">Compromise offer.</E> An offer to compromise may be accepted: (1) If there is real doubt concerning the Department's ability to prove its case in court for the full amount claimed; (2) if the cost of collecting the claim does not justify the enforced collection of the full amount; (3) if in connection with statutory penalties of forfeitures established as an aid to enforcement and to compel compliance, the Department's enforcement policy will be adequately served by acceptance of the sum to be agreed upon, or (4) for other reasons deemed valid by the Assistant Secretary for Administration (or other designee) and made a part of the claim record.<PRTPAGE P="165"/> (b) <E T="03">Documentary evidence of compromise.</E> No compromise of a claim shall be final or binding on the Department unless it is in writing and signed by the appropriate officer who has authority to compromise the claim pursuant to this subpart. </SECTION> <SECTION> <SECTNO>§ 17.74</SECTNO> <SUBJECT>Standards for suspension or termination of collection action.</SUBJECT> (a) <E T="03">Suspension of collection action.</E> Collection action shall be suspended temporarily on a claim when the debtor cannot be located after diligent effort but there is reason to believe that future collection action may be sufficiently productive to justify periodic review and action on the claim, having consideration for its size and the amount which may be realized. Collection action may be suspended temporarily on a claim when the debtor owns no substantial equity in realty and is presently unable to make payment on the Department's claim or effect a compromise, but his future prospects justify retention of the claim for periodic review and action and (1) the applicable statute of limitations has been tolled or started anew or (2) future collection can be effected by offset notwithstanding the statute of limitations. Suspension as to a particular debtor should not defer the early liquidation of security for the debt. (b) <E T="03">Termination of collection action.</E> Collection action may be terminated and the Department file closed for the following reasons: (1) No substantial amount can be collected; (2) the debtor cannot be located; (3) the cost will exceed recovery; (4) the claim is legally without merit; or (5) the claim cannot be substantiated by evidence. </SECTION> <SECTION> <SECTNO>§ 17.75</SECTNO> <SUBJECT>Referral to GAO or Justice Department.</SUBJECT> (a) <E T="03">Claims referred.</E> Claims which cannot be collected, compromised, or terminated in accordance with 4 CFR parts 101 to 105 will be referred to the General Accounting Office in accordance with 31 U.S.C. 71 or to the Department of Justice if this Department has been granted an exception from referrals to the General Accounting Office. Also, if there is doubt as to whether collection action should be suspended or terminated on a claim, the claim may be referred to the General Accounting Office for advice. When recovery of a judgment is prerequisite to imposition of administrative sanctions, the claim may be referred to the Justice Department for litigation even though termination of collection activity might otherwise be considered. (b) <E T="03">Prompt referral.</E> Such referrals shall be made as early as possible consistent with aggressive collection action, and in any event, well within the statute of limitations for bringing suit against the debtor. </SECTION> <SECTION> <SECTNO>§ 17.76</SECTNO> <SUBJECT>Disclosure to a consumer reporting agency.</SUBJECT> (a) <E T="03">Definition.</E> For purposes of this section, individual means a natural person. (b) <E T="03">Conditions for disclosure.</E> The Secretary may disclose to a Consumer Reporting Agency information from a system of records to the effect that an individual is responsible for a debt. Before doing so, the Secretary will ensure that: (1) The notice for the system of records required by the Privacy Act of 1974 (5 U.S.C. 552a(e)(4)) indicates that the information in the system may be disclosed to a Consumer Reporting Agency; (2) There has been Departmental review of the debt and a determination that the debt is valid and overdue; (3) There has been written notice sent to the individual informing the individual: (i) That payment of the debt is overdue; (ii) That the Department intends to disclose to a Consumer Reporting Agency, within not less than 60 days after sending the notice, that the individual is responsible for the debt; (iii) Of the specific information intended to be disclosed to the Consumer Reporting Agency; and (iv) Of the rights of the individual to a full explanation of the debt, to dispute any information in the records of the Department concerning the debt, as determined by the Secretary, and to administrative appeal or review with respect to the debt; and (4) The individual has neither repaid or agreed to repay the debt under a written repayment plan signed by the <PRTPAGE P="166"/>individual and agreed to by the Secretary nor has filed for review of the claim under paragraph (c) of this section. (c) <E T="03">Limitations on disclosure.</E> The Secretary may not disclose information to a Consumer Reporting Agency unless the Department has: (1) Obtained satisfactory assurances from each Consumer Reporting Agency that the agency is complying with the Fair Credit Reporting Act (15 U.S.C. 1681) and any other Federal laws governing the provision of consumer credit information; (2) Provided, upon request by the individual alleged to be responsible for the claim, the opportunity to review the claim, including an opportunity for reconsideration of the initial decision on the claim; and (3) Taken reasonable action to locate an individual for whom the Secretary does not have a current address to send a notice under paragraph (b)(3) of this section. (d) <E T="03">Additional responsibilities of the Department.</E> In providing information to a Consumer Reporting Agency, the Department will only disclose: (1) Information necessary to establish the identity of the individual, including name, address and taxpayer identification number; (2) The amount, status, and history of the claim; and (3) The program under which the claim arose. <FP>In all cases, the Department will notify each Consumer Reporting Agency to which the original disclosure was made of any substantial change in the condition or amount of the claim. This includes promptly correcting or verifying information about the claim requested by the Consumer Reporting Agency.</FP> <CITA>[49 FR 32350, Aug. 14, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.77</SECTNO> <SUBJECT>Contracts for collection services.</SUBJECT> The Secretary may enter into a contract or contracts for collection services to recover indebtedness owed the Department. Any such contract will include the following provisions: (a) The Secretary retains the authority to resolve a dispute, compromise a claim, end collection action or refer a matter to the Attorney General to bring civil action; (b) The person contracted with by the Secretary is subject to the Privacy Act of 1974 to the extent provided for in 5 U.S.C. 552a(m), the section on government contractors; (c) The person contracted with by the Secretary is subject to State and Federal laws governing debt collection practices, such as the Debt Collection Practices Act, 15 U.S.C. 1692; and (d) The person contracted with agrees to provide to the Secretary, if asked to return the file to the Department so that the Secretary may refer the account to the Department of Justice for litigation, any data contained in the files relating to actions previously taken to collect the debt, the current address of the debtor, as well as the current credit data of the debtor or any current other information requested and available. <CITA>[49 FR 32350, Aug. 14, 1984]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Administrative Offset Provisions</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> Sections 17.100 through 17.118, 49 FR 32351, appear at Aug. 14, 1984, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.100</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) The standards set forth in §§ 17.100 through 17.118 are the Department's procedures for the collection of money owed to the government by means of administrative offset. These procedures apply to the collection of debts as authorized by common law, by 31 U.S.C. 3716, or under other statutory authority. These procedures will not be used when a statute provides its own collection procedure, for procedures for grant reduction as a remedial action in grant programs (including the CDBG program), when explicitly prohibited by a statute, or when the United States has a judgment against the debtor. Unless otherwise provided for by statute, these procedures do not apply to an agency of the United States, a State government, or unit of general local government. In addition, these procedures do not apply to debts arising under the Internal Revenue Code of 1954 (26 U.S.C. 1-9602), the Social Security Act (42 U.S.C. 301-1397f), or the tariff laws of the United States.<PRTPAGE P="167"/> (b) The Secretary will use administrative offset to collect claims which are certain in amount in every instance in which collection is determined to be feasible and not prohibited by law. The Secretary will determine feasibility on a case-by-case basis, exercising sound discretion. In determining feasibility the Secretary will consider: (1) The debtor's financial condition; (2) Whether offset would substantially interfere with or defeat the purposes of the program authorizing the payments against which offset is contemplated; and (3) Whether offset best serves to further and protect all of the interests of the United States. </SECTION> <SECTION> <SECTNO>§ 17.101</SECTNO> <SUBJECT>Coordinating administrative offset with another Federal agency.</SUBJECT> (a) <E T="03">When HUD is owed the debt.</E> When the Department is owed a debt, but another Federal agency is responsible for making the payment to the debtor against which administrative offset is sought, the other agency shall not initiate the requested administrative offset until the Department provides the agency with a written certification that the debtor owes the Department a debt (including the amount and basis of the debt and the due date of the payment) and that the Department has complied with these regulations. (b) <E T="03">When another agency is owed the debt.</E> The Department may administratively offset money it owes to a person who is indebted to another agency if requested to do so by that agency. Such a request must be accompanied by a certification by the requesting agency that the person owes the debt (including the amount) and that the person has been given the procedural rights required by 31 U.S.C. 3716 and 4 CFR part 102. </SECTION> <SECTION> <SECTNO>§ 17.102</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> Except as provided in § 17.103, deductions will be made only after the Secretary makes a determination that an amount is owed and past due and provides the debtor with a minimum of 30 calendar days written notice. This Notice of Intent to Collect by Administrative Offset (Notice of Intent) will state: (a) The nature and amount of the debt: (b) That the Secretary intends to collect the debt by administrative offset until the debt and all accumulated interest and other charges are paid in full; (c) That the debtor has a right to obtain review within the Department of the Secretary's initial determination of indebtedness (see § 17.104); (d) That the debtor has a right to inspect and copy Department records related to the debt, as determined by the Secretary, and will be informed as to where and when the inspection and copying can be done after the Department receives notice from the debtor that inspection and copying are requested. (see § 17.105); and (e) That the debtor may enter into a written agreement with the Secretary to repay the debt, so long as the terms of the repayment agreement proposed by the debtor are agreeable to the Secretary (see § 17.106). </SECTION> <SECTION> <SECTNO>§ 17.103</SECTNO> <SUBJECT>Exceptions to notice requirements.</SUBJECT> (a) In cases where the notice requirements specified in § 17.102 already have been provided to the debtor in connection with the same debt under some other proceeding, the Secretary is not required to duplicate those requirements before effecting administrative offset. (b) The Secretary may effect administrative offset against a payment to be made to a debtor before completion of the procedures required by § 17.102 if (1) failure to make the offset would substantially prejudice the Government's ability to collect the debt, and (2) the time before the payment is to be made does not reasonably permit the completion of those procedures. Such prior offset must be followed promptly by the completion of those procedures. Amounts recovered by offset but later found not to be owed to the Secretary will be refunded promptly. </SECTION> <SECTION> <SECTNO>§ 17.104</SECTNO> <SUBJECT>Review within the Department of a determination of indebtedness.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who receives a Notice of Intent has the right to request Departmental review <PRTPAGE P="168"/>of the determination of indebtedness. To exercise this right, the debtor must send a letter requesting review to the Secretary. The letter must explain why the debtor seeks review and must be received by the Secretary within 20 calendar days of the date of the Department's Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to a timely request for review of the initial determination of indebtedness, the Secretary will notify the debtor whether review will be by review of the record or by hearing. The notice to the debtor will include the procedures used for reviewing the record or will include information on the date, location and procedures to be used if review is by a hearing. </SECTION> <SECTION> <SECTNO>§ 17.105</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who intends to inspect or copy Departmental records related to the debt as determined by the Secretary must send a letter to the Secretary stating his or her intention. The letter must be received by the Secretary within 20 calendar days of the date of the Department's Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to timely notification by the debtor as described in paragraph (a) of this section, the Secretary will notify the debtor of the location and time when the debtor may inspect or copy Department records related to the debt. </SECTION> <SECTION> <SECTNO>§ 17.106</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to administrative offset.</SUBJECT> (a) <E T="03">Notification by debtor.</E> The debtor may, in response to a Notice of Intent, propose a written agreement to repay the debt as an alternative to administrative offset. Any debtor who wishes to do this must submit a proposed written agreement to repay the debt. This proposed written agreement must be received by the Secretary within 20 calendar days of the date of the Department's Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to timely notification by the debtor as described in paragraph (a) of this section, the Secretary will notify the debtor whether the debtor's proposed written agreement for repayment is acceptable. It is within the Secretary's discretion to accept a repayment agreement instead of proceeding by offset. In making this determination the Secretary will balance the Department's interest in collecting the debt against hardship to the debtor. If the debt is delinquent and the debtor has not disputed its existence or amount, the Secretary will accept a repayment agreement instead of offset only if the debtor is able to establish that offset would result in undue financial hardship or would be against equity and good conscience. </SECTION> <SECTION> <SECTNO>§ 17.107</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> If the debtor timely notifies the Secretary that he or she is exercising a right described in § 17.104 or § 17.106, the offset will be stayed until the Secretary either makes a determination concerning the debtor's proposal to repay the debt or issues a written decision following review of the record or, where appropriate, a hearing. However, interest continues to run during any stay. </SECTION> <SECTION> <SECTNO>§ 17.108</SECTNO> <SUBJECT>Types of review.</SUBJECT> (a) <E T="03">Hearing.</E> The Secretary will provide the debtor with a reasonable opportunity for hearing if: (1) An applicable statute authorizes or requires the Secretary to consider waiver of the indebtedness and the waiver determination turns on credibility or veracity; or (2) The debtor requests reconsideration of the debt and the Secretary determines that the question of the indebtedness cannot be resolved by review of the documentary evidence. (b) <E T="03">Review of the record.</E> Unless the Secretary determines that a hearing is required (see paragraph (a) of this section), the Secretary will provide for a review of the record (a review of the documentary evidence). </SECTION> <SECTION> <SECTNO>§ 17.109</SECTNO> <SUBJECT>Review procedures.</SUBJECT> (a) <E T="03">Hearings.</E> (1) The appropriate Deputy Assistant Secretary (DAS) or designee conducts the hearing. The DAS or designee will take steps necessary to ensure that the hearing is conducted in a fair and expeditious manner. If necessary, the DAS or designee may administer oaths of affirmations.<PRTPAGE P="169"/> (2) The DAS or designee does not use the formal rules of evidence with regard to admissibility of evidence or the use of evidence once admitted. However, parties may object to clearly irrelevant material. (3) The DAS or designee records all significant matters discussed at the hearing. There is no “official” record or transcript provided for these hearings. (4) A debtor may represent himself or herself or may be represented by an attorney or other person. The Secretary is represented by the General Counsel or his or her designee. (5) The Secretary proceeds first by presenting evidence on the relevant issues. The debtor then presents his or her evidence regarding these issues. The Secretary then may offer evidence to rebut or clarify the evidence introduced by the debtor. (b) <E T="03">Review of the record.</E> The appropriate DAS or designee will review all material related to the debt which is in the possession of the Department. The DAS or designee makes a determination based upon a review of this written record, which may include a request for reconsideration of the determination of indebtedness, or such other relevant material submitted by the debtor. </SECTION> <SECTION> <SECTNO>§ 17.110</SECTNO> <SUBJECT>Determination of indebtedness and appeal from determination.</SUBJECT> (a) Following the hearing or the review of the record, the DAS or designee will issue a written decision which includes the supporting rationale for the decision. The decision of the DAS or designee is the final agency action with regard to the particular administrative offset. (b) Copies of the DAS decision will be distributed to the debtor and the debtor's attorney or other representative, if applicable. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984 (interim), as amended at 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.111</SECTNO> <SUBJECT>Procedures for administrative offset: single debt.</SUBJECT> (a) Offset will commence 31 days after the debtor receives the Notice of Intent, unless the debtor has requested a hearing (see § 17.104) or has entered into a repayment agreement (see § 17.106). (b) When there is review of the debt within the Department, offset will begin after the DAS determination has been issued under § 17.110 and a copy of the determination is received by the Department's Office of Finance and Accounting. </SECTION> <SECTION> <SECTNO>§ 17.112</SECTNO> <SUBJECT>Procedures for administrative offset: multiple debts.</SUBJECT> The Secretary will use the procedures identified in § 17.111 for the offset of multiple debts. However, when collecting multiple debts the Secretary will apply the recovered amounts to those debts in accordance with the best interests of the United States, as determined by the facts and circumstances of the particular case, paying special attention to applicable statutes of limitations. </SECTION> <SECTION> <SECTNO>§ 17.113</SECTNO> <SUBJECT>Procedures for administrative offset: interagency cooperation.</SUBJECT> The Department will make use of all possible methods of cooperating with other Federal agencies in effecting collections by offset. </SECTION> <SECTION> <SECTNO>§ 17.114</SECTNO> <SUBJECT>Procedures for administrative offset: time limitation.</SUBJECT> (a) The Secretary may not initiate administrative offset to collect a debt under 31 U.S.C. 3716 more than 10 years after the Secretary's right to collect the debt first accrued, unless facts material to the Secretary's right to collect the debt were not known and could not reasonably have been known by the officials of the Department who were responsible for discovering and collecting such debts. (b) When the debt first accrued is determined according to existing law regarding the accrual of debts. (See, for example, 28 U.S.C. 2415.) </SECTION> <SECTION> <SECTNO>§ 17.115</SECTNO> <SUBJECT>Procedures for administrative offset: offset against amounts payable from Civil Service Retirement and Disability Fund.</SUBJECT> (a) Unless otherwise prohibited by law, the Secretary may request that moneys which are due and payble to a <PRTPAGE P="170"/>debtor from the Civil Service Retirement and Disability Fund be administratively offset in one or more payments to collect debts owed to the Secretary by the debtor. The Secretary submits the request to the appropriate officials of the Office of Personnel Management (OPM) in accordance with OPM regulations and procedures. (b) To request administrative offset under paragraph (a) of this section, the Secretary will provide a written certification that: (1) The debtor owes the Secretary a debt, including the amount of the debt; (2) The Secretary has complied with the applicable statutes, regulations, and procedures of the Office of Personnel Management; and (3) The Secretary has complied with the Department's regulations contained in these regulations. (c) Once the decision is made to request administrative offset under paragraph (a) of this section, the Secretary will make the request as soon as practical after completion of the applicable procedures necessary for the Office of Personnel Management to identify the debtor's account and to add a notation in the debtor's file in anticipation of the time when the debtor requests or becomes eligible to receive payments from the Fund. (This notation will satisfy any requirement that offset be initiated before the applicable statute of limitations expires.) (d) If, at the time the debtor makes a claim for payments from the Fund, at least one year has elapsed since the offset was originally made, the debtor may offer a satisfactory repayment plan instead of offset upon establishing that changed financial circumstances would render the offset unjust. (e) If the Department collects part or all of the debt by other means before deductions are made or completed under paragraph (a) of this section, the Secretary will act promptly to modify or terminate the Department's request for offset under paragraph (a) of this section. </SECTION> <SECTION> <SECTNO>§ 17.116</SECTNO> <SUBJECT>Procedures for administrative offset: offset of debtor's judgment against the United States.</SUBJECT> Collection by offset against a judgment obtained by a debtor against the United States will be accomplished in accordance with 31 U.S.C. 3728. </SECTION> <SECTION> <SECTNO>§ 17.117</SECTNO> <SUBJECT>Procedures for administrative offset: imposition of interest.</SUBJECT> Interest will be charged in accordance with § 17.72. </SECTION> <SECTION> <SECTNO>§ 17.118</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> (a) All correspondence from the debtor to the Secretary shall be addressed to the Department Claims Officer, Office of Finance and Accounting, Department of HUD, Washington, DC 20410. (b) The Department Claims Officer will deliver any correspondence to the appropriate Deputy Assistant Secretary within four working days. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Salary Offset Provisions</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> Sections 17.125 through 17.140, appear at 49 FR 32353, Aug. 14, 1984, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.125</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) The provisions set forth in §§ 17.125 through 17.140 are the Department's procedures for the collection by salary offset of a Federal employee's pay to satisfy certain debts owed the government. (b) These regulations apply to collections by the Secretary from: (1) Current employees of the Department and other agencies who owe debts to the Department; and (2) Current employees of the Department who owe debts to other agencies. (c) These regulations do not apply to debts or claims arising under the Internal Revenue Code of 1954 (26 U.S.C. 1-9602); the Social Security Act (42 U.S.C. 301-1397f); the tariff laws of the United States; or to any case where collection of a debt by salary offset is explicitly provided for or prohibited by another statute. (d) These regulations identify the types of salary offset available to the Department, as well as certain rights provided to the employee, which include a written notice before deductions begin, the opportunity to petition for a hearing and to receive a written decision if a hearing is granted. These employee rights do not apply to any adjustment to pay arising out of an <PRTPAGE P="171"/>employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over four pay periods or less. (e) Nothing in these regulations precludes the compromise, suspension or termination of collection actions where appropriate under the Department's regulations contained elsewhere in this subpart (see 24 CFR 17.60 through 17.77). </SECTION> <SECTION> <SECTNO>§ 17.126</SECTNO> <SUBJECT>Coordinating offset with another Federal agency.</SUBJECT> (a) <E T="03">When HUD is owed the debt.</E> When the Department is owed a debt by an employee of another agency, the other agency shall not initiate the requested offset until the Department provides the agency with a written certification that the debtor owes the Department a debt (including the amount and basis of the debt and the due date of the payment) and that the Department has complied with these regulations. (b) <E T="03">When another agency is owed the debt.</E> The Department may use salary offset against one of its employees who is indebted to another agency if requested to do so by that agency. Such a request must be accompanied by a certification by the requesting agency that the person owes the debt (including the amount) and that the employee has been given the procedural rights required by 5 U.S.C. 5514 and 5 CFR part 550, subpart K. </SECTION> <SECTION> <SECTNO>§ 17.127</SECTNO> <SUBJECT>Determination of indebtedness.</SUBJECT> In determining that an employee is indebted, the Secretary will review the debt to make sure that it is valid and past due. </SECTION> <SECTION> <SECTNO>§ 17.128</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> Except as provided in § 17.125(d), deductions will not be made unless the Secretary first provides the employee with a minimum of 30 calendar days written notice. This Notice of Intent to Offset Salary (Notice of Intent) will state: (a) That the Secretary has reviewed the records relating to the claim and has determined that a debt is owed, the amount of the debt, and the facts giving rise to the debt; (b) The Secretary's intention to collect the debt by means of deduction from the employee's current disposable pay account until the debt and all accumulated interest are paid in full; (c) The amount, frequency, approximate beginning date, and duration of the intended deductions; (d) An explanation of the Department's requirements concerning interest, unless such payments are excused in accordance with § 17.72; (e) The employee's right to inspect and copy Department records relating to the debt; (f) The employee's right to enter into a written agreement with the Secretary for a repayment schedule differing from that proposed by the Secretary, so long as the terms of the repayment schedule proposed by the employee are agreeable to the Secretary; (g) The right to a hearing, conducted by an administrative law judge of the Department or a hearing official of another agency, on the Secretary's determination of the debt, the amount of the debt, or percentage of disposable pay to be deducted each pay period, so long as a petition is filed by the employee as prescribed by the Secretary; (h) That the timely filing of a petition for hearing will stay the collection proceedings; (See § 17.129). (i) That a final decision on the hearing will be issued at the earliest practical date, but not later than 60 calendar days after the filing of the petition requesting the hearing, unless the employee requests and the hearing officer grants a delay in the proceedings; (j) That any knowingly false or frivolous statements, representations, or evidence may subject the employee to: (1) Disciplinary procedures appropriate under 5 U.S.C. Ch. 75, 5 CFR part 752, or any other applicable statutes or regulations; (2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or any other applicable statutory authority; or (3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or any other applicable statutory authority.<PRTPAGE P="172"/> (k) Any other rights and remedies available to the employee under statutes or regulations governing the program for which the collection is being made; (l) Unless there are applicable contractual or statutory provisions to the contrary, that amounts paid on or deducted for the debt which are later waived or found not owed to the United States will be promptly refunded to the employee; and (m) The method and time period for requesting a hearing. </SECTION> <SECTION> <SECTNO>§ 17.129</SECTNO> <SUBJECT>Request for a hearing.</SUBJECT> (a) Except as provided in paragraph (d) of this section, an employee must file a petition for a hearing, that is received by the Secretary not later than 20 calendar days from the date of the Department's notice described in § 17.128 if an employee wants a hearing concerning— (1) The existence or amount of the debt; or (2) The Secretary's proposed offset schedule. (b) The petition must be signed by the employee and should admit or deny the existence of or the amount of the debt, or any part of the debt, briefly setting forth any basis for a denial. If the employee objects to the percentage of disposable pay to be deducted from each check, the petition should state the objection and the reasons for it. The petition should identify and explain with reasonable specificity and brevity the facts, evidence and witnesses which the employee believes support his or her position. (c) Upon receipt of the petition, the Department will send the employee a copy of the Salary Offset Hearing Procedures Manual of the Department of Housing and Urban Development. (d) If the employee files a petition for hearing later than the 20 calendar days as described in paragraph (a) of this section, the hearing officer may accept the request if the employee can show that the delay was because of circumstances beyond his or her control or because of failure to receive notice of the filing deadline (unless the employee has actual notice of the filing deadline). </SECTION> <SECTION> <SECTNO>§ 17.130</SECTNO> <SUBJECT>Result if employee fails to meet deadlines.</SUBJECT> An employee waives the right to a hearing, and will have his or her disposable pay offset in accordance with the Secretary's offset schedule, if the employee: (a) Fails to file a petition for a hearing as prescribed in § 17.129; or (b) Is scheduled to appear and fails to appear at the hearing. </SECTION> <SECTION> <SECTNO>§ 17.131</SECTNO> <SUBJECT>Written decision following a hearing.</SUBJECT> Written decisions provided after a request for a hearing will include: (a) A statement of the facts presented to support the nature and origin of the alleged debt; (b) The hearing officer's analysis, findings and conclusions, in light of the hearing, concerning the employee's or the Department's grounds; (c) The amount and validity of the alleged debt; and (d) The repayment schedule, if applicable. </SECTION> <SECTION> <SECTNO>§ 17.132</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> (a) <E T="03">Notification by employee.</E> An employee who intends to inspect or copy departmental records related to the debt must send a letter to the Secretary stating his or her intention. The letter must be received by the Secretary within 20 calendar days of the date of the Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to timely notice submitted by the debtor as described in paragraph (a) of this section, the Secretary will notify the employee of the location and time when the employee may inspect and copy Department records related to the debt. </SECTION> <SECTION> <SECTNO>§ 17.133</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to salary offset.</SUBJECT> (a) <E T="03">Notification by employee.</E> The employee may propose, in response to a Notice of Intent, a written agreement to repay the debt as an alternative to salary offset. Any employee who wishes to do this must submit a proposed written agreement to repay the debt which is received by the Secretary within 20 calendar days of the date of the Notice of Intent.<PRTPAGE P="173"/> (b) <E T="03">Secretary's response.</E> In response to timely notice by the debtor as described in paragraph (a) of this section, the Secretary will notify the employee whether the employee's proposed written agreement for repayment is acceptable. It is within the Secretary's discretion to accept a repayment agreement instead of proceeding by offset. In making this determination, the Secretary will balance the Department's interest in collecting the debt against hardship to the employee. If the debt is delinquent and the employee has not disputed its existence or amount, the Secretary will accept a repayment agreement instead of offset only if the employee is able to establish that offset would result in undue financial hardship or would be against equity and good conscience. </SECTION> <SECTION> <SECTNO>§ 17.134</SECTNO> <SUBJECT>Procedures for salary offset: when deductions may begin.</SUBJECT> (a) Deductions to liquidate an employee's debt will be by the method and in the amount stated in the Secretary's Notice of Intent to collect from the employee's current pay. (b) If the employee filed a petition for hearing with the Secretary before the expiration of the period provided for in § 17.129, then deductions will begin after the hearing officer has provided the employee with a hearing, and the final written decision is in favor of the Secretary. (c) If an employee retires or resigns before collection of the amount of the indebtedness is completed, the remaining indebtedness will be collected according to the procedures for administrative offset (see §§ 17.100 through 17.118). </SECTION> <SECTION> <SECTNO>§ 17.135</SECTNO> <SUBJECT>Procedures for salary offset: types of collection.</SUBJECT> A debt will be collected in a lump-sum or in installments. Collection will be by lump-sum collection unless the employee is financially unable to pay in one lump-sum, or if the amount of the debt exceeds 15 percent of disposable pay. In these cases, deduction will be by installments. </SECTION> <SECTION> <SECTNO>§ 17.136</SECTNO> <SUBJECT>Procedures for salary offset: methods of collection.</SUBJECT> (a) <E T="03">General.</E> A debt will be collected by deductions at officially-established pay intervals from an employee's current pay account, unless the employee and the Secretary agree to alternative arrangements for repayment. The alternative arrangement must be in writing, signed by both the employee and the Secretary. (b) <E T="03">Installment deductions.</E> Installment deductions will be made over a period not greater than the anticipated period of employment. The size and frequency of installment deductions will bear a reasonable relation to the size of the debt and the employee's ability to pay. However, the amount deducted for any period will not exceed 15 percent of the disposable pay from which the deduction is made, unless the employee has agreed in writing to the deduction of a greater amount. If possible, the installment payment will be sufficient in size and frequency to liquidate the debt in three years. Installment payments of less than $25 per pay period or $50 a month will be accepted only in the most unusual circumstances. (c) <E T="03">Sources of deductions.</E> The Department will make deductions only from basic pay, special pay, incentive pay, retired pay, retainer pay, or in the case of an employee not entitled to basic pay, other authorized pay. </SECTION> <SECTION> <SECTNO>§ 17.137</SECTNO> <SUBJECT>Procedures for salary offset: imposition of interest.</SUBJECT> Interest will be charged in accordance with § 17.72. </SECTION> <SECTION> <SECTNO>§ 17.138</SECTNO> <SUBJECT>Non-waiver of rights.</SUBJECT> So long as there are no statutory or contractual provisions to the contrary, no employee involuntary payment (of all or a portion of a debt) collected under these regulations will be interpreted as a waiver of any rights that the employee may have under 5 U.S.C. 5514. </SECTION> <SECTION> <SECTNO>§ 17.139</SECTNO> <SUBJECT>Refunds.</SUBJECT> The Department will refund promptly to the appropriate individual amounts offset under these regulations when:<PRTPAGE P="174"/> (a) A debt is waived or otherwise found not owing the United States (unless expressly prohibited by statute or regulation); or (b) The Department is directed by an administrative or judicial order to refund amounts deducted from the employee's current pay. </SECTION> <SECTION> <SECTNO>§ 17.140</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> The employee shall file an original and two copies of a request for a hearing with the Clerk, Office of the Chief Administrative Law Judge, Room 2158, Department of HUD, Washington, DC 20410, on official work days between the hours of 8:45 a.m. and 5:15 p.m. All other correspondence shall be submitted to the Department Claims Officer, Department of Housing and Urban Development, Washington, DC 20410. Documents may be filed by personal delivery or mail. All documents shall be printed, typewritten, or otherwise processed in clear, legible form and on letter-size paper. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">IRS Tax Refund Offset Provisions</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> Sections 17.150 through 17.161 appear at 51 FR 39750, Oct. 31, 1986, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.150</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) The standards set forth in §§ 17.150 through 17.161 are the Department's procedures for requesting the Internal Revenue Service (IRS) to offset tax refunds due taxpayers who have a past-due debt obligation to the Department. These procedures are authorized by the Deficit Reduction Act of 1984 (31 U.S.C. 3720A) and apply to the collection of debts as authorized by common law, by 31 U.S.C. 3716, or under other statutory authority. (b) The Secretary will use the IRS tax refund offset to collect claims which are certain in amount, past due and legally enforceable, and which are eligible for tax refund offset under regulations issued by the Secretary of the Treasury. (c) The Secretary will not report debts to the IRS except for the purpose of using the offset procedures described in §§ 17.150 through 17.161. Debts of less than $100.00, exclusive of interest and other charges, will not be reported. (d) If not legally enforceable because of lapse of statute of limitations but otherwise valid, the debt will be reported to the IRS as a forgiven debt on Form 1099G. (Form 1099G is an information return which Government agencies file with the IRS to report forgiven debt, and the forgiven amount is considered income to the taxpayer.) (See § 17.159.) </SECTION> <SECTION> <SECTNO>§ 17.151</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> A request for deduction from an IRS tax refund will be made only after the Secretary makes a determination that an amount is owed and past due and provides the debtor with 65 calendar days written notice. This Notice of Intent to Collect by IRS Tax Refund Offset (Notice of Intent) will state: (a) The nature and amount of the debt; (b) That unless the debt is repaid within 65 days from the date of the Notice, the Secretary intends to collect the debt by requesting the IRS to reduce any amounts payable to the debtor as refunds of Federal taxes paid by amount equal to the amount of the debt and all accumulated interest and other charges; (c) That the debtor has a right to obtain review within the Department of the Secretary's initial determination that the debt is past due and legally enforceable (see § 17.152); (d) That the debtor has a right to inspect and copy departmental records related to the debt as determined by the Secretary and will be informed as to where and when the inspection and copying can be done after the Department receives notice from the debtor that inspection and copying are requested. (See § 17.155.) </SECTION> <SECTION> <SECTNO>§ 17.152</SECTNO> <SUBJECT>Review within the Department of a determination that an amount is past-due and legally enforceable.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who receives a Notice of Intent has the right to present evidence that all or part of the debt is not past-due or not legally enforceable. The debtor should send a copy of the Notice of Intent with a letter notifying the HUD Board of Contract Appeals within 25 calendar <PRTPAGE P="175"/>days from the date of the Department's Notice of Intent that he or she intends to present evidence. (See § 17.161(a) for address of the Board.) Failure to give this advance notice will not jeopardize the debtor's right to present evidence within the 65 days provided for in paragraph (b) of this section. If the HUD Board of Contract Appeals has additional procedures governing the review process, a copy of the procedures will be mailed to the debtor after his request for review is received and docketed by the Board. (b) <E T="03">Submission of evidence.</E> The debtor may submit evidence showing that all or part of the debt is not past-due or not legally enforceable along with the notification requested by paragraph (a) of this section, but in any event the evidence must be submitted to the Board of Contract Appeals within 65 calendar days from the date of the Department's Notice of Intent. Failure to submit evidence within 65 calendar days will result in a dismissal of the request for review by the HUD Board of Contract Appeals. (c) <E T="03">Review of the record.</E> After a timely submission of evidence by the debtor, an Administrative Judge from the HUD Board of Contract Appeals will review the evidence submitted by the Department which shows that all or part of the debt is past-due and legally enforceable. (Administrative Judges are appointed in accordance with 41 U.S.C. 607(b)(1)). The Administrative Judge shall make a determination based upon a review of the written record, except that the Administrative Judge may order an oral hearing if he or she finds that: (1) An applicable statute authorizes or requires the Secretary to consider waiver of the indebtedness and the waiver determination turns on credibility or veracity; or (2) The question of indebtedness cannot be resolved by review of the documentary evidence. (d) <E T="03">Previous decision by Board of Contract Appeals.</E> The debtor is not entitled to a review of the Department's intent to offset it, in a previous year the HUD Board of Contract Appeals has issued a decision on the merits that the debt is past-due and legally enforceable, <E T="03">except</E> when the debt has become legally unenforceable since the issuance of that decision, or the debtor can submit newly discovered material evidence that the debt is presently not legally enforceable. </SECTION> <SECTION> <SECTNO>§ 17.153</SECTNO> <SUBJECT>Determination of the Administrative Judge.</SUBJECT> (a) Following the hearing or the review of the record, the Administrative Judge shall issue a written decision which includes the supporting rationale for the decision. The decision of the Administrative Judge concerning whether a debt or part of a debt is past-due and legally enforceable is the final agency decision with respect to the past-due status and enforceability of the debt. (b) Copies of the Administrative Judge's decision will be distributed to the General Counsel of the Department, the Department's Office of Finance and Accounting, the debtor, and the debtor's attorney or other representative, if any. (c) If the Administrative Judge's decision affirms that all or part of the debt is past due and legally enforceable, the Secretary will notify the IRS after the Administrative Judge's determination has been issued under paragraph (a) of this section and a copy of the determination is received by the Department's Office of Finance and Accounting. No referral will be made to the IRS if review of the debt by the Administrative Judge reverses the initial decision that the debt is past due and legally enforceable. </SECTION> <SECTION> <SECTNO>§ 17.154</SECTNO> <SUBJECT>Postponements, withdrawals and extensions of time.</SUBJECT> (a) <E T="03">Postponements and withdrawals.</E> The Secretary may, for good cause, postpone or withdraw referral of the debt to the IRS. (For example, a delay in the mail between the debtor and the Secretary could normally warrant a postponement; a mathematical error or computer malfunction could be the reason for a withdrawal.) (b) <E T="03">Extensions of time.</E> At the discretion of the Administrative Judge, time limitations required in these procedures may be extended in appropriate circumstances for good cause shown. </SECTION> <SECTION> <PRTPAGE P="176"/> <SECTNO>§ 17.155</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who intends to inspect or copy departmental records related to the debt as determined by the Secretary must send a letter to the Title I Representative stating his or her intention. The letter must be received by the Title I Representative within 25 calendar days from the date of the Department's Notice of Intent. (b) <E T="03">Department's response.</E> In response to timely notification by the debtor as described in paragraph (a) of this section, the Title I Representative will notify the debtor of the location and time when the debtor may inspect or copy departmental records related to the debt. </SECTION> <SECTION> <SECTNO>§ 17.156</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> If the debtor timely notifies the Secretary that he or she is exercising a right described in § 17.152(a) and timely submits evidence in accordance with § 17.152(b), any notice to the IRS will be stayed until the issuance of a written decision by the Administrative Judge which determines that a debt or part of a debt is past-due and legally enforceable. </SECTION> <SECTION> <SECTNO>§ 17.157</SECTNO> <SUBJECT>Application of offset funds: Single debt.</SUBJECT> If the debtor does not timely notify the Secretary that he or she is exercising a right described in § 17.152, the Secretary will notify the IRS of the debt no earlier than 65 calendar days from the date of the Department's Notice of Intent, and will request that the amount of the debt be offset against any amount payable by the IRS as refund of Federal taxes paid. Normally, recovered funds will be applied first to costs of collection, then to any special charges provided for in HUD regulations or contracts, then to interest and finally, to the principal owed by the debtor. </SECTION> <SECTION> <SECTNO>§ 17.158</SECTNO> <SUBJECT>Application of offset funds: Multiple debts.</SUBJECT> The Secretary will use the procedures set out in § 17.157 for the offset of multiple debts. However, when collecting on multiple debts the Secretary will apply the recovered amounts against the debts in the order in which the debts accrued. </SECTION> <SECTION> <SECTNO>§ 17.159</SECTNO> <SUBJECT>Application of offset funds: Tax refund insufficient to cover amount of debt.</SUBJECT> If a tax refund is insufficient to satisfy a debt in a given tax year, the Secretary will recertify to the IRS the following year to collect further on the debt. If, in the following year, the debt has become legally unenforceable because of the lapse of the statute of limitations, the debt will be reported to the IRS as a forgiven debt in accordance with § 17.150(d). </SECTION> <SECTION> <SECTNO>§ 17.160</SECTNO> <SUBJECT>Time limitation for notifying the IRS to request offset of tax refunds due.</SUBJECT> (a) The Secretary may not initiate offset of tax refunds due to collect a debt for which authority to collect arises under 31 U.S.C. 3716 more than 10 years after the Secretary's right to collect the debt first accrued, unless facts material to the Secretary's right to collect the debt were not known and could not reasonably have been known by the officials of the Department who were responsible for discovering and collecting such debts. (b) When the debt first accrued is determined according to existing law regarding the accrual of debts. (See, for example, 28 U.S.C. 2415.) </SECTION> <SECTION> <SECTNO>§ 17.161</SECTNO> <SUBJECT>Correspondence with the Department.</SUBJECT> (a) All correspondence from the debtor to the Board concerning the right to review as described in § 17.152 shall be addressed to the HUD Board of Contract Appeals, Room 2131, 451 Seventh Street SW., Washington, DC 20410-0500. (b) The request for review of Departmental records should be addressed to the Title I Representative whose address appears in the Notice of Intent of Offset. All requests for review of departmental records must be marked: Attention: Records Inspection Request. (c) All other correspondence shall be addressed to the Department Claims Officer, Office of Finance and Accounting, Department of Housing and Urban <PRTPAGE P="177"/>Development, room 2202, Washington, DC 20410. <CITA>[51 FR 39750, Oct. 31, 1986, as amended at 59 FR 59647, Nov. 18, 1994]</CITA> </SECTION> </SUBJGRP> </SUBPART> </PART> <PART> <EAR>Pt. 18</EAR> <HD SOURCE="HED">PART 18—INDEMNIFICATION OF HUD EMPLOYEES</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 301; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 62 FR 6096, Feb. 10, 1997, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 18.1</SECTNO> <SUBJECT>Policy.</SUBJECT> (a) The Department of Housing and Urban Development may indemnify, in whole or in part, a Department employee (which for the purpose of this part includes a former Department employee) for any verdict, judgment or other monetary award which is rendered against any such employee, provided the Secretary or his or her designee determines that: (1) The conduct giving rise to the verdict, judgment or award was taken within the scope of his or her employment with the Department; and (2) Such indemnification is in the interest of the United States. (b) The Department of Housing and Urban Development may settle or compromise a personal damage claim against a Department employee by the payment of available funds, at any time, provided the Secretary or his or her designee determines that: (1) The alleged conduct giving rise to the personal damage claim was taken within the scope of employment; and (2) That such settlement or compromise is in the interest of the United States. (c) Absent exceptional circumstances, as determined by the Secretary or his or her designee, the Department will not entertain a request either to agree to indemnify or to settle a personal damage claim before entry of an adverse verdict, judgment or monetary award. (d) When an employee of the Department becomes aware that an action has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee should immediately notify his or her supervisor that such an action is pending. The supervisor shall promptly notify the head of his or her operating component and the Associate General Counsel for Litigation and Fair Housing Enforcement, if the supervisor is located at headquarters, or Field Assistant General Counsel—who shall promptly notify the Associate General Counsel for Litigation and Fair Housing Enforcement—if the supervisor is located in the field. As used in this section, the term “principal operating component” means an office in the Department headed by an Assistant Secretary, the General Counsel, the Inspector General, or an equivalent departmental officer who reports directly to the Secretary. Questions regarding representation of the employee will be determined by the Department of Justice pursuant to 28 CFR 50.15 (Representation of Federal officials and employees by Department of Justice attorneys or by private counsel furnished by the Department in civil, criminal, and congressional proceedings in which Federal employees are sued, subpoenaed, or charged in their individual capacities). (e) The employee may, thereafter, request indemnification to satisfy a verdict, judgment or monetary award entered against the employee or to compromise a claim pending against the employee. The employee shall submit a written request, with appropriate documentation including a copy of the verdict, judgment, award or other order or settlement proposal, in a timely manner to the head of the employee's principal operating component. The head of the employee's principal operating component shall submit the written request and accompanying documentation, together with a recommended disposition of the request, in a timely manner to the General Counsel. (f) The General Counsel shall seek the views of the Department of Justice on the request. Where the Department of Justice has rendered a decision denying representation of the employee pursuant to 28 CFR 50.15, the General Counsel shall seek the concurrence of the Department of Justice on the request. If the Department of Justice does not concur in the request, the <PRTPAGE P="178"/>General Counsel shall so advise the employee and no further action on the employee's request shall be taken. (g) In all instances except those where the Department of Justice has non-concurred in the request, the General Counsel shall forward for decision to the Secretary or his or her designee the employee's request, the recommendation of the head of the employee's principal operating component, the views of the Department of Justice, and the General Counsel's recommendation. (h) Any payment under this part, either to indemnify a Department employee or to settle a personal damage claim, is contingent upon the availability of appropriated funds of the Department that are permitted by law to be utilized for this purpose. </SECTION> </PART> <PART> <EAR>Pt. 20</EAR> <HD SOURCE="HED">PART 20—BOARD OF CONTRACT APPEALS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Development of Housing and Urban Development Board of Contract Appeals</HD> <SECHD>Sec.</SECHD> <SECTNO>20.1</SECTNO> <SUBJECT>Scope of part.</SUBJECT> <SECTNO>20.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> <SECTNO>20.3</SECTNO> <SUBJECT>Organization and location of the Board.</SUBJECT> <SECTNO>20.4</SECTNO> <SUBJECT>Jurisdiction of the Board.</SUBJECT> <SECTNO>20.5</SECTNO> <SUBJECT>Board powers.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Rules of the Department of Housing and Urban Development Board of Contract Appeals</HD> <SECTNO>20.10</SECTNO> <SUBJECT>Rules.</SUBJECT> </SUBPART> </CONTENTS> <SUBJGRP> <HD SOURCE="HED">Preliminary Procedures</HD> </SUBJGRP> <EXTRACT> <FP>Rules</FP> <FP SOURCE="FP-2">1. Appeals, how taken.</FP> <FP SOURCE="FP-2">2. Notice of appeal, contents of.</FP> <FP SOURCE="FP-2">3. Docketing of appeals.</FP> <FP SOURCE="FP-2">4. Preparation, content, organization, forwarding, and status of appeal file.</FP> <FP SOURCE="FP-2">5. Dismissal for lack of jurisdiction.</FP> <FP SOURCE="FP-2">6. Pleadings.</FP> <FP SOURCE="FP-2">7. Amendments of pleadings or record.</FP> <FP SOURCE="FP-2">8. Hearing election and motions.</FP> <FP SOURCE="FP-2">9. Prehearing briefs.</FP> <FP SOURCE="FP-2">10. Prehearing of presubmission conference.</FP> <FP SOURCE="FP-2">11. Submission without a hearing.</FP> <FP SOURCE="FP-2">12. Optional small claims (expedited) and accelerated procedures. (These procedures are available solely at the election of the appellant.)</FP> <FP SOURCE="FP-2">12.1Elections to utilize small claims (expedited) and accelerated procedure.</FP> <FP SOURCE="FP-2">12.2The small claims (expedited) procedure.</FP> <FP SOURCE="FP-2">12.3The accelerated procedure.</FP> <FP SOURCE="FP-2">12.4Motions for reconsideration in Rule 12 cases.</FP> <FP SOURCE="FP-2">13. Settling the record.</FP> <FP SOURCE="FP-2">14. Discovery—depositions.</FP> <FP SOURCE="FP-2">15. Interrogatories to parties, admission of facts, and production and inspection of documents.</FP> <FP SOURCE="FP-2">16. Filing and service of papers other than subpoenas.</FP> <HD SOURCE="HD1">Hearings</HD> <FP SOURCE="FP-2">17. Where and when held.</FP> <FP SOURCE="FP-2">18. Notice of hearings.</FP> <FP SOURCE="FP-2">19. Unexcused absence of a party.</FP> <FP SOURCE="FP-2">20. Hearings: conduct; examination of witnesses.</FP> <FP SOURCE="FP-2">21. Subpoenas.</FP> <FP SOURCE="FP-2">22. Copies of papers.</FP> <FP SOURCE="FP-2">23. Posthearing briefs.</FP> <FP SOURCE="FP-2">24. Transcript of proceedings.</FP> <FP SOURCE="FP-2">25. Withdrawal of exhibits.</FP> <HD SOURCE="HD1">Representation</HD> <FP SOURCE="FP-2">26. Appellant.</FP> <FP SOURCE="FP-2">27. Government.</FP> <HD SOURCE="HD1">Decisions</HD> <FP SOURCE="FP-2">28. Decisions.</FP> <HD SOURCE="HD1">Motion for Reconsideration</HD> <FP SOURCE="FP-2">29. Motion for reconsideration.</FP> <HD SOURCE="HD1">Dismissals and Defaults</HD> <FP SOURCE="FP-2">30. Dismissal without prejudice.</FP> <FP SOURCE="FP-2">31. Dismissal or default for failure to prosecute or defend.</FP> <HD SOURCE="HD1">Remand</HD> <FP SOURCE="FP-2">32. Remand from court.</FP> <HD SOURCE="HD1">Sanctions</HD> <FP SOURCE="FP-2">33. Sanctions.</FP> <HD SOURCE="HD1">Miscellaneous Procedures</HD> <FP SOURCE="FP-2">34. Applicability.</FP> <FP SOURCE="FP-2">35. Time, computation and extensions.</FP> <FP SOURCE="FP-2">36. Ex parte communications.</FP> </EXTRACT> <AUTH> <HD SOURCE="HED">Authority:</HD> 41 U.S.C. 601-613; 42 U.S.C. 3535(d). </AUTH> <SUBPART> <HD SOURCE="HED">Subpart A—Department of Housing and Urban Development Board of Contract Appeals</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 50 FR 45911, Nov. 5, 1985, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 20.1</SECTNO> <SUBJECT>Scope of part.</SUBJECT> This part establishes a Board of Contract Appeals, sets forth its function, <PRTPAGE P="179"/>policies and procedures regarding matters to be considered by the Board, and prescribes the rules of the Board. </SECTION> <SECTION> <SECTNO>§ 20.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> There is established in the Office of the Secretary, the Housing and Urban Development Board of Contract Appeals (“the Board”). </SECTION> <SECTION> <SECTNO>§ 20.3</SECTNO> <SUBJECT>Organization and location of the Board.</SUBJECT> (a) <E T="03">Location.</E> The Board's mailing address is: Board of Contract Appeals, U.S. Department of Housing and Urban Development, Room 2131, 451 Seventh Street, S.W., Washington, DC 20410-0001. For items requiring non-postal delivery, the Board is located in Room 3229, 1201 Constitution Ave., N.W. 20001. The telephone number of the Board is (202) 927-5110. (This is not a toll-free number.) For learning- or speech-impaired persons, this number may be accessed via TTY by contacting the Federal Information Relay Service at 1-800-877-8339. The facsimile number is (202) 927-6257. (b) <E T="03">Organization.</E> The Board shall be comprised of a Chief Administrative Judge, who shall be the Chair, an Administrative Judge, who shall be the Vice-Chair, and such other Administrative Judges as may be appointed by the Secretary. All members of the Board shall be attorneys at law duly licensed by any State, commonwealth, territory, or the District of Columbia. All members shall be selected and appointed to serve in accordance with section 8(b)(1) of the Contract Disputes Act of 1978 (41 U.S.C. 608(b)(1)). Except as otherwise provided, appeals are assigned to a panel of at least three members who decide the case by a majority vote. The Chair shall assign one member of the panel to preside over the appeal and to conduct necessary conferences and hearings, supervise discovery and the development of the record for the Board, and to make such procedural determinations as are necessary to the proper disposition of the appeal. <CITA>[50 FR 45911, Nov. 5, 1985, as amended at 61 FR 13280, Mar. 26, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 20.4</SECTNO> <SUBJECT>Jurisdiction of the Board.</SUBJECT> (a) <E T="03">Contract appeals.</E> The Board shall consider and determine appeals from decisions of contracting officers under the Contract Disputes Act of 1978 (41 U.S.C. 601-613) relating to contracts entered into by (1) the Department of Housing and Urban Development or (2) any other executive agency when that agency or the Administrator for Federal Procurement Policy has designated the Board to decide the appeal. (b) <E T="03">Other matters.</E> The Board or its individual members shall have jurisdiction over other matters assigned to it by the Secretary or designee. Determinations in other matters shall have the finality provided by the applicable statute, regulation or agreement. </SECTION> <SECTION> <SECTNO>§ 20.5</SECTNO> <SUBJECT>Board powers.</SUBJECT> (a) <E T="03">Board powers.</E> The Board shall employ support personnel, as needed, and shall have all powers necessary and incident to the proper performance of the duties assigned to it. (b) <E T="03">Disqualification.</E> No Administrative Judge may act for the Board or participate in a decision if, prior to the time the appeal was filed, he or she had participated in the matter in any manner on behalf of an interested party. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Rules of the Department of Housing and Urban Development Board of Contract Appeals</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 50 FR 45912, Nov. 5, 1985, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 20.10</SECTNO> <SUBJECT>Rules.</SUBJECT> (a) These rules govern the procedure in all matters before the Department of Housing and Urban Development Board of Contract Appeals, unless otherwise provided by applicable law or regulation. The Federal Rules of Civil Procedure may be applied where procedures are not otherwise provided in these rules. For applications and proceedings involving award of attorney fees and other expenses, the rules set forth in 24 CFR part 14 shall apply. (b) <E T="03">Filing Requirements.</E> A party shall file with the Board one original of any pleading or motion. That party shall simultaneously serve upon the other <PRTPAGE P="180"/>party of record one copy of that pleading or motion filed with the Board. Filings may be transmitted to the Board via facsimile. However, the original of any document transmitted to the Board by facsimile shall simultaneously be mailed to the Board. (c) <E T="03">Alternative Disputes Resolution.</E> The Administrative Dispute Resolution Act authorizes and encourages Federal agencies to use mediation, conciliation, arbitration, and other techniques for the prompt and informal resolution of disputes. With the mutual consent of the parties, the Board may assist in the resolution of disputes by Alternative Dispute Resolution (ADR) procedures. The utilization of ADR procedures shall not relieve the parties from the filing requirements or other orders of the Board relating to a contract appeal duly docketed before the Board. (d) <E T="03">Equal Access to Justice Act.</E> The Equal Access to Justice Act provides that agencies which conduct adversary adjudications “shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust.” 5 U.S.C. § 504. Prevailing parties in proceedings before the Board may apply for an award under the Act following the issuance by the Board of its final decision in the appeal. <EXTRACT> <HD SOURCE="HD1">Preliminary Procedures</HD> <HD SOURCE="HD2">Rule 1. Appeals, how taken.</HD> (a) <E T="03">General.</E> Notice of an appeal shall be in writing and mailed or otherwise furnished to the Board within 90 days from the date of receipt of a final written decision of the contracting officer. (b) <E T="03">Contracting officer's failure to act-claim of $100,000 or less.</E> Where the contractor has submitted a claim of $100,000 or less to the contracting officer and has requested a written decision within 60 days from receipt of the request, and the contracting officer has not issued the decision, the contractor may file a notice of appeal as provided in paragraph (a) of this section, citing the failure of the contracting officer to issue a decision. (c) <E T="03">Contracting officer's failure to act-claim in excess of $100,000.</E> Where the contractor has submitted a claim in excess of $100,000 to the contracting officer and the contracting officer has failed, within 60 days of submission of the claim, to issue a final written decision, or to advise the contractor of a date when the final written decision will be issued, the contractor may file a notice of appeal as provided in paragraph (a) of this section, citing the failure to issue a decision. (d) <E T="03">Unreasonable delay by contracting officer.</E> A contractor may request the Board to direct a contracting officer to issue a final written decision within a specified period of time, as determined by the Board, in the event of an unreasonable delay on the part of the contracting officer. (e) <E T="03">Stay of proceedings.</E> Upon docketing of appeals filed under paragraph (b) or (c) of this section, the Board may stay further proceedings pending issuance of a final decision by the contracting officer within the period of time determined by the Board. <HD SOURCE="HD2">Rule 2. Notice of appeal, contents of.</HD> A notice of appeal shall indicate that an appeal is being taken and shall identify the contract (by number), the department and agency involved in the dispute, the final written decision from which the appeal is taken, and the amount in dispute, if known. The notice of appeal shall be signed by the appellant (the contractor making the appeal), or by the appellant's duly authorized representative or attorney. The complaint referred to in Rule 6 may be filed with the notice of appeal, or the appellant may designate the notice of appeal as a complaint, if it otherwise fulfills the requirements of a complaint. A notice of appeal from a final written decision of a contracting officer involving a claim in excess of $100,000 shall state that certification has been made as required under section 6(c)(1) of the Contract Disputes Act of 1978 [41 U.S.C. 606(c)(1)]. <HD SOURCE="HD2">Rule 3. Docketing of appeals.</HD> When a notice of appeal in any form has been received by the Board, it shall be docketed promptly. A written notice of docketing shall be transmitted to the appellant with a copy of these rules, to the contracting officer, and to HUD's Office of General Counsel. <HD SOURCE="HD2">Rule 4. Preparation, content, organization, forwarding, and status of appeal file.</HD> (a) <E T="03">Duties of contracting officer.</E> Within 30 days of receipt of notice from the Board that an appeal has been docketed, the contracting officer shall assemble and transmit to the Board (through HUD's Office of General Counsel) three copies of an appeal file consisting of all documents relevant to the appeal, including: (1) The decision from which the appeal is taken; (2) The contract including specifications and relevant amendments, plans, and drawings;<PRTPAGE P="181"/> (3) All correspondence between the parties relevant to the appeal, including the appellant's letter or letters of claim; (4) Transcripts of any testimony and affidavits or statements of any witnesses on the matter in dispute made prior to the filing of the notice of appeal with the Board; and (5) Any additional information considered relevant to the appeal. <FP>Upon receipt of the appeals file, the Board shall furnish the appellant and HUD's Office of General Counsel with true and exact copies of the appeal file.</FP> (b) <E T="03">Duties of appellant.</E> Within 30 days after receipt of a copy of the appeal file assembled by the contracting officer, the appellant shall transmit to the Board any documents not contained in the appeal file which are relevant to the appeal, and furnish two copies of these documents to the government trial attorney. (c) <E T="03">Organization of appeal file.</E> Documents in the appeal file may be originals, legible facsimiles, or authenticated copies, and shall be arranged in chronological order where practicable, numbered sequentially, tabbed, and indexed to identify the contents of the file. (d) <E T="03">Unusual documents.</E> Upon request by either party, the Board may waive the requirement to furnish to the other party copies of bulky, lengthy, or out-of-size documents in the appeal file when inclusion would be burdensome. At the time a party files with the Board a document for which waiver has been granted, he or she shall notify the other party that the document or a copy is available for inspection at the offices of the Board or of the party filing the document. (e) <E T="03">Status of documents in appeal file.</E> Documents contained in the appeal file are, without further action by the parties, part of the record upon which the Board will render its decision. However, a party may object, for reasons stated, to consideration of a particular document or documents within 30 days of receipt, unless good cause is shown for later objection. If an objection is made, the Board shall remove the document or documents from the appeal file and permit the party offering the document to move its admission as evidence in accordance with Rules 13 and 20. (f) <E T="03">Waiver of filing of documents.</E> Notwithstanding the foregoing, the filing of the Rule 4 (a) and (b) documents may be dispensed with by the Board either upon request of the appellant in the notice of appeal or thereafter upon stipulation of the parties. <HD SOURCE="HD2">Rule 5. Dismissal for lack of jurisdiction.</HD> Any motion addressed to the jurisdiction of the Board shall be promptly filed. Hearing on the motion shall be afforded on application of either party. However, the Board may defer its decision on the motion pending hearing on both the merits and the motion. The Board may at any time raise the issue of its jurisdiction to proceed with a particular case by an appropriate order, affording the parties an opportunity to be heard on the issue. <HD SOURCE="HD2">Rule 6. Pleadings.</HD> (a) <E T="03">Appellant.</E> Within 30 days after receipt of notice of docketing of the appeal, the appellant shall file a complaint with the Board. The complaint shall set forth simple, concise and direct statements of each of the appellant's claims. Appellant shall also set forth the basis, with appropriate reference to contract provisions, of each claim and the dollar amount claimed, to the extent known. This pleading shall fulfill the generally recognized requirements of a complaint, although no particular form is required. Should the complaint not be received within 30 days, appellant's notice of appeal may, if in the opinion of the Board the issues before the Board are sufficiently defined, be deemed its complaint and the Government shall be so notified. (b) <E T="03">Government.</E> Within 30 days from receipt of the complaint, the Government shall file an answer with the Board. The answer shall set forth simple, concise and direct statements of Government's defenses to each claim asserted by appellant, including any affirmative defenses available. <HD SOURCE="HD2">Rule 7. Amendments of pleadings or record.</HD> The Board, upon its own initiative or upon application by a party, may order a party to make a more definite statement of the complaint or answer, or to reply to an answer. The Board may, within the proper scope of the appeal, permit either party to amend its pleading upon conditions fair to both parties. When issues within the proper scope of the appeal, but not raised by the pleadings, are tried by express or implied consent of the parties, with the permission of the Board, they shall be treated in all respects as if they have been raised in the pleadings. In such instances, motions to amend the pleadings to conform to the proof may be entered, but are not required. If evidence is objected to at a hearing on the ground that it is not within the issues raised by the pleadings, it may be admitted within the proper scope of the appeal, provided, however, that the objecting party may be granted a continuance if necessary to enable it to meet this evidence. <HD SOURCE="HD2">Rule 8. Hearing election and motions.</HD> (a) <E T="03">Hearing election.</E> After the filing of the Government's answer or notice from the Board that it has entered a general denial on behalf of the Government, each party shall advise whether it desires a hearing as prescribed in Rules 17 through 25, or whether it <PRTPAGE P="182"/>elects to submit its case on the record without a hearing, as prescribed in Rule 11. (b) <E T="03">Motions.</E> (1) The Board may entertain any timely motion for an appropriate order. Application to the Board for an order shall be by motion which, unless made during a hearing, shall be made in writing, shall state with particularity the grounds for the motion and shall set forth the relief or order sought. (2) The Board may, on its own motion, initiate any action by notice to the parties. (3) Unless otherwise specified by the Board, a party who receives a motion shall file any answering material within 20 days after the date of receipt of the motion. The Board may require the presentation of briefs or arguments. The Board shall issue a decision on each motion that is appropriate and just to the parties. (4) Affidavits in support of motions shall set forth such facts as would be admissible in evidence and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavit. When a motion is made and supported as provided in this rule, a party opposing the motion who is represented by counsel may not rest upon the mere allegations or denials of his pleading; his response, by affidavits or as otherwise provided in this rule, must show that there is a genuine issue of fact or of law for decision. Should it appear from the affidavits of a party opposing the motion that for reasons stated he cannot present by affidavit facts essential to justify his opposition, the Board may deny the motion or may order a continuance to permit affidavits to be obtained or discovery to be had or may make such order as is just. <HD SOURCE="HD2">Rule 9. Prehearing briefs.</HD> Based on an examination of the pleadings, and its determination of whether the arguments and authorities addressed to the issues are adequately set forth in the pleadings, the Board may require the parties to submit prehearing briefs. If the Board does not require prehearing briefs, either party may upon appropriate and sufficient notice to the other party, furnish a prehearing brief to the Board. In any case where a prehearing brief is submitted, it shall be furnished so as to be received by the Board at least 15 days prior to the date set for hearing, and a copy shall simultaneously be furnished to the other party. <HD SOURCE="HD2">Rule 10. Prehearing or presubmission conference.</HD> (a) <E T="03">Conference.</E> Whether the case is to be submitted under Rule 11, or heard under Rules 17 through 25, the Board may upon its own initiative, or upon the application of either party, arrange a telephone conference or call upon the parties to appear before an Administrative Judge for a conference to consider: (1) Simplification, clarification, or severing of the issues; (2) The possibility of obtaining stipulations, admissions, agreements and rulings on admissibility of documents, understandings on matters already on record, or similar agreements that will avoid unnecessary proof; (3) Agreements and rulings to facilitate discovery; (4) Limitation of the number of expert witnesses or avoidance of cumulative evidence; (5) The possibility of agreement disposing of any or all of the issues in dispute; and (6) Such other matters as may aid in the disposition of the appeal. (b) <E T="03">Results of conference.</E> The Administrative Judge shall make such rulings and orders as may be appropriate to achieve settlement by agreement of the parties or to aid in the disposition of the appeal. The results of the conference, including any rulings and orders, shall be reduced to writing by the Administrative Judge or the conference shall be transcribed. The writing or the transcript shall constitute a part of the record. <HD SOURCE="HD2">Rule 11. Submission without a hearing.</HD> Either party may elect to waive its right to appear at a hearing and to submit its case upon the record before the Board, as settled under Rule 13. Submission of a case without hearing does not relieve the parties from the necessity of proving the facts supporting their allegations or defenses. Affidavits, depositions, admissions, answers to interrogatories, and stipulations may be employed to supplement other documentary evidence in the record. The Board may permit submissions to be supplemented by oral argument, which may be transcribed if requested, and by briefs in accordance with Rule 9 or Rule 23. <HD SOURCE="HD2">Rule 12. Optional small claims (expedited) and accelerated procedures. (These procedures are available solely at the election of the appellant.)</HD> <HD SOURCE="HD2">Rule 12.1 Elections to utilize small claims (expedited) and accelerated procedure.</HD> (a) <E T="03">Election-dispute involving $50,000 or less.</E> In appeals where the amount in dispute is $50,000 or less, the appellant may elect to have the appeal processed under a Small Claims (Expedited) procedure requiring decision of the appeal, whenever possible, within 120 days after the Board receives written notice of the appellant's election. The details of this procedure appear in section 12.2 of this Rule. (b) <E T="03">Election-dispute involving $100,000 or less.</E> In appeals where the amount in dispute is $100,000 or less, the appellant may elect to <PRTPAGE P="183"/>have the appeal processed under an Accelerated procedure requiring decision of the appeal, whenever possible, within 180 days after the Board receives written notice of the apellant's election. The details of this procedure appear in section 12.3 of this Rule. (c) <E T="03">Notice of election.</E> The appellant's election of either the Small Claims (Expedited) procedure or the Accelerated procedure may be made by written notice within 60 days after receipt of notice of docketing the appeal unless this period is extended by the Board for good cause. The election may not be withdrawn except with permission of the Board and for good cause. (d) <E T="03">Determination of amount in dispute.</E> In deciding whether the Small Claims (Expedited) procedure or the Accelerated procedure is applicable to a given appeal, the Board shall determine the amount in dispute. <HD SOURCE="HD2">Rule 12.2 The small claims (expedited) procedure.</HD> (a) <E T="03">Document submission and prehearing conference.</E> In cases proceeding under the Small Claims (Expedited) procedure, the following time periods shall apply: (1) Within ten days from the Government's first receipt from either the appellant or the Board of a copy of the appellant's notice of election of the Small Claims (Expedited) procedure, the Government shall send the Board a copy of the contract, the contracting officer's final decision, and the appellant's letter or letters of claim, if any; remaining documents required under Rule 4 shall be submitted in accordance with times specified in that rule unless the Board otherwise directs; (2) Within 15 days after the Board has acknowledged receipt of appellant's notice of election, the assigned Administrative Judge shall take the following actions, if feasible, in an informal meeting or a telephone conference with both parties: (i) Identify and simplify the issues; (ii) establish a simplified procedure appropriate to the particular appeal; (iii) determine whether the appellant wants a hearing, and if so, fix a time and place for the hearing; (iv) require the Government to furnish all the additional documents relevant to the appeal, and (v) establish an expedited schedule for resolution of the appeal. (b) <E T="03">Pleadings, discovery and other prehearing activity.</E> Pleadings, discovery and other prehearing activity will be allowed only as consistent with the requirement to conduct the hearing on the date scheduled, or if no hearing is scheduled, to close the record on a date that will allow decisions within the 120-day limit. The Board may impose shortened time periods for any actions prescribed or allowed under these rules, as necessary to enable the Board to decide the appeal within the 120-day limit, allowing whatever time, up to 30 days, that the Board considers necessary for the preparation of the decision after closing the record and the filing of briefs, if any. (c) <E T="03">Decision.</E> The written decision by the Board in cases processed under the Small Claims (Expedited) procedure will be short and contain only summary findings of fact and conclusions. Decisions will be rendered for the Board by a single Administrative Judge. If there has been a hearing, the Administrative Judge presiding at the hearing may at the conclusion of the hearing and after entertaining oral arguments as deemed appropriate, render on the record oral summary findings of fact, conclusions, and a decision of the Appeal. Whenever an oral decision is rendered, the Board will subsequently furnish the parties a typed copy of the oral decision (or a copy of the transcript of the hearing) for record and payment purposes and to establish the starting date for the period for filing a motion for reconsideration under Rule 29. (d) <E T="03">Effect of decision.</E> A decision issued under the Small Claims (Expedited) procedure shall have no value as precedent and, in the absence of fraud shall be final and conclusive and may not be appealed or set aside. <HD SOURCE="HD2">Rule 12.3The accelerated procedure.</HD> (a) <E T="03">Waiver of pleadings, discovery and briefs.</E> In cases proceeding under the Accelerated procedure, the parties are encouraged, to the extent possible consistent with adequate presentation of their factual and legal positions, to waive pleadings, discovery, and briefs. (b) <E T="03">Pleadings, discovery, and other prehearing activity.</E> Pleadings, discovery and other prehearing activity will be allowed only as consistent with the requirement to conduct the hearing on the dates scheduled or, if no hearing is scheduled, to close the record on a date that will allow decision within the 180-day limit. The Board may shorten time periods for any actions prescribed or allowed under these rules, as necessary to enable the Board to decide the appeal within the 180-day limit, and may reserve up to 30 days for preparation of the decision. (c) <E T="03">Decision.</E> Written decisions by the Board in cases processed under the Accelerated procedure will normally be short and contain only summary findings of fact and conclusions. In cases where the amount in dispute is $50,000 or less where the Accelerated procedure has been elected and where there has been a hearing, the single Administrative Judge presiding at the hearing may, with the concurrence of both parties, at the conclusion of the hearing and after entertaining such oral arguments as deemed appropriate, render on the record oral summary findings of fact, conclusions, and a decision of the appeal. Whenever an oral decision is rendered, the Board will subsequently furnish the parties a typed copy of the oral decision (or a <PRTPAGE P="184"/>copy of the transcript of the hearing) for record and payment purposes, and to establish the starting date for the period for filing a motion for reconsideration under Rule 29. <HD SOURCE="HD2">Rule 12.4Motions for reconsideration in Rule 12 cases.</HD> Motions for Reconsideration of cases decided under either the Small Claims (Expedited) procedure or the Accelerated procedure need not be decided within the original 120-day or 180-day limit, but all such motions shall be processed and decided rapidly to fulfill the intent of this Rule. <HD SOURCE="HD2">Rule 13.Settling the record.</HD> (a) <E T="03">Contents of record.</E> The record upon which the Board's decision will be rendered consists of the documents in the appeal file furnished under Rule 4 or 12 (unless removed by the Board) and the following items, if any: Pleadings, prehearing conference memoranda or orders, prehearing briefs, depositions or interrogatories admitted into evidence, admissions, stipulations, transcripts of conferences and hearings, exhibits admitted into evidence, posthearing briefs, orders of the Board, and documents which the Board has specifically designated to be made a part of the record. The record will, at all reasonable times, be available for inspection by the parties at the office of the Board. (b) <E T="03">Closing of record.</E> Except as the Board may otherwise order, no proof shall be received in evidence after completion of an oral hearing or, in cases submitted on the record, after notification by the Board that the case is ready for decision. (c) <E T="03">Weight of evidence.</E> The weight to be attached to any evidence of record will rest within the sound discretion of the Board. The Board may in any case require either party, with appropriate notice to the other party, to submit additional evidence on any matter relevant to the appeal. <HD SOURCE="HD2">Rule 14.Discovery—depositions.</HD> (a) <E T="03">General policy and protective orders.</E> The parties are encouraged to engage in voluntary discovery procedures. In connection with any discovery procedure under this rule or rule 15, the Board may make any order required to protect a party or person from annoyance, embarrassment, or undue burden or expense. Those orders may include limitations on the scope, method, time and place for discovery, and provisions for protecting the secrecy of confidential information or documents. (b) <E T="03">When depositions permitted.</E> After an appeal has been docketed and complaint filed, the parties may mutually agree to, or the Board may, upon application of either party, order the taking of testimony of any person by deposition upon oral examination or written interrogatories before any officer authorized to administer oaths at the place of examination. (c) <E T="03">Orders on depositions.</E> The time, place, and manner of taking depositions shall be as mutually agreed by the parties, or failing such agreement, governed by order of the Board. (d) <E T="03">Use as evidence.</E> No testimony taken by depositions shall be considered as part of the evidence in the hearing of an appeal until the testimony is offered and received in evidence at the hearing. It will not ordinarily be received in evidence if the deponent is present and can testify at the hearing. In these instances, however, the deposition may be used to contradict or impeach the testimony of the deponent given at the hearing. In cases submitted on the record, the Board may receive depositions to supplement the record. (e) <E T="03">Expenses.</E> Each party shall bear its own expenses associated with the taking of any depositions. <HD SOURCE="HD2">Rule 15.Interrogatories to parties, admission of facts, and production and inspection of documents.</HD> After an appeal has been docketed and complaint filed with the Board, a party may serve on the other party: (a) Written interrogatories to be answered separately in writing, signed under oath and answered or objected to within 30 days; (b) a request for the admission of specified facts or the authenticity of any documents, to be answered or objected to within 30 days after service; the factual statements and the authenticity of the documents to be deemed admitted upon failure of a party to respond to the request; and (c) a request for the production, inspection and copying of any documents or objects not privileged, which reasonably may lead to the discovery of admissible evidence. <HD SOURCE="HD2">Rule 16.Filing and service of papers other than subpoenas.</HD> Papers shall be considered filed with the Board when mailed or otherwise furnished to the Board. Papers shall be served upon parties personally or by mail, addressed to the party upon whom service is to be made. Timely filing and service by facsimile transmission (telecopier) is permissible provided that the original telecopied document is promptly mailed or served thereafter in the manner specified by this rule. Except as provided in rule 4(a), the party filing any paper with the Board shall simultaneously serve a copy of the paper upon the opposing party, and shall file a certificate of service with the Board indicating that a copy has been so served. Subpoenas shall be served as provided in rule 21.<PRTPAGE P="185"/> <HD SOURCE="HD1">Hearings</HD> <HD SOURCE="HD2">Rule 17.Where and when held.</HD> Hearings will be held at places determined by the Board to best serve the interest of the parties and the Board. Hearings will be scheduled at the discretion of the Board with due consideration to the regular order of appeals, Rule 12 requirements, the convenience of the parties, the requirement for just and inexpensive determination of appeals without necessary delay, and other pertinent factors. On request or motion by either party and for good cause, the Board may adjust the date of a hearing. <HD SOURCE="HD2">Rule 18.Notice of hearings.</HD> Parties shall be given not less than 20 days notice of the time and place for hearing, unless otherwise agreed. The notice of hearing shall be sent by certified mail (return receipt requested). <HD SOURCE="HD2">Rule 19.Unexcused absence of a party.</HD> The unexcused absence of a party at the time and place set for hearing will not be occasion for delay. Notwithstanding the provisions of Rule 31, in the event of an unexcused absence: (a) The appeal will be dismissed with prejudice for want of prosecution; or (b) the hearing will proceed and the case will be regarded as submitted on the record by the absent party. <HD SOURCE="HD2">Rule 20.Hearings: conduct; examination of witnesses.</HD> (a) <E T="03">Conduct of hearings.</E> Hearings shall be as informal as may be reasonable and appropriate under the circumstances. Appellant and the Government may offer such evidence as would be admissible under the Federal Rules of Evidence or as otherwise determined to be reliable and relevant by the presiding Administrative Judge. Stipulations of fact agreed upon by the parties may be regarded and used as evidence at the hearing. The parties may stipulate the testimony that would be given by a witness if the witness were present. The Board may require evidence in addition to that offered by the parties. (b) <E T="03">Examination of witnesses.</E> Oral testimony before the Board shall generally be given under oath or affirmation. However, if the testimony of a witness is not given under oath or affirmation, the Board shall advise the witness that his statements may be subject to the provisions of title 18 U.S.C., sections 287 and 1001, and any other provision of law imposing penalties for knowingly making false representations in connection with claims against the United States or in any matter within the jurisdiction of any department or agency. <HD SOURCE="HD2">Rule 21.Subpoenas.</HD> (a) <E T="03">General.</E> Upon written request of either party filed with the Board or on the Administrative Judge's initiative, the Administrative Judge to whom a case is assigned or who is otherwise designated by the Chairman may issue a subpoena requiring: (1) Testimony at a deposition—the deposing of a witness in the city or county where he or she resides, is employed or transacts business in person, or at another location convenient for the witness that is specifically determined by the Board; (2) Testimony at a hearing—the attendance of a witness for the purpose of taking testimony at a hearing; and (3) Production of books and papers—the production by the witness at the deposition or hearing of books and papers designated in the subpoena. (b) <E T="03">Voluntary cooperation.</E> Each party is expected (1) to cooperate and make available witnesses and evidence under its control as requested by the other party, without issuance of a subpoena, and (2) to secure voluntary attendance of desired third-party witnesses and production of desired third-party books, papers, documents, or tangible things whenever possible. (c) <E T="03">Requests for subpoenas.</E> (1) A request for a subpoena shall normally be filed at least: (i) 15 days before a scheduled deposition where the attendance of a witness at a deposition is sought; (ii) 30 days before a scheduled hearing where the attendance of a witness at a hearing is sought. In its discretion the Board may honor requests for subpoenas not made within these time limitations. (2) A request for a subpoena shall state the reasonable scope and general relevance to the case of the testimony and of any books and papers sought. (d) <E T="03">Requests to quash or modify.</E> Upon written request by the person subpoenaed or by a party, made within 10 days after service but in any event not later than the time specified in the subpoena for compliance, the Board may (1) quash or modify the subpoena if it is unreasonable and oppressive or for other good cause shown, or (2) require the person in whose behalf the subpoena was issued to advance the reasonable cost of producing subpoenaed books and papers. Where circumstances require, the Board may act upon such a request at any time after a copy of the request has been served upon the opposing party. (e) <E T="03">Form; issuance.</E> (1) Every subpoena shall state the name of the Board and the title of the appeal, and shall command each person to whom it is directed to attend and give testimony, and if appropriate, to produce specified books and papers at the time and place <PRTPAGE P="186"/>specified in the subpoena. In issuing a subpoena to a requesting party, the Administrative Judge shall sign the subpoena and may, in his discretion, enter the name of the witness and otherwise leave it blank. The party to whom the subpoena is issued shall complete the subpoena before service. (2) Where the witness is located in a foreign county, a letter rogatory or subpoena may be issued and served under the circumstances and in the manner provided in 28 U.S.C. 1781-1784. (f) <E T="03">Service.</E> (1) The party requesting issuance of a subpoena shall be responsible for service. (2) A subpoena requiring the attendance of a witness at a deposition or hearing may be served (i) by sending a copy of the subpoena by certified mail (return receipt requested) to the last known address of the party named in the subpoena, or (ii) by personal delivery of a copy of the subpoena to the party named in the subpoena, by a United States marshal or deputy marshal, or by any other person who is not a party and not less than 18 years of age. Service shall include the tender of the fees for one day's attendance and the mileage provided by 28 U.S.C. 1821 or other applicable law; however, where the subpoena is issued on behalf of the Government, money payments need not be tendered in advance of attendance. (3) The party at whose instance a subpoena is issued shall be responsible for the payment of fees and mileage of the witness and for the costs of service of the subpoena. (g) <E T="03">Contumacy or refusal to obey subpoena.</E> In case of contumacy or refusal to obey a subpoena by a person who resides, is found, or transacts business within the jurisdiction of a United States District Court, the Board will apply to the Court through the Attorney General of the United States for an order requiring the person to appear before the Board or a member of the Board to give testimony or produce evidence or both. <HD SOURCE="HD2">Rule 22. Copies of papers.</HD> When books, records, papers, or documents have been received in evidence, a true copy of this evidence or a copy of any material or relevant part of this evidence may be substituted during or at the conclusion of the hearing. <HD SOURCE="HD2">Rule 23. Posthearing briefs.</HD> The presiding Administrative Judge may order the parties to submit post hearing briefs to the Board. <HD SOURCE="HD2">Rule 24. Transcript of proceedings.</HD> Testimony and argument at hearings shall be reported <E T="03">verbatim,</E> unless the Board otherwise orders. Extra transcripts or copies of the proceedings in the possession of the board may be supplied to the parties. Otherwise, the parties may obtain transcripts or copies of the proceedings from the hearing reporter. <HD SOURCE="HD2">Rule 25. Withdrawal of exhibits.</HD> After a decision has become final the Board may, upon request and after notice to the other party, permit the withdrawal of original exhibits, or any part of original exhibits by the party entitled to the exhibits. The subsitution of true copies of exhibits or any part of exhibits may be required by the Board as a condition of granting permission for the withdrawal. <HD SOURCE="HD1">Representation</HD> <HD SOURCE="HD2">Rule 26. Appellant.</HD> An individual appellant may appear before the Board in person; a corporation by one of its duly authorized officers; and a partnership or joint venture by one of its duly authorized members; or any of these by an attorney at law duly licensed in any State, commonwealth, territory, the District of Columbia, or in a foreign country. An attorney representing an appellant shall file a written notice of appearance with the Board. <HD SOURCE="HD2">Rule 27. Government.</HD> Government counsel may, in accordance with their authority, represent the interests of the Government before the Board. They shall file notices of appearance with the Board. This notice of appearance will be given appellant or appellant's attorney in the form specified by the Board from time to time. Whenever an appellant and the Government are in agreement as to disposition of the controversy, the Board may suspend further processing of the appeal. However, if the Board is advised by either party that the controversy has not been disposed of by agreement, the case shall be restored to the Board's calendar without loss of position. <HD SOURCE="HD1">Decisions</HD> <HD SOURCE="HD2">Rule 28. Decisions.</HD> Decisions of the Board shall be made in writing. Copies of the decision shall be forwarded simultaneously to both parties. The rules of the Board and all final orders and decisions (except those required for good cause to be held confidential and not cited as precedents) shall be open for public inspection at the offices of the Board in Washington, DC. Decisions of the Board shall be made solely upon the record, as described in Rule 13. Oral decisions shall be rendered in accordance with Rules 12.2(c) and 12.3(c).<PRTPAGE P="187"/> <HD SOURCE="HD1">Motion for Reconsideration</HD> <HD SOURCE="HD2">Rule 29. Motion for reconsideration.</HD> A motion for reconsideration may be filed by either party. It shall set forth specifically the grounds relied upon to sustain the motion. The motion shall be filed within 30 days from the date of the receipt of a copy of the decision of the Board by the party filing the motion. <HD SOURCE="HD1">Dismissals and Defaults</HD> <HD SOURCE="HD2">Rule 30. Dismissal without prejudice.</HD> In certain cases, appeals docketed before the Board are required to be placed in a suspended status and the Board is unable to proceed with disposition for reasons not within the control of the Board. Where the suspension has continued, or may continue, for an inordinate length of time, the Board may dismiss such appeals from its docket without prejudice to their restoration to the docket when the cause of suspension has been removed. Unless either party or the Board acts within three years to reinstate any appeal dismissed without prejudice, the dismissal shall be considered to be with prejudice. <HD SOURCE="HD2">Rule 31. Dismissal or default for failure to prosecute or defend.</HD> Whenever a record discloses the failure of either party to file documents required by these rules, respond to notices or correspondence from the Board, comply with orders of the Board, or otherwise indicates an intention not to continue the prosecution or defense of an appeal, the Board may, in the case of such a default by the appellant, issue an order to show cause why the appeal should not be dismissed with prejudice or, in the case of a default by the Government, issue an order to show cause why the Board should not act under Rule 33. If good cause is not shown, the Board may take appropriate action. <HD SOURCE="HD1">Remand</HD> <HD SOURCE="HD2">Rule 32. Remand from court.</HD> Whenever any court remands a case to the Board for further proceedings, each of the parties shall, within 20 days of the remand, submit a report to the Board recommending procedures to be followed to comply with the court's order. The Board shall consider any timely filed reports and enter special orders governing the handling of the remanded case. To the extent the court's directive and time limitations permit, these orders shall conform to these rules. <HD SOURCE="HD1">Sanctions</HD> <HD SOURCE="HD2">Rule 33. Sanctions.</HD> If any party fails or refuses to obey an order issued by the Board, the Board may then make such order as it considers necessary to the just and expeditious conduct or dismissal of the appeal. <HD SOURCE="HD1">Miscellaneous Procedures</HD> <HD SOURCE="HD2">Rule 34.Applicability.</HD> These rules shall apply to all appeals relating to contracts entered into on or after March 1, 1979, and, to appeals relating to earlier contracts, with respect to claims pending before the contracting officer on March 1, 1979 or initiated thereafter, if the contractor elects to proceed under the Act. <HD SOURCE="HD2">Rule 35.Time, computation, and extensions.</HD> (a) <E T="03">General.</E> Where possible, procedural actions should be taken in less time than the maximum time allowed. Where appropriate and justified, extensions of time shall be granted. All requests for extensions of time shall be in writing and shall be filed before the due date, unless excused. (b) <E T="03">Computation.</E> In computing any period of time, the day of the event from which the designated period of time begins to run shall not be included, but the last day of the period shall be included unless it is a Saturday, Sunday, or a legal holiday, in which event the period shall run to the end of the next business day. <HD SOURCE="HD2">Rule 36.Ex parte communications.</HD> (a) <E T="03">Definition.</E> An ex parte communication is any communication with a member of the Board, direct or indirect, oral or written, concerning the merits of matters in issue of any pending proceeding which is made by a party in the absence of any other party. Ex parte communications do not include communications where: (1) The purpose and content of the communication have been disclosed in advance or simultaneously to all parties; (2) The communication is a request for information concerning the status of the case; or (3) The communication involves the Board's administrative functions or procedures. (b) <E T="03">Prohibition of ex parte communications.</E> Ex parte communications are prohibited. (c) <E T="03">Procedure after receipt of ex parte communications.</E> Any member of the Board who receives an ex parte communication that the member of the Board knows or has reason to believe is unauthorized shall promptly place the communication, or its substance, in all files and shall furnish copies to all parties. <PRTPAGE P="188"/>Unauthorized ex parte communications shall not be taken into consideration in deciding any matter in issue. </EXTRACT> <CITA>[50 FR 45912, Nov. 5, 1985, as amended at 52 FR 27130, July 17, 1987; 57 FR 20201, May 12, 1992; 61 FR 13280-13281, Mar. 26, 1996]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 24</EAR> <HD SOURCE="HED">PART 24—GOVERNMENT DEBARMENT AND SUSPENSION AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>24.100</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>24.105</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>24.110</SECTNO> <SUBJECT>Coverage.</SUBJECT> <SECTNO>24.115</SECTNO> <SUBJECT>Policy.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Effect of Action</HD> <SECTNO>24.200</SECTNO> <SUBJECT>Debarment or suspension.</SUBJECT> <SECTNO>24.205</SECTNO> <SUBJECT>Ineligible persons.</SUBJECT> <SECTNO>24.210</SECTNO> <SUBJECT>Voluntary exclusion.</SUBJECT> <SECTNO>24.215</SECTNO> <SUBJECT>Exception provision.</SUBJECT> <SECTNO>24.220</SECTNO> <SUBJECT>Continuation of covered transactions.</SUBJECT> <SECTNO>24.225</SECTNO> <SUBJECT>Failure to adhere to restrictions.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Debarment</HD> <SECTNO>24.300</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>24.305</SECTNO> <SUBJECT>Causes for debarment.</SUBJECT> <SECTNO>24.310</SECTNO> <SUBJECT>Procedures.</SUBJECT> <SECTNO>24.311</SECTNO> <SUBJECT>Investigation and referral.</SUBJECT> <SECTNO>24.312</SECTNO> <SUBJECT>Notice of proposed debarment.</SUBJECT> <SECTNO>24.313</SECTNO> <SUBJECT>Opportunity to contest proposed debarment.</SUBJECT> <SECTNO>24.314</SECTNO> <SUBJECT>Debarring official's decision.</SUBJECT> <SECTNO>24.315</SECTNO> <SUBJECT>Settlement and voluntary exclusion.</SUBJECT> <SECTNO>24.320</SECTNO> <SUBJECT>Period of debarment.</SUBJECT> <SECTNO>24.325</SECTNO> <SUBJECT>Scope of debarment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Suspension</HD> <SECTNO>24.400</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>24.405</SECTNO> <SUBJECT>Causes for suspension.</SUBJECT> <SECTNO>24.410</SECTNO> <SUBJECT>Procedures.</SUBJECT> <SECTNO>24.411</SECTNO> <SUBJECT>Notice of suspension.</SUBJECT> <SECTNO>24.412</SECTNO> <SUBJECT>Opportunity to contest suspension.</SUBJECT> <SECTNO>24.413</SECTNO> <SUBJECT>Suspending official's decision.</SUBJECT> <SECTNO>24.415</SECTNO> <SUBJECT>Period of suspension.</SUBJECT> <SECTNO>24.420</SECTNO> <SUBJECT>Scope of suspension.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Responsibilities of GSA, Agency and Participants</HD> <SECTNO>24.500</SECTNO> <SUBJECT>GSA responsibilities.</SUBJECT> <SECTNO>24.505</SECTNO> <SUBJECT>HUD responsibilities.</SUBJECT> <SECTNO>24.510</SECTNO> <SUBJECT>Participants’ responsibilities.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Drug-Free Workplace Requirements (Grants)</HD> <SECTNO>24.600</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>24.605</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>24.610</SECTNO> <SUBJECT>Coverage.</SUBJECT> <SECTNO>24.615</SECTNO> <SUBJECT>Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.</SUBJECT> <SECTNO>24.620</SECTNO> <SUBJECT>Effect of violation.</SUBJECT> <SECTNO>24.625</SECTNO> <SUBJECT>Exception provision.</SUBJECT> <SECTNO>24.630</SECTNO> <SUBJECT>Certification requirements and procedures.</SUBJECT> <SECTNO>24.635</SECTNO> <SUBJECT>Reporting of and employee sanctions for convictions of criminal drug offenses.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Limited Denial of Participation</HD> <SECTNO>24.700</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>24.705</SECTNO> <SUBJECT>Causes for a limited denial of participation.</SUBJECT> <SECTNO>24.710</SECTNO> <SUBJECT>Period and scope of a limited denial of participation.</SUBJECT> <SECTNO>24.711</SECTNO> <SUBJECT>Notice of limited denial of participation.</SUBJECT> <SECTNO>24.712</SECTNO> <SUBJECT>Conference.</SUBJECT> <SECTNO>24.713</SECTNO> <SUBJECT>Opportunity to contest the limited denial of participation.</SUBJECT> <SECTNO>24.714</SECTNO> <SUBJECT>Reporting of limited denial of participation.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 41 U.S.C. 701 <E T="03">et seq.</E>; 42 U.S.C. 3535(d); E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 19182 and 19204, May 26, 1988, unless otherwise noted. </SOURCE> <CROSSREF> <HD SOURCE="HED">Cross Reference:</HD> See also Office of Management and Budget notice published at 55 FR 21679, May 25, 1990, and 60 FR 33036, June 26, 1995. </CROSSREF> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 24.100</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) Executive Order (E.O.) 12549 provides that, to the extent permitted by law, Executive departments and agencies shall participate in a governmentwide system for nonprocurement debarment and suspension. A person who is debarred or suspended shall be excluded from Federal financial and nonfinancial assistance and benefits under Federal programs and activities. Debarment or suspension of a participant in a program by one agency shall have governmentwide effect. (b) These regulations implement section 3 of E.O. 12549 and the guidelines promulgated by the Office of Management and Budget under section 6 of the E.O. by: (1) Prescribing the programs and activities that are covered by the governmentwide system;<PRTPAGE P="189"/> (2) Prescribing the governmentwide criteria and governmentwide minimum due process procedures that each agency shall use; (3) Providing for the listing of debarred and suspended participants, participants declared ineligible (see definition of “ineligible” in § 24.105), and participants who have voluntarily excluded themselves from participation in covered transactions; (4) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion; and (5) Offering such other guidance as necessary for the effective implementation and administration of the governmentwide system. (c) These regulations also implement Executive Order 12689 (3 CFR, 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103-355, sec. 2455, 108 Stat. 3327) by— (1) Providing for the inclusion in the <E T="03">List of Parties Excluded from Federal Procurement and Nonprocurement Programs</E> all persons proposed for debarment, debarred or suspended under the Federal Acquisition Regulation, 48 CFR part 9, subpart 9.4; persons against which governmentwide exclusions have been entered under this part; and persons determined to be ineligible; and (2) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion. (d) Although these regulations cover the listing of ineligible participants and the effect of such listing, they do not prescribe policies and procedures governing declarations of ineligibility. (e) These regulations also: (1) Prescribe policies and procedures governing the debarment and suspension of contractors and the limited denial of participation of participants and contractors; (2) Provide for the listing of debarred, suspended and ineligible contractors; and (3) Set forth the consequences of such listing. (f) Although this part covers the listing of ineligible contractors, it does not prescribe policies and procedures governing declarations of ineligibility. <CITA>[60 FR 33040, 33048, June 26, 1995, as amended at 60 FR 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.105</SECTNO> <SUBJECT>Definitions.</SUBJECT> The following definitions apply to this part: <E T="03">Adequate evidence.</E> Information sufficient to support the reasonable belief that a particular act or omission has occurred. <E T="03">Affiliate.</E> Persons are affiliates of each other if, directly or indirectly, either one controls or has the power to control the other, <E T="03">or</E>, a third person controls or has the power to control both. Indicia of control include, but are not limited to: interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the suspension or debarment of a person which has the same or similar management, ownership, or principal employees as the suspended, debarred, ineligible, or voluntarily excluded person. <E T="03">Agency.</E> Any executive department, military department or defense agency or other agency of the executive branch, excluding the independent regulatory agencies. <E T="03">Benefits</E>. Money or any other thing of value provided by, or realized because of the Department. <E T="03">Thing of value</E> includes insurance or guarantees of any kind. <E T="03">Civil judgment.</E> The disposition of a civil action by any court of competent jurisdiction, whether entered by verdict, decision, settlement, stipulation, or otherwise creating a civil liability for the wrongful acts complained of; or a final determination of liability under the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-12). <E T="03">Contractor</E>. As used in this part, contractor means any individual or other legal entity that: (1) Submits offers for, or is awarded, or reasonably may be expected to submit offers for or be awarded, a Government contract (or a subcontract under a Government contract); or (2) Conducts business with the Government as an agent or representative of another contractor;<PRTPAGE P="190"/> <E T="03">Conviction.</E> A judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, including a plea of nolo contendere. <E T="03">Debarment.</E> An action taken by a debarring official in accordance with these regulations to exclude a person from participating in covered transactions. A person so excluded is <E T="03">debarred.</E> <E T="03">Debarring official.</E> An official authorized to impose debarment. The debarring official is either: (1) The agency head, or (2) An official designated by the agency head. <E T="03">Hearing officer</E>. An Administrative Law Judge or Board of Contract Appeals Judge authorized by HUD's Secretary, or by the Secretary's designee, to conduct proceedings under this part. <E T="03">HUD</E>. Department of Housing and Urban Development. <E T="03">Indictment.</E> Indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense shall be given the same effect as an indictment. <E T="03">Ineligible.</E> Excluded from participation in Federal nonprocurement programs pursuant to a determination of ineligibility under statutory, executive order, or regulatory authority, other than Executive Order 12549 and its agency implementing regulations; for exemple, excluded pursuant to the Davis-Bacon Act and its implementing regulations, the equal employment opportunity acts and executive orders, or the environmental protection acts and executive orders. A person is ineligible where the determination of ineligibility affects such person's eligibility to participate in more than one covered transaction. <E T="03">Legal proceedings.</E> Any criminal proceeding or any civil judicial proceeding to which the Federal Government or a State or local government or quasi-governmental authority is a party. The term includes appeals from such proceedings. <E T="03">Limited denial of participation.</E> An action taken by a HUD official, in accordance with subpart G of these regulations, that immediately excludes or restricts a person from participating in HUD program(s) within a defined geographic area. <E T="03">List of Parties Excluded from Federal Procurement and Nonprocurement Programs.</E> A list compiled, maintained and distributed by the General Services Administration (GSA) containing the names and other information about persons who have been debarred, suspended, or voluntarily excluded under Executive Orders 12549 and 12689 and these regulations or 48 CFR part 9, subpart 9.4, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, and those persons who have been determined to be ineligible. <E T="03">Notice.</E> A written communication served in person or sent by certified mail, return receipt requested, or its equivalent, to the last known address of a party, its identified counsel, its agent for service of process, or any partner, officer, director, owner, or joint venturer of the party. Notice, if undeliverable, shall be considered to have been received by the addressee five days after being properly sent to the last address known by the agency. <E T="03">Participant.</E> Any person who submits a proposal for, enters into, or reasonably may be expected to enter into a covered transaction. This term also includes any person who acts on behalf of or is authorized to commit a participant in a covered transaction as an agent or representative of another participant. <E T="03">Person.</E> Any individual, corporation, partnership, association, unit of government or legal entity, however organized, except: foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities. <E T="03">Preponderance of the evidence.</E> Proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not. <E T="03">Principal.</E> Officer, director, owner, partner, key employee, or other person within a participant with primary management or supervisory responsibilities; or a person who has a critical influence on or substantive control <PRTPAGE P="191"/>over a covered transaction, whether or not employed by the participant. Persons who have a critical influence on or substantive control over a covered transaction are: (1) Principal investigators. (2) Loan officers; (3) Staff appraisers and inspectors; (4) Underwriters; (5) Bonding companies; (6) Borrowers under programs financed by HUD or with loans guaranteed, insured or subsidized through HUD programs; (7) Purchasers of properties with HUD-insured or Secretary-held mortgages; (8) Recipients under HUD assistance agreements; (9) Ultimate beneficiaries of HUD programs; (10) Fee appraisers and inspectors; (11) Real estate agents and brokers; (12) Management and marketing agents; (13) Accountants, consultants, investment bankers, architects, engineers, attorneys and others in a business relationship with participants in connection with a covered transaction under a HUD program; (14) Contractors involved in the construction or rehabilitation of properties financed by HUD, with HUD insured loans, or acquired properties including properties held by HUD as mortgagee-in-possession; (15) Closing agents; (16) Turnkey developers of projects financed by or with financing insured by HUD; (17) Title companies; (18) Escrow agents; (19) Project owners; (20) Administrators of nursing homes and projects for the elderly financed or insured by HUD; (21) Developers, sellers or owners of property financed with loans insured under title I or title II of the National Housing Act; and (22) Employees or agents of any of the above. <E T="03">Procurement List</E>. A list compiled, maintained, and distributed by the General Services Administration (GSA) (see § 24.500(c)), containing the names and other information regarding contractors debarred or suspended or declared ineligible by agencies under the procedures of this part as well as under other statutory or regulatory authority. <E T="03">Proposal.</E> A solicited or unsolicited bid, application, request, invitation to consider or similar communication by or on behalf of a person seeking to participate or to receive a benefit, directly or indirectly, in or under a covered transaction. <E T="03">Respondent.</E> A person against whom a debarment or suspension action has been initiated. (1) A respondent is also a person against whom a limited denial of participation has been initiated. (2) [Reserved] <E T="03">State.</E> Any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written determination from a State government that such State considers that instrumentality to be an agency of the State government. <E T="03">Suspending official.</E> An official authorized to impose suspension. The suspending official is either: (1) The agency head, or (2) An official designated by the agency head. <E T="03">Suspension.</E> An action taken by a suspending official in accordance with these regulations that immediately excludes a person from participating in covered transactions for a temporary period, pending completion of an investigation and such legal, debarment, or Program Fraud Civil Remedies Act proceedings as may ensue. A person so excluded is <E T="03">suspended.</E> <E T="03">Ultimate beneficiaries</E>. Ultimate beneficiaries of HUD programs include, but are not limited to, subsidized tenants and subsidized mortgagors such as those assisted under Section 8 Housing Assistance Payments Contracts, by Section 236 Rental Assistance, or by Rent Supplement payments. <E T="03">Voluntary exclusion or voluntarily excluded.</E> A status of nonparticipation or <PRTPAGE P="192"/>limited participation in covered transactions assumed by a person pursuant to the terms of a settlement. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19182, May 26, 1988, 53 FR 30051, Aug. 10, 1988; 60 FR 33040, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.110</SECTNO> <SUBJECT>Coverage.</SUBJECT> (a) These regulations apply to all persons who have participated, are currently participating or may reasonably be expected to participate in transactions under Federal nonprocurement programs. For purposes of these regulations such transactions will be referred to as <E T="03">covered transactions.</E> (1) <E T="03">Covered transaction.</E> For purposes of these regulations, a covered transaction is a primary covered transaction or a lower tier covered transaction. Covered transactions at any tier need not involve the transfer of Federal funds. (i) <E T="03">Primary covered transaction.</E> Except as noted in paragraph (a)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regardless of type, including: grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person. Primary covered transactions also include those transactions specially designated by the U.S. Department of Housing and Urban Development in such agency's regulations governing debarment and suspension. (A) Specially designated transactions are: (<E T="03">1</E>) Transactions regulated by the Interstate Land Sales Act (15 U.S.C. 1701); (<E T="03">2</E>) Transactions regulated by the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401); (<E T="03">3</E>) Any procurement transaction between HUD and a person. (ii) <E T="03">Lower tier covered transaction.</E> A lower tier covered transaction is: (A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction. (B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary covered transaction. (C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons are: (<E T="03">1</E>) Principal investigators. (<E T="03">2</E>) Providers of federally-required audit services. (<E T="03">3</E>) Bonding companies; (<E T="03">4</E>) Borrowers; (<E T="03">5</E>) Purchasers of a property with a HUD-insured or Secretary-held mortgage; (<E T="03">6</E>) Recipients under HUD assistance agreements; (<E T="03">7</E>) Ultimate beneficiaries of HUD programs; (<E T="03">8</E>) Fee appraisers and inspectors; (<E T="03">9</E>) Real estate agents and brokers; (<E T="03">10</E>) Management and marketing agents; (<E T="03">11</E>) Accountants, consultants, investment bankers; architects, engineers, attorneys and others in a business relationship with participants in connection with a covered transaction under a HUD program; (<E T="03">12</E>) Contractors involved in the construction or rehabilitation of properties financed by HUD, with HUD insured loans, or acquired properties including properties held by HUD as mortgagee-in-possession; (<E T="03">13</E>) Closing agents; (<E T="03">14</E>) Turnkey developers of projects financed with or insured by HUD; (<E T="03">15</E>) Title companies; (<E T="03">16</E>) Escrow agents; (<E T="03">17</E>) Project owners; (<E T="03">18</E>) Administrators of nursing homes and projects for the elderly financed or insured by HUD; (<E T="03">19</E>) Developers, sellers or owners of property financed with loans insured under title I or title II of the National Housing Act; and<PRTPAGE P="193"/> (<E T="03">20</E>) Employees or agents of any of the above. (2) <E T="03">Exceptions.</E> The following transactions are not covered: (i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; (ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, entities consisting wholly or partially of foreign governments or foreign governmental entities; (iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); (iv) Federal employment; (v) Transactions pursuant to national or agency-recognized emergencies or disasters; (vi) Incidental benefits derived from ordinary governmental operations; and (vii) Other transactions where the application of these regulations would be prohibited by law. (3) <E T="03">Other exceptions.</E> (i) Sanctions against participants whose only involvement in HUD programs is as ultimate beneficiaries, such as subsidized tenants and subsidized mortgagors, may be taken only upon commission of one of the offenses set forth in § 24.305(a), unless the participant has otherwise been debarred or suspended by another Federal agency. (ii) Sanctions under this part against mortgagees and lenders approved by HUD to participate in Federal Housing Administration programs may be initiated only with the approval of the Mortgagee Review Board. (b) <E T="03">Relationship to other sections.</E> This section describes the types of transactions to which a debarment or suspension under the regulations will apply. Subpart B, “Effect of Action,” § 24.200, “Debarment or suspension,” sets forth the consequences of a debarment or suspension. Those consequences would obtain only with respect to participants and principals in the covered transactions and activities described in § 24.110(a). Sections 24.325, “Scope of debarment,” and 24.420, “Scope of suspension,” govern the extent to which a specific participant or organizational elements of a participant would be automatically included within a debarment or suspension action, and the conditions under which affiliates or persons associated with a participant may also be brought within the scope of the action. (c) <E T="03">Relationship to Federal procurement activities.</E> In accordance with E.O. 12689 and section 2455 of Public Law 103-355, any debarment, suspension, proposed debarment or other governmentwide exclusion initiated under the Federal Acquisition Regulation (FAR) on or after August 25, 1995 shall be recognized by and effective for Executive Branch agencies and participants as an exclusion under this regulation. Similarly, any debarment, suspension or other governmentwide exclusion initiated under this regulation on or after August 25, 1995 shall be recognized by and effective for those agencies as a debarment or suspension under the FAR. (d) These regulations also apply to all persons who have participated, are currently participating or may reasonably be expected to participate in Federal procurement programs. For purposes of these regulations, such persons will be referred to as <E T="03">contractors</E> and such transactions will be referred to as <E T="03">procurement contracts.</E> The consequences of a debarment or suspension as set forth in § 24.200 apply to contractors in Federal procurement programs, and §§ 24.325 and 24.420 govern the extent to which a specific contractor or its organizational elements would be included within a debarment or suspension action. (e) <E T="03">Retroactivity.</E> Limitations on participation in HUD programs proposed or imposed prior to the effective date of these regulations under an ancillary procedure shall not be affected by this part. This part shall apply to sanctions initiated after the effective date of <PRTPAGE P="194"/>these regulations (October 1, 1988) regardless of the date of the cause giving rise to the sanction. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19183, May 26, 1988, 53 FR 30051, Aug. 10, 1988; 60 FR 33041, 33048, June 26, 1995; 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.115</SECTNO> <SUBJECT>Policy.</SUBJECT> (a) In order to protect the public interest, it is the policy of the Federal Government to conduct business only with responsible persons. Debarment and suspension are discretionary actions that, taken in accordance with Executive Order 12549 and these regulations, are appropriate means to implement this policy. (b) Debarment and suspension are serious actions which shall be used only in the public interest and for the Federal Government's protection and not for purposes of punishment. Agencies may impose debarment or suspension for the causes and in accordance with the procedures set forth in these regulations. (c) When more than one agency has an interest in the proposed debarment or suspension of a person, consideration shall be given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33048, June 26, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Effect of Action</HD> <SECTION> <SECTNO>§ 24.200</SECTNO> <SUBJECT>Debarment or suspension.</SUBJECT> (a) <E T="03">Primary covered transactions.</E> Except to the extent prohibited by law, persons who are debarred or suspended shall be excluded from primary covered transactions as either participants or principals throughout the Executive Branch of the Federal Government for the period of their debarment, suspension, or the period they are proposed for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall enter into primary covered transactions with such excluded persons during such period, except as permitted pursuant to § 24.215. (b) <E T="03">Lower tier covered transactions.</E> Except to the extent prohibited by law, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded from participating as either participants or principals in all lower tier covered transactions (see § 24.110(a)(1)(ii)) for the period of their exclusion. (c) <E T="03">Exceptions.</E> Debarment or suspension does not affect a person's eligibility for— (1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; (2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities; (3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); (4) Federal employment; (5) Transactions pursuant to national or agency-recognized emergencies or disasters; (6) Incidental benefits derived from ordinary governmental operations; and (7) Other transactions where the application of these regulations would be prohibited by law. (8) Debarment for any of the causes set forth in § 24.305(f) shall have no governmentwide effect. (9) Sanctions imposed on an individual participant under this part shall not preclude the participant from selling his or her principal residence to a purchaser using HUD/FHA financing. (d) <E T="03">Relationship to HUD administrative sanction procedures—</E>(1) <E T="03">Sanctions provided pursuant to contract provisions.</E> Nothing in this part shall impair or limit the right to impose any sanction provided for by contract, including guaranty agreements with the Government National Mortgage Association.<PRTPAGE P="195"/> (2) <E T="03">Other Departmental sanctions.</E> Where an office of the Department is required by statute, regulation, or Executive Order to follow administrative sanction procedures that may differ from the requirements of this part, the requirements of the statute, regulation, or Executive Order shall take precedence. These alternative procedures include, but are not limited to: 24 CFR part 200 Previous Participation Review and Clearance procedures, 24 CFR part 25 Mortgagee Review Board administrative actions, and 24 CFR part 570 Community Development Block Grant corrective and remedial actions. <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.205</SECTNO> <SUBJECT>Ineligible persons.</SUBJECT> Persons who are ineligible, as defined in § 24.105(i), are excluded in accordance with the applicable statutory, executive order, or regulatory authority. </SECTION> <SECTION> <SECTNO>§ 24.210</SECTNO> <SUBJECT>Voluntary exclusion.</SUBJECT> Persons who accept voluntary exclusions under § 24.315 are excluded in accordance with the terms of their settlements. HUD shall, and participants may, contact the original action agency to ascertain the extent of the exclusion. </SECTION> <SECTION> <SECTNO>§ 24.215</SECTNO> <SUBJECT>Exception provision.</SUBJECT> HUD may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549 and § 24.200. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with § 24.505(a). <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.220</SECTNO> <SUBJECT>Continuation of covered transactions.</SUBJECT> (a) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action. (b) Agencies and participants shall not renew or extend covered transactions (other than no-cost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in § 24.215. <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.225</SECTNO> <SUBJECT>Failure to adhere to restrictions.</SUBJECT> (a) Except as permitted under § 24.215 or § 24.220, a participant shall not knowingly do business under a covered transaction with a person who is— (1) Debarred or suspended; (2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or (3) Ineligible for or voluntarily excluded from the covered transaction. (b) Violation of the restriction under paragraph (a) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate. (c) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction (See appendix B of these regulations), unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification. <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="196"/> <HD SOURCE="HED">Subpart C—Debarment</HD> <SECTION> <SECTNO>§ 24.300</SECTNO> <SUBJECT>General.</SUBJECT> The debarring official may debar a person for any of the causes in § 24.305, using procedures established in §§ 24.310 through 24.314. The existence of a cause for debarment, however, does not necessarily require that the person be debarred; the seriousness of the person's acts or omissions and any mitigating factors shall be considered in making any debarment decision. </SECTION> <SECTION> <SECTNO>§ 24.305</SECTNO> <SUBJECT>Causes for debarment.</SUBJECT> Debarment may be imposed in accordance with the provisions of §§ 24.300 through 24.314 for: (a) Conviction of or civil judgment for: (1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction; (2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging; (3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, or obstruction of justice; or (4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a person. (b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as: (1) A willful failure to perform in accordance with the terms of one or more public agreements or transactions; (2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or (3) A willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction. (c) Any of the following causes: (1) A nonprocurement debarment by any Federal agency taken before October 1, 1988, the effective date of these regulations, or a procurement debarment by any Federal agency taken pursuant to 48 CFR subpart 9.4; (2) Knowingly doing business with a debarred, suspended, ineligible, or voluntarily excluded person, in connection with a covered transaction, except as permitted in § 24.215 or § 24.220; (3) Failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owed the Federal Government under the Internal Revenue Code) owed to any Federal agency or instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted; (4) Violation of a material provision of a voluntary exclusion agreement entered into under § 24.315 or of any settlement of a debarment or suspension action; or (5) Violation of any requirement of subpart F of this part, relating to providing a drug-free workplace, as set forth in § 24.615 of this part. (d) Any other cause of so serious or compelling a nature that it affects the present responsibility of a person. (e) Debarment of a contractor may be imposed for any of the causes in paragraphs (a), (b), and (d). For purposes of this section, <E T="03">agreement</E> is deemed to include <E T="03">contracts or subcontracts.</E> (f) In addition to the causes set forth above, HUD may debar a person from participating in any programs or activities of the Department for material violation of a statutory or regulatory provision or program requirement applicable to a public agreement or transaction including applications for grants, financial assistance, insurance or guarantees, or to the performance of requirements under a grant, assistance award or conditional or final commitment to insure or guarantee. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19184, May 26, 1988, 54 FR 4950 and 4957, Jan. 31, 1989; 60 FR 33049, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.310</SECTNO> <SUBJECT>Procedures.</SUBJECT> HUD shall process debarment actions as informally as practicable, consistent with the principles of fundamental <PRTPAGE P="197"/>fairness, using the procedures in §§ 24.311 through 24.314. </SECTION> <SECTION> <SECTNO>§ 24.311</SECTNO> <SUBJECT>Investigation and referral.</SUBJECT> Information concerning the existence of a cause for debarment from any source shall be promptly reported, investigated, and referred, when appropriate, to the debarring official for consideration. After consideration, the debarring official may issue a notice of proposed debarment. </SECTION> <SECTION> <SECTNO>§ 24.312</SECTNO> <SUBJECT>Notice of proposed debarment.</SUBJECT> A debarment proceeding shall be initiated by notice to the respondent advising: (a) That debarment is being considered; (b) Of the reasons for the proposed debarment in terms sufficient to put the respondent on notice of the conduct or transaction(s) upon which it is based; (c) Of the cause(s) relied upon under § 24.305 for proposing debarment; (d) Of the provisions of § 24.311 through § 24.314, and any other HUD procedures, if applicable, governing debarment decisionmaking; and (e) Of the potential effect of a debarment. </SECTION> <SECTION> <SECTNO>§ 24.313</SECTNO> <SUBJECT>Opportunity to contest proposed debarment.</SUBJECT> (a) <E T="03">Submission in opposition.</E> Within 30 days after receipt of the notice of proposed debarment, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment. (1) The information and argument should be addressed to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. (2) If the respondent does not contest the proposed debarment within the 30 day period, the proposed debarment shall become final. (3) If the respondent desires a hearing, it shall submit a written request to the Debarment Docket Clerk within the 30-day period following receipt of the notice of proposed debarment. (4) The parties may agree to engage in an alternative dispute resolution, including informal conference, mediation, conciliation, summary trial with binding decision, minitrial, or use of a settlement judge. (b) <E T="03">Additional proceedings as to disputed material facts.</E> (1) In actions not based upon a conviction or civil judgment, if the debarring official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the proposed debarment, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witness the agency presents. (2) A transcribed record of any additional proceedings shall be made available at cost to the respondent, upon request, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript. (i) Upon the agreement of the parties, the additional proceedings may be recorded using audiotape without transcription. The audiotape shall be made available at cost to the respondent. (ii) [Reserved] <CITA>[60 FR 33049, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.314</SECTNO> <SUBJECT>Debarring official's decision.</SUBJECT> (a) <E T="03">No additional proceedings necessary.</E> In actions based upon a conviction or civil judgment, or in which there is no genuine dispute over material facts, the debarring official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the debarring official extends this period for good cause. (1) The debarring official may, in his or her discretion, refer actions based upon a conviction or civil judgment, or in which there is no genuine dispute over material facts, to a hearing officer or other official for review of the administrative record and appropriate findings. The hearing officer or other official shall issue such findings within 45 days after the referral, and the debarring official shall issue a decision within 15 days after the date of the findings, unless such periods are extended for good cause. (2) [Reserved]<PRTPAGE P="198"/> (b) <E T="03">Additional proceedings necessary.</E> (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The debarring official shall base the decision on the facts as found, together with any information and argument submitted by the respondent and any other information in the administrative record. (2) The debarring official may refer disputed material facts to another official for findings of fact. The debarring official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous. (i) The debarring official may refer disputed material facts and issues of law to a hearing officer for findings of fact and conclusions of law. (A) No appeal to the Secretary may be taken under §§ 26.24 through 26.26 of this title with respect to any order or decision by a hearing officer or other official. (B) The debarring official shall provide the hearing officer or other official with all the information in the administrative record, including any information and argument submitted by the respondent. The administrative record and any documents admitted at the hearing shall constitute the exhibits in evidence. (ii) Unless the parties mutually agree to extend this period, a proceeding before a hearing officer or other official shall commence within 45 days after referral of the case by the debarring official. The hearing officer or other official shall issue findings of fact within 30 days after the conclusion of such additional proceedings. The time limitations of this subparagraph may be extended upon issuance, by the debarring official, hearing officer or other official, of a written notice describing good cause for such extension. (3) The debarring official's decision shall be made after the conclusion of the proceedings with respect to the disputed facts. (i) Such decision shall be made within 15 days after the hearing officer or other official issues findings of fact. (ii) [Reserved] (c)(1) <E T="03">Standard of proof.</E> In any debarment action, the cause for debarment must be established by a preponderance of the evidence. Where the proposed debarment is based upon a conviction or civil judgment, the standard shall be deemed to have been met. (2) <E T="03">Burden of proof.</E> The burden of proof is on the agency proposing debarment. (d) <E T="03">Notice of debarring official's decision.</E> (1) If the debarring official decides to impose debarment, the respondent shall be given prompt notice: (i) Referring to the notice of proposed debarment; (ii) Specifying the reasons for debarment; (iii) Stating the period of debarment, including effective dates; and (iv) Advising that the debarment is effective for covered transactions throughout the executive branch of the Federal Government unless an agency head or an authorized designee makes the determination referred to in § 24.215. (A) Where a debarment is based solely on § 24.305(f), the notice of the debarring official's decision shall advise that the debarment is effective for programs or activities of the Department. (B) [Reserved] (2) If the debarring official decides not to impose debarment, the respondent shall be given prompt notice of that decision. A decision not to impose debarment shall be without prejudice to a subsequent imposition of debarment by any other agency. <CITA>[60 FR 33049, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.315</SECTNO> <SUBJECT>Settlement and voluntary exclusion.</SUBJECT> (a) When in the best interest of the Government, HUD may, at any time, settle a debarment or suspension action. (b) If a participant and the agency agree to a voluntary exclusion of the participant, such voluntary exclusion shall be entered on the Nonprocurement List (see subpart E). </SECTION> <SECTION> <SECTNO>§ 24.320</SECTNO> <SUBJECT>Period of debarment.</SUBJECT> (a) Debarment shall be for a period commensurate with the seriousness of the cause(s). If a suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.<PRTPAGE P="199"/> (1) Debarment for causes other than those related to a violation of the requirements of subpart F of this part generally should not exceed three years. Where circumstances warrant, a longer period of debarment may be imposed. (2) In the case of a debarment for a violation of the requirements of subpart F of this part (<E T="03">see</E> § 24.305(c)(5)), the period of debarment shall not exceed five years. (b) The debarring official may extend an existing debarment for an additional period, if that official determines that an extension is necessary to protect the public interest. However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. If debarment for an additional period is determined to be necessary, the procedures of §§ 24.311 through 24.314 shall be followed to extend the debarment. (c) The respondent may request the debarring official to reverse the debarment decision or to reduce the period or scope of debarment. Such a request shall be in writing and supported by documentation. The debarring official may grant such a request for reasons including, but not limited to: (1) Newly discovered material evidence; (2) Reversal of the conviction or civil judgment upon which the debarment was based; (3) Bona fide change in ownership or management; (4) Elimination of other causes for which the debarment was imposed; or (5) Other reasons the debarring official deems appropriate. (d) Where respondent's request to reduce the period or scope of debarment is based on reasons set forth in paragraphs (c)(4) or (5) of this section, such request may not be submitted earlier than six months after the final decision to debar. In no event may more than one such request be submitted within any 12-month period. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19185, May 26, 1988, 54 FR 4950 and 4957, Jan 31, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.325</SECTNO> <SUBJECT>Scope of debarment.</SUBJECT> (a) <E T="03">Scope in general.</E> (1) Debarment of a person under these regulations constitutes debarment of all its divisions and other organizational elements from all covered transactions, unless the debarment decision is limited by its terms to one or more specifically identified individuals, divisions or other organizational elements or to specific types of transactions. (2) The debarment action may include any affiliate of the participant that is specifically named and given notice of the proposed debarment and an opportunity to respond (see §§ 24.311 through 24.314). (3) Debarment of a contractor under these regulations, or by another Federal agency pursuant to 48 CFR subpart 9.4, constitutes debarment of all its divisions and other organizational elements from all Federal procurement, unless the debarment is limited by its terms to one or more specifically identified individuals, divisions, or other organizational elements or to specific types of contracts. The debarment may be extended to include any affiliates of the contractor, if they are specifically named, given written notice of the proposed debarment, and provided with an opportunity to respond. (b) <E T="03">Imputing conduct.</E> For purposes of determining the scope of debarment, conduct may be imputed as follows: (1) <E T="03">Conduct imputed to participant.</E> The fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a participant may be imputed to the participant when the conduct occurred in connection with the individual's performance of duties for or on behalf of the participant, or with the participant's knowledge, approval, or acquiescence. The participant's acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence. (2) <E T="03">Conduct imputed to individuals associated with participant.</E> The fraudulent, criminal, or other seriously improper conduct of a participant may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the participant who participated in, knew of, or <PRTPAGE P="200"/>had reason to know of the participant's conduct. (3) <E T="03">Conduct of one participant imputed to other participants in a joint venture.</E> The fraudulent, criminal, or other seriously improper conduct of one participant in a joint venture, grant pursuant to a joint application, or similar arrangement may be imputed to other participants if the conduct occurred for or on behalf of the joint venture, grant pursuant to a joint application, or similar arrangement may be imputed to other participants if the conduct occurred for or on behalf of the joint venture, grant pursuant to a joint application, or similar arrangement or with the knowledge, approval, or acquiescence of these participants. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence. (4) The provisions of paragraphs (b)(1) through (3) of this section are also applicable for purposes of imputing conduct to a contractor. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19185, May 26, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Suspension</HD> <SECTION> <SECTNO>§ 24.400</SECTNO> <SUBJECT>General.</SUBJECT> (a) The suspending official may suspend a person for any of the causes in § 24.405 using procedures established in §§ 24.410 through 24.413. (b) Suspension is a serious action to be imposed only when: (1) There exists adequate evidence of one or more of the causes set out in § 24.405, and (2) Immediate action is necessary to protect the public interest. (c) In assessing the adequacy of the evidence, the agency should consider how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such as grants, cooperative agreements, loan authorizations, and contracts. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.405</SECTNO> <SUBJECT>Causes for suspension.</SUBJECT> (a) Suspension may be imposed in accordance with the provisions of §§ 24.400 through 24.413 upon adequate evidence: (1) To suspect the commission of an offense listed in § 24.305(a); or (2) That a cause for debarment under § 24.305 may exist. (b) Indictment shall constitute adequate evidence for purposes of suspension actions. </SECTION> <SECTION> <SECTNO>§ 24.410</SECTNO> <SUBJECT>Procedures.</SUBJECT> (a) <E T="03">Investigation and referral.</E> Information concerning the existence of a cause for suspension from any source shall be promptly reported, investigated, and referred, when appropriate, to the suspending official for consideration. After consideration, the suspending official may issue a notice of suspension. (b) <E T="03">Decisionmaking process.</E> HUD shall process suspension actions as informally as practicable, consistent with principles of fundamental fairness, using the procedures in § 24.411 through § 24.413. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.411</SECTNO> <SUBJECT>Notice of suspension.</SUBJECT> When a respondent is suspended, notice shall immediately be given: (a) That the suspension has been imposed; (b) That the suspension is based on an indictment, conviction, or other adequate evidence that the respondent has committed irregularities seriously reflecting on the propriety of further Federal Government dealings with the respondent; (c) Describing any such irregularities in terms sufficient to put the respondent on notice without disclosing the Federal Government's evidence; (d) Of the cause(s) relied upon under § 24.405 for imposing suspension; (e) That the suspension is for a temporary period pending the completion of an investigation or ensuing legal, debarment or Program Fraud Civil Remedies Act proceedings; (f) Of the provisions of §§ 24.411 through 24.413 and any other HUD procedures, if applicable, governing suspension decisionmaking; and<PRTPAGE P="201"/> (g) Of the effect of the suspension. <CITA>[60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.412</SECTNO> <SUBJECT>Opportunity to contest suspension.</SUBJECT> (a) <E T="03">Submission in opposition.</E> Within 30 days after receipt of the notice of suspension, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the suspension. (1) The information and argument should be addressed to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. (2) If the respondent does not contest the suspension within the 30 day period, the suspension shall become final. (3) If the respondent desires a hearing, it shall submit a written request to the Debarment Docket Clerk within the 30-day period following receipt of the notice of suspension. (4) The parties may agree to engage in an alternative dispute resolution, including informal conference, mediation, conciliation, summary trial with binding decision, minitrial, or use of a settlement judge. (b) <E T="03">Additional proceedings as to disputed material facts.</E> (1) If the suspending official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the suspension, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witnesses the agency presents, unless: (i) The action is based on an indictment, conviction or civil judgment; or (ii) A determination is made, on the basis of Department of Justice advice, that the substantial interests of the Federal Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced. (2) A transcribed record of any additional proceedings shall be prepared and made available at cost to the respondent, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript. (i) Upon the agreement of the parties, the additional proceedings may be recorded using audiotape without transcription. The audiotape shall be made available at cost to the respondent. (ii) [Reserved] <CITA>[60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.413</SECTNO> <SUBJECT>Suspending official's decision.</SUBJECT> The suspending official may modify or terminate the suspension (see § 24.320(c) for reasons for reducing the period or scope of debarment) or may leave it in force. However, a decision to modify or terminate the suspension shall be without prejudice to the subsequent imposition of suspension by any other agency or debarment by any agency. The decision shall be rendered in accordance with the following provisions: (a) <E T="03">No additional proceedings necessary.</E> In actions based upon an indictment, conviction, or civil judgment, in which there is no genuine dispute over material facts, or in which additional proceedings to determine disputed material facts have been denied on the basis of Department of Justice advice, the suspending official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the suspending official extends this period for good cause. (1) The suspending official may, in his or her discretion, refer actions based upon an indictment, conviction or civil judgment, or in which there is no genuine dispute over material facts, to a hearing officer or other official for review of the administrative record and appropriate findings. The hearing officer or other official shall issue such findings within 45 days after the referral, and the suspending official shall issue a decision within 15 days after the date of such findings, unless such periods are extended for good cause. (2) [Reserved] (b) <E T="03">Additional proceedings necessary.</E> (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The suspending official shall base the decision on the facts as found, together with <PRTPAGE P="202"/>any information and argument submitted by the respondent and any other information in the administrative record. (2) The suspending official may refer matters involving disputed material facts to another official for findings of fact. The suspending official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary or capricious or clearly erroneous. (3) The suspending official may refer disputed material facts and issues of law to a hearing officer for findings of fact and conclusions of law. (i) No appeal to the Secretary may be taken under §§ 26.24 through 26.26 of this title with respect to any order or decision by a hearing officer or other official. (ii) The suspending official shall provide the hearing officer or other official with all the information in the administrative record, including any information and argument submitted by the respondent. The administrative record and any documents admitted at the hearing shall constitute the exhibits in evidence. (4) Unless the parties mutually agree to extend this period, a proceeding before a hearing officer or other official shall commence within 45 days after referral of disputed material facts and issues of law by the suspending official. The hearing officer or other official shall issue findings of fact within 30 days after the conclusion of such additional proceedings. The time limitations of this subparagraph may be extended upon issuance, by the suspending official, other official or hearing officer, of a written notice describing good cause for such extension. (5) The suspending official's decision shall be made within 15 days after the hearing officer or other official issues findings of fact. (c) <E T="03">Notice of suspending official's decision.</E> Prompt written notice of the suspending official's decision shall be sent to the respondent. <CITA>[60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.415</SECTNO> <SUBJECT>Period of suspension.</SUBJECT> (a) Suspension shall be for a temporary period pending the completion of an investigation or ensuing legal, debarment, or Program Fraud Civil Remedies Act proceedings, unless terminated sooner by the suspending official or as provided in paragraph (b) of this section. (b) If legal or administrative proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General or United States Attorney requests its extension in writing, in which case it may be extended for an additional six months. In no event may a suspension extend beyond 18 months, unless such proceedings have been initiated within that period. (c) The suspending official shall notify the Department of Justice of an impending termination of a suspension, at least 30 days before the 12-month period expires, to give that Department an opportunity to request an extension. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.420</SECTNO> <SUBJECT>Scope of suspension.</SUBJECT> The scope of a suspension is the same as the scope of a debarment (see § 24.325), except that the procedures of §§ 24.410 through 24.413 shall be used in imposing a suspension. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Responsibilities of GSA, Agency and Participants</HD> <SECTION> <SECTNO>§ 24.500</SECTNO> <SUBJECT>GSA responsibilities.</SUBJECT> (a) In accordance with the OMB guidelines, GSA shall compile, maintain, and distribute a list of all persons who have been debarred, suspended, or voluntarily excluded by agencies under Executive Order 12549 and these regulations, and those who have been determined to be ineligible. (b) At a minimum, this list shall indicate: (1) The names and addresses of all debarred, suspended, ineligible, and voluntarily excluded persons, in alphabetical order, with cross-references when more than one name is involved in a single action; (2) The type of action; (3) The cause for the action; (4) The scope of the action; (5) Any termination date for each listing; and<PRTPAGE P="203"/> (6) The agency and name and telephone number of the agency point of contact for the action. (c) In accordance with 48 CFR 9.404, GSA shall compile and distribute a list of contractors who are debarred, suspended or ineligible. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19186, May 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.505</SECTNO> <SUBJECT>HUD responsibilities.</SUBJECT> (a) The agency shall provide GSA with current information concerning debarments, suspension, determinations of ineligibility, and voluntary exclusions it has taken. Until February 18, 1989, the agency shall also provide GSA and OMB with information concerning all transactions in which HUD has granted exceptions under § 24.215 permitting participation by debarred, suspended, or voluntarily excluded persons. (b) Unless an alternative schedule is agreed to by GSA, the agency shall advise GSA of the information set forth in § 24.500(b) and of the exceptions granted under § 24.215 within five working days after taking such actions. (c) The agency shall direct inquiries concerning listed persons to the agency that took the action. (d) Agency officials shall check the Nonprocurement List before entering covered transactions to determine whether a participant in a primary transaction is debarred, suspended, ineligible, or voluntarily excluded (Tel. −). (e) Agency officials shall check the Nonprocurement List before approving principals or lower tier participants where agency approval of the principal or lower tier participant is required under the terms of the transaction, to determine whether such principals or participants are debarred, suspended, ineligible, or voluntarily excluded. (f) The agency shall notify GSA within 5 working days after modifying or rescinding an action; (g) The agency shall, in accordance with internal retention procedures, maintain records relating to each suspension or debarment action taken by the agency; (h) Contracting Officers shall check the Procurement List before entering into any contract or before approving any subcontract to determine whether a contractor is debarred, suspended, ineligible or voluntarily excluded. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19186, May 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.510</SECTNO> <SUBJECT>Participants’ responsibilities.</SUBJECT> (a) <E T="03">Certification by participants in primary covered transactions.</E> Each participant shall submit the certification in appendix A to this part for it and its principals at the time the participant submits its proposal in connection with a primary covered transaction, except that States need only complete such certification as to their principals. Participants may decide the method and frequency by which they determine the eligibility of their principals. In addition, each participant may, but is not required to, check the Nonprocurement List for its principals (Tel. −). Adverse information on the certification will not necessarily result in denial of participation. However, the certification, and any additional information pertaining to the certification submitted by the participant, shall be considered in the administration of covered transactions. (b) <E T="03">Certification by participants in lower tier covered transactions.</E> (1) Each participant shall require participants in lower tier covered transactions to include the certification in appendix B to this part for it and its principals in any proposal submitted in connection with such lower tier covered transactions. (2) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction by any Federal agency, unless it knows that the certification is erroneous. Participants may decide the method and frequency by which they determine the eligiblity of their principals. In addition, a participant may, but is not required to, check the Nonprocurement List for its principals and for participants (Tel. −). (c) <E T="03">Changed circumstances regarding certification.</E> A participant shall provide immediate written notice to HUD if at any time the participant learns that its certification was erroneous when <PRTPAGE P="204"/>submitted or has become erroneous by reason of changed circumstances. Participants in lower tier covered transactions shall provide the same updated notice to the participant to which it submitted its proposals. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Drug-Free Workplace Requirements (Grants)</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 55 FR 21688, 21695, May 25, 1990, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 24.600</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) The purpose of this subpart is to carry out the Drug-Free Workplace Act of 1988 by requiring that— (1) A grantee, other than an individual, shall certify to the agency that it will provide a drug-free workplace; (2) A grantee who is an individual shall certify to the agency that, as a condition of the grant, he or she will not engage in the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance in conducting any activity with the grant. (b) Requirements implementing the Drug-Free Workplace Act of 1988 for contractors with the agency are found at 48 CFR subparts 9.4, 23.5, and 52.2. </SECTION> <SECTION> <SECTNO>§ 24.605</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) Except as amended in this section, the definitions of § 24.105 apply to this subpart. (b) For purposes of this subpart— (1) <E T="03">Controlled substance</E> means a controlled substance in schedules I through V of the Controlled Substances Act (21 U.S.C. 812), and as further defined by regulation at 21 CFR 1308.11 through 1308.15; (2) <E T="03">Conviction</E> means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; (3) <E T="03">Criminal drug statute</E> means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; (4) <E T="03">Drug-free workplace</E> means a site for the performance of work done in connection with a specific grant at which employees of the grantee are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance; (5) <E T="03">Employee</E> means the employee of a grantee directly engaged in the performance of work under the grant, including: (i) All <E T="03">direct charge</E> employees; (ii) All <E T="03">indirect charge</E> employees, unless their impact or involvement is insignificant to the performance of the grant; and, (iii) Temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. <FP>This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the payroll; or employees of subrecipients or subcontractors in covered workplaces);</FP> (6) <E T="03">Federal agency</E> or <E T="03">agency</E> means any United States executive department, military department, government corporation, government controlled corporation, any other establishment in the executive branch (including the Executive Office of the President), or any independent regulatory agency; (7) <E T="03">Grant</E> means an award of financial assistance, including a cooperative agreement, in the form of money, or property in lieu of money, by a Federal agency directly to a grantee. The term grant includes block grant and entitlement grant programs, whether or not exempted from coverage under the grants management government-wide common rule on uniform administrative requirements for grants and cooperative agreements. The term does not include technical assistance that provides services instead of money, or other assistance in the form of loans, loan guarantees, interest subsidies, insurance, or direct appropriations; or any veterans’ benefits to individuals, i.e., any benefit to veterans, their families, or survivors by virtue of the service of a veteran in the Armed Forces of the United States;<PRTPAGE P="205"/> (8) <E T="03">Grantee</E> means a person who applies for or receives a grant directly from a Federal agency (except another Federal agency); (9) <E T="03">Individual</E> means a natural person; (10) <E T="03">State</E> means any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written determination from a State government that such State considers the instrumentality to be an agency of the State government. </SECTION> <SECTION> <SECTNO>§ 24.610</SECTNO> <SUBJECT>Coverage.</SUBJECT> (a) This subpart applies to any grantee of the agency. (b) This subpart applies to any grant, except where application of this subpart would be inconsistent with the international obligations of the United States or the laws or regulations of a foreign government. A determination of such inconsistency may be made only by the agency head or his/her designee. (c) The provisions of subparts A, B, C, D and E of this part apply to matters covered by this subpart, except where specifically modified by this subpart. In the event of any conflict between provisions of this subpart and other provisions of this part, the provisions of this subpart are deemed to control with respect to the implementation of drug-free workplace requirements concerning grants. </SECTION> <SECTION> <SECTNO>§ 24.615</SECTNO> <SUBJECT>Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.</SUBJECT> A grantee shall be deemed in violation of the requirements of this subpart if the agency head or his or her official designee determines, in writing, that— (a) The grantee has made a false certification under § 24.630; (b) With respect to a grantee other than an individual— (1) The grantee has violated the certification by failing to carry out the requirements of paragraphs (A)(a)-(g) and/or (B) of the certification (Alternate I to appendix C) or (2) Such a number of employees of the grantee have been convicted of violations of criminal drug statutes for violations occurring in the workplace as to indicate that the grantee has failed to make a good faith effort to provide a drug-free workplace. (c) With respect to a grantee who is an individual— (1) The grantee has violated the certification by failing to carry out its requirements (Alternate II to appendix C); or (2) The grantee is convicted of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity. </SECTION> <SECTION> <SECTNO>§ 24.620</SECTNO> <SUBJECT>Effect of violation.</SUBJECT> (a) In the event of a violation of this subpart as provided in § 24.615, and in accordance with applicable law, the grantee shall be subject to one or more of the following actions: (1) Suspension of payments under the grant; (2) Suspension or termination of the grant; and (3) Suspension or debarment of the grantee under the provisions of this part. (b) Upon issuance of any final decision under this part requiring debarment of a grantee, the debarred grantee shall be ineligible for award of any grant from any Federal agency for a period specified in the decision, not to exceed five years (<E T="03">see</E> § 24.320(a)(2) of this part). </SECTION> <SECTION> <SECTNO>§ 24.625</SECTNO> <SUBJECT>Exception provision.</SUBJECT> The agency head may waive with respect to a particular grant, in writing, a suspension of payments under a grant, suspension or termination of a grant, or suspension or debarment of a grantee if the agency head determines that such a waiver would be in the public interest. This exception authority cannot be delegated to any other official. </SECTION> <SECTION> <SECTNO>§ 24.630</SECTNO> <SUBJECT>Certification requirements and procedures.</SUBJECT> (a)(1) As a prior condition of being awarded a grant, each grantee shall <PRTPAGE P="206"/>make the appropriate certification to the Federal agency providing the grant, as provided in appendix C to this part. (2) Grantees are not required to make a certification in order to continue receiving funds under a grant awarded before March 18, 1989, or under a no-cost time extension of such a grant. However, the grantee shall make a one-time drug-free workplace certification for a non-automatic continuation of such a grant made on or after March 18, 1989. (b) Except as provided in this section, all grantees shall make the required certification for each grant. For mandatory formula grants and entitlements that have no application process, grantees shall submit a one-time certification in order to continue receiving awards. (c) A grantee that is a State may elect to make one certification in each Federal fiscal year. States that previously submitted an annual certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. Except as provided in paragraph (d) of this section, this certification shall cover all grants to all State agencies from any Federal agency. The State shall retain the original of this statewide certification in its Governor's office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency has designated a central location for submission. (d)(1) The Governor of a State may exclude certain State agencies from the statewide certification and authorize these agencies to submit their own certifications to Federal agencies. The statewide certification shall name any State agencies so excluded. (2) A State agency to which the statewide certification does not apply, or a State agency in a State that does not have a statewide certification, may elect to make one certification in each Federal fiscal year. State agencies that previously submitted a State agency certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. The State agency shall retain the original of this State agency-wide certification in its central office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency designates a central location for submission. (3) When the work of a grant is done by more than one State agency, the certification of the State agency directly receiving the grant shall be deemed to certify compliance for all workplaces, including those located in other State agencies. (e)(1) For a grant of less than 30 days performance duration, grantees shall have this policy statement and program in place as soon as possible, but in any case by a date prior to the date on which performance is expected to be completed. (2) For a grant of 30 days or more performance duration, grantees shall have this policy statement and program in place within 30 days after award. (3) Where extraordinary circumstances warrant for a specific grant, the grant officer may determine a different date on which the policy statement and program shall be in place. </SECTION> <SECTION> <SECTNO>§ 24.635</SECTNO> <SUBJECT>Reporting of and employee sanctions for convictions of criminal drug offenses.</SUBJECT> (a) When a grantee other than an individual is notified that an employee has been convicted for a violation of a criminal drug statute occurring in the workplace, it shall take the following actions: (1) Within 10 calendar days of receiving notice of the conviction, the grantee shall provide written notice, including the convicted employee's position title, to every grant officer, or other designee on whose grant activity the convicted employee was working, unless a Federal agency has designated a central point for the receipt of such notifications. Notification shall include the identification number(s) for each of the Federal agency's affected grants. (2) Within 30 calendar days of receiving notice of the conviction, the grantee shall do the following with respect to the employee who was convicted.<PRTPAGE P="207"/> (i) Take appropriate personnel action against the employee, up to and including termination, consistent with requirements of the Rehabilitation Act of 1973, as amended; or (ii) Require the employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency. (b) A grantee who is an individual who is convicted for a violation of a criminal drug statute occurring during the conduct of any grant activity shall report the conviction, in writing, within 10 calendar days, to his or her Federal agency grant officer, or other designee, unless the Federal agency has designated a central point for the receipt of such notices. Notification shall include the identification number(s) for each of the Federal agency's affected grants. <APPRO>(Approved by the Office of Management and Budget under control number 0991-0002)</APPRO> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Limited Denial of Participation</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 19186, May 26, 1988. Redesignated at 54 FR 4950 and 4957, Jan. 31, 1989, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 24.700</SECTNO> <SUBJECT>General.</SUBJECT> <E T="03">Officials who may order a limited denial of participation.</E> HUD officials, as designated by the Secretary, are authorized to order a limited denial of participation affecting any participant or contractor and its affiliates, except HUD-FHA approved mortgagees. In each case, even if the offense or violation is of a criminal, fraudulent or other serious nature, the decision to order a limited denial of participation shall be discretionary and in the best interests of the Government. <CITA>[59 FR 18482, Apr. 19, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.705</SECTNO> <SUBJECT>Causes for a limited denial of participation.</SUBJECT> (a) <E T="03">Causes.</E> A limited denial of participation shall be based upon adequate evidence of any of the following causes: (1) Approval of an applicant for insurance would constitute an unsatisfactory risk; (2) Irregularities in a participant's or contractor's past performance in a HUD program; (3) Failure of a participant or contractor to maintain the prerequisites of eligibility to participate in a HUD program; (4) Failure to honor contractual obligations or to proceed in accordance with contract specifications or HUD regulations; (5) Failure to satisfy, upon completion, the requirements of an assistance agreement or contract; (6) Deficiencies in ongoing construction projects; (7) Falsely certifying in connection with any HUD program, whether or not the certification was made directly to HUD; (8) Commission of an offense listed in § 24.305; (9) Violation of any law, regulation, or procedure relating to the application for financial assistance, insurance or guarantee, or to the performance of obligations incurred pursuant to a grant of financial assistance or pursuant to a conditional or final commitment to insure or guarantee. (10) Making or procuring to be made any false statement for the purpose of influencing in any way an action of the Department. (11) Imposition of a limited denial of participation by any other HUD regional or field office. (12) Debarment or suspension by another Federal agency for any cause substantially the same as provided in § 24.305. (b) <E T="03">Indictment.</E> Indictment or Information shall constitute adequate evidence for the purpose of limited denial of participation actions. (c) <E T="03">Limited denial of participation.</E> Imposition of a limited denial of participation by any other HUD office shall constitute adequate evidence for a concurrent limited denial of participation. Where such a concurrent limited denial of participation is imposed, participation may be restricted on the same basis without the need for additional conference or further hearing. <CITA>[53 FR 19186, May 26, 1988. Redesignated at 54 FR 4950 and 4957, Jan. 31, 1989, as amended at 60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <PRTPAGE P="208"/> <SECTNO>§ 24.710</SECTNO> <SUBJECT>Period and scope of a limited denial of participation.</SUBJECT> (a) The scope of a limited denial of participation shall be as follows: (1) A limited denial of participation generally extends only to participation in the program under which the cause arose, except: Where it is based on an indictment, conviction, or suspension or debarment by another agency, it need not be based on offenses against HUD and it may apply to all programs. (2) For purposes of this subpart, participation includes receipt of any benefit or financial assistance through grants or contractual arrangements; benefits or assistance in the form of loan guarantees or insurance; and awards of procurement contracts, notwithstanding any <E T="03">quid pro quo</E> given and whether the Department gives anything in return. <E T="03">Program</E> may, in the discretion of the authorized official, include any or all of the functions within the jurisdiction of an Assistant Secretary. (3) The sanction may be imposed for a period not to exceed 12 months, is limited to specific HUD programs, and shall be effective within the geographic jurisdiction of the office imposing it, unless the sanction is imposed by an Assistant Secretary or Deputy Assistant Secretary in which case the sanction may be imposed on a nationwide basis or a more restricted basis. (b) <E T="03">Effectiveness.</E> This sanction shall be effective immediately upon issuance, and shall remain effective up to 12 months thereafter. If the cause for the limited denial of participation is resolved before the expiration of the 12-month period, the official who imposed the sanction may terminate it. The imposition of a limited denial of participation shall not affect the right of the Department to suspend or debar any person under this part. (c) <E T="03">Affiliates.</E> An affiliate or organizational element may be included in a limited denial of participation solely on the basis of its affiliation, and regardless of its knowledge of or participation in the acts providing cause for the sanction. The burden of proving that a particular affiliate or organizational element is currently responsible and not controlled by the primary sanctioned party (or by an entity that itself is controlled by the primary sanctioned party) is on the affiliate or organizational element. <CITA>[53 FR 19186, May 26, 1988. Redesignated at 54 FR 4950 and 4957, Jan. 31, 1989, as amended at 57 FR 58339, Dec. 9, 1992; 60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.711</SECTNO> <SUBJECT>Notice of limited denial of participation.</SUBJECT> A limited denial of participation shall be made effective by advising the participant or contractor, and any specifically named affiliate, by mail, return receipt requested: (a) That the limited denial of participation is being imposed; (b) Of the cause(s) under § 24.705 for the sanction; (c) Of the potential effect of the sanction, including the length of the sanction and the HUD program(s) and geographic area affected by the sanction; (d) Of the right to request, in writing, within 30 days of receipt of the notice, a conference under § 24.712; and (e) Of the right to contest the limited denial of participation under § 24.713. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.712</SECTNO> <SUBJECT>Conference.</SUBJECT> Within 30 days after receiving a notice of limited denial of participation, the respondent may request a conference with the official who issued such notice. If the respondent does not request a conference, the respondent shall nevertheless have the right to contest the limited denial of participation under the provisions of § 24.713. The conference shall be held within 15 days after the Department's receipt of the request for a conference, unless the respondent waives this time limit. The official who imposed the sanction, or his or her designee, shall preside. At the conference, the respondent may appear with a representative and may present all relevant information and materials to the official or designee. Within 20 days after the conference, or within 20 days after any agreed upon extension of time for submission of additional materials by the respondent, the official or designee shall, in writing, advise the respondent of the decision to terminate, modify, or affirm the limited denial of participation. If all or a portion of the remaining period <PRTPAGE P="209"/>of exclusion is affirmed, the notice of affirmation shall advise the respondent of the opportunity to contest the notice pursuant to § 24.713. If the official or designee does not issue a decision within the 20-day period, the respondent may contest the sanction under § 24.713. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.713</SECTNO> <SUBJECT>Opportunity to contest the limited denial of participation.</SUBJECT> (a) <E T="03">Submission in opposition.</E> (1) The respondent may request a hearing before a hearing officer: (i) Within 30 days after receipt of a notice of affirmation of all or a portion of the remaining period of exclusion under a limited denial of participation; or (ii) Within 30 days after receipt of a notice of a limited denial of participation where the respondent elects not to request a conference under § 24.712. (2) The request must be addressed to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. (3) If the respondent does not submit the request within the 30-day period, the sanction shall become final. (b) <E T="03">Procedures.</E> The hearing shall be conducted in accordance with the procedures of §§ 24.313 and 24.314 Within 15 days of the hearing officer's issuance of findings of fact and a recommended decision, the official who issued the limited denial of participation shall issue a decision. (c) <E T="03">Effect of suspension or debarment on limited denial of participation.</E> If a respondent has submitted a request for a hearing pursuant to paragraph (a) of this section, and if the respondent has also received, pursuant to subpart C or D of this part, a notice of proposed debarment or suspension that is based on the same transaction(s) or conduct as the limited denial of participation, the following rules shall apply: (1) If the respondent has not contested the proposed debarment pursuant to § 24.313(a) or the suspension pursuant to § 24.412(a), the final imposition of the debarment or suspension shall also constitute a final decision with respect to the limited denial of participation to the extent that the debarment or suspension is based on the same transaction(s) or conduct as the limited denial of participation. (2) If the respondent has contested the proposed debarment pursuant to § 24.313(a), or the suspension pursuant to § 24.412(a), the proceedings shall be consolidated and the debarring or suspending official shall issue a final decision as to both the limited denial of participation and the debarment or suspension. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.714</SECTNO> <SUBJECT>Reporting of limited denial of participation.</SUBJECT> When a limited denial of participation has been made final, or the period for requesting a conference pursuant to § 24.712 has expired without receipt of such a request, the official imposing the limited denial of participation shall notify the Director of the Participation and Compliance Division in the Office of Housing of the scope of the limited denial of participation. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 25</EAR> <HD SOURCE="HED">PART 25—MORTGAGEE REVIEW BOARD</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>25.1</SECTNO> <SUBJECT>Scope of rules in this part.</SUBJECT> <SECTNO>25.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> <SECTNO>25.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>25.4</SECTNO> <SUBJECT>Operation of the Mortgagee Review Board.</SUBJECT> <SECTNO>25.5</SECTNO> <SUBJECT>Administrative actions.</SUBJECT> <SECTNO>25.6</SECTNO> <SUBJECT>Notice of violation.</SUBJECT> <SECTNO>25.7</SECTNO> <SUBJECT>Notice of administrative action.</SUBJECT> <SECTNO>25.8</SECTNO> <SUBJECT>Hearings and hearing request.</SUBJECT> <SECTNO>25.9</SECTNO> <SUBJECT>Grounds for an administrative action.</SUBJECT> <SECTNO>25.10</SECTNO> <SUBJECT>Publication in <E T="04">Federal Register</E> of actions.</SUBJECT> <SECTNO>25.11</SECTNO> <SUBJECT>Notification to other agencies.</SUBJECT> <SECTNO>25.12</SECTNO> <SUBJECT>Civil money penalties.</SUBJECT> <SECTNO>25.13</SECTNO> <SUBJECT>Notifying GNMA of withdrawal actions.</SUBJECT> <SECTNO>25.14</SECTNO> <SUBJECT>Prohibition against modification of Board orders.</SUBJECT> <SECTNO>25.15</SECTNO> <SUBJECT>Retroactive application of board regulations.</SUBJECT> <SECTNO>25.17</SECTNO> <SUBJECT>[Reserved]</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 12 U.S.C. 1708(c), 1708(d), 1709(s), 1715b and 1735(f)-14; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 57 FR 31051, July 13, 1992, unless otherwise noted. </SOURCE> <SECTION> <PRTPAGE P="210"/> <SECTNO>§ 25.1</SECTNO> <SUBJECT>Scope of rules in this part.</SUBJECT> The rules in this part are applicable to the operation of the Mortgagee Review Board and to proceedings arising from administrative actions of the Mortgagee Review Board. </SECTION> <SECTION> <SECTNO>§ 25.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> The Mortgagee Review Board (the Board) was established in the Federal Housing Administration, which is in the Office of the Assistant Secretary for Housing—Federal Housing Commissioner, by section 202(c)(1) of the National Housing Act (12 U.S.C. 1708(c)(1)), as added by section 142 of the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989). Except as limited by this part, the Board shall exercise all of the functions of the Secretary with respect to administrative actions against mortgagees and lenders and such other functions as are provided in this part. The Board may, in its discretion, approve the initiation of a suspension or debarment action against a mortgagee or lender by any Suspending or Debarring Official under part 24 of this subtitle A. The Board shall have all powers necessary and incident to the performance of these functions. The Board may redelegate its authority to review submissions and conduct hearings under § 25.8. The Board may also redelegate its authority to impose administrative sanctions on the grounds specified in §§ 25.9 (e), (h), and (u), and to take all other nondiscretionary acts. With respect to actions taken against Title I lenders and loan correspondents, the Board may redelegate its authority to take administrative actions for failure to remain in compliance with the requirements for approval in 24 CFR 202.5(i), 202.5(n), 202.7(b)(4), 202.8(b)(1) and 202.8(b)(3). <CITA>[60 FR 39237, Aug. 1, 1995, as amended at 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Adequate evidence.</E> Information sufficient to support the reasonable belief that a particular act or omission has occurred. <E T="03">Board.</E> The Mortgagee Review Board. <E T="03">Hearing officer.</E> An Administrative Law Judge or Board of Contract Appeals judge authorized by the Secretary, or by the Secretary's designee, to issue findings of fact or other appropriate findings under § 25.8(d)(2). <E T="03">Hearing official.</E> An official designated by the Board to conduct hearings under § 25.8. <E T="03">Lender.</E> A financial institution as defined in paragraphs (a) and (b) of the definition of lender in § 202.2 of this title. <E T="03">Loan correspondent.</E> A financial institution as defined in paragraph (c) of the definition of lender in § 202.2 of this title. <E T="03">Mortgagee.</E> For purposes of the regulations in this part, the term “mortgagee” includes: (1) The original lender under the mortgage, as that term is defined at sections 201(a) and 207(a)(1) of the National Housing Act (12 U.S.C. 1707(a), 1713(a)(1)); (2) A lender or loan correspondent as defined in this section; (3) A branch office or subsidiary of the mortgagee, lender, or loan correspondent; or (4) Successors and assigns of the mortgagee, lender, or loan correspondent, as are approved by the Commissioner. <E T="03">Person.</E> Any individual, corporation, partnership, association, unit of government or legal entity, however organized. <E T="03">Secretary.</E> The Secretary of the Department of Housing and Urban Development or a person designated by the Secretary. <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 60 FR 13835, Mar. 14, 1995; 60 FR 39237, Aug. 1, 1995; 61 FR 685, Jan. 9, 1996; 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.4</SECTNO> <SUBJECT>Operation of the Mortgagee Review Board.</SUBJECT> (a) <E T="03">Members.</E> The Board consists of the following voting members: The Assistant Secretary for Housing—Federal Housing Commissioner who serves as chairperson; the General Counsel; the President of the Government National Mortgage Association (GNMA); the Assistant Secretary for Administration; <PRTPAGE P="211"/>the Chief Financial Officer of the Department; and, in cases involving violations of nondiscrimination requirements, the Assistant Secretary for Fair Housing and Equal Opportunity; or their designees. (b) <E T="03">Advisors.</E> The Inspector General or his or her designee, and the Director of the Office of Lender Activities and Land Sales Registration (or such other position as may be assigned such duties), and such other persons as the Board may appoint, shall serve as nonvoting advisors to the Board. (c) <E T="03">Quorum.</E> Four members of the Board or their designees shall constitute a quorum. (d) <E T="03">Determination by the Board.</E> Any administrative action taken by the Board shall be determined by a majority vote of the quorum. <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.5</SECTNO> <SUBJECT>Administrative actions.</SUBJECT> (a) <E T="03">General.</E> The Board is authorized to take the following administrative actions: letter of reprimand, probation, suspension, withdrawal, or settlement agreement. These actions are described at 12 U.S.C. 1708(c)(3), and as further set out in this section. (b) <E T="03">Letter of reprimand.</E> A letter of reprimand shall be effective upon receipt of the letter by the mortgagee. Failure to comply with a directive in the letter of reprimand may result in any other administrative action under this part that the Board finds appropriate. (c) <E T="03">Probation.</E> Probation shall be effective upon receipt of the notice of probation by the mortgagee. Failure to comply with the terms of probation may result in any other administrative action under this part that the Board finds appropriate. (d) <E T="03">Suspension.</E> A suspension shall be based upon adequate evidence and shall be effective upon receipt of the notice of suspension by the mortgagee. During the period of suspension, HUD will not endorse any mortgage originated by the suspended mortgagee unless prior to the date of suspension a firm commitment has been issued relating to any such mortgage, or a Direct Endorsement underwriter has approved the mortgagor for any such mortgage. During the period of suspension, a lender or loan correspondent may not originate new title I loans under their Title I Contracts of Insurance or apply for a new Contract of Insurance. (e)(1) <E T="03">Withdrawal.</E> During the period of withdrawal, HUD will not endorse any mortgage originated by the withdrawn mortgagee unless prior to the date of withdrawal a firm commitment has been issued relating to any such mortgage, or a Direct Endorsement underwriter has approved the mortgagor for any such mortgage. During the period of withdrawal, a lender or loan correspondent may not originate new title I loans under their Title I Contracts of Insurance or apply for a new Contract of Insurance. The Board may limit the geographical extent of the withdrawal, or limit its scope (e.g., to either the single family or multifamily activities of a withdrawn mortgagee). Upon the expiration of the period of withdrawal, the mortgagee may file a new application for approval under 24 CFR part 202. (2) <E T="03">Effective date of withdrawal.</E> (i) If the Board determines that immediate action is in the public interest or in the best interests of the Department, then withdrawal shall be effective upon receipt of the Board's notice of withdrawal. (ii) If the Board does not determine that immediate action is necessary according to paragraph (e)(2)(i) of this section, then withdrawal shall be effective either: (A) Upon the expiration of the 30-day period specified in § 25.8, if the mortgagee has not requested a hearing; or (B) Upon receipt of the Board's decision under § 25.8, if the mortgagee requests a hearing. <CITA>[60 FR 685, Jan. 9, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.6</SECTNO> <SUBJECT>Notice of violation.</SUBJECT> (a) <E T="03">General.</E> The Chairperson of the Board, or the Chairperson's designee, shall issue a written notice to the mortgagee at least thirty days prior to taking any probation, suspension or withdrawal action against a mortgagee. The notice shall state the specific violations that have been alleged, and shall direct the mortgagee to reply in writing to the Board within thirty days after receipt of the notice by the mortgagee. The notice shall also provide the <PRTPAGE P="212"/>address to which the response shall be sent. If the mortgagee fails to reply during such time period, the Board may make a determination without considering any comments of the mortgagee. (b) <E T="03">Mortgagee's response.</E> The mortgagee's response to the Board shall be in a format prescribed by the Secretary and shall not exceed 15 double-spaced typewritten pages. The response shall include an executive summary, a statement of the facts surrounding the matter, an argument and a conclusion. A more lengthy submission, including documents and other exhibits, may be simultaneously submitted to Board staff for review. <APPRO>(Approved by the Office of Management and Budget under Control Number 2502-0450)</APPRO> </SECTION> <SECTION> <SECTNO>§ 25.7</SECTNO> <SUBJECT>Notice of administrative action.</SUBJECT> Whenever the Board takes an action to issue a letter of reprimand, to place a mortgagee on probation, or to suspend or withdraw a mortgagee's approval, the Board shall promptly notify the mortgagee in writing of the determination. Except for a letter of reprimand, the notice shall describe the nature and duration of the administrative action, shall specifically state the violations, and shall set forth the findings of the Board. The notice shall inform the mortgagee of its right to a hearing, pursuant to § 25.8, regarding the administrative action (except for a letter of reprimand) and of the manner and time in which to request a hearing. A supplemental notice may be issued in the discretion of the Board to add or modify the reasons for the action. <CITA>[60 FR 39237, Aug. 1, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.8</SECTNO> <SUBJECT>Hearings and hearing request.</SUBJECT> (a) <E T="03">Hearing request.</E> A mortgagee that is issued a probation, suspension, or withdrawal action is entitled to a hearing on the record. The mortgagee shall submit its request for a hearing within 30 days of receiving the Board's notice of administrative action. The request shall be addressed to the Board Docket Clerk, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410. The request shall specifically respond to the violations set forth in the notice of administrative action. If the mortgagee fails to request a hearing within 30 days after receiving the notice of administrative action, the Board's action shall become final. (b) <E T="03">Procedural rules.</E> The hearing official shall hold a de novo hearing within 30 days of HUD's receipt of the mortgagee's request, unless the mortgagee requests a later hearing date. The mortgagee or its representative shall be afforded an opportunity to appear, submit documentary evidence, present witnesses, and confront any witness the agency presents. The parties shall not be allowed to present members of the Board as witnesses. At the mortgagee's request, a transcribed record of the hearing shall be made available at cost to the mortgagee. (c) <E T="03">Hearing location.</E> The hearing shall generally be held in Washington, DC However, upon a showing of undue hardship or other cause, the hearing official may, in his or her discretion, order the hearing to be held in a location other than Washington, DC. (d) <E T="03">Hearing official's recommendation.</E> (1) The hearing official shall issue written findings and a recommended decision to the Board within 45 days after the conclusion of the hearing, unless the hearing official extends this period for good cause or refers a matter for findings of fact or other appropriate findings pursuant to paragraph (d)(2)(i) of this section. The findings and recommendation shall be based upon the facts as found, together with any information and argument submitted by the parties and any other information in the administrative record. (2) <E T="03">Referral to a hearing officer or other independent official.</E> (i) The hearing official may, at his or her discretion, refer disputed material facts to a hearing officer or other independent official for findings of fact. The hearing official may also, at his or her discretion, refer other issues to a hearing officer or other independent official for appropriate findings. The hearing official shall provide the parties with notice of the referral. The hearing official may reject the findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous.<PRTPAGE P="213"/> (ii) The provisions of part 26 of this subtitle A shall be applicable to proceedings before a hearing officer, with the following limitations: (A) No appeal to the Secretary may be taken under §§ 26.24 through 26.26 of this subtitle A with respect to any order or decision by the hearing officer. (B) Discovery shall be limited to exclude requests for answers to interrogatories, requests for admissions, and production of documents that either do not pertain to the appealing mortgagee, or pertain to reviews or audits by the Department or administrative actions by the Board against mortgagees other than the appealing mortgagee. Members of the Board shall not be subject to deposition, nor shall they be required to testify at any hearing. (iii) Proceedings before a hearing officer or other independent official shall commence within 45 days after referral by the hearing official, unless the parties agree to an extension of time. The hearing officer or other independent official shall issue the requested findings of fact or other appropriate findings to the hearing official within 30 days after the conclusion of such proceedings. The time limitations of this paragraph may be extended upon issuance of a written notice describing good cause for such extension. (iv) The hearing official shall provide a recommended decision to the Board within 15 days after the findings are issued. (v) [Reserved] (e) <E T="03">Decision by the Board.</E> The Board shall issue its decision within 15 days after the hearing official issues the recommended decision. The Board's decision shall be mailed to the mortgagee, and shall serve as the final agency action concerning the mortgagee. <CITA>[60 FR 39238, Aug. 1, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.9</SECTNO> <SUBJECT>Grounds for an administrative action.</SUBJECT> One or more of the following violations by a mortgagee may result in an administrative action by the Board under § 25.5. Except in cases where the Board's authority has been delegated in accordance with § 25.2, the Board will consider, among other factors, the seriousness and extent of the violations, the degree of mortgagee responsibility for the occurrences and any mitigating factors, in determining which administrative action, if any, is appropriate. Any administrative action imposed under § 25.5 shall be based upon one or more of the following grounds: (a) The transfer of an insured mortgage to non-approved mortgagee, except pursuant to 24 CFR 203.433 or 203.435; (b) The failure of a mortgagee to segregate all escrow funds received from mortgagors on account of ground rents, taxes, assessments and insurance premiums, or failure to deposit these funds with one or more financial institutions in a special account or accounts that are fully insured by the Federal Deposit Insurance Corporation or by the National Credit Union Administration except as otherwise provided in writing by the Assistant Secretary for Housing—Federal Housing Commissioner; (c) The use of escrow funds for any purpose other than that for which they are received; (d) The termination of a mortgagee's supervision by a governmental agency; (e) The failure of a nonsupervised mortgagee to submit the required annual audit report of its financial condition prepared in accordance with instructions issued by the Secretary within 90 days of the close of its fiscal year, or such longer period as the Assistant Secretary of Housing—Federal Housing Commissioner may authorize in writing prior to the expiration of 90 days; (f) The payment by a mortgagee of a referral fee to any person or organization; or payment of any thing of value, directly or indirectly, in connection with any insured mortgage transaction or transactions to any person, including but not limited to an attorney, escrow agent, title company, consultant, mortgage broker, seller, builder or real estate agent, if that person has received any other compensation from the mortgagor, the seller, the builder or any other person for services related to such transactions or from or related to the purchase or sale of the mortgaged property, except compensation paid for the actual performance of such <PRTPAGE P="214"/>services as may be approved by the Assistant Secretary for Housing—Federal Housing Commissioner; (g) Failure to comply with any agreement, certification, undertaking, or condition of approval listed on either a mortgagee's application for approval or on an approved mortgagee's branch office notification; (h) Failure of an approved mortgagee to meet or maintain the applicable net worth, liquidity or warehouse line of credit requirements of 24 CFR part 202 pertaining to net worth, liquid assets, and warehouse line of credit or other acceptable funding plan; (i) Failure or refusal of an approved mortgagee to comply with an order of the Board, the Secretary, the hearing official, hearing officer or other independent official to whom matters are referred under § 25.8(d)(2). (j) Violation of the requirements of any contract with the Department, or violation of the requirements set forth in any statute, regulation, handbook, mortgagee letter, or other written rule or instruction; (k) Submission of false information to HUD in connection with any HUD/FHA insured mortgage transaction; (l) Failure of a mortgagee to respond to inquiries from the Board; (m) Indictment or conviction of a mortgagee or any of its officers, directors, principals or employees for an offense which reflects upon the responsibility, integrity, or ability of the mortgagee to participate in HUD/FHA programs as an approved mortgagee; (n) Employing or retaining: (1) An officer, partner, director or principal at such time when such person was suspended, debarred, ineligible, or subject to a limited denial of participation under 24 CFR part 24 or otherwise prohibited from participation in HUD programs, where the mortgagee knew or should have known of the prohibition; (2) An employee who is not an officer, partner, director, or principal and who is or will be working on HUD/FHA program matters at a time when such person was suspended, debarred, ineligible, or subject to a limited denial of participation under 24 CFR part 24 or otherwise prohibited from participation in HUD programs, where the mortgagee knew or should have known of the prohibition; (o) Violation by an approved mortgagee of the nondiscrimination requirements of the Equal Credit Opportunity Act (15 U.S.C. 1691-1691f), Fair Housing Act (42 U.S.C. 3601-3619), Executive Order 11063 (27 FR 11527), and all regulations issued pursuant thereto; (p) Business practices which do not conform to generally accepted practices of prudent mortgagees or which demonstrate irresponsibility; (q) Failure to cooperate with an audit or investigation by the Department's Office of Inspector General or an inquiry by HUD/FHA into the conduct of the mortgagee's HUD/FHA insured business or any other failure to provide information to the Secretary or a representative related to the conduct of the mortgagee's HUD/FHA business; (r) Violation by an approved mortgagee of the requirements or prohibitions of the Real Estate Settlement Procedures Act (12 U.S.C. 2601-2617); (s) Without regard to the date of the insurance of the mortgage, failure to service an insured mortgage in accordance with the regulations and any other requirements of the Secretary which are in effect at the time the act or omission occurs; (t) Failure to administer properly an assistance payment contract under section 235 of the National Housing Act (12 U.S.C. 1715z); (u) Failure to pay the application and annual fees required by 24 CFR part 202; (v) The failure of a coinsuring mortgagee: (1) To properly perform underwriting, servicing or property disposition functions in accordance with instructions and standards issued by the Commissioner; (2) To make full payment to an investing mortgagee as required by 24 CFR part 204; (3) To discharge responsibilities under a contract for coinsurance; (4) To comply with restrictions concerning the transfer of a coinsured mortgage to an agency not approved under 24 CFR part 250; (5) To maintain additional net worth requirements, as applicable;<PRTPAGE P="215"/> (w) Failure to remit, or timely remit, mortgage insurance premiums, loan insurance charges, late charges, or interest penalties to the Department; (x) Failure to submit a report required under 24 CFR 202.12(c) within the time determined by the Commissioner, or to commence or complete a plan for corrective action under that section within the time agreed upon by the Commissioner. (y) Failure to properly perform underwriting functions in accordance with instructions and standards issued by the Department; (z) Failure to fund mortgage loans or any other misuse of mortgage loan proceeds; (aa) Permitting the use of strawbuyer mortgagors in an insured mortgage transaction where the mortgagee knew or should have known of such use of strawbuyers; (bb) Breach by the mortgagee of a fiduciary duty owed by it to any person as defined in § 25.3, including GNMA and the holder of any mortgage-backed security guaranteed by GNMA, with respect to an insured loan or mortgage transaction. (cc) Violation by a Title I lender or loan correspondent of any of the applicable provisions of this section or 24 CFR 202.11(a)(2). (dd) Failure to pay any civil money penalty, but only after all administrative appeals requested by the mortgagee have been exhausted. (ee) Any other reason the Board or the Secretary determines to be so serious as to justify an administrative sanction. <APPRO>(Approved by the Office of Management and Budget under Control Number 2502-0450)</APPRO> <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 57 FR 58339, Dec. 9, 1992; 60 FR 13836, Mar. 14, 1995; 60 FR 39238, Aug. 1, 1995; 61 FR 685, Jan. 9, 1996; 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.10</SECTNO> <SUBJECT>Publication in Federal Register of actions.</SUBJECT> The Secretary shall publish, in the <E T="04">Federal Register</E>, a description of and the cause for each administrative action taken by the Board against a mortgagee. Such publication shall be made quarterly or more frequently in the discretion of the Secretary. </SECTION> <SECTION> <SECTNO>§ 25.11</SECTNO> <SUBJECT>Notification to other agencies.</SUBJECT> Whenever the Board has taken any discretionary action to suspend and/or withdraw the approval of a mortgagee, the Secretary shall provide prompt notice of the action and a statement of the reasons for the action to the Secretary of Veterans Affairs; the chief executive officer of the Federal National Mortgage Association; the chief executive officer of the Federal Home Loan Mortgage Corporation; the Administrator of the Farmers Home Administration; the Comptroller of the Currency, if the mortgagee is a National Bank or District Bank or subsidiary or affiliate of such a bank; the Board of Governors of the Federal Reserve System, if the mortgagee is a State bank that is a member of the Federal Reserve System or a subsidiary or affiliate of such a bank, or a bank holding company or a subsidiary or affiliate of such a company; the Board of Directors of the Federal Deposit Insurance Corporation if the mortgagee is a State bank that is not a member of the Federal Reserve System, or is a subsidiary or affiliate of such a bank; and the Director of the Office of Thrift Supervision, if the mortgagee is a Federal or State savings association or a subsidiary or affiliate of a savings association. </SECTION> <SECTION> <SECTNO>§ 25.12</SECTNO> <SUBJECT>Civil money penalties.</SUBJECT> The Board is authorized pursuant to section 536 of the National Housing Act (12 U.S.C. 1735(f)-14) to impose civil money penalties on mortgagees and Title I lenders, as set forth in 24 CFR part 30. The violations for which a civil money penalty may be imposed are listed at 24 CFR 30.320. Hearings to challenge the imposition of civil money penalties shall be conducted according to the applicable rules of 24 CFR part 30. <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992. Redesignated at 61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.13</SECTNO> <SUBJECT>Notifying GNMA of withdrawal actions.</SUBJECT> When the Board issues a notice of violation that could lead to withdrawal of a mortgagee's approval, or is notified by GNMA of an action that could lead to withdrawal of GNMA approval, <PRTPAGE P="216"/>the Board shall proceed in accordance with 12 U.S.C. 1708(d). <APPRO>(Approved by the Office of Management and Budget under Control Number 2502-0450)</APPRO> <CITA>[61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.14</SECTNO> <SUBJECT>Prohibition against modification of Board orders.</SUBJECT> No hearing official, hearing officer, or other independent official before whom proceedings are conducted under § 25.8 shall modify or otherwise disturb in any way an order or notice by the Board. <CITA>[60 FR 39238, Aug. 1, 1995. Redesignated at 61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.15</SECTNO> <SUBJECT>Retroactive application of board regulations.</SUBJECT> Limitations on participation in HUD mortgage insurance programs proposed or imposed prior to August 12, 1992, under an ancillary procedure shall not be affected by this part. This part shall apply to sanctions initiated after the effective date of the Department of Housing and Urban Development Reform Act of 1989 (December 15, 1989) regardless of the date of the cause giving rise to the sanction. <CITA>[57 FR 31051, July 13, 1992. Redesignated at 61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>25.17</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> </PART> <PART> <EAR>Pt. 26</EAR> <HD SOURCE="HED">PART 26—HEARING PROCEDURES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Hearings Before Hearing Officers</HD> <SECHD>Sec.</SECHD> <SECTNO>26.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SUBJGRP> <HD SOURCE="HED">Hearing Officer</HD> <SECTNO>26.2</SECTNO> <SUBJECT>Hearing officer, powers and duties.</SUBJECT> <SECTNO>26.3</SECTNO> <SUBJECT>Failure to comply with an order of the hearing officer.</SUBJECT> <SECTNO>26.4</SECTNO> <SUBJECT>Ex parte communications.</SUBJECT> <SECTNO>26.5</SECTNO> <SUBJECT>Disqualification of hearing officer.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Representation of the Parties</HD> <SECTNO>26.6</SECTNO> <SUBJECT>Department representative.</SUBJECT> <SECTNO>26.7</SECTNO> <SUBJECT>Respondent's representative.</SUBJECT> <SECTNO>26.8</SECTNO> <SUBJECT>Standards of practice.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pleadings and Motions</HD> <SECTNO>26.9</SECTNO> <SUBJECT>Notice of administrative action.</SUBJECT> <SECTNO>26.10</SECTNO> <SUBJECT>Complaint.</SUBJECT> <SECTNO>26.11</SECTNO> <SUBJECT>Answer.</SUBJECT> <SECTNO>26.12</SECTNO> <SUBJECT>Amendments and supplemental pleadings.</SUBJECT> <SECTNO>26.13</SECTNO> <SUBJECT>Motions.</SUBJECT> <SECTNO>26.14</SECTNO> <SUBJECT>Form and filing requirements.</SUBJECT> <SECTNO>26.15</SECTNO> <SUBJECT>Service.</SUBJECT> <SECTNO>26.16</SECTNO> <SUBJECT>Time computation.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Discovery</HD> <SECTNO>26.17</SECTNO> <SUBJECT>Discovery.</SUBJECT> <SECTNO>26.18</SECTNO> <SUBJECT>Depositions.</SUBJECT> <SECTNO>26.19</SECTNO> <SUBJECT>Request for production of documents.</SUBJECT> <SECTNO>26.20</SECTNO> <SUBJECT>Admissions as to facts and documents.</SUBJECT> <SECTNO>26.21</SECTNO> <SUBJECT>Prehearing conference.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Hearings</HD> <SECTNO>26.22</SECTNO> <SUBJECT>Public nature and timing of hearings, transcripts.</SUBJECT> <SECTNO>26.23</SECTNO> <SUBJECT>Rules of evidence.</SUBJECT> <SECTNO>26.24</SECTNO> <SUBJECT>Hearing officer's determination and order.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Secretarial Review</HD> <SECTNO>26.25</SECTNO> <SUBJECT>Review of determination of hearing officers.</SUBJECT> <SECTNO>26.26</SECTNO> <SUBJECT>Interlocutory rulings.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Hearings Pursuant to the Administrative Procedure Act</HD> <SUBJGRP> <HD SOURCE="HED">General</HD> <SECTNO>26.27</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>26.28</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>26.29</SECTNO> <SUBJECT>Powers and duties of the Administrative Law Judge (ALJ).</SUBJECT> <SECTNO>26.30</SECTNO> <SUBJECT>Ex parte contacts.</SUBJECT> <SECTNO>26.31</SECTNO> <SUBJECT>Disqualification of ALJ.</SUBJECT> <SECTNO>26.32</SECTNO> <SUBJECT>Parties to the hearing.</SUBJECT> <SECTNO>26.33</SECTNO> <SUBJECT>Separation of functions.</SUBJECT> <SECTNO>26.34</SECTNO> <SUBJECT>Time computations.</SUBJECT> <SECTNO>26.35</SECTNO> <SUBJECT>Service and filing.</SUBJECT> <SECTNO>26.36</SECTNO> <SUBJECT>Sanctions.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Prehearing Procedures</HD> <SECTNO>26.37</SECTNO> <SUBJECT>Commencement of action.</SUBJECT> <SECTNO>26.38</SECTNO> <SUBJECT>Motions.</SUBJECT> <SECTNO>26.39</SECTNO> <SUBJECT>Default.</SUBJECT> <SECTNO>26.40</SECTNO> <SUBJECT>Prehearing conferences.</SUBJECT> <SECTNO>26.41</SECTNO> <SUBJECT>Discovery.</SUBJECT> <SECTNO>26.42</SECTNO> <SUBJECT>Subpoenas.</SUBJECT> <SECTNO>26.43</SECTNO> <SUBJECT>Protective order.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Hearings</HD> <SECTNO>26.44</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>26.45</SECTNO> <SUBJECT>Witnesses.</SUBJECT> <SECTNO>26.46</SECTNO> <SUBJECT>Evidence.</SUBJECT> <SECTNO>26.47</SECTNO> <SUBJECT>The record.</SUBJECT> <SECTNO>26.48</SECTNO> <SUBJECT>Posthearing briefs.</SUBJECT> <SECTNO>26.49</SECTNO> <SUBJECT>Initial decision.</SUBJECT> <SECTNO>26.50</SECTNO> <SUBJECT>Appeal to the Secretary.</SUBJECT> <SECTNO>26.51</SECTNO> <SUBJECT>Exhaustion of administrative remedies.</SUBJECT> <SECTNO>26.52</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>26.53</SECTNO> <SUBJECT>Collection of civil penalties and assessments.</SUBJECT> <SECTNO>26.54</SECTNO> <SUBJECT>Right to administrative offset.</SUBJECT> </SUBJGRP> </SUBPART> </CONTENTS> <AUTH> <PRTPAGE P="217"/> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 48 FR 43304, Sept. 23, 1983, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Hearings Before Hearing Officers</HD> <SECTION> <SECTNO>§ 26.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> This part sets forth rules of procedure in certain proceedings of the Department of Housing and Urban Development presided over by a hearing officer. These rules of procedure apply to hearings with respect to determinations by the Multifamily Participation Review Committee pursuant to 24 CFR part 200, subpart H, to hearings conducted pursuant to referrals by debarring or suspending officials under 24 CFR part 24, and to hearings conducted pursuant to referrals by a hearing official under 24 CFR part 25, unless such regulations at 24 CFR parts 24, 25, or 200, provide otherwise. They also apply in any other case where a hearing is required by statute or regulation, to the extent that rules adopted under such statute or regulation are not inconsistent. <CITA>[48 FR 43304, Sept. 23, 1983, as amended at 60 FR 39239, Aug. 1, 1995]</CITA> </SECTION> </SUBPART> </PART> </CHAPTER>

