[Title 24 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2004 Edition]
[From the U.S. Government Printing Office]



[[Page 1]]



          24


          Parts 0 to 199

                         Revised as of April 1, 2004


          Housing and Urban Development
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2004
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

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                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2004



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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
          Chapter I--Office of Assistant Secretary for Equal 
          Opportunity, Department of Housing and Urban 
          Development                                              645
  Finding Aids:
      Material Approved for Incorporation by Reference........     757
      Table of CFR Titles and Chapters........................     759
      Alphabetical List of Agencies Appearing in the CFR......     777
      List of CFR Sections Affected...........................     787

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  24 CFR 0.1 refers 
                       to title 24, part 0, 
                       section 1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
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    To determine whether a Code volume has been amended since its 
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Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

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Code a note has been inserted to reflect the future effective date. In 
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inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
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OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
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1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
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INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
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to materials already published elsewhere. For an incorporation to be 
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This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 741-6010.

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    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]


REPUBLICATION OF MATERIAL

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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2004.

[[Page ix]]



                               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, 
2004.

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

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[[Page 1]]



                 TITLE 24--HOUSING AND URBAN DEVELOPMENT




                   (This book contains parts 0 to 199)

  --------------------------------------------------------------------
                                                                    Part

SUBTITLE A--Office of the Secretary, Department of Housing 
  and Urban Development.....................................           0

SUBTITLE B--Regulations Relating to Housing and Urban 
  Development:..............................................

chapter i--Office of Assistant Secretary for Equal 
  Opportunity, Department of Housing and Urban Development..         100

Cross References: Farmers Home Administration, Department of 
  Agriculture: For agricultural credit, see 7 CFR chapter XVIII.

  Office of Thrift Supervision, Department of the Treasury, 12 CFR 
chapter V.

  Department of Veterans Affairs regulations on assistance to certain 
veterans in acquiring specially adapted housing and guaranty of loans on 
homes: See Pensions, Bonuses, and Veteran Relief, 38 CFR part 36.

[[Page 3]]

  Subtitle A--Office of the Secretary, Department of Housing and Urban 
                               Development

  --------------------------------------------------------------------


  Editorial Note: For nomenclature changes to chapter I see 59 FR 14092, 
Mar. 25, 1994.
Part                                                                Page
0               Standards of conduct........................           7
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           7
3               Nondiscrimination on the basis of sex in 
                    education programs or activities 
                    receiving Federal financial assistance..          14
4               HUD Reform Act..............................          31
5               General HUD program requirements; waivers...          38
6               Nondiscrimination in programs and activities 
                    receiving assistance under Title I of 
                    the Housing and Community Development 
                    Act of 1974.............................         103
7               Equal employment opportunity; policy, 
                    procedures, and programs................         111
8               Nondiscrimination based on handicap in 
                    federally assisted programs and 
                    activities of the Department of Housing 
                    and Urban Development...................         132
9               Enforcement of nondiscrimination on the 
                    basis of disability in programs or 
                    activities conducted by the Department 
                    of Housing and Urban Development........         154
10              Rulemaking: Policy and procedures...........         165
13              Use of penalty mail in the location and 
                    recovery of missing children............         167

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14              Implementation of the Equal Access to 
                    Justice Act in administrative 
                    proceedings.............................         168
15              Public access to HUD records under the 
                    Freedom of Information Act and testimony 
                    and production of information by HUD 
                    employees...............................         175
16              Implementation of the Privacy Act of 1974...         188
17              Administrative claims.......................         201
18              Indemnification of HUD employees............         227
20              Board of Contract Appeals...................         228
21              Governmentwide requirements for drug-free 
                    workplace (grants)......................         238
24              Government debarment and suspension 
                    (Nonprocurement)........................         244
25              Mortgagee Review Board......................         271
26              Hearing procedures..........................         278
27              Nonjudicial foreclosure of multifamily and 
                    single family mortgages.................         292
28              Implementation of the Program Fraud Civil 
                    Remedies Act of 1986....................         301
30              Civil money penalties: certain prohibited 
                    conduct.................................         305
35              Lead-based paint poisoning prevention in 
                    certain residential structures..........         313
40              Accessibility standards for design, 
                    construction, and alteration of publicly 
                    owned residential structures............         358
41              Policies and procedures for the enforcement 
                    of standards and requirements for 
                    accessibility by the physically 
                    handicapped.............................         359
42              Displacement, relocation assistance, and 
                    real property acquisition for HUD and 
                    HUD-assisted programs...................         362
43-45           [Reserved]
50              Protection and enhancement of environmental 
                    quality.................................         366
51              Environmental criteria and standards........         375
52              Intergovernmental review of Department of 
                    Housing and Urban Development programs 
                    and activities..........................         393
55              Floodplain management.......................         396
58              Environmental review procedures for entities 
                    assuming HUD environmental 
                    responsibilities........................         405
60              Protection of human subjects................         425
70              Use of volunteers on projects subject to 
                    Davis-Bacon and HUD-determined wage 
                    rates...................................         425

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81              The Secretary of HUD's regulation of the 
                    Federal National Mortgage Association 
                    (Fannie Mae) and the Federal Home Loan 
                    Mortgage Corporation (Freddie Mac)......         428
84              Uniform administrative requirements for 
                    grants and agreements with institutions 
                    of higher education, hospitals, and 
                    other non-profit organizations..........         465
85              Administrative requirements for grants and 
                    cooperative agreements to State, local 
                    and federally recognized Indian tribal 
                    governments.............................         502
87              New restrictions on lobbying................         529
91              Consolidated submissions for community 
                    planning and development programs.......         541
92              Home Investment Partnerships Program........         574


Appendixes A-C to Subtitle A [Reserved]

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PART 0_STANDARDS OF CONDUCT--Table of Contents






Sec. 0.1  Cross-reference to employees ethical conduct standards and 
financial disclosure regulations.

    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.

5 U.S.C. 301, 7301; 42 U.S.C. 3535(d)

[61 FR 36251, July 9, 1996]



 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--Table of Contents



Sec.
1.1 Purpose.
1.2 Definitions.
1.3 Application of part 1.
1.4 Discrimination prohibited.
1.5 Assurances required.
1.6 Compliance information.
1.7 Conduct of investigations.
1.8 Procedure for effecting compliance.
1.9 Hearings.
1.10 Effect on other regulations; forms and instructions.

    Authority: 42 U.S.C. 2000d-1 and 3535(d).

    Source: 38 FR 17949, July 5, 1973, unless otherwise noted.



Sec. 1.1  Purpose.

    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 Act) 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.



Sec. 1.2  Definitions.

    As used in this part 1--
    (a) The term Department means the Department of Housing and Urban 
Development.
    (b) The term Secretary means the Secretary of Housing and Urban 
Development.
    (c) The term responsible Department official 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 United States 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 State means any one of 
the foregoing.
    (e) The term Federal financial assistance 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 Federal financial 
assistance does not include a contract of insurance or guaranty.
    (f) The term recipient 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

[[Page 8]]

any ultimate beneficiary under any such program or activity.
    (g) The term applicant 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 
application means such an application, contract, request, or plan.



Sec. 1.3  Application of part 1.

    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 Sec. 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 Federal Register.



Sec. 1.4  Discrimination prohibited.

    (a) General. 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) Specific discriminatory actions prohibited. (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 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

[[Page 9]]

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 et seq.), 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.

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 to remove or overcome the consequences of the prior 
discriminatory practice or usage, and to accomplish the purpose of the 
Act.
    (c) Employment practices. (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

[[Page 10]]

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.



Sec. 1.5  Assurances required.

    (a) General. (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.
    (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) Preexisting contracts--funds not disbursed. In any case where a 
contract for Federal financial assistance, to carry

[[Page 11]]

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) Preexisting contracts--periodic payments. 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) Assurances from institutions. (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) Elementary and secondary schools. 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.

[38 FR 17949, July 5, 1973, as amended at 50 FR 9269, Mar. 7, 1985]



Sec. 1.6  Compliance information.

    (a) Cooperation and assistance. 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.
    (b) Compliance reports. 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

[[Page 12]]

the extent to which members of minority groups are beneficiaries of 
federally assisted programs.
    (c) Access to sources of information. 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) Information to beneficiaries and participants. 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.



Sec. 1.7  Conduct of investigations.

    (a) Periodic compliance reviews. 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) Complaints. 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) Investigations. 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) Resolution of matters. (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 
Sec. 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) Intimidatory or retaliatory acts prohibited. 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.



Sec. 1.8  Procedure for effecting compliance.

    (a) General. 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

[[Page 13]]

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) Noncompliance with Sec. 1.5. If an applicant fails or refuses 
to furnish an assurance required under Sec. 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) Termination of or refusal to grant or to continue Federal 
financial assistance. 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) Other means authorized by law. 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.



Sec. 1.9  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec. 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. 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 
Sec. 1.8(c) and consent to the making

[[Page 14]]

of a decision on the basis of such information as is available.
    (b) Hearing procedures. Hearings shall be conducted in accordance 
with 24 CFR part 180.

[38 FR 17949, July 5, 1973, as amended at 61 FR 52217, Oct. 4, 1996]



Sec. 1.10  Effect on other regulations; forms and instructions.

    (a) Effect on other regulations. 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) Forms and instructions. 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) Supervision and coordination. 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 Sec. 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.

[38 FR 17949, July 5, 1973. Redesignated at 61 FR 52217, Oct. 4, 1996]



PART 3_NONDISCRIMINATION ON THE BASIS OF SEX IN EDUCATION PROGRAMS OR 
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents




                         Subpart A_Introduction

Sec.
3.100 Purpose and effective date.
3.105 Definitions.
3.110 Remedial and affirmative action and self-evaluation.
3.115 Assurance required.
3.120 Transfers of property.
3.125 Effect of other requirements.
3.130 Effect of employment opportunities.
3.135 Designation of responsible employee and adoption of grievance 
          procedures.
3.140 Dissemination of policy.

                           Subpart B_Coverage

3.200 Application.
3.205 Educational institutions and other entities controlled by 
          religious organizations.
3.210 Military and merchant marine educational institutions.
3.215 Membership practices of certain organizations.
3.220 Admissions.
3.225 Educational institutions eligible to submit transition plans.
3.230 Transition plans.

[[Page 15]]

3.235 Statutory amendments.

     Subpart C_Discrimination on the Basis of Sex in Admission and 
                         Recruitment Prohibited

3.300 Admission.
3.305 Preference in admission.
3.310 Recruitment.

 Subpart D_Discrimination on the Basis of Sex in Education Programs or 
                          Activities Prohibited

3.400 Education programs or activities.
3.405 Housing.
3.410 Comparable facilities.
3.415 Access to course offerings.
3.420 Access to schools operated by LEAs.
3.425 Counseling and use of appraisal and counseling materials.
3.430 Financial assistance.
3.435 Employment assistance to students.
3.440 Health and insurance benefits and services.
3.445 Marital or parental status.
3.450 Athletics.
3.455 Textbooks and curricular material.

Subpart E_Discrimination on the Basis of Sex in Employment in Education 
                    Programs or Activities Prohibited

3.500 Employment.
3.505 Employment criteria.
3.510 Recruitment.
3.515 Compensation.
3.520 Job classification and structure.
3.525 Fringe benefits.
3.530 Marital or parental status.
3.535 Effect of state or local law or other requirements.
3.540 Advertising.
3.545 Pre-employment inquiries.
3.550 Sex as a bona fide occupational qualification.

                          Subpart F_Procedures

3.600 Notice of covered programs.
3.605 Enforcement procedures.

    Authority: 20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687, 1688.

    Source: 65 FR 52865, 52879, Aug. 30, 2000, unless otherwise noted.



                         Subpart A_Introduction



Sec. 3.100  Purpose and effective date.

    The purpose of these Title IX regulations is to effectuate Title IX 
of the Education Amendments of 1972, as amended (except sections 904 and 
906 of those Amendments) (20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687, 
1688), which is designed to eliminate (with certain exceptions) 
discrimination on the basis of sex in any education program or activity 
receiving Federal financial assistance, whether or not such program or 
activity is offered or sponsored by an educational institution as 
defined in these Title IX regulations. The effective date of these Title 
IX regulations shall be September 29, 2000.



Sec. 3.105  Definitions.

    As used in these Title IX regulations, the term:
    Administratively separate unit means a school, department, or 
college of an educational institution (other than a local educational 
agency) admission to which is independent of admission to any other 
component of such institution.
    Admission means selection for part-time, full-time, special, 
associate, transfer, exchange, or any other enrollment, membership, or 
matriculation in or at an education program or activity operated by a 
recipient.
    Applicant means one who submits an application, request, or plan 
required to be approved by an official of the Federal agency that awards 
Federal financial assistance, or by a recipient, as a condition to 
becoming a recipient.
    Designated agency official means Assistant Secretary for Fair 
Housing and Equal Opportunity.
    Educational institution means a local educational agency (LEA) as 
defined by 20 U.S.C. 8801(18), a preschool, a private elementary or 
secondary school, or an applicant or recipient that is an institution of 
graduate higher education, an institution of undergraduate higher 
education, an institution of professional education, or an institution 
of vocational education, as defined in this section.
    Federal financial assistance means any of the following, when 
authorized or extended under a law administered by the Federal agency 
that awards such assistance:
    (1) A grant or loan of Federal financial assistance, including funds 
made available for:
    (i) The acquisition, construction, renovation, restoration, or 
repair of a building or facility or any portion thereof; and

[[Page 16]]

    (ii) Scholarships, loans, grants, wages, or other funds extended to 
any entity for payment to or on behalf of students admitted to that 
entity, or extended directly to such students for payment to that 
entity.
    (2) A grant of Federal real or personal property or any interest 
therein, including surplus property, and the proceeds of the sale or 
transfer of such property, if the Federal share of the fair market value 
of the property is not, upon such sale or transfer, properly accounted 
for to the Federal Government.
    (3) Provision of the services of Federal personnel.
    (4) Sale or lease of Federal property or any interest therein at 
nominal consideration, or at consideration reduced for the purpose of 
assisting the recipient or in recognition of public interest to be 
served thereby, or permission to use Federal property or any interest 
therein without consideration.
    (5) Any other contract, agreement, or arrangement that has as one of 
its purposes the provision of assistance to any education program or 
activity, except a contract of insurance or guaranty.
    Institution of graduate higher education means an institution that:
    (1) Offers academic study beyond the bachelor of arts or bachelor of 
science degree, whether or not leading to a certificate of any higher 
degree in the liberal arts and sciences;
    (2) Awards any degree in a professional field beyond the first 
professional degree (regardless of whether the first professional degree 
in such field is awarded by an institution of undergraduate higher 
education or professional education); or
    (3) Awards no degree and offers no further academic study, but 
operates ordinarily for the purpose of facilitating research by persons 
who have received the highest graduate degree in any field of study.
    Institution of professional education means an institution (except 
any institution of undergraduate higher education) that offers a program 
of academic study that leads to a first professional degree in a field 
for which there is a national specialized accrediting agency recognized 
by the Secretary of Education.
    Institution of undergraduate higher education means:
    (1) An institution offering at least two but less than four years of 
college-level study beyond the high school level, leading to a diploma 
or an associate degree, or wholly or principally creditable toward a 
baccalaureate degree; or
    (2) An institution offering academic study leading to a 
baccalaureate degree; or
    (3) An agency or body that certifies credentials or offers degrees, 
but that may or may not offer academic study.
    Institution of vocational education means a school or institution 
(except an institution of professional or graduate or undergraduate 
higher education) that has as its primary purpose preparation of 
students to pursue a technical, skilled, or semiskilled occupation or 
trade, or to pursue study in a technical field, whether or not the 
school or institution offers certificates, diplomas, or degrees and 
whether or not it offers full-time study.
    Recipient means any State or political subdivision thereof, or any 
instrumentality of a State or political subdivision thereof, any public 
or private agency, institution, or organization, or other entity, or any 
person, to whom Federal financial assistance is extended directly or 
through another recipient and that operates an education program or 
activity that receives such assistance, including any subunit, 
successor, assignee, or transferee thereof.
    Student means a person who has gained admission.
    Title IX means Title IX of the Education Amendments of 1972, Public 
Law 92-318, 86 Stat. 235, 373 (codified as amended at 20 U.S.C. 1681-
1688) (except sections 904 and 906 thereof), as amended by section 3 of 
Public Law 93-568, 88 Stat. 1855, by section 412 of the Education 
Amendments of 1976, Public Law 94-482, 90 Stat. 2234, and by Section 3 
of Public Law 100-259, 102 Stat. 28, 28-29 (20 U.S.C. 1681, 1682, 1683, 
1685, 1686, 1687, 1688).
    Title IX regulations means the provisions set forth at Sec. Sec. 
3.100 through 3.605.
    Transition plan means a plan subject to the approval of the 
Secretary of Education pursuant to section 901(a)(2) of the Education 
Amendments of 1972,

[[Page 17]]

20 U.S.C. 1681(a)(2), under which an educational institution operates in 
making the transition from being an educational institution that admits 
only students of one sex to being one that admits students of both sexes 
without discrimination.

[65 FR 52865, 52879, Aug. 30, 2000, as amended at 65 FR 52880, Aug. 30, 
2000]



Sec. 3.110  Remedial and affirmative action and self-evaluation.

    (a) Remedial action. If the designated agency official finds that a 
recipient has discriminated against persons on the basis of sex in an 
education program or activity, such recipient shall take such remedial 
action as the designated agency official deems necessary to overcome the 
effects of such discrimination.
    (b) Affirmative action. In the absence of a finding of 
discrimination on the basis of sex in an education program or activity, 
a recipient may take affirmative action consistent with law to overcome 
the effects of conditions that resulted in limited participation therein 
by persons of a particular sex. Nothing in these Title IX regulations 
shall be interpreted to alter any affirmative action obligations that a 
recipient may have under Executive Order 11246, 3 CFR, 1964-1965 Comp., 
p. 339; as amended by Executive Order 11375, 3 CFR, 1966-1970 Comp., p. 
684; as amended by Executive Order 11478, 3 CFR, 1966-1970 Comp., p. 
803; as amended by Executive Order 12086, 3 CFR, 1978 Comp., p. 230; as 
amended by Executive Order 12107, 3 CFR, 1978 Comp., p. 264.
    (c) Self-evaluation. Each recipient education institution shall, 
within one year of September 29, 2000:
    (1) Evaluate, in terms of the requirements of these Title IX 
regulations, its current policies and practices and the effects thereof 
concerning admission of students, treatment of students, and employment 
of both academic and non-academic personnel working in connection with 
the recipient's education program or activity;
    (2) Modify any of these policies and practices that do not or may 
not meet the requirements of these Title IX regulations; and
    (3) Take appropriate remedial steps to eliminate the effects of any 
discrimination that resulted or may have resulted from adherence to 
these policies and practices.
    (d) Availability of self-evaluation and related materials. 
Recipients shall maintain on file for at least three years following 
completion of the evaluation required under paragraph (c) of this 
section, and shall provide to the designated agency official upon 
request, a description of any modifications made pursuant to paragraph 
(c)(2) of this section and of any remedial steps taken pursuant to 
paragraph (c)(3) of this section.



Sec. 3.115  Assurance required.

    (a) General. Either at the application stage or the award stage, 
Federal agencies must ensure that applications for Federal financial 
assistance or awards of Federal financial assistance contain, be 
accompanied by, or be covered by a specifically identified assurance 
from the applicant or recipient, satisfactory to the designated agency 
official, that each education program or activity operated by the 
applicant or recipient and to which these Title IX regulations apply 
will be operated in compliance with these Title IX regulations. An 
assurance of compliance with these Title IX regulations shall not be 
satisfactory to the designated agency official if the applicant or 
recipient to whom such assurance applies fails to commit itself to take 
whatever remedial action is necessary in accordance with Sec. 3.110(a) 
to eliminate existing discrimination on the basis of sex or to eliminate 
the effects of past discrimination whether occurring prior to or 
subsequent to the submission to the designated agency official of such 
assurance.
    (b) Duration of obligation. (1) In the case of Federal financial 
assistance extended to provide real property or structures thereon, such 
assurance shall 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 to provide an education program or activity.
    (2) In the case of Federal financial assistance extended to provide 
personal property, such assurance shall obligate the recipient for the 
period during

[[Page 18]]

which it retains ownership or possession of the property.
    (3) In all other cases such assurance shall obligate the recipient 
for the period during which Federal financial assistance is extended.
    (c) Form. (1) The assurances required by paragraph (a) of this 
section, which may be included as part of a document that addresses 
other assurances or obligations, shall include that the applicant or 
recipient will comply with all applicable Federal statutes relating to 
nondiscrimination. These include but are not limited to: Title IX of the 
Education Amendments of 1972, as amended (20 U.S.C. 1681-1683, 1685-
1688).
    (2) The designated agency official will specify the extent to which 
such assurances will be required of the applicant's or recipient's 
subgrantees, contractors, subcontractors, transferees, or successors in 
interest.