CODE OF FEDERAL REGULATIONS24 Housing and Urban Development PARTS 0 TO 199 Revised as of April 1, 1998

CONTAINING

A CODIFICATION OF DOCUMENTS

OF GENERAL APPLICABILITY

AND FUTURE EFFECT

AS OF APRIL 1, 1998 With Ancillaries

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the Office of the Federal Register

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Administration

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the Federal Register

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Table of Contents Page Explanation v Title 24: Subtitle A—Office of the Secretary, Department of Housing and Urban Development 3 Subtitle B—Regulations Relating to Housing and Urban Development 531 Chapter I—Office of Assistant Secretary for Equal Opportunity, Department of Housing and Urban Development 533 Finding Aids: Material Approved for Incorporation by Reference 641 Table of CFR Titles and Chapters 643 Alphabetical List of Agencies Appearing in the CFR 659 List of CFR Sections Affected 669

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Raymond A. Mosley, Director, Office of the Federal Register. April 1, 1998. THIS TITLE

Title 24—Housing and Urban Development is composed of five volumes. The first four volumes containing parts 0-199, parts 200-499, parts 500-699, parts 700-1699, represent the regulations of the Department of Housing and Urban Development. The fifth volume, containing part 1700 to end continues with regulations of the Department of Housing and Urban Development and also includes regulations of the Neighborhood Reinvestment Corporation. The contents of these volumes represent all current regulations codified under this title of the CFR as of April 1, 1998.

For this volume, Karen A. Thornton was Chief Editor. The Code of Federal Regulations publication program is under the direction of Frances D. McDonald, assisted by Alomha S. Morris.