Sec. 3.120  Transfers of property.

    If a recipient sells or otherwise transfers property financed in 
whole or in part with Federal financial assistance to a transferee that 
operates any education program or activity, and the Federal share of the 
fair market value of the property is not upon such sale or transfer 
properly accounted for to the Federal Government, both the transferor 
and the transferee shall be deemed to be recipients, subject to the 
provisions of Sec. Sec. 3.205 through 3.235(a).



Sec. 3.125  Effect of other requirements.

    (a) Effect of other Federal provisions. The obligations imposed by 
these Title IX regulations are independent of, and do not alter, 
obligations not to discriminate on the basis of sex imposed by Executive 
Order 11246, 3 CFR, 1964-1965 Comp., p. 339; as amended by Executive 
Order 11375, 3 CFR, 1966-1970 Comp., p. 684; as amended by Executive 
Order 11478, 3 CFR, 1966-1970 Comp., p. 803; as amended by Executive 
Order 12087, 3 CFR, 1978 Comp., p. 230; as amended by Executive Order 
12107, 3 CFR, 1978 Comp., p. 264; sections 704 and 855 of the Public 
Health Service Act (42 U.S.C. 295m, 298b-2); Title VII of the Civil 
Rights Act of 1964 (42 U.S.C. 2000e et seq.); the Equal Pay Act of 1963 
(29 U.S.C. 206); and any other Act of Congress or Federal regulation.
    (b) Effect of State or local law or other requirements. The 
obligation to comply with these Title IX regulations is not obviated or 
alleviated by any State or local law or other requirement that would 
render any applicant or student ineligible, or limit the eligibility of 
any applicant or student, on the basis of sex, to practice any 
occupation or profession.
    (c) Effect of rules or regulations of private organizations. The 
obligation to comply with these Title IX regulations is not obviated or 
alleviated by any rule or regulation of any organization, club, athletic 
or other league, or association that would render any applicant or 
student ineligible to participate or limit the eligibility or 
participation of any applicant or student, on the basis of sex, in any 
education program or activity operated by a recipient and that receives 
Federal financial assistance.



Sec. 3.130  Effect of employment opportunities.

    The obligation to comply with these Title IX regulations is not 
obviated or alleviated because employment opportunities in any 
occupation or profession are or may be more limited for members of one 
sex than for members of the other sex.



Sec. 3.135  Designation of responsible employee and adoption of grievance 
procedures.

    (a) Designation of responsible employee. Each recipient shall 
designate at least one employee to coordinate its efforts to comply with 
and carry out its responsibilities under these Title IX regulations, 
including any investigation of any complaint communicated to such 
recipient alleging its noncompliance with these Title IX regulations or 
alleging any actions that would be prohibited by these Title IX 
regulations. The recipient shall notify all its students and employees 
of the name, office address, and telephone number of the employee or 
employees appointed pursuant to this paragraph.
    (b) Complaint procedure of recipient. A recipient shall adopt and 
publish grievance procedures providing for prompt and equitable 
resolution of student and

[[Page 19]]

employee complaints alleging any action that would be prohibited by 
these Title IX regulations.



Sec. 3.140  Dissemination of policy.

    (a) Notification of policy. (1) Each recipient shall implement 
specific and continuing steps to notify applicants for admission and 
employment, students and parents of elementary and secondary school 
students, employees, sources of referral of applicants for admission and 
employment, and all unions or professional organizations holding 
collective bargaining or professional agreements with the recipient, 
that it does not discriminate on the basis of sex in the educational 
programs or activities that it operates, and that it is required by 
Title IX and these Title IX regulations not to discriminate in such a 
manner. Such notification shall contain such information, and be made in 
such manner, as the designated agency official finds necessary to 
apprise such persons of the protections against discrimination assured 
them by Title IX and these Title IX regulations, but shall state at 
least that the requirement not to discriminate in education programs or 
activities extends to employment therein, and to admission thereto 
unless Sec. Sec. 3.300 through 3.310 do not apply to the recipient, and 
that inquiries concerning the application of Title IX and these Title IX 
regulations to such recipient may be referred to the employee designated 
pursuant to Sec. 3.135, or to the designated agency official.
    (2) Each recipient shall make the initial notification required by 
paragraph (a)(1) of this section within 90 days of September 29, 2000 or 
of the date these Title IX regulations first apply to such recipient, 
whichever comes later, which notification shall include publication in:
    (i) Newspapers and magazines operated by such recipient or by 
student, alumnae, or alumni groups for or in connection with such 
recipient; and
    (ii) Memoranda or other written communications distributed to every 
student and employee of such recipient.
    (b) Publications. (1) Each recipient shall prominently include a 
statement of the policy described in paragraph (a) of this section in 
each announcement, bulletin, catalog, or application form that it makes 
available to any person of a type, described in paragraph (a) of this 
section, or which is otherwise used in connection with the recruitment 
of students or employees.
    (2) A recipient shall not use or distribute a publication of the 
type described in paragraph (b)(1) of this section that suggests, by 
text or illustration, that such recipient treats applicants, students, 
or employees differently on the basis of sex except as such treatment is 
permitted by these Title IX regulations.
    (c) Distribution. Each recipient shall distribute without 
discrimination on the basis of sex each publication described in 
paragraph (b)(1) of this section, and shall apprise each of its 
admission and employment recruitment representatives of the policy of 
nondiscrimination described in paragraph (a) of this section, and shall 
require such representatives to adhere to such policy.



                           Subpart B_Coverage



Sec. 3.200  Application.

    Except as provided in Sec. Sec. 3.205 through 3.235(a), these Title 
IX regulations apply to every recipient and to each education program or 
activity operated by such recipient that receives Federal financial 
assistance.



Sec. 3.205  Educational institutions and other entities controlled by 
religious organizations.

    (a) Exemption. These Title IX regulations do not apply to any 
operation of an educational institution or other entity that is 
controlled by a religious organization to the extent that application of 
these Title IX regulations would not be consistent with the religious 
tenets of such organization.
    (b) Exemption claims. An educational institution or other entity 
that wishes to claim the exemption set forth in paragraph (a) of this 
section shall do so by submitting in writing to the designated agency 
official a statement by the highest-ranking official of the institution, 
identifying the provisions of these Title IX regulations that conflict 
with a specific tenet of the religious organization.

[[Page 20]]



Sec. 3.210  Military and merchant marine educational institutions.

    These Title IX regulations do not apply to an educational 
institution whose primary purpose is the training of individuals for a 
military service of the United States or for the merchant marine.



Sec. 3.215  Membership practices of certain organizations.

    (a) Social fraternities and sororities. These Title IX regulations 
do not apply to the membership practices of social fraternities and 
sororities that are exempt from taxation under section 501(a) of the 
Internal Revenue Code of 1954, 26 U.S.C. 501(a), the active membership 
of which consists primarily of students in attendance at institutions of 
higher education.
    (b) YMCA, YWCA, Girl Scouts, Boy Scouts, and Camp Fire Girls. These 
Title IX regulations do not apply to the membership practices of the 
Young Men's Christian Association (YMCA), the Young Women's Christian 
Association (YWCA), the Girl Scouts, the Boy Scouts, and Camp Fire 
Girls.
    (c) Voluntary youth service organizations. These Title IX 
regulations do not apply to the membership practices of a voluntary 
youth service organization that is exempt from taxation under section 
501(a) of the Internal Revenue Code of 1954, 26 U.S.C. 501(a), and the 
membership of which has been traditionally limited to members of one sex 
and principally to persons of less than nineteen years of age.



Sec. 3.220  Admissions.

    (a) Admissions to educational institutions prior to June 24, 1973, 
are not covered by these Title IX regulations.
    (b) Administratively separate units. For the purposes only of this 
section, Sec. Sec. 3.225 and 3.230, and Sec. Sec. 3.300 through 3.310, 
each administratively separate unit shall be deemed to be an educational 
institution.
    (c) Application of Sec. Sec. 3.300 through 3.310. Except as 
provided in paragraphs (d) and (e) of this section, Sec. Sec. 3.300 
through 3.310 apply to each recipient. A recipient to which Sec. Sec. 
3.300 through 3.310 apply shall not discriminate on the basis of sex in 
admission or recruitment in violation of Sec. Sec. 3.300 through 3.310.
    (d) Educational institutions. Except as provided in paragraph (e) of 
this section as to recipients that are educational institutions, 
Sec. Sec. 3.300 through 3.310 apply only to institutions of vocational 
education, professional education, graduate higher education, and public 
institutions of undergraduate higher education.
    (e) Public institutions of undergraduate higher education. 
Sec. Sec. 3.300 through 3.310 do not apply to any public institution of 
undergraduate higher education that traditionally and continually from 
its establishment has had a policy of admitting students of only one 
sex.



Sec. 3.225  Educational institutions eligible to submit transition plans.

    (a) Application. This section applies to each educational 
institution to which Sec. Sec. 3.300 through 3.310 apply that:
    (1) Admitted students of only one sex as regular students as of June 
23, 1972; or
    (2) Admitted students of only one sex as regular students as of June 
23, 1965, but thereafter admitted, as regular students, students of the 
sex not admitted prior to June 23, 1965.
    (b) Provision for transition plans. An educational institution to 
which this section applies shall not discriminate on the basis of sex in 
admission or recruitment in violation of Sec. Sec. 3.300 through 3.310.



Sec. 3.230  Transition plans.

    (a) Submission of plans. An institution to which Sec. 3.225 applies 
and that is composed of more than one administratively separate unit may 
submit either a single transition plan applicable to all such units, or 
a separate transition plan applicable to each such unit.
    (b) Content of plans. In order to be approved by the Secretary of 
Education, a transition plan shall:
    (1) State the name, address, and Federal Interagency Committee on 
Education Code of the educational institution submitting such plan, the 
administratively separate units to which the plan is applicable, and the 
name, address, and telephone number of the person to whom questions 
concerning the plan may be addressed. The person who

[[Page 21]]

submits the plan shall be the chief administrator or president of the 
institution, or another individual legally authorized to bind the 
institution to all actions set forth in the plan.
    (2) State whether the educational institution or administratively 
separate unit admits students of both sexes as regular students and, if 
so, when it began to do so.
    (3) Identify and describe with respect to the educational 
institution or administratively separate unit any obstacles to admitting 
students without discrimination on the basis of sex.
    (4) Describe in detail the steps necessary to eliminate as soon as 
practicable each obstacle so identified and indicate the schedule for 
taking these steps and the individual directly responsible for their 
implementation.
    (5) Include estimates of the number of students, by sex, expected to 
apply for, be admitted to, and enter each class during the period 
covered by the plan.
    (c) Nondiscrimination. No policy or practice of a recipient to which 
Sec. 3.225 applies shall result in treatment of applicants to or 
students of such recipient in violation of Sec. Sec. 3.300 through 
3.310 unless such treatment is necessitated by an obstacle identified in 
paragraph (b)(3) of this section and a schedule for eliminating that 
obstacle has been provided as required by paragraph (b)(4) of this 
section.
    (d) Effects of past exclusion. To overcome the effects of past 
exclusion of students on the basis of sex, each educational institution 
to which Sec. 3.225 applies shall include in its transition plan, and 
shall implement, specific steps designed to encourage individuals of the 
previously excluded sex to apply for admission to such institution. Such 
steps shall include instituting recruitment programs that emphasize the 
institution's commitment to enrolling students of the sex previously 
excluded.



Sec. 3.235  Statutory amendments.

    (a) This section, which applies to all provisions of these Title IX 
regulations, addresses statutory amendments to Title IX.
    (b) These Title IX regulations shall not apply to or preclude:
    (1) Any program or activity of the American Legion undertaken in 
connection with the organization or operation of any Boys State 
conference, Boys Nation conference, Girls State conference, or Girls 
Nation conference;
    (2) Any program or activity of a secondary school or educational 
institution specifically for:
    (i) The promotion of any Boys State conference, Boys Nation 
conference, Girls State conference, or Girls Nation conference; or
    (ii) The selection of students to attend any such conference;
    (3) Father-son or mother-daughter activities at an educational 
institution or in an education program or activity, but if such 
activities are provided for students of one sex, opportunities for 
reasonably comparable activities shall be provided to students of the 
other sex;
    (4) Any scholarship or other financial assistance awarded by an 
institution of higher education to an individual because such individual 
has received such award in a single-sex pageant based upon a combination 
of factors related to the individual's personal appearance, poise, and 
talent. The pageant, however, must comply with other nondiscrimination 
provisions of Federal law.
    (c) Program or activity or program means:
    (1) All of the operations of any entity described in paragraphs 
(c)(1)(i) through (iv) of this section, any part of which is extended 
Federal financial assistance:
    (i)(A) A department, agency, special purpose district, or other 
instrumentality of a State or of a local government; or
    (B) 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;
    (ii)(A) A college, university, or other postsecondary institution, 
or a public system of higher education; or
    (B) A local educational agency (as defined in section 8801 of title 
20), system

[[Page 22]]

of vocational education, or other school system;
    (iii)(A) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship--
    (1) If assistance is extended to such corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (2) Which is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (B) 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
    (iv) Any other entity that is established by two or more of the 
entities described in paragraphs (c)(1)(i), (ii), or (iii) of this 
section.
    (2)(i) Program or activity does not include any operation of an 
entity that is controlled by a religious organization if the application 
of 20 U.S.C. 1681 to such operation would not be consistent with the 
religious tenets of such organization.
    (ii) For example, all of the operations of a college, university, or 
other postsecondary institution, including but not limited to 
traditional educational operations, faculty and student housing, campus 
shuttle bus service, campus restaurants, the bookstore, and other 
commercial activities are part of a ``program or activity'' subject to 
these Title IX regulations if the college, university, or other 
institution receives Federal financial assistance.
    (d)(1) Nothing in these Title IX regulations shall be construed to 
require or prohibit any person, or public or private entity, to provide 
or pay for any benefit or service, including the use of facilities, 
related to an abortion. Medical procedures, benefits, services, and the 
use of facilities, necessary to save the life of a pregnant woman or to 
address complications related to an abortion are not subject to this 
section.
    (2) Nothing in this section shall be construed to permit a penalty 
to be imposed on any person or individual because such person or 
individual is seeking or has received any benefit or service related to 
a legal abortion. Accordingly, subject to paragraph (d)(1) of this 
section, no person shall be excluded from participation in, be denied 
the benefits of, or be subjected to discrimination under any academic, 
extracurricular, research, occupational training, employment, or other 
educational program or activity operated by a recipient that receives 
Federal financial assistance because such individual has sought or 
received, or is seeking, a legal abortion, or any benefit or service 
related to a legal abortion.



     Subpart C_Discrimination on the Basis of Sex in Admission and 
                         Recruitment Prohibited



Sec. 3.300  Admission.

    (a) General. No person shall, on the basis of sex, be denied 
admission, or be subjected to discrimination in admission, by any 
recipient to which Sec. Sec. 3.300 through 3.310 apply, except as 
provided in Sec. Sec. 3.225 and 3.230.
    (b) Specific prohibitions. (1) In determining whether a person 
satisfies any policy or criterion for admission, or in making any offer 
of admission, a recipient to which Sec. Sec. 3.300 through 3.310 apply 
shall not:
    (i) Give preference to one person over another on the basis of sex, 
by ranking applicants separately on such basis, or otherwise;
    (ii) Apply numerical limitations upon the number or proportion of 
persons of either sex who may be admitted; or
    (iii) Otherwise treat one individual differently from another on the 
basis of sex.
    (2) A recipient shall not administer or operate any test or other 
criterion for admission that has a disproportionately adverse effect on 
persons on the basis of sex unless the use of such test or criterion is 
shown to predict validly success in the education program or activity in 
question and alternative tests or criteria that do not have such a 
disproportionately adverse effect are shown to be unavailable.
    (c) Prohibitions relating to marital or parental status. In 
determining whether a person satisfies any policy or criterion for 
admission, or in making any offer of admission, a recipient to which 
Sec. Sec. 3.300 through 3.310 apply:

[[Page 23]]

    (1) Shall not apply any rule concerning the actual or potential 
parental, family, or marital status of a student or applicant that 
treats persons differently on the basis of sex;
    (2) Shall not discriminate against or exclude any person on the 
basis of pregnancy, childbirth, termination of pregnancy, or recovery 
therefrom, or establish or follow any rule or practice that so 
discriminates or excludes;
    (3) Subject to Sec. 3.235(d), shall treat disabilities related to 
pregnancy, childbirth, termination of pregnancy, or recovery therefrom 
in the same manner and under the same policies as any other temporary 
disability or physical condition; and
    (4) Shall not make pre-admission inquiry as to the marital status of 
an applicant for admission, including whether such applicant is ``Miss'' 
or ``Mrs.'' A recipient may make pre-admission inquiry as to the sex of 
an applicant for admission, but only if such inquiry is made equally of 
such applicants of both sexes and if the results of such inquiry are not 
used in connection with discrimination prohibited by these Title IX 
regulations.



Sec. 3.305  Preference in admission.

    A recipient to which Sec. Sec. 3.300 through 3.310 apply shall not 
give preference to applicants for admission, on the basis of attendance 
at any educational institution or other school or entity that admits as 
students only or predominantly members of one sex, if the giving of such 
preference has the effect of discriminating on the basis of sex in 
violation of Sec. Sec. 3.300 through 3.310.



Sec. 3.310  Recruitment.

    (a) Nondiscriminatory recruitment. A recipient to which Sec. Sec. 
3.300 through 3.310 apply shall not discriminate on the basis of sex in 
the recruitment and admission of students. A recipient may be required 
to undertake additional recruitment efforts for one sex as remedial 
action pursuant to Sec. 3.110(a), and may choose to undertake such 
efforts as affirmative action pursuant to Sec. 3.110(b).
    (b) Recruitment at certain institutions. A recipient to which 
Sec. Sec. 3.300 through 3.310 apply shall not recruit primarily or 
exclusively at educational institutions, schools, or entities that admit 
as students only or predominantly members of one sex, if such actions 
have the effect of discriminating on the basis of sex in violation of 
Sec. Sec. 3.300 through 3.310.



 Subpart D_Discrimination on the Basis of Sex in Education Programs or 
                          Activities Prohibited



Sec. 3.400  Education programs or activities.

    (a) General. Except as provided elsewhere in these Title IX 
regulations, no person shall, on the basis of sex, be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination under any academic, extracurricular, research, 
occupational training, or other education program or activity operated 
by a recipient that receives Federal financial assistance. Sections 
3.400 through 3.455 do not apply to actions of a recipient in connection 
with admission of its students to an education program or activity of a 
recipient to which Sec. Sec. 3.300 through 3.310 do not apply, or an 
entity, not a recipient, to which Sec. Sec. 3.300 through 3.310 would 
not apply if the entity were a recipient.
    (b) Specific prohibitions. Except as provided in Sec. Sec. 3.400 
through 3.455, in providing any aid, benefit, or service to a student, a 
recipient shall not, on the basis of sex:
    (1) Treat one person differently from another in determining whether 
such person satisfies any requirement or condition for the provision of 
such aid, benefit, or service;
    (2) Provide different aid, benefits, or services or provide aid, 
benefits, or services in a different manner;
    (3) Deny any person any such aid, benefit, or service;
    (4) Subject any person to separate or different rules of behavior, 
sanctions, or other treatment;
    (5) Apply any rule concerning the domicile or residence of a student 
or applicant, including eligibility for in-state fees and tuition;
    (6) Aid or perpetuate discrimination against any person by providing 
significant assistance to any agency, organization, or person that 
discriminates on the basis of sex in providing

[[Page 24]]

any aid, benefit, or service to students or employees;
    (7) Otherwise limit any person in the enjoyment of any right, 
privilege, advantage, or opportunity.
    (c) Assistance administered by a recipient educational institution 
to study at a foreign institution. A recipient educational institution 
may administer or assist in the administration of scholarships, 
fellowships, or other awards established by foreign or domestic wills, 
trusts, or similar legal instruments, or by acts of foreign governments 
and restricted to members of one sex, that are designed to provide 
opportunities to study abroad, and that are awarded to students who are 
already matriculating at or who are graduates of the recipient 
institution; Provided, that a recipient educational institution that 
administers or assists in the administration of such scholarships, 
fellowships, or other awards that are restricted to members of one sex 
provides, or otherwise makes available, reasonable opportunities for 
similar studies for members of the other sex. Such opportunities may be 
derived from either domestic or foreign sources.
    (d) Aids, benefits or services not provided by recipient. (1) This 
paragraph (d) applies to any recipient that requires participation by 
any applicant, student, or employee in any education program or activity 
not operated wholly by such recipient, or that facilitates, permits, or 
considers such participation as part of or equivalent to an education 
program or activity operated by such recipient, including participation 
in educational consortia and cooperative employment and student-teaching 
assignments.
    (2) Such recipient:
    (i) Shall develop and implement a procedure designed to assure 
itself that the operator or sponsor of such other education program or 
activity takes no action affecting any applicant, student, or employee 
of such recipient that these Title IX regulations would prohibit such 
recipient from taking; and
    (ii) Shall not facilitate, require, permit, or consider such 
participation if such action occurs.



Sec. 3.405  Housing.

    (a) Generally. A recipient shall not, on the basis of sex, apply 
different rules or regulations, impose different fees or requirements, 
or offer different services or benefits related to housing, except as 
provided in this section (including housing provided only to married 
students).
    (b) Housing provided by recipient. (1) A recipient may provide 
separate housing on the basis of sex.
    (2) Housing provided by a recipient to students of one sex, when 
compared to that provided to students of the other sex, shall be as a 
whole:
    (i) Proportionate in quantity to the number of students of that sex 
applying for such housing; and
    (ii) Comparable in quality and cost to the student.
    (c) Other housing. (1) A recipient shall not, on the basis of sex, 
administer different policies or practices concerning occupancy by its 
students of housing other than that provided by such recipient.
    (2)(i) A recipient which, through solicitation, listing, approval of 
housing, or otherwise, assists any agency, organization, or person in 
making housing available to any of its students, shall take such 
reasonable action as may be necessary to assure itself that such housing 
as is provided to students of one sex, when compared to that provided to 
students of the other sex, is as a whole:
    (A) Proportionate in quantity; and
    (B) Comparable in quality and cost to the student.
    (ii) A recipient may render such assistance to any agency, 
organization, or person that provides all or part of such housing to 
students of only one sex.



Sec. 3.410  Comparable facilities.

    A recipient may provide separate toilet, locker room, and shower 
facilities on the basis of sex, but such facilities provided for 
students of one sex shall be comparable to such facilities provided for 
students of the other sex.



Sec. 3.415  Access to course offerings.

    (a) A recipient shall not provide any course or otherwise carry out 
any of its

[[Page 25]]

education program or activity separately on the basis of sex, or require 
or refuse participation therein by any of its students on such basis, 
including health, physical education, industrial, business, vocational, 
technical, home economics, music, and adult education courses.
    (b)(1) With respect to classes and activities in physical education 
at the elementary school level, the recipient shall comply fully with 
this section as expeditiously as possible but in no event later than one 
year from September 29, 2000. With respect to physical education classes 
and activities at the secondary and post-secondary levels, the recipient 
shall comply fully with this section as expeditiously as possible but in 
no event later than three years from September 29, 2000.
    (2) This section does not prohibit grouping of students in physical 
education classes and activities by ability as assessed by objective 
standards of individual performance developed and applied without regard 
to sex.
    (3) This section does not prohibit separation of students by sex 
within physical education classes or activities during participation in 
wrestling, boxing, rugby, ice hockey, football, basketball, and other 
sports the purpose or major activity of which involves bodily contact.
    (4) Where use of a single standard of measuring skill or progress in 
a physical education class has an adverse effect on members of one sex, 
the recipient shall use appropriate standards that do not have such 
effect.
    (5) Portions of classes in elementary and secondary schools, or 
portions of education programs or activities, that deal exclusively with 
human sexuality may be conducted in separate sessions for boys and 
girls.
    (6) Recipients may make requirements based on vocal range or quality 
that may result in a chorus or choruses of one or predominantly one sex.



Sec. 3.420  Access to schools operated by LEAs.

    A recipient that is a local educational agency shall not, on the 
basis of sex, exclude any person from admission to:
    (a) Any institution of vocational education operated by such 
recipient; or
    (b) Any other school or educational unit operated by such recipient, 
unless such recipient otherwise makes available to such person, pursuant 
to the same policies and criteria of admission, courses, services, and 
facilities comparable to each course, service, and facility offered in 
or through such schools.



Sec. 3.425  Counseling and use of appraisal and counseling materials.

    (a) Counseling. A recipient shall not discriminate against any 
person on the basis of sex in the counseling or guidance of students or 
applicants for admission.
    (b) Use of appraisal and counseling materials. A recipient that uses 
testing or other materials for appraising or counseling students shall 
not use different materials for students on the basis of their sex or 
use materials that permit or require different treatment of students on 
such basis unless such different materials cover the same occupations 
and interest areas and the use of such different materials is shown to 
be essential to eliminate sex bias. Recipients shall develop and use 
internal procedures for ensuring that such materials do not discriminate 
on the basis of sex. Where the use of a counseling test or other 
instrument results in a substantially disproportionate number of members 
of one sex in any particular course of study or classification, the 
recipient shall take such action as is necessary to assure itself that 
such disproportion is not the result of discrimination in the instrument 
or its application.
    (c) Disproportion in classes. Where a recipient finds that a 
particular class contains a substantially disproportionate number of 
individuals of one sex, the recipient shall take such action as is 
necessary to assure itself that such disproportion is not the result of 
discrimination on the basis of sex in counseling or appraisal materials 
or by counselors.



Sec. 3.430  Financial assistance.

    (a) General. Except as provided in paragraphs (b) and (c) of this 
section,

[[Page 26]]

in providing financial assistance to any of its students, a recipient 
shall not:
    (1) On the basis of sex, provide different amounts or types of such 
assistance, limit eligibility for such assistance that is of any 
particular type or source, apply different criteria, or otherwise 
discriminate;
    (2) Through solicitation, listing, approval, provision of 
facilities, or other services, assist any foundation, trust, agency, 
organization, or person that provides assistance to any of such 
recipient's students in a manner that discriminates on the basis of sex; 
or
    (3) Apply any rule or assist in application of any rule concerning 
eligibility for such assistance that treats persons of one sex 
differently from persons of the other sex with regard to marital or 
parental status.
    (b) Financial aid established by certain legal instruments. (1) A 
recipient may administer or assist in the administration of 
scholarships, fellowships, or other forms of financial assistance 
established pursuant to domestic or foreign wills, trusts, bequests, or 
similar legal instruments or by acts of a foreign government that 
require that awards be made to members of a particular sex specified 
therein; Provided, that the overall effect of the award of such sex-
restricted scholarships, fellowships, and other forms of financial 
assistance does not discriminate on the basis of sex.
    (2) To ensure nondiscriminatory awards of assistance as required in 
paragraph (b)(1) of this section, recipients shall develop and use 
procedures under which:
    (i) Students are selected for award of financial assistance on the 
basis of nondiscriminatory criteria and not on the basis of availability 
of funds restricted to members of a particular sex;
    (ii) An appropriate sex-restricted scholarship, fellowship, or other 
form of financial assistance is allocated to each student selected under 
paragraph (b)(2)(i) of this section; and
    (iii) No student is denied the award for which he or she was 
selected under paragraph (b)(2)(i) of this section because of the 
absence of a scholarship, fellowship, or other form of financial 
assistance designated for a member of that student's sex.
    (c) Athletic scholarships. (1) To the extent that a recipient awards 
athletic scholarships or grants-in-aid, it must provide reasonable 
opportunities for such awards for members of each sex in proportion to 
the number of students of each sex participating in interscholastic or 
intercollegiate athletics.
    (2) A recipient may provide separate athletic scholarships or 
grants-in-aid for members of each sex as part of separate athletic teams 
for members of each sex to the extent consistent with this paragraph (c) 
and Sec. 3.450.



Sec. 3.435  Employment assistance to students.

    (a) Assistance by recipient in making available outside employment. 
A recipient that assists any agency, organization, or person in making 
employment available to any of its students:
    (1) Shall assure itself that such employment is made available 
without discrimination on the basis of sex; and
    (2) Shall not render such services to any agency, organization, or 
person that discriminates on the basis of sex in its employment 
practices.
    (b) Employment of students by recipients. A recipient that employs 
any of its students shall not do so in a manner that violates Sec. Sec. 
3.500 through 3.550.



Sec. 3.440  Health and insurance benefits and services.

    Subject to Sec. 3.235(d), in providing a medical, hospital, 
accident, or life insurance benefit, service, policy, or plan to any of 
its students, a recipient shall not discriminate on the basis of sex, or 
provide such benefit, service, policy, or plan in a manner that would 
violate Sec. Sec. 3.500 through 3.550 if it were provided to employees 
of the recipient. This section shall not prohibit a recipient from 
providing any benefit or service that may be used by a different 
proportion of students of one sex than of the other, including family 
planning services. However, any recipient that provides full coverage 
health service shall provide gynecological care.



Sec. 3.445  Marital or parental status.

    (a) Status generally. A recipient shall not apply any rule 
concerning a student's actual or potential parental,

[[Page 27]]

family, or marital status that treats students differently on the basis 
of sex.
    (b) Pregnancy and related conditions. (1) A recipient shall not 
discriminate against any student, or exclude any student from its 
education program or activity, including any class or extracurricular 
activity, on the basis of such student's pregnancy, childbirth, false 
pregnancy, termination of pregnancy, or recovery therefrom, unless the 
student requests voluntarily to participate in a separate portion of the 
program or activity of the recipient.
    (2) A recipient may require such a student to obtain the 
certification of a physician that the student is physically and 
emotionally able to continue participation as long as such a 
certification is required of all students for other physical or 
emotional conditions requiring the attention of a physician.
    (3) A recipient that operates a portion of its education program or 
activity separately for pregnant students, admittance to which is 
completely voluntary on the part of the student as provided in paragraph 
(b)(1) of this section, shall ensure that the separate portion is 
comparable to that offered to non-pregnant students.
    (4) Subject to Sec. 3.235(d), a recipient shall treat pregnancy, 
childbirth, false pregnancy, termination of pregnancy and recovery 
therefrom in the same manner and under the same policies as any other 
temporary disability with respect to any medical or hospital benefit, 
service, plan, or policy that such recipient administers, operates, 
offers, or participates in with respect to students admitted to the 
recipient's educational program or activity.
    (5) In the case of a recipient that does not maintain a leave policy 
for its students, or in the case of a student who does not otherwise 
qualify for leave under such a policy, a recipient shall treat 
pregnancy, childbirth, false pregnancy, termination of pregnancy, and 
recovery therefrom as a justification for a leave of absence for as long 
a period of time as is deemed medically necessary by the student's 
physician, at the conclusion of which the student shall be reinstated to 
the status that she held when the leave began.



Sec. 3.450  Athletics.

    (a) General. No person shall, on the basis of sex, be excluded from 
participation in, be denied the benefits of, be treated differently from 
another person, or otherwise be discriminated against in any 
interscholastic, intercollegiate, club, or intramural athletics offered 
by a recipient, and no recipient shall provide any such athletics 
separately on such basis.
    (b) Separate teams. Notwithstanding the requirements of paragraph 
(a) of this section, a recipient may operate or sponsor separate teams 
for members of each sex where selection for such teams is based upon 
competitive skill or the activity involved is a contact sport. However, 
where a recipient operates or sponsors a team in a particular sport for 
members of one sex but operates or sponsors no such team for members of 
the other sex, and athletic opportunities for members of that sex have 
previously been limited, members of the excluded sex must be allowed to 
try out for the team offered unless the sport involved is a contact 
sport. For the purposes of these Title IX regulations, contact sports 
include boxing, wrestling, rugby, ice hockey, football, basketball, and 
other sports the purpose or major activity of which involves bodily 
contact.
    (c) Equal opportunity. (1) A recipient that operates or sponsors 
interscholastic, intercollegiate, club, or intramural athletics shall 
provide equal athletic opportunity for members of both sexes. In 
determining whether equal opportunities are available, the designated 
agency official will consider, among other factors:
    (i) Whether the selection of sports and levels of competition 
effectively accommodate the interests and abilities of members of both 
sexes;
    (ii) The provision of equipment and supplies;
    (iii) Scheduling of games and practice time;
    (iv) Travel and per diem allowance;
    (v) Opportunity to receive coaching and academic tutoring;
    (vi) Assignment and compensation of coaches and tutors;
    (vii) Provision of locker rooms, practice, and competitive 
facilities;

[[Page 28]]

    (viii) Provision of medical and training facilities and services;
    (ix) Provision of housing and dining facilities and services;
    (x) Publicity.
    (2) For purposes of paragraph (c)(1) of this section, unequal 
aggregate expenditures for members of each sex or unequal expenditures 
for male and female teams if a recipient operates or sponsors separate 
teams will not constitute noncompliance with this section, but the 
designated agency official may consider the failure to provide necessary 
funds for teams for one sex in assessing equality of opportunity for 
members of each sex.
    (d) Adjustment period. A recipient that operates or sponsors 
interscholastic, intercollegiate, club, or intramural athletics at the 
elementary school level shall comply fully with this section as 
expeditiously as possible but in no event later than one year from 
September 29, 2000. A recipient that operates or sponsors 
interscholastic, intercollegiate, club, or intramural athletics at the 
secondary or postsecondary school level shall comply fully with this 
section as expeditiously as possible but in no event later than three 
years from September 29, 2000.



Sec. 3.455  Textbooks and curricular material.

    Nothing in these Title IX regulations shall be interpreted as 
requiring or prohibiting or abridging in any way the use of particular 
textbooks or curricular materials.



Subpart E_Discrimination on the Basis of Sex in Employment in Education 
                    Programs or Activities Prohibited



Sec. 3.500  Employment.

    (a) General. (1) No person shall, on the basis of sex, be excluded 
from participation in, be denied the benefits of, or be subjected to 
discrimination in employment, or recruitment, consideration, or 
selection therefor, whether full-time or part-time, under any education 
program or activity operated by a recipient that receives Federal 
financial assistance.
    (2) A recipient shall make all employment decisions in any education 
program or activity operated by such recipient in a nondiscriminatory 
manner and shall not limit, segregate, or classify applicants or 
employees in any way that could adversely affect any applicant's or 
employee's employment opportunities or status because of sex.
    (3) A recipient shall not enter into any contractual or other 
relationship which directly or indirectly has the effect of subjecting 
employees or students to discrimination prohibited by Sec. Sec. 3.500 
through 3.550, including relationships with employment and referral 
agencies, with labor unions, and with organizations providing or 
administering fringe benefits to employees of the recipient.
    (4) A recipient shall not grant preferences to applicants for 
employment on the basis of attendance at any educational institution or 
entity that admits as students only or predominantly members of one sex, 
if the giving of such preferences has the effect of discriminating on 
the basis of sex in violation of these Title IX regulations.
    (b) Application. The provisions of Sec. Sec. 3.500 through 3.550 
apply to:
    (1) Recruitment, advertising, and the process of application for 
employment;
    (2) Hiring, upgrading, promotion, consideration for and award of 
tenure, demotion, transfer, layoff, termination, application of nepotism 
policies, right of return from layoff, and rehiring;
    (3) Rates of pay or any other form of compensation, and changes in 
compensation;
    (4) Job assignments, classifications, and structure, including 
position descriptions, lines of progression, and seniority lists;
    (5) The terms of any collective bargaining agreement;
    (6) Granting and return from leaves of absence, leave for pregnancy, 
childbirth, false pregnancy, termination of pregnancy, leave for persons 
of either sex to care for children or dependents, or any other leave;
    (7) Fringe benefits available by virtue of employment, whether or 
not administered by the recipient;
    (8) Selection and financial support for training, including 
apprenticeship, professional meetings, conferences, and other related 
activities, selection for

[[Page 29]]

tuition assistance, selection for sabbaticals and leaves of absence to 
pursue training;
    (9) Employer-sponsored activities, including social or recreational 
programs; and
    (10) Any other term, condition, or privilege of employment.



Sec. 3.505  Employment criteria.

    A recipient shall not administer or operate any test or other 
criterion for any employment opportunity that has a disproportionately 
adverse effect on persons on the basis of sex unless:
    (a) Use of such test or other criterion is shown to predict validly 
successful performance in the position in question; and
    (b) Alternative tests or criteria for such purpose, which do not 
have such disproportionately adverse effect, are shown to be 
unavailable.



Sec. 3.510  Recruitment.

    (a) Nondiscriminatory recruitment and hiring. A recipient shall not 
discriminate on the basis of sex in the recruitment and hiring of 
employees. Where a recipient has been found to be presently 
discriminating on the basis of sex in the recruitment or hiring of 
employees, or has been found to have so discriminated in the past, the 
recipient shall recruit members of the sex so discriminated against so 
as to overcome the effects of such past or present discrimination.
    (b) Recruitment patterns. A recipient shall not recruit primarily or 
exclusively at entities that furnish as applicants only or predominantly 
members of one sex if such actions have the effect of discriminating on 
the basis of sex in violation of Sec. Sec. 3.500 through 3.550.



Sec. 3.515  Compensation.

    A recipient shall not make or enforce any policy or practice that, 
on the basis of sex:
    (a) Makes distinctions in rates of pay or other compensation;
    (b) Results in the payment of wages to employees of one sex at a 
rate less than that paid to employees of the opposite sex for equal work 
on jobs the performance of which requires equal skill, effort, and 
responsibility, and that are performed under similar working conditions.



Sec. 3.520  Job classification and structure.

    A recipient shall not:
    (a) Classify a job as being for males or for females;
    (b) Maintain or establish separate lines of progression, seniority 
lists, career ladders, or tenure systems based on sex; or
    (c) Maintain or establish separate lines of progression, seniority 
systems, career ladders, or tenure systems for similar jobs, position 
descriptions, or job requirements that classify persons on the basis of 
sex, unless sex is a bona fide occupational qualification for the 
positions in question as set forth in Sec. 3.550.



Sec. 3.525  Fringe benefits.

    (a) ``Fringe benefits'' defined. For purposes of these Title IX 
regulations, fringe benefits means: Any medical, hospital, accident, 
life insurance, or retirement benefit, service, policy or plan, any 
profit-sharing or bonus plan, leave, and any other benefit or service of 
employment not subject to the provision of Sec. 3.515.
    (b) Prohibitions. A recipient shall not:
    (1) Discriminate on the basis of sex with regard to making fringe 
benefits available to employees or make fringe benefits available to 
spouses, families, or dependents of employees differently upon the basis 
of the employee's sex;
    (2) Administer, operate, offer, or participate in a fringe benefit 
plan that does not provide for equal periodic benefits for members of 
each sex and for equal contributions to the plan by such recipient for 
members of each sex; or
    (3) Administer, operate, offer, or participate in a pension or 
retirement plan that establishes different optional or compulsory 
retirement ages based on sex or that otherwise discriminates in benefits 
on the basis of sex.



Sec. 3.530  Marital or parental status.

    (a) General. A recipient shall not apply any policy or take any 
employment action:
    (1) Concerning the potential marital, parental, or family status of 
an employee or applicant for employment

[[Page 30]]

that treats persons differently on the basis of sex; or
    (2) Which is based upon whether an employee or applicant for 
employment is the head of household or principal wage earner in such 
employee's or applicant's family unit.

    (b) Pregnancy. A recipient shall not discriminate against or exclude 
from employment any employee or applicant for employment on the basis of 
pregnancy, childbirth, false pregnancy, termination of pregnancy, or 
recovery therefrom.

    (c) Pregnancy as a temporary disability. Subject to Sec. 3.235(d), 
a recipient shall treat pregnancy, childbirth, false pregnancy, 
termination of pregnancy, recovery therefrom, and any temporary 
disability resulting therefrom as any other temporary disability for all 
job-related purposes, including commencement, duration, and extensions 
of leave, payment of disability income, accrual of seniority and any 
other benefit or service, and reinstatement, and under any fringe 
benefit offered to employees by virtue of employment.