CFRORDR.FRM 24 CFR Subtitle A (4-1-98 Edition) Office of the Secretary, HUD <CHAPTER> <PART> <EAR>Pt. 0</EAR> <PRTPAGE P="7"/> <HD SOURCE="HED">PART 0—STANDARDS OF CONDUCT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>0.1</SECTNO> <SUBJECT>Cross-reference to employees ethical conduct standards and financial disclosure regulations.</SUBJECT> <SECTNO>0.2</SECTNO> <SUBJECT>Outside employment and other activities.</SUBJECT> <SECTNO>0.3</SECTNO> <SUBJECT>Financial interests.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 7301; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 15350, Apr. 5, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 0.1</SECTNO> <SUBJECT>Cross-reference to employees ethical conduct standards and financial disclosure regulations.</SUBJECT> Employees of the Department of Housing and Urban Development (Department) are subject to the executive branch-wide standards of ethical conduct at 5 CFR part 2635, the Department's regulation at 5 CFR part 7501 which supplements the executive branch-wide standards, and the executive branch-wide financial disclosure regulation at 5 CFR part 2634. <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 301, 7301; 42 U.S.C. 3535(d). </AUTH> <CITA>[61 FR 36251, July 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 0.2</SECTNO> <SUBJECT>Outside employment and other activities.</SUBJECT> (a) Reference in this section to outside employment and outside activities is not intended to cover employee investments. That subject is covered in § 0.735-204. (b) An employee shall not engage in outside employment or other outside activity not compatible with the full and proper discharge of the employee's official duties and responsibilities. Incompatible activities include, but are not limited to: (1) Outside activities which tend to impair the employee's ability or capacity to perform official duties and responsibilities. (2) Outside activities that may be construed by the public to be the official acts of the Department; (3) Outside activities that establish relationships or property interests that may result in a conflict between private interests and official duties; (4) Active participation in, or conduct of, a business dealing with, or related to, real estate or manufactured housing including, but not limited to, real estate brokerage, management and sales, architecture, engineering, mortgage lending, property insurance, appraisal services, construction, construction financing, land planning, and real estate development; (5) Serving as an officer or director of any organization which engages in lobbying activities concerning Department programs; (6) Serving as an officer or director of a Department-approved mortgagee, lending institution or organization which services mortgages or other securities for the Department; (7) Accepting employment, with or without compensation, with any person or business entity doing business with the Department; (c) An employee shall not receive any salary or any thing of monetary value from a private source as compensation for his or her services to the Government (18 U.S.C. 209). (d) An employee must obtain the prior approval of the appropriate Deputy Counselor: (1) Before using his or her title or reference to his or her government employment or experience in connection with a commercial enterprise, or (2) Before accepting employment, with or without compensation (i) With a State or local government, or (ii) In the same professional field as that of the employee's official position. (e) Employees are encouraged to engage in teaching, lecturing, and writing that is not prohibited by law, Executive order, Office of Personnel Management regulations, or this part, except that (1) An employee may not receive compensation for any lecture, writing, or consultation, the subject matter of which is substantially related to the responsibilities, programs, or operations of the Department; (2) An employee may not, either with or without compensation, engage in teaching, lecturing or writing that is dependent on information obtained as a result of his or her Government employment, except when that information has been made available to the general public, or will be made available on request, or when the appropriate Assistant Secretary or his or her <PRTPAGE P="8"/>designee gives written authorization for the use of nonpublic information on the basis that the use is in the public interest. (3) An employee may use his or her title in connection with writing for publication only if: (i) The writing contains a statement indicating that the views contained therein are those of the employee as an individual and do not necessarily represent the views of the Department of Housing and Urban Development; or (ii) Such use of the employee's title is approved in advance by the appropriate Assistant Secretary or equivalent, or his or her designee. (4) An employee may not accept any honorarium of more than $2,000 for any appearance, speech or article (2 U.S.C. 441i), except if the honorarium is paid directly to a charitable organization at the request of the employee and selected by the payor from a list of 5 or more charitable organizations provided by the employee. In computing the $2,000 amount, the following may be excluded: (i) Actual travel and subsistence expenses for the employee and the employee's spouse or aide; and (ii) Amounts paid or incurred for any agent's fees or commissions. (f) Any employee who is compensated at an amount equal to or above GS-16 in the General Schedule and who occupies a full-time position, appointment to which must be made by the President by and with the advice and consent of the Senate, may not have in any calendar year outside earned income attributable to such calendar year which is in excess of 15 per cent of the employee's salary (Pub. L. 95-521, section 210, 5 U.S.C. App.). (g) An employee may not directly or indirectly seek or receive compensation for services, rendered by himself or others, in connection with any proceeding, application, request for ruling, contract, claim, or other particular matter in which the United States is a party or has a direct and substantial interest and which is before any Federal or District of Columbia department or agency (18 U.S.C. 203). (h) An employee may not act, with or without compensation, as agent or attorney for another: (1) In prosecuting a claim against the United States; or (2) In connection with any proceeding, application, request for ruling, contract or other particular matter in which the United States is a party or has a direct and substantial interest and which is before any Federal or District of Columbia department, agency, or court (18 U.S.C. 205). (i) Permissible exceptions to the prohibitions set forth in paragraphs (g) and (h) of this section include: (1) Representation without compensation in connection with a disciplinary, loyalty, or personnel proceeding; (2) Representation with or without compensation of parents, spouse, child, or those to whom the employee owes a fiduciary duty except in those matters in which the employee has participated personally and substantially as a Government employee or which are the subject of his official responsibility; and (3) Statements required to be made under penalty for perjury or contempt. <FP>An employee seeking to engage in one of these excepted activities is encouraged to consult in advance with a Deputy Counselor.</FP> (j) The prohibitions set forth in paragraphs (g) and (h) of this section are in addition to, and not in lieu of, any other restrictions contained in this subpart. (k) This section does not prohibit an employee from serving in an individual capacity as an officer or a member of the Board of Directors of: (1) A Federal Credit Union, or (2) A cooperative or condominium association for a housing project which is not subject to regulation by the Department or, if so regulated, in which the employee personally resides. (l) When participating in any activity permitted by this section, an employee shall make certain that his or her official title or Department connection is not shown or used in a manner which implies that the employee is acting in an official capacity. <CITA>[52 FR 27113, July 17, 1987. Redesignated at 61 FR 19188, May 1, 1996]</CITA> <EFFDNOT> <HD SOURCE="HED">Effective Date Note:</HD> At 63 FR 15268, Mar. 30, 1998, § 0.2 was removed, effective Apr. 29, 1998. </EFFDNOT> </SECTION> <SECTION> <PRTPAGE P="9"/> <SECTNO>§ 0.3</SECTNO> <SUBJECT>Financial interests.</SUBJECT> (a) An employee shall not have a direct or indirect financial interest that conflicts, or appears to conflict, with his or her official duties and responsibilities. Such interests include, but are not limited to, the voluntary acceptance, acquisition or holding of: (1) Securities issued by the Federal National Mortgage Association and securities collateralized by FNMA securities. (2) FHA debentures or certificates of claim. (3) Stock or other interest in a Department-owned, insured or subsidized multifamily project or single family dwelling, cooperative unit, or condominium unit, except to the extent that the stock or other interest represents the employee's principal residence. Employees who wish to purchase a Department-held property as a principal residence must adhere to the procedures established by the Assistant Secretary for Housing for the administration of the property disposition program set forth in Handbook 4310.5. (4) Any Department subsidy provided pursuant to section 8 of the United States Housing Act of 1937, as amended, to or on behalf of a tenant of property owned by the employee. However, an employee may accept the benefit of such a subsidy when: (i) The employee involuntarily acquires a property which at the time of acquisition has a tenant receiving such a subsidy but only as long as that tenant continues to reside in the property, or (ii) An incumbent tenant who has not previously received such a subsidy becomes the beneficiary thereof but only if there is no increase in that tenant's rent upon the commencement of subsidy payments other than normal annual adjustments. (5) Any direct creditor interest in a mortgage insured by the Department. (b) Notwithstanding paragraph (a) of this section, an employee may accept, acquire or hold (1) An interest in a mutual or money market fund which has holdings listed in paragraph (a) of this section, and which: (i) Has a broadly diversified portfolio not specializing in any particular industry; (ii) Is widely held; and (iii) Is not under the employee's control. (2) A limited partnership interest in a large public partnership (i.e. one which has at least 5,000 partnership interests) less than 25% of the assets of which are Department insured or subsidized projects; (3) Mortgage insurance provided pursuant to section 203 of the National Housing Act on any one single family residence in addition to the employee's current principal residence. (c) If an employee acquires an interest prior to the commencement of employment with the Department which is prohibited under paragraph (a) of this section, or involuntarily acquires such a prohibited interest after the commencement of employment with the Department, the matter must be reported promptly to a Deputy Counselor. The Deputy Counselor will then determine whether retention of the interest is permissible or whether divestment or other appropriate remedial action is required. (d)(1) An employee must not participate in his or her capacity as a Government employee in any matter in which, to his or her knowledge, the employee, his or her spouse, minor child, any organization in which the employee is serving as an officer, director, trustee, partner, or staff member, or a partner of the employee has a financial interest. In addition, an employee must not participate in his or her capacity as a Government employee in any matter in which, to the employee's knowledge, a person, business, or nonprofit organization with whom the employee is negotiating, or has an arrangement for, employment has a financial interest. For purposes of this paragraph a <E T="03">matter</E> includes an application, contract, claim, request for a ruling, controversy, charge, accusation, arrest, judicial or other proceeding, or other particular matter. (18 U.S.C. 208(a)). (2) Paragraph (d)(1) of this section does not apply: (i) If a Deputy Counselor first determines that the financial interest is not so substantial as to be deemed likely to <PRTPAGE P="10"/>affect the integrity of the services which the Government may expect from the employee; or (ii) If the financial interest is within one of the following categories which are hereby exempted from the requirements of section 208(a) of title 18, United States Code, as being too remote or too inconsequential to affect the integrity of an employee's service: (A) Any holding in a widely held mutual or money market fund, or regulated investment company, which is not under the employee's control and which has a broadly diversified portfolio not specializing in any particular industry; (B) Participation in a bona fide employee benefit plan, other than a profit-sharing or stock-bonus plan, that is maintained by a former employer to the extent that the employee's rights in the plan are vested and require no additional services by him or her or further payment to the plan by the former employer with respect to the services of the employee. <CITA>[52 FR 27113, July 17, 1987. Redesignated at 61 FR 19188, May 1, 1996]</CITA> <EFFDNOT> <HD SOURCE="HED">Effective Date Note:</HD> At 63 FR 15268, Mar. 30, 1998, § 0.3 was removed, effective Apr. 29, 1998. </EFFDNOT> </SECTION> </PART> <PART> <EAR>Pt. 1</EAR> <HD SOURCE="HED">PART 1—NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT—EFFECTUATION OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>1.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>1.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>1.3</SECTNO> <SUBJECT>Application of Part 1.</SUBJECT> <SECTNO>1.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> <SECTNO>1.5</SECTNO> <SUBJECT>Assurances required.</SUBJECT> <SECTNO>1.6</SECTNO> <SUBJECT>Compliance information.</SUBJECT> <SECTNO>1.7</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> <SECTNO>1.8</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> <SECTNO>1.9</SECTNO> <SUBJECT>Hearings.</SUBJECT> <SECTNO>1.10</SECTNO> <SUBJECT>Effect on other regulations; forms and instructions.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 2000d-1 and 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 38 FR 17949, July 5, 1973, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 1.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> The purpose of this part 1 is to effectuate the provisions of title VI of the Civil Rights Act of 1964 (hereafter referred to as the <E T="03">Act</E>) to the end that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving Federal financial assistance from the Department of Housing and Urban Development. </SECTION> <SECTION> <SECTNO>§ 1.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part 1— (a) The term <E T="03">Department</E> means the Department of Housing and Urban Development. (b) The term <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. (c) The term <E T="03">responsible Department official</E> means the Secretary or, to the extent of any delegation of authority by the Secretary to act under this part 1, any other Department official to whom the Secretary may hereafter delegate such authority. (d) The term <E T="03">United States</E> means the States of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, the Canal Zone, and the territories and possessions of the United States, and the term <E T="03">State</E> means any one of the foregoing. (e) The term <E T="03">Federal financial assistance</E> includes: (1) Grants, loans, and advances of Federal funds, (2) the grant or donation of Federal property and interests in property, (3) the detail of Federal personnel, (4) the sale and lease of, and the permission to use (on other than a casual or transient basis), Federal property or any interest in such property without consideration or at a nominal consideration, or at a consideration which is reduced for the purpose of assisting the recipient, or in recognition of the public interest to be served by such sale or lease to the recipient, and (5) any Federal agreement, arrangement, or other contract which has as one of its purposes the provision of assistance. The term <E T="03">Federal financial assistance</E> does not include a contract of insurance or guaranty.<PRTPAGE P="11"/> (f) The term <E T="03">recipient</E> means any State, political subdivision of any State, or instrumentality of any State or political subdivision, any public or private agency, institution, organization, or other entity, or any individual, in any State, to whom Federal financial assistance is extended, directly or through another recipient, for any program or activity, or who otherwise participates in carrying out such program or activity (such as a redeveloper in the Urban Renewal Program), including any successor, assign, or transferee thereof, but such term does not include any ultimate beneficiary under any such program or activity. (g) The term <E T="03">applicant</E> means one who submits an application, contract, request, or plan requiring Department approval as a condition to eligibility for Federal financial assistance, and the term <E T="03">application</E> means such an application, contract, request, or plan. </SECTION> <SECTION> <SECTNO>§ 1.3</SECTNO> <SUBJECT>Application of Part 1.</SUBJECT> This part 1 applies to any program or activity for which Federal financial assistance is authorized under a law administered by the Department, including any program or activity assisted under the statutes listed in appendix A of this part 1. It applies to money paid, property transferred, or other Federal financial assistance extended to any such program or activity on or after January 3, 1965. This part 1 does not apply to: (a) Any Federal financial assistance by way of insurance or guaranty contracts, (b) money paid, property transferred, or other assistance extended to any such program or activity before January 3, 1965, (c) any assistance to any person who is the ultimate beneficiary under any such program or activity, or (d) any employment practice, under any such program or activity, of any employer, employment agency, or labor organization, except to the extent described in § 1.4(c). The fact that certain financial assistance is not listed in appendix A shall not mean, if title VI of the Act is otherwise applicable, that such financial assistance is not covered. Other financial assistance under statutes now in force or hereinafter enacted may be added to this list by notice published in the <E T="04">Federal Register</E>. </SECTION> <SECTION> <SECTNO>§ 1.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> (a) <E T="03">General.</E> No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity to which this part 1 applies. (b) <E T="03">Specific discriminatory actions prohibited.</E> (1) A recipient under any program or activity to which this part 1 applies may not, directly or through contractual or other arrangements, on the ground of race, color, or national origin: (i) Deny a person any housing, accommodations, facilities, services, financial aid, or other benefits provided under the program or activity; (ii) Provide any housing, accommodations, facilities, services, financial aid, or other benefits to a person which are different, or are provided in a different manner, from those provided to others under the program or activity; (iii) Subject a person to segregation or separate treatment in any matter related to his receipt of housing, accommodations, facilities, services, financial aid, or other benefits under the program or activity; (iv) Restrict a person in any way in access to such housing, accommodations, facilities, services, financial aid, or other benefits, or in the enjoyment of any advantage or privilege enjoyed by others in connection with such housing, accommodations, facilities, services, financial aid, or other benefits under the program or activity; (v) Treat a person differently from others in determining whether he satisfies any occupancy, admission, enrollment, eligibility, membership, or other requirement or condition which persons must meet in order to be provided any housing, accommodations, facilities, services, financial aid, or other benefits provided under the program or activity; (vi) Deny a person opportunity to participate in the program or activity through the provision of services or otherwise, or afford him an opportunity to do so which is different from that afforded others under the program or activity (including the opportunity <PRTPAGE P="12"/>to participate in the program or activity as an employee but only to the extent set forth in paragraph (c) of this section). (vii) Deny a person the opportunity to participate as a member of a planning or advisory body which is an integral part of the program. (2)(i) A recipient, in determining the types of housing, accommodations, facilities, services, financial aid, or other benefits which will be provided under any such program or activity, or the class of persons to whom, or the situations in which, such housing, accommodations, facilities, services, financial aid, or other benefits will be provided under any such program or activity, or the class of persons to be afforded an opportunity to participate in any such program or activity, may not, directly or through contractual or other arrangements, utilize criteria or methods of administration which have the effect of subjecting persons to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program or activity as respect to persons of a particular race, color, or national origin. (ii) A recipient, in operating low-rent housing with Federal financial assistance under the United States Housing Act of 1937, as amended (42 U.S.C. 1401 <E T="03">et seq</E>.), shall assign eligible applicants to dwelling units in accordance with a plan, duly adopted by the recipient and approved by the responsible Department official, providing for assignment on a community-wide basis in sequence based upon the date and time the application is received, the size or type of unit suitable, and factors affecting preference or priority established by the recipient's regulations, which are not inconsistent with the objectives of title VI of the Civil Rights Act of 1964 and this part 1. The plan may allow an applicant to refuse a tendered vacancy for good cause without losing his standing on the list but shall limit the number of refusals without cause as prescribed by the responsible Department official. (iii) The responsible Department official is authorized to prescribe and promulgate plans, exceptions, procedures, and requirements for the assignment and reassignment of eligible applicants and tenants consistent with the purpose of paragraph (b)(2)(ii) of this section, this part 1, and title VI of the Civil Rights Act of 1964, in order to effectuate and insure compliance with the requirements imposed thereunder. (3) In determining the site or location of housing, accommodations, or facilities, an applicant or recipient may not make selections with the purpose or effect of excluding individuals from, denying them the benefits of, or subjecting them to discrimination under any program to which this part 1 applies, on the ground of race, color, or national origin; or with the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the Act or this part 1. (4) As used in this part 1 the housing, accommodations, facilities, services, financial aid, or other benefits provided under a program or activity receiving Federal financial assistance shall be deemed to include any housing, accommodations, facilities, services, financial aid, or other benefits provided in or through a facility provided with the aid of Federal financial assistance. (5) The enumeration of specific forms of prohibited discrimination in paragraphs (b) and (c) of this section does not limit the generality of the prohibition in paragraph (a) of this section. (6)(i) In administering a program regarding which the recipient has previously discriminated against persons on the ground of race, color, or national origin, the recipient must take affirmative action to overcome the effects of prior discrimination. (ii) Even in the absence of such prior discrimination, a recipient in administering a program should take affirmative action to overcome the effects of conditions which resulted in limiting participation by persons of a particular race, color, or national origin. <FP>Where previous discriminatory practice or usage tends, on the ground of race, color, or national origin, to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program or activity to which this part 1 applies, the applicant or recipient has an obligation to take reasonable action <PRTPAGE P="13"/>to remove or overcome the consequences of the prior discriminatory practice or usage, and to accomplish the purpose of the Act.</FP> (c) <E T="03">Employment practices.</E> (1) Where a primary objective of the Federal financial assistance to a program or activity to which this part 1 applies is to provide employment, a recipient may not, directly or through contractual or other arrangements, subject a person to discrimination on the ground of race, color, or national origin in its employment practices under such program or activity (including recruitment or recruitment advertising, employment, layoff, termination, upgrading, demotion, transfer, rates of pay or other forms of compensation and use of facilities). The requirements applicable to construction employment under such program or activity shall be those specified in or pursuant to part III of Executive Order 11246 or any executive order which supersedes or amends it. (2) Where a primary objective of the Federal financial assistance is not to provide employment, but discrimination on the ground of race, color, or national origin in the employment practices of the recipient or other persons subject to this part 1 tends, on the ground of race, color, or national origin, to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program to which this part 1 applies, the provisions of this paragraph (c) shall apply to the employment practices of the recipient or other persons subject to this part 1 to the extent necessary to assure equality of opportunity to, and nondiscriminatory treatment of, beneficiaries. </SECTION> <SECTION> <SECTNO>§ 1.5</SECTNO> <SUBJECT>Assurances required.</SUBJECT> (a) <E T="03">General.</E> (1) Every contract for Federal financial assistance to carry out a program or activity to which this part 1 applies, executed on or after January 3, 1965, and every application for such Federal financial assistance submitted on or after January 3, 1965, shall, as a condition to its approval and the extension of any Federal financial assistance pursuant to such contract or application, contain or be accompanied by an assurance that the program or activity will be conducted and the housing, accommodations, facilities, services, financial aid, or other benefits to be provided will be operated and administered in compliance with all requirements imposed by or pursuant to this part 1. In the case of a contract or application where the Federal financial assistance is to provide or is in the form of personal property or real property or interest therein or structures thereon, the assurance shall obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits, or for as long as the recipient retains ownership or possession of the property, whichever is longer. In all other cases the assurance shall obligate the recipient for the period during which Federal financial assistance is extended pursuant to the contract or application. The responsible Department official shall specify the form of the foregoing assurance for such program or activity, and the extent to which like assurances will be required of subgrantees, contractors and subcontractors, transferees, successors in interest, and other participants in the program or activity. Any such assurance shall include provisions which give the United States a right to seek its judicial enforcement. (2) In the case of real property, structures or improvements thereon, or interests therein, acquired through a program of Federal financial assistance the instrument effecting any disposition by the recipient of such real property, structures or improvements thereon, or interests therein, shall contain a covenant running with the land assuring nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. In the case where Federal financial assistance is provided in the form of a transfer of real property or interests therein from the Federal Government, the instrument effecting or recording the transfer shall contain such a covenant.<PRTPAGE P="14"/> (3) In program receiving Federal financial assistance in the form, or for the acquisition, of real property or an interest in real property, to the extent that rights to space on, over, or under any such property are included as part of the program receiving such assistance, the nondiscrimination requirements of this part 1 shall extend to any facility located wholly or in part in such space. (b) <E T="03">Preexisting contracts—funds not disbursed.</E> In any case where a contract for Federal financial assistance, to carry out a program or activity to which this part 1 applies, has been executed prior to January 3, 1965, and the funds have not been fully disbursed by the Department, the responsible Department official shall, where necessary to effectuate the purposes of this part 1, require an assurance similar to that provided in paragraph (a) of this section as a condition to the disbursement of further funds. (c) <E T="03">Preexisting contracts—periodic payments.</E> In any case where a contract for Federal financial assistance, to carry out a program or activity to which this part 1 applies, has been executed prior to January 3, 1965, and provides for periodic payments for the continuation of the program or activity, the recipient shall, in connection with the first application for such periodic payments on or after January 3, 1965: (1) Submit a statement that the program or activity is being conducted in compliance with all requirements imposed by or pursuant to this part 1 and (2) provide such methods of administration for the program or activity as are found by the responsible Department official to give reasonable assurance that the recipient will comply with all requirements imposed by or pursuant to this part 1. (d) <E T="03">Assurances from institutions.</E> (1) In the case of any application for Federal financial assistance to an institution of higher education, the assurance required by this section shall extend to admission practices and to all other practices relating to the treatment of students. (2) The assurance required with respect to an institution of higher education, hospital, or any other institution, insofar as the assurance relates to the institution's practices with respect to admission or other treatment of persons as students, patients, or clients of the institution or to the opportunity to participate in the provision of services or other benefits to such persons, shall be applicable to the entire institution unless the applicant establishes, to the satisfaction of the responsible Department official, that the institution's practices in designated parts or programs of the institution will in no way affect its practices in the program of the institution for which Federal financial assistance is sought, or the beneficiaries of or participants in such program. If in any such case the assistance sought is for the construction of a facility or part of a facility, the assurance shall in any event extend to the entire facility and to facilities operated in connection therewith. (e) <E T="03">Elementary and secondary schools.</E> The requirements of this section with respect to any elementary or secondary school or school system shall be deemed to be satisfied if such school or school system (1) is subject to a final order of a court of the United States for the desegregation of such school or school system, and provides an assurance that it will comply with such order, including any future modification of such order, or (2) submits a plan for the desegregation of such school or school system which the responsible official of the Department of Health and Human Services determines is adequate to accomplish the purposes of the Act and this part 1 within the earliest practicable time, and provides reasonable assurance that it will carry out such plan. <CITA>[38 FR 17949, July 5, 1973, as amended at 50 FR 9269, Mar. 7, 1985]</CITA> </SECTION> <SECTION> <SECTNO>§ 1.6</SECTNO> <SUBJECT>Compliance information.</SUBJECT> (a) <E T="03">Cooperation and assistance.</E> The responsible Department official and each Department official who by law or delegation has the principal responsibility within the Department for the administration of any law extending financial assistance subject to this part 1 shall to the fullest extent practicable seek the cooperation of recipients in obtaining compliance with this part 1 and shall provide assistance and guidance to recipients to help them comply voluntarily with this part 1.<PRTPAGE P="15"/> (b) <E T="03">Compliance reports.</E> Each recipient shall keep such records and submit to the responsible Department official or his designee timely, complete, and accurate compliance reports at such times, and in such form and containing such information, as the responsible Department official or his designee may determine to be necessary to enable him to ascertain whether the recipient has complied or is complying with this part 1. In general, recipients should have available for the department racial and ethnic data showing the extent to which members of minority groups are beneficiaries of federally assisted programs. (c) <E T="03">Access to sources of information.</E> Each recipient shall permit access by the responsible Department official or his designee during normal business hours to such of its books, records, accounts, and other sources of information, and its facilities as may be pertinent to ascertain compliance with this part 1. Where any information required of a recipient is in the exclusive possession of any other agency, institution, or person and this agency, institution, or person shall fail or refuse to furnish this information, the recipient shall so certify in its report and shall set forth what efforts it has made to obtain the information. (d) <E T="03">Information to beneficiaries and participants.</E> Each recipient shall make available to participants, beneficiaries, and other interested persons such information regarding the provisions of this part 1 and its applicability to the program or activity under which the recipient receives Federal financial assistance, and make such information available to them in such manner, as the responsible Department official finds necessary to apprise such persons of the protections against discrimination assured them by the Act and this part 1. </SECTION> <SECTION> <SECTNO>§ 1.7</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> (a) <E T="03">Periodic compliance reviews.</E> The responsible Department official or his designee shall from time to time review the practices of recipients to determine whether they are complying with this part 1. (b) <E T="03">Complaints.</E> Any person who believes himself or any specific class of persons to be subjected to discrimination prohibited by this part 1 may by himself or by a representative file with the responsible Department official or his designee a written complaint. A complaint must be filed not later than 180 days from the date of the alleged discrimination, unless the time for filing is extended by the responsible Department official or his designee. (c) <E T="03">Investigations.</E> The responsible Department official or his designee shall make a prompt investigation whenever a compliance review, report, complaint, or any other information indicates a possible failure to comply with this part 1. The investigation should include, where appropriate, a review of the pertinent practices and policies of the recipient, the circumstances under which the possible noncompliance with this part 1 occurred, and other factors relevant to a determination as to whether the recipient has failed to comply with this part . (d) <E T="03">Resolution of matters.</E> (1) If an investigation pursuant to paragraph (c) of this section indicates a failure to comply with this part 1, the responsible Department official or his designee will so inform the recipient and the matter will be resolved by informal means whenever possible. If it has been determined that the matter cannot be resolved by informal means, action will be taken as provided for in § 1.8. (2) If an investigation does not warrant action pursuant to paragraph (d)(1) of this section the responsible Department official or his designee will so inform the recipient and the complainant, if any, in writing. (e) <E T="03">Intimidatory or retaliatory acts prohibited.</E> No recipient or other person shall intimidate, threaten, coerce, or discriminate against any person for the purpose of interfering with any right or privilege secured by title VI of the Act or this part 1, or because he has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. The identity of complainants shall be kept confidential except to the extent necessary to carry out the purposes of this part, including the conduct of any investigation, hearing, or judicial proceeding arising thereunder. </SECTION> <SECTION> <PRTPAGE P="16"/> <SECTNO>§ 1.8</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> (a) <E T="03">General.</E> If there appears to be a failure or threatened failure to comply with this part 1, and if the noncompliance or threatened noncompliance cannot be corrected by informal means, compliance with this part 1 may be effected by the suspension or termination of or refusal to grant or to continue Federal financial assistance, or by any other means authorized by law. Such other means may include, but are not limited to: (1) A reference to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States (including other titles of the Act), or any assurance or other contractual undertaking, and (2) any applicable proceeding under State or local law. (b) <E T="03">Noncompliance with § 1.5.</E> If an applicant fails or refuses to furnish an assurance required under § 1.5 or otherwise fails or refuses to comply with the requirement imposed by or pursuant to that section, Federal financial assistance may be refused in accordance with the procedures of paragraph (c) of this section. The Department shall not be required to provide assistance in such a case during the pendency of the administrative proceedings under such paragraph, except that the Department shall continue assistance during the pendency of such proceedings where such assistance is due and payable pursuant to a contract therefor approved prior to January 3, 1965. (c) <E T="03">Termination of or refusal to grant or to continue Federal financial assistance.</E> No order suspending, terminating, or refusing to grant or continue Federal financial assistance shall become effective until (1) the responsible Department official has advised the applicant or recipient of his failure to comply and has determined that compliance cannot be secured by voluntary means, (2) there has been an express finding on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed by or pursuant to this part 1, (3) the action has been approved by the Secretary, and (4) the expiration of 30 days after the Secretary has filed with the committees of the House and Senate having legislative jurisdiction over the program or activity involved a full written report of the circumstances and the grounds for such action. Any action to suspend or terminate or to refuse to grant or to continue Federal financial assistance shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding has been made and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found. (d) <E T="03">Other means authorized by law.</E> No action to effect compliance by any other means authorized by law shall be taken until (1) the responsible Department official has determined that compliance cannot be secured by voluntary means, (2) the recipient or other person has been notified of its failure to comply and of the action to be taken to effect compliance, and (3) the expiration of at least 10 days from the mailing of such notice to the applicant or recipient. During this period of at least 10 days additional efforts shall be made to persuade the applicant or recipient to comply with this part 1 and to take such corrective action as may be appropriate. </SECTION> <SECTION> <SECTNO>§ 1.9</SECTNO> <SUBJECT>Hearings.</SUBJECT> (a) <E T="03">Opportunity for hearing.</E> Whenever an opportunity for a hearing is required by § 1.8(c), reasonable notice shall be given by registered or certified mail, return receipt requested, to the affected applicant or recipient. This notice shall advise the applicant or recipient of the action proposed to be taken, the specific provision under which the proposed action against it is to be taken, and the matters of fact or law asserted as the basis for this action, and either: (1) Fix a date not less than 20 days after the date of such notice within which the applicant or recipient may request of the responsible Department official that the matter be scheduled for hearing, or (2) advise the applicant or recipient that the matter in question has been set down for hearing at a stated time and place. The time and place so fixed shall be reasonable and shall be subject to change for cause. <PRTPAGE P="17"/>The complainant, if any, shall be advised of the time and place of the hearing. An applicant or recipient may waive a hearing and submit written information and argument for the record. The failure of an applicant or recipient to request a hearing under this paragraph (a) or to appear at a hearing for which a date has been set shall be deemed to be a waiver of the right to a hearing under section 602 of the Act and § 1.8(c) and consent to the making of a decision on the basis of such information as is available. (b) <E T="03">Hearing procedures.</E> Hearings shall be conducted in accordance with 24 CFR part 180. <EXTRACT> <FP>38 FR 17949, July 5, 1973, as amended at 61 FR 52217, Oct. 4, 1996]</FP> </EXTRACT> </SECTION> <SECTION> <SECTNO>§ 1.10</SECTNO> <SUBJECT>Effect on other regulations; forms and instructions.</SUBJECT> (a) <E T="03">Effect on other regulations.</E> All regulations, orders, or like directions heretofore issued by any officer of the Department which impose requirements designed to prohibit any discrimination against persons on the ground of race, color, or national origin under any program or activity to which this part applies, and which authorize the suspension or termination of or refusal to grant or to continue Federal financial assistance to any applicant or recipient for failure to comply with such requirements, are hereby superseded to the extent that such discrimination is prohibited by this part, except that nothing in this part shall be deemed to relieve any person of any obligation assumed or imposed under any such superseded regulation, order, instruction, or like direction prior to January 3, 1965. Nothing in this part, however, shall be deemed to supersede any of the following (including future amendments thereof): (1) Executive Orders 11246 and 11375 and regulations issued thereunder, or (2) Executive Order 11063 and regulations issued thereunder, or any other order, regulations or instructions, insofar as such order, regulations, or instructions, prohibit discrimination on the ground of race, color, or national origin in any program or activity or situation to which this part is inapplicable, or prohibit discrimination on any other ground. (b) <E T="03">Forms and instructions.</E> The responsible Department official shall assure that forms and detailed instructions and procedures for effectuating this part are issued and promptly made available to interested persons. (c) <E T="03">Supervision and coordination.</E> The Secretary may from time to time assign to officials of the Department, or to officials of other departments or agencies of the Government with the consent of such department or agency, responsibilities in connection with the effectuation of the purposes of title VI of the Act and this part (other than responsibility for final decision as provided in § 1.10), including the achievement of effective coordination and maximum uniformity within the Department and within the Executive Branch of the Government in the application of title VI and this part to similar programs or activities and in similar situations. Any action taken, determination made, or requirement imposed by an official of another department or agency acting pursuant to an assignment of responsibility under this paragraph shall have the same effect as though such action had been taken by the responsible official of this Department. <CITA>[38 FR 17949, July 5, 1973. Redesignated at 61 FR 52217, Oct. 4, 1996]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 4</EAR> <HD SOURCE="HED">PART 4—HUD REFORM ACT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Accountability in the Provision of HUD Assistance</HD> <SECHD>Sec.</SECHD> <SECTNO>4.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>4.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>4.5</SECTNO> <SUBJECT>Notice and documentation of assistance subject to section 102(a).</SUBJECT> <SECTNO>4.7</SECTNO> <SUBJECT>Notice of funding decisions.</SUBJECT> <SECTNO>4.9</SECTNO> <SUBJECT>Disclosure requirements for assistance subject to section 102(b).</SUBJECT> <SECTNO>4.11</SECTNO> <SUBJECT>Updating of disclosure.</SUBJECT> <SECTNO>4.13</SECTNO> <SUBJECT>Limitation of assistance subject to section 102(d).</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Prohibition of Advance Disclosure of Funding Decisions</HD> <SECTNO>4.20</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>4.22</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>4.24</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>4.26</SECTNO> <SUBJECT>Permissible and impermissible disclosures.</SUBJECT> <SECTNO>4.28</SECTNO> <SUBJECT>Civil penalties.<PRTPAGE P="18"/> </SUBJECT> <SECTNO>4.30</SECTNO> <SUBJECT>Procedure upon discovery of a violation.</SUBJECT> <SECTNO>4.32</SECTNO> <SUBJECT>Investigation by Office of Inspector General.</SUBJECT> <SECTNO>4.34</SECTNO> <SUBJECT>Review of Inspector General's report by the Ethics Law Division.</SUBJECT> <SECTNO>4.36</SECTNO> <SUBJECT>Action by the Ethics Law Division.</SUBJECT> <SECTNO>4.38</SECTNO> <SUBJECT>Administrative remedies.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d), 3537a, 3545. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 14449, Apr. 1, 1996, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Accountability in the Provision of HUD Assistance</HD> <SECTION> <SECTNO>§ 4.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> The provisions of this subpart A are authorized under section 102 of the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a) (hereinafter, Section 102). Both the provisions of Section 102 and this subpart A apply for the purposes of Section 102. Section 102 contains a number of provisions designed to ensure greater accountability and integrity in the way in which the Department makes assistance available under certain of its programs. </SECTION> <SECTION> <SECTNO>§ 4.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Applicant</E> includes a person whose application for assistance must be submitted to HUD for any purpose including approval, environmental review, or rent determination. <E T="03">Assistance under any program or discretionary fund administered by the Secretary</E> is subject to Section 102(a), and means any assistance, under any program administered by the Department, that provides by statute, regulation or otherwise for the competitive distribution of funding. <E T="03">Assistance within the jurisdiction of the Department</E> is subject to Section 102(b), and means any contract, grant, loan, cooperative agreement, or other form of assistance, including the insurance or guarantee of a loan or mortgage, that is provided with respect to a specific project or activity under a program administered by the Department, whether or not it is awarded through a competitive process. <E T="03">Assistance within the jurisdiction of the Department to any housing project</E> is subject to Section 102(d), and means: (1) Assistance which is provided directly by HUD to any person or entity, but not to subrecipients. It includes assistance for the acquisition, rehabilitation, operation conversion, modernization, renovation, or demolition of any property containing five or more dwelling units that is to be used primarily for residential purposes. It includes assistance to independent group residences, board and care facilities, group homes and transitional housing but does not include primarily nonresidential facilities such as intermediate care facilities, nursing homes and hospitals. It also includes any change requested by a recipient in the amount of assistance previously provided, except changes resulting from annual adjustments in Section 8 rents under Section 8(c)(2)(A) of the United States Housing Act of 1937 (42 U.S.C. 1437f); (2) Assistance to residential rental property receiving a tax credit under Federal, State or local law. (3) For purposes of this definition, assistance includes assistance resulting from annual adjustments in Section 8 rents under Section 8(c)(2)(A) of the United States Housing Act of 1937, unless the initial assistance was made available before April 15, 1991, and no other assistance subject to this subpart A was made available on or after that date. <E T="03">Housing project</E> means: (1) Property containing five or more dwelling units that is to be used for primarily residential purposes, including (but not limited to) living arrangements such as independent group residences, board and care facilities, group homes, and transitional housing, but excluding facilities that provide primarily non-residential services, such as intermediate care facilities, nursing homes, and hospitals. (2) Residential rental property receiving a tax credit under Federal, State, or local law. <E T="03">Interested party</E> means any person involved in the application for assistance, or in the planning, development or implementation of the project or activity for which assistance is sought and any other person who has a pecuniary interest exceeding the lower of $50,000 or 10 percent in the project or activity for which assistance is sought.<PRTPAGE P="19"/> <E T="03">Selection criteria</E> includes, in addition to any objective measures of housing and other need, project merit, or efficient use of resources, the weight or relative importance of each published selection criterion as well as any other factors that may affect the selection of recipients. </SECTION> <SECTION> <SECTNO>§ 4.5</SECTNO> <SUBJECT>Notice and documentation of assistance subject to section 102(a).</SUBJECT> (a) <E T="03">Notice.</E> Before the Department solicits an application for assistance subject to Section 102(a), it will publish a Notice in the <E T="04">Federal Register</E> describing application procedures. Not less than 30 calendar days before the deadline by which applications must be submitted, the Department will publish selection criteria in the <E T="04">Federal Register</E>. (b) <E T="03">Documentation of decisions.</E> HUD will make available for public inspection, for at least five (5) years, and beginning not less than 30 calendars days after it provides the assistance, all documentation and other information regarding the basis for the funding decision with respect to each application submitted to HUD for assistance. HUD will also make available any written indication of support that it received from any applicant. Recipients of HUD assistance must ensure, in accordance with HUD guidance, the public availability of similar information submitted by subrecipients of HUD assistance. </SECTION> <SECTION> <SECTNO>§ 4.7</SECTNO> <SUBJECT>Notice of funding decisions.</SUBJECT> HUD will publish a Notice in the <E T="04">Federal Register</E> at least quarterly to notify the public of all decisions made by the Department to provide: (a) Assistance subject to Section 102(a); and (b) Assistance that is provided through grants or cooperative agreements on a discretionary (non-formula, non-demand) basis, but that is not provided on the basis of a competition. </SECTION> <SECTION> <SECTNO>§ 4.9</SECTNO> <SUBJECT>Disclosure requirements for assistance subject to section 102(b).</SUBJECT> (a) <E T="03">Receipt and reasonable expectation of receipt.</E> (1) In determining the threshold of applicability of Section 102(b), an applicant will be deemed to have received or to have a reasonable expectation of receiving: (i) The total amount of assistance received during the Federal fiscal year during which the application was submitted; (ii) The total amount of assistance requested for the fiscal year in which any pending application, including the current application, was submitted; and (iii) For the fiscal year described in paragraph (a)(1)(ii) of this section, the total amount of assistance from the Department or any other entity that is likely to be made available on a formula basis or in the form of program income as defined in 24 CFR part 85. (2) In the case of assistance that will be provided pursuant to contract over a period of time (such as project-based assistance under Section 8 of the United States Housing Act of 1937), all amounts that are to be provided over the term of the contract, irrespective of when they are to be received. (b) <E T="03">Content of disclosure.</E> Applicants that receive or can reasonably be expected to receive, as defined in paragraph (a) of this section, an aggregate amount of assistance that is in excess of $200,000 must disclose the following information: (1) Other governmental assistance that is or is expected to be made available, based upon a reasonable assessment of the circumstances, with respect to the project or activities for which the assistance is sought; (2) The name and pecuniary interest of any interested party; and (3) A report of the expected sources and uses of funds for the project or activity which is the subject of the application, including governmental and non-governmental sources of funds and private capital resulting from tax benefits. (c) In the case of mortgage insurance under 24 CFR subtitle B, chapter II, the mortgagor is responsible for making the disclosures required under Section 102(b) and this section, and the mortgagee is responsible for furnishing the mortgagor's disclosures to the Department. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0011)</APPRO> </SECTION> <SECTION> <PRTPAGE P="20"/> <SECTNO>§ 4.11</SECTNO> <SUBJECT>Updating of disclosure.</SUBJECT> (a) During the period in which an application for assistance covered under Section 102(b) is pending, or in which such assistance is being provided, the applicant must report to the Department, or to the State or unit of general local government, as appropriate: (1) Any information referred to in Section 102(b) that the applicant should have disclosed with respect to the application, but did not disclose; (2) Any information referred to in Section 102(b) that initially arose after the time for making disclosures under that subsection, including the name and pecuniary interest of any person who did not have a pecuniary interest in the project or activity that exceeded the threshold in Section 102(b) at the time of the application, but that subsequently exceeded the threshold. (b) With regard to changes in information that was disclosed under Sections 102(b) or 102(c): (1) For programs administered by the Assistant Secretary for Community Planning and Development: (i) Any change in other government assistance covered by Section 102(b) that exceeds the amount of all assistance that was previously disclosed by the lesser of $250,000 or 10 percent of the assistance; (ii) Any change in the expected sources or uses of funds that exceed the amount of all previously disclosed sources or uses by the lesser of $250,000 or 10 percent of previously disclosed sources; (2) For all other programs: (i) Any change in other government assistance under Section 102(b)(1) that exceeds the amount of assistance that was previously disclosed; (ii) Any change in the pecuniary interest of any person under Section 102(b)(2) that exceeds the amount of all previously disclosed interests by the lesser of $50,000 or 10 percent of such interest; (iii) For all projects receiving a tax credit under Federal, Sate or local law, any change in the expected sources or uses of funds that were previously disclosed; (iv) For all other projects: (A) Any change in the expected source of funds from a single source that exceeds the lesser of the amount previously disclosed for that source of funds by $250,000 or 10 percent of the funds previously disclosed for that source; (B) Any change in the expected sources of funds from all sources previously disclosed that exceeds the lesser of $250,000 or 10 percent of the amounts previously disclosed from all sources of funds; (C) Any change in a single expected use of funds that exceeds the lesser of $250,000 or 10 percent of the previously disclosed use; (D) Any change in the use of all funds that exceeds the lesser of $250,000 or 10 percent of the previously disclosed uses for all funds. (c) <E T="03">Period of coverage.</E> For purposes of updating of Section 102(c), an application for assistance will be considered to be pending from the time the application is submitted until the Department communicates its decision with respect to the selection of the applicant. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0011)</APPRO> </SECTION> <SECTION> <SECTNO>§ 4.13</SECTNO> <SUBJECT>Limitation of assistance subject to section 102(d).</SUBJECT> (a) In making the certification for assistance subject to Section 102(d), the Secretary will consider the aggregate amount of assistance from the Department and from other sources that is necessary to ensure the feasibility of the assisted activity. The Secretary will take into account all factors relevant to feasibility, which may include, but are not limited to, past rates of returns for owners, sponsors, and investors; the long-term needs of the project and its tenants; and the usual and customary fees charged in carrying out the assisted activity. (b) If the Department determines that the aggregate of assistance within the jurisdiction of the Department to a housing project from the Department and from other governmental sources exceeds the amount that the Secretary determines is necessary to make the assisted activity feasible, the Department will consider all options available to enable it to make the required certification, including reductions in the <PRTPAGE P="21"/>amount of Section 8 subsidies. The Department also may impose a dollar-for-dollar, or equivalent, reduction in the amount of HUD assistance to offset the amount of other government assistance. In grant programs, this could result in a reduction of any grant amounts not yet drawn down. The Department may make these adjustments immediately, or in conjunction with servicing actions anticipated to occur in the near future (<E T="03">e.g.,</E> in conjunction with the next annual adjustment of Section 8 rents). (c) If an applicant does not meet the $200,000 disclosure requirement in § 4.7(b), an applicant must certify whether there is, or is expected to be made, available with respect to the housing project any other governmental assistance. The Department may also require any applicant subject to this subpart A to submit such a certification in conjunction with the Department's processing of any subsequent servicing action on that project. If there is other government assistance for purposes of the two preceding sentences, the applicant must submit such information as the Department deems necessary to make the certification and subsequent adjustments under Section 102(d). (d) The certification under Section 102(d) shall be retained in the official file for the housing project. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Prohibition of Advance Disclosure of Funding Decisions</HD> <SECTION> <SECTNO>§ 4.20</SECTNO> <SUBJECT>Purpose.</SUBJECT> The provisions of this subpart B are authorized under section 103 of the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989) (42 U.S.C. 3537a) (hereinafter, Section 103). Both the provisions of Section 103 and this subpart B apply for the purposes of Section 103. Section 103 proscribes direct or indirect communication of certain information during the selection process by HUD employees to persons within or outside of the Department who are not authorized to receive that information. The purpose of the proscription is to preclude giving an unfair advantage to applicants who would receive information not available to other applicants or to the public. Section 103 also authorizes the Department to impose a civil money penalty on a HUD employee who knowingly discloses protected information, if such a violation of Section 103 is material, and authorizes the Department to sanction the person who received information improperly by, among other things, denying assistance to that person. </SECTION> <SECTION> <SECTNO>§ 4.22</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Application</E> means a written request for assistance regardless of whether the request is in proper form or format. <E T="03">Assistance</E> does not include any contract (e.g., a procurement contract) that is subject to the Federal Acquisition Regulation (FAR) (48 CFR ch. 1). <E T="03">Disclose</E> means providing information directly or indirectly to a person through any means of communication. <E T="03">Employee</E> includes persons employed on a full-time, part-time, or temporary basis, and special government employees as defined in 18 U.S.C. 202. The term applies whether or not the employee is denoted as an officer of the Department. “Employee” is to be construed broadly to include persons who are retained on a contractual or consultative basis under an Office of Human Resources appointment. However, “employee” does not include an independent contractor, e.g., a firm or individual working under the authority of a procurement contract. <E T="03">Material or materially</E> means in some influential or substantial respect or having to do more with substance than with form. <E T="03">Person</E> means an individual, corporation, company, association, authority, firm, partnership, society, State, local government, or any other organization or group of people. <E T="03">Selection process</E> means the period with respect to a selection for assistance that begins when the HUD official responsible for awarding the assistance involved, or his or her designee, makes a written request (which includes the selection criteria to be used in providing the assistance) to the Office of General Counsel (OGC) to prepare the <PRTPAGE P="22"/>NOFA, solicitation, or request for applications for assistance for publication in the <E T="04">Federal Register</E>. The period includes the evaluation of applications, and concludes with the announcement of the selection of recipients of assistance. </SECTION> <SECTION> <SECTNO>§ 4.24</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) <E T="03">Coverage.</E> The prohibitions against improper disclosure of covered selection information apply to any person who is an employee of the Department. In addition, the Department will require any other person who participates at the invitation of the Department in the selection process to sign a certification that he or she will be bound by the provisions of this part. (b) <E T="03">Applicability.</E> The prohibitions contained in this part apply to conduct occurring on or after June 12, 1991. </SECTION> <SECTION> <SECTNO>§ 4.26</SECTNO> <SUBJECT>Permissible and impermissible disclosures.</SUBJECT> (a) Notwithstanding the provisions of Section 103, an employee is permitted to disclose information during the selection process with respect to: (1) The requirements of a HUD program or programs, including unpublished policy statements and the provision of technical assistance concerning program requirements, provided that the requirements or statements are disclosed on a uniform basis to any applicant or potential applicant. For purposes of this part, the term “technical assistance” includes such activities as explaining and responding to questions about program regulations, defining terms in an application package, and providing other forms of technical guidance that may be described in a NOFA. The term “technical assistance” also includes identification of those parts of an application that need substantive improvement, but this term does not include advising the applicant how to make those improvements. (2) The dates by which particular decisions in the selection process will be made; (3) Any information which has been published in the <E T="04">Federal Register</E> in a NOFA or otherwise; (4) Any information which has been made public through means other than the <E T="04">Federal Register</E>; (5) An official audit, inquiry or investigation, if the disclosure is made to an auditor or investigator authorized by the HUD Inspector General to conduct the audit or investigation; (6) Legal activities, including litigation, if the disclosure is made to an attorney who is representing or is otherwise responsible to the Department in connection with the activities; or (7) Procedures that are required to be performed to process an application, e.g., environmental or budget reviews, and technical assistance from experts in fields who are regularly employed by other government agencies, provided that the agency with which the expert is employed or associated is not an applicant for HUD assistance during the pending funding cycle. (b) An authorized employee, during the selection process, may contact an applicant for the purpose of: (1) Communication of the applicant's failure to qualify, after a preliminary review for eligibility and completeness with respect to his or her application, and the reasons for the failure to qualify, or the fact of the applicant's failure to be determined to be technically acceptable after a full review; or (2) Clarification of the terms of the applicant's application. A clarification, for the purpose of this paragraph (b), may include a request for additional information consistent with regulatory requirements. (c) Prohibition of advance disclosure of funding decisions. During the selection process an employee shall not knowingly disclose any covered selection information regarding the selection process to any person other than an employee authorized to receive that information. (1) The following disclosures of information are, at any time during the selection process, a violation of Section 103: (i) Information regarding any applicant's relative standing; (ii) The amount of assistance requested by any applicant; (iii) Any information contained in an application;<PRTPAGE P="23"/> (2) The following disclosures of information, before the deadline for the submission of applications, shall be a violation of Section 103: (i) The identity of any applicant; and (ii) The number of applicants. </SECTION> <SECTION> <SECTNO>§ 4.28</SECTNO> <SUBJECT>Civil penalties.</SUBJECT> Whenever any employee knowingly and materially violates the prohibition in Section 103, the Department may impose a civil money penalty on the employee in accordance with the provisions of 24 CFR part 30. </SECTION> <SECTION> <SECTNO>§ 4.30</SECTNO> <SUBJECT>Procedure upon discovery of a violation.</SUBJECT> (a) <E T="03">In general.</E> When an alleged violation of Section 103 or this subpart B comes to the attention of any person, including an employee, he or she may either: (1) Contact the HUD Ethics Law Division to provide information about the alleged violation; or (2) Contact the HUD Office of Inspector General to request an inquiry or investigation into the matter. (b) <E T="03">Ethics Law Division.</E> When the Ethics Law Division receives information concerning an alleged violation of Section 103, it shall refer the matter to the Inspector General stating the facts of the alleged violation and requesting that the Inspector General make an inquiry or investigation into the matter. (c) <E T="03">Inspector General.</E> When the Inspector General receives information concerning an alleged violation of Section 103 or this subpart B, he or she shall notify the Ethics Law Division when the Inspector General begins an inquiry or investigation into the matter. (d) <E T="03">Protection of employee complainants.</E> (1) No official of the Ethics Law Division, after receipt of information from an employee stating the facts of an alleged violation of this part, shall disclose the identity of the employee without the consent of that employee. The Inspector General, after receipt of information stating the facts of an alleged violation of this part, shall not disclose the identity of the employee who provided the information without the consent of that employee, unless the Inspector General determines that disclosure of the employee's identity is unavoidable during the course of an investigation. However, any employee who knowingly reports a false alleged violation of this part is not so protected and may be subject to disciplinary action. (2) Any employee who has authority to take, direct others to take, recommend or approve a personnel action is prohibited from threatening, taking, failing to take, recommending, or approving any personnel action as reprisal against another employee for providing information to investigating officials. </SECTION> <SECTION> <SECTNO>§ 4.32</SECTNO> <SUBJECT>Investigation by Office of Inspector General.</SUBJECT> The Office of Inspector General shall review every alleged violation of Section 103. If after a review the Office of Inspector General determines that further investigation is not warranted, it shall notify the Ethics Law Division of that determination. If, after a review, the Office of Inspector General determines that additional investigation is warranted, it shall conduct the investigation and upon completion issue a report of the investigation to the Ethics Law Division as to each alleged violation. </SECTION> <SECTION> <SECTNO>§ 4.34</SECTNO> <SUBJECT>Review of Inspector General's report by the Ethics Law Division.</SUBJECT> After receipt of the Inspector General's report, the Ethics Law Division shall review the facts and circumstances of the alleged violations. In addition, the Ethics Law Division may: (a) Return the report to the Inspector General with a request for further investigation; (b) Discuss the violation with the employee alleged to have committed the violation; or (c) Interview any other person, including employees who it believes will be helpful in furnishing information relevant to the inquiry. </SECTION> <SECTION> <SECTNO>§ 4.36</SECTNO> <SUBJECT>Action by the Ethics Law Division.</SUBJECT> (a) After review of the Inspector General's report, the Ethics Law Division shall determine whether or not there is <PRTPAGE P="24"/>sufficient information providing a reasonable basis to believe that a violation of Section 103 or this subpart B has occurred. (b) If the Ethics Law Division determines that there is no reasonable basis to believe that a violation of Section 103 or this subpart B has occurred, it shall close the matter and send its determination to the Office of Inspector General. (c) If the Ethics Law Division determines that there is sufficient information to provide a reasonable basis to believe that a violation of Section 103 or this subpart B has occurred, it shall: (1) Send its determination to the Office of Inspector General; and (2) Refer the matter to the appropriate official for review as to whether to impose a civil money penalty in accordance with 24 CFR part 30; provided, however, that the Ethics Law Division shall not make a civil money penalty recommendation unless it finds the violation to have been knowing and material. The decision to impose a civil money penalty in a particular matter may be made only upon referral from the Ethics Law Division. (d) In determining whether a violation is material, the Ethics Law Division shall consider the following factors, as applicable: (1) The content of the disclosure and its significance to the person to whom the disclosure was made; (2) The time during the selection process when the disclosure was made; (3) The person to whom the disclosure was made; (4) The dollar amount of assistance requested by the person to whom the disclosure was made; (5) The dollar amount of assistance available for a given competition or program; (6) The benefit, if any, received or expected by the employee, the employee's relatives or friends, or any other person with whom the employee is affiliated; (7) The potential injury to the Department. (e) If the Ethics Law Division determines that there is sufficient information to provide a reasonable basis to believe that a violation of Section 103 or this subpart B has occurred, it may, in addition to referring the matter under 24 CFR part 30, refer the matter to an appropriate HUD official for consideration of any other available disciplinary action. Any referral authorized by this paragraph (e) shall be reported to the Inspector General and may be reported to the employee's supervisor. </SECTION> <SECTION> <SECTNO>§ 4.38</SECTNO> <SUBJECT>Administrative remedies.</SUBJECT> (a) If the Department receives or obtains information providing a reasonable basis to believe that a violation of Section 103 has occurred, the Department may impose a sanction, as determined to be appropriate, upon an applicant for or a recipient of assistance who has received covered selection information. (b) In determining whether a sanction is appropriate and if so which sanction or sanctions should be sought, the Secretary shall give consideration to the applicant's conduct with respect to the violation. In so doing, the Secretary shall consider the factors listed at § 4.36(d), as well as any history of prior violations in any HUD program, the benefits received or expected, deterrence of future violations and the extent of any complicity in the violation. (c) The Secretary may impose a sanction authorized by this section whether or not the Ethics Law Division refers a case under 24 CFR part 30, and whether or not a civil money penalty is imposed. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 5</EAR> <HD SOURCE="HED">PART 5—GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Generally Applicable Definitions and Federal Requirements; Waivers</HD> <SECHD>Sec.</SECHD> <SECTNO>5.100</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.105</SECTNO> <SUBJECT>Other Federal requirements.</SUBJECT> <SECTNO>5.107</SECTNO> <SUBJECT>Audit requirements for non-profit organizations.</SUBJECT> <SECTNO>5.110</SECTNO> <SUBJECT>Waivers.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Disclosure and Verification of Social Security Numbers and Employer Identification Numbers; Procedures for Obtaining Income Information</HD> <SECTNO>5.210</SECTNO> <SUBJECT>Purpose, applicability, and Federal preemption.</SUBJECT> <SECTNO>5.212</SECTNO> <SUBJECT>Compliance with the Privacy Act and <PRTPAGE P="25"/>other requirements.</SUBJECT> <SECTNO>5.214</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SUBJGRP> <HD SOURCE="HED">Disclosure and Verification of Social Security Numbers and Employer Identification Numbers for Applicants and Participants in Certain HUD Programs</HD> <SECTNO>5.216</SECTNO> <SUBJECT>Disclosure and verification of Social Security and Employer Identification Numbers.</SUBJECT> <SECTNO>5.218</SECTNO> <SUBJECT>Penalties for failing to disclose and verify Social Security and Employer Identification Numbers.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Obtaining Income Information About Applicants and Participants</HD> <SECTNO>5.230</SECTNO> <SUBJECT>Consent by assistance applicants and participants.</SUBJECT> <SECTNO>5.232</SECTNO> <SUBJECT>Penalties for failing to sign consent forms.</SUBJECT> <SECTNO>5.234</SECTNO> <SUBJECT>Requests for information from SWICAs and Federal agencies; restrictions on use.</SUBJECT> <SECTNO>5.236</SECTNO> <SUBJECT>Procedures for termination, denial, suspension, or reduction of assistance based on information obtained from a SWICA or Federal agency.</SUBJECT> <SECTNO>5.238</SECTNO> <SUBJECT>Criminal and civil penalties.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Pet Ownership for the Elderly or Persons With Disabilities</HD> <SUBJGRP> <HD SOURCE="HED">General Requirements</HD> <SECTNO>5.300</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>5.303</SECTNO> <SUBJECT>Exclusion for animals that assist persons with disabilities.</SUBJECT> <SECTNO>5.306</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.309</SECTNO> <SUBJECT>Prohibition against discrimination.</SUBJECT> <SECTNO>5.312</SECTNO> <SUBJECT>Notice to tenants.</SUBJECT> <SECTNO>5.315</SECTNO> <SUBJECT>Content of pet rules: general requirements.</SUBJECT> <SECTNO>5.318</SECTNO> <SUBJECT>Discretionary pet rules.</SUBJECT> <SECTNO>5.321</SECTNO> <SUBJECT>Lease provisions.</SUBJECT> <SECTNO>5.324</SECTNO> <SUBJECT>Implementation of lease provisions.</SUBJECT> <SECTNO>5.327</SECTNO> <SUBJECT>Nuisance or threat to health or safety.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Housing Programs</HD> <SECTNO>5.350</SECTNO> <SUBJECT>Mandatory pet rules for housing programs.</SUBJECT> <SECTNO>5.353</SECTNO> <SUBJECT>Housing programs: Procedure for development of pet rules.</SUBJECT> <SECTNO>5.356</SECTNO> <SUBJECT>Housing programs: Pet rule violation procedures.</SUBJECT> <SECTNO>5.359</SECTNO> <SUBJECT>Housing programs: Rejection of units by applicants for tenancy.</SUBJECT> <SECTNO>5.360</SECTNO> <SUBJECT>Housing programs: Additional lease provisions.</SUBJECT> <SECTNO>5.363</SECTNO> <SUBJECT>Housing programs: Protection of the pet.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Public Housing Programs</HD> <SECTNO>5.380</SECTNO> <SUBJECT>Public housing programs: Procedure for development of pet rules.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Definitions and Other General Requirements for Assistance Under the United States Housing Act of 1937</HD> <SECTNO>5.400</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>5.403</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.405</SECTNO> <SUBJECT>Basic eligibility; preference over single persons; and housing assistance limitation for single persons.</SUBJECT> <SECTNO>5.410</SECTNO> <SUBJECT>Selection preferences.</SUBJECT> <SECTNO>5.415</SECTNO> <SUBJECT>Federal preferences: general.</SUBJECT> <SECTNO>5.420</SECTNO> <SUBJECT>Federal preference: involuntary displacement.</SUBJECT> <SECTNO>5.425</SECTNO> <SUBJECT>Federal preference: substandard housing.</SUBJECT> <SECTNO>5.430</SECTNO> <SUBJECT>Federal preference: rent burden.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Restrictions on Assistance to Noncitizens</HD> <SECTNO>5.500</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>5.501</SECTNO> <SUBJECT>PHA election whether to comply with this subpart.</SUBJECT> <SECTNO>5.502</SECTNO> <SUBJECT>Requirements concerning documents.</SUBJECT> <SECTNO>5.504</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.506</SECTNO> <SUBJECT>General provisions.</SUBJECT> <SECTNO>5.508</SECTNO> <SUBJECT>Submission of evidence of citizenship or eligible immigration status.</SUBJECT> <SECTNO>5.510</SECTNO> <SUBJECT>Documents of eligible immigration status.</SUBJECT> <SECTNO>5.512</SECTNO> <SUBJECT>Verification of eligible immigration status.</SUBJECT> <SECTNO>5.514</SECTNO> <SUBJECT>Delay, denial, reduction or termination of assistance.</SUBJECT> <SECTNO>5.516</SECTNO> <SUBJECT>Availability of preservation assistance to mixed families and other families.</SUBJECT> <SECTNO>5.518</SECTNO> <SUBJECT>Types of preservation assistance available to mixed families and other families.</SUBJECT> <SECTNO>5.520</SECTNO> <SUBJECT>Proration of assistance.</SUBJECT> <SECTNO>5.522</SECTNO> <SUBJECT>Prohibition of assistance to noncitizen students.</SUBJECT> <SECTNO>5.524</SECTNO> <SUBJECT>Compliance with nondiscrimination requirements.</SUBJECT> <SECTNO>5.526</SECTNO> <SUBJECT>Protection from liability for responsible entities and State and local government agencies and officials.</SUBJECT> <SECTNO>5.528</SECTNO> <SUBJECT>Liability of ineligible tenants for reimbursement of benefits.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Income Limits, Annual Income, Adjusted Income, Rent, and Examinations for the Public Housing and Section 8 Programs</HD> <SECTNO>5.601</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> <SECTNO>5.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>5.605</SECTNO> <SUBJECT>Overall income eligibility for assistance.</SUBJECT> <SECTNO>5.607</SECTNO> <SUBJECT>Income limits for admission.</SUBJECT> <SECTNO>5.609</SECTNO> <SUBJECT>Annual income.</SUBJECT> <SECTNO>5.611</SECTNO> <SUBJECT>Adjusted income.</SUBJECT> <SECTNO>5.613</SECTNO> <SUBJECT>Total tenant payment.</SUBJECT> <SECTNO>5.615</SECTNO> <SUBJECT>Utility reimbursements.</SUBJECT> <SECTNO>5.617</SECTNO> <SUBJECT>Reexamination and verification.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <PRTPAGE P="26"/> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d), unless otherwise noted. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 5202, Feb. 9, 1996, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Generally Applicable Definitions and Federal Requirements; Waivers</HD> <SECTION> <SECTNO>§ 5.100</SECTNO> <SUBJECT>Definitions.</SUBJECT> The following definitions apply as noted in the respective program regulations: <E T="03">1937 Act</E> means the United States Housing Act of 1937 (42 U.S.C. 1437 <E T="03">et seq.</E>) <E T="03">ADA</E> means the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 <E T="03">et seq.</E>). <E T="03">ALJ</E> means an administrative law judge appointed to HUD pursuant to 5 U.S.C. 3105 or detailed to HUD pursuant to 5 U.S.C. 3344. <E T="03">Department</E> means the Department of Housing and Urban Development. <E T="03">Elderly Person</E> means an individual who is at least 62 years of age. <E T="03">Fair Housing Act</E> means title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988 (42 U.S.C. 3601 <E T="03">et seq.</E>). <E T="03">Fair Market Rent (FMR)</E> means the rent that would be required to be paid in the particular housing market area in order to obtain privately owned, decent, safe and sanitary rental housing of modest (non-luxury) nature with suitable amenities. This Fair Market Rent includes utilities (except telephone). Separate Fair Market Rents will be established by HUD for dwelling units of varying sizes (number of bedrooms) and will be published in the <E T="04">Federal Register</E> in accordance with part 888 of this title. <E T="03">General Counsel</E> means the General Counsel of HUD. <E T="03">Grantee</E> means the person or legal entity to which a grant is awarded and that is accountable for the use of the funds provided. <E T="03">HUD</E> means the same as <E T="03">Department.</E> <E T="03">Indian</E> means a person who is recognized as being an Indian or Alaska Native by an Indian Tribe, the Federal government, or any State. <E T="03">Indian Housing Authority (IHA)</E> means an entity that: (1) Is authorized to engage or assist in the development or operation of low-income housing for Indians under the 1937 Act; and (2) Is established: (i) By exercise of the power of self-government of an Indian Tribe independent of State law; or (ii) By operation of State law providing specifically for housing authorities for Indians, including regional housing authorities in the State of Alaska. <E T="03">NAHA</E> means the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 <E T="03">et seq.</E>). <E T="03">NEPA</E> means the National Environmental Policy Act of 1969 (42 U.S.C. 4321). <E T="03">NOFA</E> means Notice of Funding Availability. <E T="03">OMB</E> means the Office of Management and Budget. <E T="03">Organizational Unit</E> means the jurisdictional area of each Assistant Secretary, and each office head or field administrator reporting directly to the Secretary. <E T="03">Public Housing Agency (PHA)</E> means any State, county, municipality, or other governmental entity or public body, or agency or instrumentality of these entities, that is authorized to engage or assist in the development or operation of low-income housing under the 1937 Act. <E T="03">Section 8</E> means section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f). <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. <E T="03">URA</E> means the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4201-4655). </SECTION> <SECTION> <SECTNO>§ 5.105</SECTNO> <SUBJECT>Other Federal requirements.</SUBJECT> The following Federal requirements apply as noted in the respective program regulations: (a) <E T="03">Nondiscrimination and equal opportunity.</E> The Fair Housing Act (42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 <E T="03">et seq.</E>; Executive Order 11063, as amended by Executive Order 12259 (3 CFR, 1959-1963 Comp., p. 652 and 3 CFR, 1980 Comp., p. 307) (Equal Opportunity in Housing Programs) and implementing regulations at 24 CFR part 107; title VI of the Civil <PRTPAGE P="27"/>Rights Act of 1964 (42 U.S.C. 2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs) and implementing regulations at 24 CFR part 1; the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and implementing regulations at 24 CFR part 146; section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing regulations at 24 CFR part 8; section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and implementing regulations at 24 CFR part 135; Executive Order 11246, as amended by Executive Orders 11375, 11478, 12086, and 12107 (3 CFR, 1964-1965 Comp., p. 339; 3 CFR, 1966-1970 Comp., p. 684; 3 CFR, 1966-1970 Comp., p. 803; 3 CFR, 1978 Comp., p. 230; and 3 CFR, 1978 Comp., p. 264, respectively) (Equal Employment Opportunity Programs) and implementing regulations at 41 CFR chapter 60; Executive Order 11625, as amended by Executive Order 12007 (3 CFR, 1971-1975 Comp., p. 616 and 3 CFR, 1977 Comp., p. 139) (Minority Business Enterprises); Executive Order 12432 (3 CFR, 1983 Comp., p. 198) (Minority Business Enterprise Development); and Executive Order 12138, as amended by Executive Order 12608 (3 CFR, 1977 Comp., p. 393 and 3 CFR, 1987 Comp., p. 245) (Women's Business Enterprise). (b) <E T="03">Disclosure requirements.</E> The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 CFR part 87; and the requirements for funding competitions established by the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3531 <E T="03">et seq.</E>). (c) <E T="03">Debarred, suspended or ineligible contractors.</E> The prohibitions at 24 CFR part 24 on the use of debarred, suspended or ineligible contractors. (d) <E T="03">Drug-Free Workplace.</E> The Drug-Free Workplace Act of 1988 (41 U.S.C. 701 <E T="03">et seq.</E>) and HUD's implementing regulations at 24 CFR part 24. </SECTION> <SECTION> <SECTNO>§ 5.107</SECTNO> <SUBJECT>Audit requirements for non-profit organizations.</SUBJECT> Non-profit organizations subject to regulations in the part 200 and part 800 series of title 24 of the CFR shall comply with the audit requirements of revised OMB Circular A-133, “Audits of States, Local Governments, and Non-profit Organizations” (see 24 CFR 84.26). For HUD programs, a non-profit organization is the mortgagor or owner (as these terms are defined in the regulations in the part 200 and part 800 series) and not a related or affiliated organization or entity. <CITA>[62 FR 61617, Nov. 18, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.110</SECTNO> <SUBJECT>Waivers.</SUBJECT> Upon determination of good cause, the Secretary may, subject to statutory limitations, waive any provision of this title and delegate this authority in accordance with section 106 of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3535(q)). </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Disclosure and Verification of Social Security Numbers and Employer Identification Numbers; Procedures for Obtaining Income Information</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d), 3543, 3544, and 11901 <E T="03">et seq.</E> </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 11113, Mar. 18, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 5.210</SECTNO> <SUBJECT>Purpose, applicability, and Federal preemption.</SUBJECT> (a) <E T="03">Purpose.</E> This subpart B requires applicants for and participants in covered HUD programs to disclose, and submit documentation to verify, their Social Security Numbers (SSNs). This subpart B also enables HUD and HAs to obtain income information about applicants and participants in the covered programs through computer matches with State Wage Information Collection Agencies (SWICAs) and Federal agencies, in order to verify an applicant's or participant's eligibility for or level of assistance. The purpose of this subpart B is to enable HUD to decrease the incidence of fraud, waste, and abuse in the covered programs. (b) <E T="03">Applicability.</E> (1) This subpart B applies to mortgage and loan insurance and coinsurance and housing assistance programs contained in chapter II, subchapter B, and chapters VIII and IX of this title. (2) The information covered by consent forms described in this subpart involves income information from <PRTPAGE P="28"/>SWICAs, and wages, net earnings from self-employment, payments of retirement income, and unearned income as referenced at 26 U.S.C. 6103. In addition, consent forms may authorize the collection of other information from applicants and participants to determine eligibility or level of benefits, as provided in parts 813 and 913 of this title. (c) <E T="03">Federal preemption.</E> This subpart B preempts any State law, including restrictions and penalties, that governs the collection and use of income information to the extent State law is inconsistent with this subpart. </SECTION> <SECTION> <SECTNO>§ 5.212</SECTNO> <SUBJECT>Compliance with the Privacy Act and other requirements.</SUBJECT> (a) <E T="03">Compliance with the Privacy Act.</E> The collection, maintenance, use, and dissemination of SSNs, EINs, any information derived from SSNs and Employer Identification Numbers (EINs), and income information under this subpart shall be conducted, to the extent applicable, in compliance with the Privacy Act (5 U.S.C. 552a) and all other provisions of Federal, State, and local law. (b) <E T="03">Privacy Act notice.</E> All assistance applicants shall be provided with a Privacy Act notice at the time of application. All participants shall be provided with a Privacy Act notice at each annual income recertification. </SECTION> <SECTION> <SECTNO>§ 5.214</SECTNO> <SUBJECT>Definitions.</SUBJECT> In addition to the definitions in § 5.100, the following definitions apply to this subpart B: <E T="03">Assistance applicant.</E> Except as excluded pursuant to 42 U.S.C. 3543(b) and 3544(a)(2), this term means the following: (1) For any program under 24 CFR parts 215, 221, 236, 290, 880, 882, 886, 887, 891: A family or individual that seeks rental assistance under the program. (2) For any program under 24 CFR parts 904, 950, and 960: A prospective tenant or homebuyer seeking the benefit of the program. (3) For any program under 24 CFR part 235: A homeowner or cooperative member seeking homeownership assistance (including where the individual seeks to assume an existing mortgage). <E T="03">Computer match</E> means the automated comparison of data bases containing records about individuals. <E T="03">Computer matching agreement</E> means the agreement that describes the responsibilities and obligations of the parties participating in a computer match. <E T="03">Consent form</E> means any consent form approved by HUD to be signed by assistance applicants and participants for the purpose of obtaining income information from employers and SWICAs; return information from the Social Security Administration (including wages, net earnings from self-employment, and payments of retirement income), as referenced at 26 U.S.C. 6103(l)(7)(A); and return information for unearned income from the Internal Revenue Service, as referenced at 26 U.S.C. 6103(l)(7)(B). The consent forms expire after a certain time and may authorize the collection of other information from assistance applicants or participants to determine eligibility or level of benefits as provided in §§ 813.109, 913.109, and 950.315 of this title. <E T="03">Employer Identification Number (EIN)</E> means the nine-digit taxpayer identifying number that is assigned to an individual, trust, estate, partnership, association, company, or corporation pursuant to sections 6011(b), or corresponding provisions of prior law, or 6109 of the Internal Revenue Code. <E T="03">Entity applicant.</E> (1) Except as excluded pursuant to 42 U.S.C. 3543(b), 3544(a)(2), and paragraph (2) of this definition, this term means a partnership, corporation, or any other association or entity, other than an individual owner applicant, that seeks to participate as a private owner in any of the following: (i) The project-based assistance programs in 24 CFR parts 880, 882, 886, or 891; (ii) The programs in 24 CFR parts 215, 221, or 236; or (iii) The other mortgage and loan insurance programs in 24 CFR parts 201 through 267, except that the term “entity applicant” does not include a mortgagee or lender. (2) The term does not include a public entity, such as a PHA, IHA, or State Housing Finance Agency.<PRTPAGE P="29"/> <E T="03">Federal agency</E> means a department of the executive branch of the Federal Government. <E T="03">HA</E> is the collective term for PHAs and IHAs. <E T="03">Income information</E> means information relating to an individual's income, including: (1) All employment income information known to current or previous employers or other income sources that HUD or the processing entity determines is necessary for purposes of determining an assistance applicant's or participant's eligibility for, or level of assistance in, a covered program; (2) All information about wages, as defined in the State's unemployment compensation law, including any Social Security Number; name of the employee; quarterly wages of the employee; and the name, full address, telephone number, and, when known, Employer Identification Number of an employer reporting wages under a State unemployment compensation law; (3) With respect to unemployment compensation: (i) Whether an individual is receiving, has received, or has applied for unemployment compensation; (ii) The amount of unemployment compensation the individual is receiving or is entitled to receive; and (iii) The period with respect to which the individual actually received such compensation; (4) Unearned IRS income and self-employment, wages and retirement income as described in the Internal Revenue Code, 26 U.S.C. 6103(l)(7); and (5) Wage, social security (Title II), and supplemental security income (Title XVI) data obtaied from the Social Security Administration. <E T="03">Individual owner applicant.</E> Except as excluded pursuant to 42 U.S.C. 3543(b), 3544(a)(2), or paragraph (2) of this definition, this term means: (1) An individual who seeks to participate as a private owner in any of: (i) The project-based assistance programs in 24 CFR parts 880, 882, 886, 887, or 891; or (ii) The programs in 24 CFR parts 215, 221, 235 (without homeownership assistance), or 236, including where the individual seeks to assume an existing mortgage; or (2) An individual who: (i) Either: (A) Applies for a mortgage or loan insured or coinsured under any of the programs referred to in paragraph (1)(iii) of the definition of “entity applicant” in this section; or (B) Seeks to assume an existing mortgage or loan; and (ii) Intends to hold the mortgaged property in his or her individual right. <E T="03">IRS</E> means the Internal Revenue Service. <E T="03">Owner</E> means the person or entity (or employee of an owner) that leases an assisted dwelling unit to an eligible family and includes, when applicable, a mortgagee. <E T="03">Participant.</E> Except as excluded pursuant to 42 U.S.C. 3543(b) and 3544(a)(2), this term has the following meaning: (1) For 24 CFR parts 880, 882, 886, 887, and 891: A family receiving rental assistance under the program; (2) For 24 CFR parts 904, 950, 960: A tenant or homebuyer under the program; (3) For 24 CFR parts 215, 221, 236, and 290: A tenant or qualified tenant under any of the programs; and (4) For 24 CFR part 235: A homeowner or a cooperative member receiving homeownership assistance. <E T="03">Processing entity</E> means the person or entity that, under any of the programs covered under this subpart B, is responsible for making eligibility and related determinations and any income reexamination. <E T="03">Social Security Number (SSN)</E> means the nine-digit number that is assigned to a person by the Social Security Administration and that identifies the record of the person's earnings reported to the Social Security Administration. The term does not include a number with a letter as a suffix that is used to identify an auxiliary beneficiary. <E T="03">SSA</E> means the Social Security Administration. <E T="03">State Wage Information Collection Agency (SWICA)</E> means the State agency, including any Indian tribal agency, receiving quarterly wage reports from employers in the State, or an alternative system that has been determined by the Secretary of Labor to be <PRTPAGE P="30"/>as effective and timely in providing employment-related income and eligibility information. </SECTION> <SUBJGRP> <HD SOURCE="HED">Disclosure and Verification of Social Security Numbers and Employer Identification Numbers for Applicants and Participants in Certain HUD Programs</HD> <SECTION> <SECTNO>§ 5.216</SECTNO> <SUBJECT>Disclosure and verification of Social Security and Employer Identification Numbers.</SUBJECT> (a) <E T="03">Disclosure: assistance applicants.</E> Each assistance applicant must submit the following information to the processing entity when the assistant applicant's eligibility under the program involved is being determined: (1)(i) The complete and accurate SSN assigned to the assistant applicant and to each member of the assistant applicant's household who is at least six years of age; and (ii) The documentation referred to in paragraph (f)(1) of this section to verify each such SSN; or (2) If the assistance applicant or any member of the assistance applicant's household who is at least six years of age has not been assigned an SSN, a certification executed by the individual involved that meets the requirements of paragraph (j) of this section. (b) <E T="03">Disclosure: individual owner applicants.</E> Each individual owner applicant must submit the following information to the processing entity when the individual owner applicant's eligibility under the program involved is being determined: (1)(i) The complete and accurate SSNs assigned to the individual owner applicant and to each member of the individual owner applicant's household who will be obligated to pay the debt evidenced by the mortgage or loan documents; and (ii) The documentation referred to in paragraph (f)(1) of this section to verify the SSNs; or (2) If any person referred to in paragraph (b)(1)(i) of this section has not been assigned an SSN, a certification executed by the individual involved that meets the requirements of paragraph (j) of this section. (c) <E T="03">Disclosure: certain officials of entity applicants.</E> As explained more fully in HUD administrative instructions, each officer, director, principal stockholder, or other official of an entity applicant must submit the following information to the processing entity when the entity applicant's eligibility under the program involved is being determined: (1) The complete and accurate SSN assigned to each such individual; and (2) The documentation referred to in paragraph (f)(1) of this section to verify each SSN. (d) <E T="03">Disclosure: participants—</E>(1) <E T="03">Initial disclosure.</E> Each participant whose initial determination of eligibility under the program involved was begun before November 6, 1989, must submit the following information to the processing entity at the next regularly scheduled income reexamination for the program involved: (i)(A) The complete and accurate SSN assigned to the participant and to each member of the participant's family who is at least six years of age; and (B) The documentation referred to in paragraph (f)(1) of this section to verify each such SSN; or (ii) If the participant or any member of the participant's household who is at least six years of age has not been assigned an SSN, a certification executed by the individual(s) involved that meets the requirements of paragraph (j) of this section. (2) <E T="03">Subsequent disclosure.</E> Once a participant has disclosed and verified every SSN, or submitted any certification that an SSN has not been assigned, as provided by paragraph (a) of this section (for an assistance applicant) or paragraph (d)(1) (for a preexisting participant) of this section, the following rules apply: (i) If the participant's household adds a new member who is at least six years of age, the participant must submit to the processing entity, at the next interim or regularly scheduled income reexamination that includes the new members: (A) The complete and accurate SSNs assigned to each new member and the documentation referred to in paragraph (f)(1) of this section to verify the SSNs for each new member; or (B) If the new member has not been assigned an SSN, a certification executed by the individual involved that <PRTPAGE P="31"/>meets the requirements of paragraph (j) of this section. (ii) If the participant or any member of the participant's household who is at least six years of age obtains a previously undisclosed SSN, or has been assigned a new SSN, the participant must submit the following to the processing entity at the next regularly scheduled income reexamination: (A) The complete and accurate SSN assigned to the participant or household member involved; and (B) The documentation referred to in paragraph (f)(1) of this section to verify the SSN of each such individual. (iii) Additional SSN disclosure and verification requirements, including the nature of the disclosure and the verification required and the time and manner for making the disclosure and verification, may be specified in administrative instructions by: (A) HUD; and (B) In the case of the public housing program or the programs under parts 882 and 887 of this title, the HA. (e) <E T="03">Disclosure: entity applicants.</E> Each entity applicant must submit the following information to the processing entity when the entity applicant's eligibility under the program involved is being determined: (1) Any complete and accurate EIN assigned to the entity applicant; and (2) The documentation referred to in paragraph (f)(2) of this section to verify the EIN. (f) <E T="03">Required documentation</E>—(1) <E T="03">Social Security Numbers.</E> The documentation necessary to verify the SSN of an individual who is required to disclose his or her SSN under paragraphs (a) through (d) of this section is a valid SSN card issued by the SSA, or such other evidence of the SSN as HUD and, where applicable, the HA may prescribe in administrative instructions. (2) <E T="03">Employer Identification Numbers.</E> The documentation necessary to verify any EIN of an entity applicant that is required to disclose its EIN under paragraph (e) of this section is the official, written communication from the IRS assigning the EIN to the entity applicant, or such other evidence of the EIN as HUD may prescribe in administrative instructions. (g) <E T="03">Special documentation rules for assistance applicants and participants</E>—(1) <E T="03">Certification of inability to meet documentation requirements.</E> If an individual who is required to disclose his or her SSN under paragraph (a) (assistance applicants) of this section or paragraph (d) (participants) of this section is able to disclose the SSN, but cannot meet the documentation requirements of paragraph (f)(1) of this section, the assistance applicant or participant must submit to the processing entity the individual's SSN and a certification executed by the individual that the SSN submitted has been assigned to the individual, but that acceptable documentation to verify the SSN cannot be provided. (2) <E T="03">Acceptance or certification by processing entity.</E> Except as provided by paragraph (h) of this section, the processing entity must accept the certification referred to in paragraph (g)(1) of this section and continue to process the assistant applicant's or participant's eligibility to participate in the program involved. (3) <E T="03">Effect on assistance applicants.</E> If the processing entity determines that the assistance applicant is otherwise eligible to participate in the program, the assistance applicant may not become a participant in the program, unless it submits to the processing entity the documentation required under paragraph (f)(1) of this section within the time period specified in paragraph (g)(5) of this section. During such period, the assistance applicant will retain the position that it occupied in the program at the time the determination of eligibility was made, including its place on any waiting list maintained for the program, if applicable. (4) <E T="03">Effect on participants.</E> If the processing entity determines that the participant otherwise continues to be eligible to participate in the program, participation will continue, provided that the participant submits to the processing entity the documentation required under paragraph (f)(1) of this section within the time period specified in paragraph (g)(5) of this section. (5) <E T="03">Time for submitting documentation.</E> The time period referred to in paragraphs (g)(4) and (5) of this section is 60 <PRTPAGE P="32"/>calendar days from the date on which the certification referred to in paragraph (g)(1) of this section is executed, except that the processing entity may, in its discretion, extend this period for up to an additional 60 days if the individual is at least 62 years of age and is unable to submit the required documentation within the initial 60-day period. (h) <E T="03">Rejection of documentation or certification.</E> The processing entity may reject documentation referred to in paragraph (f) of this section, or a certification provided under paragraphs (a)(2), (b)(2), (d), or (g)(1) of this section, only for such reasons as HUD and the HA may prescribe in applicable administrative instructions. (i) <E T="03">Information on SSNs and EINs.</E> (1) Information regarding SSNs and SSN cards may be obtained by contacting the local SSA Office or consulting the SSA regulations at 20 CFR chapter III (see, particularly, part 422). (2) Information regarding EINs may be obtained by contacting the local office of the IRS or consulting the appropriate regulations for the IRS. (j) <E T="03">Form and manner of certifications.</E> The certifications referred to in paragraphs (a)(2), (b)(2), (d), and (g)(1) of this section must be in the form and manner that HUD and the HA prescribe in applicable administrative instructions. If an individual who is required to execute a certification is less than 18 years of age, the certification must be executed by his or her parent or guardian or, in accordance with administrative instructions, by the individual or another person. <APPRO>(Approved by the Office of Management and Budget under control number 2502-0204)</APPRO> </SECTION> <SECTION> <SECTNO>§ 5.218</SECTNO> <SUBJECT>Penalties for failing to disclose and verify Social Security and Employer Identification Numbers.</SUBJECT> (a) <E T="03">Denial of eligibility: assistance applicants and individual owner applicants.</E> The processing entity must deny the eligibility of an assistance applicant or individual owner applicant in accordance with the provisions governing the program involved, if the assistance or individual owner applicant does not meet the applicable SSN disclosure, documentation and verification, and certification requirements specified in § 5.216. (b) <E T="03">Denial of eligibility: entity applicants.</E> The processing entity must deny the eligibility of an entity applicant in accordance with the provisions governing the program involved; if: (1) The entity applicant does not meet the applicable EIN disclosure and verification requirements specified in § 5.216; or (2) Any of the officials of the entity applicant referred to in § 5.216(c) does not meet the applicable SSN disclosure, and documentation and verification requirements specified in § 5.216. (c) <E T="03">Termination of assistance or tenancy: participants.</E> The processing entity must terminate the assistance or tenancy, or both, of a participant, in accordance with the provisions governing the program involved, if the participant does not meet the applicable SSN disclosure, documentation and verification, and certification requirements specified in § 5.216. (d) <E T="03">Cross reference.</E> Individuals should consult the regulations and administrative instructions for the programs covered under this subpart B for further information on the use of SSNs and EINs in determinations regarding eligibility. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures for Obtaining Income Information About Applicants and Participants</HD> <SECTION> <SECTNO>§ 5.230</SECTNO> <SUBJECT>Consent by assistance applicants and participants.</SUBJECT> (a) <E T="03">Required consent by assistance applicants and participants.</E> Each member of the family of an assistance applicant or participant who is at least 18 years of age, and each family head and spouse regardless of age, shall sign one or more consent forms. (b) <E T="03">Consent authorization</E>—(1) <E T="03">To whom and when.</E> The assistance applicant shall submit the signed consent forms to the processing entity when eligibility under a covered program is being determined. A participant shall sign and submit consent forms at the next regularly scheduled income reexamination. Assistance applicants and participants shall be responsible for the signing and submitting of consent forms by each applicable family member.<PRTPAGE P="33"/> (2) <E T="03">Subsequent consent forms—special cases.</E> Participants are required to sign and submit consent forms at the next interim or regularly scheduled income reexamination under the following circumstances: (i) When any person 18 years or older becomes a member of the family; (ii) When a member of the family turns 18 years of age; and (iii) As required by HUD or the HA in administrative instructions. (c) <E T="03">Consent form—contents.</E> The consent form required by this section shall contain, at a minimum, the following: (1) A provision authorizing HUD and HAs to obtain from SWICAs any information or materials necessary to complete or verify the application for participation and to maintain continued assistance under a covered program; and (2) A provision authorizing HUD, HAs, or the owner responsible for determining eligibility for or the level of assistance to verify with previous or current employers income information pertinent to the assistance applicant's or participant's eligibility for or level of assistance under a covered program; (3) A provision authorizing HUD to request income return information from the IRS and the SSA for the sole purpose of verifying income information pertinent to the assistance applicant's or participant's eligibility or level of benefits; and (4) A statement that the authorization to release the information requested by the consent form expires 15 months after the date the consent form is signed. </SECTION> <SECTION> <SECTNO>§ 5.232</SECTNO> <SUBJECT>Penalties for failing to sign consent forms.</SUBJECT> (a) <E T="03">Denial or termination of benefits.</E> In accordance with the provisions governing the program involved, if the assistance applicant or participant, or any member of the assistance applicant's or participant's family, does not sign and submit the consent form as required in § 5.230, then: (1) The processing entity shall deny assistance to and admission of an assistance applicant; (2) Assistance to, and the tenancy of, a participant may be terminated. (b) <E T="03">Cross references.</E> Individuals should consult the regulations and administrative instructions for the programs covered under this subpart B for further information on the use of income information in determinations regarding eligibility. </SECTION> <SECTION> <SECTNO>§ 5.234</SECTNO> <SUBJECT>Requests for information from SWICAs and Federal agencies; restrictions on use.</SUBJECT> (a) <E T="03">Information available from SWICAs and Federal agencies—to whom and what.</E> Income information will generally be obtained through computer matching agreements between HUD and a SWICA or Federal agency, or between a HA and a SWICA, as described in paragraph (c) of this section. Certification that the applicable assistance applicants and participants have signed appropriate consent forms and have received the necessary Privacy Act notice is required, as follows: (1) When HUD requests the computer match, the processing entity shall certify to HUD; and (2) When the HA requests the computer match, the HA shall certify to the SWICA. (b) <E T="03">Restrictions on use of information.</E> The restrictions of 42 U.S.C. 3544(c)(2)(A) apply to the use by HUD or a HA of income information obtained from a SWICA. The restrictions of 42 U.S.C. 3544(c)(2)(A) and of 26 U.S.C. 6103(l)(7) apply to the use by HUD or a HA of income information obtained from the IRS or SSA. (c) <E T="03">Computer matching agreements.</E> Computer matching agreements shall specify the purpose and the legal authority for the match, and shall include a description of the records to be matched, a statement regarding disposition of information generated through the match, a description of the administrative and technical safeguards to be used in protecting the information obtained through the match, a description of the use of records, the restrictions on duplication and redisclosure, a certification, and the amount that will be charged for processing a request. <APPRO>(Approved by the Office of Management and Budget under control number 2508-0008)</APPRO> </SECTION> <SECTION> <PRTPAGE P="34"/> <SECTNO>§ 5.236</SECTNO> <SUBJECT>Procedures for termination, denial, suspension, or reduction of assistance based on information obtained from a SWICA or Federal agency.</SUBJECT> (a) <E T="03">Termination, denial, suspension, or reduction of assistance.</E> The provisions of 42 U.S.C. 3544(c)(2)(B) and (C) shall govern the termination, denial, suspension, or reduction of benefits for an assistance applicant or participant based on income information obtained from a SWICA or a Federal agency. Procedures necessary to comply with these provisions are provided in paragraph (b) of this section. (b) <E T="03">Procedures for independent verification.</E> (1) Any determination or redetermination of family income made on the basis of information verified in accordance with paragraph (b) of this section shall be carried out in accordance with the requirements and procedures applicable to the individual covered program. Independent verification of information obtained from a SWICA or a Federal agency may be: (i) By HUD; and (ii) By a HA, when the benefit to be provided to the assistance applicant or participant is under a program in parts 880, 882, 886, 887, 891, 904, 950, or 960 of this title, including when the HA is the contract administrator for the owner. (2) Upon receiving income information from a SWICA or a Federal agency, HUD or, when applicable, the HA shall compare the information with the information about a family's income that was: (i) Provided by the assistance applicant or participant to the HA; or (ii) Obtained by the owner (or mortgagee, as applicable) from the assistance applicant or participant or from his or her employer. (3) When the income information reveals an employer or other income source that was not disclosed by the assistance applicant or participant, or when the income information differs substantially from the information received from the assistance applicant or participant or from his or her employer: (i) HUD or, as applicable or directed by HUD, the HA shall request the undisclosed employer or other income source to furnish any information necessary to establish an assistance applicant's or participant's eligibility for or level of assistance in a covered program. This information shall be furnished in writing, as directed to: (A) HUD, with respect to programs under parts 215, 221, 235, 236, or 290 of this title; (B) The HA, with respect to programs under parts 880, 882, 886, 887, 891, 904, 950, or 960 of this title for which the HA is responsible for determining eligibility or level of benefits; or (C) The owner (or mortgagee, as applicable), with respect to programs under parts 215, 221, 235, 236, or 290 of this title, or when the owner is responsible under parts 880, 882, 886, 887, 891, 904, 950, or 960 of this title for determining eligibility or the level of assistance; or (ii) HUD or the HA may verify the income information directly with an assistance applicant or participant. Such verification procedures shall not include any disclosure of income information prohibited under paragraph (b)(6) of this section. (4) HUD and the HA shall not be required to pursue these verification procedures when the sums of money at issue are too small to raise an inference of fraud or justify the expense of independent verification and the procedures related to termination, denial, suspension, or reduction of assistance. (5) Based on the income information received from a SWICA or Federal agency, HUD or the HA, as appropriate, may inform an owner (or mortgagee) that an assistance applicant's or participant's eligibility for or level of assistance is uncertain and needs to be verified. The owner (or mortgagee) shall then confirm the assistance applicant's or participant's income information by checking the accuracy of the information with the employer or other income source, or directly with the family. (6) Nondisclosure of Income information. Neither HUD nor the HA may disclose income information obtained from a SWICA directly to an owner (unless a HA is the owner). Disclosure of income information obtained from the SSA or IRS is restricted under 26 U.S.C. § 6103(l)(7) and 42 U.S.C. 3544.<PRTPAGE P="35"/> (c) <E T="03">Opportunity to contest.</E> HUD, the HA, or the owner (or mortgagee, as applicable) shall promptly notify any assistance applicant or participant in writing of any adverse findings made on the basis of the information verified in accordance with paragraph (b) of this section. The assistance applicant or participant may contest the findings in the same manner as applies to other information and findings relating to eligibility factors under the applicable program. Termination, denial, suspension, or reduction of assistance shall be carried out in accordance with requirements and procedures applicable to the individual covered program, and shall not occur until the expiration of any notice period provided by the statute or regulations governing the program. </SECTION> <SECTION> <SECTNO>§ 5.238</SECTNO> <SUBJECT>Criminal and civil penalties.</SUBJECT> Persons who violate the provisions of 42 U.S.C. 3544 or 26 U.S.C. 6103(l)(7) with respect to the use and disclosure of income information may be subject to civil or criminal penalties under 42 U.S.C. 3544(c)(3), 26 U.S.C. 7213(a), or 18 U.S.C. 1905. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Pet Ownership for the Elderly or Persons With Disabilities</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1701r-1 and 3535(d). </AUTH> <SUBJGRP> <HD SOURCE="HED">General Requirements</HD> <SECTION> <SECTNO>§ 5.300</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) This subpart implements section 227 of the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701r-1) as it pertains to projects for the elderly or persons with disabilities under: (1) The housing programs administered by the Assistant Secretary for Housing-Federal Housing Commissioner; (2) Projects assisted under the programs contained in chapter VIII of this title 24; and (3) The public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the United States Housing Act of 1937 (42 U.S.C. 1437, <E T="03">et seq</E>.). This part does not apply to Indian housing administered under title II of that Act. (b) [Reserved] </SECTION> <SECTION> <SECTNO>§ 5.303</SECTNO> <SUBJECT>Exclusion for animals that assist persons with disabilities.</SUBJECT> (a) This subpart C does not apply to animals that are used to assist persons with disabilities. Project owners and PHAs may not apply or enforce any pet rules developed under this subpart against individuals with animals that are used to assist persons with disabilities. This exclusion applies to animals that reside in projects for the elderly or persons with disabilities, as well as to animals that visit these projects. (1) A project owner may require resident animals to qualify for this exclusion. Project owners must grant this exclusion if: (i) The tenant or prospective tenant certifies in writing that the tenant or a member of his or her family is a person with a disability; (ii) The animal has been trained to assist persons with that specific disability; and (iii) The animal actually assists the person with a disability. (2) [Reserved] (b) Nothing in this subpart C: (1) Limits or impairs the rights of persons with disabilities; (2) Authorizes project owners or PHAs to limit or impair the rights of persons with disabilities; or (3) Affects any authority that project owners or PHAs may have to regulate animals that assist persons with disabilities, under Federal, State, or local law. </SECTION> <SECTION> <SECTNO>§ 5.306</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Common household pet</E> means: (1) <E T="03">For purposes of Housing programs:</E> A domesticated animal, such as a dog, cat, bird, rodent (including a rabbit), fish, or turtle, that is traditionally kept in the home for pleasure rather than for commercial purposes. Common household pet does not include reptiles (except turtles). If this definition conflicts with any applicable State or local law or regulation defining the pets that may be owned or kept in dwelling accommodations, the State or local law or regulation shall apply. This definition shall not include animals that are used to assist persons with disabilities.<PRTPAGE P="36"/> (2) <E T="03">For purposes of Public Housing programs:</E> PHAs may define the term “common household pet” under § 5.318. <E T="03">Elderly or disabled family</E> means: (1) <E T="03">For purposes of Housing programs:</E> An elderly person, a person with a disability, or an elderly or disabled family for purposes of the program under which a project for the elderly or persons with disabilities is assisted or has its mortgage insured. (2) <E T="03">For purposes of Public Housing programs:</E> (i) An elderly person, a person with a disability, or an elderly or disabled family as defined in § 5.403 in subpart A of this part. (ii) [Reserved] <E T="03">Housing programs</E> means: (1) The housing programs administered by the Assistant Secretary for Housing-Federal Housing Commissioner; and (2) The programs contained in chapter VIII of this title 24 that assist rental projects that meet the definition of project for the elderly or persons with disabilities in this subpart C. <E T="03">Project for the elderly or persons with disabilities</E> means: (1) <E T="03">For purposes of Housing programs:</E> (i) A specific rental or cooperative multifamily property that, unless currently owned by HUD, is subject to a first mortgage, and: (A) That is assisted under statutory authority identified by HUD through notice; (B) That was designated for occupancy by elderly or disabled families when funds for the project were reserved, or when the commitment to insure the mortgage was issued or, of not then so designated, that is designated for such occupancy in an effective amendment to the regulatory agreement covering the project, made pursuant to the project owner's request, and that is assisted or insured under one of the programs identified by HUD through notice; or (C) For which preference in tenant selection is given for all units in the project to elderly or disabled families and that is owned by HUD or assisted under one of the programs identified by HUD through notice. (ii) This term does not include health and care facilities that have mortgage insurance under the National Housing Act. This term also does not include any of the project owner's other property that does not meet the criteria contained in any one of paragraphs (1)(i)(A) through (C) of this definition, even if the property is adjacent to or under joint or common management with such specific property. (2) <E T="03">For purposes of Public Housing programs:</E> Any project assisted under title I of the United States Housing Act of 1937 (other than under section 8 or 17 of the Act), including any building within a mixed-use project, that was designated for occupancy by the elderly or persons with disabilities at its inception or, although not so designated, for which the PHA gives preference in tenant selection (with HUD approval) for all units in the project (or for a building within a mixed-use project) to elderly or disabled families. For purposes of this part, this term does not include projects assisted the Low-Rent Housing Homeownership Opportunity program or under title II of the United States Housing Act of 1937. <E T="03">Project owner</E> means an owner (including HUD, where HUD is the owner) or manager of a project for the elderly or persons with disabilities, or an agent authorized to act for an owner or manager of such housing. <E T="03">Public Housing Agency (PHA)</E> is defined in § 5.100. <E T="03">Public Housing programs</E> means the public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the United States Housing Act of 1937. </SECTION> <SECTION> <SECTNO>§ 5.309</SECTNO> <SUBJECT>Prohibition against discrimination.</SUBJECT> Except as otherwise specifically authorized under this subpart no project owner or PHA that owns or manages a project for the elderly or persons with disabilities may: (a) As a condition of tenancy or otherwise, prohibit or prevent any tenant of such housing from owning common household pets or having such pets living in the tenant's dwelling unit; or (b) Restrict or discriminate against any person in connection with admission to, or continued occupancy of, such housing by reason of the person's ownership of common household pets <PRTPAGE P="37"/>or the presence of such pets in the person's dwelling unit. </SECTION> <SECTION> <SECTNO>§ 5.312</SECTNO> <SUBJECT>Notice to tenants.</SUBJECT> (a) During the development of pet rules as described in §§ 5.353 or 5.380, the project owner or PHA shall serve written notice on all tenants of projects for the elderly or persons with disabilities in occupancy at the time of service, stating that: (1) Tenants are permitted to own and keep common household pets in their dwelling units, in accordance with the pet rules (if any) promulgated under this subpart C; (2) Animals that are used to assist persons with disabilities are excluded from the requirements of this subpart C, as provided in § 5.303; (3) Tenants may, at any time, request a copy of any current pet rule developed under this subpart C (as well as any current proposed rule or proposed amendment to an existing rule); and (4) Tenants may request that their leases be amended under § 5.321 to permit common household pets. (b) The project owner or PHA shall provide to each applicant for tenancy when he or she is offered a dwelling unit in a project for the elderly or persons with disabilities, the written notice specified in paragraphs (a) (1), (2), and (3) of this section. (c) If a PHA chooses not to promulgate pet rules, the notice shall be served within 60 days of the effective date of this part. PHAs shall serve notice under this section in accordance with their normal service of notice procedures. </SECTION> <SECTION> <SECTNO>§ 5.315</SECTNO> <SUBJECT>Content of pet rules: general requirements.</SUBJECT> (a) <E T="03">Housing programs.</E> The project owner shall prescribe reasonable rules to govern the keeping of common household pets. The pet rules must include the mandatory rules described in § 5.350 and may, unless otherwise noted in this subpart C, include other discretionary provisions as provided in § 5.318. (b) <E T="03">Public Housing programs.</E> (1) PHAs may choose not to promulgate rules governing the keeping of common household pets or may include rules as provided in § 5.318. PHAs may elect to include provisions based on those in § 5.350. If they so choose, the PHAs may modify the provisions in § 5.350 in any manner consistent with this subpart C. (2) If PHAs choose to promulgate pet rules, tenants must be permitted to own and keep pets in their units in accordance with the terms and conditions of their leases, the provisions of this subpart C, and any applicable State or local law or regulation governing the owning or keeping of pets in dwelling accommodations. (3) PHAs that choose not to promulgate pet rules, shall not impose, by lease modification or otherwise, any requirement that is inconsistent with the provisions of this subpart C. (c) <E T="03">Use of discretion.</E> (1) This subpart C does not define with specificity the limits of the project owners’ or PHAs’ discretion to promulgate pet rules. Where a project owner or PHA has discretion to prescribe pet rules under this subpart C, the pet rules should be: (i) Reasonably related to furthering a legitimate interest of the project owner or PHA, such as the owner's or PHA's interest in providing a decent, safe, and sanitary living environment for existing and prospective tenants and in protecting and preserving the physical condition of the project and the owner's or PHA's financial interest in it; and (ii) Drawn narrowly to achieve the owner's or PHA's legitimate interests, without imposing unnecessary burdens and restrictions on pet owners and prospective pet owners. (2) Where a project owner or PHA has discretion to prescribe pet rules under this subpart C, the owner or PHA may vary the rules’ content among projects and within individual projects, based on factors such as the size, type, location, and occupancy of the project or its units, provided that the applicable rules are reasonable and do not conflict with any applicable State or local law or regulation governing the owning or keeping of pets in dwelling accommodations. (d) <E T="03">Conflict with State or local law.</E> The pet rules adopted by the project owner or PHA shall not conflict with applicable State or local law or regulations. If such a conflict may exist, the State <PRTPAGE P="38"/>and local law or regulations shall apply. </SECTION> <SECTION> <SECTNO>§ 5.318</SECTNO> <SUBJECT>Discretionary pet rules.</SUBJECT> Pet rules promulgated by project owners and PHAs may include, but are not limited to, consideration of the following factors: (a) <E T="03">Definitions of “common household pet”</E>—(1) <E T="03">For Public Housing programs.</E> The pet rules established by a PHA may contain a reasonable definition of a common household pet. (2) <E T="03">For Housing programs.</E> Project owners wishing to define “common household pet” in their pet rules must use the Housing programs definition of the term in § 5.306. (b) <E T="03">Density of tenants and pets.</E> (1)(i) The pet rules established under this section may take into account tenant and pet density. The pet rules may place reasonable limitations on the number of common household pets that may be allowed in each dwelling unit. In the case of group homes, the pet rules may place reasonable limitations on the number of common household pets that may be allowed in each home. (ii) <E T="03">For Housing programs.</E> Under these rules, project owners may limit the number of four-legged, warm-blooded pets to one pet in each dwelling unit or group home. (iii) Other than the limitations described in this paragraph (b)(1), the pet rules may not limit the total number of pets allowed in the project. (2) As used in paragraph (b)(1) of this section, the term “group home” means: (i) <E T="03">For purposes of Housing programs.</E> A small, communal living arrangement designed specifically for individuals who are chronically mentally ill, developmentally disabled, or physically disabled who require a planned program of continual supportive services or supervision (other than continual nursing, medical or psychiatric care). (ii) <E T="03">For purposes of Public Housing programs.</E> A dwelling or dwelling unit for the exclusive residential use of elderly persons or persons with disabilities who are not capable of living completely independently and who require a planned program of continual supportive services or supervision (other than continual nursing, medical or psychiatric care). (c) <E T="03">Pet size and pet type.</E> The pet rules may place reasonable limitations on the size, weight, and type of common household pets allowed in the project. (d) <E T="03">Potential financial obligations of tenants</E>—(1) <E T="03">Pet deposits.</E> The pet rules may require tenants who own or keep pets in their units to pay a refundable pet deposit. In the case of project owners, this pet deposit shall be limited to those tenants who own or keep cats or dogs in their units. This deposit is in addition to any other financial obligation generally imposed on tenants of the project. The project owner or PHA may use the pet deposit only to pay reasonable expenses directly attributable to the presence of the pet in the project, including (but not limited to) the cost of repairs and replacements to, and fumigation of, the tenant's dwelling unit and, for project owners, the cost of animal care facilities under § 5.363. The project owner or PHA shall refund the unused portion of the pet deposit to the tenant within a reasonable time after the tenant moves from the project or no longer owns or keeps a pet (or a cat or dog in the case of project owners) in the dwelling unit. (2) <E T="03">Housing programs: Maximum pet deposit.</E> (i) Pet deposits for the following tenants shall not exceed an amount periodically fixed by HUD through notice. (A) Tenants whose rents are subsidized (including tenants of a HUD-owned project, whose rents were subsidized before HUD acquired it) under one of the programs identified by HUD through notice. (B) Tenants who live in a project assisted (including tenants who live in a HUD-owned project that was assisted before HUD acquired it) under one of the programs identified by HUD through notice. (C) For all other tenants of projects for the elderly or persons with disabilities, the pet deposit shall not exceed one month's rent at the time the pet is brought onto the premises. (ii) In establishing the maximum amount of pet deposit under paragraph (d)(2)(i) of this section, HUD will consider factors such as: (A) Projected, estimated expenses directly attributable to the presence of pets in the project;<PRTPAGE P="39"/> (B) The ability of project owners to offset such expenses by use of security deposits or HUD-reimbursable expenses; and (C) The low income status of tenants of projects for the elderly or persons with disabilities. (iii) For pet deposits subject to paragraph (d)(2)(i)(A) of this section, the pet rules shall provide for gradual accumulation of the deposit by the pet owner through an initial payment not to exceed $50 when the pet is brought onto the premises, and subsequent monthly payments not to exceed $10 per month until the amount of the deposit is reached. (iv) For pet deposits subject to paragraphs (d)(2)(i)(B) and (C) of this section, the pet rules may provide for gradual accumulation of the deposit by the pet owner. (v) The project owner may (subject to the HUD-prescribed limits) increase the amount of the pet deposit by amending the house pet rules in accordance with § 5.353. (A) For pet deposits subject to paragraph (d)(2)(i)(A) of this section, the house pet rules shall provide for gradual accumulation of any such increase not to exceed $10 per month for all deposit amounts that are being accumulated. (B) [Reserved] (vi) Any pet deposit that is established within the parameters set forth by paragraph (d)(2) of this section shall be deemed reasonable for purposes of this subpart C. (3) <E T="03">Public Housing programs: Maximum pet deposit.</E> The maximum amount of pet deposit that may be charged by the PHA, on a per dwelling unit basis, shall not exceed the higher of the Total Tenant Payment (as defined in 24 CFR 913.102) or such reasonable fixed amount as the PHA may require. The pet rules may permit gradual accumulation of the pet deposit by the pet owner. (4) <E T="03">Housing programs: Waste removal charge.</E> The pet rules may permit the project owner to impose a separate waste removal charge of up to five dollars ($5) per occurrence on pet owners that fail to remove pet waste in accordance with the prescribed pet rules. Any pet waste removal charge that is within this five dollar ($5) limitation shall be deemed to be a reasonable amount for the purposes of this subpart C. (5) The pet deposit (for Housing and Public Housing programs) and waste removal charge (for Housing programs) are not part of the rent payable by the tenant. Except as provided in paragraph (d) of this section for Housing programs and, paragraph (d) of this section and 24 CFR 966.4(b) for Public Housing programs, project owners or PHAs may not prescribe pet rules that impose additional financial obligations on pet owners that are designed to compensate the project owner or PHA for costs associated with the presence of pets in the project, including (but not limited to) requiring pet owners: (i) To obtain liability or other insurance to cover damage caused by the pet; (ii) To agree to be strictly liable for all damages caused by the pet where this liability is not otherwise imposed by State or local law, or (iii) To indemnify the project owner for pet-related litigation and attorney's fees. (e) <E T="03">Standards of pet care.</E> The pet rules may prescribe standards of pet care and handling, but must be limited to those necessary to protect the condition of the tenant's unit and the general condition of the project premises, or to protect the health or safety of present tenants, project employees, and the public. The pet rules may not require pet owners to have any pet's vocal cords removed. Permitted rules may: (1) Bar pets from specified common areas (such as lobbies, laundry rooms, and social rooms), unless the exclusion will deny a pet reasonable ingress and egress to the project or building. (2) Require the pet owner to control noise and odor caused by a pet. (3) Housing programs: Project owners may also: (i) Require pet owners to have their dogs and cats spayed or neutered; and (ii) Limit the length of time that a pet may be left unattended in a dwelling unit. (f) <E T="03">Pet licensing.</E> The pet rules may require pet owners to license their pets in accordance with applicable State <PRTPAGE P="40"/>and local laws and regulations. (Failure of the pet rules to contain this requirement does not relieve the pet owner of responsibility for complying with applicable State and local pet licensing requirements.) (g) <E T="03">Public Housing programs: Designated pet areas.</E> (1) PHAs may designate buildings, floors of buildings, or sections of buildings as no-pet areas where pets generally may not be permitted. Similarly, the pet rules may designate buildings, floors of buildings, or sections of buildings for residency generally by pet-owning tenants. The PHA may direct such initial tenant moves as may be necessary to establish pet and no-pet areas. The PHA may not refuse to admit (or delay admission of) an applicant for tenancy on the grounds that the applicant's admission would violate a pet or no-pet area. The PHA may adjust the pet and no-pet areas or may direct such additional moves as may be necessary (or both) to accommodate such applicants for tenancy or to meet the changing needs of existing tenants. (2) Project owners may not designate pet areas in buildings in their pet rules. (h) <E T="03">Pets temporarily on the premises.</E> The pet rules may exclude from the project pets not owned by a tenant that are to be kept temporarily on the project premises. For the purposes of paragraph (h) of this section, pets are to be kept “temporarily” if they are to be kept in the tenant's dwelling accommodations for a period of less than 14 consecutive days and nights. HUD, however, encourages project owners and PHAs to permit the use of a visiting pet program sponsored by a humane society, or other nonprofit organization. </SECTION> <SECTION> <SECTNO>§ 5.321</SECTNO> <SUBJECT>Lease provisions.</SUBJECT> (a) <E T="03">Lease provisions.</E> (1) PHAs which have established pet rules and project owners shall ensure that the leases for all tenants of projects for the elderly or persons with disabilities: (i) State that tenants are permitted to keep common household pets in their dwelling units (subject to the provisions of this subpart and the pet rules); (ii) Shall incorporate by reference the pet rules promulgated by the project owner or PHA; (iii) Shall provide that the tenant agrees to comply with these rules; and (iv) Shall state that violation of these rules may be grounds for removal of the pet or termination of the pet owner's tenancy (or both), in accordance with the provisions of this subpart and applicable regulations and State or local law. (2) [Reserved] (b) Where a PHA has not established pet rules, the leases of all tenants of such projects shall not contain any provisions prohibiting the owning or keeping of common household pets, and shall state that owning and keeping of such pets will be subject to the general obligations imposed on the PHA and tenants in the lease and any applicable State or local law or regulation governing the owning or keeping of pets in dwelling accommodations. </SECTION> <SECTION> <SECTNO>§ 5.324</SECTNO> <SUBJECT>Implementation of lease provisions.</SUBJECT> The lease for each tenant of a project for the elderly or persons with disabilities who is admitted on or after the date on which this subpart C is implemented shall contain the lease provisions described in § 5.321 and, if applicable, § 5.360. The lease for each tenant who occupies a unit in such a project under lease on the date of implementation of this part shall be amended to include the provisions described in § 5.321 and, if applicable, § 5.360: (a) For Housing programs: (1) Upon renewal of the lease and in accordance with any applicable regulation; and (2) When a Housing program tenant registers a common household pet under § 5.350 (b) For Public Housing programs: (1) Upon annual reexamination of tenant income in accordance with any applicable regulation; and (2) When a Public Housing program tenant wishes to own or keep a common household pet in his or her unit. </SECTION> <SECTION> <SECTNO>§ 5.327</SECTNO> <SUBJECT>Nuisance or threat to health or safety.</SUBJECT> Nothing in this subpart C prohibits a project owner, PHA, or an appropriate <PRTPAGE P="41"/>community authority from requiring the removal of any pet from a project, if the pet's conduct or condition is duly determined to constitute, under the provisions of State or local law, a nuisance or a threat to the health or safety of other occupants of the project or of other persons in the community where the project is located. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Housing Programs</HD> <SECTION> <SECTNO>§ 5.350</SECTNO> <SUBJECT>Mandatory pet rules for housing programs.</SUBJECT> <E T="03">Mandatory rules.</E> The project owner must prescribe the following pet rules: (a) <E T="03">Inoculations.</E> The pet rules shall require pet owners to have their pets inoculated in accordance with State and local laws. (b) <E T="03">Sanitary standards.</E> (1) The pet rules shall prescribe sanitary standards to govern the disposal of pet waste. These rules may: (i) Designate areas on the project premises for pet exercise and the deposit of pet waste; (ii) Forbid pet owners from exercising their pets or permitting their pets to deposit waste on the project premises outside the designated areas; (iii) Require pet owners to remove and properly dispose of all removable pet waste; and (iv) Require pet owners to remove pets from the premises to permit the pet to exercise or deposit waste, if no area in the project is designated for such purposes. (2) In the case of cats and other pets using litter boxes, the pet rules may require the pet owner to change the litter (but not more than twice each week), may require pet owners to separate pet waste from litter (but not more than once each day), and may prescribe methods for the disposal of pet waste and used litter. (c) <E T="03">Pet restraint.</E> The pet rules shall require that all cats and dogs be appropriately and effectively restrained and under the control of a responsible individual while on the common areas of the project. (d) <E T="03">Registration.</E> (1) The pet rules shall require pet owners to register their pets with the project owner. The pet owner must register the pet before it is brought onto the project premises, and must update the registration at least annually. The project owner may coordinate the annual update with the annual reexamination of tenant income, if applicable. The registration must include: (i) A certificate signed by a licensed veterinarian or a State or local authority empowered to inoculate animals (or designated agent of such an authority) stating that the pet has received all inoculations required by applicable State and local law; (ii) Information sufficient to identify the pet and to demonstrate that it is a common household pet; and (iii) The name, address, and phone number of one or more responsible parties who will care for the pet if the pet owner dies, is incapacitated, or is otherwise unable to care for the pet. (2) The project owner may require the pet owner to provide additional information necessary to ensure compliance with any discretionary rules prescribed under § 5.318, and shall require the pet owner to sign a statement indicating that he or she has read the pet rules and agrees to comply with them. (3) The pet rules shall permit the project owner to refuse to register a pet if: (i) The pet is not a common household pet; (ii) The keeping of the pet would violate any applicable house pet rule; (iii) The pet owner fails to provide complete pet registration information or fails annually to update the pet registration; or (iv) The project owner reasonably determines, based on the pet owner's habits and practices, that the pet owner will be unable to keep the pet in compliance with the pet rules and other lease obligations. The pet's temperament may be considered as a factor in determining the prospective pet owner's ability to comply with the pet rules and other lease obligations. (4) The project owner may not refuse to register a pet based on a determination that the pet owner is financially unable to care for the pet or that the pet is inappropriate, based on the therapeutic value to the pet owner or the interests of the property or existing tenants.<PRTPAGE P="42"/> (5) The pet rules shall require the project owner to notify the pet owner if the project owner refuses to register a pet. The notice shall state the basis for the project owner's action and shall be served on the pet owner in accordance with the requirements of § 5.353(f)(1)(i) or (ii). The notice of refusal to register a pet may be combined with a notice of pet violation as required in § 5.356. </SECTION> <SECTION> <SECTNO>§ 5.353</SECTNO> <SUBJECT>Housing programs: Procedure for development of pet rules.</SUBJECT> (a) <E T="03">General.</E> Project owners shall use the procedures specified in this section to promulgate the pet rules referred to in §§ 5.318 and 5.350. (b) <E T="03">Development and notice of proposed pet rules.</E> Project owners shall develop proposed rules to govern the owning or keeping of common household pets in projects for the elderly or persons with disabilities. Notice of the proposed pet rules shall be served on each tenant of the project as provided in paragraph (f) of this section. The notice shall: (1) Include the text of the proposed rules; (2) State that tenants or tenant representatives may submit written comments on the rules; and (3) State that all comments must be submitted to the project owner no later than 30 days from the effective date of the notice of the proposed rules. (4) The notice may also announce the date, time, and place for a meeting to discuss the proposed rules (as provided in paragraph (c) of this section). (c) <E T="03">Tenant consultation.</E> Tenants or tenant representatives may submit written comments on the proposed pet rules to the project owner by the date specified in the notice of proposed rules. In addition, the owner may schedule one or more meetings with tenants during the comment period to discuss the proposed rules. Tenants and tenant representatives may make oral comments on the proposed rules at these meetings. The project owner must consider comments made at these meetings only if they are summarized, reduced to writing, and submitted to the project owner before the end of the comment period. (d) <E T="03">Development and notice of final pet rules.</E> The project owner shall develop the final rules after reviewing tenants’ written comments and written summaries of any owner-tenant meetings. The project owner may meet with tenants and tenant representatives to attempt to resolve issues raised by the comments. Subject to this subpart C, the content of the final pet rules, however, is within the sole discretion of the project owner. The project owner shall serve on each tenant of the project, a notice of the final pet rules as provided in paragraph (f) of this section. The notice must include the text of the final pet rules and must specify the effective date of the final pet rules. (e) <E T="03">Amendment of pet rules.</E> The project owner may amend the pet rules at any time by following the procedure for the development of pet rules specified in paragraphs (b) through (d) of this section. (f) <E T="03">Service of notice.</E> (1) The project owner must serve the notice required under this section by: (i) Sending a letter by first class mail, properly stamped and addressed to the tenant at the dwelling unit, with a proper return address; or (ii) Serving a copy of the notice on any adult answering the door at the tenant's leased dwelling unit, or if no adult responds, by placing the notice under or through the door, if possible, or else by attaching the notice to the door; or (iii) For service of notice to tenants of a high-rise building, posting the notice in at least three conspicuous places within the building and maintaining the posted notices intact and in legible form for 30 days. For purposes of paragraph (f) of this section, a high-rise building is a structure that is equipped with an elevator and has a common lobby. (2) For purposes of computing time periods following service of the notice, service is effective on the day that all notices are delivered or mailed, or in the case of service by posting, on the day that all notices are initially posted. </SECTION> <SECTION> <SECTNO>§ 5.356</SECTNO> <SUBJECT>Housing programs: Pet rule violation procedures.</SUBJECT> (a) <E T="03">Notice of pet rule violation.</E> If a project owner determines on the basis of objective facts, supported by written <PRTPAGE P="43"/>statements, that a pet owner has violated a rule governing the owning or keeping of pets; the project owner may serve a written notice of pet rule violation on the pet owner in accordance with § 5.353(f)(1)(i) or (ii). The notice of pet rule violation must: (1) Contain a brief statement of the factual basis for the determination and the pet rule or rules alleged to be violated; (2) State that the pet owner has 10 days from the effective date of service of the notice to correct the violation (including, in appropriate circumstances, removal of the pet) or to make a written request for a meeting to discuss the violation; (3) State that the pet owner is entitled to be accompanied by another person of his or her choice at the meeting; and (4) State that the pet owner's failure to correct the violation, to request a meeting, or to appear at a requested meeting may result in initiation of procedures to terminate the pet owner's tenancy. (b)(1) <E T="03">Pet rule violation meeting.</E> If the pet owner makes a timely request for a meeting to discuss an alleged pet rule violation, the project owner shall establish a mutually agreeable time and place for the meeting but no later than 15 days from the effective date of service of the notice of pet rule violation (unless the project owner agrees to a later date). At the pet rule violation meeting, the pet owner and project owner shall discuss any alleged pet rule violation and attempt to correct it. The project owner may, as a result of the meeting, give the pet owner additional time to correct the violation. (2) <E T="03">Notice for pet removal.</E> If the pet owner and project owner are unable to resolve the pet rule violation at the pet rule violation meeting, or if the project owner determines that the pet owner has failed to correct the pet rule violation within any additional time provided for this purpose under paragraph (b)(1) of this section, the project owner may serve a written notice on the pet owner in accordance with § 5.353(f)(1) (i) or (ii) (or at the meeting, if appropriate), requiring the pet owner to remove the pet. The notice must: (i) Contain a brief statement of the factual basis for the determination and the pet rule or rules that have been violated; (ii) State that the pet owner must remove the pet within 10 days of the effective date of service of the notice of pet removal (or the meeting, if notice is served at the meeting); and (iii) State that failure to remove the pet may result in initiation of procedures to terminate the pet owner's tenancy. (c) <E T="03">Initiation of procedures to remove a pet or terminate the pet owner's tenancy.</E> (1) The project owner may not initiate procedures to terminate a pet owner's tenancy based on a pet rule violation, unless: (i) The pet owner has failed to remove the pet or correct a pet rule violation within the applicable time period specified in this section (including any additional time permitted by the owner); and (ii) The pet rule violation is sufficient to begin procedures to terminate the pet owner's tenancy under the terms of the lease and applicable regulations. (2) The project owner may initiate procedures to remove a pet under § 5.327 at any time, in accordance with the provisions of applicable State or local law. </SECTION> <SECTION> <SECTNO>§ 5.359</SECTNO> <SUBJECT>Housing programs: Rejection of units by applicants for tenancy.</SUBJECT> (a) An applicant for tenancy in a project for the elderly or persons with disabilities may reject a unit offered by a project owner if the unit is in close proximity to a dwelling unit in which an existing tenant of the project owns or keeps a common household pet. An applicant's rejection of a unit under this section shall not adversely affect his or her application for tenancy in the project, including (but not limited to) his or her position on the project waiting list or qualification for any tenant selection preference. (b) Nothing in this subpart C imposes a duty on project owners to provide alternate dwelling units to existing or prospective tenants because of the proximity of common household pets to a particular unit or the presence of such pets in the project. </SECTION> <SECTION> <PRTPAGE P="44"/> <SECTNO>§ 5.360</SECTNO> <SUBJECT>Housing programs: Additional lease provisions.</SUBJECT> (a) <E T="03">Inspections.</E> In addition to other inspections permitted under the lease, the leases for all Housing program tenants of projects for the elderly or persons with disabilities may state that the project owner may, after reasonable notice to the tenant and during reasonable hours, enter and inspect the premises. The lease shall permit entry and inspection only if the project owner has received a signed, written complaint alleging (or the project owner has reasonable grounds to believe) that the conduct or condition of a pet in the dwelling unit constitutes, under applicable State or local law, a nuisance or a threat to the health or safety of the occupants of the project or other persons in the community where the project is located. (b) <E T="03">Emergencies.</E> (1) If there is no State or local authority (or designated agent of such an authority) authorized under applicable State or local law to remove a pet that becomes vicious, displays symptoms of severe illness, or demonstrates other behavior that constitutes an immediate threat to the health or safety of the tenancy as a whole, the project owner may place a provision in tenant leases permitting the project owner to enter the premises (if necessary), remove the pet, and take such action with respect to the pet as may be permissible under State and local law, which may include placing it in a facility that will provide care and shelter for a period not to exceed 30 days. (2) The lease shall permit the project owner to enter the premises and remove the pet or take such other permissible action only if the project owner requests the pet owner to remove the pet from the project immediately, and the pet owner refuses to do so, or if the project owner is unable to contact the pet owner to make a removal request. The lease may not contain a provision relieving the project owner from liability for wrongful removal of a pet. The cost of the animal care facility shall be paid as provided in § 5.363. (3) The project owner may place a provision in tenant leases permitting the project owner to enter the premises, remove the pet, and place the pet in a facility that will provide care and shelter, in accordance with the provisions of § 5.363. The lease may not contain a provision relieving the project owner from liability for wrongful removal of a pet. </SECTION> <SECTION> <SECTNO>§ 5.363</SECTNO> <SUBJECT>Housing programs: Protection of the pet.</SUBJECT> (a) If the health or safety of a pet is threatened by the death or incapacity of the pet owner, or by other factors that render the pet owner unable to care for the pet, the project owner may contact the responsible party or parties listed in the pet registration required under § 5.350(d)(1)(iii). (b) If the responsible party or parties are unwilling or unable to care for the pet, or the project owner, despite reasonable efforts, has been unable to contact the responsible party or parties, the project owner may contact the appropriate State or local authority (or designated agent of such an authority) and request the removal of the pet. (c) If there is no State or local authority (or designated agent of such an authority) authorized to remove a pet under these circumstances and the project owner has placed a provision in the lease agreement (as described in § 5.360(c)(2)), the project owner may enter the pet owner's unit, remove the pet, and place the pet in a facility that will provide care and shelter until the pet owner or a representative of the pet owner is able to assume responsibility for the pet, but not longer than 30 days. (d) The cost of the animal care facility provided under this section shall be borne by the pet owner. If the pet owner (or the pet owner's estate) is unable or unwilling to pay, the cost of the animal care facility may be paid from the pet deposit, if imposed under the pet rules. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pet Ownership Requirements for Public Housing Programs</HD> <SECTION> <SECTNO>§ 5.380</SECTNO> <SUBJECT>Public housing programs: Procedure for development of pet rules.</SUBJECT> PHAs that choose to promulgate pet rules shall consult with tenants of projects for the elderly or persons with disabilities administered by them with <PRTPAGE P="45"/>respect to their promulgation and subsequent amendment. PHAs shall develop the specific procedures governing tenant consultation, but these procedures must be designed to give tenants (or, if appropriate, tenant councils) adequate opportunity to review and comment upon the pet rules before they are issued for effect. PHAs are solely responsible for the content of final pet rules, but must give consideration to tenant comments. PHAs shall send to the responsible HUD field office, copies of the final (or amended) pet rules, as well as summaries or copies of all tenant comments received in the course of the tenant consultation. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Definitions and Other General Requirements for Assistance Under the United States Housing Act of 1937</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1437a and 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 5665, Feb. 13, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 5.400</SECTNO> <SUBJECT>Applicability.</SUBJECT> This part applies to public housing (other than Indian housing under 24 CFR part 950) and Section 8 programs. </SECTION> <SECTION> <SECTNO>§ 5.403</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) The terms <E T="03">displaced person, elderly person, near-elderly person, and person with disabilities</E> are defined at paragraph 3 of section 3(b) of the 1937 Act (42 U.S.C. 1437a(b)(3)). (b) In addition to the terms listed in paragraph (a) of this section, the following definitions apply: <E T="03">Applicant</E> means a person or a family that has applied for housing assistance. <E T="03">Disabled family</E> means a family whose head, spouse, or sole member is a person with disabilities; or two or more persons with disabilities living together; or one or more persons with disabilities living with one or more live-in aides. <E T="03">Displaced family</E> means a family in which each member, or whose sole member, is a person displaced by governmental action, or a person whose dwelling has been extensively damaged or destroyed as a result of a disaster declared or otherwise formally recognized pursuant to Federal disaster relief laws. <E T="03">Elderly family</E> means a family whose head, spouse, or sole member is a person who is at least 62 years of age; or two or more persons who are at least 62 years of age living together; or one or more persons who are at least 62 years of age living with one or more live-in aides. <E T="03">Family</E> includes but is not limited to: (1) A family with or without children (the temporary absence of a child from the home due to placement in foster care shall not be considered in determining family composition and family size); (2) An elderly family; (3) A near-elderly family; (4) A disabled family; (5) A displaced family; (6) The remaining member of a tenant family; and (7) A single person who is not an elderly or displaced person, or a person with disabilities, or the remaining member of a tenant family. <E T="03">Live-in aide</E> means a person who resides with one or more elderly persons, or near-elderly persons, or persons with disabilities, and who: (1) Is determined to be essential to the care and well-being of the persons; (2) Is not obligated for the support of the persons; and (3) Would not be living in the unit except to provide the necessary supportive services. <E T="03">Near-elderly family</E> means a family whose head, spouse, or sole member is a person who is at least 50 years of age but below the age of 62; or two or more persons, who are at least 50 years of age but below the age of 62, living together; or one or more persons who are at least 50 years of age but below the age of 62 living with one or more live-in aides. </SECTION> <SECTION> <SECTNO>§ 5.405</SECTNO> <SUBJECT>Basic eligibility; preference over single persons; and housing assistance limitation for single persons.</SUBJECT> (a) <E T="03">Basic eligibility</E>. An applicant must meet all of the eligibility requirements of the housing assistance for which an application is made in order to obtain the housing assistance. At a minimum, the applicant must be a family, and <PRTPAGE P="46"/>must be income-eligible. Eligible applicants include single persons who are not elderly persons, or displaced persons, or persons with disabilities. (b) <E T="03">Preference over single persons</E>. An applicant that is a one- or two-person elderly, disabled or displaced family, must be given a preference over an applicant that is a single person who is not an elderly or displaced person, or a person with disabilities, regardless of the applicant's Federal or local preferences. (c) <E T="03">Housing assistance limitation for single persons</E>. A single person who is not an elderly or displaced person, or a person with disabilities, or the remaining member of a tenant family may not be provided: (1) For public housing and other project-based assistance, a housing unit with two or more bedrooms; or (2) For tenant-based assistance, housing assistance for which the family unit size as determined by the HA subsidy standard exceeds the one bedroom level. (d) This section shall not apply to the Section 8 Moderate Rehabilitation Program for Single Room Occupancy Dwellings for Homeless Individuals set forth at 24 CFR part 882, subpart H. <CITA>[61 FR 5665, Feb. 13, 1996, as amended at 61 FR 13616, Mar. 27, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.410</SECTNO> <SUBJECT>Selection preferences.</SUBJECT> (a) <E T="03">Applicability.</E> The selection preferences that are described in this part are applicable to public housing and housing assisted under the Section 8 Housing Assistance Payments program. (Corresponding provisions applicable to the Indian housing program are found in 24 CFR part 950.) These preferences are administered by the entity responsible for admission functions in the programs covered (“responsible entity”), i.e., the public housing agency (“HA”) in the public housing and Section 8 Certificate/Voucher and Moderate Rehabilitation programs and the owner in all other Section 8 programs. (b) <E T="03">Types of preference.</E> There are three types of admission preferences: (1) “Federal preferences” are admission preferences for three categories of families, as prescribed in 42 U.S.C. 1437d(c)(4)(A), 1437f(d)(1)(A), 1437f(o)(3), and 1437f note. Federal preference is given for selection of families that are: (i) Involuntarily displaced; (ii) Living in substandard housing (including families that are homeless or living in a shelter for the homeless); or (iii) Paying more than 50 percent of family income for rent. (2) “Ranking preferences” are preferences that may be established by the responsible entity to use in selecting among applicants that qualify for federal preferences. (3) “Local preferences” are preferences for use in selecting among applicants without regard to their federal preference status. (See 42 U.S.C. 1437d(c)(4)(A), 1437f(d)(1)(A), 1437f(o)(3), and 1437f note.) (c) <E T="03">System.</E> In the Section 8 programs other than the Certificate/Voucher and Moderate Rehabilitation programs, the owner must establish a system for selection of applicants from the waiting list that includes the following: (1) How the federal preferences will be used; (2) How any ranking preferences will be used; (3) How any local preferences will be used; and (4) How any residency preference will be used. (d) <E T="03">Use of preference in selection process</E>—(1) <E T="03">Factors other than federal and local preferences</E>—(i) <E T="03">Characteristics of the unit.</E> For developments administered under the Section 8 programs and for public housing, the responsible entity may, in selecting a family for a particular unit, match other characteristics of the applicant family with the type of unit available, e.g., number of bedrooms. In selection of a family for a unit that has special accessibility features, the responsible entity must give preference to families that include persons with disabilities who can benefit from those features of the unit (see 24 CFR 8.27 and 24 CFR 100.202(c)(3)). Also, in selection of a family for a unit in a mixed population project, the responsible entity will give preference to elderly families and disabled families (see subpart D of part 960 or § 880.612a or § 881.612a of this title). (ii) <E T="03">Singles preference.</E> See § 5.405.<PRTPAGE P="47"/> (2) <E T="03">Local preference admissions.</E> (i) Local preferences may be adopted or amended by an HA to respond to local housing needs and priorities after the HA has conducted a public hearing. (ii) For Section 8 programs other than the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs operated under 24 CFR part 982, 983, and 882, respectively, if the owner wants to use preferences to select among applicants without regard to their federal preference status, it must use the local preference system adopted for use in the Section 8 Certificate/Voucher programs by the housing agency for the jurisdiction. If there is more than one HA for the jurisdiction, the owner shall use the local preference system of the HA for the lowest level of government that has jurisdiction where the project is located. For the public housing program, the HA may use a local preference system it adopts for that program. (iii) In the Section 8 programs other than the Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs operated under 24 CFR parts 982, 983 and 882, respectively, before an owner implements the HA's local preferences, the owner must receive approval from the HUD Field Office. HUD shall review these preferences to ensure that they are applicable to any tenant eligibility limitations for the subject housing and that they are consistent with HUD requirements pertaining to nondiscrimination and the Affirmative Fair Housing Marketing objectives. If HUD determines that the local preferences are in violation of those requirements, the owner will not be permitted to admit applicants on the basis of any local preferences. (iv) In any year, the number of families given preference in admission pursuant to a local preference over families with a federal preference may not exceed the local preference limit. “Local preference limit” means the following: (A) For an HA's Section 8 Certificate/Voucher program operated under 24 CFR part 982, ten percent of annual waiting list admissions; (B) For an HA's public housing program, fifty percent of annual admissions; (C) For an HA's Section 8 Moderate Rehabilitation program, thirty percent of annual admissions; (D) For Section 8 New Construction, Substantial Rehabilitation, and Loan Management/Property Disposition projects, thirty percent of annual admissions to each project; and (E) For the Section 8 Project-Based Certificate program, thirty percent of total annual waiting list admissions to the HA's Project-Based Certificate program (including admissions pursuant to 24 CFR 983.203(c)(3)). (3) <E T="03">Prohibition of preference if applicant was evicted for drug-related criminal activity.</E> With respect to the Section 8 Certificate, Voucher, Loan Management, and Property Disposition programs and the public housing program, the HA may not give a preference (federal preference, local preference, or ranking preference) to an applicant if any member of the family is a person who was evicted during the past three years from housing assisted under a 1937 Housing Act program because of drug-related criminal activity. However, the HA may give an admission preference in any of the following cases: (i) If the HA determines that the evicted person has successfully completed a rehabilitation program approved by the HA; (ii) If the HA determines that the evicted person clearly did not participate in or know about the drug-related criminal activity; or (iii) If the HA determines that the evicted person no longer participates in any drug-related criminal activity. (4) <E T="03">Retention of federal preference status.</E> With respect to determining the preference status of an applicant for the Section 8 Certificate/Voucher programs, an applicant who is receiving tenant-based assistance under the HOME program (24 CFR part 92) and an applicant who resides in public or Indian housing of the same HA (and was on the tenant-based program waiting list when admitted to the HA's public or Indian housing on or after April 26, 1993), the HA determines whether the <PRTPAGE P="48"/>applicant qualifies for federal preference based on the situation of the applicant at the time the applicant began to receive tenant-based assistance under the HOME program or was admitted to the HA's public or Indian housing program (beginning of initial public or Indian housing lease). (e) <E T="03">Income-based admission.