    (d) Pregnancy leave. In the case of a recipient that does not 
maintain a leave policy for its employees, or in the case of an employee 
with insufficient leave or accrued employment time to qualify for leave 
under such a policy, a recipient shall treat pregnancy, childbirth, 
false pregnancy, termination of pregnancy, and recovery therefrom as a 
justification for a leave of absence without pay for a reasonable period 
of time, at the conclusion of which the employee shall be reinstated to 
the status that she held when the leave began or to a comparable 
position, without decrease in rate of compensation or loss of 
promotional opportunities, or any other right or privilege of 
employment.



Sec. 3.535  Effect of state or local law or other requirements.

    (a) Prohibitory requirements. The obligation to comply with 
Sec. Sec. 3.500 through 3.550 is not obviated or alleviated by the 
existence of any State or local law or other requirement that imposes 
prohibitions or limits upon employment of members of one sex that are 
not imposed upon members of the other sex.
    (b) Benefits. A recipient that provides any compensation, service, 
or benefit to members of one sex pursuant to a State or local law or 
other requirement shall provide the same compensation, service, or 
benefit to members of the other sex.



Sec. 3.540  Advertising.

    A recipient shall not in any advertising related to employment 
indicate preference, limitation, specification, or discrimination based 
on sex unless sex is a bona fide occupational qualification for the 
particular job in question.



Sec. 3.545  Pre-employment inquiries.

    (a) Marital status. A recipient shall not make pre-employment 
inquiry as to the marital status of an applicant for employment, 
including whether such applicant is ``Miss'' or ``Mrs.''

    (b) Sex. A recipient may make pre-employment inquiry as to the sex 
of an applicant for employment, but only if such inquiry is made equally 
of such applicants of both sexes and if the results of such inquiry are 
not used in connection with discrimination prohibited by these Title IX 
regulations.



Sec. 3.550  Sex as a bona fide occupational qualification.

    A recipient may take action otherwise prohibited by Sec. Sec. 3.500 
through 3.550 provided it is shown that sex is a bona fide occupational 
qualification for that action, such that consideration of sex with 
regard to such action is essential to successful operation of the 
employment function concerned. A recipient shall not take action 
pursuant to this section that is based upon alleged comparative 
employment characteristics or stereotyped characterizations of one or 
the other sex, or upon preference based on sex of the recipient, 
employees, students, or other persons, but nothing contained in this 
section shall prevent a recipient from considering an employee's sex in 
relation to employment in a locker room or toilet facility used only by 
members of one sex.

[[Page 31]]



                          Subpart F_Procedures



Sec. 3.600  Notice of covered programs.

    Within 60 days of September 29, 2000, each Federal agency that 
awards Federal financial assistance shall publish in the Federal 
Register a notice of the programs covered by these Title IX regulations. 
Each such Federal agency shall periodically republish the notice of 
covered programs to reflect changes in covered programs. Copies of this 
notice also shall be made available upon request to the Federal agency's 
office that enforces Title IX.



Sec. 3.605  Enforcement procedures.

    The investigative, compliance, and enforcement procedural provisions 
of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d) (``Title 
VI'') are hereby adopted and applied to these Title IX regulations. 
These procedures may be found at 24 CFR part 1.

[65 FR 52880, Aug. 30, 2000]



PART 4_HUD REFORM ACT--Table of Contents



       Subpart A_Accountability in the Provision of HUD Assistance

Sec.
4.1 Purpose.
4.3 Definitions.
4.5 Notice and documentation of assistance subject to section 102(a).
4.7 Notice of funding decisions.
4.9 Disclosure requirements for assistance subject to section 102(b).
4.11 Updating of disclosure.
4.13 Limitation of assistance subject to section 102(d).

    Subpart B_Prohibition of Advance Disclosure of Funding Decisions

4.20 Purpose.
4.22 Definitions.
4.24 Scope.
4.26 Permissible and impermissible disclosures.
4.28 Civil penalties.
4.30 Procedure upon discovery of a violation.
4.32 Investigation by Office of Inspector General.
4.34 Review of Inspector General's report by the Ethics Law Division.
4.36 Action by the Ethics Law Division.
4.38 Administrative remedies.

    Authority: 42 U.S.C. 3535(d), 3537a, 3545.

    Source: 61 FR 14449, Apr. 1, 1996, unless otherwise noted.



       Subpart A_Accountability in the Provision of HUD Assistance



Sec. 4.1  Purpose.

    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.



Sec. 4.3  Definitions.

    Applicant includes a person whose application for assistance must be 
submitted to HUD for any purpose including approval, environmental 
review, or rent determination.
    Assistance under any program or discretionary fund administered by 
the Secretary 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.
    Assistance within the jurisdiction of the Department 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.
    Assistance within the jurisdiction of the Department to any housing 
project 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

[[Page 32]]

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.
    Housing project 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.
    Interested party 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.
    Selection criteria 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.



Sec. 4.5  Notice and documentation of assistance subject to section 102(a).

    (a) Notice. Before the Department solicits an application for 
assistance subject to Section 102(a), it will publish a Notice in the 
Federal Register 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 Federal 
Register.
    (b) Documentation of decisions. 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.



Sec. 4.7  Notice of funding decisions.

    HUD will publish a Notice in the Federal Register 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.



Sec. 4.9  Disclosure requirements for assistance subject to section 102(b).

    (a) Receipt and reasonable expectation of receipt. (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

[[Page 33]]

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) Content of disclosure. 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.

(Approved by the Office of Management and Budget under control number 
2510-0011)



Sec. 4.11  Updating of disclosure.

    (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;

[[Page 34]]

    (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) Period of coverage. 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.

(Approved by the Office of Management and Budget under control number 
2510-0011)



Sec. 4.13  Limitation of assistance subject to section 102(d).

    (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 
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.g., in conjunction with the next annual adjustment of Section 
8 rents).
    (c) If an applicant does not meet the $200,000 disclosure 
requirement in Sec. 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.



    Subpart B_Prohibition of Advance Disclosure of Funding Decisions



Sec. 4.20  Purpose.

    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

[[Page 35]]

sanction the person who received information improperly by, among other 
things, denying assistance to that person.



Sec. 4.22  Definitions.

    Application means a written request for assistance regardless of 
whether the request is in proper form or format.
    Assistance does not include any contract (e.g., a procurement 
contract) that is subject to the Federal Acquisition Regulation (FAR) 
(48 CFR ch. 1).
    Disclose means providing information directly or indirectly to a 
person through any means of communication.
    Employee 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.
    Material or materially means in some influential or substantial 
respect or having to do more with substance than with form.
    Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, local government, or any 
other organization or group of people.
    Selection process 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 NOFA, 
solicitation, or request for applications for assistance for publication 
in the Federal Register. The period includes the evaluation of 
applications, and concludes with the announcement of the selection of 
recipients of assistance.



Sec. 4.24  Scope.

    (a) Coverage. 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) Applicability. The prohibitions contained in this part apply to 
conduct occurring on or after June 12, 1991.



Sec. 4.26  Permissible and impermissible disclosures.

    (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 Federal Register 
in a NOFA or otherwise;
    (4) Any information which has been made public through means other 
than the Federal Register;
    (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;

[[Page 36]]

    (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;
    (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.



Sec. 4.28  Civil penalties.

    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.



Sec. 4.30  Procedure upon discovery of a violation.

    (a) In general. 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) Ethics Law Division. 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) Inspector General. 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) Protection of employee complainants. (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.

[[Page 37]]

    (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.



Sec. 4.32  Investigation by Office of Inspector General.

    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.



Sec. 4.34  Review of Inspector General's report by the Ethics Law Division.

    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.



Sec. 4.36  Action by the Ethics Law Division.

    (a) After review of the Inspector General's report, the Ethics Law 
Division shall determine whether or not there is 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

[[Page 38]]

may be reported to the employee's supervisor.



Sec. 4.38  Administrative remedies.

    (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 Sec. 
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.



PART 5_GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS--Table of Contents


  Subpart A_Generally Applicable Definitions and Federal Requirements; 
                                 Waivers

Sec.
5.100 Definitions.
5.105 Other Federal requirements.
5.107 Audit requirements for non-profit organizations.
5.108 Preservation of Open Competition and Government Neutrality Towards 
          Government Contractors' Labor Relations on Federally Funded 
          Construction Projects.
5.110 Waivers.

  Subpart B_Disclosure and Verification of Social Security Numbers and 
    Employer Identification Numbers; Procedures for Obtaining Income 
                               Information

5.210 Purpose, applicability, and Federal preemption.
5.212 Compliance with the Privacy Act and other requirements.
5.214 Definitions.

  Disclosure and Verification of Social Security Numbers and Employer 
 Identification Numbers for Applicants and Participants in Certain HUD 
                                Programs

5.216 Disclosure and verification of Social Security and Employer 
          Identification Numbers.
5.218 Penalties for failing to disclose and verify Social Security and 
          Employer Identification Numbers.

    Procedures for Obtaining Income Information About Applicants and 
                              Participants

5.230 Consent by assistance applicants and participants.
5.232 Penalties for failing to sign consent forms.
5.234 Requests for information from SWICAs and Federal agencies; 
          restrictions on use.
5.236 Procedures for termination, denial, suspension, or reduction of 
          assistance based on information obtained from a SWICA or 
          Federal agency.
5.238 Criminal and civil penalties.
5.240 Family disclosure of income information to the responsible entity 
          and verification.

  Subpart C_Pet Ownership for the Elderly or Persons With Disabilities

                          General Requirements

5.300 Purpose.
5.303 Exclusion for animals that assist persons with disabilities.
5.306 Definitions.
5.309 Prohibition against discrimination.
5.312 Notice to tenants.
5.315 Content of pet rules: General requirements.
5.318 Discretionary pet rules.
5.321 Lease provisions.
5.324 Implementation of lease provisions.
5.327 Nuisance or threat to health or safety.

             Pet Ownership Requirements for Housing Programs

5.350 Mandatory pet rules for housing programs.
5.353 Housing programs: Procedure for development of pet rules.
5.356 Housing programs: Pet rule violation procedures.
5.359 Housing programs: Rejection of units by applicants for tenancy.
5.360 Housing programs: Additional lease provisions.
5.363 Housing programs: Protection of the pet.

[[Page 39]]

         Pet Ownership Requirements for Public Housing Programs

5.380 Public housing programs: Procedure for development of pet rules.

Subpart D_Definitions for Section 8 and Public Housing Assistance Under 
                  the United States Housing Act of 1937

5.400 Applicability.
5.403 Definitions.

           Subpart E_Restrictions on Assistance to Noncitizens

5.500 Applicability.
5.502 Requirements concerning documents.
5.504 Definitions.
5.506 General provisions.
5.508 Submission of evidence of citizenship or eligible immigration 
          status.
5.510 Documents of eligible immigration status.
5.512 Verification of eligible immigration status.
5.514 Delay, denial, reduction or termination of assistance.
5.516 Availability of preservation assistance to mixed families and 
          other families.
5.518 Types of preservation assistance available to mixed families and 
          other families.
5.520 Proration of assistance.
5.522 Prohibition of assistance to noncitizen students.
5.524 Compliance with nondiscrimination requirements.
5.526 Protection from liability for responsible entities and State and 
          local government agencies and officials.
5.528 Liability of ineligible tenants for reimbursement of benefits.

 Subpart F_Section 8 and Public Housing, and Other HUD Assisted Housing 
  Serving Persons with Disabilities: Family Income and Family Payment; 
      Occupancy Requirements for Section 8 Project-Based Assistance

5.601 Purpose and applicability.
5.603 Definitions.

                              Family Income

5.609 Annual income.
5.611 Adjusted income.
5.613 Public housing program and Section 8 tenant-based assistance 
          program: PHA cooperation with welfare agency.
5.615 Public housing program and Section 8 tenant-based assistance 
          program: How welfare benefit reduction affects family income.
5.617 Self-sufficiency incentives for persons with disabilities--
          Disallowance of increase in annual income.

                             Family Payment

5.628 Total tenant payment.
5.630 Minimum rent.
5.632 Utility reimbursements.
5.634 Tenant rent.

       Section 8 Project-Based Assistance: Occupancy Requirements

5.653 Section 8 project-based assistance programs: Admission--Income-
          eligibility and income-targeting.
5.655 Section 8 project-based assistance programs: Owner preferences in 
          selection for a project or unit.
5.657 Section 8 project-based assistance programs: Reexamination of 
          family income and composition.
5.659 Family information and verification.
5.661 Section 8 project-based assistance programs: Approval for police 
          or other security personnel to live in project.

   Subpart G_Physical Condition Standards and Inspection Requirements

5.701 Applicability.
5.703 Physical condition standards for HUD housing that is decent, safe, 
          sanitary and in good repair (DSS/GR).
5.705 Uniform physical inspection requirements.

             Subpart H_Uniform Financial Reporting Standards

5.801 Uniform financial reporting standards.

    Subpart I_Preventing Crime in Federally Assisted Housing_Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol Abuse

                                 General

5.850 Which subsidized housing is covered by this subpart?
5.851 What authority do I have to screen applicants and evict tenants?
5.852 What discretion do I have in screening and eviction actions?
5.853 Definitions.

                           Denying Admissions

5.854 When must I prohibit admission of individuals who have engaged in 
          drug-related criminal activity?
5.855 When am I specifically authorized to prohibit admission of 
          individuals who have engaged in criminal activity?
5.856 When must I prohibit admission of sex offenders?
5.857 When must I prohibit admission of alcohol abusers?

[[Page 40]]

                           Terminating Tenancy

5.858 When authority do I have to evict drug criminals?
5.859 When am I specifically authorized to evict other criminals?
5.860 When am I specifically authorized to evict alcohol abusers?
5.861 What evidence of criminal activity must I have to evict?

          Subpart J_Access to Criminal Records and Information

5.901 To what criminal records and searches does this subpart apply?
5.902 Definitions.
5.903 What special authority is there to obtain access to criminal 
          records?
5.905 What special authority is there to obtain access to sex offender 
          registration information?

             Subpart K_Application submission requirements.

5.1001 Applicability.
5.1003 Use of a universal identifier for organizations applying for HUD 
          grants.

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.

    Source: 61 FR 5202, Feb. 9, 1996, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 5 appear at 65 FR 
16715, Mar. 29, 2000.



  Subpart A_Generally Applicable Definitions and Federal Requirements; 
                                 Waivers



Sec. 5.100  Definitions.

    The following definitions apply to this part and also in other 
regulations, as noted:
    1937 Act means the United States Housing Act of 1937 (42 U.S.C. 1437 
et seq.)
    ADA means the Americans with Disabilities Act of 1990 (42 U.S.C. 
12101 et seq.).
    ALJ 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.
    Covered person, for purposes of 24 CFR 5, subpart I, and parts 966 
and 982, means a tenant, any member of the tenant's household, a guest 
or another person under the tenant's control.
    Department means the Department of Housing and Urban Development.
    Drug means a controlled substance as defined in section 102 of the 
Controlled Substances Act (21 U.S.C. 802).
    Drug-related criminal activity means the illegal manufacture, sale, 
distribution, or use of a drug, or the possession of a drug with intent 
to manufacture, sell, distribute or use the drug.
    Elderly Person means an individual who is at least 62 years of age.
    Fair Housing Act 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 et 
seq.).
    Fair Market Rent (FMR) 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 Federal Register in accordance with part 888 of this 
title.
    Federally assisted housing (for purposes of subparts I and J of this 
part) means housing assisted under any of the following programs:
    (1) Public housing;
    (2) Housing receiving project-based or tenant-based assistance under 
Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f);
    (3) Housing that is assisted under section 202 of the Housing Act of 
1959, as amended by section 801 of the National Affordable Housing Act 
(12 U.S.C. 1701q);
    (4) Housing that is assisted under section 202 of the Housing Act of 
1959, as such section existed before the enactment of the National 
Affordable Housing Act;
    (5) Housing that is assisted under section 811 of the National 
Affordable Housing Act (42 U.S.C. 8013);
    (6) Housing financed by a loan or mortgage insured under section 
221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3)) that bears 
interest at a rate determined under the proviso of section 221(d)(5) of 
such Act (12 U.S.C. 1715l(d)(5));
    (7) Housing insured, assisted, or held by HUD or by a State or local 
agency

[[Page 41]]

under section 236 of the National Housing Act (12 U.S.C. 1715z-1); or
    (8) Housing assisted by the Rural Development Administration under 
section 514 or section 515 of the Housing Act of 1949 (42 U.S.C. 1483, 
1484).
    General Counsel means the General Counsel of HUD.
    Grantee means the person or legal entity to which a grant is awarded 
and that is accountable for the use of the funds provided.
    Guest, only for purposes of 24 CFR part 5, subparts A and I, and 
parts 882, 960, 966, and 982, means a person temporarily staying in the 
unit with the consent of a tenant or other member of the household who 
has express or implied authority to so consent on behalf of the tenant. 
The requirements of parts 966 and 982 apply to a guest as so defined.
    Household, for purposes of 24 CFR part 5, subpart I, and parts, 960, 
966, 882, and 982, means the family and PHA-approved live-in aide.
    HUD means the same as Department.
    MSA means a metropolitan statistical area.
    NAHA means the Cranston-Gonzalez National Affordable Housing Act (42 
U.S.C. 12701 et seq.).
    NEPA means the National Environmental Policy Act of 1969 (42 U.S.C. 
4321).
    NOFA means Notice of Funding Availability.
    OMB means the Office of Management and Budget.
    Organizational Unit means the jurisdictional area of each Assistant 
Secretary, and each office head or field administrator reporting 
directly to the Secretary.
    Other person under the tenant's control, for the purposes of the 
definition of covered person and for parts 5, 882, 966, and 982 means 
that the person, although not staying as a guest (as defined in this 
section) in the unit, is, or was at the time of the activity in 
question, on the premises (as premises is defined in this section) 
because of an invitation from the tenant or other member of the 
household who has express or implied authority to so consent on behalf 
of the tenant. Absent evidence to the contrary, a person temporarily and 
infrequently on the premises solely for legitimate commercial purposes 
is not under the tenant's control.
    Premises, for purposes of 24 CFR part 5, subpart I, and parts 960 
and 966, means the building or complex or development in which the 
public or assisted housing dwelling unit is located, including common 
areas and grounds.
    Public housing means housing assisted under the 1937 Act, other than 
under Section 8. ``Public housing'' includes dwelling units in a mixed 
finance project that are assisted by a PHA with capital or operating 
assistance.
    Public Housing Agency (PHA) 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.
    Responsible entity means:
    (1) For the public housing program, the Section 8 tenant-based 
assistance program (part 982 of this title), and the Section 8 project-
based certificate or voucher programs (part 983 of this title), and the 
Section 8 moderate rehabilitation program (part 882 of this title), 
responsible entity means the PHA administering the program under an ACC 
with HUD;
    (2) For all other Section 8 programs, responsible entity means the 
Section 8 project owner.
    Section 8 means section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f).
    Secretary means the Secretary of Housing and Urban Development.
    URA means the Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970 (42 U.S.C. 4201-4655).
    Violent criminal activity means any criminal activity that has as 
one of its elements the use, attempted use, or threatened use of 
physical force substantial enough to cause, or be reasonably likely to 
cause, serious bodily injury or property damage.

[61 FR 5202, Feb. 9, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 65 
FR 16715, Mar. 29, 2000; 66 FR 28791, May 24, 2001]

[[Page 42]]



Sec. 5.105  Other Federal requirements.

    The following Federal requirements apply as noted in the respective 
program regulations:
    (a) Nondiscrimination and equal opportunity. The Fair Housing Act 
(42 U.S.C. 3601-19) and implementing regulations at 24 CFR part 100 et 
seq.; 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 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 part 8 of this title; title II of the 
Americans with Disabilities Act, 42 U.S.C. 12101 et seq.; 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) Disclosure requirements. 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 et seq.).
    (c) Debarred, suspended or ineligible contractors. The prohibitions 
at 24 CFR part 24 on the use of debarred, suspended or ineligible 
contractors.
    (d) Drug-Free Workplace. The Drug-Free Workplace Act of 1988 (41 
U.S.C. 701 et seq.) and HUD's implementing regulations at 24 CFR part 
24.

[61 FR 5202, Feb. 9, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec. 5.107  Audit requirements for non-profit organizations.

    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.

[62 FR 61617, Nov. 18, 1997]



Sec. 5.108  Preservation of Open Competition and Government Neutrality 

Towards Government Contractors' Labor Relations on Federally Funded 
Construction Projects.

    (a) Purpose. This section implements Executive Order 13202 (issued 
on February 17, 2001), as amended by Executive Order 13208 (issued on 
April 6, 2001), entitled ``Preservation of Open Competition and 
Government Neutrality Towards Government Contractors' Labor Relations on 
Federal and Federally Funded Construction Projects.''
    (b) Definitions. For purposes of this section:
    Construction contract means a contract for the construction, 
rehabilitation, alteration, conversion, extension, or repair of 
buildings, highways, or other improvements to real property, including 
any subcontracts awarded pursuant to such a contract.
    Financial assistance includes:
    (i) Grants, loans, and advances of federal funds; or
    (ii) Proceeds from loans guaranteed under section 108 of the Housing 
and Community Development Act of 1974, as amended (42 U.S.C. 5301 et 
seq.) and title VI of the Native American Housing Assistance and Self-
Determination

[[Page 43]]

Act of 1996 (25 U.S.C. 4101 et seq.). The term ``financial assistance'' 
does not include any other contract of insurance or guaranty.
    Labor organization has the same meaning it has in 42 U.S.C. 
2000e(d).
    (c) Neutrality towards government contractors' labor relations. To 
the extent permitted by law, the bid specifications, project agreements, 
or other controlling documents for a construction contract awarded on or 
after June 23, 2003, by a HUD grantee, recipient of financial assistance 
from HUD, or party to a cooperative agreement with HUD, for a 
construction project (or a construction manager acting on their behalf) 
shall not:
    (1) Require or prohibit bidders, offerors, contractors, or 
subcontractors to enter into or adhere to agreements with one or more 
labor organizations on the same or other related federally funded 
construction project; or
    (2) Otherwise discriminate against bidders, offerors, contractors, 
or subcontractors for becoming or refusing to become or remain 
signatories, or otherwise adhere to agreements with one or more labor 
organizations, on the same or other related federally funded 
construction project.
    (d) Exemptions--(1) Exemptions due to special circumstances. HUD may 
exempt a particular construction project, construction contract, 
subcontract, grant, or cooperative agreement from any requirement of 
this section, if HUD determines that special circumstances require an 
exemption in order to avert an imminent threat to public health or 
safety or to serve the national security. HUD will not base a finding of 
``special circumstances'' on the possibility or presence of a labor 
dispute concerning the use of contractors or subcontractors who are non-
signatories to, or otherwise do not adhere to, agreements with one or 
more labor organizations, or concerning employees on the construction 
project who are not members of, or affiliated with, a labor 
organization.
    (2) Exemption of construction projects subject to project labor 
agreements entered into as of June 23, 2003. HUD may exempt a particular 
construction project from any requirement of this section upon written 
request from the HUD grantee, recipient of financial assistance from 
HUD, or party to a cooperative agreement with HUD (or a construction 
manager acting on their behalf), if HUD determines that:
    (i) The HUD grantee, recipient of financial assistance from HUD, or 
party to the cooperative agreement with HUD (or a construction manager 
acting on their behalf) issued, or was a party to, as of June 23, 2003, 
bid specifications, project agreements, agreements with one or more 
labor organizations, or other controlling documents with respect to a 
particular construction project, that contain any of the requirements or 
prohibitions contained in paragraph (c) of this section; and
    (ii) One or more construction contracts subject to such requirements 
or prohibitions was awarded as of June 23, 2003.
    (e) Sanctions. If HUD determines that a HUD grantee, recipient of 
financial assistance from HUD, or party to a cooperative agreement with 
HUD (or a construction manager acting on their behalf) performs in a 
manner contrary to the requirements of this section, HUD will take such 
action, consistent with law and regulations, as HUD determines 
appropriate.
    (f) Voluntarily entering into project labor agreements. Nothing in 
this section prohibits contractors or subcontractors from voluntarily 
entering into project labor agreements.

[68 FR 28104, May 22, 2003]



Sec. 5.110  Waivers.

    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)).



  Subpart B_Disclosure and Verification of Social Security Numbers and 
    Employer Identification Numbers; Procedures for Obtaining Income 
                               Information

    Authority: 42 U.S.C. 3535(d), 3543, 3544, and 11901 et seq.

[[Page 44]]


    Source: 61 FR 11113, Mar. 18, 1996, unless otherwise noted.



Sec. 5.210  Purpose, applicability, and Federal preemption.

    (a) Purpose. 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 PHAs 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) Applicability. (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 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.
    (c) Federal preemption. 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.

[61 FR 11113, Mar. 18, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec. 5.212  Compliance with the Privacy Act and other requirements.

    (a) Compliance with the Privacy Act. 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) Privacy Act notice. 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.



Sec. 5.214  Definitions.

    In addition to the definitions in Sec. 5.100, the following 
definitions apply to this subpart B:
    Assistance applicant. 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, or 891, 
or any program under Section 8 of the 1937 Act: A family or individual 
that seeks rental assistance under the program.
    (2) For the public housing program: A family or individual that 
seeks admission to 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).
    Computer match means the automated comparison of data bases 
containing records about individuals.
    Computer matching agreement means the agreement that describes the 
responsibilities and obligations of the parties participating in a 
computer match.
    Consent form 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 Sec. Sec. 813.109, 913.109, and 950.315 of this title.

[[Page 45]]

    Employer Identification Number (EIN) 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.
    Entity applicant. (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 under Section 8 of the 
1937 Act;
    (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.
    Federal agency means a department of the executive branch of the 
Federal Government.
    Income information 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.
    Individual owner applicant. 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 under Section 8 of the 
1937 Act; 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.
    IRS means the Internal Revenue Service.
    Owner 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.
    Participant. Except as excluded pursuant to 42 U.S.C. 3543(b) and 
3544(a)(2), this term has the following meaning:
    (1) For any program under 24 CFR part 891, or Section 8 of the 1937 
Act: A family receiving rental assistance under the program;
    (2) For the public housing program: A family or individual that is 
assisted under the program;
    (3) For 24 CFR parts 215, 221, 236, and 290: A tenant or qualified 
tenant under any of the programs; and

[[Page 46]]

    (4) For 24 CFR part 235: A homeowner or a cooperative member 
receiving homeownership assistance.
    Processing entity 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 an income reexamination. (In 
the Section 8 and public housing programs, the ``processing entity'' is 
the ``responsible entity'' as defined in Sec. 5.100.)
    Social Security Number (SSN) 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.
    SSA means the Social Security Administration.
    State Wage Information Collection Agency (SWICA) 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 as effective and timely 
in providing employment-related income and eligibility information.

[61 FR 11113, Mar. 18, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 
65 FR 16715, Mar. 29, 2000]

  Disclosure and Verification of Social Security Numbers and Employer 
 Identification Numbers for Applicants and Participants in Certain HUD 
                                Programs



Sec. 5.216  Disclosure and verification of Social Security and Employer 
Identification Numbers.

    (a) Disclosure: assistance applicants. 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) Disclosure: individual owner applicants. 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) Disclosure: certain officials of entity applicants. 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) Disclosure: participants--(1) Initial disclosure. 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

[[Page 47]]

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) Subsequent disclosure. 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 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 PHA.
    (e) Disclosure: entity applicants. 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) Required documentation--(1) Social Security Numbers. 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 PHA may prescribe 
in administrative instructions.
    (2) Employer Identification Numbers. 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) Special documentation rules for assistance applicants and 
participants--(1) Certification of inability to meet documentation 
requirements. 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) Acceptance or certification by processing entity. Except as 
provided by paragraph (h) of this section, the processing entity must 
accept the certification referred to in paragraph (g)(1) of

[[Page 48]]

this section and continue to process the assistant applicant's or 
participant's eligibility to participate in the program involved.
    (3) Effect on assistance applicants. 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) Effect on participants. 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) Time for submitting documentation. The time period referred to 
in paragraphs (g)(4) and (5) of this section is 60 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) Rejection of documentation or certification. 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 PHA 
may prescribe in applicable administrative instructions.
    (i) Information on SSNs and EINs. (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) Form and manner of certifications. 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 PHA 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.

(Approved by the Office of Management and Budget under control number 
2502-0204)



Sec. 5.218  Penalties for failing to disclose and verify Social Security 
and Employer Identification Numbers.

    (a) Denial of eligibility: assistance applicants and individual 
owner applicants. 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 Sec. 5.216.
    (b) Denial of eligibility: entity applicants. 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 Sec. 5.216; or
    (2) Any of the officials of the entity applicant referred to in 
Sec. 5.216(c) does not meet the applicable SSN disclosure, and 
documentation and verification requirements specified in Sec. 5.216.
    (c) Termination of assistance or tenancy: participants. 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

[[Page 49]]

participant does not meet the applicable SSN disclosure, documentation 
and verification, and certification requirements specified in Sec. 
5.216.
    (d) Cross reference. 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.

    Procedures for Obtaining Income Information About Applicants and 
                              Participants



Sec. 5.230  Consent by assistance applicants and participants.

    (a) Required consent by assistance applicants and participants. 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) Consent authorization--(1) To whom and when. 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.
    (2) Subsequent consent forms--special cases. 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 PHA in administrative instructions.
    (c) Consent form--contents. The consent form required by this 
section shall contain, at a minimum, the following:
    (1) A provision authorizing HUD and PHAs 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, PHAs, 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.



Sec. 5.232  Penalties for failing to sign consent forms.

    (a) Denial or termination of benefits. 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 Sec. 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) Cross references. 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.



Sec. 5.234  Requests for information from SWICAs and Federal agencies; 
restrictions on use.

    (a) Information available from SWICAs and Federal agencies--to whom 
and what. Income information will generally be obtained through computer 
matching agreements between HUD and a SWICA or Federal agency, or 
between a PHA and a SWICA, as described in paragraph (c) of this 
section. Certification

[[Page 50]]

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 PHA requests the computer match, the PHA shall certify 
to the SWICA.
    (b) Restrictions on use of information. The restrictions of 42 
U.S.C. 3544(c)(2)(A) apply to the use by HUD or a PHA 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 
PHA of income information obtained from the IRS or SSA.
    (c) Computer matching agreements. 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.

(Approved by the Office of Management and Budget under control number 
2508-0008)



Sec. 5.236  Procedures for termination, denial, suspension, or reduction 
of assistance based on information obtained from a SWICA or Federal agency.

    (a) Termination, denial, suspension, or reduction of assistance. 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) Procedures for independent verification. (1) Any determination 
or redetermination of family income verified in accordance with this 
paragraph must 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;
    (ii) In the case of the public housing program, by a PHA; or
    (iii) In the case of any Section 8 program, by a PHA acting as 
contract administrator under an ACC.
    (2) Upon receiving income information from a SWICA or a Federal 
agency, HUD or, when applicable, the PHA shall compare the information 
with the information about a family's income that was:
    (i) Provided by the assistance applicant or participant to the PHA; 
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 PHA 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 responsible entity (as defined in Sec. 5.100) in the case 
of the public housing program or any Section 8 program.
    (C) The owner or mortgagee, as applicable, with respect to the rent 
supplement, Section 221(d)(3) BMIR, Section 235 homeownership 
assistance, or Section 236 programs.
    (ii) HUD or the PHA may verify the income information directly with 
an assistance applicant or participant. Such verification procedures 
shall not

[[Page 51]]

include any disclosure of income information prohibited under paragraph 
(b)(6) of this section.
    (4) HUD and the PHA 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 PHA, 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 PHA may 
disclose income information obtained from a SWICA directly to an owner 
(unless a PHA is the owner). Disclosure of income information obtained 
from the SSA or IRS is restricted under 26 U.S.C. Sec. 6103(l)(7) and 
42 U.S.C. 3544.
    (c) Opportunity to contest. HUD, the PHA, 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.

[61 FR 11113, Mar. 18, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec. 5.238  Criminal and civil penalties.

    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.



Sec. 5.240  Family disclosure of income information to the responsible 
entity and verification.

    (a) This section applies to families that reside in dwelling units 
with assistance under the public housing program, the Section 8 tenant-
based assistance programs, or for which project-based assistance is 
provided under the Section 8, Section 202, or Section 811 program.
    (b) The family must promptly furnish to the responsible entity any 
letter or other notice by HUD to a member of the family that provides 
information concerning the amount or verification of family income.
    (c) The responsible entity must verify the accuracy of the income 
information received from the family, and change the amount of the total 
tenant payment, tenant rent or Section 8 housing assistance payment, or 
terminate assistance, as appropriate, based on such information.

[65 FR 16715, Mar. 29, 2000]



  Subpart C_Pet Ownership for the Elderly or Persons With Disabilities

    Authority: 42 U.S.C. 1701r-1 and 3535(d).

                          General Requirements



Sec. 5.300  Purpose.

    (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 program.
    (b) [Reserved]

[61 FR 5202, Feb. 9, 1996, as amended at 65 FR 16715, Mar. 29, 2000]

[[Page 52]]



Sec. 5.303  Exclusion for animals that assist persons with disabilities.

    (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.



Sec. 5.306  Definitions.

    Common household pet means:
    (1) For purposes of Housing programs: 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.
    (2) For purposes of Public Housing programs: PHAs may define the 
term ``common household pet'' under Sec. 5.318.
    Elderly or disabled family means:
    (1) For purposes of Housing programs: 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) For purposes of Public Housing programs: (i) An elderly person, 
a person with a disability, or an elderly or disabled family as defined 
in Sec. 5.403 in subpart A of this part.
    (ii) [Reserved]
    Housing programs 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.
    Project for the elderly or persons with disabilities means:
    (1) For purposes of Housing programs: (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

[[Page 53]]

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) For purposes of Public Housing programs: 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.
    Project owner 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.
    Public Housing Agency (PHA) is defined in Sec. 5.100.

[61 FR 5202, Feb. 9, 1996, as amended at 65 FR 16715, Mar. 29, 2000]



Sec. 5.309  Prohibition against discrimination.

    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 or the presence of such pets 
in the person's dwelling unit.



Sec. 5.312  Notice to tenants.

    (a) During the development of pet rules as described in Sec. Sec. 
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 Sec. 
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 Sec. 
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.



Sec. 5.315  Content of pet rules: General requirements.

    (a) Housing programs. 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 Sec. 5.350 and may, unless 
otherwise noted in this subpart C, include other discretionary 
provisions as provided in Sec. 5.318.
    (b) Public Housing programs. (1) PHAs may choose not to promulgate 
rules governing the keeping of common household pets or may include 
rules as provided in Sec. 5.318. PHAs may elect to include provisions 
based on those in Sec. 5.350. If they so choose, the PHAs may

[[Page 54]]

modify the provisions in Sec. 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) Use of discretion. (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) Conflict with State or local law. 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 and local 
law or regulations shall apply.



Sec. 5.318  Discretionary pet rules.

    Pet rules promulgated by project owners and PHAs may include, but 
are not limited to, consideration of the following factors:
    (a) Definitions of ``common household pet''--(1) For Public Housing 
programs. The pet rules established by a PHA may contain a reasonable 
definition of a common household pet.
    (2) For Housing programs. Project owners wishing to define ``common 
household pet'' in their pet rules must use the Housing programs 
definition of the term in Sec. 5.306.
    (b) Density of tenants and pets. (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) For Housing programs. 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) For purposes of Housing programs. 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) For purposes of Public Housing programs. 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) Pet size and pet type. The pet rules may place reasonable 
limitations on

[[Page 55]]

the size, weight, and type of common household pets allowed in the 
project.
    (d) Potential financial obligations of tenants--(1) Pet deposits. 
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 Sec. 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) Housing programs: Maximum pet deposit. (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;
    (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 Sec. 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) Public Housing programs: Maximum pet deposit. 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) Housing programs: Waste removal charge. 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

[[Page 56]]

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) Standards of pet care. 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) Pet licensing. The pet rules may require pet owners to license 
their pets in accordance with applicable State 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) Public Housing programs: Designated pet areas. (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) Pets temporarily on the premises. 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.



Sec. 5.321  Lease provisions.

    (a) Lease provisions. (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;

[[Page 57]]

    (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.



Sec. 5.324  Implementation of lease provisions.

    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 
Sec. 5.321 and, if applicable, Sec. 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 Sec. 5.321 and, if applicable, Sec. 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 Sec. 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.



Sec. 5.327  Nuisance or threat to health or safety.

    Nothing in this subpart C prohibits a project owner, PHA, or an 
appropriate 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.

             Pet Ownership Requirements for Housing Programs



Sec. 5.350  Mandatory pet rules for housing programs.

    Mandatory rules. The project owner must prescribe the following pet 
rules:
    (a) Inoculations. The pet rules shall require pet owners to have 
their pets inoculated in accordance with State and local laws.
    (b) Sanitary standards. (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) Pet restraint. 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) Registration. (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

[[Page 58]]

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 Sec. 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.
    (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 Sec. 
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 Sec. 5.356.



Sec. 5.353  Housing programs: Procedure for development of pet rules.

    (a) General. Project owners shall use the procedures specified in 
this section to promulgate the pet rules referred to in Sec. Sec. 5.318 
and 5.350.
    (b) Development and notice of proposed pet rules. 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) Tenant consultation. 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) Development and notice of final pet rules. The project owner 
shall develop the final rules after reviewing tenants' written comments 
and written summaries of any owner-tenant meetings.

[[Page 59]]

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) Amendment of pet rules. 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) Service of notice. (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.



Sec. 5.356  Housing programs: Pet rule violation procedures.

    (a) Notice of pet rule violation. If a project owner determines on 
the basis of objective facts, supported by written 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 Sec. 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) Pet rule violation meeting. 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) Notice for pet removal. 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 Sec. 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;

[[Page 60]]

    (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) Initiation of procedures to remove a pet or terminate the pet 
owner's tenancy. (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 
Sec. 5.327 at any time, in accordance with the provisions of applicable 
State or local law.



Sec. 5.359  Housing programs: Rejection of units by applicants for tenancy.

    (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.



Sec. 5.360  Housing programs: Additional lease provisions.

    (a) Inspections. 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) Emergencies. (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 Sec. 5.363.
    (3) The project owner may place a provision in tenant leases 
permitting

[[Page 61]]

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 Sec. 5.363. The lease may not contain a provision 
relieving the project owner from liability for wrongful removal of a 
pet.



Sec. 5.363  Housing programs: Protection of the pet.

    (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 Sec. 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 Sec. 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.

         Pet Ownership Requirements for Public Housing Programs



Sec. 5.380  Public housing programs: Procedure for development of pet rules.

    PHAs that choose to promulgate pet rules shall consult with tenants 
of projects for the elderly or persons with disabilities administered by 
them with 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.



Subpart D_Definitions for Section 8 and Public Housing Assistance Under 
                  the United States Housing Act of 1937

    Authority: 42 U.S.C. 1437a and 3535(d).

    Source: 61 FR 5665, Feb. 13, 1996, unless otherwise noted.



Sec. 5.400  Applicability.

    This part applies to public housing and Section 8 programs.

[61 FR 5665, Feb. 13, 1996, as amended at 65 FR 16715, Mar. 29. 2000]



Sec. 5.403  Definitions.

    Annual contributions contract (ACC) means the written contract 
between HUD and a PHA under which HUD agrees to provide funding for a 
program under the 1937 Act, and the PHA agrees to comply with HUD 
requirements for the program.
    Applicant means a person or a family that has applied for housing 
assistance.
    Disabled family means a family whose head, spouse, or sole member is 
a person with disabilities. It may include two or more persons with 
disabilities living together, or one or more persons with disabilities 
living with one or more live-in aides.
    Displaced family 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

[[Page 62]]

declared or otherwise formally recognized pursuant to Federal disaster 
relief laws.
    Elderly family means a family whose head, spouse, or sole member is 
a person who is at least 62 years of age. It may include 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.
    Family 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.
    Live-in aide 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.
    Near-elderly family 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.
    Person with disabilities:
    (1) Means a person who:
    (i) Has a disability, as defined in 42 U.S.C. 423;
    (ii) Is determined, pursuant to HUD regulations, to have a physical, 
mental, or emotional impairment that:
    (A) Is expected to be of long-continued and indefinite duration;
    (B) Substantially impedes his or her ability to live independently, 
and
    (C) Is of such a nature that the ability to live independently could 
be improved by more suitable housing conditions; or
    (iii) Has a developmental disability as defined in 42 U.S.C. 6001.
    (2) Does not exclude persons who have the disease of acquired 
immunodeficiency syndrome or any conditions arising from the etiologic 
agent for acquired immunodeficiency syndrome;
    (3) For purposes of qualifying for low-income housing, does not 
include a person whose disability is based solely on any drug or alcohol 
dependence; and
    (4) Means ``individual with handicaps'', as defined in Sec. 8.3 of 
this title, for purposes of reasonable accommodation and program 
accessibility for persons with disabilities.