</E> (1) In public housing, the HA may only give preference to select a relatively higher income family for admission if the preference is pursuant to a “local preference” admission. (For other income-related restrictions on selection, see 24 CFR 913.105.) (2) In Section 8 programs, the responsible entity may not select a family for admission in an order different from the order on the waiting list for the purpose of selecting a relatively higher income family for admission. (f) <E T="03">Informing applicants about admission preferences.</E> (1) The responsible entity must inform all applicants about available preferences and must give applicants an opportunity to show that they qualify for available preferences (federal preference, ranking preference, or local preference). (2) If the responsible entity determines that the notification to all applicants on a waiting list required by paragraph (f)(1) of this section is impracticable because of the length of the list, the responsible entity may provide this notification to fewer than all applicants on the list at any given time. The responsible entity must, however, have notified a sufficient number of applicants at any given time that, on the basis of the entity's determination of the number of applicants on the waiting list who already claim a federal preference and the anticipated number of project admissions: (i) There is an adequate pool of applicants who are likely to qualify for a federal preference; and (ii) It is unlikely that, on the basis of the responsible entity's framework for applying the preferences under paragraph (c) of this section and the federal preferences claimed by those already on the waiting list, any applicant who has not been so notified would receive assistance before those who have received notification. (g) <E T="03">Notice and opportunity for a meeting where preference is denied.</E> (1) If the responsible entity determines that an applicant does not qualify for a federal preference, ranking preference, or local preference claimed by the applicant, the responsible entity must promptly give the applicant written notice of the determination. The notice must contain a brief statement of the reasons for the determination, and state that the applicant has the right to meet with a representative of the responsible entity to review the determination. The meeting may be conducted by any person or persons designated by the responsible entity, who may be an officer or employee of the responsible entity, including the person who made or reviewed the determination or a subordinate employee. (2) The applicant may exercise other rights if the applicant believes that the applicant has been discriminated against on the basis of race, color, religion, sex, national origin, age, disability or familial status. (h) <E T="03">Residency preferences.</E> A “residency preference” is a preference for admission of families that reside anywhere in a specified “residency preference area.” A residency preference may be used as a ranking or local preference. (1) <E T="03">Section 8 programs other than Certificate/Voucher and Project-Based Certificate.</E> In these developments, local residency requirements are prohibited. (2) <E T="03">Section 8 Certificate/Voucher and Project-Based Certificate programs.</E> Any residency preference must be approved by HUD. (i) A county or municipality may be used as a residency preference area. (ii) An area smaller than a county or municipality may not be used as a residency preference area. (3) <E T="03">All projects.</E> With respect to any residency preference, applicants who are working or who have been notified that they are hired to work in the residency preference area shall be treated as residents of the residency preference area. A residency preference may not be based on how long the applicant has resided in or worked in the residency preference area. (i) <E T="03">Nondiscrimination.</E> (1) Any selection preferences must be established <PRTPAGE P="49"/>and administered in accordance with the following authorities: (i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) and the implementing regulations at 24 CFR part 1; (ii) The Fair Housing Act (42 U.S.C. 3601-3619) and the implementing regulations at 24 CFR parts 100, 108, 109, and 110; (iii) Executive Order 11063 on Equal Opportunity in Housing and the implementing regulations at 24 CFR part 107; (iv) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the implementing regulations at 24 CFR part 8; (v) The Age Discrimination Act of 1975 (42 U.S.C. 6101-6107) and the implementing regulations at 24 CFR part 146; and (vi) The Americans with Disabilities Act (42 U.S.C. 12101-12213) to the extent applicable. (2) Such preferences also must be consistent with HUD's affirmative fair housing objectives and (where applicable) the owner's HUD-approved affirmative fair housing marketing plan. <APPRO>(Approved by the Office of Management and Budget under OMB control numbers 2577-0105 and 2502-0372)</APPRO> <CITA>[61 FR 9041, Mar. 6, 1996, as amended at 62 FR 27125, May 16, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.415</SECTNO> <SUBJECT>Federal preferences: general.</SUBJECT> (a) <E T="03">Definitions.</E> The definitions of these preference categories stated in §§ 5.420, 5.425, and 5.430 must be used by the responsible entity, except that an HA may use its own alternative definitions if they have been approved by HUD. (b) <E T="03">Ranking preferences: selection among federal preference holders.</E> The responsible entity's system of administering the federal preferences (its admission policy, in the case of the Section 8 Certificate/Voucher programs) may provide for use of ranking preference for selecting among applicants who qualify for federal preference. (1) The responsible entity may give preference to working families—so long as the prohibition of § 5.410 against selection based on income and the nondiscrimination provisions that protect against discrimination on the basis of age or disability are not violated. (If a responsible entity adopts such a preference, it may not give greater weight to an applicant based on the amount of employment income, and an applicant household shall be given the benefit of the preference if the head and spouse, or sole member, are age 62 or older or are receiving social security disability, supplemental security income disability benefits, or any other payments based on an individual's inability to work.) A responsible entity may give preference to graduates of, as well as active participants in, educational and training programs that are designed to prepare individuals for the job market. The responsible entity also may use the housing agency's “local preferences” for the Section 8 Certificate and Voucher programs to rank federal preference holders. (2) The ranking preferences may give different weight to the federal preferences, through such means as: (i) Aggregating the federal preferences (e.g., provide that two federal preferences outweigh one); (ii) Giving greater weight to holders of a particular category of federal preference; or (iii) Giving greater weight to a federal preference holder who fits a particular category of federal preference. (c) <E T="03">Qualifying for a federal preference</E>—(1) <E T="03">Certification of preference.</E> An applicant may claim qualification for a federal preference by certifying to the responsible entity that the family qualifies for federal preference. The responsible entity must accept this certification, unless the responsible entity verifies that the applicant is not qualified for federal preference. (2) <E T="03">Verification of preference.</E> (i) Before admitting an applicant on the basis of a federal preference, the responsible entity must require the applicant to provide information needed by the responsible entity to verify that the applicant qualifies for a federal preference because of the applicant's current status. The applicant's current status must be determined without regard to whether there has been a change in the applicant's qualification for a federal preference between the time of application and selection for admission, including a change from one federal preference category to another.<PRTPAGE P="50"/> (ii) In the case of Section 8 programs other than the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs, the owner must use the verification procedures specified in § 5.420(c) (involuntary displacement); § 5.425(c) (substandard housing); and § 5.430(b) (rent burden). In the case of the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs and the public housing program, the HA may adopt its own verification procedure. (iii) Once the responsible entity has verified an applicant's qualification for a federal preference, the responsible entity need not require the applicant to provide information needed by the responsible entity to verify such qualification again unless: (A) The responsible entity determines reverification is desirable because a long time has passed since verification; or (B) The responsible entity has reasonable grounds to believe that the applicant no longer qualifies for a federal preference. (3) <E T="03">Effect of current residence in assisted housing.</E> No applicant is to be denied a federal preference for which the family otherwise qualifies on the basis that the applicant already resides in assisted housing; for example, the actual condition of the housing unit must be considered, or the possibility of involuntary displacement resulting from domestic violence must be evaluated. (d) <E T="03">Approval of special conditions satisfying preference definitions.</E> With respect to Section 8 programs other than the Section 8 Certificate/Voucher, Project-Based Certificate and Moderate Rehabilitation programs, HUD may specify additional conditions under which the federal preferences, as described in §§ 5.420, 5.425, and 5.430, can be satisfied. In such cases, appropriate certification of qualification must be provided. (See HUD Handbook 4350.3, which is available at HUD field offices.) <APPRO>(Approved by the Office of Management and Budget under OMB control number 2502-0372 and 2577-0105)</APPRO> <CITA>[61 FR 9043, Mar. 6, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.420</SECTNO> <SUBJECT>Federal preference: involuntary displacement.</SUBJECT> (a) <E T="03">How applicant qualifies for displacement preference.</E> (See § 5.415(a)(2) and (c)(2)(ii) for applicability of this section to the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs and the public housing program.) (1) An applicant qualifies for a federal preference on the basis of involuntary displacement if either of the following apply: (i) The applicant has been involuntarily displaced and is not living in standard, permanent replacement housing; or (ii) The applicant will be involuntarily displaced within no more than six months from the date of preference status certification by the family or verification by the responsible entity. (2)(i) “Standard, permanent replacement housing” is housing: (A) That is decent, safe, and sanitary; (B) That is adequate for the family size; and (C) That the family is occupying pursuant to a lease or occupancy agreement. (ii) “Standard, permanent replacement housing” does not include: (A) Transient facilities, such as motels, hotels, or temporary shelters for victims of domestic violence or homeless families; or (B) In the case of domestic violence, the housing unit in which the applicant and the applicant's spouse or other member of the household who engages in such violence live. (b) <E T="03">Meaning of involuntary displacement.</E> An applicant is or will be involuntarily displaced if the applicant has vacated or will have to vacate the unit where the applicant lives because of one or more of the following: (1) <E T="03">Displacement by disaster.</E> An applicant's unit is uninhabitable because of a disaster, such as a fire or flood. (2) <E T="03">Displacement by government action.</E> Activity carried on by an agency of the United States or by any State or local governmental body or agency in connection with code enforcement or a public improvement or development program.<PRTPAGE P="51"/> (3) <E T="03">Displacement by action of housing owner.</E> (i) Action by a housing owner forces the applicant to vacate its unit. (ii) An applicant does not qualify as involuntarily displaced because action by a housing owner forces the applicant to vacate its unit unless: (A) The applicant cannot control or prevent the owner's action; (B) The owner action occurs although the applicant met all previously imposed conditions of occupancy; and (C) The action taken by the owner is other than a rent increase. (iii) To qualify as involuntarily displaced because action by a housing owner forces the applicant to vacate its unit, reasons for an applicant's having to vacate a housing unit include, but are not limited to, conversion of an applicant's housing unit to non-rental or non-residential use; closing of an applicant's housing unit for rehabilitation or for any other reason; notice to an applicant that the applicant must vacate a unit because the owner wants the unit for the owner's personal or family use or occupancy; sale of a housing unit in which an applicant resides under an agreement that the unit must be vacant when possession is transferred; or any other legally authorized act that results or will result in the withdrawal by the owner of the unit or structure from the rental market. (iv) Such reasons do not include the vacating of a unit by a tenant as a result of actions taken by the owner because the tenant refuses: (A) To comply with HUD program policies and procedures for the occupancy of under-occupied or overcrowded units; or (B) To accept a transfer to another housing unit in accordance with a court decree or in accordance with policies and procedures under a HUD-approved desegregation plan. (4) <E T="03">Displacement by domestic violence.</E> (i) An applicant is involuntarily displaced if: (A) The applicant has vacated a housing unit because of domestic violence; or (B) The applicant lives in a housing unit with a person who engages in domestic violence. (ii) “Domestic violence” means actual or threatened physical violence directed against one or more members of the applicant family by a spouse or other member of the applicant's household. (iii) To qualify as involuntarily displaced because of domestic violence: (A) The responsible entity must determine, in accordance with HUD's administrative instructions, that the domestic violence occurred recently or is of a continuing nature; and (B) The applicant must certify that the person who engaged in such violence will not reside with the applicant family unless the responsible entity has given advance written approval. If the family is admitted, the responsible entity may deny or terminate assistance to the family for breach of this certification. (5) <E T="03">Displacement to avoid reprisals.</E> (i) An applicant family is involuntarily displaced if: (A) Family members provided information on criminal activities to a law enforcement agency; and (B) Based on a threat assessment, a law enforcement agency recommends rehousing the family to avoid or minimize a risk of violence against family members as a reprisal for providing such information. (ii) The responsible entity may establish appropriate safeguards to conceal the identity of families requiring protection against such reprisals. (6) <E T="03">Displacement by hate crimes.</E> (i) An applicant is involuntarily displaced if: (A) One or more members of the applicant's family have been the victim of one or more hate crimes; and (B) The applicant has vacated a housing unit because of such crime, or the fear associated with such crime has destroyed the applicant's peaceful enjoyment of the unit. (ii) “Hate crime” means actual or threatened physical violence or intimidation that is directed against a person or his or her property and that is based on the person's race, color, religion, sex, national origin, handicap, or familial status. (iii) The responsible entity must determine, in accordance with HUD's administrative instructions, that the <PRTPAGE P="52"/>hate crime involved occurred recently or is of a continuing nature. (7) <E T="03">Displacement by inaccessibility of unit.</E> An applicant is involuntarily displaced if: (i) A member of the family has a mobility or other impairment that makes the person unable to use critical elements of the unit; and (ii) The owner is not legally obligated to make the changes to the unit that would make critical elements accessible to the disabled person as a reasonable accommodation. (8) <E T="03">Displacement because of HUD disposition of multifamily project.</E> Involuntary displacement includes displacement because of disposition of a multifamily rental housing project by HUD under section 203 of the Housing and Community Development Amendments of 1978. (c) <E T="03">Involuntary displacement preference: Verification.</E> A private owner's verification of an applicant's involuntary displacement is established by the following documentation: (1) <E T="03">Displacement by disaster.</E> Certification, in a form prescribed by the Secretary, from a unit or agency of government that an applicant has been or will be displaced as a result of a disaster that results in the uninhabitability of an applicant's unit. (2) <E T="03">Displacement by government action.</E> Certification, in a form prescribed by the Secretary, from a unit or agency of government that an applicant has been or will be displaced by activity carried on by an agency of the United States or by any State or local governmental body or agency in connection with code enforcement or a public improvement or development program. (3) <E T="03">Displacement by owner action.</E> Certification, in a form prescribed by the Secretary, from an owner or owner's agent that an applicant had to or will have to vacate a unit by a date certain because of owner action. (4) <E T="03">Displacement because of domestic violence.</E> Certification, in a form prescribed by the Secretary, of displacement because of domestic violence from the local police department, social services agency, or court of competent jurisdiction, or a clergyman, physician, or public or private facility that provides shelter or counseling to the victims of domestic violence. (5) <E T="03">Displacement to avoid reprisals.</E> A threat assessment by a law enforcement agency. (6) <E T="03">Displacement by hate crime.</E> Certification by a law enforcement agency or other reliable information. (7) <E T="03">Displacement by inaccessibility of unit.</E> Certification by a health care professional that a family member has a mobility or other impairment that makes critical elements of the current unit inaccessible, and statement by the owner that it is unable to make necessary changes to the unit to make it accessible. (8) <E T="03">Displacement by HUD disposition of multifamily project.</E> Certification by HUD with respect to the disposition. <CITA>[61 FR 9044, Mar. 6, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.425</SECTNO> <SUBJECT>Federal preference: substandard housing.</SUBJECT> (a) <E T="03">When unit is substandard.</E> (See § 5.415(a)(2) and (c)(2)(ii) for applicability of this section to the Section 8 Certificate/Voucher, Project-Based Certificate, Moderate Rehabilitation programs and the public housing program.) A unit is substandard if it: (1) Is dilapidated; (2) Does not have operable indoor plumbing; (3) Does not have a usable flush toilet inside the unit for the exclusive use of a family; (4) Does not have a usable bathtub or shower inside the unit for the exclusive use of a family; (5) Does not have electricity, or has inadequate or unsafe electrical service; (6) Does not have a safe or adequate source of heat; (7) Should, but does not, have a kitchen; or (8) Has been declared unfit for habitation by an agency or unit of government. (b) <E T="03">Other definitions—</E>(1) <E T="03">Dilapidated unit.</E> A housing unit is dilapidated if: (i) The unit does not provide safe and adequate shelter, and in its present condition endangers the health, safety, or well-being of a family; or (ii) The unit has one or more critical defects, or a combination of intermediate defects in sufficient number or extent to require considerable repair or <PRTPAGE P="53"/>rebuilding. The defects may involve original construction, or they may result from continued neglect or lack of repair or from serious damage to the structure. (2) <E T="03">Homeless family.</E> (i) An applicant that is a “homeless family” is considered to be living in substandard housing. (ii) A “homeless family” includes: (A) Any person or family that lacks a fixed, regular, and adequate nighttime residence; and (B) Any person or family that has a primary nighttime residence that is: (<E T="03">1</E>) A supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing); (<E T="03">2</E>) An institution that provides a temporary residence for individuals intended to be institutionalized; or (<E T="03">3</E>) A public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings. (iii) A “homeless family” does not include any person imprisoned or otherwise detained pursuant to an Act of Congress or a State law. (3) <E T="03">Status of SRO housing.</E> In determining whether an individual living in single room occupancy (SRO) housing qualifies for federal preference, SRO housing is not considered substandard solely because it does not contain sanitary or food preparation facilities. (c) <E T="03">Substandard housing preference: verification.</E> The following provisions are applicable to private owners: (1) Verification that an applicant is living in substandard housing consists of certification, in a form prescribed by the Secretary, from a unit or agency of government or from an applicant's present landlord that the applicant's unit is “substandard housing” (as described in this section). (2) In the case of a “homeless family” (as described in this section), verification consists of certification, in a form prescribed by the Secretary, of this status from a public or private facility that provides shelter for such individuals, or from the local police department or social services agency. <CITA>[61 FR 9045, Mar. 6, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.430</SECTNO> <SUBJECT>Federal preference: rent burden.</SUBJECT> (a) <E T="03">Rent burden preference: how determined. (See § 5.415(a)(2) and (c)(2)(ii) for applicability of this section to the Section 8 Certificate/Voucher, Project-Based Certificate, and Moderate Rehabilitation programs and the public housing program.)</E> (1) “Rent burden preference” means the federal preference for admission of applicants that pay more than 50 percent of family income for rent. (2) For purposes of determining whether an applicant qualifies for the rent burden preference: (i) “Family income” means Monthly Income, as defined in 24 CFR 813.102. (ii) “Rent” means: (A) The actual monthly amount due under a lease or occupancy agreement between a family and the family's current landlord; and (B) For utilities purchased directly by tenants from utility providers: (<E T="03">1</E>) The utility allowance for family-purchased utilities and services that is used in the HA tenant-based program; or (<E T="03">2</E>) If the family chooses, the average monthly payments that the family actually made for these utilities and services for the most recent 12-month period or, if information is not obtainable for the entire period, for an appropriate recent period. (iii) Amounts paid to or on behalf of a family under any energy assistance program must be subtracted from the otherwise applicable rental amount, to the extent that they are not included in the family's income. (iv) For purposes of the Section 8 Certificate/Voucher programs, rent for an applicant who owns a manufactured home, but rents the space upon which it is located, includes the monthly payment to amortize the purchase price of the home, calculated in accordance with HUD's requirements. In addition, for this program, rent for members of a cooperative means the charges under the occupancy agreement between the members and the cooperative. (3) An applicant does not qualify for a rent burden preference if either of the following is applicable: (i) The applicant has been paying more than 50 percent of income for rent for less than 90 days.<PRTPAGE P="54"/> (ii) The applicant is paying more than 50 percent of family income to rent a unit because the applicant's housing assistance for occupancy of the unit under any of the following programs has been terminated because of the applicant's refusal to comply with applicable program policies and procedures on the occupancy of underoccupied and overcrowded units: (A) The Section 8 programs or public and Indian housing programs under the United States Housing Act of 1937; (B) The rent supplement program under section 101 of the Housing and Urban Development Act of 1965; or (C) Rental assistance payments under section 236(f)(2) of the National Housing Act. (b) <E T="03">Rent burden preference: verification of income and rent.</E> The owner must verify that an applicant is paying more than 50 percent of family income for rent, as follows: (1) <E T="03">How to verify income.</E> The owner must verify a family's income by using the standards and procedures that it uses to verify family income under 24 CFR part 813. (2) <E T="03">How to verify rent.</E> The owner must verify the amount due to the family's landlord (or cooperative) under the lease or occupancy agreement: (i) By requiring the family to furnish copies of its most recent rental (or cooperative charges) receipts (which may include canceled checks or money order receipts) or a copy of the family's current lease or occupancy agreement; or (ii) By contacting the landlord (or cooperative) or its agent directly. (3) <E T="03">Utilities.</E> To verify the actual amount that a family paid for utilities and other housing services, the owner must require the family to provide copies of the appropriate bills or receipts, or must obtain the information directly from the utility or service supplier. <CITA>[61 FR 9045, Mar. 6, 1996]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Restrictions on Assistance to Noncitizens</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1436a and 3535(d). </AUTH> <SECTION> <SECTNO>§ 5.500</SECTNO> <SUBJECT>Applicability.</SUBJECT> (a) <E T="03">Covered programs/assistance.</E> This subpart E implements Section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). Section 214 prohibits HUD from making financial assistance available to persons who are not in eligible status with respect to citizenship or noncitizen immigration status. This subpart E is applicable to financial assistance provided under: (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program); and (4) The United States Housing Act of 1937 (42 U.S. C. 1437 <E T="03">et seq.</E>) which covers: (i) HUD's Public Housing Programs; (ii) The Section 8 Housing Assistance Programs; and (iii) The Housing Development Grant Programs (with respect to low income units only). (b) <E T="03">Covered individuals and entities</E>—(1) <E T="03">Covered individuals/persons and families.</E> The provisions of this subpart E apply to both applicants for assistance and persons already receiving assistance covered under this subpart E. (2) <E T="03">Covered entities.</E> The provisions of this subpart E apply to Public Housing Agencies (PHAs), project (or housing) owners, and mortgagees under the Section 235 Program. The term “responsible entity” is used in this subpart E to refer collectively to these entities, and is further defined in § 5.504. </SECTION> <SECTION> <SECTNO>§ 5.501</SECTNO> <SUBJECT>PHA election whether to comply with this subpart.</SUBJECT> (a) <E T="03">PHA opt-out.</E> A PHA that is a responsible entity under this subpart may elect not to comply with (“opt-out” of) the requirements of this subpart. (b) <E T="03">PHA compliance.</E> If the PHA elects to comply with this subpart, the PHA: (1) May initiate procedures to affirmatively establish or verify the eligibility of a family under this section at <PRTPAGE P="55"/>any time at which the PHA determines that such eligibility is in question, without regard to position of the family member's family on the waiting list of the PHA; (2) May affirmatively establish or verify the eligibility of a family member in accordance with the procedures set forth in section 274A(b)(1) of the Immigration and Nationality Act; and (3) Shall have access to any relevant information contained in the INS SAVE system (or any successor thereto) that relates to any family member applying for financial assistance. (c) <E T="03">HUD not responsible due to PHA opt-out.</E> HUD shall not bear any responsibility in connection with compliance with the requirements of Section 214 if a PHA elects not to comply with this subpart under paragraph (a) of this section. <CITA>[61 FR 60538, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.502</SECTNO> <SUBJECT>Requirements concerning documents.</SUBJECT> For any notice or document (decision, declaration, consent form, etc.) that this subpart E requires the responsible entity to provide to an individual, or requires the responsible entity to obtain the signature of an individual, the responsible entity, where feasible, must arrange for the notice or document to be provided to the individual in a language that is understood by the individual if the individual is not proficient in English. (See 24 CFR 8.6 of HUD's regulations for requirements concerning communications with persons with disabilities.) </SECTION> <SECTION> <SECTNO>§ 5.504</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) The definitions <E T="03">1937 Act, HUD, Public Housing Agency (PHA),</E> and <E T="03">Section 8</E> are defined in subpart A of this part. (b) As used in this subpart E: <E T="03">Child</E> means a member of the family other than the family head or spouse who is under 18 years of age. <E T="03">Citizen</E> means a citizen or national of the United States. <E T="03">Evidence of citizenship or eligible status</E> means the documents which must be submitted to evidence citizenship or eligible immigration status. (See § 5.508(b).) <E T="03">Family</E> has the same meaning as provided in the program regulations of the relevant Section 214 covered program. <E T="03">Head of household</E> means the adult member of the family who is the head of the household for purposes of determining income eligibility and rent. <E T="03">Housing covered programs</E> means the following programs administered by the Assistant Secretary for Housing: (1) Section 235 of the National Housing Act (12 U.S.C. 1715z) (the Section 235 Program); (2) Section 236 of the National Housing Act (12 U.S.C. 1715z-1) (tenants paying below market rent only) (the Section 236 Program); and (3) Section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s) (the Rent Supplement Program). <E T="03">INS</E> means the U.S. Immigration and Naturalization Service. <E T="03">Mixed family</E> means a family whose members include those with citizenship or eligible immigration status, and those without citizenship or eligible immigration status. <E T="03">National</E> means a person who owes permanent allegiance to the United States, for example, as a result of birth in a United States territory or possession. <E T="03">Noncitizen</E> means a person who is neither a citizen nor national of the United States. <E T="03">Project owner</E> means the person or entity that owns the housing project containing the assisted dwelling unit. <E T="03">Public Housing covered programs</E> means the public housing programs administered by the Assistant Secretary for Public and Indian Housing under title I of the 1937 Act. This definition does not encompass HUD's Indian Housing programs administered under title II of the 1937 Act. Further, this term does not include those programs providing assistance under section 8 of the 1937 Act. (See definition of “Section 8 Covered Programs” in this section.) <E T="03">Responsible</E> entity means the person or entity responsible for administering the restrictions on providing assistance to noncitizens with ineligible immigrations status. The entity responsible for administering the restrictions on providing assistance to noncitizens with <PRTPAGE P="56"/>ineligible immigration status under the various covered programs is as follows: (1) For the Section 235 Program, the mortgagee. (2) For Public Housing, the Section 8 Rental Certificate, the Section 8 Rental Voucher, and the Section 8 Moderate Rehabilitation programs, the PHA administering the program under an ACC with HUD. (3) For all other Section 8 programs, the Section 236 Program, and the Rent Supplement Program, the owner. <E T="03">Section 8 covered programs</E> means all HUD programs which assist housing under Section 8 of the 1937 Act, including Section 8-assisted housing for which loans are made under section 202 of the Housing Act of 1959. <E T="03">Section 214</E> means section 214 of the Housing and Community Development Act of 1980, as amended (42 U.S.C. 1436a). <E T="03">Section 214 covered programs</E> is the collective term for the HUD programs to which the restrictions imposed by Section 214 apply. These programs are set forth in § 5.500. <E T="03">Tenant</E> means an individual or a family renting or occupying an assisted dwelling unit. For purposes of this subpart E, the term tenant will also be used to include a homebuyer, where appropriate. </SECTION> <SECTION> <SECTNO>§ 5.506</SECTNO> <SUBJECT>General provisions.</SUBJECT> (a) <E T="03">Restrictions on assistance.</E> Financial assistance under a Section 214 covered program is restricted to: (1) <E T="03">Citizens;</E> or (2) <E T="03">Noncitizens</E> who have eligible immigration status under one of the categories set forth in Section 214 (see 42 U.S.C. 1436a(a)). (b) <E T="03">Family eligibility for assistance.</E> (1) A family shall not be eligible for assistance unless every member of the family residing in the unit is determined to have eligible status, as described in paragraph (a) of this section, or unless the family meets the conditions set forth in paragraph (b)(2) of this section. (2) Despite the ineligibility of one or more family members, a mixed family may be eligible for one of the three types of assistance provided in §§ 5.516 and 5.518. A family without any eligible members and receiving assistance on June 19, 1995 may be eligible for temporary deferral of termination of assistance as provided in §§ 5.516 and 5.518. </SECTION> <SECTION> <SECTNO>§ 5.508</SECTNO> <SUBJECT>Submission of evidence of citizenship or eligible immigration status.</SUBJECT> (a) <E T="03">General.</E> Eligibility for assistance or continued assistance under a Section 214 covered program is contingent upon a family's submission to the responsible entity of the documents described in paragraph (b) of this section for each family member. If one or more family members do not have citizenship or eligible immigration status, the family members may exercise the election not to contend to have eligible immigration status as provided in paragraph (e) of this section, and the provisions of §§ 5.516 and 5.518 shall apply. (b) <E T="03">Evidence of citizenship or eligible immigration status.</E> Each family member, regardless of age, must submit the following evidence to the responsible entity. (1) For citizens, the evidence consists of a signed declaration of U.S. citizenship. The responsible entity may request verification of the declaration by requiring presentation of a United States passport, resident alien card, registration card, social security card, or other appropriate documentation. (2) For noncitizens who are 62 years of age or older or who will be 62 years of age or older and receiving assistance under a Section 214 covered program on September 30, 1996 or applying for assistance on or after that date, the evidence consists of: (i) A signed declaration of eligible immigration status; and (ii) Proof of age document. (3) For all other noncitizens, the evidence consists of: (i) A signed declaration of eligible immigration status; (ii) One of the INS documents referred to in § 5.510; and (iii) A signed verification consent form. (c) <E T="03">Declaration.</E> (1) For each family member who contends that he or she is a U.S. citizen or a noncitizen with eligible immigration status, the family must submit to the responsible entity a written declaration, signed under <PRTPAGE P="57"/>penalty of perjury, by which the family member declares whether he or she is a U.S. citizen or a noncitizen with eligible immigration status. (i) For each adult, the declaration must be signed by the adult. (ii) For each child, the declaration must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. (2) <E T="03">For Housing covered programs:</E> The written declaration may be incorporated as part of the application for housing assistance or may constitute a separate document. (d) <E T="03">Verification consent form</E>—(1) <E T="03">Who signs.</E> Each noncitizen who declares eligible immigration status (except certain noncitizens who are 62 years of age or older as described in paragraph (b)(2) of this section) must sign a verification consent form as follows. (i) For each adult, the form must be signed by the adult. (ii) For each child, the form must be signed by an adult residing in the assisted dwelling unit who is responsible for the child. (2) <E T="03">Notice of release of evidence by responsible entity.</E> The verification consent form shall provide that evidence of eligible immigration status may be released by the responsible entity without responsibility for the further use or transmission of the evidence by the entity receiving it, to: (i) HUD, as required by HUD; and (ii) The INS for purposes of verification of the immigration status of the individual. (3) <E T="03">Notice of release of evidence by HUD.</E> The verification consent form also shall notify the individual of the possible release of evidence of eligible immigration status by HUD. Evidence of eligible immigration status shall only be released to the INS for purposes of establishing eligibility for financial assistance and not for any other purpose. HUD is not responsible for the further use or transmission of the evidence or other information by the INS. (e) <E T="03">Individuals who do not contend that they have eligible status.</E> If one or more members of a family elect not to contend that they have eligible immigration status, and other members of the family establish their citizenship or eligible immigration status, the family may be eligible for assistance under §§ 5.516 and 5.518, or § 5.520, despite the fact that no declaration or documentation of eligible status is submitted for one or more members of the family. The family, however, must identify in writing to the responsible entity, the family member (or members) who will elect not to contend that he or she has eligible immigration status. (f) <E T="03">Notification of requirements of Section 214—</E>(1) <E T="03">When notice is to be issued.</E> Notification of the requirement to submit evidence of citizenship or eligible immigration status, as required by this section, or to elect not to contend that one has eligible status as provided by paragraph (e) of this section, shall be given by the responsible entity as follows: (i) <E T="03">Applicant's notice.</E> The notification described in paragraph (f)(1) of this section shall be given to each applicant at the time of application for assistance. Applicants whose applications are pending on June 19, 1995, shall be notified of the requirement to submit evidence of eligible status as soon as possible after June 19, 1995. (ii) <E T="03">Notice to tenants.</E> The notification described in paragraph (f)(1) of this section shall be given to each tenant at the time of, and together with, the responsible entity's notice of regular reexamination of income, but not later than one year following June 19, 1995. (iii) <E T="03">Timing of mortgagor's notice.</E> A mortgagor receiving Section 235 assistance must be provided the notification described in paragraph (f)(1) of this section and any additional requirements imposed under the Section 235 Program. (2) <E T="03">Form and content of notice.</E> The notice shall: (i) State that financial assistance is contingent upon the submission and verification, as appropriate, of evidence of citizenship or eligible immigration status as required by paragraph (a) of this section; (ii) Describe the type of evidence that must be submitted, and state the time period in which that evidence must be submitted (see paragraph (g) of this section concerning when evidence must be submitted); and<PRTPAGE P="58"/> (iii) State that assistance will be prorated, denied or terminated, as appropriate, upon a final determination of ineligibility after all appeals have been exhausted (see § 5.514 concerning INS appeal, and informal hearing process) or, if appeals are not pursued, at a time to be specified in accordance with HUD requirements. Tenants also shall be informed of how to obtain assistance under the preservation of families provisions of §§ 5.516 and 5.518. (g) <E T="03">When evidence of eligible status is required to be submitted.</E> The responsible entity shall require evidence of eligible status to be submitted at the times specified in paragraph (g) of this section, subject to any extension granted in accordance with paragraph (h) of this section. (1) <E T="03">Applicants.</E> For applicants, responsible entities must ensure that evidence of eligible status is submitted not later than the date the responsible entity anticipates or has knowledge that verification of other aspects of eligibility for assistance will occur (see § 5.512(a)). (2) <E T="03">Tenants.</E> For tenants, evidence of eligible status is required to be submitted as follows: (i) For financial assistance under a Section 214 covered program, with the exception of Section 235 assistance payments, the required evidence shall be submitted at the first regular reexamination after June 19, 1995, in accordance with program requirements. (ii) For financial assistance in the form of Section 235 assistance payments, the mortgagor shall submit the required evidence in accordance with requirements imposed under the Section 235 Program. (3) <E T="03">New occupants of assisted units.</E> For any new occupant of an assisted unit (e.g., a new family member comes to reside in the assisted unit), the required evidence shall be submitted at the first interim or regular reexamination following the person's occupancy. (4) <E T="03">Changing participation in a HUD program.</E> Whenever a family applies for admission to a Section 214 covered program, evidence of eligible status is required to be submitted in accordance with the requirements of this subpart unless the family already has submitted the evidence to the responsible entity for a Section 214 covered program. (5) <E T="03">One-time evidence requirement for continuous occupancy.</E> For each family member, the family is required to submit evidence of eligible status only one time during continuously assisted occupancy under any Section 214 covered program. (h) <E T="03">Extensions of time to submit evidence of eligible status—</E>(1) <E T="03">When extension must be granted.</E> The responsible entity shall extend the time, provided in paragraph (g) of this section, to submit evidence of eligible immigration status if the family member: (i) Submits the declaration required under § 5.508(a) certifying that any person for whom required evidence has not been submitted is a noncitizen with eligible immigration status; and (ii) Certifies that the evidence needed to support a claim of eligible immigration status is temporarily unavailable, additional time is needed to obtain and submit the evidence, and prompt and diligent efforts will be undertaken to obtain the evidence. (2) <E T="03">Thirty-day extension period.</E> Any extension of time, if granted, shall not exceed thirty (30) days. The additional time provided should be sufficient to allow the individual the time to obtain the evidence needed. The responsible entity's determination of the length of the extension needed shall be based on the circumstances of the individual case. (3) <E T="03">Grant or denial of extension to be in writing.</E> The responsible entity's decision to grant or deny an extension as provided in paragraph (h)(1) of this section shall be issued to the family by written notice. If the extension is granted, the notice shall specify the extension period granted (which shall not exceed thirty (30) days). If the extension is denied, the notice shall explain the reasons for denial of the extension. (i) <E T="03">Failure to submit evidence or to establish eligible status.</E> If the family fails to submit required evidence of eligible immigration status within the time period specified in the notice, or any extension granted in accordance with paragraph (h) of this section, or if the evidence is timely submitted but fails <PRTPAGE P="59"/>to establish eligible immigration status, the responsible entity shall proceed to deny, prorate or terminate assistance, or provide continued assistance or temporary deferral of termination of assistance, as appropriate, in accordance with the provisions of §§ 5.514, 5.516, and 5.518. (ii) [Reserved] <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60538, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.510</SECTNO> <SUBJECT>Documents of eligible immigration status.</SUBJECT> (a) <E T="03">General.</E> A responsible entity shall request and review original documents of eligible immigration status. The responsible entity shall retain photocopies of the documents for its own records and return the original documents to the family. (b) <E T="03">Acceptable evidence of eligible immigration status.</E> Acceptable evidence of eligible immigration status shall be the original of a document designated by INS as acceptable evidence of immigration status in one of the six categories mentioned in § 5.506(a) for the specific immigration status claimed by the individual. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.512</SECTNO> <SUBJECT>Verification of eligible immigration status.</SUBJECT> (a) <E T="03">General.</E> Except as described in §§ 5.501 and 5.514, no individual or family applying for assistance may receive such assistance prior to the verification of the eligibility of at least the individual or one family member. Verification of eligibility consistent with § 5.514 occurs when the individual or family members have submitted documentation to the responsible entity in accordance with § 5.508. (b) <E T="03">Primary verification—</E>(1) <E T="03">Automated verification system.</E> Primary verification of the immigration status of the person is conducted by the responsible entity through the INS automated system (INS Systematic Alien Verification for Entitlements (SAVE)). The INS SAVE system provides access to names, file numbers and admission numbers of noncitizens. (2) <E T="03">Failure of primary verification to confirm eligible immigration status.</E> If the INS SAVE system does not verify eligible immigration status, secondary verification must be performed. (c) <E T="03">Secondary verification—</E>(1) <E T="03">Manual search of INS records.</E> Secondary verification is a manual search by the INS of its records to determine an individual's immigration status. The responsible entity must request secondary verification, within 10 days of receiving the results of the primary verification, if the primary verification system does not confirm eligible immigration status, or if the primary verification system verifies immigration status that is ineligible for assistance under a Section 214 covered program. (2) <E T="03">Secondary verification initiated by responsible entity.</E> Secondary verification is initiated by the responsible entity forwarding photocopies of the original INS documents required for the immigration status declared (front and back), attached to the INS document verification request form G-845S (Document Verification Request), or such other form specified by the INS to a designated INS office for review. (Form G-845S is available from the local INS Office.) (3) <E T="03">Failure of secondary verification to confirm eligible immigration status.</E> If the secondary verification does not confirm eligible immigration status, the responsible entity shall issue to the family the notice described in § 5.514(d), which includes notification of the right to appeal to the INS of the INS finding on immigration status (see § 5.514(d)(4)). (d) <E T="03">Exemption from liability for INS verification.</E> The responsible entity shall not be liable for any action, delay, or failure of the INS in conducting the automated or manual verification. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.514</SECTNO> <SUBJECT>Delay, denial, reduction or termination of assistance.</SUBJECT> (a) <E T="03">General.</E> Assistance to a family may not be delayed, denied, reduced or terminated because of the immigration status of a family member except as provided in this section. (b) <E T="03">Restrictions on delay, denial, reduction or termination of assistance</E>—(1) <E T="03">Restrictions on reduction, denial or termination of assistance for applicants and tenants.</E> Assistance to an applicant or <PRTPAGE P="60"/>tenant shall not be delayed, denied, reduced, or terminated, on the basis of ineligible immigration status of a family member if: (i) The primary and secondary verification of any immigration documents that were timely submitted has not been completed; (ii) The family member for whom required evidence has not been submitted has moved from the assisted dwelling unit; (iii) The family member who is determined not to be in an eligible immigration status following INS verification has moved from the assisted dwelling unit; (iv) The INS appeals process under § 5.514(e) has not been concluded; (v) Assistance is prorated in accordance with § 5.520; or (vi) Assistance for a mixed family is continued in accordance with §§ 5.516 and 5.518; or (vii) Deferral of termination of assistance is granted in accordance with §§ 5.516 and 5.518. (2) <E T="03">Restrictions on delay, denial, reduction or termination of assistance pending fair hearing for tenants.</E> In addition to the factors listed in paragraph (b)(1) of this section, assistance to a tenant cannot be delayed, denied, reduced or terminated until the completion of the informal hearing described in paragraph (f) of this section. (c) <E T="03">Events causing denial or termination of assistance</E>—(1) <E T="03">General.</E> Assistance to an applicant shall be denied, and a tenant's assistance shall be terminated, in accordance with the procedures of this section, upon the occurrence of any of the following events: (i) Evidence of citizenship (i.e., the declaration) and eligible immigration status is not submitted by the date specified in § 5.508(g) or by the expiration of any extension granted in accordance with § 5.508(h); (ii) Evidence of citizenship and eligible immigration status is timely submitted, but INS primary and secondary verification does not verify eligible immigration status of a family member; and (A) The family does not pursue INS appeal or informal hearing rights as provided in this section; or (B) INS appeal and informal hearing rights are pursued, but the final appeal or hearing decisions are decided against the family member; or (iii) The responsible entity determines that a family member has knowingly permitted another individual who is not eligible for assistance to reside (on a permanent basis) in the public or assisted housing unit of the family member. Such termination shall be for a period of not less than 24 months. This provision does not apply to a family if the ineligibility of the ineligible individual was considered in calculating any proration of assistance provided for the family. (2) <E T="03">Termination of assisted occupancy.</E> For termination of assisted occupancy, see paragraph (i) of this section. (d) <E T="03">Notice of denial or termination of assistance.</E> The notice of denial or termination of assistance shall advise the family: (1) That financial assistance will be denied or terminated, and provide a brief explanation of the reasons for the proposed denial or termination of assistance; (2) That the family may be eligible for proration of assistance as provided under § 5.520; (3) In the case of a tenant, the criteria and procedures for obtaining relief under the provisions for preservation of families in §§ 5.514 and 5.518; (4) That the family has a right to request an appeal to the INS of the results of secondary verification of immigration status and to submit additional documentation or a written explanation in support of the appeal in accordance with the procedures of paragraph (e) of this section; (5) That the family has a right to request an informal hearing with the responsible entity either upon completion of the INS appeal or in lieu of the INS appeal as provided in paragraph (f) of this section; (6) For applicants, the notice shall advise that assistance may not be delayed until the conclusion of the INS appeal process, but assistance may be delayed during the pendency of the informal hearing process. (e) <E T="03">Appeal to the INS</E>—(1) <E T="03">Submission of request for appeal.</E> Upon receipt of notification by the responsible entity that <PRTPAGE P="61"/>INS secondary verification failed to confirm eligible immigration status, the responsible entity shall notify the family of the results of the INS verification, and the family shall have 30 days from the date of the responsible entity's notification, to request an appeal of the INS results. The request for appeal shall be made by the family communicating that request in writing directly to the INS. The family must provide the responsible entity with a copy of the written request for appeal and proof of mailing. (2) <E T="03">Documentation to be submitted as part of appeal to INS.</E> The family shall forward to the designated INS office any additional documentation or written explanation in support of the appeal. This material must include a copy of the INS document verification request form G-845S (used to process the secondary verification request) or such other form specified by the INS, and a cover letter indicating that the family is requesting an appeal of the INS immigration status verification results. (3) <E T="03">Decision by INS—</E>(i) <E T="03">When decision will be issued.</E> The INS will issue to the family, with a copy to the responsible entity, a decision within 30 days of its receipt of documentation concerning the family's appeal of the verification of immigration status. If, for any reason, the INS is unable to issue a decision within the 30 day time period, the INS will inform the family and responsible entity of the reasons for the delay. (ii) <E T="03">Notification of INS decision and of informal hearing procedures.</E> When the responsible entity receives a copy of the INS decision, the responsible entity shall notify the family of its right to request an informal hearing on the responsible entity's ineligibility determination in accordance with the procedures of paragraph (f) of this section. (4) <E T="03">No delay, denial, reduction, or termination of assistance until completion of INS appeal process; direct appeal to INS.</E> Pending the completion of the INS appeal under this section, assistance may not be delayed, denied, reduced or terminated on the basis of immigration status. (f) <E T="03">Informal hearing</E>—(1) <E T="03">When request for hearing is to be made.</E> After notification of the INS decision on appeal, or in lieu of request of appeal to the INS, the family may request that the responsible entity provide a hearing. This request must be made either within 30 days of receipt of the notice described in paragraph (d) of this section, or within 30 days of receipt of the INS appeal decision issued in accordance with paragraph (e) of this section. (2) <E T="03">Informal hearing procedures—</E>(i) <E T="03">Tenants assisted under a Section 8 covered program:</E> For tenants assisted under a Section 8 covered program, the procedures for the hearing before the responsible entity are set forth in: (A) <E T="03">For Section 8 Moderate Rehabilitation assistance:</E> 24 CFR part 882; (B) <E T="03">For Section 8 tenant-based assistance:</E> 24 CFR part 982; or (C) <E T="03">For Section 8 project-based certificate program:</E> 24 CFR part 983. (ii) <E T="03">Tenants assisted under any other Section 8 covered program or a Public Housing covered program:</E> For tenants assisted under a Section 8 covered program not listed in paragraph (f)(3)(i) of this section or a Public Housing covered program, the procedures for the hearing before the responsible entity are set forth in 24 CFR part 966. (iii) <E T="03">Families under Housing covered programs and applicants for assistance under all covered programs.</E> For all families under Housing covered programs (applicants as well as tenants already receiving assistance) and for applicants for assistance under all covered programs, the procedures for the informal hearing before the responsible entity are as follows: (A) <E T="03">Hearing before an impartial individual.</E> The family shall be provided a hearing before any person(s) designated by the responsible entity (including an officer or employee of the responsible entity), other than a person who made or approved the decision under review, and other than a person who is a subordinate of the person who made or approved the decision; (B) <E T="03">Examination of evidence.</E> The family shall be provided the opportunity to examine and copy at the individual's expense, at a reasonable time in advance of the hearing, any documents in the possession of the responsible entity pertaining to the family's eligibility status, or in the possession of the INS <PRTPAGE P="62"/>(as permitted by INS requirements), including any records and regulations that may be relevant to the hearing; (C) <E T="03">Presentation of evidence and arguments in support of eligible status.</E> The family shall be provided the opportunity to present evidence and arguments in support of eligible status. Evidence may be considered without regard to admissibility under the rules of evidence applicable to judicial proceedings; (D) <E T="03">Controverting evidence of the responsible entity.</E> The family shall be provided the opportunity to controvert evidence relied upon by the responsible entity and to confront and cross-examine all witnesses on whose testimony or information the responsible entity relies; (E) <E T="03">Representation.</E> The family shall be entitled to be represented by an attorney, or other designee, at the family's expense, and to have such person make statements on the family's behalf; (F) <E T="03">Interpretive services.</E> The family shall be entitled to arrange for an interpreter to attend the hearing, at the expense of the family, or responsible entity, as may be agreed upon by the two parties to the proceeding; and (G) <E T="03">Hearing to be recorded.</E> The family shall be entitled to have the hearing recorded by audiotape (a transcript of the hearing may, but is not required to, be provided by the responsible entity). (3) <E T="03">Hearing decision.</E> The responsible entity shall provide the family with a written final decision, based solely on the facts presented at the hearing, within 14 days of the date of the informal hearing. The decision shall state the basis for the decision. (g) <E T="03">Judicial relief.</E> A decision against a family member, issued in accordance with paragraphs (e) or (f) of this section, does not preclude the family from exercising the right, that may otherwise be available, to seek redress directly through judicial procedures. (h) <E T="03">Retention of documents.</E> The responsible entity shall retain for a minimum of 5 years the following documents that may have been submitted to the responsible entity by the family, or provided to the responsible entity as part of the INS appeal or the informal hearing process: (1) The application for financial assistance; (2) The form completed by the family for income reexamination; (3) Photocopies of any original documents (front and back), including original INS documents; (4) The signed verification consent form; (5) The INS verification results; (6) The request for an INS appeal; (7) The final INS determination; (8) The request for an informal hearing; and (9) The final informal hearing decision. (i) <E T="03">Termination of assisted occupancy.</E> (1) Under Housing covered programs, and in the Section 8 covered programs other than the Section 8 Rental Certificate, Rental Voucher, and Moderate Rehabilitation programs, assisted occupancy is terminated by: (i) If permitted under the lease, the responsible entity notifying the tenant that because of the termination of assisted occupancy the tenant is required to pay the HUD-approved market rent for the dwelling unit. (ii) The responsible entity and tenant entering into a new lease without financial assistance. (iii) The responsible entity evicting the tenant. While the tenant continues in occupancy of the unit, the responsible entity may continue to receive assistance payments if action to terminate the tenancy under an assisted lease is promptly initiated and diligently pursued, in accordance with the terms of the lease, and if eviction of the tenant is undertaken by judicial action pursuant to State and local law. Action by the responsible entity to terminate the tenancy and to evict the tenant must be in accordance with applicable HUD regulations and other HUD requirements. For any jurisdiction, HUD may prescribe a maximum period during which assistance payments may be continued during eviction proceedings and may prescribe other standards of reasonable diligence for the prosecution of eviction proceedings. (2) In the Section 8 Rental Certificate, Rental Voucher, and Moderate <PRTPAGE P="63"/>Rehabilitation programs, assisted occupancy is terminated by terminating assistance payments. (See provisions of this section concerning termination of assistance.) The PHA shall not make any additional assistance payments to the owner after the required procedures specified in this section have been completed. In addition, the PHA shall not approve a lease, enter into an assistance contract, or process a portability move for the family after those procedures have been completed. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.516</SECTNO> <SUBJECT>Availability of preservation assistance to mixed families and other families.</SUBJECT> (a) <E T="03">Assistance available for tenant mixed families—</E>(1) <E T="03">General.</E> Preservation assistance is available to tenant mixed families, following completion of the appeals and informal hearing procedures provided in § 5.514. There are three types of preservation assistance: (i) Continued assistance (see paragraph (a) of § 5.518); (ii) Temporary deferral of termination of assistance (see paragraph (b) of § 5.518); or (iii) Prorated assistance (see § 5.520, a mixed family must be provided prorated assistance if the family so requests). (2) <E T="03">Availability of assistance—</E>(i) <E T="03">For Housing covered programs:</E> One of the three types of assistance described is available to tenant mixed families assisted under a National Housing Act or 1965 HUD Act covered program, depending upon the family's eligibility for such assistance. Continued assistance must be provided to a mixed family that meets the conditions for eligibility for continued assistance. (ii) <E T="03">For Section 8 or Public Housing covered programs.</E> One of the three types of assistance described may be available to tenant mixed families assisted under a Section 8 or Public Housing covered program. (b) <E T="03">Assistance available for applicant mixed families.</E> Prorated assistance is also available for mixed families applying for assistance as provided in § 5.520. (c) <E T="03">Assistance available to other families in occupancy.</E> Temporary deferral of termination of assistance may be available to families receiving assistance under a Section 214 covered program on June 19, 1995, and who have no members with eligible immigration status, as set forth in paragraphs (c) (1) and (2) of this section. (1) <E T="03">For Housing covered programs:</E> Temporary deferral of termination of assistance is available to families assisted under a Housing covered program. (2) <E T="03">For Section 8 or Public Housing covered programs:</E> The responsible entity may make temporary deferral of termination of assistance to families assisted under a Section 8 or Public Housing covered program. (d) <E T="03">Section 8 covered programs: Discretion afforded to provide certain family preservation assistance—</E>(1) <E T="03">Project owners.</E> With respect to assistance under a Section 8 Act covered program administered by a project owner, HUD has the discretion to determine under what circumstances families are to be provided one of the two statutory forms of assistance for preservation of the family (continued assistance or temporary deferral of assistance). HUD is exercising its discretion by specifying the standards in this section under which a project owner must provide one of these two types of assistance to a family. However, project owners and PHAs must offer prorated assistance to eligible mixed families. (2) <E T="03">PHAs.</E> The PHA, rather than HUD, has the discretion to determine the circumstances under which a family will be offered one of the two statutory forms of assistance (continued assistance or temporary deferral of termination of assistance). The PHA must establish its own policy and criteria to follow in making its decision. In establishing the criteria for granting continued assistance or temporary deferral of termination of assistance, the PHA must incorporate the statutory criteria, which are set forth in paragraphs (a) and (b) of § 5.518. However, the PHA must offer prorated assistance to eligible families. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <PRTPAGE P="64"/> <SECTNO>§ 5.518</SECTNO> <SUBJECT>Types of preservation assistance available to mixed families and other families.</SUBJECT> (a) <E T="03">Continued assistance</E>—(1) <E T="03">General.</E> A mixed family may receive continued housing assistance if all of the following conditions are met (a mixed family assisted under a Housing covered program must be provided continued assistance if the family meets the following conditions): (i) The family was receiving assistance under a Section 214 covered program on June 19, 1995; (ii) The family's head of household or spouse has eligible immigration status as described in § 5.506; and (iii) The family does not include any person (who does not have eligible immigration status) other than the head of household, any spouse of the head of household, any parents of the head of household, any parents of the spouse, or any children of the head of household or spouse. (2) <E T="03">Proration of continued assistance.</E> A family entitled to continued assistance before November 29, 1996 is entitled to continued assistance as described in paragraph (a) of this section. A family entitled to continued assistance after November 29, 1996 shall receive prorated assistance as described in § 5.520. (b) <E T="03">Temporary deferral of termination of assistance—</E>(1) <E T="03">Eligibility for this type of assistance.</E> If a mixed family qualifies for prorated assistance (and does not qualify for continued assistance), but decides not to accept prorated assistance, or if a family has no members with eligible immigration status, the family may be eligible for temporary deferral of termination of assistance if necessary to permit the family additional time for the orderly transition of those family members with ineligible status, and any other family members involved, to other affordable housing. Other affordable housing is used in the context of transition of an ineligible family from a rent level that reflects HUD assistance to a rent level that is unassisted; the term refers to housing that is not substandard, that is of appropriate size for the family and that can be rented for an amount not exceeding the amount that the family pays for rent, including utilities, plus 25 percent. (2) <E T="03">Housing covered programs: Conditions for granting temporary deferral of termination of assistance.</E> The responsible entity shall grant a temporary deferral of termination of assistance to a mixed family if the family is assisted under a Housing covered program and one of the following conditions is met: (i) The family demonstrates that reasonable efforts to find other affordable housing of appropriate size have been unsuccessful (for purposes of this section, reasonable efforts include seeking information from, and pursuing leads obtained from the State housing agency, the city government, local newspapers, rental agencies and the owner); (ii) The vacancy rate for affordable housing of appropriate size is below five percent in the housing market for the area in which the project is located; or (iii) The consolidated plan, as described in 24 CFR part 91 and if applicable to the covered program, indicates that the local jurisdiction's housing market lacks sufficient affordable housing opportunities for households having a size and income similar to the family seeking the deferral. (3) <E T="03">Time limit on deferral period.</E> If temporary deferral of termination of assistance is granted, the deferral period shall be for an initial period not to exceed six months. The initial period may be renewed for additional periods of six months, but the aggregate deferral period for deferrals provided after November 29, 1996 shall not exceed a period of eighteen months. The aggregate deferral period for deferrals granted prior to November 29, 1996 shall not exceed 3 years. These time periods do not apply to a family which includes a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act. (4) <E T="03">Notification requirements for beginning of each deferral period.</E> At the beginning of each deferral period, the responsible entity must inform the family of its ineligibility for financial assistance and offer the family information concerning, and referrals to assist in finding, other affordable housing. (5) <E T="03">Determination of availability of affordable housing at end of each deferral <PRTPAGE P="65"/>period.</E> (i) Before the end of each deferral period, the responsible entity must satisfy the applicable requirements of either paragraph (b)(5)(i) (A) or (B) of this section. Specifically, the responsible entity must: (A) <E T="03">For Housing covered programs:</E> Make a determination that one of the two conditions specified in paragraph (b)(2) of this section continues to be met (note: affordable housing will be determined to be available if the vacancy rate is five percent or greater), the owner's knowledge and the tenant's evidence indicate that other affordable housing is available; or (B) <E T="03">For Section 8 or Public Housing covered programs:</E> Make a determination of the availability of affordable housing of appropriate size based on evidence of conditions which when taken together will demonstrate an inadequate supply of affordable housing for the area in which the project is located, the consolidated plan (if applicable, as described in 24 CFR part 91), the responsible entity's own knowledge of the availability of affordable housing, and on evidence of the tenant family's efforts to locate such housing. (ii) The responsible entity must also: (A) Notify the tenant family in writing, at least 60 days in advance of the expiration of the deferral period, that termination will be deferred again (provided that the granting of another deferral will not result in aggregate deferral periods that exceeds the maximum deferral period). This time period does not apply to a family which includes a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act, and a determination was made that other affordable housing is not available; <E T="03">or</E> (B) Notify the tenant family in writing, at least 60 days in advance of the expiration of the deferral period, that termination of financial assistance will not be deferred because either granting another deferral will result in aggregate deferral periods that exceed the maximum deferral period (unless the family includes a refugee under section 207 of the Immigration and Nationality Act or an individual seeking asylum under section 208 of that Act), or a determination has been made that other affordable housing is available. (c) <E T="03">Option to select proration of assistance at end of deferral period.</E> A family who is eligible for, and receives temporary deferral of termination of assistance, may request, and the responsible entity shall provide proration of assistance at the end of the deferral period if the family has made a good faith effort during the deferral period to locate other affordable housing. (d) <E T="03">Notification of decision on family preservation assistance.</E> A responsible entity shall notify the family of its decision concerning the family's qualification for family preservation assistance. If the family is ineligible for family preservation assistance, the notification shall state the reasons, which must be based on relevant factors. For tenant families, the notice also shall inform the family of any applicable appeal rights. <CITA>[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.520</SECTNO> <SUBJECT>Proration of assistance.</SUBJECT> (a) <E T="03">Applicability.</E> This section applies to a mixed family other than a family receiving continued assistance, or other than a family who is eligible for and requests and receives temporary deferral of termination of assistance. An eligible mixed family who requests prorated assistance must be provided prorated assistance. (b) <E T="03">Method of prorating assistance for Housing covered programs—</E>(1) <E T="03">Proration under Rent Supplement Program.</E> If the household participates in the Rent Supplement Program, the rent supplement paid on the household's behalf shall be the rent supplement the household would otherwise be entitled to, multiplied by a fraction, the denominator of which is the number of people in the household and the numerator of which is the number of eligible persons in the household; (2) <E T="03">Proration under Section 235 Program.</E> If the household participates in the Section 235 Program, the interest reduction payments paid on the household's behalf shall be the payments the household would otherwise be entitled to, multiplied by a fraction the denominator of which is the number of people in the household and the numerator of <PRTPAGE P="66"/>which is the number of eligible persons in the household; (3) <E T="03">Proration under Section 236 Program without the benefit of additional assistance.</E> If the household participates in the Section 236 Program without the benefit of any additional assistance, the household's rent shall be increased above the rent the household would otherwise pay by an amount equal to the difference between the market rate rent for the unit and the rent the household would otherwise pay multiplied by a fraction the denominator of which is the number of people in the household and the numerator of which is the number of ineligible persons in the household; (4) <E T="03">Proration under Section 236 Program with the benefit of additional assistance.</E> If the household participates in the Section 236 Program with the benefit of additional assistance under the rent supplement, rental assistance payment or Section 8 programs, the household's rent shall be increased above the rent the household would otherwise pay by: (i) An amount equal to the difference between the market rate rent for the unit and the basic rent for the unit multiplied by a fraction, the denominator of which is the number of people in the household, and the numerator of which is the number of ineligible persons in the household, plus; (ii) An amount equal to the rent supplement, housing assistance payment or rental assistance payment the household would otherwise be entitled to multiplied by a fraction, the denominator of which is the number of people in the household and the numerator of which is the number of ineligible persons in the household. (c) <E T="03">Method of prorating assistance for Section 8 covered programs—</E>(1) <E T="03">Section 8 assistance other than Section 8 rental voucher assistance.</E> For Section 8 assistance other than assistance provided under the Section 8 Rental Voucher Program, the PHA shall prorate the family's assistance as follows: (i) <E T="03">Step 1.</E> Determine gross rent for the unit. (Gross rent is contract rent plus any allowance for tenant paid utilities). (ii) <E T="03">Step 2.</E> Determine total tenant payment in accordance with 24 CFR 813.107(a). (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (iii) <E T="03">Step 3.</E> Subtract amount determined in paragraph (c)(1)(ii), (Step 2), from amount determined in paragraph (c)(1)(i), (Step 1). (iv) <E T="03">Step 4.</E> Multiply the amount determined in paragraph (c)(1)(iii), (Step 3) by a fraction for which: (A) The numerator is the number of family members who have established eligible immigration status; and (B) The denominator is the total number of family members. (v) <E T="03">Prorated housing assistance.</E> The amount determined in paragraph (c)(1)(iv), (Step 4) is the prorated housing assistance payment for a mixed family. (vi) <E T="03">No effect on contract rent.</E> Proration of the housing assistance payment does not affect contract rent to the owner. The family must pay as rent the portion of contract rent not covered by the prorated housing assistance payment. (2) <E T="03">Section 8 Rental Voucher assistance.</E> For assistance under the Section 8 Rental Voucher Program, the PHA shall prorate the family's assistance as follows: (i) <E T="03">Step 1.</E> Determine the amount of the pre-proration voucher housing assistance payment in accordance with 24 CFR part 887. (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (ii) <E T="03">Step 2.</E> Multiply the amount determined in paragraph (c)(2)(i), (Step 1) by a fraction for which: (A) The numerator is the number of family members who have established eligible immigration status; and (B) The denominator is the total number of family members. (iii) <E T="03">Prorated housing assistance.</E> The amount determined in paragraph (c)(2)(ii), (Step 2) is the prorated housing assistance payment for a mixed family. (iv) <E T="03">No effect on rent to owner.</E> Proration of the voucher housing assistance payment does not affect rent to the owner. The family must pay as rent the portion of rent not covered by the prorated housing assistance payment.<PRTPAGE P="67"/> (d) <E T="03">Method of prorating assistance for Public Housing covered programs.</E> The PHA shall prorate the family's assistance by: (1) <E T="03">Step 1.</E> Determining total tenant payment in accordance with 24 CFR 913.107(a). (Annual income includes income of all family members, including any family member who has not established eligible immigration status.) (2) <E T="03">Step 2.</E> Subtracting the total tenant payment from a HUD-supplied “public housing maximum rent” applicable to the unit or the PHA. (This “maximum rent” shall be determined by HUD using the 95th percentile rent for the PHA.) The result is the maximum subsidy for which the family could qualify if all members were eligible (“family maximum subsidy”). (3) <E T="03">Step 3.</E> Dividing the family maximum subsidy by the number of persons in the family (all persons) to determine the maximum subsidy per each family member who has citizenship or eligible immigration status (“eligible family member”). The subsidy per eligible family member is the “member maximum subsidy”. (4) <E T="03">Step 4.</E> Multiplying the member maximum subsidy by the number of family members who have citizenship or eligible immigration status (“eligible family members”). (5) <E T="03">Step 5.</E> The product of steps 1 through 4, as set forth in paragraph (d)(2) of this section is the amount of subsidy for which the family is eligible (“eligible subsidy”). The family's rent is the “public housing maximum rent” minus the amount of the eligible subsidy. </SECTION> <SECTION> <SECTNO>§ 5.522</SECTNO> <SUBJECT>Prohibition of assistance to noncitizen students.</SUBJECT> (a) <E T="03">General.</E> The provisions of §§ 5.516 and 5.518 permitting continued assistance or temporary deferral of termination of assistance for certain families do not apply to any person who is determined to be a noncitizen student as in paragraph (c)(2)(A) of Section 214 (42 U.S.C. 1436a(c)(2)(A)). The family of a noncitizen student may be eligible for prorated assistance, as provided in paragraph (b)(2) of this section. (b) <E T="03">Family of noncitizen students.</E> (1) The prohibition on providing assistance to a noncitizen student as described in paragraph (a) of this section extends to the noncitizen spouse of the noncitizen student and minor children accompanying the student or following to join the student. (2) The prohibition on providing assistance to a noncitizen student does not extend to the citizen spouse of the noncitizen student and the children of the citizen spouse and noncitizen student. </SECTION> <SECTION> <SECTNO>§ 5.524</SECTNO> <SUBJECT>Compliance with nondiscrimination requirements.</SUBJECT> The responsible entity shall administer the restrictions on use of assisted housing by noncitizens with ineligible immigration status imposed by this part in conformity with all applicable nondiscrimination and equal opportunity requirements, including, but not limited to, title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-2000d-5) and the implementing regulations in 24 CFR part 1, section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and the implementing regulations in 24 CFR part 8, the Fair Housing Act (42 U.S.C. 3601-3619) and the implementing regulations in 24 CFR part 100. </SECTION> <SECTION> <SECTNO>§ 5.526</SECTNO> <SUBJECT>Protection from liability for responsible entities and State and local government agencies and officials.</SUBJECT> (a) <E T="03">Protection from liability for responsible entities.</E> Responsible entities are protected from liability as set forth in Section 214(e) (42 U.S.C 1436a(e)). (b) <E T="03">Protection from liability for State and local government agencies and officials.</E> State and local government agencies and officials shall not be liable for the design or implementation of the verification system described in § 5.512, as long as the implementation by the State and local government agency or official is in accordance with prescribed HUD rules and requirements. <CITA>[61 FR 60540, Nov. 29, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 5.528</SECTNO> <SUBJECT>Liability of ineligible tenants for reimbursement of benefits.</SUBJECT> Where a tenant has received the benefit of HUD financial assistance to <PRTPAGE P="68"/>which the tenant was not entitled because the tenant intentionally misrepresented eligible status, the ineligible tenant is responsible for reimbursing HUD for the assistance improperly paid. If the amount of the assistance is substantial, the responsible entity is encouraged to refer the case to the HUD Inspector General's office for further investigation. Possible criminal prosecution may follow based on the False Statements Act (18 U.S.C. 1001 and 1010). </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Income Limits, Annual Income, Adjusted Income, Rent, and Examinations for the Public Housing and Section 8 Programs</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, and 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 54498, Oct. 18, 1996, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 5.601</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> (a) This subpart establishes definitions and requirements concerning income limits for admission, annual income, adjusted income, total tenant payment, utility allowances and reimbursements, and reexamination of income and family composition for: (1) HUD's public housing programs, including its public housing homeownership programs. (2) Housing assisted under section 8 of the United States Housing Act of 1937 (the 1937 Act) (42 U.S.C. 1437f). (i) Section 5.613 (Total tenant payment) and the definitions of “<E T="03">tenant rent</E>” and “<E T="03">total tenant payment</E>” found in § 5.603 do not apply to the Section 8 Rental Voucher Program. (ii) Section 5.615 (Utility reimbursement) and the definition of <E T="03">utility reimbursement</E> found in § 5.603 also do not apply to the Section 8 Rental Voucher Program. For the Voucher Program, in cases where the amount of the HAP payment exceeds the rent to owner, the excess will be paid to the family. (iii) Section 5.607 (Income limits for admission) does not apply to the Section 8 Rental Voucher and Rental Certificate Programs. (3) Applicants and tenants assisted under sections 10(c) and 23 of the 1937 Act as in effect before amendment by the Housing and Community Development Act of 1974 (42 U.S.C. 1410 and 1421b (1970 ed.)). (b) This subpart does not apply to HUD's Indian housing programs. The analogous rule that applies to Indian housing is located at 24 CFR part 950. </SECTION> <SECTION> <SECTNO>§ 5.603</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this subpart: (a) The terms <E T="03">elderly person, low-income family, person with disabilities, State,</E> and <E T="03">very low-income family</E> are defined in section 3(b) of the 1937 Act (42 U.S.C. 1437a(b)). (b) The terms <E T="03">1937 Act</E> and <E T="03">public housing agency (PHA)</E> are defined in § 5.100. (c) The terms <E T="03">disabled family, elderly family, family,</E> and <E T="03">live-in aide</E> are defined in § 5.403. (d) The following terms shall have the meanings set forth below: <E T="03">Adjusted income.</E> See § 5.611. <E T="03">Annual income.</E> See § 5.609. <E T="03">Child care expenses.</E> Amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary to enable a family member to actively seek employment, be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income. <E T="03">Dependent.</E> A member of the family (except foster children and foster adults) other than the family head or spouse, who is under 18 years of age, or is a person with a disability, or is a full-time student. <E T="03">Disability assistance expenses.</E> Reasonable expenses that are anticipated, during the period for which annual income is computed, for attendant care and auxiliary apparatus for a disabled family member and that are necessary to enable a family member (including the disabled member) to be employed, provided that the expenses are neither <PRTPAGE P="69"/>paid to a member of the family nor reimbursed by an outside source. <E T="03">Full-time student.</E> A person who is carrying a subject load that is considered full-time for day students under the standards and practices of the educational institution attended. An educational institution includes a vocational school with a diploma or certificate program, as well as an institution offering a college degree. <E T="03">Medical expenses.</E> Medical expenses, including medical insurance premiums, that are anticipated during the period for which annual income is computed, and that are not covered by insurance. <E T="03">Monthly adjusted income.</E> One twelfth of adjusted income. <E T="03">Monthly income.</E> One twelfth of annual income. <E T="03">Net family assets.</E> (1) Net cash value after deducting reasonable costs that would be incurred in disposing of real property, savings, stocks, bonds, and other forms of capital investment, excluding interests in Indian trust land and excluding equity accounts in HUD homeownership programs. The value of necessary items of personal property such as furniture and automobiles shall be excluded. (2) In cases where a trust fund has been established and the trust is not revocable by, or under the control of, any member of the family or household, the value of the trust fund will not be considered an asset so long as the fund continues to be held in trust. Any income distributed from the trust fund shall be counted when determining annual income under § 5.609. (3) In determining net family assets, PHAs or owners, as applicable, shall include the value of any business or family assets disposed of by an applicant or tenant for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the two years preceding the date of application for the program or reexamination, as applicable, in excess of the consideration received therefor. In the case of a disposition as part of a separation or divorce settlement, the disposition will not be considered to be for less than fair market value if the applicant or tenant receives important consideration not measurable in dollar terms. <E T="03">Owner</E> has the meaning provided in the relevant program regulations. As used in this subpart, where appropriate, the term “owner” shall also include a “borrower” as defined in 24 CFR part 885. <E T="03">Tenant rent.</E> The amount payable monthly by the family as rent to the PHA or owner, as applicable. Where all utilities (except telephone) and other essential housing services are supplied by the PHA or owner, tenant rent equals total tenant payment. Where some or all utilities (except telephone) and other essential housing services are supplied by the PHA or owner and the cost thereof is not included in the amount paid as rent, tenant rent equals total tenant payment less the utility allowance. <E T="03">Total tenant payment.</E> See § 5.613. <E T="03">Utility allowance.</E> If the cost of utilities (except telephone) and other housing services for an assisted unit is not included in the tenant rent but is the responsibility of the family occupying the unit, an amount equal to the estimate made or approved by a PHA or HUD of the monthly cost of a reasonable consumption of such utilities and other services for the unit by an energy-conservative household of modest circumstances consistent with the requirements of a safe, sanitary, and healthful living environment. <E T="03">Utility reimbursement.</E> The amount, if any, by which the utility allowance for the unit, if applicable, exceeds the total tenant payment for the family occupying the unit. <E T="03">Welfare assistance</E>. Welfare or other payments to families or individuals, based on need, that are made under programs funded, separately or jointly, by Federal, State or local governments. </SECTION> <SECTION> <SECTNO>§ 5.605</SECTNO> <SUBJECT>Overall income eligibility for assistance.</SUBJECT> No family other than a low-income family shall be eligible for admission to a program covered by this part. </SECTION> <SECTION> <SECTNO>§ 5.607</SECTNO> <SUBJECT>Income limits for admission.</SUBJECT> (a) <E T="03">General</E>—(1) <E T="03">Admission to units available before October 1, 1981</E>. Not more than 25 percent of the dwelling units that were available for occupancy under Annual Contributions Contracts <PRTPAGE P="70"/>(ACC) and Section 8 Housing Assistance Payments (HAP) Contracts taking effect before October 1, 1981 and that are leased on or after that date shall be available for leasing by low-income families other than very low-income families. HUD reserves the right to limit the admission of low-income families other than very low-income families to these units. (2) <E T="03">Admission to units available on or after October 1, 1981</E>. Not more than 15 percent of the dwelling units that initially become available for occupancy under Annual Contributions Contracts (ACC) and Section 8 Housing Assistance Payments (HAP) Contracts on or after October 1, 1981 shall be available for leasing by low-income families other than very low-income families. Except with the prior approval of HUD under paragraphs (b) and (c) of this section, no low-income family, other than a very low-income family shall be admitted to these units. (b) <E T="03">Request for exception</E>. A request by a PHA or owner for approval of admission of low-income families other than very low-income families to units described in paragraph (a)(2) of this section must state the basis for requesting the exception and provide supporting data. Bases for exceptions that may be considered include the following: (1) <E T="03">For Section 8 Programs.</E> (i) Low-income families that would otherwise be displaced from Section 8 Substantial Rehabilitation or Moderate Rehabilitation projects; (ii) Low-income families that are displaced as a result of Rental Rehabilitation or Development activities assisted under section 17 of the 1937 Act (42 U.S.C. 1437o), or as a result of activities under the Rental Rehabilitation Demonstration Program; (iii) Need for admission of a broader range of tenants to preserve the financial or management viability of a project because there is an insufficient number of potential applicants who are very low-income families; (iv) Commitment of an owner to attaining occupancy by families with a broad range of incomes, as evidenced in the application for development. An application citing this basis should be supported by evidence that the owner is pursuing this goal throughout its assisted projects in the community; and (v) Project supervision by a State Housing Finance Agency having a policy of occupancy by families with a broad range of incomes, supported by evidence that the Agency is pursuing this goal throughout its assisted projects in the community, or a project with financing through Section 11(b) of the 1937 Act (42 U.S.C. 1437i) or under Section 103 of the Internal Revenue Code (26 U.S.C. 103). (2) <E T="03">For public housing only</E>. (i) Need for admission of a broader range of tenants to obtain full occupancy; (ii) Local commitment to attaining occupancy by families with a broad range of incomes. An application citing this basis should be supported by evidence that the PHA is pursuing this goal throughout its housing program in the community; (iii) Need for higher incomes to sustain homeownership eligibility in a homeownership project; and (iv) Need to avoid displacing low-income families from a project acquired by the PHA for rehabilitation. (c) <E T="03">Action on request for exception</E>. Whether to grant any request for exception is a matter committed by law to HUD's sole discretion, and no implication is intended to be created that HUD will seek to grant approvals up to the maximum limits permitted by statute, nor is any presumption of an entitlement to an exception created by the specification of certain grounds for exception that HUD may consider. HUD will review exceptions granted to owners and PHAs at regular intervals. HUD may withdraw permission to exercise those exceptions for program applicants at any time that exceptions are not being used or after a periodic review, based on the findings of the review. (d) <E T="03">Reporting</E>. PHAs and owners shall comply with HUD-prescribed reporting requirements that will permit HUD to maintain the reasonably current data necessary to monitor compliance with the income eligibility restrictions described in paragraph (a) of this section. (e) <E T="03">Inapplicability to certain scattered site housing</E>. The income eligibility restrictions described in paragraph (a) of this section do not apply to scattered <PRTPAGE P="71"/>site public housing dwelling units sold or intended to be sold to public housing tenants under section 5(h) of the 1937 Act (42 U.S.C. 1437c(h)). (f) <E T="03">Inapplicability to the Section 8 Rental Voucher and Rental Certificate Programs</E>. The provisions of this section do not apply to the Section 8 Rental Voucher and Section 8 Rental Certificate Programs. <APPRO>(Approved by the Office of Management and Budget under Control number 2502-0204.)</APPRO> </SECTION> <SECTION> <SECTNO>§ 5.609</SECTNO> <SUBJECT>Annual income.</SUBJECT> (a) <E T="03">Annual income</E> means all amounts, monetary or not, which: (1) Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or (2) Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3) Which are not specifically excluded in paragraph (c) of this section. (4) Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access. (b) Annual income includes, but is not limited to: (1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (2) The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family; (3) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD; (4) The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); (5) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section); (6) <E T="03">Welfare assistance</E>. If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of: (i) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus (ii) The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph (b)(6)(ii) shall be the amount resulting from one application of the percentage;<PRTPAGE P="72"/> (7) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling; (8) All regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section). (c) Annual income does not include the following: (1) Income from employment of children (including foster children) under the age of 18 years; (2) Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); (3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses (except as provided in paragraph (b)(5) of this section); (4) Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member; (5) Income of a live-in aide, as defined in § 5.403; (6) The full amount of student financial assistance paid directly to the student or to the educational institution; (7) The special pay to a family member serving in the Armed Forces who is exposed to hostile fire; (8)(i) Amounts received under training programs funded by HUD; (ii) Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); (iii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (iv) Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, and resident initiatives coordination. No resident may receive more than one such stipend during the same period of time; (v) Incremental earnings and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program; (9) Temporary, nonrecurring or sporadic income (including gifts); (10) Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; (11) Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household and spouse); (12) Adoption assistance payments in excess of $480 per adopted child; (13) <E T="03">For public housing only:</E> (i) The earnings and benefits to any family member resulting from the participation in a program providing employment training and supportive services in accordance with the Family Support Act of 1988, section 22 of the 1937 Act (42 U.S.C. 1437t), or any comparable Federal, State, or local law during the exclusion period. (ii) For purposes of this paragraph, the following definitions apply: (A) <E T="03">Comparable Federal, State or local law</E> means a program providing employment training and supportive services that—<PRTPAGE P="73"/> (<E T="03">1</E>) Is authorized by a Federal, State or local law; (<E T="03">2</E>) Is funded by the Federal, State or local government; (<E T="03">3</E>) Is operated or administered by a public agency; and (<E T="03">4</E>) Has as its objective to assist participants in acquiring employment skills. (B) <E T="03">Exclusion period</E> means the period during which the family member participates in a program described in this section, plus 18 months from the date the family member begins the first job acquired by the family member after completion of such program that is not funded by public housing assistance under the 1937 Act. If the family member is terminated from employment with good cause, the exclusion period shall end. (C) <E T="03">Earnings and benefits</E> means the incremental earnings and benefits resulting from a qualifying employment training program or subsequent job; (14) Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts. (15) Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit; (16) Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or (17) Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the <E T="04">Federal Register</E> and distributed to PHAs and housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. (d) <E T="03">For public housing only.</E> In addition to the exclusions from annual income covered in paragraph (c) of this section, a PHA may adopt additional exclusions for earned income pursuant to an established written policy. (1) In establishing such a policy, a PHA must adopt one or more of the following types of earned income exclusions, including variations thereof: (i) Exclude all or part of the family's earned income; (ii) Apply the exclusion only to new sources of earned income or only to increases in earned income; (iii) Apply the exclusion to the earned income of the head, the spouse, or any other family member age 18 or older; (iv) Apply the exclusion only to the earned income of persons other than the primary earner; (v) Apply the exclusion to applicants, newly admitted families, existing tenants, or persons joining the family; (vi) Make the exclusion temporary or permanent, for the PHA, the family, or the affected family member; (vii) Make the exclusion graduated, so that more earned income is excluded at first and less earned income is excluded after a period of time; (viii) Exclude any or all of the costs that are incurred in order to go to work but are not compensated, such as the cost of special tools, equipment, or clothing; (ix) Exclude any or all of the costs that result from earning income, such as social security taxes or other items that are withheld in payroll deductions; (x) Exclude any portion of the earned income that is not available to meet the family's own needs, such as amounts that are paid to someone outside the family for alimony or child support; and (xi) Exclude any portion of the earned income that is necessary to replace benefits lost because a family member becomes employed, such as amounts that the family pays for medical costs or to obtain medical insurance. (2) Any amounts that are excluded from annual income under this paragraph (d) may not also be deducted in determining adjusted income, as defined in § 5.611. (3) Housing agencies do not need HUD approval to adopt optional earned income exclusions.<PRTPAGE P="74"/> (4) In the calculation of Performance Funding System operating subsidy eligibility, housing agencies will have to absorb any loss in rental income that results from the adoption of any of the optional earned income exclusions discussed in paragraph (d)(1) of this section, including any variations of the listed options. (e) If it is not feasible to anticipate a level of income over a 12-month period, the income anticipated for a shorter period may be annualized, subject to a redetermination at the end of the shorter period. </SECTION> <SECTION> <SECTNO>§ 5.611</SECTNO> <SUBJECT>Adjusted income.</SUBJECT> Adjusted income means annual income less the following deductions: (a) $480 for each dependent; (b) $400 for any elderly family or disabled family; (c) For any family that is not an elderly family or disabled family but has a member (other than the head of household or spouse) who is a person with a disability, disability assistance expenses in excess of three percent of annual income, but this allowance may not exceed the employment income received by family members who are 18 years of age or older as a result of the assistance to the person with disabilities; (d) For any elderly family or disabled family: (1) That has no disability assistance expenses, an allowance for medical expenses equal to the amount by which the medical expenses exceed three percent of annual income; (2) That has disability assistance expenses greater than or equal to three percent of annual income, an allowance for disability assistance expenses computed in accordance with paragraph (c) of this section, plus an allowance for medical expenses that is equal to the family's medical expenses; (3) That has disability assistance expenses that are less than three percent of annual income, an allowance for combined disability assistance expenses and medical expenses that is equal to the amount by which the sum of these expenses exceeds three percent of annual income; and (e) Child care expenses. </SECTION> <SECTION> <SECTNO>§ 5.613</SECTNO> <SUBJECT>Total tenant payment.</SUBJECT> (a) <E T="03">Total tenant payment for families whose initial lease is effective on or after August 1, 1982.</E> (1) Total tenant payment is the amount calculated under section 3(a)(1) of the 1937 Act (42 U.S.C. 1437a(a)(1)). If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under paragraph (C) of section 3(a)(1) of the 1937 Act (42 U.S.C. 1437a(a)(1)(C)) shall be the amount resulting from one application of the percentage. (2) <E T="03">For public housing only.</E> Total tenant payment for families residing in public housing does not include charges for excess utility consumption or other miscellaneous charges (see § 966.4 of this chapter). (b) <E T="03">Total tenant payment for families residing in public housing whose initial lease was effective before August 1, 1982.</E> Paragraphs (b) and (c) of 24 CFR 913.107, as it existed immediately before November 18, 1996 (contained in the April 1, 1995 edition of 24 CFR, parts 900 to 1699), will continue to govern the total tenant payment of families, under a public housing program, whose initial lease was effective before August 1, 1982. (c) <E T="03">Inapplicability to the Section 8 Rental Voucher Program.</E> The provisions of this section do not apply to the Section 8 Rental Voucher Program. </SECTION> <SECTION> <SECTNO>§ 5.615</SECTNO> <SUBJECT>Utility reimbursements.</SUBJECT> (a) <E T="03">General.</E> Where applicable, the utility reimbursement shall be paid to the family in the manner provided in the pertinent program regulations. If the family and the utility company consent, a PHA or owner may pay the utility reimbursement jointly to the family and the utility company, or directly to the utility company. (b) <E T="03">Inapplicability to the Section 8 Rental Voucher Program.</E> The provisions of this section do not apply to the Section 8 Rental Voucher Program. For the Voucher Program, in cases where the amount of the HAP payment exceeds the rent to owner, the excess will be paid to the family. </SECTION> <SECTION> <PRTPAGE P="75"/> <SECTNO>§ 5.617</SECTNO> <SUBJECT>Reexamination and verification.</SUBJECT> (a) <E T="03">Responsibility for initial determination and reexamination.</E> The PHA or owner, as applicable, must conduct a reexamination of family income and composition at least annually. The “effective date” of an examination or reexamination refers to: (1) In the case of an examination for admission, the effective date of the lease; and (2) In the case of a reexamination of an existing participant, the effective date of the redetermined housing assistance payment with respect to the Rental Voucher program and the effective date of the redetermined total tenant payment in all other cases. (b) <E T="03">Verification.</E> (1) As a condition of admission to, or continued occupancy of, any assisted unit, the PHA or owner, as applicable, shall require the family head and other such family members as it designates to execute a HUD-approved release and consent form (including any release and consent as required under 24 CFR part 760) authorizing any depository or private source of income, or any Federal, State or local agency, to furnish or release to the PHA or owner, as applicable, and to HUD such information as the HA or owner, as applicable, and HUD determines to be necessary. (2) The PHA or owner shall also require the family to submit directly documentation determined to be necessary. Information or documentation shall be considered necessary if it is required for purposes of determining or auditing a family's eligibility to receive housing assistance, for determining the family's annual income, adjusted income or total tenant payment. (3) The use or disclosure of information obtained from a family or from another source pursuant to this release and consent shall be limited to purposes directly connected with administration of this subpart or applying for assistance. <APPRO>(Approved by the Office of Management and Budget under control numbers 2502-0204 and 2577-0083.)</APPRO> <CITA>[61 FR 54498, Oct. 18, 1996, as amended at 62 FR 27125, May 16, 1997]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 7</EAR> <HD SOURCE="HED">PART 7—EQUAL EMPLOYMENT OPPORTUNITY; POLICY AND PROCEDURES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Equal Employment Opportunity Without Regard to Race, Color, Religion, Sex, National Origin, Age, or Disability</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>7.1</SECTNO> <SUBJECT>Policy.</SUBJECT> <SECTNO>7.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>7.3</SECTNO> <SUBJECT>Designations.</SUBJECT> <SECTNO>7.4</SECTNO> <SUBJECT>Affirmative employment programs.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Responsibilities</HD> <SECTNO>7.10</SECTNO> <SUBJECT>Responsibilities of the Director and Deputy Director of EEO.</SUBJECT> <SECTNO>7.11</SECTNO> <SUBJECT>Responsibilities of the EEO Officers.</SUBJECT> <SECTNO>7.12</SECTNO> <SUBJECT>Responsibilities of the EEO Counselors.</SUBJECT> <SECTNO>7.13</SECTNO> <SUBJECT>Responsibilities of the Assistant Secretary for Administration.</SUBJECT> <SECTNO>7.14</SECTNO> <SUBJECT>Responsibilities of Human Resources Officers.</SUBJECT> <SECTNO>7.15</SECTNO> <SUBJECT>Responsibilities of managers and supervisors.</SUBJECT> <SECTNO>7.16</SECTNO> <SUBJECT>Responsibilities of employees.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Precomplaint Processing</HD> <SECTNO>7.25</SECTNO> <SUBJECT>Precomplaint processing.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Complaints</HD> <SECTNO>7.30</SECTNO> <SUBJECT>Presentation of complaint.</SUBJECT> <SECTNO>7.31</SECTNO> <SUBJECT>Who may file a complaint, with whom filed, and time limits.</SUBJECT> <SECTNO>7.32</SECTNO> <SUBJECT>Contents.</SUBJECT> <SECTNO>7.33</SECTNO> <SUBJECT>Acceptability.</SUBJECT> <SECTNO>7.34</SECTNO> <SUBJECT>Processing.</SUBJECT> <SECTNO>7.35</SECTNO> <SUBJECT>Hearing.</SUBJECT> <SECTNO>7.36</SECTNO> <SUBJECT>Decision by Director of EEO.</SUBJECT> <SECTNO>7.37</SECTNO> <SUBJECT>Rights of appeal.</SUBJECT> <SECTNO>7.38</SECTNO> <SUBJECT>Relationship to other HUD appellate procedures.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B [Reserved]</HD> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d); E.O. 11478, 3 CFR, 1969 Comp. p. 306; 42 U.S.C. 2000e note. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 61 FR 14228, Mar. 29, 1996, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Equal Employment Opportunity Without Regard to Race, Color, Religion, Sex, National Origin, Age, or Disability</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 7.1</SECTNO> <SUBJECT>Policy.</SUBJECT> In conformity with the policy expressed in Executive Order 11478 (34 FR <PRTPAGE P="76"/>12985, 3 CFR, 1966-1970 Comp., p. 803) and with implementing regulations of the Equal Employment Opportunity Commission, codified under 29 CFR part 1614, it is the policy and the intent of the Department of Housing and Urban Development to provide equality of opportunity in employment in the Department for all persons; to prohibit discrimination because of race, color, religion, sex, national origin, age or disability in all aspects of its personnel policies, program, practices, and operations and in all its working conditions and relationships with employees and applicants for employment; and to promote the full realization of equal opportunity in employment through continuing programs of affirmative employment at every management level within the Department. </SECTION> <SECTION> <SECTNO>§ 7.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this subpart A— <E T="03">AE</E> means Affirmative Employment. <E T="03">EEO</E> means Equal Employment Opportunity. <E T="03">Organizational unit</E> means the jurisdictional area of the Office of the Secretary, the Assistant to the Deputy Secretary for Field Management, each Assistant Secretary, the General Counsel, the Inspector General, the President of the Government National Mortgage Association, the Chief Financial Officer, the Director of Lead-Based Paint Abatement and Poisoning Prevention, and the Office of Federal Housing Enterprise Oversight. <E T="03">Person with a disability</E> means the same as handicap under EEOC's regulations at 29 CFR part 1614. </SECTION> <SECTION> <SECTNO>§ 7.3</SECTNO> <SUBJECT>Designations.</SUBJECT> (a) <E T="03">Director of Equal Employment Opportunity.</E> The Director of the Office of Departmental Equal Employment Opportunity is designated the Director of EEO, except that with respect to complaints naming the Director and/or Deputy Director of Departmental EEO as the alleged discriminating official(s) and complaints arising in the Office of Departmental EEO, the Chief of Staff shall be Director of EEO. (b) <E T="03">Deputy Director of Equal Employment Opportunity.</E> The Deputy Director of the Office of Departmental Equal Employment Opportunity is designated as the Deputy Director of Equal Employment Opportunity and acts for the Director of EEO. (c) <E T="03">Equal Employment Opportunity Officers.</E> The Director of Equal Employment Opportunity shall designate appropriate HUD officials to be Equal Employment Opportunity Officers for their respective organizational units. </SECTION> <SECTION> <SECTNO>§ 7.4</SECTNO> <SUBJECT>Affirmative employment programs.</SUBJECT> The Office of the Secretary, the Assistant to the Deputy Secretary for Field Management, each Assistant Secretary, the General Counsel, the Inspector General, the President of the Government National Mortgage Association, the Chief Financial Officer, the Director of Lead-Based Paint Abatement and Poisoning Prevention, and the Director, Office of Federal Housing Enterprise Oversight shall establish, maintain and carry out a plan of affirmative employment to promote equal opportunity in every aspect of employment policy and practice. Each plan shall identify instances of under-representation of minorities, women and persons with disabilities, recognize situations or barriers that impede equality of opportunity, and include objectives and action items targeted to eliminate any employment, training, advancement, and retention issues which adversely affect minorities, women and persons with disabilities. Each plan must be consistent with 29 CFR part 1614 and the governing Management Directive issued by the Equal Employment Opportunity Commission, and is subject to approval by the Director of Equal Employment Opportunity and shall be developed within the framework of Departmentwide guidelines published by the Director of EEO. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Responsibilities</HD> <SECTION> <SECTNO>§ 7.10</SECTNO> <SUBJECT>Responsibilities of the Director and Deputy Director of EEO.</SUBJECT> The Director and Deputy Director of EEO are assigned the functions of: (a) Advising the Secretary with respect to the preparation of plans, procedures, regulations, reports, and other matters pertaining to the Government's equal employment opportunity <PRTPAGE P="77"/>policy and the Department's EEO/AE programs; (b) In coordination with other officials, developing and maintaining plans, procedures, and regulations necessary to carry out the Department's EEO programs, including a Departmentwide program of affirmative employment developed in coordination with other officials; approving programs of affirmative employment established throughout the Department; (c) Evaluating from time to time the sufficiency of the Department's EEO/AE programs and reporting thereon to the Secretary with recommendations as to any improvement or correction needed, including remedial or disciplinary action with respect to managerial or supervisory employees who have failed in their responsibility; (d) Appraising the Department's personnel operations at regular intervals to insure their conformity with the policy of the Government and the Department's equal employment opportunity program; (e) Making changes in programs and procedures designed to eliminate discriminatory practices and improve the Department's EEO/AE programs; (f) Selecting EEO Counselors; (g) Providing for counseling by an EEO Counselor of an aggrieved employee or applicant for employment who believes that he or she has been discriminated against because of race, color, religion, sex, national origin, age or disability and for attempting to resolve on an informal basis or through a formal alternative dispute resolution process, the matter raised by the employee or applicant before a complaint of discrimination may be filed under § 7.31; (h) Providing for the prompt, fair and impartial processing of individual complaints involving issues of discrimination within the Department subject to 29 CFR part 1614; (i) Making the final decision on discrimination complaints and ordering such corrective measures as may be necessary, including disciplinary action as is warranted by the circumstances when an employee has been found to have engaged in a discriminatory practice; and (j) Executing settlement agreements to resolve EEO complaints. </SECTION> <SECTION> <SECTNO>§ 7.11</SECTNO> <SUBJECT>Responsibilities of the EEO Officers.</SUBJECT> Each EEO Officer shall: (a) Advise the Director of EEO on all matters affecting the implementation of the Department's EEO/AE policies and programs in the organizational unit; (b) Develop and maintain a program of affirmative employment for the organizational unit and insure that it is carried out in an exemplary manner; (c) Publicize to all employees of the organizational unit the name and address of the Director of EEO, the EEO Officer, and the EEO Counselor(s), the EEO Discrimination Complaint Manager, the Affirmative Employment Program (AEP) Manager, the Diversity Program Manager, and the EEO complaint procedures; (d) Inform all supervisors in the organizational unit of the responsibilities and objectives of the EEO Counselors and the EEO complaint process and the importance of cooperating with the Counselors to informally find solutions to problems brought to the officer's attention by employees and applicants; (e) Evaluate the performance by the managers and supervisors in the organizational unit in carrying out their responsibilities under this subpart and taking appropriate action; (f) Seek a resolution of EEO matters alleging discrimination within their organization brought to their attention; (g) Designate a high level Affirmative Employment Program (AEP) Manager in Headquarters responsible for the preparation of the AEP plan; the management of the plan; providing advice and guidance to managers and supervisors in removing barriers to EEO/AE and in implementing all their EEO/AE responsibilities; and reviewing all recruitment and personnel actions taken by managers and supervisors to ensure the achievement of AEP objectives; (h) Designate a senior level EEO Discrimination Complaint Manager in Headquarters to manage and direct the organization's EEO responsibilities; and<PRTPAGE P="78"/> (i) Designate a senior level Diversity Program Manager in Headquarters to manage and direct the organization's Diversity Program and provide resources for Diversity activities for its employees. </SECTION> <SECTION> <SECTNO>§ 7.12</SECTNO> <SUBJECT>Responsibilities of the EEO Counselors.</SUBJECT> The EEO Counselors are responsible for counseling and attempting resolution of matters brought to the counselor's attention pursuant to § 7.26 and 29 CFR part 1614 by any employee or applicant for employment who believes that he or she has been discriminated against because of race, color, religion, sex, national origin, age, or disability. </SECTION> <SECTION> <SECTNO>§ 7.13</SECTNO> <SUBJECT>Responsibilities of the Assistant Secretary for Administration.</SUBJECT> The Assistant Secretary for Administration shall: (a) Provide leadership in developing and maintaining personnel management policies, programs, automated systems and procedures which will promote continuing affirmative employment to insure equal opportunity in the recruitment, selection, placement, training, awards, recognition and promotion of employees, including an applicant flow tracking system; (b) Provide positive assistance and guidance to organizational units and personnel offices to insure the effective implementation of the personnel management policies, programs, automated systems, and procedures on equal employment opportunity; (c) Participate at the national level with other Government departments and agencies, other employers, and other public and private groups, in cooperative action to improve employment opportunities and community conditions which effect employability; (d) Prepare and implement plans for recruitment and reports in accordance with the Federal Equal Opportunity Recruitment Program and the Disabled Veterans Affirmative Action Program; (e) Make reasonable accommodation to the known physical or mental limitations of qualified applicants and employees with disabilities unless the accommodation would impose an undue hardship on the operation of the agency's program; and (f) Designate a senior level Disability Program Manager to promote EEO/AE for persons with disabilities; to assure the accessibility of all HUD facilities and programs; and to manage the resources for providing reasonable accommodation. </SECTION> <SECTION> <SECTNO>§ 7.14</SECTNO> <SUBJECT>Responsibilities of Human Resources Officers.</SUBJECT> In conformity with guidelines issued by the Assistant Secretary for Administration, Human Resources Officers shall: (a) Appraise job structure and employment practices to insure genuine equality of opportunity for all employees to participate fully on the basis of merit in all occupations and levels of responsibility; (b) Communicate the Department's equal employment opportunity policy and program and its employment needs to all sources of job candidates without regard to race, color, religion, sex, national origin, disability or age and solicit their recruitment assistance on a continuing basis; (c) As appropriate, provide personnel information to EEO counselors and others who are involved in the decision on a discrimination complaint; (d) Evaluate hiring methods and practices to insure impartial consideration for all job applicants; (e) Ensure that new employee orientation programs contain appropriate references to the Department's EEO/AE policies and programs; (f) Participate in the preparation and distribution of such educational materials as may be necessary to inform adequately all employees of their rights and responsibilities as described in this part, including the Department's directives issued to carry out the Equal Employment Opportunity Program; (g) In coordination with the Director of the Training Academy, develop an on-going training program for various levels of administration and supervision, to ensure understanding of the Departmental EEO/AE programs, policy and requirements which fosters effective teamwork and high morale, and provide communication with employees on any matter related to equal employment opportunity;<PRTPAGE P="79"/> (h) Decide all personnel actions on merit principles in a manner which will demonstrative affirmative equal employment opportunity for the organization; (i) Ensure the greatest possible utilization and development of the skills and potential ability of all employees; (j) Track applicant flow and promptly take or recommend appropriate action to overcome any impediment to the achievement of the objectives of the EEO/AE programs; and (k) Provide recognition to employees, supervisors, managers and units demonstrating superior accomplishment in equal employment opportunity. </SECTION> <SECTION> <SECTNO>§ 7.15</SECTNO> <SUBJECT>Responsibilities of managers and supervisors.</SUBJECT> All managers and supervisors of the Department are responsible for: (a) Removing barriers to EEO and ensuring that Affirmative Employment objectives are accomplished in their areas of responsibility; (b) Evaluating subordinate managers and supervisors on their performance of EEO/AE responsibilities; (c) Encouraging and taking positive steps to ensure respect for and acceptance of minorities, women and persons with disabilities, veterans and others of diverse characteristics in the work force; (d) Providing for the non-discriminatory treatment of all employees and for providing full and fair opportunity for all employees in obtaining employment and career advancement, including support for F.A.I.R., the Upward Mobility Program, the Mentoring Program and the Individual Development Plan; (e) Encouraging and authorizing staff participation in the various Diversity Program observances; (f) Being proactive in addressing EEO/AE issues, and for work environments that encourage and support complaint avoidance through sound management and personnel practices; (g) Resolving complaints of discrimination early in the EEO process either independently, or through the use of alternate dispute resolution techniques, when it is the right thing to do and when it represents a sound business decision; and (h) Making reasonable accommodation to the religious and disability needs of applicants and employees when those accommodations can be made without undue hardship on the business of the agency. </SECTION> <SECTION> <SECTNO>§ 7.16</SECTNO> <SUBJECT>Responsibilities of employees.</SUBJECT> All employees of the Department are responsible for: (a) Being informed as to the Department's EEO/AE programs; (b) Adopting an attitude of full acceptance of minority, female and disabled group associates, and support of F.A.I.R.; (c) Providing equality of treatment of, and service to, all citizens with whom they come in contact in carrying out their job responsibilities; and (d) Providing assistance to supervisors and managers in carrying out their responsibilities in the EEO/AE programs. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Precomplaint Processing</HD> <SECTION> <SECTNO>§ 7.25</SECTNO> <SUBJECT>Precomplaint processing.</SUBJECT> The regulations in 29 CFR 1614.105, concerning precomplaint processing shall apply. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Complaints</HD> <SECTION> <SECTNO>§ 7.30</SECTNO> <SUBJECT>Presentation of complaint.</SUBJECT> At any stage in the presentation of a complaint, including the counseling stage, the Complainant shall be free from restraint, interference, coercion, discrimination, or reprisal and shall have the right to be accompanied, represented, and advised by a representative of the Complainant's own choosing, except as limited by 29 CFR 1614.605. If the Complainant is an employee of the Department, the employee shall have a reasonable amount of official time to present the complaint if the employee is otherwise in an active duty status. If the Complainant is an employee of the Department and designates another employee of the Department as Complainant's representative, the representative shall be free from restraint, interference, coercion, discrimination, or reprisal, and <PRTPAGE P="80"/>shall have a reasonable amount of official time, if the representative is otherwise in an active duty status, to present the complaint. </SECTION> <SECTION> <SECTNO>§ 7.31</SECTNO> <SUBJECT>Who may file a complaint, with whom filed, and time limits.</SUBJECT> Any aggrieved person (hereafter referred to as the Complainant) who has observed the provisions of § 7.25 may file a complaint if the matter of discrimination was not resolved to the complainant's satisfaction. The complaint must be filed with the Director of EEO within fifteen (15) days of receipt of the Notice of Right to File a Complaint issued by the EEO Counselor. The Department may accept a complaint only if the Complainant has met the appropriate requirements contained in 29 CFR 1614.605. </SECTION> <SECTION> <SECTNO>§ 7.32</SECTNO> <SUBJECT>Contents.</SUBJECT> (a) The complaint filed should include the following information: (1) The specific action or personnel matter which is alleged to be discriminatory; (2) The date the act or matter occurred; (3) The protected basis or bases on which the alleged discrimination occurred; (4) Facts and other pertinent information to support the allegation of discrimination; and (5) The relief desired. (b) To expedite the processing of complaints of discrimination, the Complainant should use HUD EEO-1 form to file the complaint. </SECTION> <SECTION> <SECTNO>§ 7.33</SECTNO> <SUBJECT>Acceptability.</SUBJECT> The Director of EEO shall determine whether the complaint comes within the purview of the EEO regulations at 29 CFR part 1614 and shall advise the Complainant and Complainant's representative in writing of the acceptance or dismissal of the allegation(s) of the complaint. Should the Director of EEO dismiss the complaint or any allegations contained in the complaint, the written decision to the Complainant shall inform Complainant of the complainant's right to appeal the decision and of the time limit applicable to the right of appeal, if Complainant believes the dismissal improper. </SECTION> <SECTION> <SECTNO>§ 7.34</SECTNO> <SUBJECT>Processing.</SUBJECT> (a) The Director of EEO will process complaints filed under 29 CFR part 1614 for the Department. The Director or the Director's designee has jurisdiction of any case. (b) The Director of EEO shall provide for the development of a complete and impartial record on which to decide the merits of the allegations accepted for investigation. (1) The person assigned to develop the factual record for the complaint shall occupy a position in the Department which is not, directly or indirectly, under the jurisdiction of the head of the part of the Department in which the complaint arose, or the person shall develop the record under a contract with the Department. (2) The Department will develop a complete and impartial factual record, subject to the requirements of 29 CFR part 1614, upon which to make findings on the matters raised in the complaint and accepted for processing. (3) The Director of EEO will provide the Complainant and the EEO Officer a copy of the record developed. </SECTION> <SECTION> <SECTNO>§ 7.35</SECTNO> <SUBJECT>Hearing.</SUBJECT> (a) The Director of EEO will notify the Complainant of the Complainant's right to request an administrative hearing before the Equal Employment Opportunity Commission or a Final Agency Decision from the Department and the timeframes for executing the right to request an administrative hearing. (b) The Director of EEO will notify the appropriate EEOC office of Complainant's timely request for a hearing and request the appointment of an administrative judge to conduct the hearing pursuant to 29 CFR 1614.109. </SECTION> <SECTION> <SECTNO>§ 7.36</SECTNO> <SUBJECT>Decision by Director of EEO.</SUBJECT> Following consultation with the General Counsel and the Assistant Secretary for Administration, the Director of EEO shall make the final agency decision for the Department based on the record developed through the processing of the complaint. The decision shall require the remedial and corrective action necessary to ensure that the Department is in compliance with the EEO statutes and to promote the <PRTPAGE P="81"/>Department's policy of equal employment opportunity. </SECTION> <SECTION> <SECTNO>§ 7.37</SECTNO> <SUBJECT>Rights of appeal.</SUBJECT> The provisions of 29 CFR part 1614, subpart D, shall govern rights of appeal. </SECTION> <SECTION> <SECTNO>§ 7.38</SECTNO> <SUBJECT>Relationship to other HUD appellate procedures.</SUBJECT> (a) An aggrieved individual covered by a collective bargaining agreement that permits allegations of discrimination to be raised in a negotiated grievance procedure can file a complaint under these procedures or a negotiated grievance, but not both. An election to proceed under this part is indicated only by filing of a written complaint. An election to proceed under a negotiated grievance procedure is indicated by the filing of a timely grievance. (b) An aggrieved individual alleging discrimination on the basis of race, color, religion, sex, national origin, age or disability related to or stemming from an action that can be appealed to the Merit Systems Protection Board (MSPB) can file a complaint under these procedures, or an appeal with the MSPB, but not both. Whichever is filed first, the complaint or the appeal, is considered an election to proceed in that forum. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B [Reserved]</HD> </SUBPART> </PART> <PART> <EAR>Pt. 8</EAR> <HD SOURCE="HED">PART 8—NONDISCRIMINATION BASED ON HANDICAP IN FEDERALLY ASSISTED PROGRAMS AND ACTIVITIES OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>8.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>8.2</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>8.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>8.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> <SECTNO>8.5</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>8.6</SECTNO> <SUBJECT>Communications.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Employment</HD> <SECTNO>8.10</SECTNO> <SUBJECT>General prohibitions against employment discrimination.</SUBJECT> <SECTNO>8.11</SECTNO> <SUBJECT>Reasonable accommodation.</SUBJECT> <SECTNO>8.12</SECTNO> <SUBJECT>Employment criteria.</SUBJECT> <SECTNO>8.13</SECTNO> <SUBJECT>Preemployment inquiries.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Program Accessibility</HD> <SECTNO>8.20</SECTNO> <SUBJECT>General requirement concerning program accessibility.</SUBJECT> <SECTNO>8.21</SECTNO> <SUBJECT>Non-housing facilities.</SUBJECT> <SECTNO>8.22</SECTNO> <SUBJECT>New construction—housing facilities.</SUBJECT> <SECTNO>8.23</SECTNO> <SUBJECT>Alterations of existing housing facilities.</SUBJECT> <SECTNO>8.24</SECTNO> <SUBJECT>Existing housing programs.</SUBJECT> <SECTNO>8.25</SECTNO> <SUBJECT>Public housing and multi-family Indian housing.</SUBJECT> <SECTNO>8.26</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> <SECTNO>8.27</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> <SECTNO>8.28</SECTNO> <SUBJECT>Housing certificate and housing voucher programs.</SUBJECT> <SECTNO>8.29</SECTNO> <SUBJECT>Homeownership programs (sections 235(i) and 235(j), Turnkey III and Indian Housing Mutual Self-Help Programs).</SUBJECT> <SECTNO>8.30</SECTNO> <SUBJECT>Rental rehabilitation program.</SUBJECT> <SECTNO>8.31</SECTNO> <SUBJECT>Historic properties.</SUBJECT> <SECTNO>8.32</SECTNO> <SUBJECT>Accessibility standards.</SUBJECT> <SECTNO>8.33</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Enforcement</HD> <SECTNO>8.50</SECTNO> <SUBJECT>Assurances required.</SUBJECT> <SECTNO>8.51</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> <SECTNO>8.52</SECTNO> <SUBJECT>Remedial and affirmative action.</SUBJECT> <SECTNO>8.53</SECTNO> <SUBJECT>Designation of responsible employee and adoption of grievance procedures.</SUBJECT> <SECTNO>8.54</SECTNO> <SUBJECT>Notice.</SUBJECT> <SECTNO>8.55</SECTNO> <SUBJECT>Compliance information.</SUBJECT> <SECTNO>8.56</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> <SECTNO>8.57</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> <SECTNO>8.58</SECTNO> <SUBJECT>Hearings.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 29 U.S.C. 794; 42 U.S.C. 3535(d) and 5309. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 20233, June 2, 1988, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 8.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) The purpose of this part is to effectuate section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C 794), to the end that no otherwise qualified individual with handicaps in the United States shall, solely by reason of his or her handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance from the Department of Housing and Urban Development. This part also implements section 109 of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5309). This part does not effectuate section 504 as <PRTPAGE P="82"/>it applies to any program or activity conducted by the Department. Compliance with this part does not assure compliance with requirements for accessibility by physically-handicapped persons imposed under the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157; 24 CFR part 40). (b) The policies and standards for compliance established by this part are established in contemplation of, and with a view to enforcement through, the Department's administration of programs or activities receiving Federal financial assistance and the administrative procedures described in subparts D and E (including, without limitation, judicial enforcement under § 8.57(a)). </SECTION> <SECTION> <SECTNO>§ 8.2</SECTNO> <SUBJECT>Applicability.</SUBJECT> This part applies to all applicants for, and recipients of, HUD assistance in the operation of programs or activities receiving such assistance. Such assistance includes, but is not limited to, that which is listed in appendix A of this part. </SECTION> <SECTION> <SECTNO>§ 8.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part: <E T="03">Accessible</E>, when used with respect to the design, construction, or alteration of a facility or a portion of a facility other than an individual dwelling unit, means that the facility or portion of the facility when designed, constructed or altered, can be approached, entered, and used by individuals with physical handicaps. The phrase <E T="03">accessible to and usable by</E> is synonomous with accessible. <E T="03">Accessible</E>, when used with respect to the design, construction, or alteration of an individual dwelling unit, means that the unit is located on an accessible route and when designed, constructed, altered or adapted can be approached, entered, and used by individuals with physical handicaps. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in § 8.32 is <E T="03">accessible</E> within the meaning of this paragraph. When a unit in an existing facility which is being made accessible as a result of alterations is intended for use by a specific qualified individual with handicaps (e.g., a current occupant of such unit or of another unit under the control of the same recipient, or an applicant on a waiting list), the unit will be deemed accessible if it meets the requirements of applicable standards that address the particular disability or impairment of such person. <E T="03">Accessible route</E> means a continuous unobstructed path connecting accessible elements and spaces in a building or facility that complies with the space and reach requirements of applicable standards prescribed by § 8.32. An accessible route that serves only accessible units occupied by persons with hearing or vision impairments need not comply with those requirements intended to effect accessibility for persons with mobility impairments. <E T="03">Adaptability</E> means the ability of certain elements of a dwelling unit, such as kitchen counters, sinks, and grab bars, to be added to, raised, lowered, or otherwise altered, to accommodate the needs of persons with or without handicaps, or to accommodate the needs of persons with different types or degrees of disability. For example, in a unit adaptable for a hearing-impaired person, the wiring for visible emergency alarms may be installed but the alarms need not be installed until such time as the unit is made ready for occupancy by a hearing-impaired person. <E T="03">Alteration</E> means any change in a facility or its permanent fixtures or equipment. It includes, but is not limited to, remodeling, renovation, rehabilitation, reconstruction, changes or rearrangements in structural parts and extraordinary repairs. It does not include normal maintenance or repairs, reroofing, interior decoration, or changes to mechanical systems. <E T="03">Applicant for assistance</E> means one who submits an application, request, plan, or statement required to be approved by a Department official or by a primary recipient as a condition of eligibility for Federal financial assistance. An application means such a request, plan or statement. <E T="03">Auxiliary aids</E> means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities receiving <PRTPAGE P="83"/>Federal financial assistance. For example, auxiliary aids for persons with impaired vision may include readers, Brailled materials, audio recordings, and other similar services and devices. Auxiliary aids for persons with impaired hearing may include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD's), interpreters, notetakers, written materials, and other similar services and devices. <E T="03">Department</E> or <E T="03">HUD</E> means the Department of Housing and Urban Development. <E T="03">Facility</E> means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other real or personal property or interest in the property. <E T="03">Federal financial assistance</E> means any assistance provided or otherwise made available by the Department through any grant, loan, contract or any other arrangement, in the form of: (a) Funds; (b) Services of Federal personnel; or (c) Real or personal property or any interest in or use of such property, including: (1) Transfers or leases of the property for less than fair market value or for reduced consideration; and (2) Proceeds from a subsequent transfer or lease of the property if the Federal share of its fair market value is not returned to the Federal Government. <E T="03">Federal financial assistance</E> includes community development funds in the form of proceeds from loans guaranteed under section 108 of the Housing and Community Development Act of 1974, as amended, but does not include assistance made available through direct Federal procurement contracts or payments made under these contracts or any other contract of insurance or guaranty. <E T="03">Handicap</E> means any condition or characteristic that renders a person an individual with handicaps. <E T="03">Historic preservation programs or activities</E> means programs or activities receiving Federal financial assistance that have preservation of historic properties as a primary purpose. <E T="03">Historic properties</E> means those properties that are listed or are eligible for listing in the National Register of Historic Places, or such properties designated as historic under a statute of the appropriate State or local government body. <E T="03">Individual with handicaps</E> means any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such an impairment; or is regarded as having such an impairment. For purposes of employment, this term does not include: Any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents the individual from performing the duties of the job in question, or whose employment, by reason of current alcohol or drug abuse, would constitute a direct threat to property or the safety of others; or any individual who has a currently contagious disease or infection and who, by reason of such disease or infection, would constitute a direct threat to the health or safety of other individuals or who, by reason of the currently contagious disease or infection, is unable to perform the duties of the job. For purposes of other programs and activities, the term does not include any individual who is an alcoholic or drug abuser whose current use of alcohol or drugs prevents the individual from participating in the program or activity in question, or whose participation, by reason of such current alcohol or drug abuse, would constitute a direct threat to property or the safety of others. As used in this definition, the phrase: (a) <E T="03">Physical or mental impairment</E> includes: (1) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or (2) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term <E T="03">physical or mental impairment</E> includes, but is not limited <PRTPAGE P="84"/>to, such diseases and conditions as orthopedic, visual, speech and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, drug addiction and alcoholism. (b) <E T="03">Major life activities</E> means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working. (c) <E T="03">Has a record of such an impairment</E> means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities. (d) <E T="03">Is regarded as having an impairment</E> means: (1) Has a physical or mental impairment that does not substantially limit one or more major life activities but that is treated by a recipient as constituting such a limitation; (2) Has a physical or mental impairment that substantially limits one or more major life activities only as a result of the attitudes of others toward such impairment; or (3) Has none of the impairments defined in paragraph (a) of this section but is treated by a recipient as having such an impairment. <E T="03">Multifamily housing project</E> means a project containing five or more dwelling units. <E T="03">Primary recipient</E> means a person, group, organization, State or local unit of government that is authorized or required to extend Federal financial assistance to another recipient for the purpose of carrying out a program or activity. <E T="03">Program or activity</E> means all of the operations of: (a)(1) A department, agency, special purpose district, or other instrumentality of a State or of a local government; or (2) The entity of such State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government; (b)(1) A college, university, or other post-secondary institution, or a public system of higher education; or (2) A local educational agency (as defined in section 198(a)(10) of the Elementary and Secondary Education Act of 1965), system of vocational education, or other school system; (c)(1) An entire corporation, partnership, or other private organization, or an entire sole proprietorship— (i) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or (ii) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or (2) The entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or (d) Any other entity which is established by two or more of the entities described in paragraphs (a), (b), or (c) of this section; <FP>any part of which is extended Federal financial assistance.</FP> <E T="03">Project</E> means the whole of one or more residential structures and appurtenant structures, equipment, roads, walks, and parking lots which are covered by a single contract for Federal financial assistance or application for assistance, or are treated as a whole for processing purposes, whether or not located on a common site. <E T="03">Qualified individual with handicaps</E> means: (a) With respect to employment, an individual with handicaps who, with reasonable accommodation, can perform the essential functions of the job in question; and (b) With respect to any non-employment program or activity which requires a person to perform services or to achieve a level of accomplishment, an individual with handicaps who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the recipient can demonstrate would result in a fundamental alteration in its nature; or<PRTPAGE P="85"/> (c) With respect to any other non-employment program or activity, an individual with handicaps who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity. <E T="03">Essential eligibility requirements</E> include stated eligibility requirements such as income as well as other explicit or implicit requirements inherent in the nature of the program or activity, such as requirements that an occupant of multifamily housing be capable of meeting the recipient's selection criteria and be capable of complying with all obligations of occupancy with or without supportive services provided by persons other than the recipient. For example, a chronically metally ill person whose particular condition poses a significant risk of substantial interference with the safety or enjoyment of others or with his or her own health or safety in the absence of necessary supportive services may be <E T="03">qualified</E> for occupancy in a project where such supportive services are provided by the recipient as part of the assisted program. The person may not be <E T="03">qualified</E> for a project lacking such services. <E T="03">Recipient</E> means any State or its political subdivision, any instrumentality of a State or its political subdivision, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance is extended for any program or activity directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance. An entity or person receiving housing assistance payments from a recipient on behalf of eligible families under a housing assistance payments program or a voucher program is not a recipient or subrecipient merely by virtue of receipt of such payments. <E T="03">Replacement cost of the completed facility</E> means the current cost of construction and equipment for a newly constructed housing facility of the size and type being altered. Construction and equipment costs do not include the cost of land, demolition, site improvements, non-dwelling facilities and administrative costs for project development activities. <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. <E T="03">Section 504</E> means section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794, as it applies to programs or activities receiving Federal financial assistance. <E T="03">Substantial impairment</E> means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration. <CITA>[53 FR 20233, June 2, 1988; 54 FR 8188, Feb. 27, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.4</SECTNO> <SUBJECT>Discrimination prohibited.</SUBJECT> (a) No qualified individual with handicaps shall, solely on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity that receives Federal financial assistance from the Department. (b)(1) A recipient, in providing any housing, aid, benefit, or service in a program or activity that receives Federal financial assistance from the Department may not, directly or through contractual, licensing, or other arrangements, solely on the basis of handicap: (i) Deny a qualified individual with handicaps the opportunity to participate in, or benefit from, the housing, aid, benefit, or service; (ii) Afford a qualified individual with handicaps an opportunity to participate in, or benefit from, the housing, aid, benefit, or service that is not equal to that afforded to others; (iii) Provide a qualified individual with handicaps with any housing, aid, benefit, or service that is not as effective in affording the individual an equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others; (iv) Provide different or separate housing, aid, benefits, or services to individuals with handicaps or to any class of individuals with handicaps from that provided to others unless such action is necessary to provide qualified individuals with handicaps with housing, aid, benefits, or services that are as effective as those provided to others.<PRTPAGE P="86"/> (v) Aid or perpetuate discrimination against a qualified individual with handicaps by providing significant assistance to an agency, organization, or person that discriminates on the basis of handicap in providing any housing, aid, benefit, or service to beneficiaries in the recipient's federally assisted program or activity; (vi) Deny a qualified individual with handicaps the opportunity to participate as a member of planning or advisory boards; (vii) Deny a dwelling to an otherwise qualified buyer or renter because of a handicap of that buyer or renter or a person residing in or intending and eligible to reside in that dwelling after it is sold, rented or made available; or (viii) Otherwise limit a qualified individual with handicaps in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by other qualified individuals receiving the housing, aid, benefit, or service. (2) For purposes of this part, housing, aids, benefits, and services, to be equally effective, are not required to produce the identical result or level of achievement for individuals with handicaps and non-handicapped persons, but must afford individuals with handicaps equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement. (3) A recipient may not deny a qualified individual with handicaps the opportunity to participate in any federally assisted program or activity that is not separate or different despite the existence of permissibly separate or different programs or activities. (4) In any program or activity receiving Federal financial assistance from the Department, a recipient may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would: (i) Subject qualified individuals with handicaps to discrimination solely on the basis of handicap; (ii) Defeat or substantially impair the accomplishment of the objectives of the recipient's federally assisted program or activity for qualified individuals with a particular handicap involved in the program or activity, unless the recipient can demonstrate that the criteria or methods of administration are manifestly related to the accomplishment of an objective of a program or activity; or (iii) Perpetuate the discrimination of another recipient if both recipients are subject to common administrative control or are agencies of the same State. (5) In determining the site or location of a federally assisted facility, an applicant for assistance or a recipient may not make selections the purpose or effect of which would: (i) Exclude qualified individuals with handicaps from, deny them the benefits of, or otherwise subject them to discrimination under, any program or activity that receives Federal financial assistance from the Department, or (ii) Defeat or substantially impair the accomplishment of the objectives of the program or activity with respect to qualified individuals with handicaps. (6) As used in this section, the housing, aid, benefit, or service provided under a program or activity receiving Federal financial assistance includes any housing, aid, benefit, or service provided in or through a facility that has been constructed, altered, leased or rented, or otherwise acquired, in whole or in part, with Federal financial assistance. (c)(1) Non-handicapped persons may be excluded from the benefits of a program if the program is limited by Federal statute or executive order to individuals with handicaps. A specific class of individuals with handicaps may be excluded from a program if the program is limited by Federal statute or Executive order to a different class of individuals. (2) Certain Department programs operate under statutory definitions of <E T="03">handicapped person</E> that are more restrictive than the definition of <E T="03">individual with handicaps</E> contained in § 8.3 (see appendix B). Those definitions are not superseded or otherwise affected by this regulation. (d) Recipients shall administer programs and activities receiving Federal financial assistance in the most integrated setting appropriate to the needs of qualified individuals with handicaps. (e) The obligation to comply with this part is not obviated or alleviated <PRTPAGE P="87"/>by any State or local law or other requirement that, based on handicap, imposes inconsistent or contradictory prohibitions or limits upon the eligibility of qualified individuals with handicaps to receive services or to practice any occupation or profession. (f) The enumeration of specific forms of prohibited discrimination in paragraphs (b) through (e) of this section does not limit the general prohibition in paragraph (a) of this section. <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]</CITA> <SECTNO>§ 8.5</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 8.6</SECTNO> <SUBJECT>Communications.</SUBJECT> (a) The recipient shall take appropriate steps to ensure effective communication with applicants, beneficiaries, and members of the public. (1) The recipient shall furnish appropriate auxiliary aids where necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity receiving Federal financial assistance. (i) In determining what auxiliary aids are necessary, the recipient shall give primary consideration to the requests of the individual with handicaps. (ii) The recipient is not required to provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature. (2) Where a recipient communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf persons (TDD's) or equally effective communication systems shall be used. (b) The recipient shall adopt and implement procedures to ensure that interested persons (including persons with impaired vision or hearing) can obtain information concerning the existence and location of accessible services, activities, and facilities. (c) This section does not require a recipient to take any action that the recipient can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. If an action would result in such an alteration or burdens, the recipient shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with handicaps receive the benefits and services of the program or activity receiving HUD assistance. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Employment</HD> <SECTION> <SECTNO>§ 8.10</SECTNO> <SUBJECT>General prohibitions against employment discrimination.</SUBJECT> (a) No qualified individual with handicaps shall, solely on the basis of handicap, be subjected to discrimination in employment under any program or activity that receives Federal financial assistance from the Department. (b) A recipient may not limit, segregate, or classify applicants or employees in any way that adversely affects their opportunities or status because of handicap. (c) The prohibition against discrimination in employment applies to the following activities: (1) Recruitment, advertising, and the processing of applications for employment; (2) Hiring, upgrading, promotion, award of tenure, demotion, transfer, layoff, termination, right of return from layoff, injury or illness, and rehiring; (3) Rates of pay or any other form of compensation and changes in compensation; (4) Job assignments, job classifications, organizational structures, position descriptions, lines of progression, and seniority lists; (5) Leaves of absence, sick leave, or any other leave; (6) Fringe benefits available by virtue of employment, whether or not administered by the recipient; (7) Selection and financial support for training, including apprenticeship, professional meetings, conferences, and other related activities, and selection for leaves of absence for training; (8) Employer sponsored activities, including social or recreational programs; and (9) Any other term, condition, or privilege of employment. (d) A recipient may not participate in a contractual or other relationship <PRTPAGE P="88"/>that has the effect of subjecting qualified applicants with handicaps or employees with handicaps to discrimination prohibited by this subpart. The relationships referred to in this paragraph (d) include relationships with employment and referral agencies, labor unions, organizations providing or administering fringe benefits to employees of the recipient, and organizations providing training and apprenticeship programs. </SECTION> <SECTION> <SECTNO>§ 8.11</SECTNO> <SUBJECT>Reasonable accommodation.</SUBJECT> (a) A recipient shall make reasonable accommodation to the known physical or mental limitations of an otherwise qualified applicant with handicaps or employee with handicaps, unless the recipient can demonstrate that the accommodation would impose an undue hardship on the operation of its program. (b) Reasonable accommodation may include: (1) Making facilities used by employees accessible to and usable by individuals with handicaps and (2) Job restructuring, job relocation, part-time or modified work schedules, acquisitions or modification of equipment or devices, the provision of readers or interpreters, and other similar actions. (c) In determining, under paragraph (a) of this section, whether an accommodation would impose an undue hardship on the operation of a recipient's program, factors to be considered include: (1) The overall size of the recipient's program with respect to number of employees, number and type of facilities, and size of budget; (2) The type of the recipient's operation, including the composition and structure of the recipient's workforce; and (3) The nature and cost of the accommodation needed. (d) A recipient may not deny any employment opportunity to a qualified handicapped employee or applicant if the basis for the denial is the need to make reasonable accommodation to the physical or mental limitations of the employee or applicant. </SECTION> <SECTION> <SECTNO>§ 8.12</SECTNO> <SUBJECT>Employment criteria.</SUBJECT> (a) A recipient may not use any employment test or other selection criterion that screens out or tends to screen out individuals with handicaps or any class of individuals with handicaps unless: (1) The recipient demonstrates that the test score or other selection criterion, as used by the recipient, is job-related for the position in question; and (2) The appropriate HUD official demonstrates that alternative job-related tests or criteria that tend to screen out fewer individuals with handicaps are unavailable. (b) A recipient shall select and administer tests concerning employment to ensure that, when administered to an applicant or employee who has a handicap that impairs sensory, manual, or speaking skills, the test results accurately reflect the applicant's or employee's job skills, aptitude, or whatever other factor the test purports to measure, rather than the applicant's or employee's impaired sensory, manual, or speaking skills (except where those skills are the factors that the test purports to measure). </SECTION> <SECTION> <SECTNO>§ 8.13</SECTNO> <SUBJECT>Preemployment inquiries.</SUBJECT> (a) Except as provided in paragraphs (b) and (c) of this section, a recipient may not make a preemployment inquiry or conduct a preemployment medical examination of an applicant to determine whether the applicant is an individual with handicaps or the nature or severity of a handicap. A recipient may, however, make preemployment inquiry into an applicant's ability to perform job-related functions. (b) When a recipient is undertaking affirmative action efforts, voluntary or otherwise, the recipient may invite applicants for employment to indicate whether and to what extent they are handicapped, if the following conditions are met: (1) The recipient states clearly on any written questionnaire used for this purpose, or makes clear orally if no written questionnaire is used, that the information requested is intended for <PRTPAGE P="89"/>use solely in connection with its remedial action obligations, or its voluntary or affirmative action efforts; and (2) The recipient states clearly that the information is being requested on a voluntary basis, that it will be kept confidential (as provided in paragraph (d) of this section), that refusal to provide the information will not subject the applicant or employee to any adverse treatment, and that the information will be used only in accordance with this part. (c) Nothing in this section shall prohibit a recipient from conditioning an offer of employment on the results of a medical examination conducted before the employee's entrance on duty if all entering employees in that category of job classification must take such an examination regardless of handicap, and the results of such examination are used only in accordance with the requirements of this part. (d) Information obtained under this section concerning the medical condition or history of the applicant is to be collected and maintained on separate forms that are accorded confidentiality as medical records, except that: (1) Supervisors and managers may be informed of restrictions on the work or duties of individuals with handicaps and informed of necessary accommodations; (2) First aid and safety personnel may be informed if the condition might require emergency treatment; and (3) Government officials investigating compliance with section 504 shall be provided relevant information upon request. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Program Accessibility</HD> <SECTION> <SECTNO>§ 8.20</SECTNO> <SUBJECT>General requirement concerning program accessibility.</SUBJECT> Except as otherwise provided in §§ 8.21(c)(1), 8.24(a), 8.25, and 8.31, no qualified individual with handicaps shall, because a recipient's facilities are inaccessible to or unusable by individuals with handicaps, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity that receives Federal financial assistance. </SECTION> <SECTION> <SECTNO>§ 8.21</SECTNO> <SUBJECT>Non-housing facilities.</SUBJECT> (a) <E T="03">New construction.</E> New non-housing facilities shall be designed and constructed to be readily accessible to and usable by individuals with handicaps. (b) <E T="03">Alterations to facilities.</E> Alterations to existing non-housing facilities shall, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with handicaps. For purposes of this paragraph, the phrase <E T="03">to the maximum extent feasible</E> shall not be interpreted as requiring that a recipient make a non-housing facility, or element thereof, accessible if doing so would impose undue financial and administrative burdens on the operation of the recipient's program or activity. (c) <E T="03">Existing non-housing facilities</E>—(1) <E T="03">General</E>. A recipient shall operate each non-housing program or activity receiving Federal financial assistance so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not— (i) Necessarily require a recipient to make each of its existing non-housing facilities accessible to and usable by individuals with handicaps; (ii) In the case of historic preservation programs or activities, require the recipient to take any action that would result in a substantial impairment of significant historic features of an historic property; or (iii) Require a recipient to take any action that it can demonstrate would result in a fundamental alteration in the nature of its program or activity or in undue financial and administrative burdens. If an action would result in such an alteration or such burdens, the recipient shall take any action that would not result in such an alteration or such burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity. (2) <E T="03">Methods</E>—(i) <E T="03">General</E>. A recipient may comply with the requirements of this section in its programs and activities receiving Federal financial assistance through such means as location of programs or services to accessible facilities or accessible portions of facilities, assignment of aides to beneficiaries, home visits, the addition or redesign of equipment (e.g., appliances <PRTPAGE P="90"/>or furnishings) changes in management policies or procedures, acquisition or construction of additional facilities, or alterations to existing facilities on a selective basis, or any other methods that result in making its program or activity accessible to individuals with handicaps. A recipient is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. In choosing among available methods for meeting the requirements of this section, the recipient shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate. (ii) <E T="03">Historic preservation programs or activities.</E> In meeting the requirements of § 8.21(c) in historic preservation programs or activities, a recipient shall give priority to methods that provide physical access to individuals with handicaps. In cases where a physical alteration to an historic property is not required because of § 8.21(c)(1)(ii) or (iii), alternative methods of achieving program accessibility include using audio-visual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible; assigning persons to guide individuals with handicaps into or through portions of historic properties that cannot otherwise be made accessible; or adopting other innovative methods. (3) <E T="03">Time period for compliance</E>. The recipient shall comply with the obligations established under this section within sixty days of July 11, 1988, except that where structural changes in facilities are undertaken, such changes shall be made within three years of July 11, 1988, but in any event as expeditiously as possible. (4) <E T="03">Transition plan</E>. If structural changes to non-housing facilities will be undertaken to achieve program accessibility, a recipient shall develop, within six months of July 11, 1988, a transition plan setting forth the steps necessary to complete such changes. The plan shall be developed with the assistance of interested persons, including individuals with handicaps or organizations representing individuals with handicaps. A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum— (i) Identify physical obstacles in the recipient's facilities that limit the accessibility of its programs or activities to individuals with handicaps; (ii) Describe in details the methods that will be used to make the facilities accessible; (iii) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; (iv) Indicate the official responsible for implementation of the plan; and (v) Identify the persons or groups with whose assistance the plan was prepared. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 FR 37645, Sept. 12, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.22</SECTNO> <SUBJECT>New construction—housing facilities.</SUBJECT> (a) New multifamily housing projects (including public housing and Indian housing projects as required by § 8.25) shall be designed and constructed to be readily accessible to and usable by individuals with handicaps. (b) Subject to paragraph (c) of this section, a minimum of five percent of the total dwelling units or at least one unit in a multifamily housing project, whichever is greater, shall be made accessible for persons with mobility impairments. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in § 8.32 is accessible for purposes of this section. An additional two percent of the units (but not less than one unit) in such a project shall be accessible for persons with hearing or vision impairments. (c) HUD may prescribe a higher percentage or number than that prescribed in paragraph (b) of this section for any area upon request therefor by any affected recipient or by any State or local government or agency thereof <PRTPAGE P="91"/>based upon demonstration to the reasonable satisfaction of HUD of a need for a higher percentage or number, based on census data or other available current data (including a currently effective Housing Assistance Plan or Comprehensive Homeless Assistance Plan), or in response to evidence of a need for a higher percentage or number received in any other manner. In reviewing such request or otherwise assessing the existence of such needs, HUD shall take into account the expected needs of eligible persons with and without handicaps. <CITA>[53 FR 20233, June 2, 1988, as amended at 56 FR 920, Jan. 9, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.23</SECTNO> <SUBJECT>Alterations of existing housing facilities.</SUBJECT> (a) <E T="03">Substantial alteration.</E> If alterations are undertaken to a project (including a public housing project as required by § 8.25(a)(2)) that has 15 or more units and the cost of the alterations is 75 percent or more of the replacement cost of the completed facility, then the provisions of § 8.22 shall apply. (b) <E T="03">Other alterations.</E> (1) Subject to paragraph (b)(2) of this section, alterations to dwelling units in a multifamily housing project (including public housing) shall, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with handicaps. If alterations of single elements or spaces of a dwelling unit, when considered together, amount to an alteration of a dwelling unit, the entire dwelling unit shall be made accessible. Once five percent of the dwelling units in a project are readily accessible to and usable by individuals with mobility impairments, then no additional elements of dwelling units, or entire dwelling units, are required to be accessible under this paragraph. Alterations to common areas or parts of facilities that affect accessibility of existing housing facilities shall, to the maximum extent feasible, be made to be accessible to and usable by individuals with handicaps. For purposes of this paragraph, the phrase <E T="03">to the maximum extent feasible</E> shall not be interpreted as requiring that a recipient (including a PHA) make a dwelling unit, common area, facility or element thereof accessible if doing so would impose undue financial and administrative burdens on the operation of the multifamily housing project. (2) HUD may prescribe a higher percentage or number than that prescribed in paragraph (b)(1) of this section for any area upon request therefor by any affected recipient or by any State or local government or agency thereof based upon demonstration to the reasonable satisfaction of HUD of a need for a higher percentage or number, based on census data or other available current data (including a currently effective Housing Assistance Plan or Comprehensive Homeless Assistance Plan), or in response to evidence of a need for a higher percentage or number received in any other manner. In reviewing such request or otherwise assessing the existence of such needs, HUD shall take into account the expected needs of eligible persons with and without handicaps. </SECTION> <SECTION> <SECTNO>§ 8.24</SECTNO> <SUBJECT>Existing housing programs.</SUBJECT> (a) <E T="03">General.</E> A recipient shall operate each existing housing program or activity receiving Federal financial assistance so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not— (1) Necessarily require a recipient to make each of its existing facilities accessible to and usable by individuals with handicaps; (2) Require a recipient to take any action that it can demonstrate would result in a fundamental alteration in the nature of its program or activity or in undue financial and administrative burdens. If an action would result in such an alteration or such burdens, the recipient shall take any action that would not result in such an alteration or such burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity. (b) <E T="03">Methods.</E> A recipient may comply with the requirements of this section through such means as reassignment of services to accessible buildings, assignment of aides to beneficiaries, provision of housing or related services at alternate accessible sites, alteration of <PRTPAGE P="92"/>existing facilities and construction of new facilities, or any other methods that result in making its programs or activities readily accessible to and usable by individuals with handicaps. A recipient is not required to make structural changes in existing housing facilities where other methods are effective in achieving compliance with this section or to provide supportive services that are not part of the program. In choosing among available methods for meeting the requirements of this section, the recipient shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate. (c) <E T="03">Time period for compliance.</E> The recipient shall comply with the obligations established under this section within sixty days of July 11, 1988 except that— (1) In a public housing program where structural changes in facilities are undertaken, such changes shall be made within the timeframes established in § 8.25(c). (2) In other housing programs, where structural changes in facilities are undertaken, such changes shall be made within three years of July 11, 1988, but in any event as expeditiously as possible. (d) <E T="03">Transition plan and time period for structural changes.</E> Except as provided in § 8.25(c), in the event that structural changes to facilities will be undertaken to achieve program accessibility, a recipient shall develop, within six months of July 11, 1988, a transition plan setting forth the steps necessary to complete such changes. The plan shall be developed with the assistance of interested persons, including individuals with handicaps or organizations representing individuals with handicaps. A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum— (1) Identify physical obstacles in the recipient's facilities that limit the accessibility of its programs or activities to individuals with handicaps; (2) Describe in detail the methods that will be used to make the facilities accessible; (3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; (4) Indicate the official responsible for implementation of the plan; and (5) Identify the persons or groups with whose assistance the plan was prepared. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 FR 37645, Sept. 12, 1989] </CITA> </SECTION> <SECTION> <SECTNO>§ 8.25</SECTNO> <SUBJECT>Public housing and multi-family Indian housing.</SUBJECT> (a) <E T="03">Development and alteration of public housing and multi-family Indian housing.</E> (1) The requirements of § 8.22 shall apply to all newly constructed public housing and multi-family Indian housing. (2) The requirements of § 8.23 shall apply to public housing and multi-family Indian housing developed through rehabilitation and to the alteration of public housing and multi-family Indian housing. (3) In developing public housing and multi-family Indian housing through the purchase of existing properties PHAs and IHAs shall give priority to facilities which are readily accessible to and usable by individuals with handicaps. (b) <E T="03">Existing public housing and multi-family Indian housing—general.</E> The requirements of § 8.24(a) shall apply to public housing and multi-family Indian housing programs. (c) <E T="03">Existing public housing and multi-family Indian housing—needs assessment and transition plan.</E> As soon as possible, each PHA (for the purpose of this paragraph, this includes an Indian Housing Authority) shall assess, on a PHA-wide basis, the needs of current tenants and applicants on its waiting list for accessible units and the extent to which such needs have not been met or cannot reasonably be met within four years through development, alterations otherwise contemplated, or other programs administered by the PHA (e.g., Section 8 Moderate Rehabilitation or <PRTPAGE P="93"/>Section 8 Existing Housing or Housing Vouchers). If the PHA currently has no accessible units or if the PHA or HUD determines that information regarding the availability of accessible units has not been communicated sufficiently so that, as a result, the number of eligible qualified individuals with handicaps on the waiting list is not fairly representative of the number of such persons in the area, the PHA's assessment shall include the needs of eligible qualified individuals with handicaps in the area. If the PHA determines, on the basis of such assessment, that there is no need for additional accessible dwelling units or that the need is being or will be met within four years through other means, such as new construction, Section 8 or alterations otherwise contemplated, no further action is required by the PHA under this paragraph. If the PHA determines, on the basis of its needs assessment, that alterations to make additional units accessible must be made so that the needs of eligible qualified individuals with handicaps may be accommodated proportionally to the needs of non-handicapped individuals in the same categories, then the PHA shall develop a transition plan to achieve program accessibility. The PHA shall complete the needs assessment and transition plan, if one is necessary, as expeditiously as possible, but in any event no later than two years after July 11, 1988. The PHA shall complete structural changes necessary to achieve program accessibility as soon as possible but in any event no later than four years after July 11, 1988. The Assistant Secretary for Fair Housing and Equal Opportunity and the Assistant Secretary for Public and Indian Housing may extend the four year period for a period not to exceed two years, on a case-by-case determination that compliance within that period would impose undue financial and administrative burdens on the operation of the recipient's public housing and multi-family Indian housing program. The Secretary or the Undersecretary may further extend this time period in extraordinary circumstances, for a period not to exceed one year. The plan shall be developed with the assistance of interested persons including individuals with handicaps or organizations representing individuals with handicaps. A copy of the needs assessment and transition plan shall be made available for public inspection. The transition plan shall, at a minimum— (1) Identify physical obstacles in the PHA's facilities (e.g., dwelling units and common areas) that limit the accessibility of its programs or activities to individuals with handicaps; (2) Describe in detail the methods that will be used to make the PHA's facilities accessible. A PHA may, if necessary, provide in its plan that it will seek HUD approval, under 24 CFR part 968, of a comprehensive modernization program to meet the needs of eligible individuals with handicaps; (3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; (4) Indicate the official responsible for implementation of the plan; and (5) Identify the persons or groups with whose assistance the plan was prepared. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989; 56 FR 920, Jan. 9, 1991]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.26</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> Accessible dwelling units required by § 8.22, 8.23, 8.24 or 8.25 shall, to the maximum extent feasible and subject to reasonable health and safety requirements, be distributed throughout projects and sites and shall be available in a sufficient range of sizes and amenities so that a qualified individual with handicaps’ choice of living arrangements is, as a whole, comparable to that of other persons eligible for housing assistance under the same program. This provision shall not be construed to require provision of an elevator in any multifamily housing project solely for the purpose of permitting location of accessible units above or below the accessible grade level. </SECTION> <SECTION> <PRTPAGE P="94"/> <SECTNO>§ 8.27</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> (a) Owners and managers of multifamily housing projects having accessible units shall adopt suitable means to assure that information regarding the availability of accessible units reaches eligible individuals with handicaps, and shall take reasonable nondiscriminatory steps to maximize the utilization of such units by eligible individuals whose disability requires the accessibility features of the particular unit. To this end, when an accessible unit becomes vacant, the owner or manager before offering such units to a non-handicapped applicant shall offer such unit: (1) First, to a current occupant of another unit of the same project, or comparable projects under common control, having handicaps requiring the accessibility features of the vacant unit and occupying a unit not having such features, or, if no such occupant exists, then (2) Second, to an eligible qualified applicant on the waiting list having a handicap requiring the accessibility features of the vacant unit. (b) When offering an accessible unit to an applicant not having handicaps requiring the accessibility features of the unit, the owner or manager may require the applicant to agree (and may incorporate this agreement in the lease) to move to a non-accessible unit when available. </SECTION> <SECTION> <SECTNO>§ 8.28</SECTNO> <SUBJECT>Housing certificate and housing voucher programs.</SUBJECT> (a ) In carrying out the requirements of this subpart, a recipient administering a Section 8 Existing Housing Certificate program or a housing voucher program shall: (1) In providing notice of the availability and nature of housing assistance for low-income families under program requirements, adopt suitable means to assure that the notice reaches eligible individuals with handicaps; (2) In its activities to encourage participation by owners, include encouragement of participation by owners having accessible units; (3) When issuing a Housing Certificate or Housing Voucher to a family which includes an individual with handicaps include a current listing of available accessible units known to the PHA and, if necessary, otherwise assist the family in locating an available accessible dwelling unit; (4) Take into account the special problem of ability to locate an accessible unit when considering requests by eligible individuals with handicaps for extensions of Housing Certificates or Housing Vouchers; and (5) If necessary in order to achieve compliance with this subpart, request under 24 CFR part 882, an exception to the Fair Market Rents to allow section 8 certificate holders to rent accessible units. (b) In order to ensure that participating owners do not discriminate in the recipient's federally assisted program, a recipient shall enter into a HUD-approved contract with participating owners, which contract shall include necessary assurances of nondiscrimination. </SECTION> <SECTION> <SECTNO>§ 8.29</SECTNO> <SUBJECT>Homeownership programs (sections 235(i) and 235(j), Turnkey III and Indian Housing Mutual Self-Help programs).</SUBJECT> Any housing units newly constructed or rehabilitated for purchase or single family (including semi-attached and attached) units to be constructed or rehabilitated in a program or activity receiving Federal financial assistance shall be made accessible upon request of the prospective buyer if the nature of the handicap of an expected occupant so requires. In such case, the buyer shall consult with the seller or builder/sponsor regarding the specific design features to be provided. If accessibility features selected at the option of the homebuyer are ones covered by the standards prescribed by § 8.32, those features shall comply with the standards prescribed in § 8.32. The buyer shall be permitted to depart from particular specifications of these standards in order to accommodate his or her specific handicap. The cost of making a facility accessible under this paragraph may be included in the mortgage amount within the allowable mortgage limits, where applicable. To the extent such costs exceed allowable mortgage limits, they may be passed <PRTPAGE P="95"/>on to the prospective homebuyer, subject to maximum sales price limitations (see 24 CFR 235.320.) </SECTION> <SECTION> <SECTNO>§ 8.30</SECTNO> <SUBJECT>Rental rehabilitation program.</SUBJECT> Each grantee or state recipient in the rental rehabilitation program shall, subject to the priority in 24 CFR 511.10(l) and in accordance with other requirements in 24 CFR part 511, give priority to the selection of projects that will result in dwelling units being made readily accessible to and usable by individuals with handicaps. <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.31</SECTNO> <SUBJECT>Historic properties.</SUBJECT> If historic properties become subject to alterations to which this part applies the requirements of § 4.1.7 of the standards of § 8.32 of this part shall apply, except in the case of the Urban Development Action Grant (UDAG) program. In the UDAG program the requirements of 36 CFR part 801 shall apply. Accessibility to historic properties subject to alterations need not be provided if such accessibility would substantially impair the significant historic features of the property or result in undue financial and administrative burdens. </SECTION> <SECTION> <SECTNO>§ 8.32</SECTNO> <SUBJECT>Accessibility standards.</SUBJECT> (a) Effective as of July 11, 1988, design, construction, or alteration of buildings in conformance with sections 3-8 of the Uniform Federal Accessibility Standards (UFAS) shall be deemed to comply with the requirements of §§ 8.21, 8.22, 8.23, and 8.25 with respect to those buildings. Departures from particular technical and scoping requirements of the UFAS by the use of other methods are permitted where substantially equivalent or greater access to and usability of the building is provided. The alteration of housing facilities shall also be in conformance with additional scoping requirements contained in this part. Persons interested in obtaining a copy of the UFAS are directed to § 40.7 of this title. (b) For purposes of this section, section 4.1.6(1)(g) of UFAS shall be interpreted to exempt from the requirements of UFAS only mechanical rooms and other spaces that, because of their intended use, will not require accessibility to the public or beneficiaries or result in the employment or residence therein of individuals with physical handicaps. (c) This section does not require recipients to make building alterations that have little likelihood of being accomplished without removing or altering a load-bearing structural member. (d) For purposes of this section, section 4.1.4(11) of UFAS may not be used to waive or lower the minimum of five percent accessible units required by § 8.22(b) or to apply the minimum only to projects of 15 or more dwelling units. (e) Except as otherwise provided in this paragraph, the provisions of §§ 8.21 (a) and (b), 8.22 (a) and (b), 8.23, 8.25(a) (1) and (2), and 8.29 shall apply to facilities that are designed, constructed or altered after July 11, 1988. If the design of a facility was commenced before July 11, 1988, the provisions shall be followed to the maximum extent practicable, as determined by the Department. For purposes of this paragraph, the date a facility is constructed or altered shall be deemed to be the date bids for the construction or alteration of the facility are solicited. For purposes of the Urban Development Action Grant (UDAG) program, the provisions shall apply to the construction or alteration of facilities that are funded under applications submitted after July 11, 1988. If the UDAG application was submitted before July 11, 1988, the provisions shall apply, to the maximum extent practicable, as determined by the Department. <CITA>[53 FR 20233, June 2, 1988, as amended at 61 FR 5203, Feb. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.33</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> A recipient shall modify its housing policies and practices to ensure that these policies and practices do not discriminate, on the basis of handicap, against a qualified individual with handicaps. The recipient may not impose upon individuals with handicaps other policies, such as the prohibition of assistive devices, auxiliary alarms, or guides in housing facilities, that have the effect of limiting the participation of tenants with handicaps in the recipient's federally assisted housing <PRTPAGE P="96"/>program or activity in violation of this part. Housing policies that the recipient can demonstrate are essential to the housing program or activity will not be regarded as discriminatory within the meaning of this section if modifications to them would result in a fundamental alteration in the nature of the program or activity or undue financial and administrative burdens. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Enforcement</HD> <SECTION> <SECTNO>§ 8.50</SECTNO> <SUBJECT>Assurances required.</SUBJECT> (a) <E T="03">Assurances.</E> An applicant for Federal financial assistance for a program or activity to which this part applies shall submit an assurance to HUD, or in the case of a subrecipient to a primary recipient, on a form specified by the responsible civil rights official, that the program or activity will be operated in compliance with this part. An applicant may incorporate these assurances by reference in subsequent applications to the Department. (b) <E T="03">Duration of obligation.</E> (1) In the case of Federal financial assistance extended in the form of real property or to provide real property or structures on the property, the assurance will obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used for the purpose for which Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. (2) In the case of Federal financial assistance extended to provide personal property, the assurance will obligate the recipient for the period during which it retains ownership or possession of the property. (3) In all other cases the assurance will obligate the recipient for the period during which Federal financial assistance is extended. (c) <E T="03">Covenants.</E> (1) Where Federal financial assistance is provided in the form of real property or interest in the property from the Department, the instrument effecting or recording this transfer shall contain a covenant running with the land to assure nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. (2) Where no transfer of property is involved but property is purchased or improved with Federal financial assistance, the recipient shall agree to include the covenant described in paragraph (b)(2) of this section in the instrument effecting or recording any subsequent transfer of the property. (3) Where Federal financial assistance is provided in the form of real property or interest in the property from the Department, the covenant shall also include a condition coupled with a right to be reserved by the Department to revert title to the property in the event of a breach of the covenant. If a transferee of real property proposes to mortgage or otherwise encumber the real property as security for financing construction of new, or improvement of existing, facilities on the property for the purposes for which the property was transferred, the Secretary may, upon request of the transferee and if necessary to accomplish such financing and upon such conditions as he or she deems appropriate, agree to forbear the exercise of such right to revert title for so long as the lien of such mortgage or other encumbrance remains effective. </SECTION> <SECTION> <SECTNO>§ 8.51</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> (a) Each recipient shall, within one year of July 11, 1988, and after consultation with interested persons, including individuals with handicaps or organizations representing individuals with handicaps: (1) Evaluate its current policies and practices to determine whether, in whole or in part, they do not or may not meet the requirements of this part; (2) Modify any policies and practices that do not meet the requirements of this part; and (3) Take appropriate corrective steps to remedy the discrimination revealed by the self-evaluation. (b) A recipient that employs fifteen or more persons shall, for at least three years following completion of the evaluation required under paragraph (a)(1) of this section, maintain on file, make available for public inspection, and provide to the responsible civil rights <PRTPAGE P="97"/>official, upon request: (1) A list of the interested persons consulted; (2) a description of areas examined and any problems identified; and (3) a description of any modifications made and of any remedial steps taken. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.52</SECTNO> <SUBJECT>Remedial and affirmative action.</SUBJECT> (a) <E T="03">Remedial action.</E> (1) If the responsible civil rights official finds that a recipient has discriminated against persons on the basis of handicap in violation of section 504 or this part, the recipient shall take such remedial action as the responsible civil rights official deems necessary to overcome the effects of the discrimination. (2) The responsible civil rights official may, where necessary to overcome the effects of discrimination in violation of section 504 or this part, require a recipient to take remedial action— (i) With respect to individuals with handicaps who are no longer participants in the program but who were participants in the program when such discrimination occurred or (ii) With respect to individuals with handicaps who would have been participants in the program had the discrimination not occurred. (b) <E T="03">Voluntary action.</E> A recipient may take nondiscriminatory steps, in addition to any action that is required by this part, to overcome the effects of conditions that resulted in limited participation in the recipient's program or activity by qualified individuals with handicaps. </SECTION> <SECTION> <SECTNO>§ 8.53</SECTNO> <SUBJECT>Designation of responsible employee and adoption of grievance procedures.</SUBJECT> (a) <E T="03">Designation of responsible employee.</E> A recipient that employs fifteen or more persons shall designate at least one person to coordinate its efforts to comply with this part. (b) <E T="03">Adoption of grievance procedures.</E> A recipient that employees fifteen or more persons shall adopt grievance procedures that incorporate appropriate due process standards and that provide for the prompt and equitable resolution of complaints alleging any action prohibited by this part. Such procedures need not be established with respect to complaints from applicants for employment or from applicants for admission to housing covered by this part. </SECTION> <SECTION> <SECTNO>§ 8.54</SECTNO> <SUBJECT>Notice.</SUBJECT> (a) A recipient that employs fifteen or more persons shall take appropriate initial and continuing steps to notify participants, beneficiaries, applicants, and employees, including those with impaired vision or hearing, and unions or professional organizations holding collective bargaining or professional agreements with the recipient that it does not discriminate on the basis of handicap in violation of this part. The notification shall state, where appropriate, that the recipient does not discriminate in admission or access to, or treatment or employment in, its federally assisted programs and activities. The notification shall also include an identification of the responsible employee designated pursuant to § 8.53. A recipient shall make the initial notification required by this paragraph within 90 days of July 11, 1988. Methods of initial and continuing notification may include the posting of notices, publication in newspapers and magazines, placement of notices in recipients’ publications, and distribution of memoranda or other written communications. (b) If a recipient publishes or uses recruitment materials or publications containing general information that it makes available to participants, beneficiaries, applicants, or employees, it shall include in those materials or publications a statement of the policy described in paragraph (a) of this section. A recipient may meet the requirement of this paragraph either by including appropriate inserts in existing materials and publications or by revising and reprinting the materials and publications. (c) The recipient shall ensure that members of the population eligible to be served or likely to be affected directly by a federally assisted program <PRTPAGE P="98"/>who have visual or hearing impairments are provided with the information necessary to understand and participate in the program. Methods for ensuring participation include, but are not limited to, qualified sign language and oral interpreters, readers, or the use of taped and Braille materials. </SECTION> <SECTION> <SECTNO>§ 8.55</SECTNO> <SUBJECT>Compliance information.</SUBJECT> (a) <E T="03">Cooperation and assistance.</E> The responsible civil rights official and the award official shall, to the fullest extent practicable, seek the cooperation of recipients in obtaining compliance with this part and shall provide assistance and guidance to recipients to help them comply voluntarily with this part. (b) <E T="03">Compliance reports.</E> Each recipient shall keep such records and submit to the responsible civil rights official or his or her designee timely, complete, and accurate compliance reports at such times, and in such form and containing such information, as the responsible civil rights official or his or her designee may determine to be necessary to enable him or her to ascertain whether the recipient has complied or is complying with this part. In general, recipients should have available for the Department data showing the extent to which individuals with handicaps are beneficiaries of federally assisted programs. (c) <E T="03">Access to sources of information.</E> Each recipient shall permit access by the responsible civil rights official during normal business hours to such of its books, records, accounts, and other sources of information, and its facilities, as may be pertinent to ascertain compliance with this part. Where any information required of a recipient is in the exclusive possession of any other agency, institution, or person and this agency, institution, or person shall fail or refuse to furnish this information, the recipient shall so certify in its report and shall set forth what efforts it has made to obtain the information. (d) <E T="03">Information to beneficiaries and participants.</E> Each recipient shall make available to participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the program or activity under which the recipient receives Federal financial assistance, and make such information available to them in such manner as the responsible civil rights official finds necessary to apprise such persons of the protections against discrimination assured them by this part. <APPRO>(Approved by the Office of Management and Budget under control number 2529-0034)</APPRO> <CITA>[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.56</SECTNO> <SUBJECT>Conduct of investigations.</SUBJECT> (a) <E T="03">Periodic compliance reviews.</E> The responsible civil rights official or designee may periodically review the practices of recipients to determine whether they are complying with this part and where he or she has a reasonable basis to do so may conduct on-site reviews. Such basis may include any evidence that a problem exists or that programmatic matters exist that justify on-site investigation in selected circumstances. The responsible civil rights official shall initiate an on-site review by sending to the recipient a letter advising the recipient of the practices to be reviewed; the programs affected by the review; and the opportunity, at any time prior to receipt of a final determination, to make a documentary or other submission that explains, validates, or otherwise addresses the practices under review. In addition, each award official shall include in normal program compliance reviews and monitoring procedures appropriate actions to review and monitor compliance with general or specific program requirements designed to effectuate the requirements of this part. (b) <E T="03">Investigations.</E> The responsible civil rights official shall make a prompt investigation whenever a compliance review, report, complaint or any other information indicates a possible failure to comply with this part. (c) <E T="03">Filing a complaint—</E>(1) <E T="03">Who may file.</E> Any person who believes that he or she has been subjected to discrimination prohibited by this part may by himself or herself or by his or her authorized representative file a complaint with the responsible civil rights official. Any person who believes that any specific class of persons has been subjected to discrimination prohibited <PRTPAGE P="99"/>by this part and who is a member of that class or who is the authorized representative of a member of that class may file a complaint with the responsible civil rights official. (2) <E T="03">Confidentiality.</E> The responsible civil rights official shall hold in confidence the identity of any person submitting a complaint, unless the person submits written authorization otherwise, and except to the extent necessary to carry out the purposes of this part, including the conduct of any investigation, hearing, or proceeding under this part. (3) <E T="03">When to file.</E> Complaints shall be filed within 180 days of the alleged act of discrimination, unless the responsible civil rights official waives this time limit for good cause shown. For purposes of determining when a complaint is filed under this paragraph, a complaint mailed to the Department shall be deemed filed on the date it is postmarked. Any other complaint shall be deemed filed on the date it is received by the Department. (4) <E T="03">Where to file complaints.</E> Complaints may be filed by mail with the Office of Fair Housing and Equal Opportunity, Department of Housing and Urban Development, Washington, DC 20410, or any Regional or Field Office of the Department. (5) <E T="03">Contents of complaints.</E> Each complaint should contain the complainant's name and address, the name and address of the recipient alleged to have violated this part, and a description of the recipient's alleged discriminatory action in sufficient detail to inform the Department of the nature and date of the alleged violation of this part. (6) <E T="03">Amendments of complaints.</E> Complaints may be reasonably and fairly amended at any time. Amendments to complaints such as clarification and amplification of allegations in a complaint or the addition of other recipients may be made at any time during the pendency of the complaint and any amendment shall be deemed to be made as of the original filing date. (d) <E T="03">Notification.</E> The responsible civil rights official will notify the complainant and the recipient of the agency's receipt of the complaint within ten (10) calendar days. (e) <E T="03">Complaint processing procedures.</E> After acknowledging receipt of a complaint, the responsible civil rights official will immediately initiate complaint processing procedures. (1) Preliminary investigation. (i) Within twenty (20) calendar days of acknowledgement of the complaint, the responsible civil rights official will review the complaint for acceptance, rejection, or referral to the appropriate Federal agency. (ii) If the complaint is accepted, the responsible civil rights official will notify the complainant and the award official. The responsible civil righs official will also notify the applicant or recipient complained against of the allegations and give the applicant or recipient an opportunity to make a written submission responding to, rebutting, or denying the allegations raised in the complaint. (iii) The party complained against may send the responsible civil rights official a response to the notice of complaint within thirty (30) calendar days of receiving it. With leave of the responsible civil rights official, an answer may be amended at any time. The responsible civil rights official will permit answers to be amended for good cause shown. (2) Informal resolution. In accordance with paragraph (j) of this section, the responsible civil rights official shall attempt to resolve complaints informally whenever possible. (f) <E T="03">Dismissal of complaint.</E> If the investigation reveals no violation of this part, the responsible civil rights offical will dismiss the complaint and notify the complainant and recipient. (g) <E T="03">Letter of findings.</E> If an informal resolution of the complaint is not reached the responsible civil rights official or his or her designee shall, within 180 days of receipt of the complaint, notify the recipient and the complainant (if any) of the results of the investigation in a letter sent by certified mail, return receipt requested, containing the following: (1) Preliminary findings of fact and a preliminary finding of compliance or noncompliance; (2) A description of an appropriate remedy for each violation believed to exist;<PRTPAGE P="100"/> (3) A notice that a copy of the Final Investigative Report of the Department will be made available, upon request, to the recipient and the complainant (if any); and (4) A notice of the right of the recipient and the complainant (if any) to request a review of the letter of findings by the reviewing civil rights official. (h) <E T="03">Right to review of the letter of findings.</E> (1) A complainant or recipient may request that a complete review be made of the letter of findings within 30 days of receipt, by mailing or delivering to the reviewing civil rights official, Office of Fair Housing and Equal Opportunity, Washington, DC 20410, a written statement of the reasons why the letter of findings should be modified in light of supplementary information. (2) The reviewing civil rights official shall send by certified mail, return receipt requested, a copy of the request for review to the other party, if any. Such other party shall have 20 days to respond to the request for review. (3) The reviewing civil rights official shall either sustain or modify the letter of findings within 60 days of the request for review. The reviewing civil rights official's decision shall constitute the formal determination. (4) If neither party requests that the letter of findings be reviewed, the responsibile civil rights official shall, within fourteen (14) calendar days of the expiration of the time period in paragraph (h)(1) of this section, send a formal written determination of compliance or noncompliance to the recipient and copies to the award official. (i) <E T="03">Voluntary compliance time limits.</E> The recipient will have ten (10) calendar days from receipt of the formal determination of noncompliance within which to come into voluntary compliance. If the recipient fails to meet this deadline, HUD shall proceed under § 8.57. (j) <E T="03">Informal resolution/voluntary compliance—</E>(1) <E T="03">General</E>. It is the policy of the Department to encourage the informal resolution of matters. The responsible civil rights official may attempt to resolve a matter through informal means at any stage of processing. A matter may be resolved by informal means at any time. If a letter of findings making a preliminary finding of noncompliance is issued, the responsible civil rights official shall attempt to resolve the matter by informal means. (2) <E T="03">Objectives of informal resolution/voluntary compliance.</E> In attempting informal resolution, the responsible civil rights official shall attempt to achieve a just resolution of the matter and to obtain assurances where appropriate, that the recipient will satisfactorily remedy any violations of the rights of any complainant and will take such action as will assure the elimination of any violation of this part or the prevention of the occurrence of such violation in the future. The terms of such an informal resolution shall be reduced to a written voluntary compliance agreement, signed by the recipient and the responsible civil rights official, and be made part of the file for the matter. Such voluntary compliance agreements shall seek to protect the interests of the complainant (if any), other persons similary situated, and the public interest. (k) <E T="03">Intimidatory or retaliatory acts prohibited.</E> No recipient or other person shall intimidate, threaten, coerce, or discriminate against any person for the purpose of interfering with any right or privilege secured by this part, or because he or she has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. The identity of complainants shall be kept confidential except to the extent necessary to carry out the purposes of this part, including the conduct of investigation, hearing or judicial proceeding arising thereunder. <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988; 53 FR 34634, Sept. 7, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.57</SECTNO> <SUBJECT>Procedure for effecting compliance.</SUBJECT> (a) <E T="03">General.</E> If there appears to be a failure or threatened failure to comply with this part and if the noncompliance or threatened noncompliance cannot be corrected by informal means, compliance with this part may be effected by the suspension or termination of or refusal to grant or to continue Federal financial assistance, or by other means authorized by law. <PRTPAGE P="101"/>Such other means may include, but are not limited to: (1) A referral to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States, or any assurance or other contractual undertaking; (2) The initiation of debarment proceedings pursuant to part 24 of this title; and (3) Any applicable proceeding under State or local law. (b) <E T="03">Noncompliance with § 8.50.</E> If an applicant or a recipient of assistance under a contract which is extended or amended on or after July 11, 1988, fails or refuses to furnish an assurance required under § 8.50 or otherwise fails or refuses to comply with the requirements imposed by that section, Federal financial assistance may be refused under paragraph (c) of this section. The Department is not required to provide assistance during the pendency of the administrative proceeding under such paragraph (c), except where the assistance is due and payable under a contract approved before July 11, 1988. (c) <E T="03">Termination of or refusal to grant or to continue Federal financial assistance.</E> No order suspending, terminating, or refusing to grant or continue Federal financial assistance shall become effective until: (1) The responsible civil rights official has advised the applicant or recipient of its failure to comply and has determined that compliance cannot be secured by voluntary means; (2) There has been an express finding on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed under this part; (3) The action has been approved by the Secretary; and (4) The expiration of 30 days after the Secretary has filed with the committees of the House and Senate having legislative jurisdiction over the program or activity involved a full written report of the circumstances and the grounds for such action. Any action to suspend or terminate, or to refuse to grant or to continue Federal financial assistance shall be limited to the particular political entity, or part thereof, or other applicant or recipient as to whom such a finding has been made and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found. (d) <E T="03">Notice to State or local government.</E> Whenever the Secretary determines that a State or unit of general local government which is a recipient of Federal financial assistance under title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. 5301-5318) has failed to comply with a requirement of this part with respect to a program or activity funded in whole or in part with such assistance, the Secretary shall notify the Governor of the State or the chief executive officer of the unit of general local government of the noncompliance and shall request the Governor or the chief executive officer to secure compliance. The notice shall be given at least sixty days before: (1) An order suspending, terminating, or refusing to grant or continue Federal financial assistance becomes effective under paragraph (c) of this section; or (2) Any action to effect compliance by any other means authorized by law is taken under paragraph (a) of this section. (e) <E T="03">Other means authorized by law.</E> No action to effect compliance by any other means authorized by law shall be taken until: (1) The responsible civil rights official has determined that compliance cannot be secured by voluntary means; (2) The recipient or other person has been notified of its failure to comply and of the action to be taken to effect compliance; and (3) At least 10 days have elapsed since the mailing of such notice to the applicant or recipient. During this period, additional efforts shall be made to persuade the applicant or recipient to comply with this part and to take such corrective action as may be appropriate. <FP>However, this paragraph shall not be construed to prevent an award official from utilizing appropriate procedures and sanctions established under the program to assure or secure compliance with a specific requirement of the <PRTPAGE P="102"/>program designed to effectuate the objectives of this part.</FP> <CITA>[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 8.58</SECTNO> <SUBJECT>Hearings.</SUBJECT> (a) <E T="03">Opportunity for hearing.</E> Whenever an opportunity for a hearing is required by § 8.57(c), reasonable notice shall be given by registered or certified mail, return receipt requested, to the affected applicant or recipient. This notice shall advise the applicant or recipient of the action proposed to be taken, the specific provision under which the proposed action against it is to be taken, and the matters of fact or law asserted as the basis for this action. The notice shall: (1) Fix a date not less than 20 days after the date of the notice for the applicant or recipient to request the administrative law judge to schedule a hearing, or (2) Advise the applicant or recipient that the matter has been scheduled for hearing at a stated time and place. The time and place so fixed shall be reasonable and shall be subject to change for cause. The complainant, if any, shall be advised of the time and place of the hearing. An applicant or recipient may waive a hearing and submit written information and argument for the record. The failure of an applicant or recipient to request a hearing under this paragraph or to appear at a hearing for which a date has been set is a waiver of the right to a hearing under § 8.57(c) and consent to the making of a decision on the basis of available information. (b) <E T="03">Hearing procedures.</E> Hearings shall be conducted in accordance with 24 CFR part 180. <CITA>[53 FR 20233, June 2, 1988, as amended at 61 FR 52218, Oct. 4, 1996]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 9</EAR> <HD SOURCE="HED">PART 9—ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF DISABILITY IN PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>9.101</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>9.102</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>9.103</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>9.110</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> <SECTNO>9.111</SECTNO> <SUBJECT>Notice.</SUBJECT> <SECTNO>9.112—9.129</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>9.130</SECTNO> <SUBJECT>General prohibitions against discrimination.</SUBJECT> <SECTNO>9.131</SECTNO> <SUBJECT>Direct threat.</SUBJECT> <SECTNO>9.132—9.139</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>9.140</SECTNO> <SUBJECT>Employment.</SUBJECT> <SECTNO>9.141—9.148</SECTNO> <SUBJECT>[Reserved]</SUBJECT> <SECTNO>9.149</SECTNO> <SUBJECT>Program accessibility: discrimination prohibited.</SUBJECT> <SECTNO>9.150</SECTNO> <SUBJECT>Program accessibility: existing facilities.</SUBJECT> <SECTNO>9.151</SECTNO> <SUBJECT>Program accessibility: new construction and alterations.</SUBJECT> <SECTNO>9.152</SECTNO> <SUBJECT>Program accessibility: alterations of Property Disposition Program multifamily housing facilities.</SUBJECT> <SECTNO>9.153</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> <SECTNO>9.154</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> <SECTNO>9.155</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> <SECTNO>9.160</SECTNO> <SUBJECT>Communications.</SUBJECT> <SECTNO>9.170</SECTNO> <SUBJECT>Compliance procedures.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 29 U.S.C. 794; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 59 FR 31047, June 16, 1994, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 9.101</SECTNO> <SUBJECT>Purpose.</SUBJECT> The purpose of this part is to effectuate section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of disability in programs or activities conducted by Executive agencies or the United States Postal Service. </SECTION> <SECTION> <SECTNO>§ 9.102</SECTNO> <SUBJECT>Applicability.</SUBJECT> This part applies to all programs or activities conducted by the agency, except for programs or activities conducted outside the United States that do not involve individuals with disabilities in the United States. </SECTION> <SECTION> <SECTNO>§ 9.103</SECTNO> <SUBJECT>Definitions.</SUBJECT> For purposes of this part: <E T="03">Accessible:</E> (1) When used with respect to the design, construction, or alteration of a facility or a portion of a facility other than an individual dwelling unit, means that the facility or portion of the facility when designed, constructed or altered, complies with applicable accessibility standards and can be approached, entered, and used <PRTPAGE P="103"/>by individuals with physical disabilities. The phrase “accessible to and usable by” is synonymous with accessible. (2) When used with respect to the design, construction, or alteration of an individual dwelling unit, means that the unit is located on an accessible route and, when designed, constructed, altered or adapted, complies with applicable accessibility standards, and can be approached, entered, and used by individuals with physical disabilities. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in § 9.151 is “accessible” within the meaning of this definition. When a unit in an existing facility which is being made accessible as a result of alterations is intended for use by a specific qualified individual with disabilities (e.g., a current occupant of such unit or of another unit under the control of the same agency, or an applicant on a waiting list), the unit will be deemed accessible if it meets the requirements of applicable standards that address the particular disability or impairment of such person. <E T="03">Accessible route</E> means a continuous unobstructed path connecting accessible elements and spaces of a building or facility. Interior accessible routes may include corridors, floors, ramps, elevators, lifts, and clear floor space at fixtures. Exterior accessible routes may include parking access aisles, curb ramps, crosswalks at vehicular ways, walks, ramps and lifts. <E T="03">ADA</E> means the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 through 12213) <E T="03">ADA Accessibility Guidelines (ADAAG)</E> means the Accessibility Guidelines issued under the ADA, and which are codified in the Appendix to 39 CFR part 1191. <E T="03">Adaptability</E> means the ability of certain building, spaces and elements, such as kitchen counters, sinks, and grab bars, to be added or altered, to accommodate the needs of persons with or without disabilities, or to accommodate the needs of persons with different types or degrees of disability. For example, in a unit adaptable for a person with impaired hearing, the wiring for visible emergency alarms may be installed but the alarms need not be installed until such time as the unit is made ready for occupancy by a person with impaired hearing. <E T="03">Agency</E> means the Department of Housing and Urban Development. <E T="03">Alteration</E> means a change to a building or facility or its permanent fixtures or equipment that affects or could affect the usability of the building or facility or part thereof. Alterations include, but are not limited to, remodeling, renovation, rehabilitation, reconstruction, historic restoration, changes or rearrangements of the structural parts and changes or rearrangements in the plan configuration of walls and full-height partitions. Normal maintenance, re-roofing, painting, or wallpapering or changes to mechanical and electrical systems are not alterations unless they affect the usability of the building or facility. <E T="03">Assistant Attorney General</E> means the Assistant Attorney General, Civil Rights Division, United States Department of Justice. <E T="03">Assistant Secretary</E> means the Assistant Secretary of Housing and Urban Development for Fair Housing and Equal Opportunity. <E T="03">Auxiliary aids</E> means services or devices that enable persons with impaired sensory, manual, or communication skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the agency. For example, auxiliary aids useful for persons with impaired vision include readers, Brailled materials, audio recordings, and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDD's), interpreters, note takers, written materials, and other similar services and devices. <E T="03">Complete complaint</E> means a written statement that contains the complainant's name and address and describes the agency's alleged discriminatory action in sufficient detail to inform the agency of the nature and date of the alleged violation of section 504. It shall be signed by the complainant or by someone authorized to do so on his or <PRTPAGE P="104"/>her behalf. Complaints filed on behalf of classes or third parties shall describe or identify (by name, if possible) the alleged victims of discrimination. <E T="03">Current illegal use of drugs</E> means illegal use of drugs that occurred recently enough to justify a reasonable belief that a person's drug use is current or that continuing use is a real and ongoing problem. <E T="03">Drug</E> means a controlled substance, as defined in schedules I through V of section 202 of the Controlled Substances Act (21 U.S.C. 812). <E T="03">Facility</E> means all or any portion of buildings, structures, site improvements, complexes, equipment, roads, walks, passageways, parking lots, rolling stock or other conveyances, or other real or personal property located on a site. <E T="03">Historic properties</E> means those properties that are listed or are eligible for listing in the National Register of Historic Places, or such properties designated as historic under a statute of the appropriate State or local government body. <E T="03">Illegal use of drugs</E> means the use of one or more drugs, the possession or distribution of which is unlawful under the Controlled Substances Act (21 U.S.C. 812). The term “illegal use of drugs” does not include the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act or other provisions of Federal law. <E T="03">Individual with disabilities</E> means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. As used in this definition, the phrase: (1) “Physical or mental impairment” includes: (i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genito-urinary; hemic and lymphatic; skin; and endocrine; or (ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term “physical or mental impairment” includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, autism, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, Human Immunodeficiency Virus disease (symptomatic or asymptomatic), mental retardation, emotional illness, drug addiction and alcoholism. (2) The term “individual with disabilities” does not include: (i) An individual who is currently engaging in the illegal use of drugs, when the agency acts on the basis of such use. This exclusion, however, does not exclude an individual with disabilities who— (A) Has successfully completed a supervised drug rehabilitation program, and is no longer engaging in the illegal use of drugs, or has otherwise been rehabilitated successfully, and is no longer engaging in such use; (B) Is participating in a supervised rehabilitation program, and is no longer engaging in such use; or (C) Is erroneously regarded as engaging in such use, but is not engaging in such use. (ii) Except that it shall not violate this part for the agency to adopt or administer reasonable policies and procedures, including but not limited to drug testing, designed to ensure than an individual described in paragraphs (2)(i) (A) and (B) of this definition is no longer engaging in the illegal use of drugs. (iii) Nothing in paragraph (2) of this definition shall be construed to encourage, prohibit, restrict or authorize the conduct of testing for illegal use of drugs. (iv) The agency shall not deny health services provided under titles I, II and III of the Rehabilitation Act of 1973 (29 U.S.C. 701 through 777f) to an individual with disabilities on the basis of that individual's current illegal use of drugs, if the individual is otherwise entitled to such services. (3) For purposes of employment, the term “individual with disabilities” does not include:<PRTPAGE P="105"/> (i) An individual who has a currently contagious disease or infection and who, by reason of such disease or infection— (A) Has been determined, in accordance with the provisions of § 9.131, to pose a direct threat to the health or safety of other individuals, which threat cannot be eliminated or reduced by reasonable accommodation, or (B) Is unable to perform the essential duties of the job, with or without reasonable accommodation; or (ii) An individual who is an alcoholic and whose current use of alcohol prevents him or her from performing the duties of the job in question or whose employment would constitute a direct threat to the property or the safety of others by reason of his or her current alcohol abuse. (4) “Major life activities” means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working. (5) “Has a record of such an impairment” means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities. (6) “Is regarded as having an impairment” means— (i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the agency as constituting such a limitation; (ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or (iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the agency as having such an impairment. <E T="03">Multifamily housing project</E> means a project containing five or more dwelling units. <E T="03">Official or Responsible Official</E> means the Assistant Secretary of HUD for Fair Housing and Equal Opportunity. <E T="03">PDP housing facility</E> means a housing facility administered under HUD's Property Disposition Program. <E T="03">Project</E> means the whole of one or more residential structures and appurtenant structures, equipment, roads, walks, and parking lots which are covered by a single mortgage or contract or otherwise treated as a whole by the agency for processing purposes, whether or not located on a common site. <E T="03">Property Disposition Program (PDP)</E> means the HUD program which administers the housing facilities that are either owned by the Secretary or where, even though the Secretary has not obtained title, the Secretary is mortgagee-in-possession. Such properties are deemed to be in the possession or control of the agency. <E T="03">Qualified individual with disabilities</E> means: (1) With respect to any agency non-employment program or activity under which a person is required to perform services or to achieve a level of accomplishment, an individual with disabilities who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the agency can demonstrate would result in a fundamental alteration in its nature; or (2) With respect to any other agency non-employment program or activity, an individual with disabilities who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity. (3) “Essential eligibility requirements” include stated eligibility requirements such as income, as well as other explicit or implicit requirements inherent in the nature of the program or activity, such as requirements that an occupant of a PDP multifamily housing facility be capable of meeting selection criteria and be capable of complying with all obligations of occupancy with or without supportive services provided by persons other than the agency. (4) “Qualified person with disabilities” as that term is defined for purposes of employment in 29 CFR 1613.702(f), which is made applicable to this part by § 9.140. <E T="03">Replacement cost of the completed facility</E> means the current cost of construction and equipment for a newly constructed housing facility of the size and type being altered. Construction <PRTPAGE P="106"/>and equipment costs do not include the cost of land, demolition, site improvements, non-dwelling facilities and administrative costs for project development activities. <E T="03">Secretary</E> means the Secretary of Housing and Urban Development. <E T="03">Section 504</E> means section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794). As used in this part, section 504 applies only to programs or activities conducted by the agency and not to federally assisted programs. <E T="03">Substantial impairment</E> means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration. <E T="03">UFAS</E> means the Uniform Federal Accessibility Standards, which implement the accessibility standards required by the Architectural Barriers Act (42 U.S.C. 4151 through 4157), and which are established at 24 CFR part 40, Appendix A for residential structures, and 41 CFR 101-19.600 through 101-19.607, and Appendix A to these sections, for non-residential structures. </SECTION> <SECTION> <SECTNO>§ 9.110</SECTNO> <SUBJECT>Self-evaluation.</SUBJECT> (a) The agency shall, within one year of the effective date of this part, evaluate its current policies and practices, and the effects of those policies and practices, including regulations, handbooks, notices and other written guidance, that do not or may not meet the requirements of this part. To the extent modification of any such policies is required, the agency shall take the necessary corrective actions. (b) The agency shall provide an opportunity to interested persons, including individuals with disabilities or organizations representing individuals with disabilities, to participate in the self-evaluation process by submitting comments (both oral and written). (c) The agency shall, for at least three years following the completion of the self-evaluation, maintain on file and make available for public inspection: (1) A list of interested persons; (2) A description of the areas examined and any problems identified; and (3) A description of any modifications made or to be made. </SECTION> <SECTION> <SECTNO>§ 9.111</SECTNO> <SUBJECT>Notice.</SUBJECT> The agency shall make available to employees, applicants, participants, beneficiaries, and other interested persons information regarding the provisions of this part and its applicability to the programs or activities conducted by the agency. The agency shall make such information available to such persons in such manner as the Secretary finds necessary to apprise them of the protections against discrimination assured them by section 504 and this part. All publications and recruitment materials distributed to participants, beneficiaries, applicants or employees shall include a statement that the agency does not discriminate on the basis of disability. The notice shall include the name of the person or office responsible for the implementation of section 504. </SECTION> <SECTION> <SECTNO>§§ 9.112-9.129</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 9.130</SECTNO> <SUBJECT>General prohibitions against discrimination.</SUBJECT> (a) No qualified individual with disabilities shall, on the basis of disability, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the agency. (b)(1) The agency, in providing any housing, aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of disability— (i) Deny a qualified individual with disabilities the opportunity to participate in or benefit from the housing, aid, benefit, or service; (ii) Afford a qualified individual with disabilities an opportunity to participate in or benefit from the housing, aid, benefit, or service that is not equal to that afforded others; (iii) Provide a qualified individual with disabilities with any housing, aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others; (iv) Provide different or separate housing, aid, benefits, or services to individuals with disabilities or to any <PRTPAGE P="107"/>class of individuals with disabilities than is provided to others unless such action is necessary to provide qualified individuals with disabilities with housing, aid, benefits, or services that are as effective as those provided to others; (v) Deny a qualified individual with disabilities the opportunity to participate as a member of planning or advisory boards; (vi) Deny a dwelling to an otherwise qualified buyer or renter because of a disability of that buyer or renter or a person residing in or intending to reside in that dwelling after it is sold, rented or made available; or (vii) Otherwise limit a qualified individual with disabilities in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the housing, aid, benefit, or service. (2) For purposes of this part, housing, aids, benefits, and services, to be equally effective, are not required to produce the identical result or level of achievement for individuals with disabilities and for persons without disabilities, but must afford individuals with disabilities equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement. (3) The agency may not deny a qualified individual with disabilities the opportunity to participate in programs or activities that are not separate or different, despite the existence of programs or activities that are permissibly separate or different for persons with disabilities. (4) The agency may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would: (i) Subject qualified individuals with disabilities to discrimination on the basis of disability; or (ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to individuals with disabilities. (5) The agency may not, in determining the site or location of a facility, make selections the purpose or effect of which would: (i) Exclude individuals with disabilities from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the agency; or (ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to individuals with disabilities. (6) The agency, in the selection of procurement contractors, may not use criteria that subject qualified individuals with disabilities to discrimination on the basis of disability. (7) The agency may not administer a licensing or certification program in a manner that subjects qualified individuals with disabilities to discrimination on the basis of disability, nor may the agency establish requirements for the programs or activities of licensees or certified entities that subject qualified individuals with disabilities to discrimination on the basis of disability. However, the programs or activities of entities that are licensed or certified by the agency are not, themselves, covered by this part. (c)(1) Notwithstanding any other provision of this part, persons without disabilities may be excluded from the benefits of a program if the program is limited by Federal statute or Executive order to individuals with disabilities. A specific class of individuals with disabilities may be excluded from a program if the program is limited by Federal statute or Executive order to a different class of individuals. (2) Certain agency programs operate under statutory definitions of “persons with disabilities” that are more restrictive than the definition of “individual with disabilities” contained in § 9.103. Those definitions are not superseded or otherwise affected by this regulation. (d) The agency shall administer programs and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities. (e) The obligation to comply with this part is not obviated or alleviated by any State or local law or other requirement that, based on disability, imposes inconsistent or contradictory prohibitions or limits upon the eligibility of qualified individuals with disabilities to receive services or to practice any occupation or profession.<PRTPAGE P="108"/> (f) The enumeration of specific forms of prohibited discrimination in paragraphs (b) and (d) of this section does not limit the general prohibition in paragraph (a) of this section. <SECTNO>§ 9.131</SECTNO> <SUBJECT>Direct threat.</SUBJECT> (a) This part does not require the agency to permit an individual to participate in, or benefit from the goods, services, facilities, privileges, advantages and accommodations of that agency when that individual poses a direct threat to the health or safety of others. (b) “Direct threat” means a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices, or procedures, or by the provision of auxiliary aids or services. (c) In determining whether an individual poses a direct threat to the health or safety of others, the agency must make an individualized assessment, based on reasonable judgment that relies on current medical knowledge or on the best available objective evidence to ascertain: the nature, duration, and severity of the risk; the probability that the potential injury will actually occur; and whether reasonable modifications of policies, practices, or procedures will mitigate the risk. </SECTION> <SECTION> <SECTNO>§§ 9.132—9.139</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 9.140</SECTNO> <SUBJECT>Employment.</SUBJECT> No qualified individual with disabilities shall, on the basis of disability, be subjected to discrimination in employment under any program or activity conducted by the agency. The definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1613 (subpart G), shall apply to employment in federally conducted programs or activities. </SECTION> <SECTION> <SECTNO>§§ 9.141—9.148</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> <SECTION> <SECTNO>§ 9.149</SECTNO> <SUBJECT>Program accessibility: discrimination prohibited.</SUBJECT> Except as otherwise provided in § 9.150, no qualified individual with disabilities shall, because the agency's facilities are inaccessible to or unusable by individuals with disabilities, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the agency. </SECTION> <SECTION> <SECTNO>§ 9.150</SECTNO> <SUBJECT>Program accessibility: existing facilities.</SUBJECT> (a) <E T="03">General.</E> Except as otherwise provided in paragraph (e) of this section, the agency shall operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with disabilities. This section does not— (1) Necessarily require the agency to make each of its existing facilities accessible to and usable by individuals with disabilities; (2) In the case of historic properties, require the agency to take any action that would result in a substantial impairment of significant historic features of an historic property; or (3) Require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 9.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the Secretary or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that individuals with disabilities receive the benefits and services of the program or activity.<PRTPAGE P="109"/> (b) <E T="03">Methods.</E> The agency may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any other methods that result in making its programs or activities readily accessible to and usable by individuals with disabilities. The agency is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. The agency, in making alterations to existing buildings, also shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151 through 4157), and any regulations implementing it. In choosing among available methods for meeting the requirements of this section, the agency shall give priority to those methods that offer programs and activities to qualified individuals with disabilities in the most integrated setting appropriate. (c) <E T="03">Time period for compliance.</E> The agency shall comply with the obligations established under this section within sixty days of July 18, 1994 except that where structural changes in facilities are undertaken, such changes shall be made within three years of July 18, 1994, but in any event as expeditiously as possible. (d) <E T="03">Transition plan.</E> In the event that structural changes to facilities will be undertaken to achieve program accessibility, the agency shall develop, within six months of July 18, 1994, a transition plan setting forth the steps necessary to complete such changes. The agency shall provide an opportunity to interested persons, including individuals with disabilities or organizations representing individuals with disabilities, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum— (1) Identify physical obstacles in the agency's facilities that limit the accessibility of its programs or activities to individuals with disabilities; (2) Describe in detail the methods that will be used to make the facilities accessible; (3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and (4) Indicate the official responsible for implementation of the plan. (e) The requirements of paragraphs (a), (b), and (c) of this section shall apply to the Property Disposition Programs. However, this section does not require HUD to make alterations to existing facilities that are part of the Property Disposition Programs unless such alterations are necessary to meet the needs of a current or prospective tenant during the time when HUD expects to retain legal possession of the facilities, and there is no alternative method to meet the needs of that current or prospective tenant. Nothing in this section shall be construed to require alterations to make facilities accessible to persons with disabilities who are expected to occupy the facilities only after HUD relinquishes legal possession. </SECTION> <SECTION> <SECTNO>§ 9.151</SECTNO> <SUBJECT>Program accessibility: new construction and alterations.</SUBJECT> Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the agency shall be designed, constructed, or altered and provide emergency egress so as to be readily accessible to and usable by individuals with disabilities. The definitions, requirements, and accessibility standards that apply to buildings covered by this section are those contained in the UFAS, except where the ADAAG provides for greater accessibility for the type of construction or alteration being undertaken, and in this case, the definitions, requirements and standards of the ADAAG shall apply. </SECTION> <SECTION> <PRTPAGE P="110"/> <SECTNO>§ 9.152</SECTNO> <SUBJECT>Program accessibility: alterations of Property Disposition Program multifamily housing facilities.</SUBJECT> (a) <E T="03">Substantial alteration.</E> If the agency undertakes alterations to a PDP multifamily housing project that has 15 or more units and the cost of the alterations is 75 percent or more of the replacement cost of the completed facility, then the project shall be designed and altered to be readily accessible to and usable by individuals with disabilities. Subject to paragraph (c) of this section, a minimum of five percent of the total dwelling units, or at least one unit, whichever is greater, shall be made accessible for persons with mobility impairments. A unit that is on an accessible route and is adaptable and otherwise in compliance with the standards set forth in paragraph (d) of this section is accessible for purposes of this section. An additional two percent of the units (but not less that one unit) in such a project shall be accessible for persons with hearing or vision impairments. If state or local requirements for alterations require greater action than this paragraph, those requirements shall prevail. (b) <E T="03">Other alteration.</E> (1) Subject to paragraph (c) of this section, alterations to dwelling units in a PDP multifamily housing project shall, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with disabilities. If alterations of single elements or spaces of a dwelling unit, when considered together, amount to an alteration of a dwelling unit, the entire dwelling unit shall be made accessible. Once five percent of the dwelling units in a project are readily accessible to and usable by individuals with mobility impairments, then no additional elements of dwelling units, or entire dwelling units, are required to be accessible under this paragraph. Once two percent of the dwelling units in a project are readily accessible to or usable by individuals with hearing or vision impairments, then no additional elements of dwelling units, or entire dwelling units, are required to be accessible under this paragraph. (2) Alterations to common areas or parts of facilities that affect accessibility of existing housing facilities, shall, to the maximum extent feasible, be made to be accessible to and usable by individuals with disabilities. (c) The agency may establish a higher percentage or number of accessible units than that prescribed in paragraphs (a) or (b) of this section if the agency determines that there is a need for a higher percentage or number, based on census data or other available current data. In making such a determination, HUD shall take into account the expected needs of eligible persons with and without disabilities. (d) The definitions, requirements, and accessibility standards that apply to PDP multifamily housing projects covered by this section are those contained in the UFAS, except where the ADAAG provides for greater accessibility for the type of alteration being undertaken, and, in this case, the definitions, requirements and standards of the ADAAG shall apply. (e) With respect to multifamily housing projects operated by HUD, but in which HUD does not have an ownership interest, alterations under this section need not be made if doing so would impose undue financial and administrative burdens on the operation of the multifamily housing project. </SECTION> <SECTION> <SECTNO>§ 9.153</SECTNO> <SUBJECT>Distribution of accessible dwelling units.</SUBJECT> Accessible dwelling units required by § 9.152 shall, to the maximum extent feasible, be distributed throughout projects and sites and shall be available in a sufficient range of sizes and amenities so that a qualified individual with disabilities’ choice of living arrangements is, as a whole, comparable to that of other persons eligible for housing assistance under the same agency conducted program. This provision shall not be construed to require (but does allow) the provision of an elevator in any multifamily housing project solely for the purpose of permitting location of accessible units above or below the accessible grade level. </SECTION> <SECTION> <SECTNO>§ 9.154</SECTNO> <SUBJECT>Occupancy of accessible dwelling units.</SUBJECT> (a) The agency shall adopt suitable means to assure that information regarding the availability of accessible <PRTPAGE P="111"/>units in PDP housing facilities reaches eligible individuals with disabilities, and shall take reasonable nondiscriminatory steps to maximize the utilization of such units by eligible individuals whose disability requires the accessibility features of the particular unit. To this end, when an accessible unit becomes vacant, the agency (or its management agent) before offering such units to an applicant without disabilities shall offer such unit: (1) First, to a current occupant of another unit of the same project, or comparable projects under common control, having disabilities requiring the accessibility features of the vacant unit and occupying a unit not having such features, or, if no such occupant exists, then (2) Second, to an eligible qualified applicant on the waiting list having a disability requiring the accessibility features of the vacant unit. (b) When offering an accessible unit to an applicant not having disabilities requiring the accessibility features of the unit, the agency may require the applicant to agree (and may incorporate this agreement in the lease) to move to a non-accessible unit when available. </SECTION> <SECTION> <SECTNO>§ 9.155</SECTNO> <SUBJECT>Housing adjustments.</SUBJECT> (a) The agency shall modify its housing policies and practices as they relate to PDP housing facilities to ensure that these policies and practices do not discriminate, on the basis of disability, against a qualified individual with disabilities. The agency may not impose upon individuals with disabilities other policies, such as the prohibition of assistive devices, auxiliary aids, alarms, or guides in housing facilities, that have the effect of limiting the participation of tenants with disabilities in any agency conducted housing program or activity in violation of this part. Housing policies that the agency can demonstrate are essential to the housing program or activity will not be regarded as discriminatory within the meaning of this section if modifications would result in a fundamental alteration in the nature of the program or activity or undue financial and administrative burdens. (b) The decision that compliance would result in such alteration or burdens must be made by the Secretary or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with disabilities receive the benefits and services of the program or activity. </SECTION> <SECTION> <SECTNO>§ 9.160</SECTNO> <SUBJECT>Communications.</SUBJECT> (a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public. (1) The agency shall furnish appropriate auxiliary aids where necessary to afford an individual with disabilities an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency. (i) In determining what type of auxiliary aid is necessary, the agency shall give primary consideration to the requests of the individual with disabilities. (ii) The agency need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature. (2) Where the agency communicates with applicants and beneficiaries or members of the public by telephone, telecommunication devices for deaf persons (TDD's) or equally effective telecommunication systems shall be used to communicate with persons with impaired hearing. (b) The agency shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities. (c) The agency shall provide signage at a primary entrance to each of its inaccessible facilities, directing users to <PRTPAGE P="112"/>a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility. (d) This section does not require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with this section would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the Secretary or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with § 9.160 would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with disabilities receive the benefits and services of the program or activity. </SECTION> <SECTION> <SECTNO>§ 9.170</SECTNO> <SUBJECT>Compliance procedures.</SUBJECT> (a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of disability in programs or activities conducted by the agency. (b) The agency shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1613 under section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791). (c) The Responsible Official shall coordinate implementation of this section. (d) Persons may submit complete complaints to the Assistant Secretary for Fair Housing and Equal Opportunity, 451 Seventh St., SW., Washington, DC 20410, or to any HUD Area Office. The agency shall accept and investigate all complete complaints for which the agency has jurisdiction. All complete complaints shall be filed within 180 days of the alleged act of discrimination. The agency may extend this time period for good cause. For purposes of determining when a complaint is filed, a complaint mailed to the agency shall be deemed filed on the date it is postmarked. Any other complaint shall be deemed filed on the date it is received by the agency. The agency shall acknowledge all complaints, in writing, within ten (10) working days of receipt of the complaint. (e) If the agency receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate Government entity. (f) The agency shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151 through 4157), is not readily accessible to and usable by individuals with disabilities. The agency shall delete the identity of the complainant from the copy of the complaint. (g)(1) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the Office of Fair Housing and Equal Opportunity shall complete the investigation of the complaint, attempt informal resolution, and if no informal resolution is achieved, issue a letter of findings. If a complaint is filed against the Office of Fair Housing and Equal Opportunity, the Secretary or a designee of the Secretary shall investigate and resolve the complaint through informal agreement or letter of findings. (2) If a complaint is resolved informally, the terms of the agreement shall be reduced to writing and made part of the complaint file, with a copy of the agreement provided to the complainant and the agency. The written agreement may include a finding on the issue of discrimination and shall describe any corrective action to which <PRTPAGE P="113"/>the complainant and the respondent have agreed. (3) If a complaint is not resolved informally, the Office of Fair Housing and Equal Opportunity or a person designated under this paragraph shall notify the complainant of the results of the investigation in a letter containing— (i) Findings of fact and conclusions of law; (ii) A description of a remedy for each violation found; (iii) A notice of the right to appeal to the Secretary; (h)(1) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the agency of the letter required by § 9.170(g). The Assistant Secretary or the person designated by the Secretary to decide an appeal of a complaint filed against the Office of Fair Housing and Equal Opportunity may extend this time for good cause. (2) Timely appeals shall be accepted and processed by the Assistant Secretary. Decisions on an appeal shall not be issued by the person who made the initial determination. (i) The Assistant Secretary or the person designated by the Secretary to decide an appeal of a complaint filed against the Office of Fair Housing and Equal Opportunity shall notify the complainant of the results of the appeal within 60 days of the receipt of the request. If the agency determines that it needs additional information from the complainant, it shall have 60 days from the date it receives the additional information to make its determination on the appeal. (j) The time limits cited in paragraphs (g) and (i) of this section may be extended with the permission of the Assistant Attorney General. (k) The agency may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated to another agency. </SECTION> </PART> <PART> <EAR>Pt. 10</EAR> <HD SOURCE="HED">PART 10—RULEMAKING: POLICY AND PROCEDURES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>10.1</SECTNO> <SUBJECT>Policy.</SUBJECT> <SECTNO>10.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>10.3</SECTNO> <SUBJECT>Applicability.</SUBJECT> <SECTNO>10.4</SECTNO> <SUBJECT>Rules docket.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Procedures</HD> <SECTNO>10.6</SECTNO> <SUBJECT>Initiation of rulemaking.</SUBJECT> <SECTNO>10.7</SECTNO> <SUBJECT>Advance Notice of Proposed Rulemaking.</SUBJECT> <SECTNO>10.8</SECTNO> <SUBJECT>Notice of proposed rulemaking.</SUBJECT> <SECTNO>10.10</SECTNO> <SUBJECT>Participation by interested persons.</SUBJECT> <SECTNO>10.12</SECTNO> <SUBJECT>Additional rulemaking proceedings.</SUBJECT> <SECTNO>10.14</SECTNO> <SUBJECT>Hearings.</SUBJECT> <SECTNO>10.16</SECTNO> <SUBJECT>Adoption of a final rule.</SUBJECT> <SECTNO>10.18</SECTNO> <SUBJECT>Petitions for reconsideration.</SUBJECT> <SECTNO>10.20</SECTNO> <SUBJECT>Petition for rulemaking.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 44 FR 1606, Jan. 5, 1979, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 10.1</SECTNO> <SUBJECT>Policy.</SUBJECT> It is the policy of the Department of Housing and Urban Development to provide for public participation in rulemaking with respect to all HUD programs and functions, including matters that relate to public property, loans, grants, benefits, or contracts even though such matters would not otherwise be subject to rulemaking by law or Executive policy. The Department therefore publishes notices of proposed rulemaking in the <E T="04">Federal Register</E> and gives interested persons an opportunity to participate in the rulemaking through submission of written data, views, and arguments with or without opportunity for oral presentation. It is the policy of the Department that its notices of proposed rulemaking are to afford the public not less than sixty days for submission of comments. For some rules the Secretary will employ additional methods of inviting public participation. These methods include, but are not limited to, publishing Advance Notices of Proposed Rulemaking (ANPR), conducting public surveys, and convening public forums or panels. <PRTPAGE P="114"/>An ANPR will be used to solicit public comment early in the rulemaking process for significant rules unless the Secretary grants an exception based upon legitimate and pressing time constraints. Unless required by statute, notice and public procedure will be omitted if the Department determines in a particular case or class of cases that notice and public procedure are impracticable, unnecessary or contrary to the public interest. In a particular case, the reasons for the determination shall be stated in the rulemaking document. Notice and public procedure may also be omitted with respect to statements of policy, interpretative rules, rules governing the Department's organization or its own internal practices or procedures, or if a statute expressly so authorizes. A final substantive rule will be published not less than 30 days before its effective date, unless it grants or recognizes an exemption or relieves a restriction or unless the rule itself states good cause for taking effect upon publication or less than 30 days thereafter. Statements of policy and interpretative rules will usually be made effective on the date of publication. <CITA>[44 FR 1606, Jan. 5, 1979, as amended at 47 FR 56625, Dec. 20, 1982]</CITA> </SECTION> <SECTION> <SECTNO>§ 10.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) <E T="03">Rule</E> or <E T="03">Regulation</E> means all or part of any Departmental statement of general or particular applicability and future effect designed to: (1) Implement, interpret, or prescribe law or policy, or (2) describe the Department's organization, or its procedure or practice requirements. The term <E T="03">regulation</E> is sometimes applied to a rule which has been published in the <E T="03">Code of Federal Regulations</E>. (b) <E T="03">Rulemaking</E> means the Departmental process for considering and formulating the issuance, modification, or repeal of a rule. (c) <E T="03">Secretary</E> means the Secretary or the Under Secretary of Housing and Urban Development, or an official to whom the Secretary has expressly delegated authority to issue rules. </SECTION> <SECTION> <SECTNO>§ 10.3</SECTNO> <SUBJECT>Applicability.</SUBJECT> (a) This part prescribes general rulemaking procedures for the issuance, amendment, or repeal of rules in which participation by interested persons is required by 5 U.S.C. or by Department policy. (b) The authority to issue rules, delegated by the Secretary, may not be redelegated unless expressly permitted. (c) This part is not applicable to a determination by HUD under 24 CFR part 966 (public housing) or 24 CFR part 950 (Indian housing) that the law of a jurisdiction requires that, prior to eviction, a tenant be given a hearing in court which provides the basic elements of due process (“due process determination”). <CITA>[44 FR 1606, Jan. 5, 1979, as amended at 61 FR 13273, Mar. 26, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 10.4</SECTNO> <SUBJECT>Rules docket.</SUBJECT> (a) All documents relating to rulemaking procedures including but not limited to advance notices of proposed rulemaking, notices of proposed rulemaking, written comments received in response to notices, withdrawals or terminations of proposed rulemaking, petitions for rulemaking, requests for oral argument in public participation cases, requests for extension of time, grants or denials of petitions or requests, transcripts or minutes of informal hearings, final rules and general notices are maintained in the Rules Docket Room (Room 5218), Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. All public rulemaking comments should refer to the docket number which appears in the heading of the rule and should be addressed to the Rules Docket Clerk, Room 5218, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. (b) Documents relating to rulemaking proceedings are public records. After a docket is established, any person may examine docketed material at any time during regular business hours, and may obtain a copy of any docketed material upon payment of the prescribed fee. (See part 15 of this title). </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="115"/> <HD SOURCE="HED">Subpart B—Procedures</HD> <SECTION> <SECTNO>§ 10.6</SECTNO> <SUBJECT>Initiation of rulemaking.</SUBJECT> Rulemaking proceedings may be initiated on the Secretary's motion, or on the recommendation of a Federal, State, or local government or government agency, or on the petition of any interested person. </SECTION> <SECTION> <SECTNO>§ 10.7</SECTNO> <SUBJECT>Advance Notice of Proposed Rulemaking.</SUBJECT> An Advance Notice of Proposed Rulemaking issued in accordance with § 10.1 of this part is published in the <E T="04">Federal Register</E> and briefly outlines: (a) The proposed new program or program changes, and why they are needed; (b) The major policy issues involved; (c) A request for comments, both specific and general, as to the need for the proposed rule and the provisions that the rule might include; (d) If appropriate, a list of questions about the proposal that will elicit detailed comments; (e) If known, an estimate of the reporting or recordkeeping requirements, if any, that the rule would impose; and (f) Where comments should be addressed and the time within which they must be submitted. </SECTION> <SECTION> <SECTNO>§ 10.8</SECTNO> <SUBJECT>Notice of proposed rulemaking.</SUBJECT> Each notice of proposed rulemaking required by statute or by § 10.1 is published in the <E T="04">Federal Register</E> and includes: (a) The substance or terms of the proposed rule or a description of the subject matter and issues involved; (b) A statement of how and to what extent interested persons may participate in the proceeding; (c) Where participation is limited to written comments, a statement of the time within which such comments must be submitted; (d) A reference to the legal authority under which the proposal is issued; and (e) In a proceeding which has provided Advance Notice of Proposed Rulemaking, an analysis of the principal issues and recommendations raised by the comments, and the manner in which they have been addressed in the proposed rulemaking. </SECTION> <SECTION> <SECTNO>§ 10.10</SECTNO> <SUBJECT>Participation by interested persons.</SUBJECT> (a) Unless the notice otherwise provides, any interested person may participate in rulemaking proceedings by submitting written data, views or arguments within the comment time stated in the notice. In addition, the Secretary may permit the filing of comments in response to original comments. (b) In appropriate cases, the Secretary may provide for oral presentation of views in additional proceedings described in § 10.12. </SECTION> <SECTION> <SECTNO>§ 10.12</SECTNO> <SUBJECT>Additional rulemaking proceedings.</SUBJECT> The Secretary may invite interested persons to present oral arguments, appear at informal hearings, or participate in any other procedure affording opportunity for oral presentation of views. The transcript or minutes of such meetings, as appropriate, will be kept and filed in the Rules Docket. </SECTION> <SECTION> <SECTNO>§ 10.14</SECTNO> <SUBJECT>Hearings.</SUBJECT> (a) The provisions of 5 U.S.C. 556 and 557, which govern formal hearings in adjudicatory proceedings, do not apply to informal rule making proceedings described in this part. When opportunity is afforded for oral presentation, such informal <E T="03">hearing</E> is a nonadversary, fact-finding proceeding. Any rule issued in a proceeding under this part in which a hearing is held is not based exclusively on the record of such hearing. (b) When a hearing is provided, the Secretary will designate a representative to conduct the hearing, and if the presence of a legal officer is desirable, the General Counsel will designate a staff attorney to serve as the officer. </SECTION> <SECTION> <SECTNO>§ 10.16</SECTNO> <SUBJECT>Adoption of a final rule.</SUBJECT> All timely comments are considered in taking final action on a proposed rule. Each preamble to a final rule will contain a short analysis and evaluation of the relevant significant issues set forth in the comments submitted, and a clear concise statement of the basis and purpose of the rule. </SECTION> <SECTION> <PRTPAGE P="116"/> <SECTNO>§ 10.18</SECTNO> <SUBJECT>Petitions for reconsideration.</SUBJECT> Petitions for reconsideration of a final rule will not be considered. Such petitions, if filed, will be treated as peitions for rulemaking in accordance with § 10.20. </SECTION> <SECTION> <SECTNO>§ 10.20</SECTNO> <SUBJECT>Petition for rulemaking.</SUBJECT> (a) Any interested person may petition the Secretary for the issuance, amendment, or repeal of a rule. Each petition shall: (1) Be submitted to the Rules Docket Clerk, Room 5218, Department of Housing and Urban Development, Washington, DC 20410; (2) Set forth the text of substance of the rule or amendment proposed or specify the rule sought to be repealed; (3) Explain the interest of the petitioner in the action sought; and (4) Set forth all data and arguments available to the petitioner in support of the action sought. (b) No public procedures will be held directly on the petition before its disposition. If the Secretary finds that the petition contains adequate justification, a rulemaking proceeding will be initiated or a final rule will be issued as appropriate. If the Secretary finds that the petition does not contain adequate justification, the petition will be denied by letter or other notice, with a brief statement of the ground for denial. The Secretary may consider new evidence at any time; however, repetitious petitions for rulemaking will not be considered. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 13</EAR> <HD SOURCE="HED">PART 13—USE OF PENALTY MAIL IN THE LOCATION AND RECOVERY OF MISSING CHILDREN</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>13.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>13.2</SECTNO> <SUBJECT>Procedures for obtaining and disseminating data.</SUBJECT> <SECTNO>13.3</SECTNO> <SUBJECT>Withdrawal of data.</SUBJECT> <SECTNO>13.4</SECTNO> <SUBJECT>Reports.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 39 U.S.C. 3220(a)(2); 5 U.S.C. 301. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 51 FR 19830, June 3, 1986, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 13.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> To support the national effort to locate and recover missing children, the Department of Housing and Urban Development (HUD) joins other executive departments and independent establishments of the Government of the United States in using penalty mail to disseminate photographs and biographical information on hundreds of missing children. <CITA>[51 FR 19830, June 3, 1986; 51 FR 43608, Dec. 3, 1986]</CITA> </SECTION> <SECTION> <SECTNO>§ 13.2</SECTNO> <SUBJECT>Procedures for obtaining and disseminating data.</SUBJECT> (a) HUD shall insert, manually and via automated inserts, pictures and biographical data related to missing children in domestic penalty mail directed to members of the public in the United States, its territories and possessions. These include: (1) Standard letter-size envelopes (4<FR>1/2</FR> <E T="61">″</E> X 9<FR>1/2</FR> <E T="61">″</E>); (2) Document-size envelopes (9<FR>1/2</FR> <E T="61">″</E> X 12<E T="61">″</E>, 9<FR>1/2</FR> <E T="61">″</E> X 11<FR>1/2</FR> <E T="61">″</E>, 10<E T="61">″</E> X 13<E T="61">″</E>); and (3) Other envelopes (miscellaneous size). (b) Missing children information shall not be placed on the <E T="03">Penalty Indicia</E>, <E T="03">OCR Read Area</E>, <E T="03">Bar Code Read Area</E>, and <E T="03">Return Address</E> areas of letter-size envelopes. (c) Posters containing pictures and biographical data shall be placed on bulletin boards in Headquarters and Field offices. (d) HUD shall accept camera-ready and other photographic and biographical materials solely from the National Center for Missing and Exploited Children (National Center). Photographs that were reasonably current as of the time of the child's disappearance shall be the only acceptable form of visual media or pictorial likeness used in penalty mail or posters. </SECTION> <SECTION> <SECTNO>§ 13.3</SECTNO> <SUBJECT>Withdrawal of data.</SUBJECT> HUD shall remove all printed penalty mail envelopes and other materials from circulation or other use within a three month period from the date the National Center receives information or notice that a child, whose picture and biographical information have been made available to HUD, has been recovered or that the parent or guardian's permission to use the child's photograph and biographical information has been withdrawn. The HUD contact person shall be notified immediately <PRTPAGE P="117"/>and in writing by the National Center of the need to withdraw from circulation penalty mail envelopes and other materials related to a particular child. </SECTION> <SECTION> <SECTNO>§ 13.4</SECTNO> <SUBJECT>Reports.</SUBJECT> HUD shall compile and submit to Office of Juvenile Justice and Deliquency Prevention (OJJDP), by June 30, 1987, a consolidated report on its experience in implementing S. 1195 <E T="03">Official Mail Use in the Location and Recovery of Missing Children</E> along with recommendations for future Departmental action. </SECTION> </PART> <PART> <EAR>Pt. 14</EAR> <HD SOURCE="HED">PART 14—IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN ADMINISTRATIVE PROCEEDINGS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>14.50</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>14.100</SECTNO> <SUBJECT>Time computation.</SUBJECT> <SECTNO>14.105</SECTNO> <SUBJECT>Purpose of these rules.</SUBJECT> <SECTNO>14.110</SECTNO> <SUBJECT>When the Act applies.</SUBJECT> <SECTNO>14.115</SECTNO> <SUBJECT>Proceedings covered.</SUBJECT> <SECTNO>14.120</SECTNO> <SUBJECT>Eligibility of applicants.</SUBJECT> <SECTNO>14.125</SECTNO> <SUBJECT>Standards for awards.</SUBJECT> <SECTNO>14.130</SECTNO> <SUBJECT>Allowable fees and expenses.</SUBJECT> <SECTNO>14.135</SECTNO> <SUBJECT>Rulemaking on maximum rates for attorney fees.</SUBJECT> <SECTNO>14.140</SECTNO> <SUBJECT>Awards against other agencies.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Information Required From Applicants</HD> <SECTNO>14.200</SECTNO> <SUBJECT>Contents of application.</SUBJECT> <SECTNO>14.205</SECTNO> <SUBJECT>Net worth exhibit.</SUBJECT> <SECTNO>14.210</SECTNO> <SUBJECT>Documentation of fees and expenses.</SUBJECT> <SECTNO>14.215</SECTNO> <SUBJECT>When an application may be filed.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for Considering Applications</HD> <SECTNO>14.300</SECTNO> <SUBJECT>Jurisdiction of adjudicative officer.</SUBJECT> <SECTNO>14.305</SECTNO> <SUBJECT>Filing and service of documents.</SUBJECT> <SECTNO>14.310</SECTNO> <SUBJECT>Answer to application.</SUBJECT> <SECTNO>14.315</SECTNO> <SUBJECT>Comments by other parties.</SUBJECT> <SECTNO>14.320</SECTNO> <SUBJECT>Settlement.</SUBJECT> <SECTNO>14.325</SECTNO> <SUBJECT>Extensions of time and further proceedings.</SUBJECT> <SECTNO>14.330</SECTNO> <SUBJECT>Decision.</SUBJECT> <SECTNO>14.335</SECTNO> <SUBJECT>Departmental review.</SUBJECT> <SECTNO>14.340</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>14.345</SECTNO> <SUBJECT>Payment of award.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> Sec. 504(c)(1) of the Equal Access to Justice Act (5 U.S.C. 504(c)(1); sec. 7(d) of the Department of Housing and Urban Development Act (42 U.S.C. 3535(d)). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 52 FR 27126, July 17, 1987, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—General Provisions</HD> <SECTION> <SECTNO>§ 14.50</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Act</E>. The Equal Access to Justice Act, 5 U.S.C. 504, title II of Pub. L. 96-481, as amended by Pub. L. 99-80. <E T="03">Adjudicative officer</E>. The hearing examiner, administrative law judge, administrative judge of the HUD Board of Contract Appeals, or other officer designated by the Secretary or other responsible Department official, who presided at the adversary adjudication. <E T="03">Adversary adjudication</E>. (a) An adjudication under 5 U.S.C. 554 in which the position of the United States is represented by counsel or otherwise, but not including an adjudication for the purpose of establishing or fixing a rate or for the purpose of granting or renewing a license; and (b) Appeals of decisions of contracting officers made pursuant to section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before agency boards of contract appeals as provided in section 8 of that Act (41 U.S.C. 607). <E T="03">Agency counsel</E> (a) When the position of the Department is being represented, the attorney or attorneys designated by the Department's General Counsel to represent the Department in a proceeding covered by this part, and (b) When the position of another agency of the United States is being represented, the representative as designated by that agency. <E T="03">Department</E>. The Department of Housing and Urban Development, or the organizational unit within the Department responsible for conducting an adversary adjudication subject to this part. <E T="03">Proceeding</E>. An adversary adjudication as defined above. <E T="03">Secretary</E>. The Secretary of Housing and Urban Development. </SECTION> <SECTION> <SECTNO>§ 14.100</SECTNO> <SUBJECT>Time computation.</SUBJECT> Time periods stated in this part shall be computed in accordance with the Department's rules with respect to computation of time which apply to the underlying proceeding. </SECTION> <SECTION> <SECTNO>§ 14.105</SECTNO> <SUBJECT>Purpose of these rules.</SUBJECT> The Act provides for the award of attorney fees and other expenses to eligible individuals and entities who are <PRTPAGE P="118"/>parties to certain administrative proceedings (<E T="03">adversary adjudications</E>) before the Department. An eligible party may receive an award when it prevails over an agency, unless the agency's position was substantially justified or special circumstances make an award unjust. The rules in this part described the parties eligible for awards and the proceedings that are covered. They also explain how to apply for awards and the procedures and standards that the Department will use to make them. </SECTION> <SECTION> <SECTNO>§ 14.110</SECTNO> <SUBJECT>When the Act applies.</SUBJECT> The Act applies to any adversary adjudication pending or commenced before this Department on or after August 5, 1985. It also applies to any adversary adjudication commenced on or after October 1, 1984, and finally disposed of before August 5, 1985, provided that an application for fees and expenses, as described in subpart B of these rules, has been filed with the Department no later than 30 days after August 5, 1985, and to any adversary adjudication pending on or commenced on or after October 1, 1981, in which an application for fees and other expenses was timely filed and was dismissed for lack of jurisdiction. </SECTION> <SECTION> <SECTNO>§ 14.115</SECTNO> <SUBJECT>Proceedings covered.</SUBJECT> (a) The proceedings to which this part applies are adversary adjudications conducted by the Department under: (1) The Interstate Land Sales Full Disclosure Act, as amended, 15 U.S.C. 1701 <E T="03">et seq.,</E> pursuant to 15 U.S.C. 1715 and 24 CFR part 1720; (2) Section 602 of the Civil Rights Act of 1964, 42 U.S.C. 2000d-1, and 24 CFR parts 1 and 2; (3) Section 505(a) of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794a, 28 CFR part 41, and any applicable HUD regulations; (4) Section 305(a) of the Age Discrimination Act of 1975, 42 U.S.C. 6104(a), 45 CFR part 90 and any applicable HUD regulations; (5) Section 3 of the HUD Act of 1968, 12 U.S.C. 170lu (Employment Opportunities for Business and Lower Income Persons in Connection with Assisted Projected), and 24 CFR part 135; (6) Debt Collection Act of 1982 (Salary Offset), 5 U.S.C. 5514, and 24 CFR 17.125-.140; (7) Manufactured Home Construction and Safety Standards Act of 1974, 42 U.S.C. 5401 <E T="03">et seq.</E>, and 24 CFR part 3280; (8) Section 111 of title I of the Housing and Community Development Act of 1974, 42 U.S.C. 5311, and 24 CFR 570.913; (9) Appeals of decisions of contracting officers made pursuant to section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605) before the HUD Board of Contract Appeals as provided in section 8 of that Act (41 U.S.C. 607); or (10) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3600-3620) and 24 CFR part 104. (b) The Department's failure to identify a type of proceeding as an adversary adjudication shall not preclude the filing of an application by a party who believes the proceeding is covered by the Act; whether the proceeding is covered will then be an issue for resolution in proceedings on the application. (c) If a proceeding includes both matters covered by the Act and matters specifically excluded from coverage, any award made will include only fees and expenses related to covered issues. <CITA>[52 FR 27126, July 17, 1987, as amended at 54 FR 3283, Jan. 23, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 14.120</SECTNO> <SUBJECT>Eligibility of applicants.</SUBJECT> (a) To be eligible for an award of attorney fees and other expenses under the Act, the applicant must be a party to the adversary adjudication for which it seeks an award. The term <E T="03">party</E> is defined in 5 U.S.C. 551(3). The applicant must show that it meets all conditions of eligibility set out in this subpart and in subpart B. (b) The types of eligible applicants are as follows: (1) An individual with a net worth of not more than $2 million; (2) The sole owner of an unincorporated business who has a net worth of not more than $7 million, including both personal and business interests, and not more than 500 employees; (3) A charitable or other tax-exempt organization described in section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), with not more than 500 employees;<PRTPAGE P="119"/> (4) A cooperative association as defined in section 15(a) of the Agricultural Marketing Act, 12 U.S.C. 1141j(a), with not more than 500 employees; or (5) Any other partnership, corporation, association, unit of local government, or organization with a net worth of not more than $7 million and not more than 500 employees. (c) For the purpose of eligibility, the net worth and number of employees of an applicant shall be determined as of the date the proceeding was initiated. For the purpose of eligibility of applicants before the HUD Board of Contract Appeals, the net worth and number of employees of an applicant shall be determined as of the date the applicant filed its appeal under 41 U.S.C. 606. (d) An applicant who owns an unincorporated business will be considered as an <E T="03">individual</E> rather than a <E T="03">sole owner of an unincorporated business</E> if the issues on which the application prevails are related primarily to personal interests rather than to business interests. (e) The employees of an applicant include all persons who regularly perform services for remuneration for the applicant, under the applicant's direction and control. Part-time employees shall be included on a proportional basis. (f) The net worth and number of employees of the applicant and all of its affiliates shall be aggregated to determine eligibility. Any individual, corporation or other entity that directly or indirectly controls or owns a majority of the voting shares or other interests of the applicant, or any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interest, will be considered an affiliate for purposes of this part, unless the adjudicative officer determines that such treatment would be unjust and contrary to the purposes of the Act in light of the actual relationship between the affiliated entities. In addition, the adjudicative officer may determine that financial relationshsips of the applicant other than those described in this paragraph constitute special circumstances that would make an award unjust. (g) An applicant that participates in a proceeding primarily on behalf of one or more other persons or entities that would be ineligible is not itself eligible for an award. </SECTION> <SECTION> <SECTNO>§ 14.125</SECTNO> <SUBJECT>Standards for awards.</SUBJECT> (a) A prevailing applicant may receive an award for fees and expenses incurred in connection with a proceeding, or in a significant and discrete substantive portion of the proceeding, unless the position of the agency over which the applicant has prevailed was substantially justified. The position of the agency includes, in addition to the position taken by the agency in the adversary adjudication, the action or failure to act by the agency upon which the adversary adjudication is based. The burden of proof that an award should not be made to an ineligible prevailing applicant because the agency's position was substantially justified is on the agency counsel, who may avoid an award by showing that its position was reasonable in law and fact. (b) An award will be reduced or denied if the applicant has unduly or unreasonably protracted the proceeding, if the applicant has falsified the application (including documentation) or net worth exhibit or if special circumstances make the award sought unjust. </SECTION> <SECTION> <SECTNO>§ 14.130</SECTNO> <SUBJECT>Allowable fees and expenses.</SUBJECT> (a) No award for the fee of an attorney or agent under these rules may exceed $75.00 per hour. However, an award may also include the reasonable expenses of the attorney, agent or witness as a separate item, if the attorney, agent or witness ordinarily charges clients separately for such expenses. (b) In determining the reasonableness of the fee sought for an attorney, agent or expert witness, the adjudicative officer shall consider the following: (1) If the attorney, agent or witness is in private practice, his or her customary fee for similar services, or, if an employee of the applicant, the fully allocated cost of the services; (2) The prevailing rate for the kind and quality of services furnished in the community in which the attorney, <PRTPAGE P="120"/>agent or witness ordinarily performs services; (3) The time actually spent in the representation of the applicant; (4) The time reasonably spent in the light of the difficulty or complexity of the issues in the proceeding; and (5) Such other factors as may bear on the value of the services provided. (c) The reasonable cost of any study, analysis, engineering report, test, project, or similar matter prepared on behalf of a party may be awarded, to the extent that the charge for the services does not exceed the prevailing rate for similar services, and the study or other matter was necessary for preparation of the applicant's case. </SECTION> <SECTION> <SECTNO>§ 14.135</SECTNO> <SUBJECT>Rulemaking on maximum rates for attorney fees.</SUBJECT> Any person may file with the Department a petition for rulemaking to increase the maximum rate for attorney fees as provided in 5 U.S.C. 504(b)(1)(A)(ii), in accordance with 24 CFR part 10. The petition should identify the rate the petitioner believes the Department should establish and the types of proceedings in which the rate should be used. It should also explain fully the reasons why the higher rate is warranted. The Department will respond to the petition in accordance with 24 CFR 10.20(b). </SECTION> <SECTION> <SECTNO>§ 14.140</SECTNO> <SUBJECT>Awards against other agencies.</SUBJECT> If an applicant is entitled to an award because it prevails over another agency of the United States that participates in a proceeding before the Department and takes a position that is not substantially justified, the award or an appropriate portion of the award shall be made against that agency. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Information Required From Applicants</HD> <SECTION> <SECTNO>§ 14.200</SECTNO> <SUBJECT>Contents of application.</SUBJECT> (a) An application for an award of fees and expenses under the Act shall identify the applicant and the proceeding for which an award is sought. The application shall show that the applicant has prevailed and identify the position of the Department or other agencies that the applicant alleges was not substantially justified. Unless the applicant is an individual, the application shall also state the number of employees of the applicant and describe briefly the type and purpose of its organization or business. (b) The application shall also include a statement that the applicant's net worth does not exceed $2 million (if an individual) or $7 million (for all other applicants, including their affiliates). However, an applicant may omit this statement if: (1) It attaches a copy of a ruling by the Internal Revenue Service that it qualifies as an organization described in section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3), or, in the case of a tax-exempt organization not required to obtain a ruling from the Internal Revenue Service on its exempt status, a statement that describes the basis for the applicant's belief that it qualifies under such section; or (2) It states that it is a cooperative association as defined in section 15(a) of the Agricultural Marketing Act, 12 U.S.C. 1141j(a). (c) If the applicant is a partnership, corporation, association, or organization, or a sole owner of an unincorporated business, the applicant shall state that it did not have more than 500 employees at the time the proceeding was initiated, giving the number of its employees and describing briefly the type and purpose of its organization or business. (d) The application shall also itemize the amount of fees and expenses for which an award is sought. (e) The application also may include any other matters that the applicant wishes the Department to consider in determining whether and in what amount an award should be made. (f) The application shall be signed by the applicant or an authorized officer with respect to the eligibility of the applicant and by the attorney of the applicant with respect to fees and expenses sought. The application shall contain or be accompanied by a written verification under oath or affirmation under penalty of perjury that the information provided in the application and all accompanying material is true and complete to the best of the applicant's <PRTPAGE P="121"/>or authorized officer's information and belief. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0001)</APPRO> </SECTION> <SECTION> <SECTNO>§ 14.205</SECTNO> <SUBJECT>Net worth exhibit.</SUBJECT> (a) Each applicant except a qualified tax-exempt organization or a qualified cooperative association must submit with its application a detailed exhibit showing the net worth of the applicant and any affiliates (as defined in § 14.120(f) of this part) when the proceeding was initiated. The exhibit may be in any form convenient to the applicant that provides full disclosure of the applicant's and its affiliates’ assets and liabilities, and is sufficient to determine whether the applicant qualifies under the standards of the Act and this part. The adjudicative officer may require an applicant to file additional information to determine its eligibility for an award. (b) The net worth exhibit shall describe any transfers of assets from, or obligations incurred by, the applicant or any affiliate, occurring in the one-year period before the date on which the proceeding was initiated, that reduced the net worth of the applicant and its affiliates below the applicable net worth ceiling. If there were no such transactions, the applicant shall so state. (c) Ordinarily, the net worth exhibit will be included in the public record of the proceeding. However, an applicant that objects to public disclosure of information in any portion of the exhibit and believes there are legal grounds for withholding it from disclosure may submit that portion of the exhibit directly to the adjudicative officer in a sealed envelope labeled “Confidential Financial Information,” accompanied by a motion to withhold the information from public disclosure. The motion shall describe the information sought to be withheld and explain, in detail, why it falls within one or more of the specific exemptions from mandatory disclosure under the Freedom of Information Act (5 U.S.C. 552(b) (1)-(9)), why public disclosure of the information would adversely affect the applicant, and why disclosure is not required in the public interest. The material in question shall be served on counsel representing the agency against which the applicant seeks an award, but need not be served on any other party to the proceeding. If the adjudicative officer finds that the information should not be withheld from disclosure, it shall be placed in the public record of the proceeding. Otherwise, any request to inspect or copy the exhibit shall be disposed of in accordance with the Department's established procedures under the Freedom of Information Act, 24 CFR part 15. In either case, disclosure shall be subject to the provisions of the Privacy Act of 1974, 5 U.S.C. 552a, and the Department's procedures implementing the Privacy Act of 1974 at 24 CFR part 16. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0001)</APPRO> </SECTION> <SECTION> <SECTNO>§ 14.210</SECTNO> <SUBJECT>Documentation of fees and expenses.</SUBJECT> (a) The application shall be accompanied by full and itemized documentation of the fees and expenses, including the cost of any study, analysis, engineering report, test, project or similar matter, for which an award is sought. (b) The documentation shall include an affidavit from any attorney, agent or expert witness representing or appearing in behalf of the party, stating the actual time expended and the rate at which fees and other expenses were computed and describing the specific services performed. (c) The documentation shall also include a description of any expenses for which reimbursement is sought and a statement of the amounts paid and payable by the applicant or by any other person or entity for the services provided. Vouchers, receipts, logs, or other substantiation for any expenses paid or payable shall be provided. (d) The adjudicative officer may require the applicant to provide additional substantiation for any expenses claimed. <APPRO>(Approved by the Office of Management and Budget under control number 2510-0001)</APPRO> </SECTION> <SECTION> <SECTNO>§ 14.215</SECTNO> <SUBJECT>When an application may be filed.</SUBJECT> (a) An application may be filed whenever the applicant has prevailed in the <PRTPAGE P="122"/>proceeding or in a significant and discrete substantive portion of the proceeding, but in no case later than 30 days after the Department's final disposition of the proceeding. (b) For purposes of this rule, final disposition means the date on which a decision or order disposing of the merits of the proceeding or any other complete resolution of the proceeding, such as a settlement of voluntary dismissal, become final and unappealable, both within the Department and to the courts. (c) If review or reconsideration (under HUD Board of Contract Appeals Rule 29, 24 CFR 20.10) is sought or taken of a decision as to which an applicant believes it has prevailed, proceedings for the award of fees shall be stayed pending final disposition of the underlying controversy. When the United States appeals the underlying merits of an adversary adjudication to a court, no decision on an application for fees and other expenses in connection with that adversary adjudication shall be made until a final and unreviewable decision is rendered by the court on the appeal or until the underlying merits of the case have been finally determined pursuant to the appeal. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for Considering Applications</HD> <SECTION> <SECTNO>§ 14.300</SECTNO> <SUBJECT>Jurisdiction of adjudicative officer.</SUBJECT> Any provision in the Department's rules and regulations other than this part which limits or terminates the jurisdiction of an adjudicative officer upon the effective date of his or her decision in the underlying proceeding shall not in any way affect his or her jurisdiction to render a decision under this part. </SECTION> <SECTION> <SECTNO>§ 14.305</SECTNO> <SUBJECT>Filing and service of documents.</SUBJECT> Any application for an award or other pleading or document related to an application shall be filed and served on all parties to the proceeding in the same manner as other pleadings in the proceeding, except as provided in § 14.205(c) for confidential financial information. </SECTION> <SECTION> <SECTNO>§ 14.310</SECTNO> <SUBJECT>Answer to application.</SUBJECT> (a) Within 30 days after service of an application, agency counsel may file an answer to the application. Agency counsel may request an extension of time for filing. If agency counsel fails to answer or otherwise fails to contest or settle the application, the adjudicative officer, upon a satisfactory showing of entitlement by the applicant, may make an award for the applicant's fees and other expenses under the Act. (b) If agency counsel and the applicant believe that the issues in the fee application can be settled, they may jointly file a statement of their intent to negotiate a settlement. The filing of this statement shall extend the time for filing an answer for an additional 30 days, and further extensions may be granted by the adjudicative officer upon request by agency counsel and the applicant. (c) The answer shall explain in detail any objections to the award requested and identify the facts relied on in support of agency counsel's position. If the answer is based on any alleged facts not already in the record of the proceeding, agency counsel shall include with the answer either supporting affidavits or a request for further proceedings under § 14.325. </SECTION> <SECTION> <SECTNO>§ 14.315</SECTNO> <SUBJECT>Comments by other parties.</SUBJECT> Any party to a proceeding other than the applicant and agency counsel may file comments on an application within 30 days after it is served, or on an answer within 15 days after it is served. A commenting party may not participate further in proceedings on the application unless the adjudicative officer determines that the public interest requires such participation in order to permit full exploration of matters raised in the comments. </SECTION> <SECTION> <SECTNO>§ 14.320</SECTNO> <SUBJECT>Settlement.</SUBJECT> The applicant and agency counsel may agree on a proposed settlement of the award before final action on the application, either in connection with a settlement of the underlying proceeding, or after the underlying proceeding has been concluded, in accordance with the settlement procedure applicable to the underlying proceeding. If a prevailing party and agency counsel agree on <PRTPAGE P="123"/>a proposed settlement of an award before an application has been filed, the application shall be filed with the proposed settlement. </SECTION> <SECTION> <SECTNO>§ 14.325</SECTNO> <SUBJECT>Extensions of time and further proceedings.</SUBJECT> (a) The adjudicative officer on motion and for good cause shown may grant extensions of time other than for filing an application for fees and expenses after final disposition in the adversary adjudication. (b) Ordinarily, the determination of an award will be made on the basis of the written record. However, on request of either the applicant or agency counsel, or on his or her own initiative, the adjudicative officer may order further proceedings, such as an informal conference, oral argument, additional written submissions, or as to issues other than substantial justification (such as the applicant's eligibility or substantiation of fees and expenses), pertinent discovery or an evidentiary hearing. Such further proceedings shall be held only when necessary for full and fair resolution of the issues arising from the application, and shall be conducted as promptly as possible. Whether or not the position of the agency was substantially justified shall be determined on the basis of the administrative record, as a whole, which is made in the adversary adjudication for which fees and other expenses are sought. (c) A request that the adjudicative officer order further proceedings under this section shall specifically identify the information sought or the disputed issues and shall explain why the additional proceedings are necessary to resolve the issues. </SECTION> <SECTION> <SECTNO>§ 14.330</SECTNO> <SUBJECT>Decision.</SUBJECT> The adjudicative officer shall issue an initial decision on the application within 30 days after completion of proceedings on the application. The decision shall include written findings and conclusions on such of the following as are relevant to the decision: (a) The applicant's status as a prevailing party; (b) The applicant's qualification as a <E T="03">party</E> under 5 U.S.C. 504(b)(1)(B); (c) Whether the agency's position was substantially justified; (d) Whether special circumstances make an award unjust; (e) Whether the applicant during the course of the proceedings engaged in conduct that unduly and unreasonably protracted the final resolution of the matter in controversy; and (f) The amounts, if any, awarded for fees and other expenses, with reasons for any difference between the amount requested and the amount awarded. <FP>If the applicant has sought an award against more than one agency, the decision shall allocate responsibility for payment of any award made among the agencies, and shall explain the reasons for the allocation made.</FP> </SECTION> <SECTION> <SECTNO>§ 14.335</SECTNO> <SUBJECT>Departmental review.</SUBJECT> (a) Either the applicant or agency counsel may seek review of the initial decision on the fee application, or the Secretary (or his or her delegate, if any) may decide to review the decision on his or her own initiative, in accordance with the Department's review or appeals procedures applicable to the underlying proceeding. If neither the applicant nor agency counsel seeks review and the Secretary (or his or her delegate, if any) does not take review on his or her own initiative, the initial decision on the application shall become a final decision of the Department in the same manner as a decision in the underlying proceeding becomes final. Whether to review a decision is a matter within the discretion of the Secretary (or his or her delegate, if any). If review is taken, the Department will issue a final decision on the application or remand the application to the adjudicative officer for further proceedings. (b) Either party may seek reconsideration of the decision on the fee application in accordance with Rule 29, 24 CFR 20.10. </SECTION> <SECTION> <SECTNO>§ 14.340</SECTNO> <SUBJECT>Judicial review.</SUBJECT> Judicial review of final departmental decisions on awards may be sought as provided in 5 U.S.C. 504(c)(2). </SECTION> <SECTION> <SECTNO>§ 14.345</SECTNO> <SUBJECT>Payment of award.</SUBJECT> An applicant seeking payment of an award shall submit a copy of the final <PRTPAGE P="124"/>decision granting the award to: Director, Office of Finance and Accounting, Room 2202, Department of Housing and Urban Development, Washington, DC 20410, with a copy to: Associate General Counsel for Equal Opportunity and Administrative Law, Room 10244, Department of Housing and Urban Development, Washington, DC 20410. A statement that review of the underlying decision is not being sought in the United States courts, or that the process for seeking review of the award, if initiated, has been completed, must also be included. The agency will pay the amount awarded to the applicant within 60 days, unless judicial review of the award or of the underlying decision of the adversary adjudication has been sought by the applicant or any other party to the proceeding. </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 15</EAR> <HD SOURCE="HED">PART 15—TESTIMONY, PRODUCTION AND DISCLOSURE OF MATERIAL OR INFORMATION BY HUD EMPLOYEES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Purpose and Policy</HD> <SECHD>Sec.</SECHD> <SECTNO>15.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>15.2</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> <SECTNO>15.3</SECTNO> <SUBJECT>Statement of policy.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Production and Disclosure of Records</HD> <SECTNO>15.11</SECTNO> <SUBJECT>Publication in the Federal Register.</SUBJECT> <SECTNO>15.12</SECTNO> <SUBJECT>Materials not published in Federal Register.</SUBJECT> <SECTNO>15.13</SECTNO> <SUBJECT>Records produced upon request when reasonably described.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Exemptions</HD> <SECTNO>15.14</SECTNO> <SUBJECT>Fees.</SUBJECT> <SECTNO>15.15</SECTNO> <SUBJECT>Fees to be charged—categories of requesters.</SUBJECT> <SECTNO>15.16</SECTNO> <SUBJECT>Review of records, aggregating requests and waiving or reducing fees.</SUBJECT> <SECTNO>15.17</SECTNO> <SUBJECT>Charges for interest and for unsuccessful searches; Utilization of Debt Collection Act.</SUBJECT> <SECTNO>15.18</SECTNO> <SUBJECT>Advance payments.</SUBJECT> <SECTNO>15.21</SECTNO> <SUBJECT>Exemptions authorized by 5 U.S.C. 552.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D [Reserved]</HD> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Procedures for Requesting Access to Records</HD> <SECTNO>15.41</SECTNO> <SUBJECT>Requests for records.</SUBJECT> <SECTNO>15.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Disclosure of Records and Refusal To Disclose</HD> <SECTNO>15.51</SECTNO> <SUBJECT>Authority to release records or copies.</SUBJECT> <SECTNO>15.52</SECTNO> <SUBJECT>Authority to deny requests for -records.</SUBJECT> <SECTNO>15.54</SECTNO> <SUBJECT>Business information.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Administrative Review of Denial of Requests for Records</HD> <SECTNO>15.61</SECTNO> <SUBJECT>Administrative appeal.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Production in Response to Subpenas or Demands of Courts or Other Authorities</HD> <SECTNO>15.71</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>15.72</SECTNO> <SUBJECT>Production or disclosure prohibited unless approved by the Secretary.</SUBJECT> <SECTNO>15.73</SECTNO> <SUBJECT>Procedure in the event of a demand for production or disclosure.</SUBJECT> <SECTNO>15.74</SECTNO> <SUBJECT>Procedure in the event of an adverse ruling.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart I—Testimony of Employees of the Department in Legal Proceedings</HD> <SECTNO>15.81</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>15.82</SECTNO> <SUBJECT>Testimony in proceedings in which the United States is a party.</SUBJECT> <SECTNO>15.83</SECTNO> <SUBJECT>Legal proceedings among private litigants; general rule.</SUBJECT> <SECTNO>15.84</SECTNO> <SUBJECT>Legal proceedings among private litigants; subpoenas.</SUBJECT> <SECTNO>15.85</SECTNO> <SUBJECT>Legal proceedings among private litigants; expert or opinion testimony.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart J—Processing Request for Declassification and Release of Classified Material</HD> <SECTNO>15.91</SECTNO> <SUBJECT>Authority for release or denial of classified material.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 552; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 40 FR 48123, Oct. 14, 1975, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Purpose and Policy</HD> <SECTION> <SECTNO>§ 15.1</SECTNO> <SUBJECT>Definitions.</SUBJECT> As used in this part. <EDNOTE> <HD SOURCE="HED">Editorial Note:</HD> At 61 FR 5203, Feb. 9, 1996, in § 15.1, the following introductory text was added; however, introductory text already exists. </EDNOTE> The terms <E T="03">Department</E>, <E T="03">Secretary</E>, and <E T="03">Organizational unit</E> are defined in 24 CFR part 5. <E T="03">Act</E> means section 552 of title 5 U.S.C., as amended by Pub. L. 90-23, 81 Stat. 54, June 5, 1967, and Pub. L. 93-502, 88 Stat. 1561, November 21, 1974.<PRTPAGE P="125"/> <E T="03">Person</E> means <E T="03">person</E> as defined in 5 U.S.C. 551(2) to include corporations and organizations as well as individuals. <E T="03">Information center</E> means library, reading room, desk, or other facility, or any combination of places established and maintained by the Department, where the public may request and obtain information and records concerning the Department's operations and business. <E T="03">Legal proceeding</E> includes any proceeding before a court of law or other authority, i.e., administrative board or commission, hearing officer, arbitrator or other body conducting a quasi-judicial or legislative proceeding. <E T="03">Legal proceeding in which the United States is a party</E> means any legal proceeding including as a named party the United States, the Department of Housing and Urban Development, or any other Federal executive or administrative agency or department, or any official thereof in his official capacity. <E T="03">Legal proceeding among private litigants</E> means any legal proceeding in which the United States is not a party. <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 52 FR 12160, Apr. 15, 1987; 60 FR 11903, Mar. 3, 1995; 61 FR 5203, Feb. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.2</SECTNO> <SUBJECT>Purpose and applicability.</SUBJECT> (a) This part contains the regulations of the Department implementing 5 U.S.C. 552 and prescribing the Department's policies and procedures with respect to testimony of its employees as witnesses in legal proceedings. It informs the public about where and how the Department's records and information may be obtained from its organizational units as defined in § 15.1(d), and about the Department's policy concerning allowing its employees to testify in legal proceedings. (b) All subparts of part 15, other than subpart I, apply to all organizational units, except that their applicability to the Office of Inspector General is subject to the provisions of parts 2002 and 2004 of this title, and their applicability to the Office of Interstate Land Sales Registration is subject to the provisions of § 1700.30 of this title. Subpart I applies to all organizational units other than the Office of Inspector General. <CITA>[52 FR 12160, Apr. 15, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.3</SECTNO> <SUBJECT>Statement of policy.</SUBJECT> The Department's policy is one of full and responsible disclosure of its identifiable records and information consistent with such competing public interests concerning the national security, personal privacy, and obligations of confidentiality as are recognized by 5 U.S.C. 552. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Production and Disclosure of Records</HD> <SECTION> <SECTNO>§ 15.11</SECTNO> <SUBJECT>Publication in the Federal Register.</SUBJECT> Subject to the exemptions in § 15.21, the Department shall separately state and currently publish in the <E T="04">Federal Register</E> for the guidance of the public: (a) Descriptions of its central and field organization and the established places at which, the employees from whom and the methods whereby, the public may obtain information, make submittals or requests, or obtain decisions; (b) Statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures available; (c) Rules of procedure, descriptions of forms available or the places at which forms may be obtained, and instructions as to the scope and contents of all papers, reports, or examinations; (d) Substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the Department; and (e) Each amendment, revision, or repeal of the foregoing. <FP>Except to the extent that a person has actual and timely notice of the terms thereof, no person shall in any manner be required to resort to or be adversely affected by any matter required to be published in the <E T="04">Federal Register</E> and not so published. For purposes of this section, matter which is reasonably available to the class of persons <PRTPAGE P="126"/>affected thereby shall be deemed published in the <E T="04">Federal Register</E> when incorporated by reference therein with the approval of the Director of the Office of the Federal Register, as provided in 1 CFR part 51.</FP> </SECTION> <SECTION> <SECTNO>§ 15.12</SECTNO> <SUBJECT>Materials not published in Federal Register.</SUBJECT> (a) Subject to the exemptions in § 15.21, the Department, in accordance with this part, shall make available for public inspection and copying: (1) Final opinions, including concurring and dissenting opinions, as well as orders, made in the adjudication of cases; (2) Statements of policy and interpretations which have been adopted by the Department and are not published in the <E T="04">Federal Register</E>; and (3) Administrative staff manuals and instructions to staff that affect a member of the public. (b) To prevent a clearly unwarranted invasion of personal privacy, the Department may delete identifying details when it makes available or publishes any material. Whenever such deletions are required, the record or copy will be made available with the space formerly occupied by such identifying details left blank, and the justification for the deletion shall be explained fully in writing. (c) The Department shall also maintain and make available for public inspection and copying current indexes providing identifying information for the public as to any matter issued, adopted, or promulgated after July 4, 1967, and required by this section to be made available or published. The Department shall promptly publish quarterly and distribute (by sale or otherwise) copies of each index or supplements thereto unless it determines by order published in the <E T="04">Federal Register</E> that the publication would be unnecessary and impracticable, in which case the Department shall nonetheless provide copies of such index on request at a cost not to exceed the direct cost of duplication. </SECTION> <SECTION> <SECTNO>§ 15.13</SECTNO> <SUBJECT>Records produced upon request when reasonably described.</SUBJECT> (a) The procedures for requesting access to records are set forth in subpart E of this part. (b) When a request is made that reasonably describes a record of the Department that has been stored in a record center of the National Archives and Record Administration, this record will be requested from the Records Center by the Department and made available to the requester if the record would otherwise be available under this part. Records accessioned by the National Archives will not be made available by the Department, but may be requested directly from the National Archives. (c) Every effort will be made to make a record in use by the staff of the Department available when requested, and such availability will be deferred only to the extent necessary to avoid serious interference with the business of the Department. (d) Copies of a requested record need not be furnished if the record is published in the <E T="04">Federal Register</E> or is available for purchase from the Superintendent of Documents of the Government Printing Office. Such records may, however, be examined in one of the Department's information centers. <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 60 FR 11903, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Exemptions</HD> <SECTION> <SECTNO>§ 15.14</SECTNO> <SUBJECT>Fees.</SUBJECT> (a) <E T="03">Copies of records.</E> HUD will charge $0.15 per page for photocopies of documents. For copies prepared by computer, HUD will charge the actual cost of the tape or disk plus $25.00 per minute for central processing unit (CPU) time, so as to recoup reasonable direct costs of duplicating. For other methods of reproduction or duplication of documents, HUD will charge the actual direct costs of producing the documents. (b) <E T="03">Manual searches for records.</E> HUD will charge $16.35 per hour per person <PRTPAGE P="127"/>for searches/reviews performed by clerical staff, and $37.00 per hour per person for searches/reviews performed by professional staff. Charges for search/review time will be billed in 1/2 hour segments. (c) <E T="03">Computer searches for records.</E> HUD will charge $35.00 per hour for computer programming relating to a search, plus $25.00 per minute for central processing unit (CPU) time. (d) <E T="03">Contract services.</E> HUD will contract with private sector sources to locate, reproduce and disseminate records in response to FOIA requests when that is the most efficient and least costly method. When doing so, however, HUD will ensure that the ultimate cost to the requester is no greater than it would be if HUD itself had performed these tasks. In no case will HUD contract out responsibilities which the FOIA provides that HUD alone may discharge, such as determining the applicability of an exemption, or determining whether to waive or reduce fees. HUD will ensure that when documents that would be responsive to a request are maintained for distribution by agencies operating statutory-based fee schedule programs such as the National Technical Information Service, HUD will inform requesters of the steps necessary to obtain records from those sources. Information provided routinely in the normal course of business will be provided at no charge. (e) <E T="03">Restrictions on assessing fees.</E> HUD will provide the first 100 pages of duplication and the first two hours of search time, manual or computer, free of charge to noncommercial use requesters. There is no charge to noncommercial use requesters for time needed for review, as defined in paragraph (g)(4) of this section. Review time is chargeable only to commercial use requesters. HUD will only assess fees for amounts in excess of $25.00. (f) <E T="03">Payment of fees.</E> Payment of fees under this section and under § 15.16(a) shall be made by check or money order, payable to the Treasurer of the United States. Cash payments may be made in person at Headquarters or the Field Offices. The fees shall be sent to the Office of Executive Secretariat at Headquarters or to the appropriate Field Office. (g) <E T="03">Definitions.</E> As used in this subpart: (1) <E T="03">Direct costs</E> means those expenditures which HUD actually incurs in searching for and duplicating (and, in the case of commercial requesters, reviewing) documents to respond to a FOIA request. Direct costs include, for example, the salary of the employee performing work (the basic rate of pay for the employee plus 16 percent of that rate to cover benefits) and the cost of operating duplicating machinery. Not included in direct costs are overhead expenses such as costs of space, and heating or lighting the facility in which the records are stored. (2) <E T="03">Search</E> includes all time spent looking for material that is responsive to a request, including page-by-page or line-by-line identification of material within documents. Such activity is distinguished from <E T="03">review</E> of material in order to determine whether the material is exempt from disclosure. (3) <E T="03">Duplication</E> means the process of making a copy of a document necessary to respond to a FOIA request. Such copies can take the form of paper copy, microform, audio-visual materials, or machine readable documentation (e.g., magnetic tape or disk), among others. (4) <E T="03">Review</E> means the process of examining a document located in response to a request that is for a commercial use to determine whether any portion of it may be withheld, excising portions to be withheld and otherwise preparing the document for release. <E T="03">Review</E> does not include time spent resolving general legal or policy issues regarding the application of exemptions. <CITA>[53 FR 37547, Sept. 27, 1988, as amended at 60 FR 11903, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.15</SECTNO> <SUBJECT>Fees to be charged—categories of requesters.</SUBJECT> There are four categories of FOIA requesters: Commercial use requesters; educational and non-commercial scientific institutions; representatives of the news media; and all other requesters. Specific levels of fees are prescribed for each of these categories: (a) <E T="03">Commercial use requesters.</E> (1) HUD will assess charges which recover the <PRTPAGE P="128"/>full direct costs of searching for, reviewing for release, and duplicating records sought for commercial use. Requesters must reasonably describe the records sought. Commercial use requesters are not entitled to two hours of free search time or 100 free pages of reproduction of documents. (2) <E T="03">Commercial use</E> refers to a request from or on behalf of one who seeks information for a use or purpose that furthers the commercial, trade, or profit interests of the requester or the person on whose behalf the request is made. In determining whether a requester properly belongs in this category, HUD must determine the use to which a requester will put the documents requested. Moreover, where HUD has reasonable cause to doubt the use to which a requester will put the records sought, or where that use is not clear from the request itself, HUD will seek additional clarification before assigning the request to a specific category. (b) <E T="03">Educational and non-commercial scientific institution requesters.</E> (1) HUD will provide documents to educational and non-commercial scientific institutions for the cost of reproduction alone, excluding charges for the first 100 pages. To be eligible for inclusion in this category, requesters must show that the request is being made as authorized by and under the auspices of a qualifying institution and that the records are not sought for a commercial use, but are sought for furtherance of scholarly (if the request is from an educational institution) or scientific (if the request is from a non-commerical scientific institution) research. Requesters must reasonably describe the records sought. (2) <E T="03">Educational institution</E> means a preschool, a public or private elementary or secondary school, an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, and an institution of vocational education, which operates a program or programs of scholarly research. (3) <E T="03">Non-commercial scientific institution</E> means an institution that is not operated on a <E T="03">commercial</E> basis as that term is referenced in § 15.15(a) and which is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry. (c) <E T="03">Requesters who are representatives of the news media.</E> (1) HUD will provide documents to representatives of the news media for the cost of reproduction alone, excluding charges for the first 100 pages. In reference to this class of requester, a request for records supporting the news dissemination function of the requester shall not be considered to be a request that is for a commercial use. Requesters must reasonable describe the records sought. (2) <E T="03">Representative of the news media</E> means any person actively gathering news for an entity that is organized and operated to publish or broadcast news to the public. The term <E T="03">news</E> means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large, and publishers of periodicals (but only in those instances when they can qualify as disseminators of <E T="03">news</E>) who make their products available for purchase or subscription by the general public. <E T="03">Freelance</E> journalists may be regarded as working for a news organization if they can demonstrate a solid basis for expecting publication through that organization, even though not actually emloyed by it. A publication contract would be the clearest proof, but HUD may also look to the past publication record of a requester in making this determination. (d) <E T="03">All other requesters.</E> HUD will charge requesters who do not fit into any of the categories above fees which recover the full reasonable direct cost of searching for and reproducing records that are responsive to the request, except that the first 100 pages of reproduction and the first two hours of search time shall be furnished without charge. Requests from subjects for records about themselves filed in agencies’ systems of records will continue to be treated under the fee provisions of the Privacy Act of 1974 which permit fees only for reproduction. Requesters must reasonably describe the records sought. <CITA>[53 FR 37548, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <PRTPAGE P="129"/> <SECTNO>§ 15.16</SECTNO> <SUBJECT>Review of records, aggregating requests and waiving or reducing fees.</SUBJECT> (a) <E T="03">Review of records.</E> Only requesters who are seeking documents for commercial use may be charged for time HUD spends reviewing records to determine whether they are exempt from mandatory disclosure. Charges may be assessed only for the <E T="03">initial</E> review; <E T="03">i.e.,</E> the review undertaken the first time HUD analyzes the applicability of a specific exemption to a particular record or portion of a record. HUD will not charge for review at the administrative appeal level of an exemption already applied. However, records or portions of records withheld in full under an exemption which is subsequently determined not to apply may be reviewed again to determine the applicability of other exemptions not previously considered. The costs for such a subsequent review would be properly assessable. Review time will be assessed at the same rates established for search time in § 15.14. (b) <E T="03">Aggregating requests.</E> A requester may not file multiple requests at the same time, each seeking portions of a document or documents, solely in order to avoid payment of fees. When HUD reasonably believes that a requester or a group of requesters acting in concert, is attempting to break a request down into a series of requests for the purpose of evading the assessment of fees, HUD may aggregate any such requests and charge accordingly. (c) <E T="03">Waiving or reducing fees.</E> HUD will furnish documents without charge or at reduced charge if disclosure of the information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester. The official authorized to grant access to records may waive or reduce the applicable fee where requested. The determination not to waive or reduce the fee will be subject to administrative review as provided in § 15.61 after the decision on the request for access has been made. Six factors shall be used in determining whether the requirements for a fee waiver or reduction are met. These factors are as follows: (1) <E T="03">The subject of the request:</E> Whether the subject of the requested records concerns <E T="03">the operations or activities of the government</E>; (2) <E T="03">The informative value of the information to be disclosed:</E> Whether the disclosure is <E T="03">likely to contribute</E> to an understanding of government operations or activities; (3) <E T="03">The contribution to an understanding of the subject by the general public likely to result from disclosure:</E> Whether disclosure of the requested information will contribute to <E T="03">public understanding</E>; (4) <E T="03">The significance of the contribution to public understanding:</E> Whether the disclosure is likely to contribute <E T="03">significantly</E> to public understanding of government operations or activities; (5) <E T="03">The existence and magnitude of a commercial interest:</E> Whether the requester has a commercial interest that would be furthered by the requested disclosure; and, if so (6) <E T="03">The primary interest in disclosure:</E> Whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is <E T="03">primarily in the commercial interest of the requester.</E> <CITA>[53 FR 37549, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.17</SECTNO> <SUBJECT>Charges for interest and for unsuccessful searches; Utilization of Debt Collection Act.</SUBJECT> (a) <E T="03">Charging interest.</E> HUD will begin assessing interest charges on an upaid bill starting on the 31st day following the day on which the billing was sent. A fee received by HUD, even if not processed, will suffice to stay the accrual of interest. Interest will be at the rate prescribed in section 3717 of title 31 U.S.C. and will accrue from the date of the billing. (b) <E T="03">Charge for unsuccessful search.</E> Ordinarily no charge for search time will be assessed when the records requested are not found or when the records located are withheld as exempt. However, if the requester has been notified of the esimated cost of the search time and has been advised specifically that the requested records may not exist or may be withheld as exempt, fees shall be charged. (c) <E T="03">Use of Debt Collection Act of 1982.</E> When a requester has failed to pay a <PRTPAGE P="130"/>fee charged in a timely fashion (<E T="03">i.e.,</E> within 30 days of the date of the billing), HUD may, under the authority of the Debt Collection Act and part 17, subpart C of this title, use consumer reporting agencies and collection agencies, where appropriate, to recover the indebtedness owed the Department. <CITA>[53 FR 37549, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.18</SECTNO> <SUBJECT>Advance payments.</SUBJECT> (a) HUD may not require a requester to make an advance payment, <E T="03">i.e.,</E> payment before work is commenced or continued on a request, unless: (1) HUD estimates or determines that allowable charges that a requester may be required to pay are likely to exceed $250. Then, HUD will notify the requester of the likely cost and obtain satisfactory assurance of full payment where the requester has a history of prompt payment of FOIA fees, or require an advance payment of an amount up to the full estimated charges in the case of requesters with no history of payment; or (2) Where a requester has previously failed to pay a fee charged in a timely fashion (<E T="03">i.e.,</E> within 30 days of the date of the billing), HUD may require the requester to pay the full amount owed plus any applicable interest as provided by § 15.17(a) or demonstrate that he has, in fact, paid the fees, and to make an advance payment of the full amount of the estimated fee before HUD begins to process a new request or a pending request from that requester. (b) When HUD acts under paragraphs (a)(1) or (a)(2) of this section, the administrative time limits prescribed in subsection (a)(6) of the FOIA (<E T="03">i.e.,</E> 10 working days from receipt of initial requests and 20 working days from receipt of appeals from initial denial, plus permissible extensions of these time limits) will begin only after HUD has received fee payments described above. (c) Where it is anticipated that either the duplication fee individually, the search fee individually, or a combination of the two exceeds $25.00 over and above the free search time and duplication costs, where applicable, and the requesting party has not indicated in advance a willingness to pay so high a fee, the requesting party shall be promptly informed of the amount of the anticipated fee or such portion thereof as can readily be estimated. The notification shall offer the requesting party the opportunity to confer with agency representatives for the purpose of reformulating the request so as to meet that party's needs at a reduced cost. <CITA>[53 FR 37549, Sept. 27, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.21</SECTNO> <SUBJECT>Exemptions authorized by 5 U.S.C. 552.</SUBJECT> A requested record shall not be withheld from inspection or copying unless it both: Comes within one of the classes of records exempted by 5 U.S.C. 552; and there is need in the public interest to withhold it. In determining the scope of the classes of records described in paragraph (a) of this section, the Attorney General's Memorandum on the Public Information Act, June 1967, will be used as a guide. (a) The classes of records authorized to be exempted from disclosure by 5 U.S.C. 552 are those which concern matters that are: (1) Specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and are in fact properly classified pursuant to such Executive order; (2) Related solely to the internal personnel rules and practices of the Department; (3) Specifically exempted from disclosure by statute; (4) Except as otherwise provided in paragraph (c) of this section, trade secrets and commercial or financial information obtained from a person and privileged or confidential; (5) Interagency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the Department; (6) Personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy; (7) Records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information:<PRTPAGE P="131"/> (i) Could reasonably be expected to interfere with enforcement proceedings; (ii) Would deprive a person of a right to a fair trial or an impartial adjudication; (iii) Could reasonably be expected to constitute an unwarranted invasion of personal privacy; (iv) Could reasonably be expected to disclose the identity of a confidential source, including a state, local or foreign agency or authority or any private institution which furnished information on a confidential basis, and, in the case of a record or information compiled by a criminal law enforcement authority in the course of a criminal investigation or by an agency conducting a lawful national security intelligence investigation, information furnished by a confidential source; (v) Would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law; or (vi) Could reasonably be expected to endanger the life or physical safety of any individual. (8) Contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of the Department in connection with its responsibility for the regulation or supervision of financial institutions; or (9) Geological and geophysical information and data, including maps, concerning wells. (b) Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this section. (c) Subject to the following conditions, financial and related information submitted by a mortgagor and contained in Form HUD-92410 (Statement of Profit and Loss), or a HUD-approved substitute form that the mortgagor may have submitted, may be disclosed to eligible potential purchasers of HUD-held multifamily mortgages. (1) Information from Form HUD-92410 concerning a project may be made available in conjunction with the sale of a HUD-held mortgage covering that project conducted under the authority of sections 207 (k) and (<E T="03">l</E>) of the National Housing Act, 12 U.S.C. 1713 (k) and (<E T="03">l</E>), or section 7(i)(3) of the Department of Housing and Urban Development Act, 42 U.S.C. 3535(i)(3). (2) The release of this information by HUD to eligible potential purchasers shall be limited to the period specified by HUD for the mortgage sale. (3) Eligible potential purchasers who have received this information shall agree to keep the information confidential, to disclose the information only to potential investors in the mortgage, to use the information for the sole purpose of their evaluation of the mortgage in connection with the mortgage sale, and to follow disclosure procedures for that sale that have been established by the Secretary. (4) Any disclosure by eligible potential purchasers to potential investors in the mortgage shall be limited to the period specified by HUD for the mortgage sale. Similar, potential investors in the mortgage shall agree to keep the information confidential and to use the information for the sole purpose of their evaluation of the mortgage in connection with their investment decision. In addition, potential investors in the mortgage may not disclose the information to other entities, unless the disclosure is necessary for the investor's evaluation of the mortgage, is in accordance with disclosure procedures for the specific sale that have been established by the Secretary, and is limited to the period specified by HUD for the mortgage sale. Any potential purchaser is responsible for notifying potential investors in the mortgage who receive this information from that entity of the investors’ obligations under this section. (5) Disclosure of information from Form HUD-92410 by an eligible potential purchaser or by a potential investor (who has received the information from a potential purchaser and has been notified by that entity of its obligations under paragraph (c)(3) of this section) that is not in accordance with <PRTPAGE P="132"/>this section is a violation of this regulation and may subject the entity making the unauthorized disclosure to administrative sanctions under 24 CFR part 24. <APPRO>(Approved by the Office of Management and Budget under control number 2502-0052)</APPRO> <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 51 FR 44286, Dec. 9, 1986; 60 FR 11903, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D [Reserved]</HD> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Procedures for Requesting Access to Records</HD> <SECTION> <SECTNO>§ 15.41</SECTNO> <SUBJECT>Requests for records.</SUBJECT> (a) Requests for copies of records may be made in person during normal business hours at information centers listed in § 15.31 or by mail addressed to such centers. Although oral requests may be honored, a requester may be asked to submit his request in writing. (b) Each request must reasonably describe the desired record including the name, subject matter, and number or date, where possible, so that the record may be identified and located. In order to enable the Department to comply with the time limitations set forth in § 15.42, the envelope containing a written request and the letter itself should both clearly indicate that the subject is a Freedom of Information Act request. (c) The request shall be accompanied by an agreement to pay a fee to be determined in accordance with § 15.14. Under the circumstances enumerated in § 15.18, the Department may refuse to furnish records before receipt of the appropriate fee. A requester may specify a limit for fees, above which the requester is not willing to pay without advance consultation with the Department. (d) Copies of available records shall be made as promptly as possible. Copying service shall be limited to not more than 10 copies of any single page. Records which are published or available for sale need not be reproduced. <CITA>[40 FR 48123, Oct. 14, 1975, as amended at 60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> (a) Upon receipt of a request for records, the appropriate office will determine within ten working days whether to comply with such requests. The office will either agree to provide the requested documents, or will notify the requester, in writing, of an adverse determination, the reasons therefor, and the right to appeal the denial to the: (1) General Counsel, with respect to a denial issued by the Office of the Executive Secretariat or by the offices in which there is a Field Assistant General Counsel; or (2) Field Assistant General Counsel, with respect to a denial issued by the Field Offices. (b) When a request for records is misdirected by the requester, the office receiving the request shall: (1) Promptly refer it to the appropriate office; and (2) Advise the requester that the time of receipt by the appropriate office will be the time of receipt for processing purposes. (c) A determination by the General Counsel or the Field Assistant General Counsel with respect to an appeal under § 15.61 shall be made within 20 working days after receipt of the appeal, and shall be communicated to the appellant, in writing. (d) In unusual circumstances, the General Counsel, or the appropriate Field Assistant General Counsel, may extend the time limits prescribed in paragraphs (a) and (c) of this section, by written notice to the requester setting forth the reasons for the extension and the date on which a determination is expected to be dispatched. An extension shall not exceed ten working days. As used in this paragraph, unusual circumstances means that there is a need: (1) To search for and collect the requested records from field facilities or other establishments that are separate from the office processing the request; (2) To search for, collect, and examine appropriately a voluminous amount of separate and distinct records that are demanded in a single request; or (3) For consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the determination of <PRTPAGE P="133"/>the request, or among two or more organizational units of the Department having a substantial interest in the subject matter of the request. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Disclosure of Records and Refusal To Disclose</HD> <SECTION> <SECTNO>§ 15.51</SECTNO> <SUBJECT>Authority to release records or copies.</SUBJECT> The Office of the Executive Secretariat in Headquarters and the FOIA liaisons in each Field Office are authorized to release copies of any Department records upon written request unless disclosure is clearly not appropriate under this part. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.52</SECTNO> <SUBJECT>Authority to deny requests for records.</SUBJECT> The officers described in § 15.51, or other official designated by the Secretary's Representative, may deny a request for a record only with the concurrence of the appropriate program counsel in Headquarters or counsel in the Field Offices. Any denial shall: (a) Be made in writing, describing the documents denied and, if fewer than 21, listing them specifically; (b) Contain a simple reason for the denial, stating the appropriate exemption used; and (c) Advise of the right to appeal the adverse determination, in accordance with § 15.61, to the: (1) General Counsel, with respect to a denial issued by the Office of Executive Secretariat or by offices in which there is a Field Assistant General Counsel; and (2) Field Assistant General Counsel, with respect to a denial issued by Field Offices. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.54</SECTNO> <SUBJECT>Business information.</SUBJECT> (a) <E T="03">In general.</E> Business information provided to the Department by a submitter shall not be disclosed pursuant to a FOIA request except in accordance with this section. (b) <E T="03">Definitions.</E> As used in this section: <E T="03">Business information</E> means commercial or financial information provided to the Department by a submitter that arguably is protected from disclosure under Exemption 4 (42 U.S.C. 552(b)(4)) of the Act. <E T="03">Submitter</E> means any person or entity who provides business information, directly or indirectly, to the Department. The term includes, but is not limited to, corporations, State governments, and foreign governments. (c) <E T="03">Designation of business information.</E> A submitter's claim that certain information is confidential or proprietary should be supported by a statement or certification by an officer or authorized representative of the submitter that the information is, in fact, confidential or proprietary and has not been disclosed to the public. All information considered confidential or proprietary by a submitter should be clearly designated with a prominent stamp, typed legend, or other suitable form of notice, stating “Confidential Treatment Requested by [insert name of submitter]”, which should appear on each page or segregable portion of the page. If such marking is impractical, a cover sheet prominently marked “Confidential Treatment Requested by [insert name of submitter]” should be securely attached to the information for which confidential treatment is requested. These designations shall be deemed to have expired 10 years after the date of the submission, unless the submitter requests, and provides reasonable justification for, a longer period of designation. (d) <E T="03">Notice to submitter.</E> To the extent permitted by law, the Department shall provide a submitter with prompt written notice of a FOIA request or administrative appeal encompassing its business information, unless notice is excused under paragraph (h) of this section. Such notice shall afford the submitter an opportunity to object to disclosure pursuant to paragraph (f) of this section. The notice shall either describe the exact nature of the business information requested or provide copies of the records or portions thereof containing the business information. The Department will provide this notice whenever: (1) The information has been designated in good faith by the submitter <PRTPAGE P="134"/>as information deemed protected under Exemption 4; or (2) The Department has reason to believe that the information may be protected from disclosure under Exemption 4. (e) <E T="03">Notice to requester.</E> At the same time the Department notifies the submitter, the Department shall also notify the requester that the request is subject to the provisions of this section and that the submitter is being afforded an opportunity to object to disclosure of the information. (f) <E T="03">Opportunity to object to disclosure.</E> Through the notice described in paragraph (d) of this section, the Department shall afford a submitter or its designee 10 Federal working days to provide the Department a detailed written statement of the submitter's objection to disclosure of any portion of the information it submitted to the Department. Such statement shall specify all grounds for withholding any of the information and shall demonstrate why the information is a trade secret or commercial or financial information that is privileged or confidential. Conclusory statements that particular information would be useful to competitors or would impair sales, or similar statements, generally will not be considered sufficient to justify confidential treatment. Information provided by a submitter or its designee pursuant to this paragraph may itself be subject to disclosure under the FOIA. (g) <E T="03">Notice of intent to disclose.</E> The Department shall consider carefully a submitter's objections and specific grounds for nondisclosure, before determining whether to disclose business information. If the Department decides to disclose business information over the objection of a submitter, the Department shall forward to both the submitter and the requester a written notice of intent to disclose. The written notice shall be forwarded 10 Federal working days before the specified disclosure date and shall include: (1) A statement of the reasons for which the submitter's disclosure objections were not sustained; (2) A description of the business information to be disclosed; and (3) A specified disclosure date. (h) <E T="03">Exceptions to the notice requirement.</E> The notice requirements of paragraphs (d) and (g) of this section shall not apply if: (1) The Department determines that the information should not be disclosed; (2) The information has been published lawfully or has been made available officially to the public; (3) Disclosure of the information is required by law (other than the Act); (4) Disclosure of the information is required by a departmental regulation that: (i) Was adopted pursuant to notice and public comment; (ii) Specifies narrow classes of records submitted to the Department that are to be released under the FOIA; and (iii) Provides for notice in exceptional circumstances when the submitter provides, at the time the information is submitted or a reasonable time thereafter, written justification that disclosure of the information could reasonably be expected to cause substantial competitive harm; (5) The information requested was not designated by the submitter as exempt from disclosure in accordance with paragraph (c) of this section at the time of the submission of the information or a reasonable time thereafter, unless the Department has substantial reason to believe that the disclosure of the information would cause competitive harm; or (6) The designation made by the submitter in accordance with paragraph (c) of this section appears obviously frivolous. In such circumstances, the Department shall forward to the submitter, 10 Federal working days before a specified disclosure date, written notice of any final administrative decision to disclose business information. (i) <E T="03">Notice of FOIA lawsuit.