[61 FR 5665, Feb. 13, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 65 
FR 16715, Mar. 29, 2000]



           Subpart E_Restrictions on Assistance to Noncitizens

    Authority: 42 U.S.C. 1436a and 3535(d).



Sec. 5.500  Applicability.

    (a) Covered programs/assistance. 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 et seq.) 
which covers:
    (i) HUD's Public Housing Programs;

[[Page 63]]

    (ii) The Section 8 Housing Assistance Programs; and
    (iii) The Housing Development Grant Programs (with respect to low 
income units only).
    (b) Covered individuals and entities--(1) Covered individuals/
persons and families. The provisions of this subpart E apply to both 
applicants for assistance and persons already receiving assistance 
covered under this subpart E.
    (2) Covered entities. 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 Sec. 5.504.



Sec. 5.502  Requirements concerning documents.

    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.)



Sec. 5.504  Definitions.

    (a) The definitions 1937 Act, HUD, Public Housing Agency (PHA), and 
Section 8 are defined in subpart A of this part.
    (b) As used in this subpart E:
    Child means a member of the family other than the family head or 
spouse who is under 18 years of age.
    Citizen means a citizen or national of the United States.
    Evidence of citizenship or eligible status means the documents which 
must be submitted to evidence citizenship or eligible immigration 
status. (See Sec. 5.508(b).)
    Family has the same meaning as provided in the program regulations 
of the relevant Section 214 covered program.
    Head of household means the adult member of the family who is the 
head of the household for purposes of determining income eligibility and 
rent.
    Housing covered programs 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).
    INS means the U.S. Immigration and Naturalization Service.
    Mixed family means a family whose members include those with 
citizenship or eligible immigration status, and those without 
citizenship or eligible immigration status.
    National 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.
    Noncitizen means a person who is neither a citizen nor national of 
the United States.
    Project owner means the person or entity that owns the housing 
project containing the assisted dwelling unit.
    Public Housing covered programs 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.)
    Responsible 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 ineligible immigration status under the various covered programs is 
as follows:
    (1) For the Section 235 Program, the mortgagee.

[[Page 64]]

    (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.
    Section 8 covered programs 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.
    Section 214 means section 214 of the Housing and Community 
Development Act of 1980, as amended (42 U.S.C. 1436a).
    Section 214 covered programs is the collective term for the HUD 
programs to which the restrictions imposed by Section 214 apply. These 
programs are set forth in Sec. 5.500.
    Tenant 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.



Sec. 5.506  General provisions.

    (a) Restrictions on assistance. Financial assistance under a Section 
214 covered program is restricted to:
    (1) Citizens; or
    (2) Noncitizens who have eligible immigration status under one of 
the categories set forth in Section 214 (see 42 U.S.C. 1436a(a)).
    (b) Family eligibility for assistance. (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 Sec. Sec. 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 Sec. Sec. 5.516 
and 5.518.
    (c) Preferences. Citizens of the Republic of Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau who are 
eligible for assistance under paragraph (a)(2) of this section are 
entitled to receive local preferences for housing assistance, except 
that, within Guam, such citizens who have such local preference will not 
be entitled to housing assistance in preference to any United States 
citizen or national resident therein who is otherwise eligible for such 
assistance.

[61 FR 5202, Feb. 9, 1996, as amended at 67 FR 65273, Oct. 23, 2002]



Sec. 5.508  Submission of evidence of citizenship or eligible immigration 
status.

    (a) General. 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 Sec. Sec. 5.516 and 5.518 shall apply.
    (b) Evidence of citizenship or eligible immigration status. Each 
family member, regardless of age, must submit the following evidence to 
the responsible entity.
    (1) For U.S. citizens or U.S. nationals, the evidence consists of a 
signed declaration of U.S. citizenship or U.S. nationality. The 
responsible entity may request verification of the declaration by 
requiring presentation of a United States passport or other appropriate 
documentation, as specified in HUD guidance.
    (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:

[[Page 65]]

    (i) A signed declaration of eligible immigration status;
    (ii) One of the INS documents referred to in Sec. 5.510; and
    (iii) A signed verification consent form.
    (c) Declaration. (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 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) For Housing covered programs: The written declaration may be 
incorporated as part of the application for housing assistance or may 
constitute a separate document.
    (d) Verification consent form--(1) Who signs. 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) Notice of release of evidence by responsible entity. 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) Notice of release of evidence by HUD. 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) Individuals who do not contend that they have eligible status. 
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 Sec. Sec. 5.516 and 5.518, or Sec. 
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) Notification of requirements of Section 214--(1) When notice is 
to be issued. 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) Applicant's notice. 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) Notice to tenants. 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) Timing of mortgagor's notice. 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) Form and content of notice. The notice shall:

[[Page 66]]

    (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
    (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 Sec. 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 Sec. Sec. 5.516 and 5.518.
    (g) When evidence of eligible status is required to be submitted. 
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) Applicants. 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 Sec. 
5.512(a)).
    (2) Tenants. 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) New occupants of assisted units. 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) Changing participation in a HUD program. 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) One-time evidence requirement for continuous occupancy. 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) Extensions of time to submit evidence of eligible status--(1) 
When extension must be granted. 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 Sec. 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) Thirty-day extension period. 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) Grant or denial of extension to be in writing. 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

[[Page 67]]

exceed thirty (30) days). If the extension is denied, the notice shall 
explain the reasons for denial of the extension.
    (i) Failure to submit evidence or to establish eligible status. 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 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 Sec. Sec. 5.514, 5.516, and 5.518.
    (ii) [Reserved]

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60538, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec. 5.510  Documents of eligible immigration status.

    (a) General. 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) Acceptable evidence of eligible immigration status. 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 Sec. 5.506(a) for the 
specific immigration status claimed by the individual.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec. 5.512  Verification of eligible immigration status.

    (a) General. Except as described in paragraph (b) of this section 
and Sec. 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 Sec. 5.514 occurs when the individual or 
family members have submitted documentation to the responsible entity in 
accordance with Sec. 5.508.
    (b) PHA election to provide assistance before verification. A PHA 
that is a responsible entity under this subpart may elect to provide 
assistance to a family before the verification of the eligibility of the 
individual or one family member.
    (c) Primary verification--(1) Automated verification system. 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) Failure of primary verification to confirm eligible immigration 
status. If the INS SAVE system does not verify eligible immigration 
status, secondary verification must be performed.
    (d) Secondary verification--(1) Manual search of INS records. 
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) Secondary verification initiated by responsible entity. 
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) Failure of secondary verification to confirm eligible 
immigration status. If the secondary verification does not confirm 
eligible immigration status, the responsible entity shall issue to the 
family the notice described in Sec. 5.514(d), which includes 
notification of the right

[[Page 68]]

to appeal to the INS of the INS finding on immigration status (see Sec. 
5.514(d)(4)).
    (e) Exemption from liability for INS verification. The responsible 
entity shall not be liable for any action, delay, or failure of the INS 
in conducting the automated or manual verification.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec. 5.514  Delay, denial, reduction or termination of assistance.

    (a) General. 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) Restrictions on delay, denial, reduction or termination of 
assistance. (1) Restrictions on reduction, denial or termination of 
assistance for applicants and tenants. Assistance to an applicant or 
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 Sec. 5.514(e) has not been 
concluded;
    (v) Assistance is prorated in accordance with Sec. 5.520; or
    (vi) Assistance for a mixed family is continued in accordance with 
Sec. Sec. 5.516 and 5.518; or
    (vii) Deferral of termination of assistance is granted in accordance 
with Sec. Sec. 5.516 and 5.518.
    (2) Restrictions on delay, denial, reduction or termination of 
assistance pending fair hearing for tenants. 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) Events causing denial or termination of assistance. (1) General. 
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 Sec. 
5.508(g) or by the expiration of any extension granted in accordance 
with Sec. 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) Termination of assisted occupancy. For termination of assisted 
occupancy, see paragraph (i) of this section.
    (d) Notice of denial or termination of assistance. 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 Sec. 5.520;

[[Page 69]]

    (3) In the case of a tenant, the criteria and procedures for 
obtaining relief under the provisions for preservation of families in 
Sec. Sec. 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) Appeal to the INS. (1) Submission of request for appeal. Upon 
receipt of notification by the responsible entity that 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) Documentation to be submitted as part of appeal to INS. 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) Decision by INS--(i) When decision will be issued. 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) Notification of INS decision and of informal hearing 
procedures. 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) No delay, denial, reduction, or termination of assistance until 
completion of INS appeal process; direct appeal to INS. 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) Informal hearing. (1) When request for hearing is to be made. 
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) Informal hearing procedures--(i) Tenants assisted under a 
Section 8 covered program: For tenants assisted under a Section 8 
covered program, the procedures for the hearing before the responsible 
entity are set forth in:
    (A) For Section 8 Moderate Rehabilitation assistance: 24 CFR part 
882;
    (B) For Section 8 tenant-based assistance: 24 CFR part 982; or
    (C) For Section 8 project-based certificate program: 24 CFR part 
983.
    (ii) Tenants assisted under any other Section 8 covered program or a 
Public Housing covered program: 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.

[[Page 70]]

    (iii) Families under Housing covered programs and applicants for 
assistance under all covered programs. 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) Hearing before an impartial individual. 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) Examination of evidence. 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 (as permitted by INS 
requirements), including any records and regulations that may be 
relevant to the hearing;
    (C) Presentation of evidence and arguments in support of eligible 
status. 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) Controverting evidence of the responsible entity. 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) Representation. 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) Interpretive services. 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) Hearing to be recorded. 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) Hearing decision. 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) Judicial relief. 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) Retention of documents. 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) Termination of assisted occupancy. (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.

[[Page 71]]

    (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 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.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25731, May 12, 1999]



Sec. 5.516  Availability of preservation assistance to mixed families 
and other families.

    (a) Assistance available for tenant mixed families--(1) General. 
Preservation assistance is available to tenant mixed families, following 
completion of the appeals and informal hearing procedures provided in 
Sec. 5.514. There are three types of preservation assistance:
    (i) Continued assistance (see paragraph (a) of Sec. 5.518);
    (ii) Temporary deferral of termination of assistance (see paragraph 
(b) of Sec. 5.518); or
    (iii) Prorated assistance (see Sec. 5.520, a mixed family must be 
provided prorated assistance if the family so requests).
    (2) Availability of assistance--(i) For Housing covered programs: 
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) For Section 8 or Public Housing covered programs. 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) Assistance available for applicant mixed families. Prorated 
assistance is also available for mixed families applying for assistance 
as provided in Sec. 5.520.
    (c) Assistance available to other families in occupancy. 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) For Housing covered programs: Temporary deferral of termination 
of assistance is available to families assisted under a Housing covered 
program.
    (2) For Section 8 or Public Housing covered programs: The 
responsible entity may make temporary deferral of termination of 
assistance to families assisted under a Section 8 or Public Housing 
covered program.
    (d) Section 8 covered programs: Discretion afforded to provide 
certain family preservation assistance--(1) Project owners. 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

[[Page 72]]

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) PHAs. 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 Sec. 5.518. 
However, the PHA must offer prorated assistance to eligible families.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25732, May 12, 1999]



Sec. 5.518  Types of preservation assistance available to mixed families 
and other families.

    (a) Continued assistance. (1) General. 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 Sec. 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) Proration of continued assistance. 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 Sec. 5.520.
    (b) Temporary deferral of termination of assistance--(1) Eligibility 
for this type of assistance. 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) Housing covered programs: Conditions for granting temporary 
deferral of termination of assistance. 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.

[[Page 73]]

    (3) Time limit on deferral period. 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) Notification requirements for beginning of each deferral period. 
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) Determination of availability of affordable housing at end of 
each deferral period. (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) For Housing covered programs: 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) For Section 8 or Public Housing covered programs: 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; 
or
    (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) Option to select proration of assistance at end of deferral 
period. 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) Notification of decision on family preservation assistance. 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.

[61 FR 13616, Mar. 27, 1996, as amended at 61 FR 60539, Nov. 29, 1996; 
64 FR 25732, May 12, 1999]



Sec. 5.520  Proration of assistance.

    (a) Applicability. This section applies to a mixed family other than 
a family receiving continued assistance, or

[[Page 74]]

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) Method of prorating assistance for Housing covered programs--(1) 
Proration under Rent Supplement Program. 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) Proration under Section 235 Program. 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 
which is the number of eligible persons in the household;
    (3) Proration under Section 236 Program without the benefit of 
additional assistance. 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) Proration under Section 236 Program with the benefit of 
additional assistance. 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) Method of prorating assistance for Section 8 covered programs--
(1) Section 8 assistance other than assistance provided for a tenancy 
under the Section 8 Rental Voucher Program or for an over-FMR tenancy in 
the Section 8 Rental Certificate Program. For Section 8 assistance other 
than assistance for a tenancy under the voucher program or an over-FMR 
tenancy under the certificate program, the PHA must prorate the family's 
assistance as follows:
    (i) Step 1. Determine gross rent for the unit. (Gross rent is 
contract rent plus any allowance for tenant paid utilities).
    (ii) Step 2. Determine total tenant payment in accordance with 
section 5.613(a). (Annual income includes income of all family members, 
including any family member who has not established eligible immigration 
status.)
    (iii) Step 3. Subtract amount determined in paragraph (c)(1)(ii), 
(Step 2), from amount determined in paragraph (c)(1)(i), (Step 1).
    (iv) Step 4. 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) Prorated housing assistance. The amount determined in paragraph 
(c)(1)(iv), (Step 4) is the prorated housing assistance payment for a 
mixed family.
    (vi) No effect on contract rent. 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.

[[Page 75]]

    (2) Assistance for a Section 8 voucher tenancy or over-FMR tenancy. 
For a tenancy under the voucher program or for an over-FMR tenancy under 
the certificate program, the PHA must prorate the family's assistance as 
follows:
    (i) Step 1. Determine the amount of the pre-proration housing 
assistance payment. (Annual income includes income of all family 
members, including any family member who has not established eligible 
immigration status.)
    (ii) Step 2. 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) Prorated housing assistance. The amount determined in 
paragraph (c)(2)(ii), (Step 2) is the prorated housing assistance 
payment for a mixed family.
    (iv) No effect on rent to owner. Proration of the housing assistance 
payment does not affect rent to owner. The family must pay the portion 
of rent to owner not covered by the prorated housing assistance payment.
    (d) Method of prorating assistance for Public Housing covered 
programs. The PHA shall prorate the family's assistance by:
    (1) Step 1. 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) Step 2. 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) Step 3. 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) Step 4. Multiplying the member maximum subsidy by the number of 
family members who have citizenship or eligible immigration status 
(``eligible family members'').
    (5) Step 5. 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.

[61 FR 5202, Feb. 9, 1996, as amended at 63 FR 23853, Apr. 30, 1998; 64 
FR 13056, Mar. 16, 1999]



Sec. 5.522  Prohibition of assistance to noncitizen students.

    (a) General. The provisions of Sec. Sec. 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) Family of noncitizen students. (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.



Sec. 5.524  Compliance with nondiscrimination requirements.

    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

[[Page 76]]

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.



Sec. 5.526  Protection from liability for responsible entities and State 
and local government agencies and officials.

    (a) Protection from liability for responsible entities. Responsible 
entities are protected from liability as set forth in Section 214(e) (42 
U.S.C 1436a(e)).
    (b) Protection from liability for State and local government 
agencies and officials. State and local government agencies and 
officials shall not be liable for the design or implementation of the 
verification system described in Sec. 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.

[64 FR 25732, May 12, 1999]



Sec. 5.528  Liability of ineligible tenants for reimbursement of benefits.

    Where a tenant has received the benefit of HUD financial assistance 
to 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).



 Subpart F_Section 8 and Public Housing, and Other HUD Assisted Housing 
  Serving Persons with Disabilities: Family Income and Family Payment; 
      Occupancy Requirements for Section 8 Project-Based Assistance

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437f, 1437n, and 3535(d).

    Source: 61 FR 54498, Oct. 18, 1996, unless otherwise noted.



Sec. 5.601  Purpose and applicability.

    This subpart states HUD requirements on the following subjects:
    (a) Determining annual and adjusted income of families who apply for 
or receive assistance in the Section 8 (tenant-based and project-based) 
and public housing programs;
    (b) Determining payments by and utility reimbursements to families 
assisted in these programs;
    (c) Additional occupancy requirements that apply to the Section 8 
project-based assistance programs. These additional requirements 
concern:
    (1) Income-eligibility and income-targeting when a Section 8 owner 
admits families to a Section 8 project or unit;
    (2) Owner selection preferences; and
    (3) Owner reexamination of family income and composition;
    (d) Determining adjusted income, as provided in Sec. 5.611(a) and 
(b), for families who apply for or receive assistance under the 
following programs: HOME Investment Partnerships Program (24 CFR part 
92); Rent Supplement Payments Program (24 CFR part 200, subpart W); 
Rental Assistance Payments Program (24 CFR part 236, subpart D); Housing 
Opportunities for Persons with AIDS (24 CFR part 574); Shelter Plus Care 
Program (24 CFR part 582); Supportive Housing Program (McKinney Act 
Homeless Assistance) (24 CFR part 583); Section 202 Supportive Housing 
Program for the Elderly (24 CFR 891, subpart B); Section 202 Direct 
Loans for Housing for the Elderly and Persons with Disabilities (24 CFR 
part 891, subpart E) and the Section 811 Supportive Housing for Persons 
with Disabilities (24 CFR part 891, subpart C). Unless specified in the 
regulations for each of the programs listed in paragraph (d) of this 
section or in another regulatory section of this part 5, subpart F, the 
regulations in part 5, subpart F, generally are not applicable to these 
programs; and
    (e) Determining earned income disregard for persons with 
disabilities, as provided in Sec. 5.617, for the following programs: 
HOME Investment Partnerships Program (24 CFR part 92); Housing 
Opportunities for Persons with AIDS (24 CFR part 574); Supportive 
Housing Program (McKinney Act

[[Page 77]]

Homeless Assistance) (24 CFR part 583); and the Housing Choice Voucher 
Program (24 CFR part 982).

[66 FR 6222, Jan. 19, 2001]



Sec. 5.603  Definitions.