</E> Whenever a requester brings suit seeking to compel disclosure of business information, the Department shall promptly notify the submitter. (j) <E T="03">Determination of confidentiality.</E> HUD will make no determination as to the validity of any request for confidentiality until a request for disclosure of the information is received.<PRTPAGE P="135"/> (k) <E T="03">Current mailing address for the submitter.</E> Each submitter shall provide to the Department: (1) A mailing address for receipt of any notices under this section; and (2) Notice of any change of address. (l) <E T="03">Treatment of confidential information by HUD employees.</E> (1) HUD officers and employees shall not, directly or indirectly, use or allow the use of business information obtained through or in connection with Government employment that has not been made available to the general public. (2) Except as otherwise provided in this section, HUD officers and employees may not disclose business information, except to other HUD officers or employees who are properly entitled to such information for the performance of their official duties. <CITA>[60 FR 11904, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Administrative Review of Denial of Requests for Records</HD> <SECTION> <SECTNO>§ 15.61</SECTNO> <SUBJECT>Administrative appeal.</SUBJECT> (a) Appeal shall be available only from a written denial of a request issued under § 15.52, and only when the appeal is filed within 30 days of issuance of the denial. An appeal from a denial issued by the Office of Executive Secretariat or by offices in which there is a Field Assistant General Counsel must be mailed to the Assistant General Counsel for Training and Administrative Law, Room 10246, 451 Seventh Street, SW, Washington, DC, 20410. An appeal from a denial issued by a Field Office must be mailed to the appropriate Field Assistant General Counsel. An appeal must include a copy of the original request for records; a copy of the written denial of access to those records, and a statement of the reasons, circumstances, or arguments advanced in support of, or in opposition to, disclosure of the records. The envelope containing the appeal should be clearly marked as a Freedom of Information Act appeal, so that the Department can comply with the time limitations set forth in § 15.42. (b) When an appeal is misdirected by the requester, the Office receiving the appeal shall: (1) Promptly refer it to the: (i) Assistant General Counsel for Training and Administrative Law, if the denial was issued by the Office of Executive Secretariat or by an office in which there is a Field Assistant General Counsel, or (ii) Appropriate Field Assistant General Counsel, if the denial was issued by a Field Office; and (2) Advise the appellant that the time of receipt for processing purposes will be the time the appeal is received by the appropriate office. (c) The appeal determination shall be in writing; constitute final administrative action by the Department; and, if the denial is upheld in full or in part, include notification of the right to judicial review. <CITA>[60 FR 11905, Mar. 3, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart H—Production in Response to Subpenas or Demands of Courts or Other Authorities</HD> <SECTION> <SECTNO>§ 15.71</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> This subpart contains the regulations of the Department concerning procedures to be followed when a subpoena, order, or other demand (hereinafter referred to in this subpart as a <E T="03">demand</E>) of a court or other authority is issued for the production or disclosure of: (a) Any material contained in the files of the Department, (b) any information relating to material contained in the files of the Department, or (c) any information or material acquired by any person while such person was an employee of the Department as a part of the performance of his or her official duties or because of his or her official status. For purposes of this subpart, the term <E T="03">employee of the Department</E> includes current and former officers and employees of the United States appointed by or subject to the supervision of the Secretary, but does not include officers and employees covered by part 2004 of this title. Also for purposes of this subpart, <E T="03">files of the Department</E> do not include files of the Office of Inspector General covered by part 2004 of this title. <CITA>[49 FR 11160, Mar. 26, 1984, as amended at 60 FR 58456, Nov. 27, 1995]</CITA> </SECTION> <SECTION> <PRTPAGE P="136"/> <SECTNO>§ 15.72</SECTNO> <SUBJECT>Production or disclosure prohibited unless approved by the Secretary.</SUBJECT> (a) Any demand of a court or other authority or any request to an employee of the Department to produce any material contained in the files of the Department, or to disclose any information relating to material contained in the files of the Department, or to disclose any information or produce any material acquired as a part of the performance of the employee's official duties or because of the employee's official status for use in a legal proceeding, shall state with particularity the material sought to be obtained or the information sought to be disclosed. (b) No employee of the Department shall comply with any such demand or request without the prior approval of the Secretary. (c) In determining whether to grant approval for an employee of the Department to testify in a legal proceeding, the Secretary shall follow the standards set forth in subpart I. (d) Where the demand or request seeks only the production of documents, the Department's procedure for authentricating documents by a keeper of the records shall be the Department's method for response. That authentication shall be evidence that the documents are true copies of documents in the Department's files. <CITA>[52 FR 12160, Apr. 15, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.73</SECTNO> <SUBJECT>Procedure in the event of a demand for production or disclosure.</SUBJECT> (a) Whenever a demand is made upon an employee of the Department for the production of material or the disclosure of information described in § 15.71, the employee shall immediately notify the Secretary and either the General Counsel or the appropriate Regional Counsel. The <E T="03">appropriate Regional Counsel</E> shall mean the Regional Counsel for the Regional Office having delegated authority over the project or activity with respect to which the information is sought. If possible, the Secretary shall be notified before the employee concerned replies to or appears before the court or other authority. (b) If response to the demand is required before the instructions from the Secretary are received, the U.S. Attorney or such other attorney as may be designated for the purpose, will appear with the employee of the Department upon whom the demand has been made, and will furnish the court or other authority with a copy of the regulations contained in this subpart and inform the court or other authority that the demand has been or is being, as the case may be, referred for prompt consideration of the Secretary. The court or other authority shall be requested respectfully to stay the demand pending receipt of the requested instructions from the Secretary. <CITA>[52 FR 12160, Apr. 15, 1987]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.74</SECTNO> <SUBJECT>Procedure in the event of an adverse ruling.</SUBJECT> If the court or other authority declines to stay the effect of the demand in response to a request made in accordance with § 15.73(b) pending receipt of instructions from the Secretary, or if the court or other authority rules that the demand must be complied with irrespective of the instructions from the Secretary not to produce the material or disclose the information sought, the employee upon whom the demand has been made shall respectfully decline to comply with the demand (<E T="03">United States ex rel. Toughy</E> v. <E T="03">Ragen,</E> 340 U.S. 462). <CITA>[52 FR 12161, Apr. 15, 1987]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart I—Testimony of Employees of the Department in Legal Proceedings</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 52 FR 12161, Apr. 15, 1987, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 15.81</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) This subpart prescribes the policies and procedures of the Department with respect to testimony of its employees as witnesses in legal proceedings with respect to material contained in the files of the Department or information learned as part of the performance of the their official duties or because of their official status. (b) For purposes of this subpart, the term <E T="03">employee of the Department</E> includes current and former officers and <PRTPAGE P="137"/>employees of the United States appointed by or subject to the supervision of the Secretary, but does not include officers and employees covered by part 2004 of this title. <CITA>[52 FR 12161, Apr. 15, 1987, as amended at 60 FR 58457, Nov. 27, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 15.82</SECTNO> <SUBJECT>Testimony in proceedings in which the United States is a party.</SUBJECT> (a) In any legal proceeding in which the United States is a party, an employee of the Department may not be called to testify as an expert or opinion witness by any party other than the United States, but may be called by such non-federal party to testify as to facts. (b) Whenever, in any legal proceeding in which the United States is a party, the attorney in charge of presenting the case for the United States requests it, the Secretary shall arrange for an employee of the Department to testify as a witness for the United States. </SECTION> <SECTION> <SECTNO>§ 15.83</SECTNO> <SUBJECT>Legal proceedings among private litigants; general rule.</SUBJECT> In any legal proceeding exclusively among private litigants, no employee of the Department may testify as an expert or opinion witness as to any matter related to his or her duties or the functions of the Department, including the meaning of Departmental documents. </SECTION> <SECTION> <SECTNO>§ 15.84</SECTNO> <SUBJECT>Legal proceedings among private litigants; subpoenas.</SUBJECT> Whenever, in a legal proceeding exclusively among private litigants, an employee of the Department is served with a subpoena or is requested to testify, the procedures set forth in §§ 15.72—15.74 shall be applicable. </SECTION> <SECTION> <SECTNO>§ 15.85</SECTNO> <SUBJECT>Legal proceedings among private litigants; expert or opinion testimony.</SUBJECT> If, while testifying in a legal proceeding exclusively among private litigants, an employee of the Department is asked for expert or opinion testimony, the employee shall decline to answer on the grounds that he or she is forbidden to do so by this part. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart J—Processing Request for Declassification and Release of Classified Material</HD> <SECTION> <SECTNO>§ 15.91</SECTNO> <SUBJECT>Authority for release or denial of classified material.</SUBJECT> (a) All requests by the public, Government employees, or other Government agencies, for the release of classified information shall be directed to the Inspector General, who will ensure that: (1) All requests are acknowledged within 10 working days. (2) The request is immediately coordinated with the original classification authority to determine whether the association of that authority with the classification of the information requires protection. (3) In those instances when the answer to paragraph (a)(2) of this section is <E T="03">no,</E> requests will be referred, along with the requested document and if appropriate any recommendations to withhold, for direct handling by the original classification authority. The requester shall be advised in writing of this action. (4) Whenever it is necessary, by either the original classification authority or HUD to deny the declassification and release, in whole or part, of the requested information, the requester shall be notified, in accordance with Executive Order 12356, of: (i) The reason for the denial, (ii) The requesters’ right to appeal the denial, and (iii) The name, title, and address of the appellate authority. <CITA>[44 FR 54478, Sept. 20, 1979, as amended at 48 FR 15895, Apr. 13, 1983. Redesignated at 52 FR 12161, Apr. 15, 1987]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 16</EAR> <HD SOURCE="HED">PART 16—IMPLEMENTATION OF THE PRIVACY ACT OF 1974</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>16.1</SECTNO> <SUBJECT>Purpose and statement of policy.</SUBJECT> <SECTNO>16.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>16.3</SECTNO> <SUBJECT>Procedures for inquiries.</SUBJECT> <SECTNO>16.4</SECTNO> <SUBJECT>Requests for access; requirements.</SUBJECT> <SECTNO>16.5</SECTNO> <SUBJECT>Disclosure of requested information to individuals.</SUBJECT> <SECTNO>16.6</SECTNO> <SUBJECT>Initial denial of access.</SUBJECT> <SECTNO>16.7</SECTNO> <SUBJECT>Administrative review of initial denial of access.</SUBJECT> <SECTNO>16.8</SECTNO> <SUBJECT>Request for correction or amendment to record.<PRTPAGE P="138"/> </SUBJECT> <SECTNO>16.9</SECTNO> <SUBJECT>Agency procedures upon request for correction or amendment of record.</SUBJECT> <SECTNO>16.10</SECTNO> <SUBJECT>Appeal of initial adverse agency determination on correction or amendment.</SUBJECT> <SECTNO>16.11</SECTNO> <SUBJECT>Disclosure of record to person other than the individual to whom it pertains.</SUBJECT> <SECTNO>16.12</SECTNO> <SUBJECT>Fees.</SUBJECT> <SECTNO>16.13</SECTNO> <SUBJECT>Penalties.</SUBJECT> <SECTNO>16.14</SECTNO> <SUBJECT>General exemptions.</SUBJECT> <SECTNO>16.15</SECTNO> <SUBJECT>Specific exemptions.</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 552(a); 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 40 FR 39729, Aug. 28, 1975, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 16.1</SECTNO> <SUBJECT>Purpose and statement of policy.</SUBJECT> (a) The purpose of this part is to establish policies and procedures for implementing the Privacy Act of 1974 (Pub. L. 93-579), 5 U.S.C. 552(a). The main objectives are to facilitate full exercise of rights conferred on individuals under the Act and to insure the protection of privacy as to individuals about whom the Department maintains records in systems of records under the Act. The Department accepts the responsibility to act promptly and in accordance with the Act upon receipt of any inquiry, request or appeal from a citizen of the United States or an alien lawfully admitted for permanent residence into the United States, regardless of the age of the individual. (b) Further, the Department accepts the obligations to maintain only such information on individuals as is relevant and necessary to the performance of its lawful functions, to maintain that information with such accuracy, relevancy, timeliness and completeness as is reasonably necessary to assure fairness in determinations made by the Department about the individual, to obtain information from the individual to the extent practicable, and to take every reasonable step to protect that information from unwarranted disclosure. The Department will maintain no record describing how an individual exercises rights guaranteed by the First Amendment unless expressly authorized by statute or by the individual about whom the record is maintained or unless pertinent to and within the scope of an authorized law enforcement activity. (c) This part applies to all organizational components in the Department in order to assure the maximum amount of uniformity and consistency within the Department in its implementation of the Act. (d) The Assistant Secretary for Administration shall be responsible for carrying out the requirements of this part, for issuing such orders and directives internal to the Department as are necessary for full compliance with the Act, and for effecting publication of all required notices concerning systems of records. (e) Requests involving information pertaining to an individual which is in a record or file but not within the scope of a System of Records Notice published in the <E T="04">Federal Register</E> are outside the scope of this part. Requests for departmental records will be considered to determine whether processing under this part, part 15, or both is most appropriate, notwithstanding the requester's characterization of the request, as follows: (1) <E T="03">A Privacy Act request from an individual for records about that individual and not contained in a Privacy Act Records System</E> shall be considered a Freedom of Information Act request and processed under HUD Freedom of Information Act regulations (24 CFR part 15) to the extent that the requester has provided the Department a reasonable description of the documents requested. When a request for records is so considered as a Freedom of Information Act request, the Privacy Act Officer shall promptly refer it to the head of the appropriate organizational unit in accordance with HUD FOIA Regulations and shall advise the requester that time of receipt for processing purposes will be the time when it is received by the appropriate official. (2) <E T="03">A Freedom of Information Act request from an individual for records about that individual contained in a Privacy Act Records System</E> shall be processed as follows: (i) If the request in whole or in part contains a reasonable description of any HUD document, processing shall be carried out pursuant to HUD FOIA Regulations. (ii) If the request in whole or in part does not contain a reasonable description of any HUD document, but does provide sufficient information under <PRTPAGE P="139"/>HUD Privacy Act Regulations to undertake a Privacy Act Records System search, the Department will provide full access under HUD Privacy Act Regulations. In this situation, the Department will comply with the deadlines for response set forth in the Privacy Act and HUD implementing regulations. In that event, an explanation will be provided to the requester advising that the request did not contain a reasonable description of a particular document as required under the FOIA and offering to process the request under FOIA procedures upon receipt of additional information sufficient to constitute a <E T="03">reasonable description.</E> (3) <E T="03">A Freedom of Information Act request from an individual for records about another individual contained in a Privacy Act Records System</E> shall be processed as follows: When an exemption under subsection (b) of FOIA is available, the Privacy Act governs the public interest determination under HUD FOIA Regulations (24 CFR 15.21) and compels the withholding of such documents unless: (i) The subject of those records consents to their release or (ii) disclosure comes within one of the subsections of 5 U.S.C. § 552a(b). (4) <E T="03">A Privacy Act request from an individual for records about another individual</E> shall be processed as follows: Except as expressly permitted in this part, requests by persons who are not the subject of a record contained in a Privacy Act Records System shall be outside the scope of this part. If the request satisfies the Freedom of Information Act requirement that requested records be reasonably described, the Privacy Act Officer shall consider the requests as a Freedom of Information Act request and shall proceed as in § 16.1(e)(1) of this section. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.2</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) The definitions of 5 U.S.C. 552a apply in this part. (b) As used in this part: (1) <E T="03">Act</E> means the <E T="03">Privacy Act of 1974,</E> Pub. L. 93-579. (2) <E T="03">Privacy Act Officer</E> means those officials, identified in Appendix A to this part, or their designees, who are authorized to receive and act upon inquiries, requests for access, and requests for correction or amendment. (3) <E T="03">Privacy Appeals Officer</E> means the General Counsel. (4) <E T="03">Inquiry</E> means a request by an individual that the Department determine whether it has any record in a system of records which pertains to that individual. (5) <E T="03">Request for access</E> means a request by an individual or guardian to inspect and/or copy and/or obtain a copy of a record which is in a particular system of records and which pertains to that individual. (6) <E T="03">Request for correction or amendment</E> means the request by an individual or guardian that the Department change (either by correction, addition or deletion) a particular record in a system of records which pertains to that individual. (7) <E T="03">Appeal</E> means the request by an individual that an initial denial of a request for access or correction or amendment by that individual be reviewed and reversed. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976; 61 FR 5204, Feb. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.3</SECTNO> <SUBJECT>Procedures for inquiries.</SUBJECT> (a) Any individual, regardless of age, may submit an inquiry to the Department. The inquiry should be made either in person at the office of, or by mail addressed to, the appropriate Privacy Act Officer. Although oral requests may be honored, a requester may be asked to submit his request in writing. The envelope containing the request and the letter itself should both clearly indicate that the subject is a “PRIVACY ACT INQUIRY”. If an individual believes the Department maintains a record pertaining to that individual but does not know which system of records might contain such a record and/or which organizational component of the Department maintains the system of records, assistance in person or by mail will be provided at the first address listed in Appendix A to this part. (b)(1) An inquiry should contain the following information: (i) Name, address and telephone number of the individual making the request;<PRTPAGE P="140"/> (ii) Name, address and telephone number of the individual to whom the record pertains, if the requesting individual is either the parent of a minor or the legal guardian of the individual to whom the record pertains; (iii) A certified or authenticated copy of documents establishing parentage or guardianship; (iv) Whether the individual to whom the record pertains is a citizen of the United States or an alien lawfully admitted for permanent residence in to the United States; (v) Name of the system of records, as published in the <E T="04">Federal Register</E>; (vi) Location of the system of records, as published in the <E T="04">Federal Register</E>; (vii) Such additional information as the individual knows will or believes might assist the Department in responding to the inquiry (for example, the individual's past or present relationship with the Department, e.g. mortgagor, contractor, employee, including relevant dates) and in verifying the individual's identity (for example, date of birth, place of birth, names of parents, place of work, dates of employment, position title, etc.); (viii) Date of inquiry; and, (ix) Individual's signature. <FP>The Department reserves the right to require compliance with the identification procedures appearing at § 16.4(d) where circumstances warrant.</FP> (2) In compliance with 5 U.S.C. 552a (e)(3) each individual supplying the information in accordance with paragraph (b)(1) of this section hereby is informed that: (i) The authority authorizing solicitation of the information is 5 U.S.C. 552a, disclosure is voluntary, and no penalty is attached for failure to respond; (ii) The principal purpose for which the information is intended to be used is processing the inquiry under the Act; (iii) The routine uses which may be made of the information are the routine uses appearing as a prefatory statement to the Department's notice of systems of records published in the <E T="04">Federal Register</E>; and, (iv) The effects of not providing all or any part of the information may delay, or in some cases make impossible, the Department's processing of the action on the request under the Act. (3) If, having been made aware of the contents of paragraph (b)(2) of this section, an individual submits the information listed in paragraph (b)(1) of this section, he or she will be deemed to have made the submission on a purely voluntary and consentual basis. (c) When an inquiry is misdirected by the requester, or not addressed as specified in paragraph (a) of this section, the Department official receiving same shall make reasonable effort to identify, and promptly refer it to, the appropriate Privacy Act Officer and the time of receipt for processing purposes will be the time when it is received by the Privacy Act Officer. (d) When an inquiry fails to provide necessary information as set forth in paragraph (b) of this section, the requester shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the Privacy Act Officer. (e) Each inquiry received shall be acted upon promptly by the responsible Privacy Act Officer. Every effort will be made to respond within ten days (excluding Saturdays, Sundays and holidays) of the date of receipt. If a response cannot be made within ten days, the Privacy Act Officer shall send an acknowledgement during that period providing information on the status of the inquiry. The Privacy Act Officer may indicate that additional information would facilitate processing or that further information is necessary to process the inquiry. </SECTION> <SECTION> <SECTNO>§ 16.4</SECTNO> <SUBJECT>Requests for access; requirements.</SUBJECT> (a) Any individual, regardless of age, may submit to the Department a request for access to records of the Department. The request should be made either in person at the Office of, or by mail addressed to, the responsible Privacy Act Officer identified in Appendix A to this part. Although oral requests may be honored, a requester may be asked to submit his request in writing. The envelope containing the request and the letter itself should both clearly indicate that the subject is a PRIVACY <PRTPAGE P="141"/>ACT REQUEST FOR ACCESS TO RECORDS. (b) When a request for access to records is misdirected by the requester, or not addressed as specified in paragraph (a) of this section, the Department official receiving same shall promptly refer it to the appropriate Privacy Act Officer and the time of receipt for processing purposes will be the time when it is received by that official. (c) When a request for access to records fails to provide necessary information as set forth in paragraph (b) of this section the requester shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (d) The requirements for identification of individuals seeking access to records are as follows: (1) <E T="03">In person.</E> Each individual making a request in person shall be required to present satisfactory proof of identity. The means of proof, in the order of preference and priority, are: (i) A document bearing the individual's photograph (for example, passport or military or civilian identification card); (ii) A document bearing the individual's signature (for example, driver's license, social security card, unemployment insurance book, employer's identification card, national credit card and professional, craft or union membership card); and (iii) A document bearing neither the photograph nor the signature of the individual (for example, a Medicaid card). In the event the individual can provide no suitable documentation of identity, the Department will require a signed statement asserting the individual's identity and stipulating that the individual understands the penalty provision of 5 U.S.C. 552a(i)(3). That penalty provision also appears at § 16.13(a). In order to avoid any unwarranted disclosure of an individual's records, the Department reserves the right to determine to its satisfaction whether proof of identity offered by any individual is adequate. (2) <E T="03">Not in person.</E> If the individual making a request does not appear in person before a Privacy Act Officer, the information set forth in § 16.3(b)(1) and a certificate of a notary public or equivalent officer empowered to administer oaths must accompany the request. The certificate within or attached to the letter must be substantially in accord with the following text: <EXTRACT> <FP>City of ——————————</FP> <FP>County of ——————————:</FP> ss —————————— (name of individual), who affixed (his) (her) signature below in my presence, came before me, a ———————— (title), in and for the aforesaid County and State, this —————— day of ——————, 19—, and established (his) (her) identity to my satisfaction. My commission expires ——————————. <FP SOURCE="FP-1">——————————————————</FP> (signature) </EXTRACT> <FP>If the request follows inquiry under § 16.3, this should be indicated in the request for access in order to facilitate processing.</FP> (3) <E T="03">Parents of minors and legal guardians.</E> An individual acting as the parent of a minor or the legal guardian of the individual to whom a record pertains shall establish his or her personal identity in the same manner prescribed in either paragraph (d) (1) or (2) of this section. In addition, such other individual shall establish his or her representative capacity of parent or legal guardian. In the case of the parent of a minor, the proof of identity shall be a certified or authenticated copy of the minor's birth certificate. In the case of a legal guardian of an individual who has been declared incompetent due to physical or mental incapacity or age by a court of competent jurisdiction, the proof of identity shall be a certified or authenticated copy of the court's order. A parent or legal guardian may act only for a living individual, not for a decedent. A parent or legal guardian may be accompanied during personal access to a record by another individual, provided the provisions of § 16.5(e) are satisfied. (e) When the provisions of this part are alleged to have the effect of impeding an individual in exercising his or her right to access, the Department will consider alternative suggestions from an individual making a request, <PRTPAGE P="142"/>regarding proof of identity and access to records. (f) An individual shall not be required to state a reason or otherwise justify his or her request for access to a record. </SECTION> <SECTION> <SECTNO>§ 16.5</SECTNO> <SUBJECT>Disclosure of requested information to individuals.</SUBJECT> (a) Each request received shall be acted upon promptly by the responsible Privacy Act Officer. Every effort will be made to respond within ten days (excluding Saturdays, Sundays and holidays) of the date of receipt. If a response cannot be made within ten days due to unusual circumstances, the Privacy Act Officer shall send an acknowledgement during that period providing information on the status of the request and asking for such further information as may be necessary to process the request. <E T="03">Unusual circumstances</E> shall include circumstances where a search for and collection of requested records from inactive storage, field facilities or other establishments are required, cases where a voluminous amount of data is involved, instances where information on other individuals must be separated or expunged from the particular record, and cases where consultations with other agencies having a substantial interest in the determination of the request are necessary. (b) <E T="03">Grant of access</E>—(1) <E T="03">Notification.</E> An individual shall be granted access to a record pertaining to him or her, except where the provisions of § 16.6 apply. The Privacy Act Officer shall notify the individual of such determination and provide the following information: (i) The methods of access, as set forth in paragraph (b)(2) of this section; (ii) The place at which the record may be inspected; (iii) The earliest date on which the record may be inspected and the period of time that the records will remain available for inspection and/or the estimated date by which a copy of the record could be mailed and the estimate of fees pursuant to § 16.12; (iv) The fact that the individual, if he or she wishes, may be accompanied by another individual during personal access, subject to procedures set forth in paragraph (e) of this section; and (v) Any additional requirements needed to grant access to a specific record. (2) <E T="03">Methods of access.</E> The following methods of access to records by an individual may be available depending on the circumstances of a given situation: (i) Inspection in person may be had in the office specified by the Privacy Act Officer granting access during hours indicated by the Privacy Act Officer; (ii) Transfer of records to a Federal facility more convenient to the individual may be arranged, but only if the Privacy Act Officer determines that a suitable facility is available, that the individual's access can be properly supervised at the facility, and that transmittal of the records to that facility will not unduly interfere with operations of the Department or involve unreasonable costs, in terms of both money and manpower; and (iii) Copies may be mailed at the request of the individual, subject to payment of the fees prescribed in § 16.12. The Department, at its own initiative, may elect to provide a copy by mail, in which case no fee will be charged the individual. (c) The Department shall supply such other information and assistance at the time of access as to make the record intelligible to the individual. (d) The Department reserves the right to limit access to copies and abstracts of original records, rather than the original records. This election would be appropriate, for example, when the record is in an automated data media such as tape or disc, when the record contains information on other individuals, and when deletion of information is permissible under exemptions (for example, 5 U.S.C. 552a(k)(2)). In no event shall original records of the Department be made available to the individual except under the immediate supervision of the Privacy Act Officer or his designee. It is a crime to conceal, mutilate, obliterate, or destroy any record filed in a public office, or to attempt to do any of the foregoing, Title 18, United States Code, 2701(a). (e) Any individual who requests access to a record pertaining to that individual may be accompanied by another <PRTPAGE P="143"/>individual of his or her choice. <E T="03">Accompanied</E> includes discussion of the record in the presence of the other individual. The individual to whom the record pertains shall authorize the presence of the other individual by a signed and dated document which includes the name of the other individual and specifically describes the record to which access is sought. The other individual shall sign the authorization in the presence of the Privacy Act Officer. An individual shall not be required to state a reason or otherwise justify his or her decision to be accompanied by another individual during personal access to a record. </SECTION> <SECTION> <SECTNO>§ 16.6</SECTNO> <SUBJECT>Initial denial of access.</SUBJECT> (a) <E T="03">Grounds.</E> Access by an individual to a record which pertains to that individual will be denied only upon a determination by the Privacy Act Officer that: (1) The record is subject to an exemption under § 16.14, § 16.15 or to an exemption determined by another agency noticing the system of records; (2) The record is information compiled in reasonable anticipation of a civil action or proceeding; or (3) The individual unreasonably has failed to comply with the procedural requirements of this part. (b) <E T="03">Notification.</E> The Privacy Act Officer shall give notice of denial of access to records to the individual in writing and shall include the following information: (1) The Privacy Act Officer's name and title or position; (2) The date of the denial; (3) The reasons for the denial, including citation to the appropriate section of the Act and/or this part; (4) The individual's opportunities, if any, for further administrative consideration, including the identity and address of the appropriate Privacy Appeals Officer. If no further administrative consideration within the Department is available, the notice shall state that the denial is administratively final; and, (5) If stated to be administratively final; and, within the Department, the individual's right to judicial review under 5 U.S.C. 552a(g)(1), as amended by 5 U.S.C. 552a(g)(5). <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 20297, Apr. 19, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.7</SECTNO> <SUBJECT>Administrative review of initial denial of access.</SUBJECT> (a) Review shall be available only from a written denial of a request for access issued under § 16.6(a) (2) or (3) and only if a written request for review is filed within thirty calendar days after the issuance of the written denial. (b) A request for review shall be addressed to the Privacy Appeals Officer identified in the initial denial, which official is authorized to make final determinations. The envelope containing the request for review and the letter itself should both clearly indicate that the subject is a PRIVACY ACT REQUEST FOR REVIEW. (c) When a request for review is misdirected by the requester, or not addressed as specified in paragraph (b) of this section, the Department official receiving same shall promptly refer it to the Privacy Appeals Officer and the time of receipt for processing purposes will be the time when it is received by the appropriate official. (d) When a request for review fails to provide necessary information as set forth in paragraph (e) of this section, the requester shall be given reasonable opportunity to amend the request and shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (e) The filing of a request for review may be accomplished by mailing to the Privacy Appeals Officer a copy of the request for access, if in writing; a copy of the written denial issued under § 16.6; and a statement of the reasons why the initial denial is believed to be in error. The appeal shall be signed by the individual. (f) No hearing will be allowed in connection with administrative review of an initial denial of access. (g) The Privacy Appeals Officer shall act upon the appeal and issue a final determination in writing not later than thirty days (excluding Saturdays, Sundays and holidays) from the date <PRTPAGE P="144"/>on which the appeal is received; provided, that the Privacy Appeals officer may extend the thirty days upon deciding that a fair and equitable review cannot be made within that period, but only if the individual is advised in writing of the reason for the extension and the estimated date by which a final determination will issue, which estimated date should not be later than the sixtieth day (excluding Saturdays, Sundays and holidays) after receipt of the appeal unless there exist unusual circumstances, as described in § 16.5(a). (h) The decision after review will be in writing, will constitute final action of the Department on a request for access, and, if the denial of the request is in whole or part upheld, the Department shall notify the person making the request of his right to judicial review under 5 U.S.C. 552a(g)(1), as amended by 5 U.S.C. 552a(g)(5). </SECTION> <SECTION> <SECTNO>§ 16.8</SECTNO> <SUBJECT>Request for correction or amendment to record.</SUBJECT> (a) Any individual, regardless of age, may submit to the Department a request for correction or amendment of a record pertaining to that individual. The request should be made either in person at the office of, or by mail addressed to, the Privacy Act Officer who processed the individual's request for access to the record. Although an oral request may be honored, a requester may be asked to submit his or her request in writing. The envelope containing the request and the letter itself should both clearly indicate that the subject is a PRIVACY ACT REQUEST FOR CORRECTION OR AMENDMENT. (b) When a request for correction or amendment is misdirected by the requester, or not addressed as specified in paragraph (a) of this section, the Department official receiving same shall make reasonable effort to identify, and promptly refer it to, the appropriate Privacy Act Officer and the time of receipt for processing purposes will be the time when it is received by the appropriate official. (c) When a request for correction or amendment fails to provide necessary information as set forth in paragraph (e) of this section, the requester shall be given reasonable opportunity to answer the request and shall be advised that the time of receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (d) Since the request, in all cases, will follow a request for access under § 16.4, the individual's identity will be established by his or her signature on the request. (e) A request for correction or amendment should include the following: (1) A specific identification of the record sought to be corrected or amended (for example, description, title, date, paragraph, sentence, line and words); (2) The specific wording to be deleted, if any; (3) The specific wording to be inserted or added, if any, and the exact place at which it is to be inserted or added; and (4) A statement of the basis for the requested correction or amendment, with all available supporting documents and materials which substantiate the statement. (f) The provisions of § 16.3(b) (2) and (3) apply to the information obtained under paragraph (e) of this section. </SECTION> <SECTION> <SECTNO>§ 16.9</SECTNO> <SUBJECT>Agency procedures upon request for correction or amendment of record.</SUBJECT> (a)(1) Not later than ten days (excluding Saturdays, Sundays and holidays) after receipt of a request to correct or amend a record, the Privacy Act Officer shall send an acknowledgment providing an estimate of time within which action will be taken on the request and asking for such further information as may be necessary to process the request. The estimate of time may take into account unusual circumstances as described in § 16.5(a). No acknowledgment will be sent if the request can be reviewed, processed, and the individual notified of the results of review (either compliance or denial) within the ten days. Requests filed in person will be acknowledged at the time submitted. (2) Promptly after acknowledging receipt of a request, or after receiving such further information as might have been requested, or after arriving at a decision within the time prescribed in <PRTPAGE P="145"/>§ 16.9(a)(1), the Privacy Act Officer shall either: (i) Make the requested correction or amendment and advise the individual in writing of such action, providing either a copy of the corrected or amended record or a statement as to the means whereby the correction or amendment was effected in cases where a copy cannot be provided; or, (ii) Inform the individual in writing that his or her request is denied and provide the following information: (A) The Privacy Act Officer's name and title and position; (B) The date of the denial; (C) The reasons for the denial, including citation to the appropriate sections of the Act and this part; and, (D) The procedures for appeal of the denial as set forth in § 16.10, including the name and address of the Privacy Appeals Officer. The term <E T="03">promptly</E> in this § 16.9 means within thirty days (excluding Saturdays, Sundays and holidays). If the Privacy Act Officer cannot make the determination within thirty days, the individual will be advised in writing of the reason therefor and of the estimated date by which the determination will be made. (b) Whenever an individual's record is corrected or amended pursuant to a request by that individual, the Privacy Act Officer shall see to the notification of all persons and agencies to which the corrected or amended portion of the record had been disclosed prior to its correction or amendment, if an accounting of such disclosure was made as required by the Act. The notification shall require a recipient agency maintaining the record to acknowledge receipt of the notification, to correct or amend the record and to appraise any agency or person to which it had disclosed the record of the substance of the correction or amendment. (c) The following criteria will be considered by the Privacy Act Officer in reviewing a request for correction or amendment: (1) The sufficiency of the evidence submitted by the individual; (2) The factual accuracy of the information; (3) The relevance and necessity of the information in terms of the purpose for which it was collected; (4) The timeliness and currency of the information in terms of the purpose for which it was collected: (5) The completeness of the information in terms of the purpose for which it was collected: (6) The possibility that denial of the request could unfairly result in determinations adverse to the individual; (7) The character of the record sought to be corrected or amended; and (8) The propriety and feasibility of complying with the specific means of correction or amendment requested by the individual. (d) The Department will not undertake to gather evidence for the individual, but does reserve the right to verify the evidence which the individual submits. (e) Correction or amendment of a record requested by an individual will be denied only upon a determination by the Privacy Act Officer that: (1) There has been a failure to establish, by the evidence presented, the propriety of the correction or amendment in light of the criteria set forth in paragraph (c) of this section; (2) The record sought to be corrected or amended was compiled in a terminated judicial, quasi-judicial, legislative or quasi-legislative proceeding to which the individual was a party or participant; (3) The information in the record sought to be corrected or amended, or the record sought to be corrected or amended, is the subject of a pending judicial, quasi-judicial or quasi-legislative proceeding to which the individual is a party or participant; (4) The correction or amendment would violate a duly enacted statute or promulgated regulation; or, (5) The individual unreasonably has failed to comply with the procedural requirements of this part. (f) If a request is partially granted and partially denied, the Privacy Act Officer shall follow the appropriate procedures of this section as to the rec-ords within the grant and the records within the denial. </SECTION> <SECTION> <PRTPAGE P="146"/> <SECTNO>§ 16.10</SECTNO> <SUBJECT>Appeal of initial adverse agency determination on correction or amendment.</SUBJECT> (a) Appeal shall be available only from a written denial of a request for correction or amendment of a record issued under § 16.9, and only if a written appeal is filed within thirty calendar days after the issuance of the written denial. (b) Each appeal shall be addressed to the Privacy Appeals Officer identified in the written denial. The envelope containing the appeal and the letter itself should both clearly indicate that the subject is PRIVACY ACT APPEAL. (c) When an appeal is misdirected by the requester, or not addressed as specified in paragraph (b) of this section, the Department official receiving same shall promptly refer it to the appropriate Privacy Appeals Officer and the time of receipt for processing purposes will be the time when it is received by the appropriate official. (d) When an appeal fails to provide the necessary information as set forth in paragraph (e) of this section, the requester shall be advised that the time for receipt for processing purposes will be the time when the additional necessary information is received by the appropriate official. (e) The individual's appeal papers shall include the following: A copy of the original request for correction or amendment; a copy of the initial denial; and a statement of the reasons why the initial denial is believed to be in error. The appeal shall be signed by the individual. The record which the individual requests be corrected or amended will be supplied by the Privacy Act Officer who issued the initial denial. While the foregoing normally will comprise the entire record on appeal, the Privacy Appeals Officer may seek additional information necessary to assure that the final determination is fair and equitable and, in such instances, the additional information will be disclosed to the individual to the greatest extent possible and an opportunity provided for comment thereon. (f) No hearing on appeal will be allowed. (g) The Privacy Appeals Officer shall act upon the appeal and issue a final Department determination in writing not later than thirty days (excluding Saturdays, Sundays and holidays) from the date on which the appeal is received; provided, that the Privacy Appeals Officer may extend the thirty days upon deciding that a fair and equitable review cannot be made within that period, but only if the individual is advised in writing of the reason for the extension and the estimated date by which a final determination will issue (which estimated date should not be later than the sixtieth day (excluding Saturdays, Sundays and holidays) after receipt of the appeal unless unusual circumstances, as described in § 16.5(a), are met). (h) If the appeal is determined in favor of the individual, the final determination shall include the specific corrections or amendments to be made and a copy thereof shall be transmitted promptly both to the individual and to the Privacy Act Officer who issued the initial denial. Upon receipt of such final determination, the Privacy Act Officer promptly shall take the actions set forth in § 16.9(a)(2)(i) and § 16.9(b). (i) If the appeal is denied, the final determination shall be transmitted promptly to the individual and shall state the reasons for the denial. The notice of final determination also shall inform the individual of the following information: (1) The right of the individual to file a concise statement of reasons for disagreeing with the final determination. The statement ordinarily should not exceed one page and the Department reserves the right to reject a statement of excessive length. Such a statement shall be filed with the Privacy Appeals Officer. It should identify the date of the final determination and be signed by the individual. The Privacy Appeals Officer shall acknowledge receipt of such statement and inform the individual of the date on which it was received; (2) The fact that any such disagreement statement filed by the individual will be noted in the disputed record and that a copy of the statement will be provided to persons and agencies to which the record is disclosed subsequent to the date of receipt of such statement;<PRTPAGE P="147"/> (3) The fact that prior recipients of the disputed record will be provided a copy of any statement of the dispute to the extent that an accounting of disclosures, as required by the Act, was made; (4) The fact that the Department will append to any such disagreement statement filed by the individual, a copy of the final determination or summary thereof which also will be provided to persons and agencies to which the disagreement statement is disclosed; and, (5) The right of the individual to judicial review of the final determination under 5 U.S.C. 552a(g)(1)(A), as limited by 5 U.S.C. 552a(g)(5). (j) In making the final determination, the Privacy Appeals Officer shall employ the criteria set forth in paragraph 16.9(c) and shall deny an appeal only on the grounds set forth in § 16.9(e). (k) If an appeal is partially granted and partially denied, the Privacy Appeals Officer shall follow the appropriate procedures of this section as to the records within the grant and the rec-ords within the denial. (l) Although a copy of the final determination or a summary thereof will be treated as part of the individual's record for purposes of disclosure in instances where the individual has filed a disagreement statement, it will not be subject to correction or amendment by the individual. (m) The provisions of § 16.3(b) (2) and (3) apply to the information obtained under paragraphs (e) and (i)(1) of this section. </SECTION> <SECTION> <SECTNO>§ 16.11</SECTNO> <SUBJECT>Disclosure of record to person other than the individual to whom it pertains.</SUBJECT> (a) The Department may disclose a record pertaining to an individual to a person other than the individual only in the following instances: (1) Upon written request by the individual, including authorization under § 16.5(e); (2) With the prior written consent of the individual; (3) To a parent or legal guardian under 5 U.S.C. 552a(h); and, (4) When required by the Act and not covered explicitly by the provisions of 5 U.S.C. 552a(b); and, (5) When permitted under 5 U.S.C. 552a(b) (1) through (11), which read as follows: <EXTRACT> (1) To those officers and employees of the agency which maintains the record who have a need for the record in the performance of their duties; (2) Required under section 552 of this title; (3) For a routine use as defined in subsection (a)(7) of this section and described under subsection (e)(4)(D) of this section; (4) To the Bureau of the Census for purposes of planning or carrying out a census or survey or related activity pursuant to the provisions of title 13; (5) To a recipient who has provided the agency with advance adequate written assurance that the record will be used solely as a statistical research or reporting record, and the record is to be transferred in a form that is not individually identifiable; (6) To the National Archives of the United States as a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Administrator of General Services or his designee to determine whether the record has such value; (7) To another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency which maintains the record specifying the particular portion desired and the law enforcement activity for which the record is sought; (8) To a person pursuant to a showing of compelling circumstances affecting the health or safety of an individual if upon such disclosure notification is transmitted to the last known address of such individual; (9) To either House of Congress, or, to the extent of matter within its jurisdiction, any committee or subcommittee thereof, any joint committee of Congress or subcommittee of any such joint committee; (10) To the Comptroller General, or any of his authorized representatives, in the course of the performance of the duties of the General Accounting Office; or (11) Pursuant to the order of a court of competent jurisdiction. </EXTRACT> (b) The situations referred to in paragraph (a)(4) of this section include the following: (1) 5 U.S.C. 552a(c)(4) requires dissemination of a corrected or amended record or notation of a disagreement statement by the Department in certain circumstances:<PRTPAGE P="148"/> (2) 5 U.S.C. 552(a)(g) authorizes civil action by an individual and requires disclosure by the Department or the court; (3) Section 5(e)(2) of the Act authorizes release of any records or information by the Department to the Privacy Protection Study Commission upon request of the Chairman; and (4) Section 6 of the Act authorizes the Office of Management and Budget to provide the Department with continuing oversight and assistance in implementation of the Act. (c) The Department shall make an accounting of each disclosure of any record contained in a system of rec-ords in accordance with 5 U.S.C. 552a(c) (1) and (2). Except for a disclosure made under 5 U.S.C. 552a(b)(7), the Privacy Act Officer shall make such accounting available to any individual, insofar as it pertains to that individual, on request submitted in accordance with § 16.4. The Privacy Act Officer shall make reasonable efforts to notify any individual when any record in a system of records is disclosed to any person under compulsory legal process, promptly upon being informed that such process has become a matter of public record. </SECTION> <SECTION> <SECTNO>§ 16.12</SECTNO> <SUBJECT>Fees.</SUBJECT> (a) The only fees to be charged to or collected from an individual under the provisions of this part are for copying records at the request of the individual. (1) No fees shall be charged or collected for the following: Search for and retrieval of the records; review of the records; copying at the initiative of the Department without a request from the individual; transportation of records and personnel; and first class postage. (2) It is the policy of the Department to provide an individual with one copy of each record corrected or amended pursuant to his or her request without charge as evidence of the correction or amendment. (3) As requested by the United States Civil Service Commission in its published regulations implementing the Act, the Department will charge no fee to an individual who requests copies of a personnel record covered by that Commission's Government-wide published notice of systems of rec-ords. However, when such records are voluminous and the cost of copying would be in excess of five dollars ($5) the Department may, in its discretion, charge a fee. (b) The copying fees prescribed by paragraph (a) of this section are: <EXTRACT> <FP SOURCE="FP-1">$0.10 Each copy of each page, up to 8 <FR>1/2</FR>″ x 14″ made by photocopy or similar process.</FP> <FP SOURCE="FP-1">$0.20 Each page of computer printout without regard to the number of carbon copies concurrently printed. </FP> </EXTRACT> (c) Payment of fees under this section shall be made in cash, or preferably by check or money order payable to the “Treasurer of the United States.” Payment shall be delivered or sent to the office stated in the billing notice or, if none is stated, to the Privacy Act Officer processing the request. Payment may be required in the form of a certified check in appropriate circumstances. Postage stamps will not be accepted. (d) A copying fee totaling $1 or less shall be waived, but the copying fees for contemporaneous requests by the same individual shall be aggregated to determine the total fee. A copying fee shall not be charged or collected, or alternatively, it may be reduced when such action is determined by the Privacy Act Officer to be in the public interest. (e) Special and additional services provided at the request of the individual, such as certification or authentication, postal insurance and special mailing arrangement costs, will be charged to the individual in accordance with other published regulations of the Department pursuant to statute (for example, 31 U.S.C. 433a). (f) This section applies only to individuals making requests under this part. All other persons shall remain subject to fees and charges prescribed by other and appropriate authorities. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 29479, June 9, 1977]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.13</SECTNO> <SUBJECT>Penalties.</SUBJECT> (a) The Act provides, in pertinent part: <EXTRACT> Any person who knowingly and willfully requests or obtains any record concerning an <PRTPAGE P="149"/>individual from an agency under false pretences shall be guilty of a misdemeanor and fined not more than $5,000. (5 U.S.C. 552a(i)(3)) </EXTRACT> (b) A person who falsely or fraudulently attempts to obtain records under the Act may also be subject to prosecution under such other criminal statutes as 18 U.S.C. 494, 495 and 1001. </SECTION> <SECTION> <SECTNO>§ 16.14</SECTNO> <SUBJECT>General exemptions.</SUBJECT> (a) Individuals may not have access to records maintained by the Department but which were provided by another agency which has determined by regulation that such information is subject to general exemption under 5 U.S.C. 552a(j). If such exempt records are within a request for access, the Department will advise the individual of their existence and of the name and address of the source agency. For any further information concerning the record and the exemption, the individual must contact that source agency. (b) The Secretary of Housing and Urban Development has determined that the Office of the Assistant Inspector General for Investigation performs, as its principal function, activities pertaining to the enforcement of criminal laws. The records maintained by that office in a system identified as “HUD/DEPT-24, Investigation Files,” primarily consist of information compiled for the purpose of criminal investigations and are associated with identifiable individuals. Therefore, the Secretary has determined that this system of records shall be exempt, consistent with 5 U.S.C. 552a(j)(2), from all requirements of the Privacy Act except 5 U.S.C. 552a (b), (c) (1) and (2), (e)(4) (A) through (F), (e) (6), (7), (9), (10), and (11), and (i) unless elsewhere exempted. <CITA>[40 FR 39729, Aug. 28, 1975, as amended at 49 FR 20486, May 15, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 16.15</SECTNO> <SUBJECT>Specific exemptions.</SUBJECT> Whenever the Secretary of Housing and Urban Development determines it to be necessary and proper, with respect to any system of records maintained by the Department, to exercise the right to promulgate rules to exempt such systems in accordance with the provisions of 5 U.S.C. 552a(k), each specific exemption, including the parts of each system to be exempted, the provisions of the Act from which they are exempted, and the justification for each exemption shall be published in the <E T="04">Federal Register</E> as part of the Department's Notice of Systems of Records. (a) Exempt under 5 U.S.C. 552a(k)(2) from the requirements of 5 U.S.C. 552a (c)(3), (d), (e)(1), (e)(4) (G), (H), (I), and (f). This exemption allows the Department to withhold records compiled for law enforcement purposes. The reasons for adopting this exemption are to prevent individuals, who are the subjects of investigation, from frustrating the investigatory process, to ensure the integrity of the investigatory process, to ensure the integrity of law enforcement activities, to prevent disclosure of investigative techniques, and to protect the confidentiality of sources of information. The names of systems correspond to those published in the <E T="04">Federal Register</E> as part of the Department's Notice of Systems of Records. (1) HUD/DEPT-15. Equal Opportunity Housing Complaints. (2) HUD/DEPT-24. Investigation Files in the Office of the Inspector General. (3) HUD/DEPT-25. Legal Action Files. (b) Exempt under 5 U.S.C. 552(k)(5) from the requirements of 5 U.S.C. 552a (c)(3), (d), (e)(1), (e)(4), (G), (H), and (I), and (f). This exemption allows the Department to withhold records compiled solely for the purpose of determining suitability, eligibility, or qualifications for Federal contracts, or access to classified material. The reasons for adopting this exemption are to insure the proper functioning of the investigatory process, to insure effective determination of suitability, eligibility and qualification for employment and to protect the confidentiality of sources of information. The names of systems correspond to those published in the <E T="04">Federal Register</E> as part of the Department's Notice of Systems of Records. (1) HUD/DEPT-24. Investigation Files in the Office of the Inspector General. (2) HUD/DEPT-25. Legal Action Files. (c) The system of records entitled “HUD/PIH-1. Tenant Eligibility Verification Files” consists in part of investigatory material compiled for law enforcement purposes. Relevant <PRTPAGE P="150"/>records will be used by appropriate Federal, state or local agencies charged with the responsibility for investigating or prosecuting violations of law. Therefore, to the extent that information in the system falls within the coverage of subsection (k)(2) of the Privacy Act, 5 U.S.C. 552a(k)(2), the system is exempt from the requirements of the following subsections of the Privacy Act, for the reasons stated below. (1) From subsection (c)(3) because release of an accounting of disclosures to an individual who may be the subject of an investigation could reveal the nature and scope of the investigation and could result in the altering or destruction of evidence, improper influencing of witnesses, and other evasive actions that could impede or compromise the investigation. (2) From subsection (d)(1) because release of the records to an individual who may become or has become the subject of an investigation could interfere with pending or prospective law enforcement proceedings, constitute an unwarranted invasion of the personal privacy of third parties, reveal the identity of confidential sources, or reveal sensitive investigative techniques and procedures. (3) From subsection (d)(2) because amendment or correction of the records could interfere with pending or prospective law enforcement proceedings, or could impose an impossible administrative and investigative burden by requiring the office that maintains the records to continuously retrograde its verifications of tenant eligibility attempting to resolve questions of accuracy, relevance, timeliness and completeness. (4) From subsection (e)(1) because it is often impossible to determine relevance or necessity of information in pre-investigative early stages. The value of such information is a question of judgment and timing; what appears relevant and necessary when collected may ultimately be evaluated and viewed as irrelevant and unnecessary to an investigation. In addition, the Assistant Secretary for Public and Indian Housing, or investigators, may obtain information concerning the violation of laws other than those within the scope of its jurisdiction. In the interest of effective law enforcement, the Assistant Secretary for Public and Indian Housing, or investigators, should retain this information because it may aid in establishing patterns of unlawful activity and provide leads for other law enforcement agencies. Further, in obtaining the evidence, information may be provided which relates to matters incidental to the main purpose of the inquiry or investigation but which may be pertinent to the investigative jurisdiction of another agency. Such information cannot readily be identified. (d) The system of records entitled “HUD/PIH-1. Tenant Eligibility Verification Files” consists in part of material that may be used for the purpose of determining suitability, eligibility, or qualifications for Federal civilian employment or Federal contracts, the release of which would reveal the identity of a source who furnished information to the Government under an express promise that the identity of the source would be held in confidence. Therefore, to the extent that information in this system falls within the coverage of subsection (k)(5) of the Privacy Act, 5 U.S.C. 552a(k)(5), the system is exempt from the requirements of the following subsection of the Privacy Act, for the reasons stated below. (1) From subsection (d)(1) because release would reveal the identity of a source who furnished information to the Government under an express promise of confidentiality. Revealing the identity of a confidential source could impede future cooperation by sources, and could result in harassment or harm to such sources. <CITA>[42 FR 49810, Sept. 28, 1977, as amended at 59 FR 9407, Feb. 28, 1994]</CITA> </SECTION> </PART> <PART> <EAR>Pt. 17</EAR> <HD SOURCE="HED">PART 17—ADMINISTRATIVE CLAIMS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Claims Against Government Under Federal Tort Claims Act</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECHD>Sec.</SECHD> <SECTNO>17.1</SECTNO> <SUBJECT>Scope; definitions.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures</HD> <SECTNO>17.2</SECTNO> <SUBJECT>Administrative claim; when presented; appropriate HUD office.</SUBJECT> <SECTNO>17.3</SECTNO> <SUBJECT>Administrative claim; who may file.<PRTPAGE P="151"/> </SUBJECT> <SECTNO>17.4</SECTNO> <SUBJECT>Administrative claim; evidence and information to be submitted.</SUBJECT> <SECTNO>17.5</SECTNO> <SUBJECT>Investigations.</SUBJECT> <SECTNO>17.6</SECTNO> <SUBJECT>Claims investigation.</SUBJECT> <SECTNO>17.7</SECTNO> <SUBJECT>Authority to adjust, determine, compromise, and settle claims.</SUBJECT> <SECTNO>17.8</SECTNO> <SUBJECT>Limitations on authority.</SUBJECT> <SECTNO>17.9</SECTNO> <SUBJECT>Referral to Department of Justice.</SUBJECT> <SECTNO>17.11</SECTNO> <SUBJECT>Final denial of claim.</SUBJECT> <SECTNO>17.12</SECTNO> <SUBJECT>Action on approved claim.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Claims Under the Military Personnel and Civilian Employees Claims Act of 1964</HD> <SECTNO>17.40</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> <SECTNO>17.41</SECTNO> <SUBJECT>Claimants.</SUBJECT> <SECTNO>17.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> <SECTNO>17.43</SECTNO> <SUBJECT>Allowable claims.</SUBJECT> <SECTNO>17.44</SECTNO> <SUBJECT>Restrictions on certain claims.</SUBJECT> <SECTNO>17.45</SECTNO> <SUBJECT>Unallowable claims.</SUBJECT> <SECTNO>17.46</SECTNO> <SUBJECT>Claims involving carriers or insurers.</SUBJECT> <SECTNO>17.47</SECTNO> <SUBJECT>Settlement of claims.</SUBJECT> <SECTNO>17.48</SECTNO> <SUBJECT>Computation of amount of award.</SUBJECT> <SECTNO>17.49</SECTNO> <SUBJECT>Attorney's fees.</SUBJECT> <SECTNO>17.50</SECTNO> <SUBJECT>Claims procedures.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for the Collection of Claims by the Government</HD> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTNO>17.60</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> <SECTNO>17.61</SECTNO> <SUBJECT>Incorporation of joint standards by reference.</SUBJECT> <SECTNO>17.62</SECTNO> <SUBJECT>Subdivision and joining of claims.</SUBJECT> <SECTNO>17.63</SECTNO> <SUBJECT>Authority of offices to attempt collection of claims.</SUBJECT> <SECTNO>17.64</SECTNO> <SUBJECT>Referral of claims to the Assistant Secretary for Administration.</SUBJECT> <SECTNO>17.65</SECTNO> <SUBJECT>Authority of offices to compromise claims or suspend or terminate collection action.</SUBJECT> <SECTNO>17.66</SECTNO> <SUBJECT>Department claims officer.</SUBJECT> <SECTNO>17.67</SECTNO> <SUBJECT>Claims files.</SUBJECT> <SECTNO>17.68</SECTNO> <SUBJECT>Monthly report of collection action.</SUBJECT> <SECTNO>17.69</SECTNO> <SUBJECT>Accounting control.</SUBJECT> <SECTNO>17.70</SECTNO> <SUBJECT>Record retention.</SUBJECT> <SECTNO>17.71</SECTNO> <SUBJECT>Suspension or revocation of eligibility.</SUBJECT> <SECTNO>17.72</SECTNO> <SUBJECT>Methods of collection and imposition of late charges.</SUBJECT> <SECTNO>17.73</SECTNO> <SUBJECT>Standards for compromise of claims.</SUBJECT> <SECTNO>17.74</SECTNO> <SUBJECT>Standards for suspension or termination of collection action.</SUBJECT> <SECTNO>17.75</SECTNO> <SUBJECT>Referral to GAO or Justice Department.</SUBJECT> <SECTNO>17.76</SECTNO> <SUBJECT>Disclosure to a consumer reporting agency.</SUBJECT> <SECTNO>17.77</SECTNO> <SUBJECT>Contracts for collection services.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Administrative Offset Provisions</HD> <SECTNO>17.100</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>17.101</SECTNO> <SUBJECT>Coordinating administrative offset with another Federal agency.</SUBJECT> <SECTNO>17.102</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> <SECTNO>17.103</SECTNO> <SUBJECT>Exceptions to notice requirements.</SUBJECT> <SECTNO>17.104</SECTNO> <SUBJECT>Review within the Department of a determination of indebtedness.</SUBJECT> <SECTNO>17.105</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> <SECTNO>17.106</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to administrative offset.</SUBJECT> <SECTNO>17.107</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> <SECTNO>17.108</SECTNO> <SUBJECT>Types of review.</SUBJECT> <SECTNO>17.109</SECTNO> <SUBJECT>Review procedures.</SUBJECT> <SECTNO>17.110</SECTNO> <SUBJECT>Determination of indebtedness and appeal from determination.</SUBJECT> <SECTNO>17.111</SECTNO> <SUBJECT>Procedures for administrative offset: single debt.</SUBJECT> <SECTNO>17.112</SECTNO> <SUBJECT>Procedures for administrative offset: multiple debts.</SUBJECT> <SECTNO>17.113</SECTNO> <SUBJECT>Procedures for administrative offset: interagency cooperation.</SUBJECT> <SECTNO>17.114</SECTNO> <SUBJECT>Procedures for administrative offset: time limitation.</SUBJECT> <SECTNO>17.115</SECTNO> <SUBJECT>Procedures for administrative offset: offset against amounts payable from Civil Service Retirement and Disability Fund.</SUBJECT> <SECTNO>17.116</SECTNO> <SUBJECT>Procedures for administrative offset: offset of debtor's judgment against the United States.</SUBJECT> <SECTNO>17.117</SECTNO> <SUBJECT>Procedures for administrative offset: imposition of interest.</SUBJECT> <SECTNO>17.118</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Salary Offset Provisions</HD> <SECTNO>17.125</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>17.126</SECTNO> <SUBJECT>Coordinating offset with another Federal agency.</SUBJECT> <SECTNO>17.127</SECTNO> <SUBJECT>Determination of indebtedness.</SUBJECT> <SECTNO>17.128</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> <SECTNO>17.129</SECTNO> <SUBJECT>Request for a hearing.</SUBJECT> <SECTNO>17.130</SECTNO> <SUBJECT>Result if employee fails to meet deadlines.</SUBJECT> <SECTNO>17.131</SECTNO> <SUBJECT>Written decision following a hearing.</SUBJECT> <SECTNO>17.132</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> <SECTNO>17.133</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to salary offset.</SUBJECT> <SECTNO>17.134</SECTNO> <SUBJECT>Procedures for salary offset: when deductions may begin.</SUBJECT> <SECTNO>17.135</SECTNO> <SUBJECT>Procedures for salary offset: types of collection.</SUBJECT> <SECTNO>17.136</SECTNO> <SUBJECT>Procedures for salary offset: methods of collection.</SUBJECT> <SECTNO>17.137</SECTNO> <SUBJECT>Procedures for salary offset: imposition of interest.</SUBJECT> <SECTNO>17.138</SECTNO> <SUBJECT>Non-waiver of rights.</SUBJECT> <SECTNO>17.139</SECTNO> <SUBJECT>Refunds.</SUBJECT> <SECTNO>17.140</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">IRS Tax Refund Offset Provisions</HD> <SECTNO>17.150</SECTNO> <SUBJECT>Scope.</SUBJECT> <SECTNO>17.151</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> <SECTNO>17.152</SECTNO> <SUBJECT>Review within the Department of a determination that an amount is past-due and legally enforceable.</SUBJECT> <SECTNO>17.153</SECTNO> <SUBJECT>Determination of the Administrative Judge.<PRTPAGE P="152"/> </SUBJECT> <SECTNO>17.154</SECTNO> <SUBJECT>Postponements, withdrawals and extensions of time.</SUBJECT> <SECTNO>17.155</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> <SECTNO>17.156</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> <SECTNO>17.157</SECTNO> <SUBJECT>Application of offset funds: Single debt.</SUBJECT> <SECTNO>17.158</SECTNO> <SUBJECT>Application of offset funds: Multiple debts.</SUBJECT> <SECTNO>17.159</SECTNO> <SUBJECT>Application of offset funds: Tax refund insufficient to cover amount of debt.</SUBJECT> <SECTNO>17.160</SECTNO> <SUBJECT>Time limitation for notifying the IRS to request offset of tax refunds due.</SUBJECT> <SECTNO>17.161</SECTNO> <SUBJECT>Correspondence with the Department.</SUBJECT> </SUBJGRP> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-18, 3721, and 5 U.S.C. 5514; 42 U.S.C. 3535(d). </AUTH> <SUBPART> <HD SOURCE="HED">Subpart A—Claims Against Government Under Federal Tort Claims Act</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 5514; 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-3718, 3721; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 36 FR 24427, Dec. 22, 1971, unless otherwise noted. </SOURCE> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 17.1</SECTNO> <SUBJECT>Scope; definitions.</SUBJECT> (a) This subpart applies to claims asserted under the Federal Tort Claims Act, as amended, accruing on or after January 18, 1967, for money damages against the United States for injury to or loss of property or personal injury or death caused by the negligent or wrongful act or omission of an officer or employee of the Department while acting within the scope of his office or employment. (b) This subpart is issued subject to and consistent with applicable regulations on administrative claims under the Federal Tort Claims Act issued by the Attorney General (31 FR 16616; 28 CFR part 14). (c) The terms <E T="03">Department</E> and <E T="03">Organizational unit</E> are defined in 24 CFR part 5. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 61 FR 5204, Feb. 9, 1996]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Procedures</HD> <SECTION> <SECTNO>§ 17.2</SECTNO> <SUBJECT>Administrative claim; when presented; appropriate HUD office.</SUBJECT> (a) For purposes of this subpart, a claim shall be deemed to have been presented when the Department receives, at a place designated in paragraph (b) of this section, an executed <E T="03">Claim for Damages or Injury,</E> Standard Form 95, or other written notification of an incident, accompanied by a claim for money damages in a sum certain for injury to or loss of property, for personal injury, or for death alleged to have occurred by reason of the incident. A claim which should have been presented to the Department, but which was mistakenly addressed to or filed with another Federal agency, is deemed to be presented to the Department as of the date that the claim is received by the Department. If a claim is mistakenly addressed to or filed with the Department, the Department shall forthwith transfer it to the appropriate Federal agency, if ascertainable, or return it to the claimant. (b) A claimant shall mail or deliver his claim to the office of employment of the Department employee or employees whose negligent or wrongful act or omission is alleged to have caused the loss or injury complained of. Where such office of employment is the Department Central Office in Washington, or is not reasonably known and not reasonably ascertainable, claimant shall file his claim with the Assistant Secretary for Administration, Department of Housing and Urban Development, 451 Seventh Street SW., Washington, DC 20410. In all other cases, claimant shall address his claim to the head of the appropriate office, the address of which will generally be found listed in the local telephone directory. </SECTION> <SECTION> <SECTNO>§ 17.3</SECTNO> <SUBJECT>Administrative claim; who may file.</SUBJECT> (a) A claim for injury to or loss of property may be presented by the owner of the property, his duly authorized agent, or his legal representative. (b) A claim for personal injury may be presented by the injured person, his duly authorized agent, or his legal representative. (c) A claim based on death may be presented by the executor or administrator of the decedent's estate, or by any other person legally entitled to assert such a claim in accordance with applicable State law.<PRTPAGE P="153"/> (d) A claim for loss wholly compensated by an insurer with the rights of a subrogee may be presented by the insurer. A claim for loss partially compensated by an insurer with the rights of a subrogee may be presented by the insurer or the insured individually, as their respective interests appear, or jointly. Whenever an insurer presents a claim asserting the rights of a subrogee, he shall present with his claim appropriate evidence that he has the rights of a subrogee. (e) A claim presented by an agent or legal representative shall be presented in the name of the claimant, be signed by the agent or legal representative, show the title or legal capacity of the person signing, and be accompanied by evidence of his authority to present a claim on behalf of the claimant as agent, executor, administrator, parent, guardian, or other representative. </SECTION> <SECTION> <SECTNO>§ 17.4</SECTNO> <SUBJECT>Administrative claim; evidence and information to be submitted.</SUBJECT> (a) <E T="03">Personal injury.</E> In support of a claim for personal injury, including pain and suffering, the claimant may be required to submit the following evidence or information: (1) A written report by his attending physician or dentist setting forth the nature and extent of the injury, nature and extent of treatment, any degree of temporary or permanent disability, the prognosis, period of hospitalization, and any diminished earning capacity. In addition, the claimant may be required to submit to a physical or mental examination by a physician employed or designated by the Department or another Federal agency. A copy of the report of the examining physician shall be made available to the claimant upon the claimant's written request provided that he has, upon request, furnished the report referred to in the first sentence of this subparagraph and has made or agrees to make available to the Department any other physician's report previously or thereafter made of the physical or mental condition which is the subject matter of his claim; (2) Itemized bills for medical, dental, and hospital expenses incurred, or itemized receipts of payment for such expenses; (3) If the prognosis reveals the necessity for future treatment, a statement of expected expenses for such treatment; (4) If a claim is made for loss of time from employment, a written statement from his employer showing actual time lost from employment, whether he is a full- or part-time employee, and wages or salary actually lost; (5) If a claim is made for loss of income and the claimant is self-employed, documentary evidence showing the amount of earnings actually lost; (6) Any other evidence or information which may have a bearing on either the responsibility of the United States for the personal injury or the damages claimed. (b) <E T="03">Death.</E> In support of a claim based on death, the claimant may be required to submit the following evidence or information: (1) An authenticated death certificate or other competent evidence showing cause of death, date of death, and age of the decedent; (2) Decedent's employment or occupation at time of death, including his monthly or yearly salary or earnings (if any), and the duration of his last employment or occupation; (3) Full names, addresses, birth dates, kinship, and marital status of the decedent's survivors, including identification of those survivors who were dependent for support upon the decedent at the time of his death; (4) Degree of support afforded by the decedent to each survivor dependent upon him for support at the time of his death; (5) Decedent's general physical and mental condition before death; (6) Itemized bills for medical and burial expenses incurred by reason of the incident causing death, or itemized receipts of payment for such expenses; (7) If damages for pain and suffering prior to death are claimed, a physician's detailed statement specifying the injuries suffered, duration of pain and suffering, any drugs administered for pain, and the decedent's physical condition in the interval between injury and death; (8) Any other evidence or information which may have a bearing on either the <PRTPAGE P="154"/>responsibility of the United States for the death or the damages claimed. (c) <E T="03">Property damage.</E> In support of a claim for injury to or loss of property, real or personal, the claimant may be required to submit the following evidence or information: (1) Proof of ownership; (2) A detailed statement of the amount claimed with respect to each item of property; (3) An itemized receipt of payment for necessary repairs or itemized written estimates of the cost of such repairs; (4) A statement listing date of purchase, purchase price, and salvage value where repair is not economical; (5) Any other evidence or information which may have a bearing on either the responsibility of the United States for the injury to or loss of property or the damages claimed. </SECTION> <SECTION> <SECTNO>§ 17.5</SECTNO> <SUBJECT>Investigations.</SUBJECT> The Department may investigate, or may request any other Federal agency to investigate, a claim filed under this subpart. </SECTION> <SECTION> <SECTNO>§ 17.6</SECTNO> <SUBJECT>Claims investigation.</SUBJECT> (a) When a claim has been filed with the Department, the head of the organizational unit concerned or his designee shall designate one employee in that unit who shall act as, and who shall be referred to herein as, the Claims Investigating Officer for that particular claim. When a claim is received by the head of an organizational unit to which this subpart applies, it shall be forwarded with or without comment to the designated Claims Investigating Officer, who shall: (1) Investigate as completely as is practicable the nature and circumstances of the occurrence causing the loss or damage of the claimant's property; (2) Ascertain the extent of loss or damage to the claimant's property; (3) Assemble the necessary forms with required data contained therein; (4) Prepare a brief statement setting forth the facts relative to the claim, a statement whether the claim satisfies the requirements of this subpart, and a recommendation as to the amount to be paid in settlement of the claim; (5) Submit such forms, statements, and all necessary supporting papers to the head of the organizational unit having jurisdiction over the employee involved, who will be responsible for assuring that all necessary data has been obtained for the file. The head of the organizational unit will transmit the entire file to the General Counsel. </SECTION> <SECTION> <SECTNO>§ 17.7</SECTNO> <SUBJECT>Authority to adjust, determine, compromise, and settle claims.</SUBJECT> The General Counsel, the Deputy General Counsel, and such employees of the Office of the General Counsel as may be designated by the General Counsel, are authorized to consider, ascertain, adjust, determine, compromise, and settle claims pursuant to the Federal Tort Claims Act, 28 U.S.C. 2671, and the regulations contained in 28 CFR part 14 and in this subpart. </SECTION> <SECTION> <SECTNO>§ 17.8</SECTNO> <SUBJECT>Limitations on authority.</SUBJECT> (a) An award, compromise, or settlement of a claim under section 2672 of Title 28, United States Code, and this subpart in excess of $25,000 may be effected only with the prior written approval of the Attorney General or his designee. For the purpose of this paragraph, a principal claim and any derivative or subrogated claim shall be treated as a single claim. (b) An administrative claim may be adjusted, determined, compromised, or settled only after consultation with the Department of Justice when, in the opinion of the General Counsel or his designee: (1) A new precedent or a new point of law is involved; or (2) A question of policy is or may be involved; or (3) The United States is or may be entitled to indemnity or contribution from a third party, and the Department is unable to adjust the third party claim; or (4) The compromise of a particular claim, as a practical matter, will or may control the disposition of a related claim in which the amount to be paid may exceed $25,000. (c) An administrative claim may be adjusted, determined, compromised, or settled only after consultation with the Department of Justice when the Department is informed or is otherwise <PRTPAGE P="155"/>aware that the United States or an officer, employee, agent, or cost-type contractor of the United States is involved in litigation based on a claim arising out of the same incident or transaction. </SECTION> <SECTION> <SECTNO>§ 17.9</SECTNO> <SUBJECT>Referral to Department of Justice.</SUBJECT> When Department of Justice approval or consultation is required under § 17.8, the referral or request shall be transmitted to the Department of Justice by the General Counsel of the Department or his designee. </SECTION> <SECTION> <SECTNO>§ 17.11</SECTNO> <SUBJECT>Final denial of claim.</SUBJECT> Final denial of an administrative claim shall be in writing, and notification of denial shall be sent to the claimant, his attorney, or legal representative by certified or registered mail. The notification of final denial may include a statement of the reasons for the denial and shall include a statement that, if the claimant is dissatisfied with the Department action, he may file suit in an appropriate U.S. District Court not later than 6 months after the date of mailing of the notification. </SECTION> <SECTION> <SECTNO>§ 17.12</SECTNO> <SUBJECT>Action on approved claim.</SUBJECT> (a) Payment of a claim approved under this subpart is contingent on claimant's execution of: (1) A <E T="03">Claim for Damage or Injury,</E> Standard Form 95; (2) a claims settlement agreement; and (3) a <E T="03">Voucher for Payment,</E> Standard Form 1145, as appropriate. When a claimant is represented by an attorney, the voucher for payment shall designate both the claimant and his attorney as payees, and the check shall be delivered to the attorney, whose address shall appear on the voucher. (b) Acceptance by the claimant, his agent, or legal representative of an award, compromise, or settlement made under section 2672 or 2677 of Title 28, United States Code, is final and conclusive on the claimant, his agent or legal representative, and any other person on whose behalf or for whose benefit the claim has been presented, and constitutes a complete release of any claim against the United States and against any officer or employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter. </SECTION> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Claims Under the Military Personnel and Civilian Employees Claims Act of 1964</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> Sec. 3, 78 Stat. 767 (31 U.S.C. 3721). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 36 FR 24427, Dec. 22, 1971, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.40</SECTNO> <SUBJECT>Scope and purpose.</SUBJECT> (a) This subpart applies to all claims filed by or on behalf of employees of the Department of Housing and Urban Development for loss of or damage to personal property which occurs incident to their service with HUD under the Military Personnel and Civilian Employees’ Claims Act of 1964. A claim must be substantiated and the possession of the property determined to be reasonable, useful, or proper. The maximum amount that can be paid under any claim under the Act is $25,000 and property may be replaced in kind at the option of the Government. Nothing in this subpart shall be construed to bar claims payable under statutory authority. (b) HUD is not an insurer and does not underwrite all personal property losses that an employee may sustain. Employees are encouraged to carry private insurance to the maximum extent practicable to avoid large losses or losses which may not be recoverable from HUD. The procedures set forth in this section are designed to enable the claimant to obtain the maximum amount of compensation for his loss or damage. Failure of the claimant to comply with these procedures may reduce or preclude payment of his claim under this subpart. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.41</SECTNO> <SUBJECT>Claimants.</SUBJECT> (a) A claim pursuant to this subpart may only be made by: (1) An employee of HUD. (2) A former employee of HUD whose claim arises out of an incident occurring before his separation from HUD.<PRTPAGE P="156"/> (3) Survivors of a person named in paragraph (a) (1) or (2) of this section, in the following order of precedence: (i) Spouse. (ii) Children. (iii) Father or mother, or both. (iv) Brothers or sisters, or both. (4) The authorized agent or legal representative of a person named in paragraphs (a) (1), (2), and (3) of this section. (b) A claim may not be presented by or for the benefit of a subrogee, assignee, conditional vendor, or other third party. </SECTION> <SECTION> <SECTNO>§ 17.42</SECTNO> <SUBJECT>Time limitations.</SUBJECT> A claim under this part may be allowed only if: (a) Except as provided in paragraph (b) of this section, it is filed in writing within 2 years after accrual. For purposes of this part, a claim accrues at the time of the accident or incident causing the loss or damage, or at such time as the loss or damage should have been discovered by the claimant by the exercise of due diligence. (b) It cannot be filed within the time limits of paragraph (a) of this section, because it accrues in time of war or in time of armed conflict in which any armed force of the United States is engaged or if such a war or armed conflict intervenes within 2 years after it accrues, and if good cause is shown, and if it is filed not later than 2 years after that cause ceases to exist, or 2 years after the war or armed conflict is terminated, whichever is earlier. </SECTION> <SECTION> <SECTNO>§ 17.43</SECTNO> <SUBJECT>Allowable claims.</SUBJECT> (a) A claim may be allowed only if: (1) The damage or loss was not caused wholly or partly by the negligent or wrongful act of the claimant, his agent, the members of his family, or his private employee (the standard to be applied is that of reasonable care under the circumstances); and (2) The possession of the property lost or damaged and the quantity possessed is determined to have been reasonable, useful, or proper under the circumstances; and (3) The claim is substantiated by proper and convincing evidence. (b) Claims which are otherwise allowable under this part shall not be disallowed solely because the property was not in the possession of the claimant at the time of the damage or loss, or solely because the claimant was not the legal owner of the property for which the claim is made. For example, borrowed property may be the subject of a claim. (c) Subject to the conditions in paragraph (a) of this section, and the other provisions of this subpart, any claim for damage to, or loss of, personal property incident to service with HUD may be considered and allowed. The following are examples of the principal types of claims which may be allowed, but these examples are not exclusive and other types of claims may be allowed, unless excluded by §§ 17.44 and 17.45: (1) <E T="03">Property loss or damage in quarters or other authorized places.</E> Claims may be allowed for damage to, or loss of, property arising from fire, flood, hurricane, other natural disaster, theft, or other unusual occurrence, while such property is located at: (i) Quarters within the 50 States or the District of Columbia that were assigned to the claimant or otherwise provided in kind by the United States; (ii) Quarters outside the 50 States and the District of Columbia that were occupied by the claimant, whether or not they were assigned or otherwise provided in kind by the United States, except when the claimant is a civilian employee who is a local inhabitant; or (iii) Any warehouse, office, working area, or other place (except quarters) authorized or apparently authorized for the reception or storage of property. (2) <E T="03">Transportation or travel losses.</E> Claims may be allowed for damage to, or loss of, property incident to transportation or storage pursuant to orders, or in connection with travel under orders, including property in the custody of a carrier, an agent or agency of the Government, or the claimant. (3) <E T="03">Manufactured homes.</E> Claims may be allowed for damage to, or loss of, manufactured homes and their contents under the provisions of paragraph (c)(2) of this section. Claims for structural damage to manufactured homes, other than that caused by collision, and damage to contents of manufactured homes resulting from such structural damage, must contain conclusive <PRTPAGE P="157"/>evidence that the damage was not caused by structural deficiency of the manufactured home and that it was not overloaded. Claims for damage to, or loss of, tires mounted on manufactured homes will not be allowed, except in cases of collision, theft, or vandalism. (4) <E T="03">Enemy action or public service.</E> Claims may be allowed for damage to, or loss of, property as a direct consequence of: (i) Enemy action or threat thereof, or combat, guerrilla, brigandage, or other belligerent activity, or unjust confiscation by a foreign power or its nationals; (ii) Action by the claimant to quiet a civil disturbance or to alleviate a public disaster; or (iii) Efforts by the claimant to save human life or Government property. (5) <E T="03">Property used for benefit of the Government.</E> Claims may be allowed for damage to, or loss of, property when used for the benefit of the Government at the request of, or with the knowledge and consent of, superior authority. (6) <E T="03">Clothing and accessories.</E> Claims may be allowed for damage to, or loss of, clothing or accessories customarily worn on the person, such as eyeglasses, hearing aids, or dentures. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 50 FR 9268, Mar. 7, 1985]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.44</SECTNO> <SUBJECT>Restrictions on certain claims.</SUBJECT> Claims of the type described in this section are only allowable subject to the restrictions noted: (a) <E T="03">Money or currency.</E> Claims may be allowed for loss of money or currency only when lost incident to fire, flood, hurricane, other natural disaster, or by theft from quarters (as limited by paragraph (a) of § 17.45). In instances of theft from quarters, it must be conclusively shown that the quarters were locked at the time of the theft. Reimbursement for loss of money or currency is limited to an amount which is determined to have been reasonable for the claimant to have had in his possession at the time of the loss. (b) <E T="03">Government property.</E> Claims may only be allowed for property owned by the United States for which the claimant is financially responsible to any agency of the Government other than HUD. (c) <E T="03">Estimate fees.</E> Claims may include fees paid to obtain estimates of repair only when it is clear that an estimate could not have been obtained without paying a fee. In that case, the fee may be allowed only in an amount determined to be reasonable in relation to the value of the property or the cost of the repairs. (d) <E T="03">Automobiles and other motor vehicles.</E> Claims may only be allowed for damage to, or loss of, automobiles and other motor vehicles if: (1) Such motor vehicles were required to be used for official Government business (official Government business, as used here, does not include travel, or parking incident thereto, between quarters and office, or use of vehicles for the convenience of the owner. However, it does include travel, and parking incident thereto, between quarters and assigned place of duty specifically authorized by the employee's supervisor as being more advantageous to the Government); or (2) Shipment of such motor vehicles was being furnished or provided by the Government, subject to the provisions of § 17.46. </SECTION> <SECTION> <SECTNO>§ 17.45</SECTNO> <SUBJECT>Unallowable claims.</SUBJECT> Claims are not allowable for the following: (a) <E T="03">Unassigned quarters in United States.</E> Property loss or damage in quarters occupied by the claimant within the 50 States or the District of Columbia that were not assigned to him or otherwise provided in kind by the United States. (b) <E T="03">Business property.</E> Property used for business or profit. (c) <E T="03">Unserviceable property.</E> Wornout or unserviceable property. (d) <E T="03">Illegal possession.</E> Property acquired, possessed, or transported in violation of law or in violation of applicable regulations or directives. (e) <E T="03">Articles of extraordinary value.</E> Valuable articles, such as cameras, watches, jewelry, furs, or other articles of extraordinary value, when shipped with household goods or as unaccompanied baggage (shipment includes storage). This prohibition does not apply to articles in the personal custody of the <PRTPAGE P="158"/>claimant or articles properly checked, provided that reasonable protection or security measures have been taken by claimant. (f) <E T="03">Minimum amount.</E> Loss or damage amounting to less than $10. </SECTION> <SECTION> <SECTNO>§ 17.46</SECTNO> <SUBJECT>Claims involving carriers or insurers.</SUBJECT> In the event the property which is the subject of a claim was lost or damaged while in the possession of a carrier or was insured, the following procedures will apply: (a) Whenever property is damaged, lost, or destroyed while being shipped pursuant to authorized travel orders, the owner must file a written claim for reimbursement with the last commercial carrier known or believed to have handled the goods, or the carrier known to be in possession of the property when the damage or loss occurred, according to the terms of its bill of lading or contract, before submitting a claim against the Government under this subpart. (1) If more than one bill of lading or contract was issued, a separate demand should be made against the last carrier on each such document. (2) The demand should be made within 9 months of the date that delivery was made, or within 9 months of the date that delivery should ordinarily have been made. (3) If it is apparent that the damage or loss is attributable to packing, storage, or unpacking while in the custody of the Government, no demand need be made against the carrier. (b) Whenever property which is damaged, lost, or destroyed incident to the claimant's service is insured in whole or in part, the claimant must make demand in writing against the insurer for reimbursement under the terms and conditions of the insurance coverage, prior to the filing of the concurrent claim against the Government. (c) Failure to make a demand on a carrier or insurer or to make all reasonable efforts to protect and prosecute rights available against a carrier or insurer and to collect the amount recoverable from the carrier or insurer may result in reducing the amount recoverable from the Government by the maximum amount which would have been recoverable from the carrier or insurer, had the claim been timely or diligently prosecuted. However, no deduction will be made where the circumstances of the claimant's service preclude reasonable filing of such a claim or diligent prosecution, or the evidence indicates a demand was impracticable or would have been unavailing. (d) Following the submission of the claim against the carrier or insurer, the claimant may immediately submit his claim against the Government in accordance with the provisions of this subpart, without waiting until either final approval or denial of his claim is made by the carrier or insurer. (1) Upon submitting his claim, he will certify in his claim that he has or has not gained any recovery from a carrier or insurer, and enclose all correspondence pertinent thereto. (2) If final action has not been taken by the carrier or insurer on his claim, he will immediately notify them to address all correspondence in regard to his claim to him, in care of the General Counsel of HUD. (3) The claimant shall advise the General Counsel of any action taken by the carrier or insurer on his claim and upon request shall furnish all correspondence documents, and other evidence pertinent to the matter. (e) The claimant will assign to the United States to the extent of any payment on his claim accepted by him, all his right, title and interest in any claim he may have against any carrier, insurer, or other party arising out of the incident on which the claim against the United States is based. After payment of his claim by the United States, the claimant will, upon receipt of any payment from a carrier or insurer, pay the proceeds to the United States to the extent of the payment received by him from the United States. (f) Where a claimant recovers for the loss from the carrier or insurer before his claim under this subpart is settled, the amount or recovery shall be applied to his claim as follows: (1) When the amount recovered from a carrier, insurer, or other third party is greater than or equal to the claimant's total loss as determined under <PRTPAGE P="159"/>this part, no compensation is allowable under this part. (2) When the amount recovered is less than such total loss, the allowable amount is determined by deducting the recovery from the amount of such total loss. (3) For the purpose of this paragraph (f) the claimant's total loss is to be determined without regard to the $6,500 maximum set forth above. However, if the resulting amount, after making this deduction, exceeds $6,500, the claimant will be allowed only $6,500. </SECTION> <SECTION> <SECTNO>§ 17.47</SECTNO> <SUBJECT>Settlement of claims.</SUBJECT> (a) The General Counsel, HUD, is authorized to settle (consider, ascertain, adjust, determine, and dispose of, whether by full or partial allowance or disallowance) any claim under this subpart. (b) The General Counsel may formulate such procedures and make such redelegations as may be required to fulfill the objectives of this subpart. (c) The General Counsel shall conduct such investigation as may be appropriate in order to determine the validity of a claim. (d) The General Counsel shall notify a claimant in writing of action taken on his claim, and if partial or full disallowance is made, the reasons therefor. (e) In the event a claim submitted against a carrier under § 17.46 has not been settled before settlement of the claim against the Government pursuant to this subpart, the General Counsel shall notify such carrier or insurer to pay the proceeds of the claim to HUD to the extent HUD has paid such to claimant in settlement. </SECTION> <SECTION> <SECTNO>§ 17.48</SECTNO> <SUBJECT>Computation of amount of award.</SUBJECT> (a) The amount allowed for damage to or loss of any item of property may not exceed the cost of the item (either the price paid in cash or property, or the value at the time of acquisition if not acquired by purchase or exchange); and there will be no allowance for replacement cost or for appreciation in the value of the property. Subject to these limitations, the amount allowable is either: (1) The depreciated value, immediately prior to the loss or damage, of property lost or damaged beyond economical repair, less any salvage value; or (2) The reasonable cost of repairs, when property is economically repairable, provided that the cost of repairs does not exceed the amount allowable under paragraph (a)(1) of this section. (b) Depreciation in value is determined by considering the type of article involved, its cost, its condition when damaged or lost, and the time elapsed between the date of acquisition and the date of damage or loss. (c) Replacement of lost or damaged property may be made in kind whenever appropriate. </SECTION> <SECTION> <SECTNO>§ 17.49</SECTNO> <SUBJECT>Attorney's fees.</SUBJECT> No more than 10 per centum of the amount paid in settlement of each individual claim submitted and settled under this subpart shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with that claim. </SECTION> <SECTION> <SECTNO>§ 17.50</SECTNO> <SUBJECT>Claims procedures.</SUBJECT> (a) Claims by, or on behalf of, employees of field offices shall be filed in writing with the appropriate Regional Counsel. Claims by, or on behalf of, employees of Department Headquarters shall be filed in writing with the General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Washington, DC 20410. (b) Each written claim shall contain, as a minimum: (1) Name, address, place of employment of claimant. (2) Place and date of loss or damage. (3) A brief statement of the facts and circumstances surrounding loss or damage. (4) Cost, date, and place of acquisition of each piece of property lost or damaged. (5) Two itemized repair estimates, or value estimates, whichever is applicable. (6) Copies of police reports, if applicable. (7) With respect to claims involving thefts or losses in quarters or other <PRTPAGE P="160"/>places where the property was reasonably kept, a statement as to what security precautions were taken to protect the property involved. (8) With respect to claims involving property being used for the benefit of the Government, a statement by the employee's supervisor evidencing that the claimant was required to provide such property or that his providing it was in the interest of the Government. (9) Other evidence as may be required by the General Counsel. <CITA>[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Procedures for the Collection of Claims by the Government</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 31 U.S.C. 3711, 3716-18, and 5 U.S.C. 5514; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 36 FR 24427, Dec. 22, 1971, unless otherwise noted. Redesignated at 49 FR 32349, Aug. 14, 1984. </SOURCE> <SUBJGRP> <HD SOURCE="HED">General Provisions</HD> <SECTION> <SECTNO>§ 17.60</SECTNO> <SUBJECT>Scope and definitions.</SUBJECT> (a) <E T="03">Scope.</E> This subpart sets forth the regulations of the Secretary of Housing and Urban Development implementing the Federal Claims Collection Act of 1966, as amended by the Federal Debt Collection Act of 1982 (31 U.S.C. 3701 <E T="03">et seq</E>.) (the Act), in conformity with the standards jointly promulgated by the Attorney General and the Comptroller General in 4 CFR parts 101 through 105. The Act: (1) Requires the Secretary or his designee to attempt collection of all claims of the United States for money or property arising out of the activities of the Department; and (2) Authorizes the Secretary or his designee to compromise claims that have not been referred to another executive or legislative agency for further collection action where the claim does not exceed $100,000 exclusive of interest, or to suspend or terminate collection action where it appears that no person liable on the claim has the present or prospective financial ability to pay any significant sum thereon or that the cost of collecting the claim is likely to exceed the amount of recovery. (b) <E T="03">Definitions</E>. As used in this subpart: <E T="03">Administrative offset</E> means withholding money payable by the United States Government to, or held by the Government for, a person to satisfy a debt the person owes the Government <E T="03">Agency</E> means: (1) An Executive department, military department, Government corporation, or independent establishment as defined in 5 U.S.C. 101, 102, 103, or 104, respectively; (2) The United States Postal Service; or (3) The Postal Rate Commission. <E T="03">Claim</E> means the same as <E T="03">Debt</E>. <E T="03">Consumer Reporting Agency</E> means: (1) Any person, that for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer (individual) credit information or other information on consumers for the purpose of providing consumer reports to third parties, and that uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. (15 U.S.C. 1681a(f)); or (2) Any person who, for monetary fees, dues, or on a cooperative basis, regularly engages in whole or in part in the practice of (i) obtaining credit or other information on consumers for the purpose of furnishing such information to consumer reporting agencies (as defined in paragraph (1) of this definition), or (ii) serving as a marketing agent under arrangements enabling third parties to obtain such information from such reporting agencies. <E T="03">Debt</E> means an amount owed to the United States and past due, from sources which include loans insured or guaranteed by the United States and all other amounts due the United States from assigned mortgages or deeds of trust, direct loans, advances, repurchase demands, fees, leases, rents, royalties, services, sale of real or personal property, overpayments, penalties, damages, interest, fines and forfeitures (except those arising under the Uniform Code of Military Justice), and all other similar sources. <E T="03">Debtor</E> means the same as <E T="03">person</E>.<PRTPAGE P="161"/> <E T="03">Department</E> means the Department of Housing and Urban Development. <E T="03">Department Claims Officer:</E> (see § 17.66). <E T="03">Determination</E> means the point at which the Secretary decides that the debt is valid. <E T="03">Disposable pay</E> means that part of current basic pay, special pay, incentive pay, retired pay, retainer pay, or in the case of an employee not entitled to basic pay, other authorized pay remaining after deductions required by law. Deductions from pay include: (1) Amounts owed by the individual to the United States; (2) Amounts withheld for Federal employment taxes; (3) Amounts properly withheld for Federal, State, or local income tax purposes, if the withholding of the amount is authorized or required by law and if amounts withheld are not greater than would be the case if the individual claimed all dependent to which he or she were entitled. The withholding of additional amounts under 26 U.S.C. 3402(i) may be permitted only when the individual presents evidence of tax obligation which supports the additional withholding; (4) Amounts deducted as health insurance premiums, including, but not limited to, amounts deducted from civil service annuities for Medicare where such deductions are requested by the Health Care Financing Administration; (5) Amounts deducted as normal retirement contributions, not including amounts deducted for supplementary coverage. Amounts withheld as Survivor Benefit Plan or Retired Serviceman's Family Protection Plan payments are considered to be normal retirement contributions. Amounts voluntarily contributed toward additional civil service annuity benefits are considered to be supplementary; (6) Amounts deducted as normal life insurance premiums from salary or other remuneration for employment, not including amounts deducted for supplementary coverage. Both Servicemen's Group Life Insurance and “Basic Life” Federal Employees’ Group Life Insurance premiums are considered to be normal life insurance premiums; all optional Federal Employees’ Group Life Insurance premiums and life insurance premiums paid for by allotment, such as National Service Life Insurance, are considered to be supplementary; (7) Amounts withheld from benefits payable under title II of the Social Security Act where the withholding is required by law; (8) Amounts mandatorily withheld for the U.S. Soldiers’ and Airmen's Home; and (9) Fines and forfeitures ordered by a court-martial or by a commanding officer. <E T="03">Employee</E> means a current employee of a Federal agency, including a current member of the Armed Forces or Reserve of the Armed Forces of the United States. <E T="03">Office</E> means the organization of each Assistant Secretary, the Government National Mortgage Association (GNMA), the Solar Energy and Energy Conservation Bank and each Field Office. <E T="03">Pay</E> means basic pay, special pay, income pay, retired pay, retainer pay, or, in case of an employee not entitled to basic pay, other authorized pay. <E T="03">Person</E> means any natural person or persons, profit or nonprofit corporations, partnership, association, trust, estate, government or government subdivision or other entity which is capable of owing a debt to the Government. For purposes of the interest provisions, person does not include an agency of the United States Government, a State government, or a unit of general local government. <E T="03">Salary offset</E> means a deduction from the pay of an employee without his or her consent to satisfy a debt. Salary offset is one type of administrative offset which may be used by the Department in the collection of claims. <E T="03">Secretary</E> means the Secretary of the Department of Housing and Urban Development or his or her designee. <E T="03">United States</E> includes an <E T="03">agency</E> of the United States. <E T="03">Waiver</E> means the cancellation, remission, forgiveness, or non-recovery of a debt allegedly owed by an employee of an agency as permitted or required by 5 U.S.C. 5584, 10 U.S.C. 2774, <PRTPAGE P="162"/>32 U.S.C. 716, or 5 U.S.C. 8346(b), or any other law. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated and amended at 49 FR 32349, Aug. 14, 1984; 59 FR 34579, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.61</SECTNO> <SUBJECT>Incorporation of joint standards by reference.</SUBJECT> All administrative actions to collect claims arising out of the activities of the Department shall be performed in accordance with the applicable standards prescribed in 4 CFR parts 101 through 105, which are incorporated by reference and supplemented in this subpart. </SECTION> <SECTION> <SECTNO>§ 17.62</SECTNO> <SUBJECT>Subdivision and joining of claims.</SUBJECT> (a) A debtor's liability arising from a particular transaction or contract shall be considered as a single claim in determining whether the claim is one not exceeding $100,000 exclusive of interest for the purpose of compromise or termination of collection action. Such a claim may not be subdivided to avoid the monetary ceiling established by the Act. (b) Joining of two or more single claims in a demand upon a particular debtor for payment totaling more than $100,000 does not preclude compromise or termination of collection action with respect to any one of such claims that does not exceed $100,000 exclusive of interest. <CITA>[59 FR 34579, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.63</SECTNO> <SUBJECT>Authority of offices to attempt collection of claims.</SUBJECT> The head of each office shall designate a claims collection officer, who shall attempt to collect in full all claims of the Department for money or property arising out of the activities of such office. Each claims collection officer shall establish and currently maintain a file with regard to each claim for which collection activities are undertaken. <CITA>[40 FR 28599, July 7, 1975. Redesignated at 49 FR 32349, Aug. 14, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.64</SECTNO> <SUBJECT>Referral of claims to the Assistant Secretary for Administration.</SUBJECT> (a) <E T="03">Authority of the Assistant Secretary for Administration.</E> The Assistant Secretary for Administration shall exercise the powers and perform the duties of the Secretary to compromise, or to suspend or terminate collection action on all Department claims not exceeding $100,000 exclusive of interest, except as provided in § 17.65 and paragraph (b) of this section. When initial attempts at collection by the office having responsibility for such claims have not been fully successful, the claim file shall be forwarded to the Assistant Secretary for Administration for further administrative collection procedures. Claims shall be referred to the Assistant Secretary for Administration well within the applicable statute of limitations (28 U.S.C. 2415 and 2416), but in no event more than 2 years after the claims accrued. (b) <E T="03">Exclusions.</E> There shall be no compromised or terminated collection action with respect to any claim: (1) As to which there is an indication of fraud, the presentation of a false claim, or misrepresentation on the part of the debtor or any other party having an interest in the claim; (2) based in whole or in part on conduct in violation of the anti-trust laws; (3) based on tax statutes; or (4) arising from an exception made by the General Accounting Office in the account of an accountable officer. Such claims shall be promptly referred to the Justice Department or GAO, as appropriate. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984 (interim), as amended at 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.65</SECTNO> <SUBJECT>Authority of offices to compromise claims or suspend or terminate collection action.</SUBJECT> (a) <E T="03">Small claims.</E> The Assistant Secretary for Administration periodically shall establish and disseminate to claims collection officers a maximum dollar amount up to which claims collection officers are authorized to compromise a claim or suspend or terminate collection action on a claim. (b) <E T="03">Claims arising under certain programs.</E> (1) The office primarily responsible for the following programs of the Department is authorized, in those cases where initial collection attempts <PRTPAGE P="163"/>are not wholly successful, to compromise or to suspend or terminate collection action on claims not exceeding $100,000 with respect to: (i) A claim under title I of the National Housing Act; (ii) A claim on a rehabilitation loan account under section 312 of the Housing Act of 1964; (iii) A claim against tenants or former tenants of properties acquired by, or under the custody of, the Secretary or held by him as mortgagee in possession; or (iv) A claim arising out of the operational (nonadministrative) activities of the Government National Mortgage Association (GNMA). (2) However, no office shall undertake to compromise or terminate any collection action excluded under § 17.64(b). <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984, and amended at 52 FR 35414, Sept. 21, 1987; 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.66</SECTNO> <SUBJECT>Department claims officer.</SUBJECT> The Assistant Secretary for Administration shall designate a subordinate official as Department Claims Officer, who shall be responsible for the establishment and maintenance of procedures within the Department relating to the collection of claims and the co-ordination of all collection activities in all Department offices. <CITA>[40 FR 28599, July 7, 1975. Redesignated at 49 FR 32349, Aug. 14, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.67</SECTNO> <SUBJECT>Claims files.</SUBJECT> Each claims collection officer is responsible for obtaining current credit data about each person against whom a claim is pending in his office. The file shall be kept reasonably up to date by the Department Claims Officer for claims referred to the Assistant Secretary for Administration for collection. Such credit data may take the form of: (a) A commercial credit report, (b) an agency investigative report showing the debtor's assets and liabilities and his income and expenses, (c) the individual debtor's own financial statement executed under penalty of perjury reflecting his assets and liabilities and his income and expenses, or (d) an audited balance sheet of a corporate debtor. The file should also contain a checklist or brief summary of actions taken to collect or comprise a claim. </SECTION> <SECTION> <SECTNO>§ 17.68</SECTNO> <SUBJECT>Monthly report of collection action.</SUBJECT> The Department Claims Officer shall make a monthly report to the Assistant Secretary for Administration and all offices that have referred claims for collection. The report should contain the following information as a minimum: (a) All outstanding claims referred to the Assistant Secretary for Administration for administrative collection, including the name and address of the debtor, the amount of the claim, the date the claim accrued, the basis of the claim, the office referring the claim, and the current progress of collection activities. (b) All claims compromised or on which collection has been suspended or terminated or referred to GAO or Justice for further collection action during the month. The collection action taken and the basis for the action should be indicated. (c) All claims referred to the Department of Justice under § 17.64(a). (d) Claims returned to this Department by the Justice Department for further collection action because Justice's handling was not warranted. </SECTION> <SECTION> <SECTNO>§ 17.69</SECTNO> <SUBJECT>Accounting control.</SUBJECT> Each office and the Department Claims Officer shall process all claims collections through the appropriate accounting office and report the collection, compromise, suspension and termination of all claims to the appropriate accounting office for recording. </SECTION> <SECTION> <SECTNO>§ 17.70</SECTNO> <SUBJECT>Record retention.</SUBJECT> The file of each claim on which administrative collection action has been completed shall be retained by the appropriate office or the Assistant Secretary for Administration not less than 1 year after the applicable statute of limitations has run. </SECTION> <SECTION> <SECTNO>§ 17.71</SECTNO> <SUBJECT>Suspension or revocation of eligibility.</SUBJECT> (a) Where a contractor, grantee, or other participant in programs sponsored by the Department fails to pay <PRTPAGE P="164"/>his debts to the Department within a reasonable time after demand, the fact shall be reported by the Assistant Secretary for Administration to the Inspector General, who shall place such defaulting participant's name on the Department's list of debarred, suspended and ineligible contractors and grantees and the participant will be so advised. (b) The failure of any surety to honor its obligations in accordance with 6 U.S.C. 11 is to be reported at once to the Assistant Secretary for Administration who shall so advise the Treasury Department. The Treasury Department will notify this Department when a surety's certificate of authority to do business with the Government has been revoked or forfeited. </SECTION> <SECTION> <SECTNO>§ 17.72</SECTNO> <SUBJECT>Methods of collection and imposition of late charges.</SUBJECT> (a) <E T="03">Demand for payment.</E> Appropriate written demands shall be made upon the debtor which shall include information relating to the consequences of his failure to cooperate. (b) <E T="03">Methods of collection: Administrative and salary offset.</E> The Department may use administrative offset and salary offset procedures as alternative methods for the collection of money owed the Department from those set out in this section. For specific procedures on administrative offset see §§ 17.100 through 17.118. For specific procedures on salary offset see §§ 17.125 through 17.140. (c) <E T="03">Method of collection: Liquidation of collateral.</E> Where the Department holds security or collateral that may be liquidated and the proceeds applied on debts due it through the exercise of a power of sale in the security instrument, such procedures will be followed if the debtor fails to pay his or her debt within a reasonable time after demand, unless the cost of disposing of the collateral will be disproportionate to its value, or unless special circumstances require judicial foreclosure. (d) <E T="03">Collection in installments.</E> Claims with accrued interest should be collected in full in one lump sum whenever this is possible. However, if the debtor is financially unable to pay the indebtedness in one lump sum, payment may be accepted in regular installments. (e) <E T="03">Interest.</E> Where prejudgment interest is not mandated by statute, contract or regulation, the minimum rate of interest to be charged on delinquent debts is the Tax and Loan Account Rate for the U.S. Treasury (also known as the Current Value of Funds rate) as prescribed and published semiannually by the Secretary of the Treasury in the <E T="04">Federal Register</E>, in accordance with 31 U.S.C. 3717. Prejudgment interest may be waived as an inducement to voluntary payment. In such cases demand letters should inform the debtor that prejudgment interest will be collected if suit becomes necessary. When a debt is paid in installments and interest is collected, installment payments will first be applied to the payment of accrued interest and then to principal unless a different rule is prescribed by statute, contract or regulation. Prejudgment interest shall not be demanded or collected on civil penalty and forfeiture claim unless the statute under which the claim arises authorizes the collection of such interest. (f) <E T="03">Omission not a defense.</E> Failure of HUD to comply with any standard prescribed in 4 CFR parts 101 through 105 or in this subpart shall not be available as a defense to any debtor. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated and amended at 49 FR 32349, 32350, Aug. 14, 1984; 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.73</SECTNO> <SUBJECT>Standards for compromise of claims.</SUBJECT> (a) <E T="03">Compromise offer.</E> An offer to compromise may be accepted: (1) If there is real doubt concerning the Department's ability to prove its case in court for the full amount claimed; (2) if the cost of collecting the claim does not justify the enforced collection of the full amount; (3) if in connection with statutory penalties of forfeitures established as an aid to enforcement and to compel compliance, the Department's enforcement policy will be adequately served by acceptance of the sum to be agreed upon, or (4) for other reasons deemed valid by the Assistant Secretary for Administration (or other designee) and made a part of the claim record.<PRTPAGE P="165"/> (b) <E T="03">Documentary evidence of compromise.</E> No compromise of a claim shall be final or binding on the Department unless it is in writing and signed by the appropriate officer who has authority to compromise the claim pursuant to this subpart. </SECTION> <SECTION> <SECTNO>§ 17.74</SECTNO> <SUBJECT>Standards for suspension or termination of collection action.</SUBJECT> (a) <E T="03">Suspension of collection action.</E> Collection action shall be suspended temporarily on a claim when the debtor cannot be located after diligent effort but there is reason to believe that future collection action may be sufficiently productive to justify periodic review and action on the claim, having consideration for its size and the amount which may be realized. Collection action may be suspended temporarily on a claim when the debtor owns no substantial equity in realty and is presently unable to make payment on the Department's claim or effect a compromise, but his future prospects justify retention of the claim for periodic review and action and (1) the applicable statute of limitations has been tolled or started anew or (2) future collection can be effected by offset notwithstanding the statute of limitations. Suspension as to a particular debtor should not defer the early liquidation of security for the debt. (b) <E T="03">Termination of collection action.</E> Collection action may be terminated and the Department file closed for the following reasons: (1) No substantial amount can be collected; (2) the debtor cannot be located; (3) the cost will exceed recovery; (4) the claim is legally without merit; or (5) the claim cannot be substantiated by evidence. </SECTION> <SECTION> <SECTNO>§ 17.75</SECTNO> <SUBJECT>Referral to GAO or Justice Department.</SUBJECT> (a) <E T="03">Claims referred.</E> Claims which cannot be collected, compromised, or terminated in accordance with 4 CFR parts 101 to 105 will be referred to the General Accounting Office in accordance with 31 U.S.C. 71 or to the Department of Justice if this Department has been granted an exception from referrals to the General Accounting Office. Also, if there is doubt as to whether collection action should be suspended or terminated on a claim, the claim may be referred to the General Accounting Office for advice. When recovery of a judgment is prerequisite to imposition of administrative sanctions, the claim may be referred to the Justice Department for litigation even though termination of collection activity might otherwise be considered. (b) <E T="03">Prompt referral.</E> Such referrals shall be made as early as possible consistent with aggressive collection action, and in any event, well within the statute of limitations for bringing suit against the debtor. </SECTION> <SECTION> <SECTNO>§ 17.76</SECTNO> <SUBJECT>Disclosure to a consumer reporting agency.</SUBJECT> (a) <E T="03">Definition.</E> For purposes of this section, individual means a natural person. (b) <E T="03">Conditions for disclosure.</E> The Secretary may disclose to a Consumer Reporting Agency information from a system of records to the effect that an individual is responsible for a debt. Before doing so, the Secretary will ensure that: (1) The notice for the system of records required by the Privacy Act of 1974 (5 U.S.C. 552a(e)(4)) indicates that the information in the system may be disclosed to a Consumer Reporting Agency; (2) There has been Departmental review of the debt and a determination that the debt is valid and overdue; (3) There has been written notice sent to the individual informing the individual: (i) That payment of the debt is overdue; (ii) That the Department intends to disclose to a Consumer Reporting Agency, within not less than 60 days after sending the notice, that the individual is responsible for the debt; (iii) Of the specific information intended to be disclosed to the Consumer Reporting Agency; and (iv) Of the rights of the individual to a full explanation of the debt, to dispute any information in the records of the Department concerning the debt, as determined by the Secretary, and to administrative appeal or review with respect to the debt; and (4) The individual has neither repaid or agreed to repay the debt under a written repayment plan signed by the <PRTPAGE P="166"/>individual and agreed to by the Secretary nor has filed for review of the claim under paragraph (c) of this section. (c) <E T="03">Limitations on disclosure.</E> The Secretary may not disclose information to a Consumer Reporting Agency unless the Department has: (1) Obtained satisfactory assurances from each Consumer Reporting Agency that the agency is complying with the Fair Credit Reporting Act (15 U.S.C. 1681) and any other Federal laws governing the provision of consumer credit information; (2) Provided, upon request by the individual alleged to be responsible for the claim, the opportunity to review the claim, including an opportunity for reconsideration of the initial decision on the claim; and (3) Taken reasonable action to locate an individual for whom the Secretary does not have a current address to send a notice under paragraph (b)(3) of this section. (d) <E T="03">Additional responsibilities of the Department.</E> In providing information to a Consumer Reporting Agency, the Department will only disclose: (1) Information necessary to establish the identity of the individual, including name, address and taxpayer identification number; (2) The amount, status, and history of the claim; and (3) The program under which the claim arose. <FP>In all cases, the Department will notify each Consumer Reporting Agency to which the original disclosure was made of any substantial change in the condition or amount of the claim. This includes promptly correcting or verifying information about the claim requested by the Consumer Reporting Agency.</FP> <CITA>[49 FR 32350, Aug. 14, 1984]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.77</SECTNO> <SUBJECT>Contracts for collection services.</SUBJECT> The Secretary may enter into a contract or contracts for collection services to recover indebtedness owed the Department. Any such contract will include the following provisions: (a) The Secretary retains the authority to resolve a dispute, compromise a claim, end collection action or refer a matter to the Attorney General to bring civil action; (b) The person contracted with by the Secretary is subject to the Privacy Act of 1974 to the extent provided for in 5 U.S.C. 552a(m), the section on government contractors; (c) The person contracted with by the Secretary is subject to State and Federal laws governing debt collection practices, such as the Debt Collection Practices Act, 15 U.S.C. 1692; and (d) The person contracted with agrees to provide to the Secretary, if asked to return the file to the Department so that the Secretary may refer the account to the Department of Justice for litigation, any data contained in the files relating to actions previously taken to collect the debt, the current address of the debtor, as well as the current credit data of the debtor or any current other information requested and available. <CITA>[49 FR 32350, Aug. 14, 1984]</CITA> </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Administrative Offset Provisions</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> Sections 17.100 through 17.118, 49 FR 32351, appear at Aug. 14, 1984, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.100</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) The standards set forth in §§ 17.100 through 17.118 are the Department's procedures for the collection of money owed to the government by means of administrative offset. These procedures apply to the collection of debts as authorized by common law, by 31 U.S.C. 3716, or under other statutory authority. These procedures will not be used when a statute provides its own collection procedure, for procedures for grant reduction as a remedial action in grant programs (including the CDBG program), when explicitly prohibited by a statute, or when the United States has a judgment against the debtor. Unless otherwise provided for by statute, these procedures do not apply to an agency of the United States, a State government, or unit of general local government. In addition, these procedures do not apply to debts arising under the Internal Revenue Code of 1954 (26 U.S.C. 1-9602), the Social Security Act (42 U.S.C. 301-1397f), or the tariff laws of the United States.<PRTPAGE P="167"/> (b) The Secretary will use administrative offset to collect claims which are certain in amount in every instance in which collection is determined to be feasible and not prohibited by law. The Secretary will determine feasibility on a case-by-case basis, exercising sound discretion. In determining feasibility the Secretary will consider: (1) The debtor's financial condition; (2) Whether offset would substantially interfere with or defeat the purposes of the program authorizing the payments against which offset is contemplated; and (3) Whether offset best serves to further and protect all of the interests of the United States. </SECTION> <SECTION> <SECTNO>§ 17.101</SECTNO> <SUBJECT>Coordinating administrative offset with another Federal agency.</SUBJECT> (a) <E T="03">When HUD is owed the debt.</E> When the Department is owed a debt, but another Federal agency is responsible for making the payment to the debtor against which administrative offset is sought, the other agency shall not initiate the requested administrative offset until the Department provides the agency with a written certification that the debtor owes the Department a debt (including the amount and basis of the debt and the due date of the payment) and that the Department has complied with these regulations. (b) <E T="03">When another agency is owed the debt.</E> The Department may administratively offset money it owes to a person who is indebted to another agency if requested to do so by that agency. Such a request must be accompanied by a certification by the requesting agency that the person owes the debt (including the amount) and that the person has been given the procedural rights required by 31 U.S.C. 3716 and 4 CFR part 102. </SECTION> <SECTION> <SECTNO>§ 17.102</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> Except as provided in § 17.103, deductions will be made only after the Secretary makes a determination that an amount is owed and past due and provides the debtor with a minimum of 30 calendar days written notice. This Notice of Intent to Collect by Administrative Offset (Notice of Intent) will state: (a) The nature and amount of the debt: (b) That the Secretary intends to collect the debt by administrative offset until the debt and all accumulated interest and other charges are paid in full; (c) That the debtor has a right to obtain review within the Department of the Secretary's initial determination of indebtedness (see § 17.104); (d) That the debtor has a right to inspect and copy Department records related to the debt, as determined by the Secretary, and will be informed as to where and when the inspection and copying can be done after the Department receives notice from the debtor that inspection and copying are requested. (see § 17.105); and (e) That the debtor may enter into a written agreement with the Secretary to repay the debt, so long as the terms of the repayment agreement proposed by the debtor are agreeable to the Secretary (see § 17.106). </SECTION> <SECTION> <SECTNO>§ 17.103</SECTNO> <SUBJECT>Exceptions to notice requirements.</SUBJECT> (a) In cases where the notice requirements specified in § 17.102 already have been provided to the debtor in connection with the same debt under some other proceeding, the Secretary is not required to duplicate those requirements before effecting administrative offset. (b) The Secretary may effect administrative offset against a payment to be made to a debtor before completion of the procedures required by § 17.102 if (1) failure to make the offset would substantially prejudice the Government's ability to collect the debt, and (2) the time before the payment is to be made does not reasonably permit the completion of those procedures. Such prior offset must be followed promptly by the completion of those procedures. Amounts recovered by offset but later found not to be owed to the Secretary will be refunded promptly. </SECTION> <SECTION> <SECTNO>§ 17.104</SECTNO> <SUBJECT>Review within the Department of a determination of indebtedness.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who receives a Notice of Intent has the right to request Departmental review <PRTPAGE P="168"/>of the determination of indebtedness. To exercise this right, the debtor must send a letter requesting review to the Secretary. The letter must explain why the debtor seeks review and must be received by the Secretary within 20 calendar days of the date of the Department's Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to a timely request for review of the initial determination of indebtedness, the Secretary will notify the debtor whether review will be by review of the record or by hearing. The notice to the debtor will include the procedures used for reviewing the record or will include information on the date, location and procedures to be used if review is by a hearing. </SECTION> <SECTION> <SECTNO>§ 17.105</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who intends to inspect or copy Departmental records related to the debt as determined by the Secretary must send a letter to the Secretary stating his or her intention. The letter must be received by the Secretary within 20 calendar days of the date of the Department's Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to timely notification by the debtor as described in paragraph (a) of this section, the Secretary will notify the debtor of the location and time when the debtor may inspect or copy Department records related to the debt. </SECTION> <SECTION> <SECTNO>§ 17.106</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to administrative offset.</SUBJECT> (a) <E T="03">Notification by debtor.</E> The debtor may, in response to a Notice of Intent, propose a written agreement to repay the debt as an alternative to administrative offset. Any debtor who wishes to do this must submit a proposed written agreement to repay the debt. This proposed written agreement must be received by the Secretary within 20 calendar days of the date of the Department's Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to timely notification by the debtor as described in paragraph (a) of this section, the Secretary will notify the debtor whether the debtor's proposed written agreement for repayment is acceptable. It is within the Secretary's discretion to accept a repayment agreement instead of proceeding by offset. In making this determination the Secretary will balance the Department's interest in collecting the debt against hardship to the debtor. If the debt is delinquent and the debtor has not disputed its existence or amount, the Secretary will accept a repayment agreement instead of offset only if the debtor is able to establish that offset would result in undue financial hardship or would be against equity and good conscience. </SECTION> <SECTION> <SECTNO>§ 17.107</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> If the debtor timely notifies the Secretary that he or she is exercising a right described in § 17.104 or § 17.106, the offset will be stayed until the Secretary either makes a determination concerning the debtor's proposal to repay the debt or issues a written decision following review of the record or, where appropriate, a hearing. However, interest continues to run during any stay. </SECTION> <SECTION> <SECTNO>§ 17.108</SECTNO> <SUBJECT>Types of review.</SUBJECT> (a) <E T="03">Hearing.</E> The Secretary will provide the debtor with a reasonable opportunity for hearing if: (1) An applicable statute authorizes or requires the Secretary to consider waiver of the indebtedness and the waiver determination turns on credibility or veracity; or (2) The debtor requests reconsideration of the debt and the Secretary determines that the question of the indebtedness cannot be resolved by review of the documentary evidence. (b) <E T="03">Review of the record.</E> Unless the Secretary determines that a hearing is required (see paragraph (a) of this section), the Secretary will provide for a review of the record (a review of the documentary evidence). </SECTION> <SECTION> <SECTNO>§ 17.109</SECTNO> <SUBJECT>Review procedures.</SUBJECT> (a) <E T="03">Hearings.</E> (1) The appropriate Deputy Assistant Secretary (DAS) or designee conducts the hearing. The DAS or designee will take steps necessary to ensure that the hearing is conducted in a fair and expeditious manner. If necessary, the DAS or designee may administer oaths of affirmations.<PRTPAGE P="169"/> (2) The DAS or designee does not use the formal rules of evidence with regard to admissibility of evidence or the use of evidence once admitted. However, parties may object to clearly irrelevant material. (3) The DAS or designee records all significant matters discussed at the hearing. There is no “official” record or transcript provided for these hearings. (4) A debtor may represent himself or herself or may be represented by an attorney or other person. The Secretary is represented by the General Counsel or his or her designee. (5) The Secretary proceeds first by presenting evidence on the relevant issues. The debtor then presents his or her evidence regarding these issues. The Secretary then may offer evidence to rebut or clarify the evidence introduced by the debtor. (b) <E T="03">Review of the record.</E> The appropriate DAS or designee will review all material related to the debt which is in the possession of the Department. The DAS or designee makes a determination based upon a review of this written record, which may include a request for reconsideration of the determination of indebtedness, or such other relevant material submitted by the debtor. </SECTION> <SECTION> <SECTNO>§ 17.110</SECTNO> <SUBJECT>Determination of indebtedness and appeal from determination.</SUBJECT> (a) Following the hearing or the review of the record, the DAS or designee will issue a written decision which includes the supporting rationale for the decision. The decision of the DAS or designee is the final agency action with regard to the particular administrative offset. (b) Copies of the DAS decision will be distributed to the debtor and the debtor's attorney or other representative, if applicable. <CITA>[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984 (interim), as amended at 59 FR 34580, July 6, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 17.111</SECTNO> <SUBJECT>Procedures for administrative offset: single debt.</SUBJECT> (a) Offset will commence 31 days after the debtor receives the Notice of Intent, unless the debtor has requested a hearing (see § 17.104) or has entered into a repayment agreement (see § 17.106). (b) When there is review of the debt within the Department, offset will begin after the DAS determination has been issued under § 17.110 and a copy of the determination is received by the Department's Office of Finance and Accounting. </SECTION> <SECTION> <SECTNO>§ 17.112</SECTNO> <SUBJECT>Procedures for administrative offset: multiple debts.</SUBJECT> The Secretary will use the procedures identified in § 17.111 for the offset of multiple debts. However, when collecting multiple debts the Secretary will apply the recovered amounts to those debts in accordance with the best interests of the United States, as determined by the facts and circumstances of the particular case, paying special attention to applicable statutes of limitations. </SECTION> <SECTION> <SECTNO>§ 17.113</SECTNO> <SUBJECT>Procedures for administrative offset: interagency cooperation.</SUBJECT> The Department will make use of all possible methods of cooperating with other Federal agencies in effecting collections by offset. </SECTION> <SECTION> <SECTNO>§ 17.114</SECTNO> <SUBJECT>Procedures for administrative offset: time limitation.</SUBJECT> (a) The Secretary may not initiate administrative offset to collect a debt under 31 U.S.C. 3716 more than 10 years after the Secretary's right to collect the debt first accrued, unless facts material to the Secretary's right to collect the debt were not known and could not reasonably have been known by the officials of the Department who were responsible for discovering and collecting such debts. (b) When the debt first accrued is determined according to existing law regarding the accrual of debts. (See, for example, 28 U.S.C. 2415.) </SECTION> <SECTION> <SECTNO>§ 17.115</SECTNO> <SUBJECT>Procedures for administrative offset: offset against amounts payable from Civil Service Retirement and Disability Fund.</SUBJECT> (a) Unless otherwise prohibited by law, the Secretary may request that moneys which are due and payble to a <PRTPAGE P="170"/>debtor from the Civil Service Retirement and Disability Fund be administratively offset in one or more payments to collect debts owed to the Secretary by the debtor. The Secretary submits the request to the appropriate officials of the Office of Personnel Management (OPM) in accordance with OPM regulations and procedures. (b) To request administrative offset under paragraph (a) of this section, the Secretary will provide a written certification that: (1) The debtor owes the Secretary a debt, including the amount of the debt; (2) The Secretary has complied with the applicable statutes, regulations, and procedures of the Office of Personnel Management; and (3) The Secretary has complied with the Department's regulations contained in these regulations. (c) Once the decision is made to request administrative offset under paragraph (a) of this section, the Secretary will make the request as soon as practical after completion of the applicable procedures necessary for the Office of Personnel Management to identify the debtor's account and to add a notation in the debtor's file in anticipation of the time when the debtor requests or becomes eligible to receive payments from the Fund. (This notation will satisfy any requirement that offset be initiated before the applicable statute of limitations expires.) (d) If, at the time the debtor makes a claim for payments from the Fund, at least one year has elapsed since the offset was originally made, the debtor may offer a satisfactory repayment plan instead of offset upon establishing that changed financial circumstances would render the offset unjust. (e) If the Department collects part or all of the debt by other means before deductions are made or completed under paragraph (a) of this section, the Secretary will act promptly to modify or terminate the Department's request for offset under paragraph (a) of this section. </SECTION> <SECTION> <SECTNO>§ 17.116</SECTNO> <SUBJECT>Procedures for administrative offset: offset of debtor's judgment against the United States.</SUBJECT> Collection by offset against a judgment obtained by a debtor against the United States will be accomplished in accordance with 31 U.S.C. 3728. </SECTION> <SECTION> <SECTNO>§ 17.117</SECTNO> <SUBJECT>Procedures for administrative offset: imposition of interest.</SUBJECT> Interest will be charged in accordance with § 17.72. </SECTION> <SECTION> <SECTNO>§ 17.118</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> (a) All correspondence from the debtor to the Secretary shall be addressed to the Department Claims Officer, Office of Finance and Accounting, Department of HUD, Washington, DC 20410. (b) The Department Claims Officer will deliver any correspondence to the appropriate Deputy Assistant Secretary within four working days. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Salary Offset Provisions</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> Sections 17.125 through 17.140, appear at 49 FR 32353, Aug. 14, 1984, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.125</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) The provisions set forth in §§ 17.125 through 17.140 are the Department's procedures for the collection by salary offset of a Federal employee's pay to satisfy certain debts owed the government. (b) These regulations apply to collections by the Secretary from: (1) Current employees of the Department and other agencies who owe debts to the Department; and (2) Current employees of the Department who owe debts to other agencies. (c) These regulations do not apply to debts or claims arising under the Internal Revenue Code of 1954 (26 U.S.C. 1-9602); the Social Security Act (42 U.S.C. 301-1397f); the tariff laws of the United States; or to any case where collection of a debt by salary offset is explicitly provided for or prohibited by another statute. (d) These regulations identify the types of salary offset available to the Department, as well as certain rights provided to the employee, which include a written notice before deductions begin, the opportunity to petition for a hearing and to receive a written decision if a hearing is granted. These employee rights do not apply to any adjustment to pay arising out of an <PRTPAGE P="171"/>employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over four pay periods or less. (e) Nothing in these regulations precludes the compromise, suspension or termination of collection actions where appropriate under the Department's regulations contained elsewhere in this subpart (see 24 CFR 17.60 through 17.77). </SECTION> <SECTION> <SECTNO>§ 17.126</SECTNO> <SUBJECT>Coordinating offset with another Federal agency.</SUBJECT> (a) <E T="03">When HUD is owed the debt.</E> When the Department is owed a debt by an employee of another agency, the other agency shall not initiate the requested offset until the Department provides the agency with a written certification that the debtor owes the Department a debt (including the amount and basis of the debt and the due date of the payment) and that the Department has complied with these regulations. (b) <E T="03">When another agency is owed the debt.</E> The Department may use salary offset against one of its employees who is indebted to another agency if requested to do so by that agency. Such a request must be accompanied by a certification by the requesting agency that the person owes the debt (including the amount) and that the employee has been given the procedural rights required by 5 U.S.C. 5514 and 5 CFR part 550, subpart K. </SECTION> <SECTION> <SECTNO>§ 17.127</SECTNO> <SUBJECT>Determination of indebtedness.</SUBJECT> In determining that an employee is indebted, the Secretary will review the debt to make sure that it is valid and past due. </SECTION> <SECTION> <SECTNO>§ 17.128</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> Except as provided in § 17.125(d), deductions will not be made unless the Secretary first provides the employee with a minimum of 30 calendar days written notice. This Notice of Intent to Offset Salary (Notice of Intent) will state: (a) That the Secretary has reviewed the records relating to the claim and has determined that a debt is owed, the amount of the debt, and the facts giving rise to the debt; (b) The Secretary's intention to collect the debt by means of deduction from the employee's current disposable pay account until the debt and all accumulated interest are paid in full; (c) The amount, frequency, approximate beginning date, and duration of the intended deductions; (d) An explanation of the Department's requirements concerning interest, unless such payments are excused in accordance with § 17.72; (e) The employee's right to inspect and copy Department records relating to the debt; (f) The employee's right to enter into a written agreement with the Secretary for a repayment schedule differing from that proposed by the Secretary, so long as the terms of the repayment schedule proposed by the employee are agreeable to the Secretary; (g) The right to a hearing, conducted by an administrative law judge of the Department or a hearing official of another agency, on the Secretary's determination of the debt, the amount of the debt, or percentage of disposable pay to be deducted each pay period, so long as a petition is filed by the employee as prescribed by the Secretary; (h) That the timely filing of a petition for hearing will stay the collection proceedings; (See § 17.129). (i) That a final decision on the hearing will be issued at the earliest practical date, but not later than 60 calendar days after the filing of the petition requesting the hearing, unless the employee requests and the hearing officer grants a delay in the proceedings; (j) That any knowingly false or frivolous statements, representations, or evidence may subject the employee to: (1) Disciplinary procedures appropriate under 5 U.S.C. Ch. 75, 5 CFR part 752, or any other applicable statutes or regulations; (2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or any other applicable statutory authority; or (3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or any other applicable statutory authority.<PRTPAGE P="172"/> (k) Any other rights and remedies available to the employee under statutes or regulations governing the program for which the collection is being made; (l) Unless there are applicable contractual or statutory provisions to the contrary, that amounts paid on or deducted for the debt which are later waived or found not owed to the United States will be promptly refunded to the employee; and (m) The method and time period for requesting a hearing. </SECTION> <SECTION> <SECTNO>§ 17.129</SECTNO> <SUBJECT>Request for a hearing.</SUBJECT> (a) Except as provided in paragraph (d) of this section, an employee must file a petition for a hearing, that is received by the Secretary not later than 20 calendar days from the date of the Department's notice described in § 17.128 if an employee wants a hearing concerning— (1) The existence or amount of the debt; or (2) The Secretary's proposed offset schedule. (b) The petition must be signed by the employee and should admit or deny the existence of or the amount of the debt, or any part of the debt, briefly setting forth any basis for a denial. If the employee objects to the percentage of disposable pay to be deducted from each check, the petition should state the objection and the reasons for it. The petition should identify and explain with reasonable specificity and brevity the facts, evidence and witnesses which the employee believes support his or her position. (c) Upon receipt of the petition, the Department will send the employee a copy of the Salary Offset Hearing Procedures Manual of the Department of Housing and Urban Development. (d) If the employee files a petition for hearing later than the 20 calendar days as described in paragraph (a) of this section, the hearing officer may accept the request if the employee can show that the delay was because of circumstances beyond his or her control or because of failure to receive notice of the filing deadline (unless the employee has actual notice of the filing deadline). </SECTION> <SECTION> <SECTNO>§ 17.130</SECTNO> <SUBJECT>Result if employee fails to meet deadlines.</SUBJECT> An employee waives the right to a hearing, and will have his or her disposable pay offset in accordance with the Secretary's offset schedule, if the employee: (a) Fails to file a petition for a hearing as prescribed in § 17.129; or (b) Is scheduled to appear and fails to appear at the hearing. </SECTION> <SECTION> <SECTNO>§ 17.131</SECTNO> <SUBJECT>Written decision following a hearing.</SUBJECT> Written decisions provided after a request for a hearing will include: (a) A statement of the facts presented to support the nature and origin of the alleged debt; (b) The hearing officer's analysis, findings and conclusions, in light of the hearing, concerning the employee's or the Department's grounds; (c) The amount and validity of the alleged debt; and (d) The repayment schedule, if applicable. </SECTION> <SECTION> <SECTNO>§ 17.132</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> (a) <E T="03">Notification by employee.</E> An employee who intends to inspect or copy departmental records related to the debt must send a letter to the Secretary stating his or her intention. The letter must be received by the Secretary within 20 calendar days of the date of the Notice of Intent. (b) <E T="03">Secretary's response.</E> In response to timely notice submitted by the debtor as described in paragraph (a) of this section, the Secretary will notify the employee of the location and time when the employee may inspect and copy Department records related to the debt. </SECTION> <SECTION> <SECTNO>§ 17.133</SECTNO> <SUBJECT>Written agreement to repay debt as alternative to salary offset.</SUBJECT> (a) <E T="03">Notification by employee.</E> The employee may propose, in response to a Notice of Intent, a written agreement to repay the debt as an alternative to salary offset. Any employee who wishes to do this must submit a proposed written agreement to repay the debt which is received by the Secretary within 20 calendar days of the date of the Notice of Intent.<PRTPAGE P="173"/> (b) <E T="03">Secretary's response.</E> In response to timely notice by the debtor as described in paragraph (a) of this section, the Secretary will notify the employee whether the employee's proposed written agreement for repayment is acceptable. It is within the Secretary's discretion to accept a repayment agreement instead of proceeding by offset. In making this determination, the Secretary will balance the Department's interest in collecting the debt against hardship to the employee. If the debt is delinquent and the employee has not disputed its existence or amount, the Secretary will accept a repayment agreement instead of offset only if the employee is able to establish that offset would result in undue financial hardship or would be against equity and good conscience. </SECTION> <SECTION> <SECTNO>§ 17.134</SECTNO> <SUBJECT>Procedures for salary offset: when deductions may begin.</SUBJECT> (a) Deductions to liquidate an employee's debt will be by the method and in the amount stated in the Secretary's Notice of Intent to collect from the employee's current pay. (b) If the employee filed a petition for hearing with the Secretary before the expiration of the period provided for in § 17.129, then deductions will begin after the hearing officer has provided the employee with a hearing, and the final written decision is in favor of the Secretary. (c) If an employee retires or resigns before collection of the amount of the indebtedness is completed, the remaining indebtedness will be collected according to the procedures for administrative offset (see §§ 17.100 through 17.118). </SECTION> <SECTION> <SECTNO>§ 17.135</SECTNO> <SUBJECT>Procedures for salary offset: types of collection.</SUBJECT> A debt will be collected in a lump-sum or in installments. Collection will be by lump-sum collection unless the employee is financially unable to pay in one lump-sum, or if the amount of the debt exceeds 15 percent of disposable pay. In these cases, deduction will be by installments. </SECTION> <SECTION> <SECTNO>§ 17.136</SECTNO> <SUBJECT>Procedures for salary offset: methods of collection.</SUBJECT> (a) <E T="03">General.</E> A debt will be collected by deductions at officially-established pay intervals from an employee's current pay account, unless the employee and the Secretary agree to alternative arrangements for repayment. The alternative arrangement must be in writing, signed by both the employee and the Secretary. (b) <E T="03">Installment deductions.</E> Installment deductions will be made over a period not greater than the anticipated period of employment. The size and frequency of installment deductions will bear a reasonable relation to the size of the debt and the employee's ability to pay. However, the amount deducted for any period will not exceed 15 percent of the disposable pay from which the deduction is made, unless the employee has agreed in writing to the deduction of a greater amount. If possible, the installment payment will be sufficient in size and frequency to liquidate the debt in three years. Installment payments of less than $25 per pay period or $50 a month will be accepted only in the most unusual circumstances. (c) <E T="03">Sources of deductions.</E> The Department will make deductions only from basic pay, special pay, incentive pay, retired pay, retainer pay, or in the case of an employee not entitled to basic pay, other authorized pay. </SECTION> <SECTION> <SECTNO>§ 17.137</SECTNO> <SUBJECT>Procedures for salary offset: imposition of interest.</SUBJECT> Interest will be charged in accordance with § 17.72. </SECTION> <SECTION> <SECTNO>§ 17.138</SECTNO> <SUBJECT>Non-waiver of rights.</SUBJECT> So long as there are no statutory or contractual provisions to the contrary, no employee involuntary payment (of all or a portion of a debt) collected under these regulations will be interpreted as a waiver of any rights that the employee may have under 5 U.S.C. 5514. </SECTION> <SECTION> <SECTNO>§ 17.139</SECTNO> <SUBJECT>Refunds.</SUBJECT> The Department will refund promptly to the appropriate individual amounts offset under these regulations when:<PRTPAGE P="174"/> (a) A debt is waived or otherwise found not owing the United States (unless expressly prohibited by statute or regulation); or (b) The Department is directed by an administrative or judicial order to refund amounts deducted from the employee's current pay. </SECTION> <SECTION> <SECTNO>§ 17.140</SECTNO> <SUBJECT>Miscellaneous provisions: correspondence with the Department.</SUBJECT> The employee shall file an original and two copies of a request for a hearing with the Clerk, Office of the Chief Administrative Law Judge, Room 2158, Department of HUD, Washington, DC 20410, on official work days between the hours of 8:45 a.m. and 5:15 p.m. All other correspondence shall be submitted to the Department Claims Officer, Department of Housing and Urban Development, Washington, DC 20410. Documents may be filed by personal delivery or mail. All documents shall be printed, typewritten, or otherwise processed in clear, legible form and on letter-size paper. </SECTION> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">IRS Tax Refund Offset Provisions</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> Sections 17.150 through 17.161 appear at 51 FR 39750, Oct. 31, 1986, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 17.150</SECTNO> <SUBJECT>Scope.</SUBJECT> (a) The standards set forth in §§ 17.150 through 17.161 are the Department's procedures for requesting the Internal Revenue Service (IRS) to offset tax refunds due taxpayers who have a past-due debt obligation to the Department. These procedures are authorized by the Deficit Reduction Act of 1984 (31 U.S.C. 3720A) and apply to the collection of debts as authorized by common law, by 31 U.S.C. 3716, or under other statutory authority. (b) The Secretary will use the IRS tax refund offset to collect claims which are certain in amount, past due and legally enforceable, and which are eligible for tax refund offset under regulations issued by the Secretary of the Treasury. (c) The Secretary will not report debts to the IRS except for the purpose of using the offset procedures described in §§ 17.150 through 17.161. Debts of less than $100.00, exclusive of interest and other charges, will not be reported. (d) If not legally enforceable because of lapse of statute of limitations but otherwise valid, the debt will be reported to the IRS as a forgiven debt on Form 1099G. (Form 1099G is an information return which Government agencies file with the IRS to report forgiven debt, and the forgiven amount is considered income to the taxpayer.) (See § 17.159.) </SECTION> <SECTION> <SECTNO>§ 17.151</SECTNO> <SUBJECT>Notice requirements before offset.</SUBJECT> A request for deduction from an IRS tax refund will be made only after the Secretary makes a determination that an amount is owed and past due and provides the debtor with 65 calendar days written notice. This Notice of Intent to Collect by IRS Tax Refund Offset (Notice of Intent) will state: (a) The nature and amount of the debt; (b) That unless the debt is repaid within 65 days from the date of the Notice, the Secretary intends to collect the debt by requesting the IRS to reduce any amounts payable to the debtor as refunds of Federal taxes paid by amount equal to the amount of the debt and all accumulated interest and other charges; (c) That the debtor has a right to obtain review within the Department of the Secretary's initial determination that the debt is past due and legally enforceable (see § 17.152); (d) That the debtor has a right to inspect and copy departmental records related to the debt as determined by the Secretary and will be informed as to where and when the inspection and copying can be done after the Department receives notice from the debtor that inspection and copying are requested. (See § 17.155.) </SECTION> <SECTION> <SECTNO>§ 17.152</SECTNO> <SUBJECT>Review within the Department of a determination that an amount is past-due and legally enforceable.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who receives a Notice of Intent has the right to present evidence that all or part of the debt is not past-due or not legally enforceable. The debtor should send a copy of the Notice of Intent with a letter notifying the HUD Board of Contract Appeals within 25 calendar <PRTPAGE P="175"/>days from the date of the Department's Notice of Intent that he or she intends to present evidence. (See § 17.161(a) for address of the Board.) Failure to give this advance notice will not jeopardize the debtor's right to present evidence within the 65 days provided for in paragraph (b) of this section. If the HUD Board of Contract Appeals has additional procedures governing the review process, a copy of the procedures will be mailed to the debtor after his request for review is received and docketed by the Board. (b) <E T="03">Submission of evidence.</E> The debtor may submit evidence showing that all or part of the debt is not past-due or not legally enforceable along with the notification requested by paragraph (a) of this section, but in any event the evidence must be submitted to the Board of Contract Appeals within 65 calendar days from the date of the Department's Notice of Intent. Failure to submit evidence within 65 calendar days will result in a dismissal of the request for review by the HUD Board of Contract Appeals. (c) <E T="03">Review of the record.</E> After a timely submission of evidence by the debtor, an Administrative Judge from the HUD Board of Contract Appeals will review the evidence submitted by the Department which shows that all or part of the debt is past-due and legally enforceable. (Administrative Judges are appointed in accordance with 41 U.S.C. 607(b)(1)). The Administrative Judge shall make a determination based upon a review of the written record, except that the Administrative Judge may order an oral hearing if he or she finds that: (1) An applicable statute authorizes or requires the Secretary to consider waiver of the indebtedness and the waiver determination turns on credibility or veracity; or (2) The question of indebtedness cannot be resolved by review of the documentary evidence. (d) <E T="03">Previous decision by Board of Contract Appeals.</E> The debtor is not entitled to a review of the Department's intent to offset it, in a previous year the HUD Board of Contract Appeals has issued a decision on the merits that the debt is past-due and legally enforceable, <E T="03">except</E> when the debt has become legally unenforceable since the issuance of that decision, or the debtor can submit newly discovered material evidence that the debt is presently not legally enforceable. </SECTION> <SECTION> <SECTNO>§ 17.153</SECTNO> <SUBJECT>Determination of the Administrative Judge.</SUBJECT> (a) Following the hearing or the review of the record, the Administrative Judge shall issue a written decision which includes the supporting rationale for the decision. The decision of the Administrative Judge concerning whether a debt or part of a debt is past-due and legally enforceable is the final agency decision with respect to the past-due status and enforceability of the debt. (b) Copies of the Administrative Judge's decision will be distributed to the General Counsel of the Department, the Department's Office of Finance and Accounting, the debtor, and the debtor's attorney or other representative, if any. (c) If the Administrative Judge's decision affirms that all or part of the debt is past due and legally enforceable, the Secretary will notify the IRS after the Administrative Judge's determination has been issued under paragraph (a) of this section and a copy of the determination is received by the Department's Office of Finance and Accounting. No referral will be made to the IRS if review of the debt by the Administrative Judge reverses the initial decision that the debt is past due and legally enforceable. </SECTION> <SECTION> <SECTNO>§ 17.154</SECTNO> <SUBJECT>Postponements, withdrawals and extensions of time.</SUBJECT> (a) <E T="03">Postponements and withdrawals.</E> The Secretary may, for good cause, postpone or withdraw referral of the debt to the IRS. (For example, a delay in the mail between the debtor and the Secretary could normally warrant a postponement; a mathematical error or computer malfunction could be the reason for a withdrawal.) (b) <E T="03">Extensions of time.</E> At the discretion of the Administrative Judge, time limitations required in these procedures may be extended in appropriate circumstances for good cause shown. </SECTION> <SECTION> <PRTPAGE P="176"/> <SECTNO>§ 17.155</SECTNO> <SUBJECT>Review of departmental records related to the debt.</SUBJECT> (a) <E T="03">Notification by debtor.</E> A debtor who intends to inspect or copy departmental records related to the debt as determined by the Secretary must send a letter to the Title I Representative stating his or her intention. The letter must be received by the Title I Representative within 25 calendar days from the date of the Department's Notice of Intent. (b) <E T="03">Department's response.</E> In response to timely notification by the debtor as described in paragraph (a) of this section, the Title I Representative will notify the debtor of the location and time when the debtor may inspect or copy departmental records related to the debt. </SECTION> <SECTION> <SECTNO>§ 17.156</SECTNO> <SUBJECT>Stay of offset.</SUBJECT> If the debtor timely notifies the Secretary that he or she is exercising a right described in § 17.152(a) and timely submits evidence in accordance with § 17.152(b), any notice to the IRS will be stayed until the issuance of a written decision by the Administrative Judge which determines that a debt or part of a debt is past-due and legally enforceable. </SECTION> <SECTION> <SECTNO>§ 17.157</SECTNO> <SUBJECT>Application of offset funds: Single debt.</SUBJECT> If the debtor does not timely notify the Secretary that he or she is exercising a right described in § 17.152, the Secretary will notify the IRS of the debt no earlier than 65 calendar days from the date of the Department's Notice of Intent, and will request that the amount of the debt be offset against any amount payable by the IRS as refund of Federal taxes paid. Normally, recovered funds will be applied first to costs of collection, then to any special charges provided for in HUD regulations or contracts, then to interest and finally, to the principal owed by the debtor. </SECTION> <SECTION> <SECTNO>§ 17.158</SECTNO> <SUBJECT>Application of offset funds: Multiple debts.</SUBJECT> The Secretary will use the procedures set out in § 17.157 for the offset of multiple debts. However, when collecting on multiple debts the Secretary will apply the recovered amounts against the debts in the order in which the debts accrued. </SECTION> <SECTION> <SECTNO>§ 17.159</SECTNO> <SUBJECT>Application of offset funds: Tax refund insufficient to cover amount of debt.</SUBJECT> If a tax refund is insufficient to satisfy a debt in a given tax year, the Secretary will recertify to the IRS the following year to collect further on the debt. If, in the following year, the debt has become legally unenforceable because of the lapse of the statute of limitations, the debt will be reported to the IRS as a forgiven debt in accordance with § 17.150(d). </SECTION> <SECTION> <SECTNO>§ 17.160</SECTNO> <SUBJECT>Time limitation for notifying the IRS to request offset of tax refunds due.</SUBJECT> (a) The Secretary may not initiate offset of tax refunds due to collect a debt for which authority to collect arises under 31 U.S.C. 3716 more than 10 years after the Secretary's right to collect the debt first accrued, unless facts material to the Secretary's right to collect the debt were not known and could not reasonably have been known by the officials of the Department who were responsible for discovering and collecting such debts. (b) When the debt first accrued is determined according to existing law regarding the accrual of debts. (See, for example, 28 U.S.C. 2415.) </SECTION> <SECTION> <SECTNO>§ 17.161</SECTNO> <SUBJECT>Correspondence with the Department.</SUBJECT> (a) All correspondence from the debtor to the Board concerning the right to review as described in § 17.152 shall be addressed to the HUD Board of Contract Appeals, Room 2131, 451 Seventh Street SW., Washington, DC 20410-0500. (b) The request for review of Departmental records should be addressed to the Title I Representative whose address appears in the Notice of Intent of Offset. All requests for review of departmental records must be marked: Attention: Records Inspection Request. (c) All other correspondence shall be addressed to the Department Claims Officer, Office of Finance and Accounting, Department of Housing and Urban <PRTPAGE P="177"/>Development, room 2202, Washington, DC 20410. <CITA>[51 FR 39750, Oct. 31, 1986, as amended at 59 FR 59647, Nov. 18, 1994]</CITA> </SECTION> </SUBJGRP> </SUBPART> </PART> <PART> <EAR>Pt. 18</EAR> <HD SOURCE="HED">PART 18—INDEMNIFICATION OF HUD EMPLOYEES</HD> <AUTH> <HD SOURCE="HED">Authority:</HD> 5 U.S.C. 301; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 62 FR 6096, Feb. 10, 1997, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 18.1</SECTNO> <SUBJECT>Policy.</SUBJECT> (a) The Department of Housing and Urban Development may indemnify, in whole or in part, a Department employee (which for the purpose of this part includes a former Department employee) for any verdict, judgment or other monetary award which is rendered against any such employee, provided the Secretary or his or her designee determines that: (1) The conduct giving rise to the verdict, judgment or award was taken within the scope of his or her employment with the Department; and (2) Such indemnification is in the interest of the United States. (b) The Department of Housing and Urban Development may settle or compromise a personal damage claim against a Department employee by the payment of available funds, at any time, provided the Secretary or his or her designee determines that: (1) The alleged conduct giving rise to the personal damage claim was taken within the scope of employment; and (2) That such settlement or compromise is in the interest of the United States. (c) Absent exceptional circumstances, as determined by the Secretary or his or her designee, the Department will not entertain a request either to agree to indemnify or to settle a personal damage claim before entry of an adverse verdict, judgment or monetary award. (d) When an employee of the Department becomes aware that an action has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee should immediately notify his or her supervisor that such an action is pending. The supervisor shall promptly notify the head of his or her operating component and the Associate General Counsel for Litigation and Fair Housing Enforcement, if the supervisor is located at headquarters, or Field Assistant General Counsel—who shall promptly notify the Associate General Counsel for Litigation and Fair Housing Enforcement—if the supervisor is located in the field. As used in this section, the term “principal operating component” means an office in the Department headed by an Assistant Secretary, the General Counsel, the Inspector General, or an equivalent departmental officer who reports directly to the Secretary. Questions regarding representation of the employee will be determined by the Department of Justice pursuant to 28 CFR 50.15 (Representation of Federal officials and employees by Department of Justice attorneys or by private counsel furnished by the Department in civil, criminal, and congressional proceedings in which Federal employees are sued, subpoenaed, or charged in their individual capacities). (e) The employee may, thereafter, request indemnification to satisfy a verdict, judgment or monetary award entered against the employee or to compromise a claim pending against the employee. The employee shall submit a written request, with appropriate documentation including a copy of the verdict, judgment, award or other order or settlement proposal, in a timely manner to the head of the employee's principal operating component. The head of the employee's principal operating component shall submit the written request and accompanying documentation, together with a recommended disposition of the request, in a timely manner to the General Counsel. (f) The General Counsel shall seek the views of the Department of Justice on the request. Where the Department of Justice has rendered a decision denying representation of the employee pursuant to 28 CFR 50.15, the General Counsel shall seek the concurrence of the Department of Justice on the request. If the Department of Justice does not concur in the request, the <PRTPAGE P="178"/>General Counsel shall so advise the employee and no further action on the employee's request shall be taken. (g) In all instances except those where the Department of Justice has non-concurred in the request, the General Counsel shall forward for decision to the Secretary or his or her designee the employee's request, the recommendation of the head of the employee's principal operating component, the views of the Department of Justice, and the General Counsel's recommendation. (h) Any payment under this part, either to indemnify a Department employee or to settle a personal damage claim, is contingent upon the availability of appropriated funds of the Department that are permitted by law to be utilized for this purpose. </SECTION> </PART> <PART> <EAR>Pt. 20</EAR> <HD SOURCE="HED">PART 20—BOARD OF CONTRACT APPEALS</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Development of Housing and Urban Development Board of Contract Appeals</HD> <SECHD>Sec.</SECHD> <SECTNO>20.1</SECTNO> <SUBJECT>Scope of part.</SUBJECT> <SECTNO>20.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> <SECTNO>20.3</SECTNO> <SUBJECT>Organization and location of the Board.</SUBJECT> <SECTNO>20.4</SECTNO> <SUBJECT>Jurisdiction of the Board.</SUBJECT> <SECTNO>20.5</SECTNO> <SUBJECT>Board powers.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Rules of the Department of Housing and Urban Development Board of Contract Appeals</HD> <SECTNO>20.10</SECTNO> <SUBJECT>Rules.</SUBJECT> </SUBPART> </CONTENTS> <SUBJGRP> <HD SOURCE="HED">Preliminary Procedures</HD> </SUBJGRP> <EXTRACT> <FP>Rules</FP> <FP SOURCE="FP-2">1. Appeals, how taken.</FP> <FP SOURCE="FP-2">2. Notice of appeal, contents of.</FP> <FP SOURCE="FP-2">3. Docketing of appeals.</FP> <FP SOURCE="FP-2">4. Preparation, content, organization, forwarding, and status of appeal file.</FP> <FP SOURCE="FP-2">5. Dismissal for lack of jurisdiction.</FP> <FP SOURCE="FP-2">6. Pleadings.</FP> <FP SOURCE="FP-2">7. Amendments of pleadings or record.</FP> <FP SOURCE="FP-2">8. Hearing election and motions.</FP> <FP SOURCE="FP-2">9. Prehearing briefs.</FP> <FP SOURCE="FP-2">10. Prehearing of presubmission conference.</FP> <FP SOURCE="FP-2">11. Submission without a hearing.</FP> <FP SOURCE="FP-2">12. Optional small claims (expedited) and accelerated procedures. (These procedures are available solely at the election of the appellant.)</FP> <FP SOURCE="FP-2">12.1Elections to utilize small claims (expedited) and accelerated procedure.</FP> <FP SOURCE="FP-2">12.2The small claims (expedited) procedure.</FP> <FP SOURCE="FP-2">12.3The accelerated procedure.</FP> <FP SOURCE="FP-2">12.4Motions for reconsideration in Rule 12 cases.</FP> <FP SOURCE="FP-2">13. Settling the record.</FP> <FP SOURCE="FP-2">14. Discovery—depositions.</FP> <FP SOURCE="FP-2">15. Interrogatories to parties, admission of facts, and production and inspection of documents.</FP> <FP SOURCE="FP-2">16. Filing and service of papers other than subpoenas.</FP> <HD SOURCE="HD1">Hearings</HD> <FP SOURCE="FP-2">17. Where and when held.</FP> <FP SOURCE="FP-2">18. Notice of hearings.</FP> <FP SOURCE="FP-2">19. Unexcused absence of a party.</FP> <FP SOURCE="FP-2">20. Hearings: conduct; examination of witnesses.</FP> <FP SOURCE="FP-2">21. Subpoenas.</FP> <FP SOURCE="FP-2">22. Copies of papers.</FP> <FP SOURCE="FP-2">23. Posthearing briefs.</FP> <FP SOURCE="FP-2">24. Transcript of proceedings.</FP> <FP SOURCE="FP-2">25. Withdrawal of exhibits.</FP> <HD SOURCE="HD1">Representation</HD> <FP SOURCE="FP-2">26. Appellant.</FP> <FP SOURCE="FP-2">27. Government.</FP> <HD SOURCE="HD1">Decisions</HD> <FP SOURCE="FP-2">28. Decisions.</FP> <HD SOURCE="HD1">Motion for Reconsideration</HD> <FP SOURCE="FP-2">29. Motion for reconsideration.</FP> <HD SOURCE="HD1">Dismissals and Defaults</HD> <FP SOURCE="FP-2">30. Dismissal without prejudice.</FP> <FP SOURCE="FP-2">31. Dismissal or default for failure to prosecute or defend.</FP> <HD SOURCE="HD1">Remand</HD> <FP SOURCE="FP-2">32. Remand from court.</FP> <HD SOURCE="HD1">Sanctions</HD> <FP SOURCE="FP-2">33. Sanctions.</FP> <HD SOURCE="HD1">Miscellaneous Procedures</HD> <FP SOURCE="FP-2">34. Applicability.</FP> <FP SOURCE="FP-2">35. Time, computation and extensions.</FP> <FP SOURCE="FP-2">36. Ex parte communications.</FP> </EXTRACT> <AUTH> <HD SOURCE="HED">Authority:</HD> 41 U.S.C. 601-613; 42 U.S.C. 3535(d). </AUTH> <SUBPART> <HD SOURCE="HED">Subpart A—Department of Housing and Urban Development Board of Contract Appeals</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 50 FR 45911, Nov. 5, 1985, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 20.1</SECTNO> <SUBJECT>Scope of part.</SUBJECT> This part establishes a Board of Contract Appeals, sets forth its function, <PRTPAGE P="179"/>policies and procedures regarding matters to be considered by the Board, and prescribes the rules of the Board. </SECTION> <SECTION> <SECTNO>§ 20.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> There is established in the Office of the Secretary, the Housing and Urban Development Board of Contract Appeals (“the Board”). </SECTION> <SECTION> <SECTNO>§ 20.3</SECTNO> <SUBJECT>Organization and location of the Board.</SUBJECT> (a) <E T="03">Location.</E> The Board's mailing address is: Board of Contract Appeals, U.S. Department of Housing and Urban Development, Room 2131, 451 Seventh Street, S.W., Washington, DC 20410-0001. For items requiring non-postal delivery, the Board is located in Room 3229, 1201 Constitution Ave., N.W. 20001. The telephone number of the Board is (202) 927-5110. (This is not a toll-free number.) For learning- or speech-impaired persons, this number may be accessed via TTY by contacting the Federal Information Relay Service at 1-800-877-8339. The facsimile number is (202) 927-6257. (b) <E T="03">Organization.</E> The Board shall be comprised of a Chief Administrative Judge, who shall be the Chair, an Administrative Judge, who shall be the Vice-Chair, and such other Administrative Judges as may be appointed by the Secretary. All members of the Board shall be attorneys at law duly licensed by any State, commonwealth, territory, or the District of Columbia. All members shall be selected and appointed to serve in accordance with section 8(b)(1) of the Contract Disputes Act of 1978 (41 U.S.C. 608(b)(1)). Except as otherwise provided, appeals are assigned to a panel of at least three members who decide the case by a majority vote. The Chair shall assign one member of the panel to preside over the appeal and to conduct necessary conferences and hearings, supervise discovery and the development of the record for the Board, and to make such procedural determinations as are necessary to the proper disposition of the appeal. <CITA>[50 FR 45911, Nov. 5, 1985, as amended at 61 FR 13280, Mar. 26, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 20.4</SECTNO> <SUBJECT>Jurisdiction of the Board.</SUBJECT> (a) <E T="03">Contract appeals.</E> The Board shall consider and determine appeals from decisions of contracting officers under the Contract Disputes Act of 1978 (41 U.S.C. 601-613) relating to contracts entered into by (1) the Department of Housing and Urban Development or (2) any other executive agency when that agency or the Administrator for Federal Procurement Policy has designated the Board to decide the appeal. (b) <E T="03">Other matters.</E> The Board or its individual members shall have jurisdiction over other matters assigned to it by the Secretary or designee. Determinations in other matters shall have the finality provided by the applicable statute, regulation or agreement. </SECTION> <SECTION> <SECTNO>§ 20.5</SECTNO> <SUBJECT>Board powers.</SUBJECT> (a) <E T="03">Board powers.</E> The Board shall employ support personnel, as needed, and shall have all powers necessary and incident to the proper performance of the duties assigned to it. (b) <E T="03">Disqualification.</E> No Administrative Judge may act for the Board or participate in a decision if, prior to the time the appeal was filed, he or she had participated in the matter in any manner on behalf of an interested party. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Rules of the Department of Housing and Urban Development Board of Contract Appeals</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 50 FR 45912, Nov. 5, 1985, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 20.10</SECTNO> <SUBJECT>Rules.</SUBJECT> (a) These rules govern the procedure in all matters before the Department of Housing and Urban Development Board of Contract Appeals, unless otherwise provided by applicable law or regulation. The Federal Rules of Civil Procedure may be applied where procedures are not otherwise provided in these rules. For applications and proceedings involving award of attorney fees and other expenses, the rules set forth in 24 CFR part 14 shall apply. (b) <E T="03">Filing Requirements.</E> A party shall file with the Board one original of any pleading or motion. That party shall simultaneously serve upon the other <PRTPAGE P="180"/>party of record one copy of that pleading or motion filed with the Board. Filings may be transmitted to the Board via facsimile. However, the original of any document transmitted to the Board by facsimile shall simultaneously be mailed to the Board. (c) <E T="03">Alternative Disputes Resolution.</E> The Administrative Dispute Resolution Act authorizes and encourages Federal agencies to use mediation, conciliation, arbitration, and other techniques for the prompt and informal resolution of disputes. With the mutual consent of the parties, the Board may assist in the resolution of disputes by Alternative Dispute Resolution (ADR) procedures. The utilization of ADR procedures shall not relieve the parties from the filing requirements or other orders of the Board relating to a contract appeal duly docketed before the Board. (d) <E T="03">Equal Access to Justice Act.</E> The Equal Access to Justice Act provides that agencies which conduct adversary adjudications “shall award, to a prevailing party other than the United States, fees and other expenses incurred by that party in connection with that proceeding, unless the adjudicative officer of the agency finds that the position of the agency was substantially justified or that special circumstances make an award unjust.” 5 U.S.C. § 504. Prevailing parties in proceedings before the Board may apply for an award under the Act following the issuance by the Board of its final decision in the appeal. <EXTRACT> <HD SOURCE="HD1">Preliminary Procedures</HD> <HD SOURCE="HD2">Rule 1. Appeals, how taken.</HD> (a) <E T="03">General.</E> Notice of an appeal shall be in writing and mailed or otherwise furnished to the Board within 90 days from the date of receipt of a final written decision of the contracting officer. (b) <E T="03">Contracting officer's failure to act-claim of $100,000 or less.</E> Where the contractor has submitted a claim of $100,000 or less to the contracting officer and has requested a written decision within 60 days from receipt of the request, and the contracting officer has not issued the decision, the contractor may file a notice of appeal as provided in paragraph (a) of this section, citing the failure of the contracting officer to issue a decision. (c) <E T="03">Contracting officer's failure to act-claim in excess of $100,000.</E> Where the contractor has submitted a claim in excess of $100,000 to the contracting officer and the contracting officer has failed, within 60 days of submission of the claim, to issue a final written decision, or to advise the contractor of a date when the final written decision will be issued, the contractor may file a notice of appeal as provided in paragraph (a) of this section, citing the failure to issue a decision. (d) <E T="03">Unreasonable delay by contracting officer.</E> A contractor may request the Board to direct a contracting officer to issue a final written decision within a specified period of time, as determined by the Board, in the event of an unreasonable delay on the part of the contracting officer. (e) <E T="03">Stay of proceedings.</E> Upon docketing of appeals filed under paragraph (b) or (c) of this section, the Board may stay further proceedings pending issuance of a final decision by the contracting officer within the period of time determined by the Board. <HD SOURCE="HD2">Rule 2. Notice of appeal, contents of.</HD> A notice of appeal shall indicate that an appeal is being taken and shall identify the contract (by number), the department and agency involved in the dispute, the final written decision from which the appeal is taken, and the amount in dispute, if known. The notice of appeal shall be signed by the appellant (the contractor making the appeal), or by the appellant's duly authorized representative or attorney. The complaint referred to in Rule 6 may be filed with the notice of appeal, or the appellant may designate the notice of appeal as a complaint, if it otherwise fulfills the requirements of a complaint. A notice of appeal from a final written decision of a contracting officer involving a claim in excess of $100,000 shall state that certification has been made as required under section 6(c)(1) of the Contract Disputes Act of 1978 [41 U.S.C. 606(c)(1)]. <HD SOURCE="HD2">Rule 3. Docketing of appeals.</HD> When a notice of appeal in any form has been received by the Board, it shall be docketed promptly. A written notice of docketing shall be transmitted to the appellant with a copy of these rules, to the contracting officer, and to HUD's Office of General Counsel. <HD SOURCE="HD2">Rule 4. Preparation, content, organization, forwarding, and status of appeal file.</HD> (a) <E T="03">Duties of contracting officer.</E> Within 30 days of receipt of notice from the Board that an appeal has been docketed, the contracting officer shall assemble and transmit to the Board (through HUD's Office of General Counsel) three copies of an appeal file consisting of all documents relevant to the appeal, including: (1) The decision from which the appeal is taken; (2) The contract including specifications and relevant amendments, plans, and drawings;<PRTPAGE P="181"/> (3) All correspondence between the parties relevant to the appeal, including the appellant's letter or letters of claim; (4) Transcripts of any testimony and affidavits or statements of any witnesses on the matter in dispute made prior to the filing of the notice of appeal with the Board; and (5) Any additional information considered relevant to the appeal. <FP>Upon receipt of the appeals file, the Board shall furnish the appellant and HUD's Office of General Counsel with true and exact copies of the appeal file.</FP> (b) <E T="03">Duties of appellant.</E> Within 30 days after receipt of a copy of the appeal file assembled by the contracting officer, the appellant shall transmit to the Board any documents not contained in the appeal file which are relevant to the appeal, and furnish two copies of these documents to the government trial attorney. (c) <E T="03">Organization of appeal file.</E> Documents in the appeal file may be originals, legible facsimiles, or authenticated copies, and shall be arranged in chronological order where practicable, numbered sequentially, tabbed, and indexed to identify the contents of the file. (d) <E T="03">Unusual documents.</E> Upon request by either party, the Board may waive the requirement to furnish to the other party copies of bulky, lengthy, or out-of-size documents in the appeal file when inclusion would be burdensome. At the time a party files with the Board a document for which waiver has been granted, he or she shall notify the other party that the document or a copy is available for inspection at the offices of the Board or of the party filing the document. (e) <E T="03">Status of documents in appeal file.</E> Documents contained in the appeal file are, without further action by the parties, part of the record upon which the Board will render its decision. However, a party may object, for reasons stated, to consideration of a particular document or documents within 30 days of receipt, unless good cause is shown for later objection. If an objection is made, the Board shall remove the document or documents from the appeal file and permit the party offering the document to move its admission as evidence in accordance with Rules 13 and 20. (f) <E T="03">Waiver of filing of documents.</E> Notwithstanding the foregoing, the filing of the Rule 4 (a) and (b) documents may be dispensed with by the Board either upon request of the appellant in the notice of appeal or thereafter upon stipulation of the parties. <HD SOURCE="HD2">Rule 5. Dismissal for lack of jurisdiction.</HD> Any motion addressed to the jurisdiction of the Board shall be promptly filed. Hearing on the motion shall be afforded on application of either party. However, the Board may defer its decision on the motion pending hearing on both the merits and the motion. The Board may at any time raise the issue of its jurisdiction to proceed with a particular case by an appropriate order, affording the parties an opportunity to be heard on the issue. <HD SOURCE="HD2">Rule 6. Pleadings.</HD> (a) <E T="03">Appellant.</E> Within 30 days after receipt of notice of docketing of the appeal, the appellant shall file a complaint with the Board. The complaint shall set forth simple, concise and direct statements of each of the appellant's claims. Appellant shall also set forth the basis, with appropriate reference to contract provisions, of each claim and the dollar amount claimed, to the extent known. This pleading shall fulfill the generally recognized requirements of a complaint, although no particular form is required. Should the complaint not be received within 30 days, appellant's notice of appeal may, if in the opinion of the Board the issues before the Board are sufficiently defined, be deemed its complaint and the Government shall be so notified. (b) <E T="03">Government.</E> Within 30 days from receipt of the complaint, the Government shall file an answer with the Board. The answer shall set forth simple, concise and direct statements of Government's defenses to each claim asserted by appellant, including any affirmative defenses available. <HD SOURCE="HD2">Rule 7. Amendments of pleadings or record.</HD> The Board, upon its own initiative or upon application by a party, may order a party to make a more definite statement of the complaint or answer, or to reply to an answer. The Board may, within the proper scope of the appeal, permit either party to amend its pleading upon conditions fair to both parties. When issues within the proper scope of the appeal, but not raised by the pleadings, are tried by express or implied consent of the parties, with the permission of the Board, they shall be treated in all respects as if they have been raised in the pleadings. In such instances, motions to amend the pleadings to conform to the proof may be entered, but are not required. If evidence is objected to at a hearing on the ground that it is not within the issues raised by the pleadings, it may be admitted within the proper scope of the appeal, provided, however, that the objecting party may be granted a continuance if necessary to enable it to meet this evidence. <HD SOURCE="HD2">Rule 8. Hearing election and motions.</HD> (a) <E T="03">Hearing election.</E> After the filing of the Government's answer or notice from the Board that it has entered a general denial on behalf of the Government, each party shall advise whether it desires a hearing as prescribed in Rules 17 through 25, or whether it <PRTPAGE P="182"/>elects to submit its case on the record without a hearing, as prescribed in Rule 11. (b) <E T="03">Motions.</E> (1) The Board may entertain any timely motion for an appropriate order. Application to the Board for an order shall be by motion which, unless made during a hearing, shall be made in writing, shall state with particularity the grounds for the motion and shall set forth the relief or order sought. (2) The Board may, on its own motion, initiate any action by notice to the parties. (3) Unless otherwise specified by the Board, a party who receives a motion shall file any answering material within 20 days after the date of receipt of the motion. The Board may require the presentation of briefs or arguments. The Board shall issue a decision on each motion that is appropriate and just to the parties. (4) Affidavits in support of motions shall set forth such facts as would be admissible in evidence and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavit. When a motion is made and supported as provided in this rule, a party opposing the motion who is represented by counsel may not rest upon the mere allegations or denials of his pleading; his response, by affidavits or as otherwise provided in this rule, must show that there is a genuine issue of fact or of law for decision. Should it appear from the affidavits of a party opposing the motion that for reasons stated he cannot present by affidavit facts essential to justify his opposition, the Board may deny the motion or may order a continuance to permit affidavits to be obtained or discovery to be had or may make such order as is just. <HD SOURCE="HD2">Rule 9. Prehearing briefs.</HD> Based on an examination of the pleadings, and its determination of whether the arguments and authorities addressed to the issues are adequately set forth in the pleadings, the Board may require the parties to submit prehearing briefs. If the Board does not require prehearing briefs, either party may upon appropriate and sufficient notice to the other party, furnish a prehearing brief to the Board. In any case where a prehearing brief is submitted, it shall be furnished so as to be received by the Board at least 15 days prior to the date set for hearing, and a copy shall simultaneously be furnished to the other party. <HD SOURCE="HD2">Rule 10. Prehearing or presubmission conference.</HD> (a) <E T="03">Conference.</E> Whether the case is to be submitted under Rule 11, or heard under Rules 17 through 25, the Board may upon its own initiative, or upon the application of either party, arrange a telephone conference or call upon the parties to appear before an Administrative Judge for a conference to consider: (1) Simplification, clarification, or severing of the issues; (2) The possibility of obtaining stipulations, admissions, agreements and rulings on admissibility of documents, understandings on matters already on record, or similar agreements that will avoid unnecessary proof; (3) Agreements and rulings to facilitate discovery; (4) Limitation of the number of expert witnesses or avoidance of cumulative evidence; (5) The possibility of agreement disposing of any or all of the issues in dispute; and (6) Such other matters as may aid in the disposition of the appeal. (b) <E T="03">Results of conference.</E> The Administrative Judge shall make such rulings and orders as may be appropriate to achieve settlement by agreement of the parties or to aid in the disposition of the appeal. The results of the conference, including any rulings and orders, shall be reduced to writing by the Administrative Judge or the conference shall be transcribed. The writing or the transcript shall constitute a part of the record. <HD SOURCE="HD2">Rule 11. Submission without a hearing.</HD> Either party may elect to waive its right to appear at a hearing and to submit its case upon the record before the Board, as settled under Rule 13. Submission of a case without hearing does not relieve the parties from the necessity of proving the facts supporting their allegations or defenses. Affidavits, depositions, admissions, answers to interrogatories, and stipulations may be employed to supplement other documentary evidence in the record. The Board may permit submissions to be supplemented by oral argument, which may be transcribed if requested, and by briefs in accordance with Rule 9 or Rule 23. <HD SOURCE="HD2">Rule 12. Optional small claims (expedited) and accelerated procedures. (These procedures are available solely at the election of the appellant.)</HD> <HD SOURCE="HD2">Rule 12.1 Elections to utilize small claims (expedited) and accelerated procedure.</HD> (a) <E T="03">Election-dispute involving $50,000 or less.</E> In appeals where the amount in dispute is $50,000 or less, the appellant may elect to have the appeal processed under a Small Claims (Expedited) procedure requiring decision of the appeal, whenever possible, within 120 days after the Board receives written notice of the appellant's election. The details of this procedure appear in section 12.2 of this Rule. (b) <E T="03">Election-dispute involving $100,000 or less.</E> In appeals where the amount in dispute is $100,000 or less, the appellant may elect to <PRTPAGE P="183"/>have the appeal processed under an Accelerated procedure requiring decision of the appeal, whenever possible, within 180 days after the Board receives written notice of the apellant's election. The details of this procedure appear in section 12.3 of this Rule. (c) <E T="03">Notice of election.</E> The appellant's election of either the Small Claims (Expedited) procedure or the Accelerated procedure may be made by written notice within 60 days after receipt of notice of docketing the appeal unless this period is extended by the Board for good cause. The election may not be withdrawn except with permission of the Board and for good cause. (d) <E T="03">Determination of amount in dispute.</E> In deciding whether the Small Claims (Expedited) procedure or the Accelerated procedure is applicable to a given appeal, the Board shall determine the amount in dispute. <HD SOURCE="HD2">Rule 12.2 The small claims (expedited) procedure.</HD> (a) <E T="03">Document submission and prehearing conference.</E> In cases proceeding under the Small Claims (Expedited) procedure, the following time periods shall apply: (1) Within ten days from the Government's first receipt from either the appellant or the Board of a copy of the appellant's notice of election of the Small Claims (Expedited) procedure, the Government shall send the Board a copy of the contract, the contracting officer's final decision, and the appellant's letter or letters of claim, if any; remaining documents required under Rule 4 shall be submitted in accordance with times specified in that rule unless the Board otherwise directs; (2) Within 15 days after the Board has acknowledged receipt of appellant's notice of election, the assigned Administrative Judge shall take the following actions, if feasible, in an informal meeting or a telephone conference with both parties: (i) Identify and simplify the issues; (ii) establish a simplified procedure appropriate to the particular appeal; (iii) determine whether the appellant wants a hearing, and if so, fix a time and place for the hearing; (iv) require the Government to furnish all the additional documents relevant to the appeal, and (v) establish an expedited schedule for resolution of the appeal. (b) <E T="03">Pleadings, discovery and other prehearing activity.</E> Pleadings, discovery and other prehearing activity will be allowed only as consistent with the requirement to conduct the hearing on the date scheduled, or if no hearing is scheduled, to close the record on a date that will allow decisions within the 120-day limit. The Board may impose shortened time periods for any actions prescribed or allowed under these rules, as necessary to enable the Board to decide the appeal within the 120-day limit, allowing whatever time, up to 30 days, that the Board considers necessary for the preparation of the decision after closing the record and the filing of briefs, if any. (c) <E T="03">Decision.</E> The written decision by the Board in cases processed under the Small Claims (Expedited) procedure will be short and contain only summary findings of fact and conclusions. Decisions will be rendered for the Board by a single Administrative Judge. If there has been a hearing, the Administrative Judge presiding at the hearing may at the conclusion of the hearing and after entertaining oral arguments as deemed appropriate, render on the record oral summary findings of fact, conclusions, and a decision of the Appeal. Whenever an oral decision is rendered, the Board will subsequently furnish the parties a typed copy of the oral decision (or a copy of the transcript of the hearing) for record and payment purposes and to establish the starting date for the period for filing a motion for reconsideration under Rule 29. (d) <E T="03">Effect of decision.</E> A decision issued under the Small Claims (Expedited) procedure shall have no value as precedent and, in the absence of fraud shall be final and conclusive and may not be appealed or set aside. <HD SOURCE="HD2">Rule 12.3The accelerated procedure.</HD> (a) <E T="03">Waiver of pleadings, discovery and briefs.</E> In cases proceeding under the Accelerated procedure, the parties are encouraged, to the extent possible consistent with adequate presentation of their factual and legal positions, to waive pleadings, discovery, and briefs. (b) <E T="03">Pleadings, discovery, and other prehearing activity.</E> Pleadings, discovery and other prehearing activity will be allowed only as consistent with the requirement to conduct the hearing on the dates scheduled or, if no hearing is scheduled, to close the record on a date that will allow decision within the 180-day limit. The Board may shorten time periods for any actions prescribed or allowed under these rules, as necessary to enable the Board to decide the appeal within the 180-day limit, and may reserve up to 30 days for preparation of the decision. (c) <E T="03">Decision.</E> Written decisions by the Board in cases processed under the Accelerated procedure will normally be short and contain only summary findings of fact and conclusions. In cases where the amount in dispute is $50,000 or less where the Accelerated procedure has been elected and where there has been a hearing, the single Administrative Judge presiding at the hearing may, with the concurrence of both parties, at the conclusion of the hearing and after entertaining such oral arguments as deemed appropriate, render on the record oral summary findings of fact, conclusions, and a decision of the appeal. Whenever an oral decision is rendered, the Board will subsequently furnish the parties a typed copy of the oral decision (or a <PRTPAGE P="184"/>copy of the transcript of the hearing) for record and payment purposes, and to establish the starting date for the period for filing a motion for reconsideration under Rule 29. <HD SOURCE="HD2">Rule 12.4Motions for reconsideration in Rule 12 cases.</HD> Motions for Reconsideration of cases decided under either the Small Claims (Expedited) procedure or the Accelerated procedure need not be decided within the original 120-day or 180-day limit, but all such motions shall be processed and decided rapidly to fulfill the intent of this Rule. <HD SOURCE="HD2">Rule 13.Settling the record.</HD> (a) <E T="03">Contents of record.</E> The record upon which the Board's decision will be rendered consists of the documents in the appeal file furnished under Rule 4 or 12 (unless removed by the Board) and the following items, if any: Pleadings, prehearing conference memoranda or orders, prehearing briefs, depositions or interrogatories admitted into evidence, admissions, stipulations, transcripts of conferences and hearings, exhibits admitted into evidence, posthearing briefs, orders of the Board, and documents which the Board has specifically designated to be made a part of the record. The record will, at all reasonable times, be available for inspection by the parties at the office of the Board. (b) <E T="03">Closing of record.</E> Except as the Board may otherwise order, no proof shall be received in evidence after completion of an oral hearing or, in cases submitted on the record, after notification by the Board that the case is ready for decision. (c) <E T="03">Weight of evidence.</E> The weight to be attached to any evidence of record will rest within the sound discretion of the Board. The Board may in any case require either party, with appropriate notice to the other party, to submit additional evidence on any matter relevant to the appeal. <HD SOURCE="HD2">Rule 14.Discovery—depositions.</HD> (a) <E T="03">General policy and protective orders.</E> The parties are encouraged to engage in voluntary discovery procedures. In connection with any discovery procedure under this rule or rule 15, the Board may make any order required to protect a party or person from annoyance, embarrassment, or undue burden or expense. Those orders may include limitations on the scope, method, time and place for discovery, and provisions for protecting the secrecy of confidential information or documents. (b) <E T="03">When depositions permitted.</E> After an appeal has been docketed and complaint filed, the parties may mutually agree to, or the Board may, upon application of either party, order the taking of testimony of any person by deposition upon oral examination or written interrogatories before any officer authorized to administer oaths at the place of examination. (c) <E T="03">Orders on depositions.</E> The time, place, and manner of taking depositions shall be as mutually agreed by the parties, or failing such agreement, governed by order of the Board. (d) <E T="03">Use as evidence.</E> No testimony taken by depositions shall be considered as part of the evidence in the hearing of an appeal until the testimony is offered and received in evidence at the hearing. It will not ordinarily be received in evidence if the deponent is present and can testify at the hearing. In these instances, however, the deposition may be used to contradict or impeach the testimony of the deponent given at the hearing. In cases submitted on the record, the Board may receive depositions to supplement the record. (e) <E T="03">Expenses.</E> Each party shall bear its own expenses associated with the taking of any depositions. <HD SOURCE="HD2">Rule 15.Interrogatories to parties, admission of facts, and production and inspection of documents.</HD> After an appeal has been docketed and complaint filed with the Board, a party may serve on the other party: (a) Written interrogatories to be answered separately in writing, signed under oath and answered or objected to within 30 days; (b) a request for the admission of specified facts or the authenticity of any documents, to be answered or objected to within 30 days after service; the factual statements and the authenticity of the documents to be deemed admitted upon failure of a party to respond to the request; and (c) a request for the production, inspection and copying of any documents or objects not privileged, which reasonably may lead to the discovery of admissible evidence. <HD SOURCE="HD2">Rule 16.Filing and service of papers other than subpoenas.</HD> Papers shall be considered filed with the Board when mailed or otherwise furnished to the Board. Papers shall be served upon parties personally or by mail, addressed to the party upon whom service is to be made. Timely filing and service by facsimile transmission (telecopier) is permissible provided that the original telecopied document is promptly mailed or served thereafter in the manner specified by this rule. Except as provided in rule 4(a), the party filing any paper with the Board shall simultaneously serve a copy of the paper upon the opposing party, and shall file a certificate of service with the Board indicating that a copy has been so served. Subpoenas shall be served as provided in rule 21.<PRTPAGE P="185"/> <HD SOURCE="HD1">Hearings</HD> <HD SOURCE="HD2">Rule 17.Where and when held.</HD> Hearings will be held at places determined by the Board to best serve the interest of the parties and the Board. Hearings will be scheduled at the discretion of the Board with due consideration to the regular order of appeals, Rule 12 requirements, the convenience of the parties, the requirement for just and inexpensive determination of appeals without necessary delay, and other pertinent factors. On request or motion by either party and for good cause, the Board may adjust the date of a hearing. <HD SOURCE="HD2">Rule 18.Notice of hearings.</HD> Parties shall be given not less than 20 days notice of the time and place for hearing, unless otherwise agreed. The notice of hearing shall be sent by certified mail (return receipt requested). <HD SOURCE="HD2">Rule 19.Unexcused absence of a party.</HD> The unexcused absence of a party at the time and place set for hearing will not be occasion for delay. Notwithstanding the provisions of Rule 31, in the event of an unexcused absence: (a) The appeal will be dismissed with prejudice for want of prosecution; or (b) the hearing will proceed and the case will be regarded as submitted on the record by the absent party. <HD SOURCE="HD2">Rule 20.Hearings: conduct; examination of witnesses.</HD> (a) <E T="03">Conduct of hearings.</E> Hearings shall be as informal as may be reasonable and appropriate under the circumstances. Appellant and the Government may offer such evidence as would be admissible under the Federal Rules of Evidence or as otherwise determined to be reliable and relevant by the presiding Administrative Judge. Stipulations of fact agreed upon by the parties may be regarded and used as evidence at the hearing. The parties may stipulate the testimony that would be given by a witness if the witness were present. The Board may require evidence in addition to that offered by the parties. (b) <E T="03">Examination of witnesses.</E> Oral testimony before the Board shall generally be given under oath or affirmation. However, if the testimony of a witness is not given under oath or affirmation, the Board shall advise the witness that his statements may be subject to the provisions of title 18 U.S.C., sections 287 and 1001, and any other provision of law imposing penalties for knowingly making false representations in connection with claims against the United States or in any matter within the jurisdiction of any department or agency. <HD SOURCE="HD2">Rule 21.Subpoenas.</HD> (a) <E T="03">General.</E> Upon written request of either party filed with the Board or on the Administrative Judge's initiative, the Administrative Judge to whom a case is assigned or who is otherwise designated by the Chairman may issue a subpoena requiring: (1) Testimony at a deposition—the deposing of a witness in the city or county where he or she resides, is employed or transacts business in person, or at another location convenient for the witness that is specifically determined by the Board; (2) Testimony at a hearing—the attendance of a witness for the purpose of taking testimony at a hearing; and (3) Production of books and papers—the production by the witness at the deposition or hearing of books and papers designated in the subpoena. (b) <E T="03">Voluntary cooperation.</E> Each party is expected (1) to cooperate and make available witnesses and evidence under its control as requested by the other party, without issuance of a subpoena, and (2) to secure voluntary attendance of desired third-party witnesses and production of desired third-party books, papers, documents, or tangible things whenever possible. (c) <E T="03">Requests for subpoenas.</E> (1) A request for a subpoena shall normally be filed at least: (i) 15 days before a scheduled deposition where the attendance of a witness at a deposition is sought; (ii) 30 days before a scheduled hearing where the attendance of a witness at a hearing is sought. In its discretion the Board may honor requests for subpoenas not made within these time limitations. (2) A request for a subpoena shall state the reasonable scope and general relevance to the case of the testimony and of any books and papers sought. (d) <E T="03">Requests to quash or modify.</E> Upon written request by the person subpoenaed or by a party, made within 10 days after service but in any event not later than the time specified in the subpoena for compliance, the Board may (1) quash or modify the subpoena if it is unreasonable and oppressive or for other good cause shown, or (2) require the person in whose behalf the subpoena was issued to advance the reasonable cost of producing subpoenaed books and papers. Where circumstances require, the Board may act upon such a request at any time after a copy of the request has been served upon the opposing party. (e) <E T="03">Form; issuance.</E> (1) Every subpoena shall state the name of the Board and the title of the appeal, and shall command each person to whom it is directed to attend and give testimony, and if appropriate, to produce specified books and papers at the time and place <PRTPAGE P="186"/>specified in the subpoena. In issuing a subpoena to a requesting party, the Administrative Judge shall sign the subpoena and may, in his discretion, enter the name of the witness and otherwise leave it blank. The party to whom the subpoena is issued shall complete the subpoena before service. (2) Where the witness is located in a foreign county, a letter rogatory or subpoena may be issued and served under the circumstances and in the manner provided in 28 U.S.C. 1781-1784. (f) <E T="03">Service.</E> (1) The party requesting issuance of a subpoena shall be responsible for service. (2) A subpoena requiring the attendance of a witness at a deposition or hearing may be served (i) by sending a copy of the subpoena by certified mail (return receipt requested) to the last known address of the party named in the subpoena, or (ii) by personal delivery of a copy of the subpoena to the party named in the subpoena, by a United States marshal or deputy marshal, or by any other person who is not a party and not less than 18 years of age. Service shall include the tender of the fees for one day's attendance and the mileage provided by 28 U.S.C. 1821 or other applicable law; however, where the subpoena is issued on behalf of the Government, money payments need not be tendered in advance of attendance. (3) The party at whose instance a subpoena is issued shall be responsible for the payment of fees and mileage of the witness and for the costs of service of the subpoena. (g) <E T="03">Contumacy or refusal to obey subpoena.</E> In case of contumacy or refusal to obey a subpoena by a person who resides, is found, or transacts business within the jurisdiction of a United States District Court, the Board will apply to the Court through the Attorney General of the United States for an order requiring the person to appear before the Board or a member of the Board to give testimony or produce evidence or both. <HD SOURCE="HD2">Rule 22. Copies of papers.</HD> When books, records, papers, or documents have been received in evidence, a true copy of this evidence or a copy of any material or relevant part of this evidence may be substituted during or at the conclusion of the hearing. <HD SOURCE="HD2">Rule 23. Posthearing briefs.</HD> The presiding Administrative Judge may order the parties to submit post hearing briefs to the Board. <HD SOURCE="HD2">Rule 24. Transcript of proceedings.</HD> Testimony and argument at hearings shall be reported <E T="03">verbatim,</E> unless the Board otherwise orders. Extra transcripts or copies of the proceedings in the possession of the board may be supplied to the parties. Otherwise, the parties may obtain transcripts or copies of the proceedings from the hearing reporter. <HD SOURCE="HD2">Rule 25. Withdrawal of exhibits.</HD> After a decision has become final the Board may, upon request and after notice to the other party, permit the withdrawal of original exhibits, or any part of original exhibits by the party entitled to the exhibits. The subsitution of true copies of exhibits or any part of exhibits may be required by the Board as a condition of granting permission for the withdrawal. <HD SOURCE="HD1">Representation</HD> <HD SOURCE="HD2">Rule 26. Appellant.</HD> An individual appellant may appear before the Board in person; a corporation by one of its duly authorized officers; and a partnership or joint venture by one of its duly authorized members; or any of these by an attorney at law duly licensed in any State, commonwealth, territory, the District of Columbia, or in a foreign country. An attorney representing an appellant shall file a written notice of appearance with the Board. <HD SOURCE="HD2">Rule 27. Government.</HD> Government counsel may, in accordance with their authority, represent the interests of the Government before the Board. They shall file notices of appearance with the Board. This notice of appearance will be given appellant or appellant's attorney in the form specified by the Board from time to time. Whenever an appellant and the Government are in agreement as to disposition of the controversy, the Board may suspend further processing of the appeal. However, if the Board is advised by either party that the controversy has not been disposed of by agreement, the case shall be restored to the Board's calendar without loss of position. <HD SOURCE="HD1">Decisions</HD> <HD SOURCE="HD2">Rule 28. Decisions.</HD> Decisions of the Board shall be made in writing. Copies of the decision shall be forwarded simultaneously to both parties. The rules of the Board and all final orders and decisions (except those required for good cause to be held confidential and not cited as precedents) shall be open for public inspection at the offices of the Board in Washington, DC. Decisions of the Board shall be made solely upon the record, as described in Rule 13. Oral decisions shall be rendered in accordance with Rules 12.2(c) and 12.3(c).<PRTPAGE P="187"/> <HD SOURCE="HD1">Motion for Reconsideration</HD> <HD SOURCE="HD2">Rule 29. Motion for reconsideration.</HD> A motion for reconsideration may be filed by either party. It shall set forth specifically the grounds relied upon to sustain the motion. The motion shall be filed within 30 days from the date of the receipt of a copy of the decision of the Board by the party filing the motion. <HD SOURCE="HD1">Dismissals and Defaults</HD> <HD SOURCE="HD2">Rule 30. Dismissal without prejudice.</HD> In certain cases, appeals docketed before the Board are required to be placed in a suspended status and the Board is unable to proceed with disposition for reasons not within the control of the Board. Where the suspension has continued, or may continue, for an inordinate length of time, the Board may dismiss such appeals from its docket without prejudice to their restoration to the docket when the cause of suspension has been removed. Unless either party or the Board acts within three years to reinstate any appeal dismissed without prejudice, the dismissal shall be considered to be with prejudice. <HD SOURCE="HD2">Rule 31. Dismissal or default for failure to prosecute or defend.</HD> Whenever a record discloses the failure of either party to file documents required by these rules, respond to notices or correspondence from the Board, comply with orders of the Board, or otherwise indicates an intention not to continue the prosecution or defense of an appeal, the Board may, in the case of such a default by the appellant, issue an order to show cause why the appeal should not be dismissed with prejudice or, in the case of a default by the Government, issue an order to show cause why the Board should not act under Rule 33. If good cause is not shown, the Board may take appropriate action. <HD SOURCE="HD1">Remand</HD> <HD SOURCE="HD2">Rule 32. Remand from court.</HD> Whenever any court remands a case to the Board for further proceedings, each of the parties shall, within 20 days of the remand, submit a report to the Board recommending procedures to be followed to comply with the court's order. The Board shall consider any timely filed reports and enter special orders governing the handling of the remanded case. To the extent the court's directive and time limitations permit, these orders shall conform to these rules. <HD SOURCE="HD1">Sanctions</HD> <HD SOURCE="HD2">Rule 33. Sanctions.</HD> If any party fails or refuses to obey an order issued by the Board, the Board may then make such order as it considers necessary to the just and expeditious conduct or dismissal of the appeal. <HD SOURCE="HD1">Miscellaneous Procedures</HD> <HD SOURCE="HD2">Rule 34.Applicability.</HD> These rules shall apply to all appeals relating to contracts entered into on or after March 1, 1979, and, to appeals relating to earlier contracts, with respect to claims pending before the contracting officer on March 1, 1979 or initiated thereafter, if the contractor elects to proceed under the Act. <HD SOURCE="HD2">Rule 35.Time, computation, and extensions.</HD> (a) <E T="03">General.</E> Where possible, procedural actions should be taken in less time than the maximum time allowed. Where appropriate and justified, extensions of time shall be granted. All requests for extensions of time shall be in writing and shall be filed before the due date, unless excused. (b) <E T="03">Computation.</E> In computing any period of time, the day of the event from which the designated period of time begins to run shall not be included, but the last day of the period shall be included unless it is a Saturday, Sunday, or a legal holiday, in which event the period shall run to the end of the next business day. <HD SOURCE="HD2">Rule 36.Ex parte communications.</HD> (a) <E T="03">Definition.</E> An ex parte communication is any communication with a member of the Board, direct or indirect, oral or written, concerning the merits of matters in issue of any pending proceeding which is made by a party in the absence of any other party. Ex parte communications do not include communications where: (1) The purpose and content of the communication have been disclosed in advance or simultaneously to all parties; (2) The communication is a request for information concerning the status of the case; or (3) The communication involves the Board's administrative functions or procedures. (b) <E T="03">Prohibition of ex parte communications.</E> Ex parte communications are prohibited. (c) <E T="03">Procedure after receipt of ex parte communications.</E> Any member of the Board who receives an ex parte communication that the member of the Board knows or has reason to believe is unauthorized shall promptly place the communication, or its substance, in all files and shall furnish copies to all parties. <PRTPAGE P="188"/>Unauthorized ex parte communications shall not be taken into consideration in deciding any matter in issue. </EXTRACT> <CITA>[50 FR 45912, Nov. 5, 1985, as amended at 52 FR 27130, July 17, 1987; 57 FR 20201, May 12, 1992; 61 FR 13280-13281, Mar. 26, 1996]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 24</EAR> <HD SOURCE="HED">PART 24—GOVERNMENT DEBARMENT AND SUSPENSION AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECHD>Sec.</SECHD> <SECTNO>24.100</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>24.105</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>24.110</SECTNO> <SUBJECT>Coverage.</SUBJECT> <SECTNO>24.115</SECTNO> <SUBJECT>Policy.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Effect of Action</HD> <SECTNO>24.200</SECTNO> <SUBJECT>Debarment or suspension.</SUBJECT> <SECTNO>24.205</SECTNO> <SUBJECT>Ineligible persons.</SUBJECT> <SECTNO>24.210</SECTNO> <SUBJECT>Voluntary exclusion.</SUBJECT> <SECTNO>24.215</SECTNO> <SUBJECT>Exception provision.</SUBJECT> <SECTNO>24.220</SECTNO> <SUBJECT>Continuation of covered transactions.</SUBJECT> <SECTNO>24.225</SECTNO> <SUBJECT>Failure to adhere to restrictions.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart C—Debarment</HD> <SECTNO>24.300</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>24.305</SECTNO> <SUBJECT>Causes for debarment.</SUBJECT> <SECTNO>24.310</SECTNO> <SUBJECT>Procedures.</SUBJECT> <SECTNO>24.311</SECTNO> <SUBJECT>Investigation and referral.</SUBJECT> <SECTNO>24.312</SECTNO> <SUBJECT>Notice of proposed debarment.</SUBJECT> <SECTNO>24.313</SECTNO> <SUBJECT>Opportunity to contest proposed debarment.</SUBJECT> <SECTNO>24.314</SECTNO> <SUBJECT>Debarring official's decision.</SUBJECT> <SECTNO>24.315</SECTNO> <SUBJECT>Settlement and voluntary exclusion.</SUBJECT> <SECTNO>24.320</SECTNO> <SUBJECT>Period of debarment.</SUBJECT> <SECTNO>24.325</SECTNO> <SUBJECT>Scope of debarment.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Suspension</HD> <SECTNO>24.400</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>24.405</SECTNO> <SUBJECT>Causes for suspension.</SUBJECT> <SECTNO>24.410</SECTNO> <SUBJECT>Procedures.</SUBJECT> <SECTNO>24.411</SECTNO> <SUBJECT>Notice of suspension.</SUBJECT> <SECTNO>24.412</SECTNO> <SUBJECT>Opportunity to contest suspension.</SUBJECT> <SECTNO>24.413</SECTNO> <SUBJECT>Suspending official's decision.</SUBJECT> <SECTNO>24.415</SECTNO> <SUBJECT>Period of suspension.</SUBJECT> <SECTNO>24.420</SECTNO> <SUBJECT>Scope of suspension.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Responsibilities of GSA, Agency and Participants</HD> <SECTNO>24.500</SECTNO> <SUBJECT>GSA responsibilities.</SUBJECT> <SECTNO>24.505</SECTNO> <SUBJECT>HUD responsibilities.</SUBJECT> <SECTNO>24.510</SECTNO> <SUBJECT>Participants’ responsibilities.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Drug-Free Workplace Requirements (Grants)</HD> <SECTNO>24.600</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SECTNO>24.605</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>24.610</SECTNO> <SUBJECT>Coverage.</SUBJECT> <SECTNO>24.615</SECTNO> <SUBJECT>Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.</SUBJECT> <SECTNO>24.620</SECTNO> <SUBJECT>Effect of violation.</SUBJECT> <SECTNO>24.625</SECTNO> <SUBJECT>Exception provision.</SUBJECT> <SECTNO>24.630</SECTNO> <SUBJECT>Certification requirements and procedures.</SUBJECT> <SECTNO>24.635</SECTNO> <SUBJECT>Reporting of and employee sanctions for convictions of criminal drug offenses.</SUBJECT> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Limited Denial of Participation</HD> <SECTNO>24.700</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>24.705</SECTNO> <SUBJECT>Causes for a limited denial of participation.</SUBJECT> <SECTNO>24.710</SECTNO> <SUBJECT>Period and scope of a limited denial of participation.</SUBJECT> <SECTNO>24.711</SECTNO> <SUBJECT>Notice of limited denial of participation.</SUBJECT> <SECTNO>24.712</SECTNO> <SUBJECT>Conference.</SUBJECT> <SECTNO>24.713</SECTNO> <SUBJECT>Opportunity to contest the limited denial of participation.</SUBJECT> <SECTNO>24.714</SECTNO> <SUBJECT>Reporting of limited denial of participation.</SUBJECT> </SUBPART> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 41 U.S.C. 701 <E T="03">et seq.</E>; 42 U.S.C. 3535(d); E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3 CFR, 1989 Comp., p. 235. </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 19182 and 19204, May 26, 1988, unless otherwise noted. </SOURCE> <CROSSREF> <HD SOURCE="HED">Cross Reference:</HD> See also Office of Management and Budget notice published at 55 FR 21679, May 25, 1990, and 60 FR 33036, June 26, 1995. </CROSSREF> <SUBPART> <HD SOURCE="HED">Subpart A—General</HD> <SECTION> <SECTNO>§ 24.100</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) Executive Order (E.O.) 12549 provides that, to the extent permitted by law, Executive departments and agencies shall participate in a governmentwide system for nonprocurement debarment and suspension. A person who is debarred or suspended shall be excluded from Federal financial and nonfinancial assistance and benefits under Federal programs and activities. Debarment or suspension of a participant in a program by one agency shall have governmentwide effect. (b) These regulations implement section 3 of E.O. 12549 and the guidelines promulgated by the Office of Management and Budget under section 6 of the E.O. by: (1) Prescribing the programs and activities that are covered by the governmentwide system;<PRTPAGE P="189"/> (2) Prescribing the governmentwide criteria and governmentwide minimum due process procedures that each agency shall use; (3) Providing for the listing of debarred and suspended participants, participants declared ineligible (see definition of “ineligible” in § 24.105), and participants who have voluntarily excluded themselves from participation in covered transactions; (4) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion; and (5) Offering such other guidance as necessary for the effective implementation and administration of the governmentwide system. (c) These regulations also implement Executive Order 12689 (3 CFR, 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103-355, sec. 2455, 108 Stat. 3327) by— (1) Providing for the inclusion in the <E T="03">List of Parties Excluded from Federal Procurement and Nonprocurement Programs</E> all persons proposed for debarment, debarred or suspended under the Federal Acquisition Regulation, 48 CFR part 9, subpart 9.4; persons against which governmentwide exclusions have been entered under this part; and persons determined to be ineligible; and (2) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion. (d) Although these regulations cover the listing of ineligible participants and the effect of such listing, they do not prescribe policies and procedures governing declarations of ineligibility. (e) These regulations also: (1) Prescribe policies and procedures governing the debarment and suspension of contractors and the limited denial of participation of participants and contractors; (2) Provide for the listing of debarred, suspended and ineligible contractors; and (3) Set forth the consequences of such listing. (f) Although this part covers the listing of ineligible contractors, it does not prescribe policies and procedures governing declarations of ineligibility. <CITA>[60 FR 33040, 33048, June 26, 1995, as amended at 60 FR 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.105</SECTNO> <SUBJECT>Definitions.</SUBJECT> The following definitions apply to this part: <E T="03">Adequate evidence.</E> Information sufficient to support the reasonable belief that a particular act or omission has occurred. <E T="03">Affiliate.</E> Persons are affiliates of each other if, directly or indirectly, either one controls or has the power to control the other, <E T="03">or</E>, a third person controls or has the power to control both. Indicia of control include, but are not limited to: interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the suspension or debarment of a person which has the same or similar management, ownership, or principal employees as the suspended, debarred, ineligible, or voluntarily excluded person. <E T="03">Agency.</E> Any executive department, military department or defense agency or other agency of the executive branch, excluding the independent regulatory agencies. <E T="03">Benefits</E>. Money or any other thing of value provided by, or realized because of the Department. <E T="03">Thing of value</E> includes insurance or guarantees of any kind. <E T="03">Civil judgment.</E> The disposition of a civil action by any court of competent jurisdiction, whether entered by verdict, decision, settlement, stipulation, or otherwise creating a civil liability for the wrongful acts complained of; or a final determination of liability under the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-12). <E T="03">Contractor</E>. As used in this part, contractor means any individual or other legal entity that: (1) Submits offers for, or is awarded, or reasonably may be expected to submit offers for or be awarded, a Government contract (or a subcontract under a Government contract); or (2) Conducts business with the Government as an agent or representative of another contractor;<PRTPAGE P="190"/> <E T="03">Conviction.</E> A judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, including a plea of nolo contendere. <E T="03">Debarment.</E> An action taken by a debarring official in accordance with these regulations to exclude a person from participating in covered transactions. A person so excluded is <E T="03">debarred.</E> <E T="03">Debarring official.</E> An official authorized to impose debarment. The debarring official is either: (1) The agency head, or (2) An official designated by the agency head. <E T="03">Hearing officer</E>. An Administrative Law Judge or Board of Contract Appeals Judge authorized by HUD's Secretary, or by the Secretary's designee, to conduct proceedings under this part. <E T="03">HUD</E>. Department of Housing and Urban Development. <E T="03">Indictment.</E> Indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense shall be given the same effect as an indictment. <E T="03">Ineligible.</E> Excluded from participation in Federal nonprocurement programs pursuant to a determination of ineligibility under statutory, executive order, or regulatory authority, other than Executive Order 12549 and its agency implementing regulations; for exemple, excluded pursuant to the Davis-Bacon Act and its implementing regulations, the equal employment opportunity acts and executive orders, or the environmental protection acts and executive orders. A person is ineligible where the determination of ineligibility affects such person's eligibility to participate in more than one covered transaction. <E T="03">Legal proceedings.</E> Any criminal proceeding or any civil judicial proceeding to which the Federal Government or a State or local government or quasi-governmental authority is a party. The term includes appeals from such proceedings. <E T="03">Limited denial of participation.</E> An action taken by a HUD official, in accordance with subpart G of these regulations, that immediately excludes or restricts a person from participating in HUD program(s) within a defined geographic area. <E T="03">List of Parties Excluded from Federal Procurement and Nonprocurement Programs.</E> A list compiled, maintained and distributed by the General Services Administration (GSA) containing the names and other information about persons who have been debarred, suspended, or voluntarily excluded under Executive Orders 12549 and 12689 and these regulations or 48 CFR part 9, subpart 9.4, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, and those persons who have been determined to be ineligible. <E T="03">Notice.</E> A written communication served in person or sent by certified mail, return receipt requested, or its equivalent, to the last known address of a party, its identified counsel, its agent for service of process, or any partner, officer, director, owner, or joint venturer of the party. Notice, if undeliverable, shall be considered to have been received by the addressee five days after being properly sent to the last address known by the agency. <E T="03">Participant.</E> Any person who submits a proposal for, enters into, or reasonably may be expected to enter into a covered transaction. This term also includes any person who acts on behalf of or is authorized to commit a participant in a covered transaction as an agent or representative of another participant. <E T="03">Person.</E> Any individual, corporation, partnership, association, unit of government or legal entity, however organized, except: foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities. <E T="03">Preponderance of the evidence.</E> Proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not. <E T="03">Principal.</E> Officer, director, owner, partner, key employee, or other person within a participant with primary management or supervisory responsibilities; or a person who has a critical influence on or substantive control <PRTPAGE P="191"/>over a covered transaction, whether or not employed by the participant. Persons who have a critical influence on or substantive control over a covered transaction are: (1) Principal investigators. (2) Loan officers; (3) Staff appraisers and inspectors; (4) Underwriters; (5) Bonding companies; (6) Borrowers under programs financed by HUD or with loans guaranteed, insured or subsidized through HUD programs; (7) Purchasers of properties with HUD-insured or Secretary-held mortgages; (8) Recipients under HUD assistance agreements; (9) Ultimate beneficiaries of HUD programs; (10) Fee appraisers and inspectors; (11) Real estate agents and brokers; (12) Management and marketing agents; (13) Accountants, consultants, investment bankers, architects, engineers, attorneys and others in a business relationship with participants in connection with a covered transaction under a HUD program; (14) Contractors involved in the construction or rehabilitation of properties financed by HUD, with HUD insured loans, or acquired properties including properties held by HUD as mortgagee-in-possession; (15) Closing agents; (16) Turnkey developers of projects financed by or with financing insured by HUD; (17) Title companies; (18) Escrow agents; (19) Project owners; (20) Administrators of nursing homes and projects for the elderly financed or insured by HUD; (21) Developers, sellers or owners of property financed with loans insured under title I or title II of the National Housing Act; and (22) Employees or agents of any of the above. <E T="03">Procurement List</E>. A list compiled, maintained, and distributed by the General Services Administration (GSA) (see § 24.500(c)), containing the names and other information regarding contractors debarred or suspended or declared ineligible by agencies under the procedures of this part as well as under other statutory or regulatory authority. <E T="03">Proposal.</E> A solicited or unsolicited bid, application, request, invitation to consider or similar communication by or on behalf of a person seeking to participate or to receive a benefit, directly or indirectly, in or under a covered transaction. <E T="03">Respondent.</E> A person against whom a debarment or suspension action has been initiated. (1) A respondent is also a person against whom a limited denial of participation has been initiated. (2) [Reserved] <E T="03">State.</E> Any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written determination from a State government that such State considers that instrumentality to be an agency of the State government. <E T="03">Suspending official.</E> An official authorized to impose suspension. The suspending official is either: (1) The agency head, or (2) An official designated by the agency head. <E T="03">Suspension.</E> An action taken by a suspending official in accordance with these regulations that immediately excludes a person from participating in covered transactions for a temporary period, pending completion of an investigation and such legal, debarment, or Program Fraud Civil Remedies Act proceedings as may ensue. A person so excluded is <E T="03">suspended.</E> <E T="03">Ultimate beneficiaries</E>. Ultimate beneficiaries of HUD programs include, but are not limited to, subsidized tenants and subsidized mortgagors such as those assisted under Section 8 Housing Assistance Payments Contracts, by Section 236 Rental Assistance, or by Rent Supplement payments. <E T="03">Voluntary exclusion or voluntarily excluded.</E> A status of nonparticipation or <PRTPAGE P="192"/>limited participation in covered transactions assumed by a person pursuant to the terms of a settlement. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19182, May 26, 1988, 53 FR 30051, Aug. 10, 1988; 60 FR 33040, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.110</SECTNO> <SUBJECT>Coverage.</SUBJECT> (a) These regulations apply to all persons who have participated, are currently participating or may reasonably be expected to participate in transactions under Federal nonprocurement programs. For purposes of these regulations such transactions will be referred to as <E T="03">covered transactions.</E> (1) <E T="03">Covered transaction.</E> For purposes of these regulations, a covered transaction is a primary covered transaction or a lower tier covered transaction. Covered transactions at any tier need not involve the transfer of Federal funds. (i) <E T="03">Primary covered transaction.</E> Except as noted in paragraph (a)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regardless of type, including: grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person. Primary covered transactions also include those transactions specially designated by the U.S. Department of Housing and Urban Development in such agency's regulations governing debarment and suspension. (A) Specially designated transactions are: (<E T="03">1</E>) Transactions regulated by the Interstate Land Sales Act (15 U.S.C. 1701); (<E T="03">2</E>) Transactions regulated by the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401); (<E T="03">3</E>) Any procurement transaction between HUD and a person. (ii) <E T="03">Lower tier covered transaction.</E> A lower tier covered transaction is: (A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction. (B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary covered transaction. (C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons are: (<E T="03">1</E>) Principal investigators. (<E T="03">2</E>) Providers of federally-required audit services. (<E T="03">3</E>) Bonding companies; (<E T="03">4</E>) Borrowers; (<E T="03">5</E>) Purchasers of a property with a HUD-insured or Secretary-held mortgage; (<E T="03">6</E>) Recipients under HUD assistance agreements; (<E T="03">7</E>) Ultimate beneficiaries of HUD programs; (<E T="03">8</E>) Fee appraisers and inspectors; (<E T="03">9</E>) Real estate agents and brokers; (<E T="03">10</E>) Management and marketing agents; (<E T="03">11</E>) Accountants, consultants, investment bankers; architects, engineers, attorneys and others in a business relationship with participants in connection with a covered transaction under a HUD program; (<E T="03">12</E>) Contractors involved in the construction or rehabilitation of properties financed by HUD, with HUD insured loans, or acquired properties including properties held by HUD as mortgagee-in-possession; (<E T="03">13</E>) Closing agents; (<E T="03">14</E>) Turnkey developers of projects financed with or insured by HUD; (<E T="03">15</E>) Title companies; (<E T="03">16</E>) Escrow agents; (<E T="03">17</E>) Project owners; (<E T="03">18</E>) Administrators of nursing homes and projects for the elderly financed or insured by HUD; (<E T="03">19</E>) Developers, sellers or owners of property financed with loans insured under title I or title II of the National Housing Act; and<PRTPAGE P="193"/> (<E T="03">20</E>) Employees or agents of any of the above. (2) <E T="03">Exceptions.</E> The following transactions are not covered: (i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; (ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, entities consisting wholly or partially of foreign governments or foreign governmental entities; (iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); (iv) Federal employment; (v) Transactions pursuant to national or agency-recognized emergencies or disasters; (vi) Incidental benefits derived from ordinary governmental operations; and (vii) Other transactions where the application of these regulations would be prohibited by law. (3) <E T="03">Other exceptions.</E> (i) Sanctions against participants whose only involvement in HUD programs is as ultimate beneficiaries, such as subsidized tenants and subsidized mortgagors, may be taken only upon commission of one of the offenses set forth in § 24.305(a), unless the participant has otherwise been debarred or suspended by another Federal agency. (ii) Sanctions under this part against mortgagees and lenders approved by HUD to participate in Federal Housing Administration programs may be initiated only with the approval of the Mortgagee Review Board. (b) <E T="03">Relationship to other sections.</E> This section describes the types of transactions to which a debarment or suspension under the regulations will apply. Subpart B, “Effect of Action,” § 24.200, “Debarment or suspension,” sets forth the consequences of a debarment or suspension. Those consequences would obtain only with respect to participants and principals in the covered transactions and activities described in § 24.110(a). Sections 24.325, “Scope of debarment,” and 24.420, “Scope of suspension,” govern the extent to which a specific participant or organizational elements of a participant would be automatically included within a debarment or suspension action, and the conditions under which affiliates or persons associated with a participant may also be brought within the scope of the action. (c) <E T="03">Relationship to Federal procurement activities.</E> In accordance with E.O. 12689 and section 2455 of Public Law 103-355, any debarment, suspension, proposed debarment or other governmentwide exclusion initiated under the Federal Acquisition Regulation (FAR) on or after August 25, 1995 shall be recognized by and effective for Executive Branch agencies and participants as an exclusion under this regulation. Similarly, any debarment, suspension or other governmentwide exclusion initiated under this regulation on or after August 25, 1995 shall be recognized by and effective for those agencies as a debarment or suspension under the FAR. (d) These regulations also apply to all persons who have participated, are currently participating or may reasonably be expected to participate in Federal procurement programs. For purposes of these regulations, such persons will be referred to as <E T="03">contractors</E> and such transactions will be referred to as <E T="03">procurement contracts.</E> The consequences of a debarment or suspension as set forth in § 24.200 apply to contractors in Federal procurement programs, and §§ 24.325 and 24.420 govern the extent to which a specific contractor or its organizational elements would be included within a debarment or suspension action. (e) <E T="03">Retroactivity.</E> Limitations on participation in HUD programs proposed or imposed prior to the effective date of these regulations under an ancillary procedure shall not be affected by this part. This part shall apply to sanctions initiated after the effective date of <PRTPAGE P="194"/>these regulations (October 1, 1988) regardless of the date of the cause giving rise to the sanction. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19183, May 26, 1988, 53 FR 30051, Aug. 10, 1988; 60 FR 33041, 33048, June 26, 1995; 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.115</SECTNO> <SUBJECT>Policy.</SUBJECT> (a) In order to protect the public interest, it is the policy of the Federal Government to conduct business only with responsible persons. Debarment and suspension are discretionary actions that, taken in accordance with Executive Order 12549 and these regulations, are appropriate means to implement this policy. (b) Debarment and suspension are serious actions which shall be used only in the public interest and for the Federal Government's protection and not for purposes of punishment. Agencies may impose debarment or suspension for the causes and in accordance with the procedures set forth in these regulations. (c) When more than one agency has an interest in the proposed debarment or suspension of a person, consideration shall be given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33048, June 26, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Effect of Action</HD> <SECTION> <SECTNO>§ 24.200</SECTNO> <SUBJECT>Debarment or suspension.</SUBJECT> (a) <E T="03">Primary covered transactions.</E> Except to the extent prohibited by law, persons who are debarred or suspended shall be excluded from primary covered transactions as either participants or principals throughout the Executive Branch of the Federal Government for the period of their debarment, suspension, or the period they are proposed for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall enter into primary covered transactions with such excluded persons during such period, except as permitted pursuant to § 24.215. (b) <E T="03">Lower tier covered transactions.</E> Except to the extent prohibited by law, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded from participating as either participants or principals in all lower tier covered transactions (see § 24.110(a)(1)(ii)) for the period of their exclusion. (c) <E T="03">Exceptions.</E> Debarment or suspension does not affect a person's eligibility for— (1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; (2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities; (3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); (4) Federal employment; (5) Transactions pursuant to national or agency-recognized emergencies or disasters; (6) Incidental benefits derived from ordinary governmental operations; and (7) Other transactions where the application of these regulations would be prohibited by law. (8) Debarment for any of the causes set forth in § 24.305(f) shall have no governmentwide effect. (9) Sanctions imposed on an individual participant under this part shall not preclude the participant from selling his or her principal residence to a purchaser using HUD/FHA financing. (d) <E T="03">Relationship to HUD administrative sanction procedures—</E>(1) <E T="03">Sanctions provided pursuant to contract provisions.</E> Nothing in this part shall impair or limit the right to impose any sanction provided for by contract, including guaranty agreements with the Government National Mortgage Association.<PRTPAGE P="195"/> (2) <E T="03">Other Departmental sanctions.</E> Where an office of the Department is required by statute, regulation, or Executive Order to follow administrative sanction procedures that may differ from the requirements of this part, the requirements of the statute, regulation, or Executive Order shall take precedence. These alternative procedures include, but are not limited to: 24 CFR part 200 Previous Participation Review and Clearance procedures, 24 CFR part 25 Mortgagee Review Board administrative actions, and 24 CFR part 570 Community Development Block Grant corrective and remedial actions. <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.205</SECTNO> <SUBJECT>Ineligible persons.</SUBJECT> Persons who are ineligible, as defined in § 24.105(i), are excluded in accordance with the applicable statutory, executive order, or regulatory authority. </SECTION> <SECTION> <SECTNO>§ 24.210</SECTNO> <SUBJECT>Voluntary exclusion.</SUBJECT> Persons who accept voluntary exclusions under § 24.315 are excluded in accordance with the terms of their settlements. HUD shall, and participants may, contact the original action agency to ascertain the extent of the exclusion. </SECTION> <SECTION> <SECTNO>§ 24.215</SECTNO> <SUBJECT>Exception provision.</SUBJECT> HUD may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549 and § 24.200. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with § 24.505(a). <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.220</SECTNO> <SUBJECT>Continuation of covered transactions.</SUBJECT> (a) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action. (b) Agencies and participants shall not renew or extend covered transactions (other than no-cost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in § 24.215. <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.225</SECTNO> <SUBJECT>Failure to adhere to restrictions.</SUBJECT> (a) Except as permitted under § 24.215 or § 24.220, a participant shall not knowingly do business under a covered transaction with a person who is— (1) Debarred or suspended; (2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or (3) Ineligible for or voluntarily excluded from the covered transaction. (b) Violation of the restriction under paragraph (a) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate. (c) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction (See appendix B of these regulations), unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification. <CITA>[60 FR 33041, 33048, June 26, 1995]</CITA> </SECTION> </SUBPART> <SUBPART> <PRTPAGE P="196"/> <HD SOURCE="HED">Subpart C—Debarment</HD> <SECTION> <SECTNO>§ 24.300</SECTNO> <SUBJECT>General.</SUBJECT> The debarring official may debar a person for any of the causes in § 24.305, using procedures established in §§ 24.310 through 24.314. The existence of a cause for debarment, however, does not necessarily require that the person be debarred; the seriousness of the person's acts or omissions and any mitigating factors shall be considered in making any debarment decision. </SECTION> <SECTION> <SECTNO>§ 24.305</SECTNO> <SUBJECT>Causes for debarment.</SUBJECT> Debarment may be imposed in accordance with the provisions of §§ 24.300 through 24.314 for: (a) Conviction of or civil judgment for: (1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction; (2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging; (3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, or obstruction of justice; or (4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a person. (b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as: (1) A willful failure to perform in accordance with the terms of one or more public agreements or transactions; (2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or (3) A willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction. (c) Any of the following causes: (1) A nonprocurement debarment by any Federal agency taken before October 1, 1988, the effective date of these regulations, or a procurement debarment by any Federal agency taken pursuant to 48 CFR subpart 9.4; (2) Knowingly doing business with a debarred, suspended, ineligible, or voluntarily excluded person, in connection with a covered transaction, except as permitted in § 24.215 or § 24.220; (3) Failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owed the Federal Government under the Internal Revenue Code) owed to any Federal agency or instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted; (4) Violation of a material provision of a voluntary exclusion agreement entered into under § 24.315 or of any settlement of a debarment or suspension action; or (5) Violation of any requirement of subpart F of this part, relating to providing a drug-free workplace, as set forth in § 24.615 of this part. (d) Any other cause of so serious or compelling a nature that it affects the present responsibility of a person. (e) Debarment of a contractor may be imposed for any of the causes in paragraphs (a), (b), and (d). For purposes of this section, <E T="03">agreement</E> is deemed to include <E T="03">contracts or subcontracts.</E> (f) In addition to the causes set forth above, HUD may debar a person from participating in any programs or activities of the Department for material violation of a statutory or regulatory provision or program requirement applicable to a public agreement or transaction including applications for grants, financial assistance, insurance or guarantees, or to the performance of requirements under a grant, assistance award or conditional or final commitment to insure or guarantee. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19184, May 26, 1988, 54 FR 4950 and 4957, Jan. 31, 1989; 60 FR 33049, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.310</SECTNO> <SUBJECT>Procedures.</SUBJECT> HUD shall process debarment actions as informally as practicable, consistent with the principles of fundamental <PRTPAGE P="197"/>fairness, using the procedures in §§ 24.311 through 24.314. </SECTION> <SECTION> <SECTNO>§ 24.311</SECTNO> <SUBJECT>Investigation and referral.</SUBJECT> Information concerning the existence of a cause for debarment from any source shall be promptly reported, investigated, and referred, when appropriate, to the debarring official for consideration. After consideration, the debarring official may issue a notice of proposed debarment. </SECTION> <SECTION> <SECTNO>§ 24.312</SECTNO> <SUBJECT>Notice of proposed debarment.</SUBJECT> A debarment proceeding shall be initiated by notice to the respondent advising: (a) That debarment is being considered; (b) Of the reasons for the proposed debarment in terms sufficient to put the respondent on notice of the conduct or transaction(s) upon which it is based; (c) Of the cause(s) relied upon under § 24.305 for proposing debarment; (d) Of the provisions of § 24.311 through § 24.314, and any other HUD procedures, if applicable, governing debarment decisionmaking; and (e) Of the potential effect of a debarment. </SECTION> <SECTION> <SECTNO>§ 24.313</SECTNO> <SUBJECT>Opportunity to contest proposed debarment.</SUBJECT> (a) <E T="03">Submission in opposition.</E> Within 30 days after receipt of the notice of proposed debarment, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment. (1) The information and argument should be addressed to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. (2) If the respondent does not contest the proposed debarment within the 30 day period, the proposed debarment shall become final. (3) If the respondent desires a hearing, it shall submit a written request to the Debarment Docket Clerk within the 30-day period following receipt of the notice of proposed debarment. (4) The parties may agree to engage in an alternative dispute resolution, including informal conference, mediation, conciliation, summary trial with binding decision, minitrial, or use of a settlement judge. (b) <E T="03">Additional proceedings as to disputed material facts.</E> (1) In actions not based upon a conviction or civil judgment, if the debarring official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the proposed debarment, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witness the agency presents. (2) A transcribed record of any additional proceedings shall be made available at cost to the respondent, upon request, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript. (i) Upon the agreement of the parties, the additional proceedings may be recorded using audiotape without transcription. The audiotape shall be made available at cost to the respondent. (ii) [Reserved] <CITA>[60 FR 33049, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.314</SECTNO> <SUBJECT>Debarring official's decision.</SUBJECT> (a) <E T="03">No additional proceedings necessary.</E> In actions based upon a conviction or civil judgment, or in which there is no genuine dispute over material facts, the debarring official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the debarring official extends this period for good cause. (1) The debarring official may, in his or her discretion, refer actions based upon a conviction or civil judgment, or in which there is no genuine dispute over material facts, to a hearing officer or other official for review of the administrative record and appropriate findings. The hearing officer or other official shall issue such findings within 45 days after the referral, and the debarring official shall issue a decision within 15 days after the date of the findings, unless such periods are extended for good cause. (2) [Reserved]<PRTPAGE P="198"/> (b) <E T="03">Additional proceedings necessary.</E> (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The debarring official shall base the decision on the facts as found, together with any information and argument submitted by the respondent and any other information in the administrative record. (2) The debarring official may refer disputed material facts to another official for findings of fact. The debarring official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous. (i) The debarring official may refer disputed material facts and issues of law to a hearing officer for findings of fact and conclusions of law. (A) No appeal to the Secretary may be taken under §§ 26.24 through 26.26 of this title with respect to any order or decision by a hearing officer or other official. (B) The debarring official shall provide the hearing officer or other official with all the information in the administrative record, including any information and argument submitted by the respondent. The administrative record and any documents admitted at the hearing shall constitute the exhibits in evidence. (ii) Unless the parties mutually agree to extend this period, a proceeding before a hearing officer or other official shall commence within 45 days after referral of the case by the debarring official. The hearing officer or other official shall issue findings of fact within 30 days after the conclusion of such additional proceedings. The time limitations of this subparagraph may be extended upon issuance, by the debarring official, hearing officer or other official, of a written notice describing good cause for such extension. (3) The debarring official's decision shall be made after the conclusion of the proceedings with respect to the disputed facts. (i) Such decision shall be made within 15 days after the hearing officer or other official issues findings of fact. (ii) [Reserved] (c)(1) <E T="03">Standard of proof.</E> In any debarment action, the cause for debarment must be established by a preponderance of the evidence. Where the proposed debarment is based upon a conviction or civil judgment, the standard shall be deemed to have been met. (2) <E T="03">Burden of proof.</E> The burden of proof is on the agency proposing debarment. (d) <E T="03">Notice of debarring official's decision.</E> (1) If the debarring official decides to impose debarment, the respondent shall be given prompt notice: (i) Referring to the notice of proposed debarment; (ii) Specifying the reasons for debarment; (iii) Stating the period of debarment, including effective dates; and (iv) Advising that the debarment is effective for covered transactions throughout the executive branch of the Federal Government unless an agency head or an authorized designee makes the determination referred to in § 24.215. (A) Where a debarment is based solely on § 24.305(f), the notice of the debarring official's decision shall advise that the debarment is effective for programs or activities of the Department. (B) [Reserved] (2) If the debarring official decides not to impose debarment, the respondent shall be given prompt notice of that decision. A decision not to impose debarment shall be without prejudice to a subsequent imposition of debarment by any other agency. <CITA>[60 FR 33049, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.315</SECTNO> <SUBJECT>Settlement and voluntary exclusion.</SUBJECT> (a) When in the best interest of the Government, HUD may, at any time, settle a debarment or suspension action. (b) If a participant and the agency agree to a voluntary exclusion of the participant, such voluntary exclusion shall be entered on the Nonprocurement List (see subpart E). </SECTION> <SECTION> <SECTNO>§ 24.320</SECTNO> <SUBJECT>Period of debarment.</SUBJECT> (a) Debarment shall be for a period commensurate with the seriousness of the cause(s). If a suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.<PRTPAGE P="199"/> (1) Debarment for causes other than those related to a violation of the requirements of subpart F of this part generally should not exceed three years. Where circumstances warrant, a longer period of debarment may be imposed. (2) In the case of a debarment for a violation of the requirements of subpart F of this part (<E T="03">see</E> § 24.305(c)(5)), the period of debarment shall not exceed five years. (b) The debarring official may extend an existing debarment for an additional period, if that official determines that an extension is necessary to protect the public interest. However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. If debarment for an additional period is determined to be necessary, the procedures of §§ 24.311 through 24.314 shall be followed to extend the debarment. (c) The respondent may request the debarring official to reverse the debarment decision or to reduce the period or scope of debarment. Such a request shall be in writing and supported by documentation. The debarring official may grant such a request for reasons including, but not limited to: (1) Newly discovered material evidence; (2) Reversal of the conviction or civil judgment upon which the debarment was based; (3) Bona fide change in ownership or management; (4) Elimination of other causes for which the debarment was imposed; or (5) Other reasons the debarring official deems appropriate. (d) Where respondent's request to reduce the period or scope of debarment is based on reasons set forth in paragraphs (c)(4) or (5) of this section, such request may not be submitted earlier than six months after the final decision to debar. In no event may more than one such request be submitted within any 12-month period. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19185, May 26, 1988, 54 FR 4950 and 4957, Jan 31, 1989]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.325</SECTNO> <SUBJECT>Scope of debarment.</SUBJECT> (a) <E T="03">Scope in general.</E> (1) Debarment of a person under these regulations constitutes debarment of all its divisions and other organizational elements from all covered transactions, unless the debarment decision is limited by its terms to one or more specifically identified individuals, divisions or other organizational elements or to specific types of transactions. (2) The debarment action may include any affiliate of the participant that is specifically named and given notice of the proposed debarment and an opportunity to respond (see §§ 24.311 through 24.314). (3) Debarment of a contractor under these regulations, or by another Federal agency pursuant to 48 CFR subpart 9.4, constitutes debarment of all its divisions and other organizational elements from all Federal procurement, unless the debarment is limited by its terms to one or more specifically identified individuals, divisions, or other organizational elements or to specific types of contracts. The debarment may be extended to include any affiliates of the contractor, if they are specifically named, given written notice of the proposed debarment, and provided with an opportunity to respond. (b) <E T="03">Imputing conduct.</E> For purposes of determining the scope of debarment, conduct may be imputed as follows: (1) <E T="03">Conduct imputed to participant.</E> The fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a participant may be imputed to the participant when the conduct occurred in connection with the individual's performance of duties for or on behalf of the participant, or with the participant's knowledge, approval, or acquiescence. The participant's acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence. (2) <E T="03">Conduct imputed to individuals associated with participant.</E> The fraudulent, criminal, or other seriously improper conduct of a participant may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the participant who participated in, knew of, or <PRTPAGE P="200"/>had reason to know of the participant's conduct. (3) <E T="03">Conduct of one participant imputed to other participants in a joint venture.</E> The fraudulent, criminal, or other seriously improper conduct of one participant in a joint venture, grant pursuant to a joint application, or similar arrangement may be imputed to other participants if the conduct occurred for or on behalf of the joint venture, grant pursuant to a joint application, or similar arrangement may be imputed to other participants if the conduct occurred for or on behalf of the joint venture, grant pursuant to a joint application, or similar arrangement or with the knowledge, approval, or acquiescence of these participants. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence. (4) The provisions of paragraphs (b)(1) through (3) of this section are also applicable for purposes of imputing conduct to a contractor. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19185, May 26, 1988]</CITA> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart D—Suspension</HD> <SECTION> <SECTNO>§ 24.400</SECTNO> <SUBJECT>General.</SUBJECT> (a) The suspending official may suspend a person for any of the causes in § 24.405 using procedures established in §§ 24.410 through 24.413. (b) Suspension is a serious action to be imposed only when: (1) There exists adequate evidence of one or more of the causes set out in § 24.405, and (2) Immediate action is necessary to protect the public interest. (c) In assessing the adequacy of the evidence, the agency should consider how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such as grants, cooperative agreements, loan authorizations, and contracts. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.405</SECTNO> <SUBJECT>Causes for suspension.</SUBJECT> (a) Suspension may be imposed in accordance with the provisions of §§ 24.400 through 24.413 upon adequate evidence: (1) To suspect the commission of an offense listed in § 24.305(a); or (2) That a cause for debarment under § 24.305 may exist. (b) Indictment shall constitute adequate evidence for purposes of suspension actions. </SECTION> <SECTION> <SECTNO>§ 24.410</SECTNO> <SUBJECT>Procedures.</SUBJECT> (a) <E T="03">Investigation and referral.</E> Information concerning the existence of a cause for suspension from any source shall be promptly reported, investigated, and referred, when appropriate, to the suspending official for consideration. After consideration, the suspending official may issue a notice of suspension. (b) <E T="03">Decisionmaking process.</E> HUD shall process suspension actions as informally as practicable, consistent with principles of fundamental fairness, using the procedures in § 24.411 through § 24.413. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.411</SECTNO> <SUBJECT>Notice of suspension.</SUBJECT> When a respondent is suspended, notice shall immediately be given: (a) That the suspension has been imposed; (b) That the suspension is based on an indictment, conviction, or other adequate evidence that the respondent has committed irregularities seriously reflecting on the propriety of further Federal Government dealings with the respondent; (c) Describing any such irregularities in terms sufficient to put the respondent on notice without disclosing the Federal Government's evidence; (d) Of the cause(s) relied upon under § 24.405 for imposing suspension; (e) That the suspension is for a temporary period pending the completion of an investigation or ensuing legal, debarment or Program Fraud Civil Remedies Act proceedings; (f) Of the provisions of §§ 24.411 through 24.413 and any other HUD procedures, if applicable, governing suspension decisionmaking; and<PRTPAGE P="201"/> (g) Of the effect of the suspension. <CITA>[60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.412</SECTNO> <SUBJECT>Opportunity to contest suspension.</SUBJECT> (a) <E T="03">Submission in opposition.</E> Within 30 days after receipt of the notice of suspension, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the suspension. (1) The information and argument should be addressed to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. (2) If the respondent does not contest the suspension within the 30 day period, the suspension shall become final. (3) If the respondent desires a hearing, it shall submit a written request to the Debarment Docket Clerk within the 30-day period following receipt of the notice of suspension. (4) The parties may agree to engage in an alternative dispute resolution, including informal conference, mediation, conciliation, summary trial with binding decision, minitrial, or use of a settlement judge. (b) <E T="03">Additional proceedings as to disputed material facts.</E> (1) If the suspending official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the suspension, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witnesses the agency presents, unless: (i) The action is based on an indictment, conviction or civil judgment; or (ii) A determination is made, on the basis of Department of Justice advice, that the substantial interests of the Federal Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced. (2) A transcribed record of any additional proceedings shall be prepared and made available at cost to the respondent, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript. (i) Upon the agreement of the parties, the additional proceedings may be recorded using audiotape without transcription. The audiotape shall be made available at cost to the respondent. (ii) [Reserved] <CITA>[60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.413</SECTNO> <SUBJECT>Suspending official's decision.</SUBJECT> The suspending official may modify or terminate the suspension (see § 24.320(c) for reasons for reducing the period or scope of debarment) or may leave it in force. However, a decision to modify or terminate the suspension shall be without prejudice to the subsequent imposition of suspension by any other agency or debarment by any agency. The decision shall be rendered in accordance with the following provisions: (a) <E T="03">No additional proceedings necessary.</E> In actions based upon an indictment, conviction, or civil judgment, in which there is no genuine dispute over material facts, or in which additional proceedings to determine disputed material facts have been denied on the basis of Department of Justice advice, the suspending official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the suspending official extends this period for good cause. (1) The suspending official may, in his or her discretion, refer actions based upon an indictment, conviction or civil judgment, or in which there is no genuine dispute over material facts, to a hearing officer or other official for review of the administrative record and appropriate findings. The hearing officer or other official shall issue such findings within 45 days after the referral, and the suspending official shall issue a decision within 15 days after the date of such findings, unless such periods are extended for good cause. (2) [Reserved] (b) <E T="03">Additional proceedings necessary.</E> (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The suspending official shall base the decision on the facts as found, together with <PRTPAGE P="202"/>any information and argument submitted by the respondent and any other information in the administrative record. (2) The suspending official may refer matters involving disputed material facts to another official for findings of fact. The suspending official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary or capricious or clearly erroneous. (3) The suspending official may refer disputed material facts and issues of law to a hearing officer for findings of fact and conclusions of law. (i) No appeal to the Secretary may be taken under §§ 26.24 through 26.26 of this title with respect to any order or decision by a hearing officer or other official. (ii) The suspending official shall provide the hearing officer or other official with all the information in the administrative record, including any information and argument submitted by the respondent. The administrative record and any documents admitted at the hearing shall constitute the exhibits in evidence. (4) Unless the parties mutually agree to extend this period, a proceeding before a hearing officer or other official shall commence within 45 days after referral of disputed material facts and issues of law by the suspending official. The hearing officer or other official shall issue findings of fact within 30 days after the conclusion of such additional proceedings. The time limitations of this subparagraph may be extended upon issuance, by the suspending official, other official or hearing officer, of a written notice describing good cause for such extension. (5) The suspending official's decision shall be made within 15 days after the hearing officer or other official issues findings of fact. (c) <E T="03">Notice of suspending official's decision.</E> Prompt written notice of the suspending official's decision shall be sent to the respondent. <CITA>[60 FR 33050, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.415</SECTNO> <SUBJECT>Period of suspension.</SUBJECT> (a) Suspension shall be for a temporary period pending the completion of an investigation or ensuing legal, debarment, or Program Fraud Civil Remedies Act proceedings, unless terminated sooner by the suspending official or as provided in paragraph (b) of this section. (b) If legal or administrative proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General or United States Attorney requests its extension in writing, in which case it may be extended for an additional six months. In no event may a suspension extend beyond 18 months, unless such proceedings have been initiated within that period. (c) The suspending official shall notify the Department of Justice of an impending termination of a suspension, at least 30 days before the 12-month period expires, to give that Department an opportunity to request an extension. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.420</SECTNO> <SUBJECT>Scope of suspension.</SUBJECT> The scope of a suspension is the same as the scope of a debarment (see § 24.325), except that the procedures of §§ 24.410 through 24.413 shall be used in imposing a suspension. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart E—Responsibilities of GSA, Agency and Participants</HD> <SECTION> <SECTNO>§ 24.500</SECTNO> <SUBJECT>GSA responsibilities.</SUBJECT> (a) In accordance with the OMB guidelines, GSA shall compile, maintain, and distribute a list of all persons who have been debarred, suspended, or voluntarily excluded by agencies under Executive Order 12549 and these regulations, and those who have been determined to be ineligible. (b) At a minimum, this list shall indicate: (1) The names and addresses of all debarred, suspended, ineligible, and voluntarily excluded persons, in alphabetical order, with cross-references when more than one name is involved in a single action; (2) The type of action; (3) The cause for the action; (4) The scope of the action; (5) Any termination date for each listing; and<PRTPAGE P="203"/> (6) The agency and name and telephone number of the agency point of contact for the action. (c) In accordance with 48 CFR 9.404, GSA shall compile and distribute a list of contractors who are debarred, suspended or ineligible. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19186, May 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.505</SECTNO> <SUBJECT>HUD responsibilities.</SUBJECT> (a) The agency shall provide GSA with current information concerning debarments, suspension, determinations of ineligibility, and voluntary exclusions it has taken. Until February 18, 1989, the agency shall also provide GSA and OMB with information concerning all transactions in which HUD has granted exceptions under § 24.215 permitting participation by debarred, suspended, or voluntarily excluded persons. (b) Unless an alternative schedule is agreed to by GSA, the agency shall advise GSA of the information set forth in § 24.500(b) and of the exceptions granted under § 24.215 within five working days after taking such actions. (c) The agency shall direct inquiries concerning listed persons to the agency that took the action. (d) Agency officials shall check the Nonprocurement List before entering covered transactions to determine whether a participant in a primary transaction is debarred, suspended, ineligible, or voluntarily excluded (Tel. −). (e) Agency officials shall check the Nonprocurement List before approving principals or lower tier participants where agency approval of the principal or lower tier participant is required under the terms of the transaction, to determine whether such principals or participants are debarred, suspended, ineligible, or voluntarily excluded. (f) The agency shall notify GSA within 5 working days after modifying or rescinding an action; (g) The agency shall, in accordance with internal retention procedures, maintain records relating to each suspension or debarment action taken by the agency; (h) Contracting Officers shall check the Procurement List before entering into any contract or before approving any subcontract to determine whether a contractor is debarred, suspended, ineligible or voluntarily excluded. <CITA>[53 FR 19182 and 19204, May 26, 1988, as amended at 53 FR 19186, May 26, 1988]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.510</SECTNO> <SUBJECT>Participants’ responsibilities.</SUBJECT> (a) <E T="03">Certification by participants in primary covered transactions.</E> Each participant shall submit the certification in appendix A to this part for it and its principals at the time the participant submits its proposal in connection with a primary covered transaction, except that States need only complete such certification as to their principals. Participants may decide the method and frequency by which they determine the eligibility of their principals. In addition, each participant may, but is not required to, check the Nonprocurement List for its principals (Tel. −). Adverse information on the certification will not necessarily result in denial of participation. However, the certification, and any additional information pertaining to the certification submitted by the participant, shall be considered in the administration of covered transactions. (b) <E T="03">Certification by participants in lower tier covered transactions.</E> (1) Each participant shall require participants in lower tier covered transactions to include the certification in appendix B to this part for it and its principals in any proposal submitted in connection with such lower tier covered transactions. (2) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction by any Federal agency, unless it knows that the certification is erroneous. Participants may decide the method and frequency by which they determine the eligiblity of their principals. In addition, a participant may, but is not required to, check the Nonprocurement List for its principals and for participants (Tel. −). (c) <E T="03">Changed circumstances regarding certification.</E> A participant shall provide immediate written notice to HUD if at any time the participant learns that its certification was erroneous when <PRTPAGE P="204"/>submitted or has become erroneous by reason of changed circumstances. Participants in lower tier covered transactions shall provide the same updated notice to the participant to which it submitted its proposals. </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart F—Drug-Free Workplace Requirements (Grants)</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 55 FR 21688, 21695, May 25, 1990, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 24.600</SECTNO> <SUBJECT>Purpose.</SUBJECT> (a) The purpose of this subpart is to carry out the Drug-Free Workplace Act of 1988 by requiring that— (1) A grantee, other than an individual, shall certify to the agency that it will provide a drug-free workplace; (2) A grantee who is an individual shall certify to the agency that, as a condition of the grant, he or she will not engage in the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance in conducting any activity with the grant. (b) Requirements implementing the Drug-Free Workplace Act of 1988 for contractors with the agency are found at 48 CFR subparts 9.4, 23.5, and 52.2. </SECTION> <SECTION> <SECTNO>§ 24.605</SECTNO> <SUBJECT>Definitions.</SUBJECT> (a) Except as amended in this section, the definitions of § 24.105 apply to this subpart. (b) For purposes of this subpart— (1) <E T="03">Controlled substance</E> means a controlled substance in schedules I through V of the Controlled Substances Act (21 U.S.C. 812), and as further defined by regulation at 21 CFR 1308.11 through 1308.15; (2) <E T="03">Conviction</E> means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; (3) <E T="03">Criminal drug statute</E> means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; (4) <E T="03">Drug-free workplace</E> means a site for the performance of work done in connection with a specific grant at which employees of the grantee are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance; (5) <E T="03">Employee</E> means the employee of a grantee directly engaged in the performance of work under the grant, including: (i) All <E T="03">direct charge</E> employees; (ii) All <E T="03">indirect charge</E> employees, unless their impact or involvement is insignificant to the performance of the grant; and, (iii) Temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. <FP>This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the payroll; or employees of subrecipients or subcontractors in covered workplaces);</FP> (6) <E T="03">Federal agency</E> or <E T="03">agency</E> means any United States executive department, military department, government corporation, government controlled corporation, any other establishment in the executive branch (including the Executive Office of the President), or any independent regulatory agency; (7) <E T="03">Grant</E> means an award of financial assistance, including a cooperative agreement, in the form of money, or property in lieu of money, by a Federal agency directly to a grantee. The term grant includes block grant and entitlement grant programs, whether or not exempted from coverage under the grants management government-wide common rule on uniform administrative requirements for grants and cooperative agreements. The term does not include technical assistance that provides services instead of money, or other assistance in the form of loans, loan guarantees, interest subsidies, insurance, or direct appropriations; or any veterans’ benefits to individuals, i.e., any benefit to veterans, their families, or survivors by virtue of the service of a veteran in the Armed Forces of the United States;<PRTPAGE P="205"/> (8) <E T="03">Grantee</E> means a person who applies for or receives a grant directly from a Federal agency (except another Federal agency); (9) <E T="03">Individual</E> means a natural person; (10) <E T="03">State</E> means any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written determination from a State government that such State considers the instrumentality to be an agency of the State government. </SECTION> <SECTION> <SECTNO>§ 24.610</SECTNO> <SUBJECT>Coverage.</SUBJECT> (a) This subpart applies to any grantee of the agency. (b) This subpart applies to any grant, except where application of this subpart would be inconsistent with the international obligations of the United States or the laws or regulations of a foreign government. A determination of such inconsistency may be made only by the agency head or his/her designee. (c) The provisions of subparts A, B, C, D and E of this part apply to matters covered by this subpart, except where specifically modified by this subpart. In the event of any conflict between provisions of this subpart and other provisions of this part, the provisions of this subpart are deemed to control with respect to the implementation of drug-free workplace requirements concerning grants. </SECTION> <SECTION> <SECTNO>§ 24.615</SECTNO> <SUBJECT>Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.</SUBJECT> A grantee shall be deemed in violation of the requirements of this subpart if the agency head or his or her official designee determines, in writing, that— (a) The grantee has made a false certification under § 24.630; (b) With respect to a grantee other than an individual— (1) The grantee has violated the certification by failing to carry out the requirements of paragraphs (A)(a)-(g) and/or (B) of the certification (Alternate I to appendix C) or (2) Such a number of employees of the grantee have been convicted of violations of criminal drug statutes for violations occurring in the workplace as to indicate that the grantee has failed to make a good faith effort to provide a drug-free workplace. (c) With respect to a grantee who is an individual— (1) The grantee has violated the certification by failing to carry out its requirements (Alternate II to appendix C); or (2) The grantee is convicted of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity. </SECTION> <SECTION> <SECTNO>§ 24.620</SECTNO> <SUBJECT>Effect of violation.</SUBJECT> (a) In the event of a violation of this subpart as provided in § 24.615, and in accordance with applicable law, the grantee shall be subject to one or more of the following actions: (1) Suspension of payments under the grant; (2) Suspension or termination of the grant; and (3) Suspension or debarment of the grantee under the provisions of this part. (b) Upon issuance of any final decision under this part requiring debarment of a grantee, the debarred grantee shall be ineligible for award of any grant from any Federal agency for a period specified in the decision, not to exceed five years (<E T="03">see</E> § 24.320(a)(2) of this part). </SECTION> <SECTION> <SECTNO>§ 24.625</SECTNO> <SUBJECT>Exception provision.</SUBJECT> The agency head may waive with respect to a particular grant, in writing, a suspension of payments under a grant, suspension or termination of a grant, or suspension or debarment of a grantee if the agency head determines that such a waiver would be in the public interest. This exception authority cannot be delegated to any other official. </SECTION> <SECTION> <SECTNO>§ 24.630</SECTNO> <SUBJECT>Certification requirements and procedures.</SUBJECT> (a)(1) As a prior condition of being awarded a grant, each grantee shall <PRTPAGE P="206"/>make the appropriate certification to the Federal agency providing the grant, as provided in appendix C to this part. (2) Grantees are not required to make a certification in order to continue receiving funds under a grant awarded before March 18, 1989, or under a no-cost time extension of such a grant. However, the grantee shall make a one-time drug-free workplace certification for a non-automatic continuation of such a grant made on or after March 18, 1989. (b) Except as provided in this section, all grantees shall make the required certification for each grant. For mandatory formula grants and entitlements that have no application process, grantees shall submit a one-time certification in order to continue receiving awards. (c) A grantee that is a State may elect to make one certification in each Federal fiscal year. States that previously submitted an annual certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. Except as provided in paragraph (d) of this section, this certification shall cover all grants to all State agencies from any Federal agency. The State shall retain the original of this statewide certification in its Governor's office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency has designated a central location for submission. (d)(1) The Governor of a State may exclude certain State agencies from the statewide certification and authorize these agencies to submit their own certifications to Federal agencies. The statewide certification shall name any State agencies so excluded. (2) A State agency to which the statewide certification does not apply, or a State agency in a State that does not have a statewide certification, may elect to make one certification in each Federal fiscal year. State agencies that previously submitted a State agency certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. The State agency shall retain the original of this State agency-wide certification in its central office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency designates a central location for submission. (3) When the work of a grant is done by more than one State agency, the certification of the State agency directly receiving the grant shall be deemed to certify compliance for all workplaces, including those located in other State agencies. (e)(1) For a grant of less than 30 days performance duration, grantees shall have this policy statement and program in place as soon as possible, but in any case by a date prior to the date on which performance is expected to be completed. (2) For a grant of 30 days or more performance duration, grantees shall have this policy statement and program in place within 30 days after award. (3) Where extraordinary circumstances warrant for a specific grant, the grant officer may determine a different date on which the policy statement and program shall be in place. </SECTION> <SECTION> <SECTNO>§ 24.635</SECTNO> <SUBJECT>Reporting of and employee sanctions for convictions of criminal drug offenses.</SUBJECT> (a) When a grantee other than an individual is notified that an employee has been convicted for a violation of a criminal drug statute occurring in the workplace, it shall take the following actions: (1) Within 10 calendar days of receiving notice of the conviction, the grantee shall provide written notice, including the convicted employee's position title, to every grant officer, or other designee on whose grant activity the convicted employee was working, unless a Federal agency has designated a central point for the receipt of such notifications. Notification shall include the identification number(s) for each of the Federal agency's affected grants. (2) Within 30 calendar days of receiving notice of the conviction, the grantee shall do the following with respect to the employee who was convicted.<PRTPAGE P="207"/> (i) Take appropriate personnel action against the employee, up to and including termination, consistent with requirements of the Rehabilitation Act of 1973, as amended; or (ii) Require the employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency. (b) A grantee who is an individual who is convicted for a violation of a criminal drug statute occurring during the conduct of any grant activity shall report the conviction, in writing, within 10 calendar days, to his or her Federal agency grant officer, or other designee, unless the Federal agency has designated a central point for the receipt of such notices. Notification shall include the identification number(s) for each of the Federal agency's affected grants. <APPRO>(Approved by the Office of Management and Budget under control number 0991-0002)</APPRO> </SECTION> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart G—Limited Denial of Participation</HD> <SOURCE> <HD SOURCE="HED">Source:</HD> 53 FR 19186, May 26, 1988. Redesignated at 54 FR 4950 and 4957, Jan. 31, 1989, unless otherwise noted. </SOURCE> <SECTION> <SECTNO>§ 24.700</SECTNO> <SUBJECT>General.</SUBJECT> <E T="03">Officials who may order a limited denial of participation.</E> HUD officials, as designated by the Secretary, are authorized to order a limited denial of participation affecting any participant or contractor and its affiliates, except HUD-FHA approved mortgagees. In each case, even if the offense or violation is of a criminal, fraudulent or other serious nature, the decision to order a limited denial of participation shall be discretionary and in the best interests of the Government. <CITA>[59 FR 18482, Apr. 19, 1994]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.705</SECTNO> <SUBJECT>Causes for a limited denial of participation.</SUBJECT> (a) <E T="03">Causes.</E> A limited denial of participation shall be based upon adequate evidence of any of the following causes: (1) Approval of an applicant for insurance would constitute an unsatisfactory risk; (2) Irregularities in a participant's or contractor's past performance in a HUD program; (3) Failure of a participant or contractor to maintain the prerequisites of eligibility to participate in a HUD program; (4) Failure to honor contractual obligations or to proceed in accordance with contract specifications or HUD regulations; (5) Failure to satisfy, upon completion, the requirements of an assistance agreement or contract; (6) Deficiencies in ongoing construction projects; (7) Falsely certifying in connection with any HUD program, whether or not the certification was made directly to HUD; (8) Commission of an offense listed in § 24.305; (9) Violation of any law, regulation, or procedure relating to the application for financial assistance, insurance or guarantee, or to the performance of obligations incurred pursuant to a grant of financial assistance or pursuant to a conditional or final commitment to insure or guarantee. (10) Making or procuring to be made any false statement for the purpose of influencing in any way an action of the Department. (11) Imposition of a limited denial of participation by any other HUD regional or field office. (12) Debarment or suspension by another Federal agency for any cause substantially the same as provided in § 24.305. (b) <E T="03">Indictment.</E> Indictment or Information shall constitute adequate evidence for the purpose of limited denial of participation actions. (c) <E T="03">Limited denial of participation.</E> Imposition of a limited denial of participation by any other HUD office shall constitute adequate evidence for a concurrent limited denial of participation. Where such a concurrent limited denial of participation is imposed, participation may be restricted on the same basis without the need for additional conference or further hearing. <CITA>[53 FR 19186, May 26, 1988. Redesignated at 54 FR 4950 and 4957, Jan. 31, 1989, as amended at 60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <PRTPAGE P="208"/> <SECTNO>§ 24.710</SECTNO> <SUBJECT>Period and scope of a limited denial of participation.</SUBJECT> (a) The scope of a limited denial of participation shall be as follows: (1) A limited denial of participation generally extends only to participation in the program under which the cause arose, except: Where it is based on an indictment, conviction, or suspension or debarment by another agency, it need not be based on offenses against HUD and it may apply to all programs. (2) For purposes of this subpart, participation includes receipt of any benefit or financial assistance through grants or contractual arrangements; benefits or assistance in the form of loan guarantees or insurance; and awards of procurement contracts, notwithstanding any <E T="03">quid pro quo</E> given and whether the Department gives anything in return. <E T="03">Program</E> may, in the discretion of the authorized official, include any or all of the functions within the jurisdiction of an Assistant Secretary. (3) The sanction may be imposed for a period not to exceed 12 months, is limited to specific HUD programs, and shall be effective within the geographic jurisdiction of the office imposing it, unless the sanction is imposed by an Assistant Secretary or Deputy Assistant Secretary in which case the sanction may be imposed on a nationwide basis or a more restricted basis. (b) <E T="03">Effectiveness.</E> This sanction shall be effective immediately upon issuance, and shall remain effective up to 12 months thereafter. If the cause for the limited denial of participation is resolved before the expiration of the 12-month period, the official who imposed the sanction may terminate it. The imposition of a limited denial of participation shall not affect the right of the Department to suspend or debar any person under this part. (c) <E T="03">Affiliates.</E> An affiliate or organizational element may be included in a limited denial of participation solely on the basis of its affiliation, and regardless of its knowledge of or participation in the acts providing cause for the sanction. The burden of proving that a particular affiliate or organizational element is currently responsible and not controlled by the primary sanctioned party (or by an entity that itself is controlled by the primary sanctioned party) is on the affiliate or organizational element. <CITA>[53 FR 19186, May 26, 1988. Redesignated at 54 FR 4950 and 4957, Jan. 31, 1989, as amended at 57 FR 58339, Dec. 9, 1992; 60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.711</SECTNO> <SUBJECT>Notice of limited denial of participation.</SUBJECT> A limited denial of participation shall be made effective by advising the participant or contractor, and any specifically named affiliate, by mail, return receipt requested: (a) That the limited denial of participation is being imposed; (b) Of the cause(s) under § 24.705 for the sanction; (c) Of the potential effect of the sanction, including the length of the sanction and the HUD program(s) and geographic area affected by the sanction; (d) Of the right to request, in writing, within 30 days of receipt of the notice, a conference under § 24.712; and (e) Of the right to contest the limited denial of participation under § 24.713. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.712</SECTNO> <SUBJECT>Conference.</SUBJECT> Within 30 days after receiving a notice of limited denial of participation, the respondent may request a conference with the official who issued such notice. If the respondent does not request a conference, the respondent shall nevertheless have the right to contest the limited denial of participation under the provisions of § 24.713. The conference shall be held within 15 days after the Department's receipt of the request for a conference, unless the respondent waives this time limit. The official who imposed the sanction, or his or her designee, shall preside. At the conference, the respondent may appear with a representative and may present all relevant information and materials to the official or designee. Within 20 days after the conference, or within 20 days after any agreed upon extension of time for submission of additional materials by the respondent, the official or designee shall, in writing, advise the respondent of the decision to terminate, modify, or affirm the limited denial of participation. If all or a portion of the remaining period <PRTPAGE P="209"/>of exclusion is affirmed, the notice of affirmation shall advise the respondent of the opportunity to contest the notice pursuant to § 24.713. If the official or designee does not issue a decision within the 20-day period, the respondent may contest the sanction under § 24.713. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.713</SECTNO> <SUBJECT>Opportunity to contest the limited denial of participation.</SUBJECT> (a) <E T="03">Submission in opposition.</E> (1) The respondent may request a hearing before a hearing officer: (i) Within 30 days after receipt of a notice of affirmation of all or a portion of the remaining period of exclusion under a limited denial of participation; or (ii) Within 30 days after receipt of a notice of a limited denial of participation where the respondent elects not to request a conference under § 24.712. (2) The request must be addressed to the Debarment Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410. (3) If the respondent does not submit the request within the 30-day period, the sanction shall become final. (b) <E T="03">Procedures.</E> The hearing shall be conducted in accordance with the procedures of §§ 24.313 and 24.314 Within 15 days of the hearing officer's issuance of findings of fact and a recommended decision, the official who issued the limited denial of participation shall issue a decision. (c) <E T="03">Effect of suspension or debarment on limited denial of participation.</E> If a respondent has submitted a request for a hearing pursuant to paragraph (a) of this section, and if the respondent has also received, pursuant to subpart C or D of this part, a notice of proposed debarment or suspension that is based on the same transaction(s) or conduct as the limited denial of participation, the following rules shall apply: (1) If the respondent has not contested the proposed debarment pursuant to § 24.313(a) or the suspension pursuant to § 24.412(a), the final imposition of the debarment or suspension shall also constitute a final decision with respect to the limited denial of participation to the extent that the debarment or suspension is based on the same transaction(s) or conduct as the limited denial of participation. (2) If the respondent has contested the proposed debarment pursuant to § 24.313(a), or the suspension pursuant to § 24.412(a), the proceedings shall be consolidated and the debarring or suspending official shall issue a final decision as to both the limited denial of participation and the debarment or suspension. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 24.714</SECTNO> <SUBJECT>Reporting of limited denial of participation.</SUBJECT> When a limited denial of participation has been made final, or the period for requesting a conference pursuant to § 24.712 has expired without receipt of such a request, the official imposing the limited denial of participation shall notify the Director of the Participation and Compliance Division in the Office of Housing of the scope of the limited denial of participation. <CITA>[60 FR 33051, June 26, 1995]</CITA> </SECTION> </SUBPART> </PART> <PART> <EAR>Pt. 25</EAR> <HD SOURCE="HED">PART 25—MORTGAGEE REVIEW BOARD</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>25.1</SECTNO> <SUBJECT>Scope of rules in this part.</SUBJECT> <SECTNO>25.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> <SECTNO>25.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>25.4</SECTNO> <SUBJECT>Operation of the Mortgagee Review Board.</SUBJECT> <SECTNO>25.5</SECTNO> <SUBJECT>Administrative actions.</SUBJECT> <SECTNO>25.6</SECTNO> <SUBJECT>Notice of violation.</SUBJECT> <SECTNO>25.7</SECTNO> <SUBJECT>Notice of administrative action.</SUBJECT> <SECTNO>25.8</SECTNO> <SUBJECT>Hearings and hearing request.</SUBJECT> <SECTNO>25.9</SECTNO> <SUBJECT>Grounds for an administrative action.</SUBJECT> <SECTNO>25.10</SECTNO> <SUBJECT>Publication in <E T="04">Federal Register</E> of actions.</SUBJECT> <SECTNO>25.11</SECTNO> <SUBJECT>Notification to other agencies.</SUBJECT> <SECTNO>25.12</SECTNO> <SUBJECT>Civil money penalties.</SUBJECT> <SECTNO>25.13</SECTNO> <SUBJECT>Notifying GNMA of withdrawal actions.</SUBJECT> <SECTNO>25.14</SECTNO> <SUBJECT>Prohibition against modification of Board orders.</SUBJECT> <SECTNO>25.15</SECTNO> <SUBJECT>Retroactive application of board regulations.</SUBJECT> <SECTNO>25.17</SECTNO> <SUBJECT>[Reserved]</SUBJECT> </CONTENTS> <AUTH> <HD SOURCE="HED">Authority:</HD> 12 U.S.C. 1708(c), 1708(d), 1709(s), 1715b and 1735(f)-14; 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 57 FR 31051, July 13, 1992, unless otherwise noted. </SOURCE> <SECTION> <PRTPAGE P="210"/> <SECTNO>§ 25.1</SECTNO> <SUBJECT>Scope of rules in this part.</SUBJECT> The rules in this part are applicable to the operation of the Mortgagee Review Board and to proceedings arising from administrative actions of the Mortgagee Review Board. </SECTION> <SECTION> <SECTNO>§ 25.2</SECTNO> <SUBJECT>Establishment of Board.</SUBJECT> The Mortgagee Review Board (the Board) was established in the Federal Housing Administration, which is in the Office of the Assistant Secretary for Housing—Federal Housing Commissioner, by section 202(c)(1) of the National Housing Act (12 U.S.C. 1708(c)(1)), as added by section 142 of the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235, approved December 15, 1989). Except as limited by this part, the Board shall exercise all of the functions of the Secretary with respect to administrative actions against mortgagees and lenders and such other functions as are provided in this part. The Board may, in its discretion, approve the initiation of a suspension or debarment action against a mortgagee or lender by any Suspending or Debarring Official under part 24 of this subtitle A. The Board shall have all powers necessary and incident to the performance of these functions. The Board may redelegate its authority to review submissions and conduct hearings under § 25.8. The Board may also redelegate its authority to impose administrative sanctions on the grounds specified in §§ 25.9 (e), (h), and (u), and to take all other nondiscretionary acts. With respect to actions taken against Title I lenders and loan correspondents, the Board may redelegate its authority to take administrative actions for failure to remain in compliance with the requirements for approval in 24 CFR 202.5(i), 202.5(n), 202.7(b)(4), 202.8(b)(1) and 202.8(b)(3). <CITA>[60 FR 39237, Aug. 1, 1995, as amended at 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.3</SECTNO> <SUBJECT>Definitions.</SUBJECT> <E T="03">Adequate evidence.</E> Information sufficient to support the reasonable belief that a particular act or omission has occurred. <E T="03">Board.</E> The Mortgagee Review Board. <E T="03">Hearing officer.</E> An Administrative Law Judge or Board of Contract Appeals judge authorized by the Secretary, or by the Secretary's designee, to issue findings of fact or other appropriate findings under § 25.8(d)(2). <E T="03">Hearing official.</E> An official designated by the Board to conduct hearings under § 25.8. <E T="03">Lender.</E> A financial institution as defined in paragraphs (a) and (b) of the definition of lender in § 202.2 of this title. <E T="03">Loan correspondent.</E> A financial institution as defined in paragraph (c) of the definition of lender in § 202.2 of this title. <E T="03">Mortgagee.</E> For purposes of the regulations in this part, the term “mortgagee” includes: (1) The original lender under the mortgage, as that term is defined at sections 201(a) and 207(a)(1) of the National Housing Act (12 U.S.C. 1707(a), 1713(a)(1)); (2) A lender or loan correspondent as defined in this section; (3) A branch office or subsidiary of the mortgagee, lender, or loan correspondent; or (4) Successors and assigns of the mortgagee, lender, or loan correspondent, as are approved by the Commissioner. <E T="03">Person.</E> Any individual, corporation, partnership, association, unit of government or legal entity, however organized. <E T="03">Secretary.</E> The Secretary of the Department of Housing and Urban Development or a person designated by the Secretary. <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 60 FR 13835, Mar. 14, 1995; 60 FR 39237, Aug. 1, 1995; 61 FR 685, Jan. 9, 1996; 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.4</SECTNO> <SUBJECT>Operation of the Mortgagee Review Board.</SUBJECT> (a) <E T="03">Members.</E> The Board consists of the following voting members: The Assistant Secretary for Housing—Federal Housing Commissioner who serves as chairperson; the General Counsel; the President of the Government National Mortgage Association (GNMA); the Assistant Secretary for Administration; <PRTPAGE P="211"/>the Chief Financial Officer of the Department; and, in cases involving violations of nondiscrimination requirements, the Assistant Secretary for Fair Housing and Equal Opportunity; or their designees. (b) <E T="03">Advisors.</E> The Inspector General or his or her designee, and the Director of the Office of Lender Activities and Land Sales Registration (or such other position as may be assigned such duties), and such other persons as the Board may appoint, shall serve as nonvoting advisors to the Board. (c) <E T="03">Quorum.</E> Four members of the Board or their designees shall constitute a quorum. (d) <E T="03">Determination by the Board.</E> Any administrative action taken by the Board shall be determined by a majority vote of the quorum. <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.5</SECTNO> <SUBJECT>Administrative actions.</SUBJECT> (a) <E T="03">General.</E> The Board is authorized to take the following administrative actions: letter of reprimand, probation, suspension, withdrawal, or settlement agreement. These actions are described at 12 U.S.C. 1708(c)(3), and as further set out in this section. (b) <E T="03">Letter of reprimand.</E> A letter of reprimand shall be effective upon receipt of the letter by the mortgagee. Failure to comply with a directive in the letter of reprimand may result in any other administrative action under this part that the Board finds appropriate. (c) <E T="03">Probation.</E> Probation shall be effective upon receipt of the notice of probation by the mortgagee. Failure to comply with the terms of probation may result in any other administrative action under this part that the Board finds appropriate. (d) <E T="03">Suspension.</E> A suspension shall be based upon adequate evidence and shall be effective upon receipt of the notice of suspension by the mortgagee. During the period of suspension, HUD will not endorse any mortgage originated by the suspended mortgagee unless prior to the date of suspension a firm commitment has been issued relating to any such mortgage, or a Direct Endorsement underwriter has approved the mortgagor for any such mortgage. During the period of suspension, a lender or loan correspondent may not originate new title I loans under their Title I Contracts of Insurance or apply for a new Contract of Insurance. (e)(1) <E T="03">Withdrawal.</E> During the period of withdrawal, HUD will not endorse any mortgage originated by the withdrawn mortgagee unless prior to the date of withdrawal a firm commitment has been issued relating to any such mortgage, or a Direct Endorsement underwriter has approved the mortgagor for any such mortgage. During the period of withdrawal, a lender or loan correspondent may not originate new title I loans under their Title I Contracts of Insurance or apply for a new Contract of Insurance. The Board may limit the geographical extent of the withdrawal, or limit its scope (e.g., to either the single family or multifamily activities of a withdrawn mortgagee). Upon the expiration of the period of withdrawal, the mortgagee may file a new application for approval under 24 CFR part 202. (2) <E T="03">Effective date of withdrawal.</E> (i) If the Board determines that immediate action is in the public interest or in the best interests of the Department, then withdrawal shall be effective upon receipt of the Board's notice of withdrawal. (ii) If the Board does not determine that immediate action is necessary according to paragraph (e)(2)(i) of this section, then withdrawal shall be effective either: (A) Upon the expiration of the 30-day period specified in § 25.8, if the mortgagee has not requested a hearing; or (B) Upon receipt of the Board's decision under § 25.8, if the mortgagee requests a hearing. <CITA>[60 FR 685, Jan. 9, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.6</SECTNO> <SUBJECT>Notice of violation.</SUBJECT> (a) <E T="03">General.</E> The Chairperson of the Board, or the Chairperson's designee, shall issue a written notice to the mortgagee at least thirty days prior to taking any probation, suspension or withdrawal action against a mortgagee. The notice shall state the specific violations that have been alleged, and shall direct the mortgagee to reply in writing to the Board within thirty days after receipt of the notice by the mortgagee. The notice shall also provide the <PRTPAGE P="212"/>address to which the response shall be sent. If the mortgagee fails to reply during such time period, the Board may make a determination without considering any comments of the mortgagee. (b) <E T="03">Mortgagee's response.</E> The mortgagee's response to the Board shall be in a format prescribed by the Secretary and shall not exceed 15 double-spaced typewritten pages. The response shall include an executive summary, a statement of the facts surrounding the matter, an argument and a conclusion. A more lengthy submission, including documents and other exhibits, may be simultaneously submitted to Board staff for review. <APPRO>(Approved by the Office of Management and Budget under Control Number 2502-0450)</APPRO> </SECTION> <SECTION> <SECTNO>§ 25.7</SECTNO> <SUBJECT>Notice of administrative action.</SUBJECT> Whenever the Board takes an action to issue a letter of reprimand, to place a mortgagee on probation, or to suspend or withdraw a mortgagee's approval, the Board shall promptly notify the mortgagee in writing of the determination. Except for a letter of reprimand, the notice shall describe the nature and duration of the administrative action, shall specifically state the violations, and shall set forth the findings of the Board. The notice shall inform the mortgagee of its right to a hearing, pursuant to § 25.8, regarding the administrative action (except for a letter of reprimand) and of the manner and time in which to request a hearing. A supplemental notice may be issued in the discretion of the Board to add or modify the reasons for the action. <CITA>[60 FR 39237, Aug. 1, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.8</SECTNO> <SUBJECT>Hearings and hearing request.</SUBJECT> (a) <E T="03">Hearing request.</E> A mortgagee that is issued a probation, suspension, or withdrawal action is entitled to a hearing on the record. The mortgagee shall submit its request for a hearing within 30 days of receiving the Board's notice of administrative action. The request shall be addressed to the Board Docket Clerk, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410. The request shall specifically respond to the violations set forth in the notice of administrative action. If the mortgagee fails to request a hearing within 30 days after receiving the notice of administrative action, the Board's action shall become final. (b) <E T="03">Procedural rules.</E> The hearing official shall hold a de novo hearing within 30 days of HUD's receipt of the mortgagee's request, unless the mortgagee requests a later hearing date. The mortgagee or its representative shall be afforded an opportunity to appear, submit documentary evidence, present witnesses, and confront any witness the agency presents. The parties shall not be allowed to present members of the Board as witnesses. At the mortgagee's request, a transcribed record of the hearing shall be made available at cost to the mortgagee. (c) <E T="03">Hearing location.</E> The hearing shall generally be held in Washington, DC However, upon a showing of undue hardship or other cause, the hearing official may, in his or her discretion, order the hearing to be held in a location other than Washington, DC. (d) <E T="03">Hearing official's recommendation.</E> (1) The hearing official shall issue written findings and a recommended decision to the Board within 45 days after the conclusion of the hearing, unless the hearing official extends this period for good cause or refers a matter for findings of fact or other appropriate findings pursuant to paragraph (d)(2)(i) of this section. The findings and recommendation shall be based upon the facts as found, together with any information and argument submitted by the parties and any other information in the administrative record. (2) <E T="03">Referral to a hearing officer or other independent official.</E> (i) The hearing official may, at his or her discretion, refer disputed material facts to a hearing officer or other independent official for findings of fact. The hearing official may also, at his or her discretion, refer other issues to a hearing officer or other independent official for appropriate findings. The hearing official shall provide the parties with notice of the referral. The hearing official may reject the findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous.<PRTPAGE P="213"/> (ii) The provisions of part 26 of this subtitle A shall be applicable to proceedings before a hearing officer, with the following limitations: (A) No appeal to the Secretary may be taken under §§ 26.24 through 26.26 of this subtitle A with respect to any order or decision by the hearing officer. (B) Discovery shall be limited to exclude requests for answers to interrogatories, requests for admissions, and production of documents that either do not pertain to the appealing mortgagee, or pertain to reviews or audits by the Department or administrative actions by the Board against mortgagees other than the appealing mortgagee. Members of the Board shall not be subject to deposition, nor shall they be required to testify at any hearing. (iii) Proceedings before a hearing officer or other independent official shall commence within 45 days after referral by the hearing official, unless the parties agree to an extension of time. The hearing officer or other independent official shall issue the requested findings of fact or other appropriate findings to the hearing official within 30 days after the conclusion of such proceedings. The time limitations of this paragraph may be extended upon issuance of a written notice describing good cause for such extension. (iv) The hearing official shall provide a recommended decision to the Board within 15 days after the findings are issued. (v) [Reserved] (e) <E T="03">Decision by the Board.</E> The Board shall issue its decision within 15 days after the hearing official issues the recommended decision. The Board's decision shall be mailed to the mortgagee, and shall serve as the final agency action concerning the mortgagee. <CITA>[60 FR 39238, Aug. 1, 1995]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.9</SECTNO> <SUBJECT>Grounds for an administrative action.</SUBJECT> One or more of the following violations by a mortgagee may result in an administrative action by the Board under § 25.5. Except in cases where the Board's authority has been delegated in accordance with § 25.2, the Board will consider, among other factors, the seriousness and extent of the violations, the degree of mortgagee responsibility for the occurrences and any mitigating factors, in determining which administrative action, if any, is appropriate. Any administrative action imposed under § 25.5 shall be based upon one or more of the following grounds: (a) The transfer of an insured mortgage to non-approved mortgagee, except pursuant to 24 CFR 203.433 or 203.435; (b) The failure of a mortgagee to segregate all escrow funds received from mortgagors on account of ground rents, taxes, assessments and insurance premiums, or failure to deposit these funds with one or more financial institutions in a special account or accounts that are fully insured by the Federal Deposit Insurance Corporation or by the National Credit Union Administration except as otherwise provided in writing by the Assistant Secretary for Housing—Federal Housing Commissioner; (c) The use of escrow funds for any purpose other than that for which they are received; (d) The termination of a mortgagee's supervision by a governmental agency; (e) The failure of a nonsupervised mortgagee to submit the required annual audit report of its financial condition prepared in accordance with instructions issued by the Secretary within 90 days of the close of its fiscal year, or such longer period as the Assistant Secretary of Housing—Federal Housing Commissioner may authorize in writing prior to the expiration of 90 days; (f) The payment by a mortgagee of a referral fee to any person or organization; or payment of any thing of value, directly or indirectly, in connection with any insured mortgage transaction or transactions to any person, including but not limited to an attorney, escrow agent, title company, consultant, mortgage broker, seller, builder or real estate agent, if that person has received any other compensation from the mortgagor, the seller, the builder or any other person for services related to such transactions or from or related to the purchase or sale of the mortgaged property, except compensation paid for the actual performance of such <PRTPAGE P="214"/>services as may be approved by the Assistant Secretary for Housing—Federal Housing Commissioner; (g) Failure to comply with any agreement, certification, undertaking, or condition of approval listed on either a mortgagee's application for approval or on an approved mortgagee's branch office notification; (h) Failure of an approved mortgagee to meet or maintain the applicable net worth, liquidity or warehouse line of credit requirements of 24 CFR part 202 pertaining to net worth, liquid assets, and warehouse line of credit or other acceptable funding plan; (i) Failure or refusal of an approved mortgagee to comply with an order of the Board, the Secretary, the hearing official, hearing officer or other independent official to whom matters are referred under § 25.8(d)(2). (j) Violation of the requirements of any contract with the Department, or violation of the requirements set forth in any statute, regulation, handbook, mortgagee letter, or other written rule or instruction; (k) Submission of false information to HUD in connection with any HUD/FHA insured mortgage transaction; (l) Failure of a mortgagee to respond to inquiries from the Board; (m) Indictment or conviction of a mortgagee or any of its officers, directors, principals or employees for an offense which reflects upon the responsibility, integrity, or ability of the mortgagee to participate in HUD/FHA programs as an approved mortgagee; (n) Employing or retaining: (1) An officer, partner, director or principal at such time when such person was suspended, debarred, ineligible, or subject to a limited denial of participation under 24 CFR part 24 or otherwise prohibited from participation in HUD programs, where the mortgagee knew or should have known of the prohibition; (2) An employee who is not an officer, partner, director, or principal and who is or will be working on HUD/FHA program matters at a time when such person was suspended, debarred, ineligible, or subject to a limited denial of participation under 24 CFR part 24 or otherwise prohibited from participation in HUD programs, where the mortgagee knew or should have known of the prohibition; (o) Violation by an approved mortgagee of the nondiscrimination requirements of the Equal Credit Opportunity Act (15 U.S.C. 1691-1691f), Fair Housing Act (42 U.S.C. 3601-3619), Executive Order 11063 (27 FR 11527), and all regulations issued pursuant thereto; (p) Business practices which do not conform to generally accepted practices of prudent mortgagees or which demonstrate irresponsibility; (q) Failure to cooperate with an audit or investigation by the Department's Office of Inspector General or an inquiry by HUD/FHA into the conduct of the mortgagee's HUD/FHA insured business or any other failure to provide information to the Secretary or a representative related to the conduct of the mortgagee's HUD/FHA business; (r) Violation by an approved mortgagee of the requirements or prohibitions of the Real Estate Settlement Procedures Act (12 U.S.C. 2601-2617); (s) Without regard to the date of the insurance of the mortgage, failure to service an insured mortgage in accordance with the regulations and any other requirements of the Secretary which are in effect at the time the act or omission occurs; (t) Failure to administer properly an assistance payment contract under section 235 of the National Housing Act (12 U.S.C. 1715z); (u) Failure to pay the application and annual fees required by 24 CFR part 202; (v) The failure of a coinsuring mortgagee: (1) To properly perform underwriting, servicing or property disposition functions in accordance with instructions and standards issued by the Commissioner; (2) To make full payment to an investing mortgagee as required by 24 CFR part 204; (3) To discharge responsibilities under a contract for coinsurance; (4) To comply with restrictions concerning the transfer of a coinsured mortgage to an agency not approved under 24 CFR part 250; (5) To maintain additional net worth requirements, as applicable;<PRTPAGE P="215"/> (w) Failure to remit, or timely remit, mortgage insurance premiums, loan insurance charges, late charges, or interest penalties to the Department; (x) Failure to submit a report required under 24 CFR 202.12(c) within the time determined by the Commissioner, or to commence or complete a plan for corrective action under that section within the time agreed upon by the Commissioner. (y) Failure to properly perform underwriting functions in accordance with instructions and standards issued by the Department; (z) Failure to fund mortgage loans or any other misuse of mortgage loan proceeds; (aa) Permitting the use of strawbuyer mortgagors in an insured mortgage transaction where the mortgagee knew or should have known of such use of strawbuyers; (bb) Breach by the mortgagee of a fiduciary duty owed by it to any person as defined in § 25.3, including GNMA and the holder of any mortgage-backed security guaranteed by GNMA, with respect to an insured loan or mortgage transaction. (cc) Violation by a Title I lender or loan correspondent of any of the applicable provisions of this section or 24 CFR 202.11(a)(2). (dd) Failure to pay any civil money penalty, but only after all administrative appeals requested by the mortgagee have been exhausted. (ee) Any other reason the Board or the Secretary determines to be so serious as to justify an administrative sanction. <APPRO>(Approved by the Office of Management and Budget under Control Number 2502-0450)</APPRO> <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992, as amended at 57 FR 58339, Dec. 9, 1992; 60 FR 13836, Mar. 14, 1995; 60 FR 39238, Aug. 1, 1995; 61 FR 685, Jan. 9, 1996; 62 FR 20081, Apr. 24, 1997]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.10</SECTNO> <SUBJECT>Publication in Federal Register of actions.</SUBJECT> The Secretary shall publish, in the <E T="04">Federal Register</E>, a description of and the cause for each administrative action taken by the Board against a mortgagee. Such publication shall be made quarterly or more frequently in the discretion of the Secretary. </SECTION> <SECTION> <SECTNO>§ 25.11</SECTNO> <SUBJECT>Notification to other agencies.</SUBJECT> Whenever the Board has taken any discretionary action to suspend and/or withdraw the approval of a mortgagee, the Secretary shall provide prompt notice of the action and a statement of the reasons for the action to the Secretary of Veterans Affairs; the chief executive officer of the Federal National Mortgage Association; the chief executive officer of the Federal Home Loan Mortgage Corporation; the Administrator of the Farmers Home Administration; the Comptroller of the Currency, if the mortgagee is a National Bank or District Bank or subsidiary or affiliate of such a bank; the Board of Governors of the Federal Reserve System, if the mortgagee is a State bank that is a member of the Federal Reserve System or a subsidiary or affiliate of such a bank, or a bank holding company or a subsidiary or affiliate of such a company; the Board of Directors of the Federal Deposit Insurance Corporation if the mortgagee is a State bank that is not a member of the Federal Reserve System, or is a subsidiary or affiliate of such a bank; and the Director of the Office of Thrift Supervision, if the mortgagee is a Federal or State savings association or a subsidiary or affiliate of a savings association. </SECTION> <SECTION> <SECTNO>§ 25.12</SECTNO> <SUBJECT>Civil money penalties.</SUBJECT> The Board is authorized pursuant to section 536 of the National Housing Act (12 U.S.C. 1735(f)-14) to impose civil money penalties on mortgagees and Title I lenders, as set forth in 24 CFR part 30. The violations for which a civil money penalty may be imposed are listed at 24 CFR 30.320. Hearings to challenge the imposition of civil money penalties shall be conducted according to the applicable rules of 24 CFR part 30. <CITA>[57 FR 31051, July 13, 1992; 57 FR 37085, Aug. 18, 1992. Redesignated at 61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.13</SECTNO> <SUBJECT>Notifying GNMA of withdrawal actions.</SUBJECT> When the Board issues a notice of violation that could lead to withdrawal of a mortgagee's approval, or is notified by GNMA of an action that could lead to withdrawal of GNMA approval, <PRTPAGE P="216"/>the Board shall proceed in accordance with 12 U.S.C. 1708(d). <APPRO>(Approved by the Office of Management and Budget under Control Number 2502-0450)</APPRO> <CITA>[61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.14</SECTNO> <SUBJECT>Prohibition against modification of Board orders.</SUBJECT> No hearing official, hearing officer, or other independent official before whom proceedings are conducted under § 25.8 shall modify or otherwise disturb in any way an order or notice by the Board. <CITA>[60 FR 39238, Aug. 1, 1995. Redesignated at 61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>§ 25.15</SECTNO> <SUBJECT>Retroactive application of board regulations.</SUBJECT> Limitations on participation in HUD mortgage insurance programs proposed or imposed prior to August 12, 1992, under an ancillary procedure shall not be affected by this part. This part shall apply to sanctions initiated after the effective date of the Department of Housing and Urban Development Reform Act of 1989 (December 15, 1989) regardless of the date of the cause giving rise to the sanction. <CITA>[57 FR 31051, July 13, 1992. Redesignated at 61 FR 685, Jan. 9, 1996]</CITA> </SECTION> <SECTION> <SECTNO>25.17</SECTNO> <RESERVED>[Reserved]</RESERVED> </SECTION> </PART> <PART> <EAR>Pt. 26</EAR> <HD SOURCE="HED">PART 26—HEARING PROCEDURES</HD> <CONTENTS> <SUBPART> <HD SOURCE="HED">Subpart A—Hearings Before Hearing Officers</HD> <SECHD>Sec.</SECHD> <SECTNO>26.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> <SUBJGRP> <HD SOURCE="HED">Hearing Officer</HD> <SECTNO>26.2</SECTNO> <SUBJECT>Hearing officer, powers and duties.</SUBJECT> <SECTNO>26.3</SECTNO> <SUBJECT>Failure to comply with an order of the hearing officer.</SUBJECT> <SECTNO>26.4</SECTNO> <SUBJECT>Ex parte communications.</SUBJECT> <SECTNO>26.5</SECTNO> <SUBJECT>Disqualification of hearing officer.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Representation of the Parties</HD> <SECTNO>26.6</SECTNO> <SUBJECT>Department representative.</SUBJECT> <SECTNO>26.7</SECTNO> <SUBJECT>Respondent's representative.</SUBJECT> <SECTNO>26.8</SECTNO> <SUBJECT>Standards of practice.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Pleadings and Motions</HD> <SECTNO>26.9</SECTNO> <SUBJECT>Notice of administrative action.</SUBJECT> <SECTNO>26.10</SECTNO> <SUBJECT>Complaint.</SUBJECT> <SECTNO>26.11</SECTNO> <SUBJECT>Answer.</SUBJECT> <SECTNO>26.12</SECTNO> <SUBJECT>Amendments and supplemental pleadings.</SUBJECT> <SECTNO>26.13</SECTNO> <SUBJECT>Motions.</SUBJECT> <SECTNO>26.14</SECTNO> <SUBJECT>Form and filing requirements.</SUBJECT> <SECTNO>26.15</SECTNO> <SUBJECT>Service.</SUBJECT> <SECTNO>26.16</SECTNO> <SUBJECT>Time computation.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Discovery</HD> <SECTNO>26.17</SECTNO> <SUBJECT>Discovery.</SUBJECT> <SECTNO>26.18</SECTNO> <SUBJECT>Depositions.</SUBJECT> <SECTNO>26.19</SECTNO> <SUBJECT>Request for production of documents.</SUBJECT> <SECTNO>26.20</SECTNO> <SUBJECT>Admissions as to facts and documents.</SUBJECT> <SECTNO>26.21</SECTNO> <SUBJECT>Prehearing conference.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Hearings</HD> <SECTNO>26.22</SECTNO> <SUBJECT>Public nature and timing of hearings, transcripts.</SUBJECT> <SECTNO>26.23</SECTNO> <SUBJECT>Rules of evidence.</SUBJECT> <SECTNO>26.24</SECTNO> <SUBJECT>Hearing officer's determination and order.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Secretarial Review</HD> <SECTNO>26.25</SECTNO> <SUBJECT>Review of determination of hearing officers.</SUBJECT> <SECTNO>26.26</SECTNO> <SUBJECT>Interlocutory rulings.</SUBJECT> </SUBJGRP> </SUBPART> <SUBPART> <HD SOURCE="HED">Subpart B—Hearings Pursuant to the Administrative Procedure Act</HD> <SUBJGRP> <HD SOURCE="HED">General</HD> <SECTNO>26.27</SECTNO> <SUBJECT>Purpose and scope.</SUBJECT> <SECTNO>26.28</SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>26.29</SECTNO> <SUBJECT>Powers and duties of the Administrative Law Judge (ALJ).</SUBJECT> <SECTNO>26.30</SECTNO> <SUBJECT>Ex parte contacts.</SUBJECT> <SECTNO>26.31</SECTNO> <SUBJECT>Disqualification of ALJ.</SUBJECT> <SECTNO>26.32</SECTNO> <SUBJECT>Parties to the hearing.</SUBJECT> <SECTNO>26.33</SECTNO> <SUBJECT>Separation of functions.</SUBJECT> <SECTNO>26.34</SECTNO> <SUBJECT>Time computations.</SUBJECT> <SECTNO>26.35</SECTNO> <SUBJECT>Service and filing.</SUBJECT> <SECTNO>26.36</SECTNO> <SUBJECT>Sanctions.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Prehearing Procedures</HD> <SECTNO>26.37</SECTNO> <SUBJECT>Commencement of action.</SUBJECT> <SECTNO>26.38</SECTNO> <SUBJECT>Motions.</SUBJECT> <SECTNO>26.39</SECTNO> <SUBJECT>Default.</SUBJECT> <SECTNO>26.40</SECTNO> <SUBJECT>Prehearing conferences.</SUBJECT> <SECTNO>26.41</SECTNO> <SUBJECT>Discovery.</SUBJECT> <SECTNO>26.42</SECTNO> <SUBJECT>Subpoenas.</SUBJECT> <SECTNO>26.43</SECTNO> <SUBJECT>Protective order.</SUBJECT> </SUBJGRP> <SUBJGRP> <HD SOURCE="HED">Hearings</HD> <SECTNO>26.44</SECTNO> <SUBJECT>General.</SUBJECT> <SECTNO>26.45</SECTNO> <SUBJECT>Witnesses.</SUBJECT> <SECTNO>26.46</SECTNO> <SUBJECT>Evidence.</SUBJECT> <SECTNO>26.47</SECTNO> <SUBJECT>The record.</SUBJECT> <SECTNO>26.48</SECTNO> <SUBJECT>Posthearing briefs.</SUBJECT> <SECTNO>26.49</SECTNO> <SUBJECT>Initial decision.</SUBJECT> <SECTNO>26.50</SECTNO> <SUBJECT>Appeal to the Secretary.</SUBJECT> <SECTNO>26.51</SECTNO> <SUBJECT>Exhaustion of administrative remedies.</SUBJECT> <SECTNO>26.52</SECTNO> <SUBJECT>Judicial review.</SUBJECT> <SECTNO>26.53</SECTNO> <SUBJECT>Collection of civil penalties and assessments.</SUBJECT> <SECTNO>26.54</SECTNO> <SUBJECT>Right to administrative offset.</SUBJECT> </SUBJGRP> </SUBPART> </CONTENTS> <AUTH> <PRTPAGE P="217"/> <HD SOURCE="HED">Authority:</HD> 42 U.S.C. 3535(d). </AUTH> <SOURCE> <HD SOURCE="HED">Source:</HD> 48 FR 43304, Sept. 23, 1983, unless otherwise noted. </SOURCE> <SUBPART> <HD SOURCE="HED">Subpart A—Hearings Before Hearing Officers</HD> <SECTION> <SECTNO>§ 26.1</SECTNO> <SUBJECT>Purpose.</SUBJECT> This part sets forth rules of procedure in certain proceedings of the Department of Housing and Urban Development presided over by a hearing officer. These rules of procedure apply to hearings with respect to determinations by the Multifamily Participation Review Committee pursuant to 24 CFR part 200, subpart H, to hearings conducted pursuant to referrals by debarring or suspending officials under 24 CFR part 24, and to hearings conducted pursuant to referrals by a hearing official under 24 CFR part 25, unless such regulations at 24 CFR parts 24, 25, or 200, provide otherwise. They also apply in any other case where a hearing is required by statute or regulation, to the extent that rules adopted under such statute or regulation are not inconsistent. <CITA>[48 FR 43304, Sept. 23, 1983, as amended at 60 FR 39239, Aug. 1, 1995]</CITA> </SECTION> </SUBPART> </PART> </CHAPTER> Hearing Officer