    As used in this subpart:
    (a) Terms found elsewhere in part 5--(1) Subpart A. The terms 1937 
Act, elderly person, public housing, public housing agency (PHA), 
responsible entity and Section 8 are defined in Sec. 5.100.
    (2) Subpart D. The terms ``disabled family'', ``elderly family'', 
``family'', ``live-in aide'', and ``person with disabilities'' are 
defined in Sec. 5.403.
    (b) The following terms shall have the meanings set forth below:
    Adjusted income. See Sec. 5.611.
    Annual income. See Sec. 5.609.
    Child care expenses. 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.
    Dependent. 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.
    Disability assistance expenses. 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 paid to a 
member of the family nor reimbursed by an outside source.
    Economic self-sufficiency program. Any program designed to 
encourage, assist, train, or facilitate the economic independence of 
HUD-assisted families or to provide work for such families. These 
programs include programs for job training, employment counseling, work 
placement, basic skills training, education, English proficiency, 
workfare, financial or household management, apprenticeship, and any 
program necessary to ready a participant for work (including a substance 
abuse or mental health treatment program), or other work activities.
    Extremely low income family. A family whose annual income does not 
exceed 30 percent of the median income for the area, as determined by 
HUD, with adjustments for smaller and larger families, except that HUD 
may establish income ceilings higher or lower than 30 percent of the 
median income for the area if HUD finds that such variations are 
necessary because of unusually high or low family incomes.
    Full-time student. A person who is attending school or vocational 
training on a full-time basis.
    Imputed welfare income. See Sec. 5.615.
    Low income family. A family whose annual income does not exceed 80 
percent of the median income for the area, as determined by HUD with 
adjustments for smaller and larger families, except that HUD may 
establish income ceilings higher or lower than 80 percent of the median 
income for the area on the basis of HUD's findings that such variations 
are necessary because of unusually high or low family incomes.
    Medical expenses. 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.
    Monthly adjusted income. One twelfth of adjusted income.
    Monthly income. One twelfth of annual income.
    Net family assets. (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,

[[Page 78]]

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 Sec. 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.
    (4) For purposes of determining annual income under Sec. 5.609, the 
term ``net family assets'' does not include the value of a home 
currently being purchased with assistance under part 982, subpart M of 
this title. This exclusion is limited to the first 10 years after the 
purchase date of the home.
    Owner 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 part 891 of this title.
    Responsible entity. For Sec. 5.611, in addition to the definition 
of ``responsible entity'' in Sec. 5.100, and for Sec. 5.617, in 
addition to only that part of the definition of ``responsible entity'' 
in Sec. 5.100 which addresses the Section 8 program covered by Sec. 
5.617 (public housing is not covered by Sec. 5.617), ``responsible 
entity'' means:
    (1) For the HOME Investment Partnerships Program, the participating 
jurisdiction, as defined in 24 CFR 92.2;
    (2) For the Rent Supplement Payments Program, the owner of the 
multifamily project;
    (3) For the Rental Assistance Payments Program, the owner of the 
Section 236 project;
    (4) For the Housing Opportunities for Persons with AIDS (HOPWA) 
program, the applicable ``State'' or ``unit of general local 
government'' or ``nonprofit organization'' as these terms are defined in 
24 CFR 574.3, that administers the HOPWA Program;
    (5) For the Shelter Plus Care Program, the ``Recipient'' as defined 
in 24 CFR 582.5;
    (6) For the Supportive Housing Program, the ``recipient'' as defined 
in 24 CFR 583.5;
    (7) For the Section 202 Supportive Housing Program for the Elderly, 
the ``Owner'' as defined in 24 CFR 891.205;
    (8) For the Section 202 Direct Loans for Housing for the Elderly and 
Persons with Disabilities), the ``Borrower'' as defined in 24 CFR 
891.505; and
    (9) For the Section 811 Supportive Housing Program for Persons with 
Disabilities, the ``owner'' as defined in 24 CFR 891.305.
    Tenant rent. The amount payable monthly by the family as rent to the 
unit owner (Section 8 owner or PHA in public housing). (This term is not 
used in the Section 8 voucher program.)
    Total tenant payment. See Sec. 5.613.
    Utility allowance. 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.
    Utility reimbursement. The amount, if any, by which the utility 
allowance for a unit, if applicable, exceeds the total tenant payment 
for the family occupying the unit. (This definition is not used in the 
Section 8 voucher program, or for a public housing family that is paying 
a flat rent.)
    Very low income family. A family whose annual income does not exceed 
50 percent of the median family income for the area, as determined by 
HUD with adjustments for smaller and larger families, except that HUD 
may establish income ceilings higher or lower than 50 percent of the 
median income for the area if HUD finds that such

[[Page 79]]

variations are necessary because of unusually high or low family 
incomes.
    Welfare assistance. 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 (including 
assistance provided under the Temporary Assistance for Needy Families 
(TANF) program, as that term is defined under the implementing 
regulations issued by the Department of Health and Human Services at 45 
CFR 260.31).
    Work activities. See definition at section 407(d) of the Social 
Security Act (42 U.S.C. 607(d)).

[61 FR 54498, Oct. 18, 1996, as amended at 65 FR 16716, Mar. 29, 2000; 
65 FR 55161, Sept. 12, 2000; 66 FR 6223, Jan. 19, 2001; 67 FR 47432, 
July 18, 2002]

                              Family Income



Sec. 5.609  Annual income.

    (a) Annual income 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) Welfare assistance payments. (i) Welfare assistance payments 
made under the Temporary Assistance for Needy Families (TANF) program 
are included in annual income only to the extent such payments:
    (A) Qualify as assistance under the TANF program definition at 45 
CFR 260.31; and
    (B) Are not otherwise excluded under paragraph (c) of this section.
    (ii) 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,

[[Page 80]]

the amount of welfare assistance income to be included as income shall 
consist of:
    (A) The amount of the allowance or grant exclusive of the amount 
specifically designated for shelter or utilities; plus
    (B) 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 shall be the 
amount resulting from one application of the percentage.
    (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 Sec. 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, resident initiatives coordination, and 
serving as a member of the PHA's governing board. 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;

[[Page 81]]

    (13) [Reserved]
    (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 Federal Register and 
distributed to PHAs and housing owners identifying the benefits that 
qualify for this exclusion. Updates will be published and distributed 
when necessary.
    (d) Annualization of income. If it is not feasible to anticipate a 
level of income over a 12-month period (e.g., seasonal or cyclic 
income), or the PHA believes that past income is the best available 
indicator of expected future income, the PHA may annualize the income 
anticipated for a shorter period, subject to a redetermination at the 
end of the shorter period.

[61 FR 54498, Oct, 18, 1996, as amended at 65 FR 16716, Mar. 29, 2000; 
67 FR 47432, July 18, 2002]



Sec. 5.611  Adjusted income.

    Adjusted income means annual income (as determined by the 
responsible entity, defined in Sec. 5.100 and Sec. 5.603) of the 
members of the family residing or intending to reside in the dwelling 
unit, after making the following deductions:
    (a) Mandatory deductions. In determining adjusted income, the 
responsible entity must deduct the following amounts from annual income:
    (1) $480 for each dependent;
    (2) $400 for any elderly family or disabled family;
    (3) The sum of the following, to the extent the sum exceeds three 
percent of annual income:
    (i) Unreimbursed medical expenses of any elderly family or disabled 
family; and
    (ii) Unreimbursed reasonable attendant care and auxiliary apparatus 
expenses for each member of the family who is a person with 
disabilities, to the extent necessary to enable any member of the family 
(including the member who is a person with disabilities) to be employed. 
This deduction may not exceed the earned income received by family 
members who are 18 years of age or older and who are able to work 
because of such attendant care or auxiliary apparatus; and
    (4) Any reasonable child care expenses necessary to enable a member 
of the family to be employed or to further his or her education.
    (b) Additional deductions. (1) For public housing, a PHA may adopt 
additional deductions from annual income. The PHA must establish a 
written policy for such deductions.
    (2) For the HUD programs listed in Sec. 5.601(d), the responsible 
entity shall calculate such other deductions as required and permitted 
by the applicable program regulations.

[66 FR 6223, Jan. 19, 2001]



Sec. 5.613  Public housing program and Section 8 tenant-based assistance 
program: PHA cooperation with welfare agency.

    (a) This section applies to the public housing program and the 
Section 8 tenant-based assistance program.
    (b) The PHA must make best efforts to enter into cooperation 
agreements with welfare agencies under which such agencies agree:
    (1) To target public assistance, benefits and services to families 
receiving assistance in the public housing program and the Section 8 
tenant-based assistance program to achieve self-sufficiency;
    (2) To provide written verification to the PHA concerning welfare 
benefits for families applying for or receiving

[[Page 82]]

assistance in these housing assistance programs.

[65 FR 16717, Mar. 29, 2000]



Sec. 5.615  Public housing program and Section 8 tenant-based assistance 
program: How welfare benefit reduction affects family income.

    (a) Applicability. This section applies to covered families who 
reside in public housing (part 960 of this title) or receive Section 8 
tenant-based assistance (part 982 of this title).
    (b) Definitions. The following definitions apply for purposes of 
this section:
    Covered families. Families who receive welfare assistance or other 
public assistance benefits (``welfare benefits'') from a State or other 
public agency (``welfare agency'') under a program for which Federal, 
State, or local law requires that a member of the family must 
participate in an economic self-sufficiency program as a condition for 
such assistance.
    Economic self-sufficiency program. See definition at Sec. 5.603.
    Imputed welfare income. The amount of annual income not actually 
received by a family, as a result of a specified welfare benefit 
reduction, that is nonetheless included in the family's annual income 
for purposes of determining rent.
    Specified welfare benefit reduction.
    (1) A reduction of welfare benefits by the welfare agency, in whole 
or in part, for a family member, as determined by the welfare agency, 
because of fraud by a family member in connection with the welfare 
program; or because of welfare agency sanction against a family member 
for noncompliance with a welfare agency requirement to participate in an 
economic self-sufficiency program.
    (2) ``Specified welfare benefit reduction'' does not include a 
reduction or termination of welfare benefits by the welfare agency:
    (i) at expiration of a lifetime or other time limit on the payment 
of welfare benefits;
    (ii) because a family member is not able to obtain employment, even 
though the family member has complied with welfare agency economic self-
sufficiency or work activities requirements; or
    (iii) because a family member has not complied with other welfare 
agency requirements.
    (c) Imputed welfare income.
    (1) A family's annual income includes the amount of imputed welfare 
income (because of a specified welfare benefits reduction, as specified 
in notice to the PHA by the welfare agency), plus the total amount of 
other annual income as determined in accordance with Sec. 5.609.
    (2) At the request of the PHA, the welfare agency will inform the 
PHA in writing of the amount and term of any specified welfare benefit 
reduction for a family member, and the reason for such reduction, and 
will also inform the PHA of any subsequent changes in the term or amount 
of such specified welfare benefit reduction. The PHA will use this 
information to determine the amount of imputed welfare income for a 
family.
    (3) A family's annual income includes imputed welfare income in 
family annual income, as determined at the PHA's interim or regular 
reexamination of family income and composition, during the term of the 
welfare benefits reduction (as specified in information provided to the 
PHA by the welfare agency).
    (4) The amount of the imputed welfare income is offset by the amount 
of additional income a family receives that commences after the time the 
sanction was imposed. When such additional income from other sources is 
at least equal to the imputed welfare income, the imputed welfare income 
is reduced to zero.
    (5) The PHA may not include imputed welfare income in annual income 
if the family was not an assisted resident at the time of sanction.
    (d) Review of PHA decision. (1) Public housing. If a public housing 
tenant claims that the PHA has not correctly calculated the amount of 
imputed welfare income in accordance with HUD requirements, and if the 
PHA denies the family's request to modify such amount, the PHA shall 
give the tenant written notice of such denial, with a brief explanation 
of the basis for the PHA determination of the amount of imputed welfare 
income. The PHA notice shall also state that if the tenant

[[Page 83]]

does not agree with the PHA determination, the tenant may request a 
grievance hearing in accordance with part 966, subpart B of this title 
to review the PHA determination. The tenant is not required to pay an 
escrow deposit pursuant to Sec. 966.55(e) for the portion of tenant 
rent attributable to the imputed welfare income in order to obtain a 
grievance hearing on the PHA determination.
    (2) Section 8 participant. A participant in the Section 8 tenant-
based assistance program may request an informal hearing, in accordance 
with Sec. 982.555 of this title, to review the PHA determination of the 
amount of imputed welfare income that must be included in the family's 
annual income in accordance with this section. If the family claims that 
such amount is not correctly calculated in accordance with HUD 
requirements, and if the PHA denies the family's request to modify such 
amount, the PHA shall give the family written notice of such denial, 
with a brief explanation of the basis for the PHA determination of the 
amount of imputed welfare income. Such notice shall also state that if 
the family does not agree with the PHA determination, the family may 
request an informal hearing on the determination under the PHA hearing 
procedure.
    (e) PHA relation with welfare agency. (1) The PHA must ask welfare 
agencies to inform the PHA of any specified welfare benefits reduction 
for a family member, the reason for such reduction, the term of any such 
reduction, and any subsequent welfare agency determination affecting the 
amount or term of a specified welfare benefits reduction. If the welfare 
agency determines a specified welfare benefits reduction for a family 
member, and gives the PHA written notice of such reduction, the family's 
annual incomes shall include the imputed welfare income because of the 
specified welfare benefits reduction.
    (2) The PHA is responsible for determining the amount of imputed 
welfare income that is included in the family's annual income as a 
result of a specified welfare benefits reduction as determined by the 
welfare agency, and specified in the notice by the welfare agency to the 
PHA. However, the PHA is not responsible for determining whether a 
reduction of welfare benefits by the welfare agency was correctly 
determined by the welfare agency in accordance with welfare program 
requirements and procedures, nor for providing the opportunity for 
review or hearing on such welfare agency determinations.
    (3) Such welfare agency determinations are the responsibility of the 
welfare agency, and the family may seek appeal of such determinations 
through the welfare agency's normal due process procedures. The PHA 
shall be entitled to rely on the welfare agency notice to the PHA of the 
welfare agency's determination of a specified welfare benefits 
reduction.

[65 FR 16717, Mar. 29, 2000]



Sec. 5.617  Self-sufficiency incentives for persons with disabilities--
Disallowance of increase in annual income.

    (a) Applicable programs. The disallowance of increase in annual 
income provided by this section is applicable only to the following 
programs: HOME Investment Partnerships Program (24 CFR part 92); Housing 
Opportunities for Persons with AIDS (24 CFR part 574); Supportive 
Housing Program (24 CFR part 583); and the Housing Choice Voucher 
Program (24 CFR part 982).
    (b) Definitions. The following definitions apply for purposes of 
this section.
    Disallowance. Exclusion from annual income.
    Previously unemployed includes a person with disabilities who has 
earned, in the twelve months previous to employment, no more than would 
be received for 10 hours of work per week for 50 weeks at the 
established minimum wage.
    Qualified family. A family residing in housing assisted under one of 
the programs listed in paragraph (a) of this section or receiving 
tenant-based rental assistance under one of the programs listed in 
paragraph (a) of this section.
    (1) Whose annual income increases as a result of employment of a 
family member who is a person with disabilities and who was previously 
unemployed for one or more years prior to employment;

[[Page 84]]

    (2) Whose annual income increases as a result of increased earnings 
by a family member who is a person with disabilities during 
participation in any economic self-sufficiency or other job training 
program; or
    (3) Whose annual income increases, as a result of new employment or 
increased earnings of a family member who is a person with disabilities, 
during or within six months after receiving assistance, benefits or 
services under any state program for temporary assistance for needy 
families funded under Part A of Title IV of the Social Security Act, as 
determined by the responsible entity in consultation with the local 
agencies administering temporary assistance for needy families (TANF) 
and Welfare-to-Work (WTW) programs. The TANF program is not limited to 
monthly income maintenance, but also includes such benefits and services 
as one-time payments, wage subsidies and transportation assistance--
provided that the total amount over a six-month period is at least $500.
    (c) Disallowance of increase in annual income--(1) Initial twelve 
month exclusion. During the cumulative twelve month period beginning on 
the date a member who is a person with disabilities of a qualified 
family is first employed or the family first experiences an increase in 
annual income attributable to employment, the responsible entity must 
exclude from annual income (as defined in the regulations governing the 
applicable program listed in paragraph (a) of this section) of a 
qualified family any increase in income of the family member who is a 
person with disabilities as a result of employment over prior income of 
that family member.
    (2) Second twelve month exclusion and phase-in. During the second 
cumulative twelve month period after the date a member who is a person 
with disabilities of a qualified family is first employed or the family 
first experiences an increase in annual income attributable to 
employment, the responsible entity must exclude from annual income of a 
qualified family fifty percent of any increase in income of such family 
member as a result of employment over income of that family member prior 
to the beginning of such employment.
    (3) Maximum four year disallowance. The disallowance of increased 
income of an individual family member who is a person with disabilities 
as provided in paragraph (c)(1) or (c)(2) is limited to a lifetime 48 
month period. The disallowance only applies for a maximum of twelve 
months for disallowance under paragraph (c)(1) and a maximum of twelve 
months for disallowance under paragraph (c)(2), during the 48 month 
period starting from the initial exclusion under paragraph (c)(1) of 
this section.
    (d) Inapplicability to admission. The disallowance of increases in 
income as a result of employment of persons with disabilities under this 
section does not apply for purposes of admission to the program 
(including the determination of income eligibility or any income 
targeting that may be applicable).

[66 FR 6223, Jan. 19, 2001, as amended at 67 FR 6820, Feb. 13, 2002]

                             Family Payment



Sec. 5.628  Total tenant payment.

    (a) Determining total tenant payment (TTP). Total tenant payment is 
the highest of the following amounts, rounded to the nearest dollar:
    (1) 30 percent of the family's monthly adjusted income;
    (2) 10 percent of the family's monthly income;
    (3) If the family is receiving payments for welfare assistance from 
a public agency and a part of those payments, adjusted in accordance 
with the family's actual housing costs, is specifically designated by 
such agency to meet the family's housing costs, the portion of those 
payments which is so designated; or
    (4) The minimum rent, as determined in accordance with Sec. 5.630.
    (b) Determining TTP if family's welfare assistance is ratably 
reduced. If the family's welfare assistance is ratably reduced from the 
standard of need by applying a percentage, the amount calculated under 
paragraph (a)(3) of this section is the amount resulting from one 
application of the percentage.

[65 FR 16718, Mar. 29, 2000]

[[Page 85]]



Sec. 5.630  Minimum rent.

    (a) Minimum rent. (1) The PHA must charge a family no less than a 
minimum monthly rent established by the responsible entity, except as 
described in paragraph (b) of this section.
    (2) For the public housing program and the section 8 moderate 
rehabilitation, and certificate or voucher programs, the PHA may 
establish a minimum rent of up to $50.
    (3) For other section 8 programs, the minimum rent is $25.
    (b) Financial hardship exemption from minimum rent. (1) When is 
family exempt from minimum rent? The responsible entity must grant an 
exemption from payment of minimum rent if the family is unable to pay 
the minimum rent because of financial hardship, as described in the 
responsible entity's written policies. Financial hardship includes these 
situations:
    (i) When the family has lost eligibility for or is awaiting an 
eligibility determination for a Federal, State, or local assistance 
program, including a family that includes a member who is a noncitizen 
lawfully admitted for permanent residence under the Immigration and 
Nationality Act who would be entitled to public benefits but for title 
IV of the Personal Responsibility and Work Opportunity Act of 1996;
    (ii) When the family would be evicted because it is unable to pay 
the minimum rent;
    (iii) When the income of the family has decreased because of changed 
circumstances, including loss of employment;
    (iv) When a death has occurred in the family; and
    (v) Other circumstances determined by the responsible entity or HUD.
    (2) What happens if family requests a hardship exemption? (i) Public 
housing. (A) If a family requests a financial hardship exemption, the 
PHA must suspend the minimum rent requirement beginning the month 
following the family's request for a hardship exemption, and continuing 
until the PHA determines whether there is a qualifying financial 
hardship and whether it is temporary or long term.
    (B) The PHA must promptly determine whether a qualifying hardship 
exists and whether it is temporary or long term.
    (C) The PHA may not evict the family for nonpayment of minimum rent 
during the 90-day period beginning the month following the family's 
request for a hardship exemption.
    (D) If the PHA determines that a qualifying financial hardship is 
temporary, the PHA must reinstate the minimum rent from the beginning of 
the suspension of the minimum rent. The PHA must offer the family a 
reasonable repayment agreement, on terms and conditions established by 
the PHA, for the amount of back minimum rent owed by the family.
    (ii) All section 8 programs. (A) If a family requests a financial 
hardship exemption, the responsible entity must suspend the minimum rent 
requirement beginning the month following the family's request for a 
hardship exemption until the responsible entity determines whether there 
is a qualifying financial hardship, and whether such hardship is 
temporary or long term.
    (B) The responsible entity must promptly determine whether a 
qualifying hardship exists and whether it is temporary or long term.
    (C) If the responsible entity determines that a qualifying financial 
hardship is temporary, the PHA must not impose the minimum rent during 
the 90-day period beginning the month following the date of the family's 
request for a hardship exemption. At the end of the 90-day suspension 
period, the responsible entity must reinstate the minimum rent from the 
beginning of the suspension. The family must be offered a reasonable 
repayment agreement, on terms and conditions established by the 
responsible entity, for the amount of back rent owed by the family.
    (iii) All programs. (A) If the responsible entity determines there 
is no qualifying financial hardship exemption, the responsible entity 
must reinstate the minimum rent, including back rent owed from the 
beginning of the suspension. The family must pay the back rent on terms 
and conditions established by the responsible entity.
    (B) If the responsible entity determines a qualifying financial 
hardship

[[Page 86]]

is long term, the responsible entity must exempt the family from the 
minimum rent requirements so long as such hardship continues. Such 
exemption shall apply from the beginning of the month following the 
family's request for a hardship exemption until the end of the 
qualifying financial hardship.
    (C) The financial hardship exemption only applies to payment of the 
minimum rent (as determined pursuant to Sec. 5.628(a)(4) and Sec. 
5.630), and not to the other elements used to calculate the total tenant 
payment (as determined pursuant to Sec. 5.628(a)(1), (a)(2) and 
(a)(3)).
    (3) Public housing: Grievance hearing concerning PHA denial of 
request for hardship exemption. If a public housing family requests a 
hearing under the PHA grievance procedure, to review the PHA's 
determination denying or limiting the family's claim to a financial 
hardship exemption, the family is not required to pay any escrow deposit 
in order to obtain a grievance hearing on such issues.

[65 FR 16718, Mar. 29, 2000]



Sec. 5.632  Utility reimbursements.