§ 26.2 Hearing officer, powers and duties.

(a) Hearing officer. Proceedings conducted under these rules shall be presided over by a hearing officer who shall be an Administrative Law Judge or Board of Contract Appeals Judge authorized by the Secretary or designee to conduct proceedings under this part.

(b) Time and place of hearing. The hearing officer shall set the time and place of any hearing and shall give reasonable notice to the parties.

(c) Powers of hearing officers. The hearing officer shall conduct a fair and impartial hearing and take all action necessary to avoid delay in the disposition of proceeding and to maintain order. The hearing officer shall have all powers necessary to those ends, including but not limited to the power:

(1) To administer oaths and affirmations;

(2) To cause subpoenas to be issued as authorized by law;

(3) To rule upon offers of proof and receive evidence;

(4) To order or limit discovery as the interests of justice may require;

(5) To regulate the course of the hearing and the conduct of the parties and their counsel;

(6) To hold conferences for the settlement or simplification of the issues by consent of the parties;

(7) To consider and rule upon all procedural and other motions appropriate in adjudicative proceedings;

(8) To take notice of any material fact not appearing in evidence in the record which is properly a matter of judicial notice; and

(9) To make and file determinations.

§ 26.3 Failure to comply with an order of the hearing officer.

If a party refuses or fails to comply with an order of the hearing officer, the hearing officer may enter any appropriate order necessary to the disposition of the hearing including a determination against the noncomplying party.

§ 26.4 Ex parte communications.

(a) Definition. An ex parte communication is any communication with a hearing officer, direct or indirect, oral or written, concerning the merits of procedures of any pending proceeding which is made by a party in the absence of any other party.

(b) Prohibition of ex parte communications. Ex parte communications are prohibited except where:

(1) The purpose and content of the communication have been disclosed in advance or simultaneously to all parties; or

(2) The communication is a request for information concerning the status of the case.

(c) Procedure after receipt of ex parte communication. Any hearing officer who receives an ex parte communication which the hearing officer knows or has reason to believe is unauthorized shall promptly place the communication, or its substance, in all files and shall furnish copies to all parties. Unauthorized ex parte communications shall not be taken into consideration in deciding any matter in issue.

[48 FR 43304, Sept. 23, 1983; 48 FR 46980, Oct. 17, 1983]

§ 26.5 Disqualification of hearing officer.

When a hearing officer believes there is a basis for disqualification in a particular proceeding, the hearing officer shall withdraw by notice on the record and shall notify the Secretary and the official initiating the action under appeal. Whenever any party believes that the hearing officer should be disqualified from presiding in a particular proceeding, the party may file a motion with the hearing officer requesting the hearing officer to withdraw from presiding over the proceedings. This motion shall be supported by affidavits setting forth the alleged grounds for disqualification. If the hearing officer does not withdraw, a written statement of his or her reasons shall be incorporated in the record and the hearing shall proceed.

Representation of the Parties

§ 26.6 Department representative.

In each case heard before a hearing officer under this part, the Department shall be represented by the General Counsel or designee.

§ 26.7 Respondent's representative.

The party against whom the administrative action is taken may be represented at hearing as follows:

(a) Individuals may appear on their own behalf;

(b) A member of a partnership or joint venture may appear on behalf of the partnership or joint venture;

(d) An attorney who files a notice of appearance with the hearing officer may represent any party. For purposes of this paragraph, an attorney is defined as a member of the bar of a Federal court or of the highest court of any State; or

(e) An individual not included within paragraphs (a) through (d) of this section may represent the respondent upon an adequate showing, as determined by the hearing officer, that the individual possesses the legal, technical or other qualifications necessary to advise and assist in the presentation of the case.

§ 26.8 Standards of practice.

Attorneys shall conform to the standards of professional and ethical conduct required of practitioners in the courts of the United States and by the bars of which the attorneys are members. Any attorney may be prohibited by the Hearing Officer from representing a party if the attorney is not qualified under § 26.7 or if such action is necessary to maintain order in or the integrity of the pending proceeding.

Pleadings and Motions

§ 26.9 Notice of administrative action.

In every case, there shall be a notice of administrative action. The notice shall be in writing and inform the party of the determination. The notice shall state the reasons for the proposed or imposed action except where general terms are permitted by 24 CFR part 24. The notice shall inform the party of any right to a hearing to challenge the determination, and the manner and time in which to request such hearing. A supplemental notice may be issued in the discretion of the initiating official to add to or modify the reasons for the action.

§ 26.10 Complaint.

(a) Respondent. A complaint shall be served upon the party against whom an administrative action is taken, who shall be called the respondent.

(b) Grounds. The complaint shall state the grounds upon which the administrative action is based. The grounds set forth in the complaint may not contain allegations beyond the scope of the notice of administrative action or any amendment thereto.

(c) Notice of administrative action as complaint. A notice of administrative action may serve as a complaint provided the notice states it is also a complaint and complies with paragraph (b) of this section.

(d) Timing. When the notice does not serve as a complaint, the complaint shall be served on or before the thirtieth day after a request for hearing is made.

§ 26.11 Answer.

Respondent shall file an answer within thirty days of receipt of the complaint. The answer shall respond specifically to each factual allegation. A general denial shall not be permitted. Where a respondent intends to rely on an affirmative defense it shall be pleaded specifically. Allegations are admitted when not specifically denied in respondent's answer.

§ 26.12 Amendments and supplemental pleadings.

(a) Amendments. (1) By right: The Department may amend its complaint without leave at any time within thirty days of the date the complaint is filed or at any time before respondent's responsive pleading is filed, whichever is later. Respondent may amend its answer at any time within thirty days of filing of its answer. A party shall plead in response to an amended pleading within fifteen days of receipt of the amended pleading.

(2) By leave: Upon conditions as are necessary to avoid prejudicing the public interest and the rights of the parties, the hearing officer may allow amendments to pleadings upon motion of any party.

(3) Conformance to evidence: When issues not raised by the pleadings but reasonably within the scope of the proceeding initiated by the complaint are tried by express or implied consent to the parties, they shall be treated in all respects as if they had been raised in the pleadings, and amendments of the pleadings necessary to make them conform to the evidence shall be allowed at any time.

(b) Supplemental pleadings. The hearing officer may, upon reasonable notice, permit service of a supplemental pleading concerning transactions, occurrences, or events which have happened or been discovered since the date of prior pleadings.

§ 26.13 Motions.

(a) Motions. All motions after the commencement of the action until decision shall be addressed to the hearing officer.

(b) Content. All written motions shall state the particular order, ruling, or action desired and the grounds for granting the motion.

(c) Answers. Within seven (7) days after receipt of any written motion, or within any other period as may be designated by the hearing officer, the opposing party shall answer the motion. Failure to make a timely answer shall constitute a party's consent to the granting of the motion. The moving party shall have no right to reply, except as permitted by the hearing officer.

(d) Oral argument. The hearing officer may order oral argument on any motion.

(e) Motions for extensions. The hearing officer may waive the requirements of this section as to motions for extensions of time.

(f) Rulings on motions for dismissal. When a motion to dismiss the proceeding is granted, the hearing officer shall make and file a determination and order in accordance with the provisions of § 26.24.

§ 26.14 Form and filing requirements.

(a) Filing. An original and two copies of a request for a hearing shall be filed with the Docket Clerk, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410, on official business days between 8:45 a.m. and 5:15 p.m. The Clerk shall assign the docket number and designate a hearing officer. An original and two copies of all other pleadings, submissions and documents should be filed directly with the appropriate hearing officer. A document is considered timely filed if postmarked on or before the date due or delivered to the appropriate person by close of business on the date due.

(b) Title. Documents shall show clearly the title of the action and the docket number.

§ 26.15 Service.

(a) Method of service. Pleadings, motions, and other documents required or permitted under these rules shall be served upon all parties. Whenever these rules require or permit service to be made upon a party represented by an attorney, the service shall be made upon the attorney unless service upon the party is ordered by the hearing officer. Service shall be made by delivering a copy to the person to be served or by mailing it to that person at the last known address. Delivery of a copy within this rule means: handing it to the person to be served; or leaving it at that person's office with a clerk or other person in charge; or, if there is no one in charge, leaving it in a conspicuous place in the office; or, if the office is closed or the person to be served has no office, leaving it at that person