    (a) Applicability. This section is applicable to:
    (1) The Section 8 programs other than the Section 8 voucher program 
(for distribution of a voucher housing assistance payment that exceeds 
rent to owner, see Sec. 982.514(b) of this title);
    (2) A public housing family paying an income-based rent (see Sec. 
960.253 of this title). (Utility reimbursement is not paid for a public 
housing family that is paying a flat rent.)
    (b) Payment of utility reimbursement. (1) The responsible entity 
pays a utility reimbursement if the utility allowance (for tenant-paid 
utilities) exceeds the amount of the total tenant payment.
    (2) In the public housing program (where the family is paying an 
income-based rent), the Section 8 moderate rehabilitation program and 
the Section 8 certificate or voucher program, the PHA may pay the 
utility reimbursement either to the family or directly to the utility 
supplier to pay the utility bill on behalf of the family. If the PHA 
elects to pay the utility supplier, the PHA must notify the family of 
the amount paid to the utility supplier.
    (3) In the other Section 8 programs, the owner must pay the utility 
reimbursement either:
    (i) To the family, or
    (ii) With consent of the family, to the utility supplier to pay the 
utility bill on behalf of the family.

[65 FR 16719, Mar. 29, 2000]



Sec. 5.634  Tenant rent.

    (a) Section 8 programs. For Section 8 programs other than the 
Section 8 voucher program, tenant rent is total tenant payment minus any 
utility allowance.
    (b) Public housing. See Sec. 960.253 of this title for the 
determination of tenant rent.

[65 FR 16719, Mar. 29, 2000]

       Section 8 Project-Based Assistance: Occupancy Requirements



Sec. 5.653  Section 8 project-based assistance programs: Admission--
Income-eligibility and income-targeting.

    (a) Applicability. This section describes requirements concerning 
income-eligibility and income-targeting that apply to the Section 8 
project-based assistance programs, except for the moderate 
rehabilitation and the project-based certificate or voucher programs.
    (b) Who is eligible?
    (1) Basic eligibility. An applicant must meet all eligibility 
requirements in order to receive housing assistance. At a minimum, the 
applicant must be a family, as defined in Sec. 5.403, and must be 
income-eligible, as described in this section. Such eligible applicants 
include single persons.
    (2) Low income limit. No family other than a low income family is 
eligible for admission to the Section 8 project-based assistance 
programs. (This paragraph (b) does not apply to the Section 8 project-
based voucher program under part 983 of this title.)
    (c) Targeting to extremely low income families. For each project 
assisted under a contract for project-based assistance, of the dwelling 
units that become available for occupancy in any fiscal year that are 
assisted under the contract, not less than 40 percent shall

[[Page 87]]

be available for leasing only by families that are extremely low income 
families at the time of admission.
    (d) Limitation on admission of non-very low income families.
    (1) Admission to units available before October 1, 1981. Not more 
than 25 percent of the Section 8 project-based dwelling units that were 
available for occupancy under Section 8 Housing Assistance Payments 
Contracts effective 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) Admission to units available on or after October 1, 1981. Not 
more than 15 percent of the Section 8 project-based dwelling units that 
initially become available for occupancy under Section 8 Housing 
Assistance Payments (HAP) Contracts on or after October 1, 1981 shall be 
available for leasing by low income families other than families that 
are very low income families at the time of admission to the Section 8 
program. Except with the prior approval of HUD under paragraphs (d)(3) 
and (d)(4) of this section, the owner may only lease such units to very 
low income families.
    (3) Request for exception. A request by an owner for approval of 
admission of low income families other than very low income families to 
section 8 project-based units must state the basis for requesting the 
exception and provide supporting data. Bases for exceptions that may be 
considered include the following:
    (i) 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;
    (ii) Commitment of an owner to attaining occupancy by families with 
a broad range of incomes;
    (iii) 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); and
    (iv) Low-income families that otherwise would be displaced from a 
Section 8 project.
    (4) Action on request for exception. Whether to grant any request 
for exception is a matter committed by law to HUD's 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 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.
    (e) Income used for eligibility and targeting. Family annual income 
(see Sec. 5.609) is used both for determination of income-eligibility 
and for income-targeting under this section.
    (f) Reporting. The Section 8 owner must comply with HUD-prescribed 
reporting requirements, including income reporting requirements that 
will permit HUD to maintain the data necessary to monitor compliance 
with income-eligibility and income-targeting requirements.

[65 FR 16719, Mar. 29, 2000]



Sec. 5.655  Section 8 project-based assistance programs: Owner preferences 
in selection for a project or unit.

    (a) Applicability. This section applies to the section 8 project-
based assistance programs. The section describes requirements concerning 
the Section 8 owner's selection of residents to occupy a project or 
unit, except for the moderate rehabilitation and the project-based 
certificate or voucher programs.
    (b) Selection. (1) Selection for owner's project or unit. Selection 
for occupancy of a project or unit is the function of the Section 8 
owner. However, selection is subject to the income-eligibility

[[Page 88]]

and income-targeting requirements in Sec. 5.653.
    (2) Tenant selection plan. The owner must adopt a written tenant 
selection plan in accordance with HUD requirements.
    (3) Amount of income. The owner may not select a family for 
occupancy of a project or unit in an order different from the order on 
the owner's waiting list for the purpose of selecting a relatively 
higher income family. However, an owner may select a family for 
occupancy of a project or unit based on its income in order to satisfy 
the targeting requirements of Sec. 5.653(c).
    (4) Selection for particular unit. In selecting a family to occupy a 
particular unit, the owner may match family characteristics with the 
type of unit available, for example, number of bedrooms. If a unit has 
special accessibility features for persons with disabilities, the owner 
must first offer the unit to families which include persons with 
disabilities who require such features (see Sec. Sec. 8.27 and 100.202 
of this title).
    (5) Housing assistance limitation for single persons. A single 
person who is not an elderly or displaced person, a person with 
disabilities, or the remaining member of a resident family may not be 
provided a housing unit with two or more bedrooms.
    (c) Particular owner preferences. The owner must inform all 
applicants about available preferences and must give applicants an 
opportunity to show that they qualify for available preferences.
    (1) Residency requirements or preferences. (i) Residency 
requirements are prohibited. Although the owner is not prohibited from 
adopting a residency preference, the owner may only adopt or implement 
residency preferences in accordance with non-discrimination and equal 
opportunity requirements listed at Sec. 5.105(a).
    (ii) A residency preference is a preference for admission of persons 
who reside in a specified geographic area (``residency preference 
area'').
    (iii) An owner's residency preference must be approved by HUD in one 
of the following methods:
    (A) Prior approval of the housing market area in the Affirmative 
Fair Housing Marketing plan (in accordance with Sec. 108.25 of this 
title) as a residency preference area;
    (B) Prior approval of the residency preference area in the PHA plan 
of the jurisdiction in which the project is located;
    (C) Modification of the Affirmative Fair Housing Marketing Plan, in 
accordance with Sec. 108.25 of this title,
    (iv) Use of a residency preference may not have the purpose or 
effect of delaying or otherwise denying admission to a project or unit 
based on the race, color, ethnic origin, gender, religion, disability, 
or age of any member of an applicant family.
    (v) A residency preference must not be based on how long an 
applicant has resided or worked in a residency preference area.
    (vi) Applicants who are working or who have been notified that they 
are hired to work in a residency preference area must be treated as 
residents of the residency preference area. The owner may treat 
graduates of, or active participants in, education and training programs 
in a residency preference area as residents of the residency preference 
area if the education or training program is designed to prepare 
individuals for the job market.
    (2) Preference for working families. (i) The owner may adopt a 
preference for admission of working families (families where the head, 
spouse or sole member is employed). However, an applicant shall be given 
the benefit of the working family preference if the head and spouse, or 
sole member, is age 62 or older, or is a person with disabilities.
    (ii) If the owner adopts a preference for admission of working 
families, the owner must not give a preference based on the amount of 
earned income.
    (3) Preference for person with disabilities. The owner may adopt a 
preference for admission of families that include a person with 
disabilities. However, the owner may not adopt a preference for 
admission of persons with a specific disability.
    (4) Preference for victims of domestic violence. The owner should 
consider whether to adopt a preference for admission of families that 
include victims of domestic violence.
    (5) Preference for single persons who are elderly, displaced, 
homeless or persons

[[Page 89]]

with disabilities over other single persons. The owner may adopt a 
preference for admission of single persons who are age 62 or older, 
displaced, homeless, or persons with disabilities over other single 
persons.

[65 FR 16720, Mar. 29, 2000]



Sec. 5.657  Section 8 project-based assistance programs: Reexamination 
of family income and composition.

    (a) Applicability. This section states requirements for 
reexamination of family income and composition in the Section 8 project-
based assistance programs, except for the moderate rehabilitation and 
the project-based certificate or voucher programs.
    (b) Regular reexamination. The owner must conduct a reexamination 
and redetermination of family income and composition at least annually.
    (c) Interim reexaminations. A family may request an interim 
reexamination of family income because of any changes since the last 
examination. The owner must make the interim reexamination within a 
reasonable time after the family request. The owner may adopt policies 
prescribing when and under what conditions the family must report a 
change in family income or composition.

[65 FR 16720, Mar. 29, 2000]



Sec. 5.659  Family information and verification.

    (a) Applicability. This section states requirements for 
reexamination of family income and composition in the Section 8 project-
based assistance programs, except for the moderate rehabilitation 
program and the project-based certificate or voucher programs.
    (b) Family obligation to supply information. (1) The family must 
supply any information that HUD or the owner determines is necessary in 
administration of the Section 8 program, including submission of 
required evidence of citizenship or eligible immigration status (as 
provided by part 5, subpart E of this title). ``Information'' includes 
any requested certification, release or other documentation.
    (2) The family must supply any information requested by the owner or 
HUD for use in a regularly scheduled reexamination or an interim 
reexamination of family income and composition in accordance with HUD 
requirements.
    (3) For requirements concerning the following, see part 5, subpart B 
of this title:
    (i) Family verification and disclosure of social security numbers;
    (ii) Family execution and submission of consent forms for obtaining 
wage and claim information from State Wage Information Collection 
Agencies (SWICAs).
    (4) Any information supplied by the family must be true and 
complete.
    (c) Family release and consent. (1) As a condition of admission to 
or continued occupancy of a unit with Section 8 assistance, the owner 
must require the family head, and such other family members as the owner 
designates, to execute a HUD-approved release and consent form 
(including any release and consent as required under Sec. 5.230 of this 
title) authorizing any depository or private source of income, or any 
Federal, State or local agency, to furnish or release to the owner or 
HUD such information as the owner or HUD determines to be necessary.
    (2) 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 the 
Section 8 program.
    (d) Owner responsibility for verification. The owner must obtain and 
document in the family file third party verification of the following 
factors, or must document in the file why third party verification was 
not available:
    (1) Reported family annual income;
    (2) The value of assets;
    (3) Expenses related to deductions from annual income; and
    (4) Other factors that affect the determination of adjusted income.

[65 FR 16721, Mar. 29, 2000]



Sec. 5.661  Section 8 project-based assistance programs: Approval for 
police or other security personnel to live in project.

    (a) Applicability. This section describes when a Section 8 owner may 
lease a Section 8 unit to police or other

[[Page 90]]

security personnel with continued Section 8 assistance for the unit. 
This section applies to the Section 8 project-based assistance programs.
    (b) Terms. (1) Security personnel means:
    (i) A police officer, or
    (ii) A qualified security professional, with adequate training and 
experience to provide security services for project residents.
    (2) Police officer means a person employed on a full-time basis as a 
duly licensed professional police officer by a Federal, State or local 
government or by any agency of these governments.
    (3) Security includes the protection of project residents, including 
resident project management from criminal or other activity that is a 
threat to person or property, or that arouses fears of such threat.
    (c) Owner application. (1) The owner may submit a written 
application to the contract administrator (PHA or HUD) for approval to 
lease an available unit in a Section 8 project to security personnel who 
would not otherwise be eligible for Section 8 assistance, for the 
purpose of increasing security for Section 8 families residing in the 
project. (2) The owner's application must include the following 
information:
    (i) A description of criminal activities in the project and the 
surrounding community, and the effect of criminal activity on the 
security of project residents.
    (ii) Qualifications of security personnel who will reside in the 
project, and the period of residence by such personnel. How owner 
proposes to check backgrounds and qualifications of any security 
personnel who will reside in the project.
    (iii) Full disclosure of any family relationship between the owner 
and any security personnel. For this purpose, ``owner'' includes a 
principal or other interested party.
    (iv) How residence by security personnel in a project unit will 
increase security for Section 8 assisted families residing in the 
project.
    (v) The amount payable monthly as rent to the unit owner by security 
personnel residing in the project (including a description of how this 
amount is determined), and the amount of any other compensation by the 
owner to such resident security personnel.
    (vi) The terms of occupancy by such security personnel. The lease by 
owner to the approved security personnel may provide that occupancy of 
the unit is authorized only while the security personnel is 
satisfactorily performing any agreed responsibilities and functions for 
project security.
    (vii) Other information as requested by the contract administrator.
    (d) Action by contract administrator. (1) The contract administrator 
shall have discretion to approve or disapprove owner's application, and 
to impose conditions for approval of occupancy by security personnel in 
a section 8 project unit.
    (2) Notice of approval by the contract administrator shall specify 
the term of such approved occupancy. Such approval may be withdrawn at 
the discretion of the contract administrator, for example, if the 
contract administrator determines that such occupancy is not providing 
adequate security benefits as proposed in the owner's application; or 
that security benefits from such occupancy are not a sufficient return 
for program costs.
    (e) Housing assistance payment and rent. (1) During approved 
occupancy by security personnel as provided in this section, the amount 
of the monthly housing assistance payment to the owner shall be equal to 
the contract rent (as determined in accordance with the HAP contract and 
HUD requirements) minus the amount (as approved by the contract 
administrator) of rent payable monthly as rent to the unit owner by such 
security personnel. The owner shall bear the risk of collecting such 
rent from such security personnel, and the amount of the housing 
assistance payment shall not be increased because of non-payment by such 
security personnel. The owner shall not be entitled to receive any 
vacancy payment for the period following occupancy by such security 
personnel.
    (2) In approving the amount of monthly rent payable by security 
personnel for occupancy of a contract unit, the contract administrator 
may consider whether security services to be performed are an adequate 
return for housing assistance payments on the

[[Page 91]]

unit, or whether the cost of security services should be borne by the 
owner from other project income.

[65 FR 16721, Mar. 29, 2000]

    Effective Date Note: At 65 FR 16721, Mar. 29, 2000, Sec. 5.661 was 
added. This section contains information collection and recordkeeping 
requirements and will not become effective until approval has been given 
by the Office of Management and Budget.



   Subpart G_Physical Condition Standards and Inspection Requirements

    Source: 63 FR 46577, Sept. 1, 1998, unless otherwise noted.



Sec. 5.701  Applicability.

    (a) This subpart applies to housing assisted under the HUD programs 
listed in 24 CFR 200.853(a).
    (b) This subpart applies to housing with mortgages insured or held 
by HUD, or housing that is receiving assistance from HUD, under the 
programs listed in 24 CFR 200.853(b).
    (c) This subpart also applies to Public Housing (housing receiving 
assistance under the U.S. Housing Act of 1937, other than under section 
8 of the Act).
    (d) For purposes of this subpart, the term ``HUD housing'' means the 
types of housing listed in paragraphs (a), (b), and (c) of this section.

[63 FR 46577, Sept. 1, 1998, as amended at 65 FR 77240, Dec. 8, 2000]



Sec. 5.703  Physical condition standards for HUD housing that is decent, 
safe, sanitary and in good repair (DSS/GR).

    HUD housing must be decent, safe, sanitary and in good repair. 
Owners of housing described in Sec. 5.701(a), mortgagors of housing 
described in Sec. 5.701(b), and PHAs and other entities approved by HUD 
owning housing described in Sec. 5.701(c), must maintain such housing 
in a manner that meets the physical condition standards set forth in 
this section in order to be considered decent, safe, sanitary and in 
good repair. These standards address the major areas of the HUD housing: 
the site; the building exterior; the building systems; the dwelling 
units; the common areas; and health and safety considerations.
    (a) Site. The site components, such as fencing and retaining walls, 
grounds, lighting, mailboxes/project signs, parking lots/driveways, play 
areas and equipment, refuse disposal, roads, storm drainage and walkways 
must be free of health and safety hazards and be in good repair. The 
site must not be subject to material adverse conditions, such as 
abandoned vehicles, dangerous walks or steps, poor drainage, septic tank 
back-ups, sewer hazards, excess accumulations of trash, vermin or rodent 
infestation or fire hazards.
    (b) Building exterior. Each building on the site must be 
structurally sound, secure, habitable, and in good repair. Each 
building's doors, fire escapes, foundations, lighting, roofs, walls, and 
windows, where applicable, must be free of health and safety hazards, 
operable, and in good repair.
    (c) Building systems. Each building's domestic water, electrical 
system, elevators, emergency power, fire protection, HVAC, and sanitary 
system must be free of health and safety hazards, functionally adequate, 
operable, and in good repair.
    (d) Dwelling units. (1) Each dwelling unit within a building must be 
structurally sound, habitable, and in good repair. All areas and aspects 
of the dwelling unit (for example, the unit's bathroom, call-for-aid (if 
applicable), ceiling, doors, electrical systems, floors, hot water 
heater, HVAC (where individual units are provided), kitchen, lighting, 
outlets/switches, patio/porch/balcony, smoke detectors, stairs, walls, 
and windows) must be free of health and safety hazards, functionally 
adequate, operable, and in good repair.
    (2) Where applicable, the dwelling unit must have hot and cold 
running water, including an adequate source of potable water (note for 
example that single room occupancy units need not contain water 
facilities).
    (3) If the dwelling unit includes its own sanitary facility, it must 
be in proper operating condition, usable in privacy, and adequate for 
personal hygiene and the disposal of human waste.
    (4) The dwelling unit must include at least one battery-operated or 
hard-

[[Page 92]]

wired smoke detector, in proper working condition, on each level of the 
unit.
    (e) Common areas. The common areas must be structurally sound, 
secure, and functionally adequate for the purposes intended. The 
basement/garage/carport, restrooms, closets, utility, mechanical, 
community rooms, day care, halls/corridors, stairs, kitchens, laundry 
rooms, office, porch, patio, balcony, and trash collection areas, if 
applicable, must be free of health and safety hazards, operable, and in 
good repair. All common area ceilings, doors, floors, HVAC, lighting, 
outlets/switches, smoke detectors, stairs, walls, and windows, to the 
extent applicable, must be free of health and safety hazards, operable, 
and in good repair. These standards for common areas apply, to a varying 
extent, to all HUD housing, but will be particularly relevant to 
congregate housing, independent group homes/residences, and single room 
occupancy units, in which the individual dwelling units (sleeping areas) 
do not contain kitchen and/or bathroom facilities.
    (f) Health and safety concerns. All areas and components of the 
housing must be free of health and safety hazards. These areas include, 
but are not limited to, air quality, electrical hazards, elevators, 
emergency/fire exits, flammable materials, garbage and debris, handrail 
hazards, infestation, and lead-based paint. For example, the buildings 
must have fire exits that are not blocked and have hand rails that are 
undamaged and have no other observable deficiencies. The housing must 
have no evidence of infestation by rats, mice, or other vermin, or of 
garbage and debris. The housing must have no evidence of electrical 
hazards, natural hazards, or fire hazards. The dwelling units and common 
areas must have proper ventilation and be free of mold, odor (e.g., 
propane, natural gas, methane gas), or other observable deficiencies. 
The housing must comply with all requirements related to the evaluation 
and reduction of lead-based paint hazards and have available proper 
certifications of such (see 24 CFR part 35).
    (g) Compliance with State and local codes. The physical condition 
standards in this section do not supersede or preempt State and local 
codes for building and maintenance with which HUD housing must comply. 
HUD housing must continue to adhere to these codes.



Sec. 5.705  Uniform physical inspection requirements.

    Any entity responsible for conducting a physical inspection of HUD 
housing, to determine compliance with this subpart, must inspect such 
HUD housing annually in accordance with HUD-prescribed physical 
inspection procedures. The inspection must be conducted annually unless 
the program regulations governing the housing provide otherwise or 
unless HUD has provided otherwise by notice.

[65 FR 77240, Dec. 8, 2000]



             Subpart H_Uniform Financial Reporting Standards



Sec. 5.801  Uniform financial reporting standards.

    (a) Applicability. This subpart H implements uniform financial 
reporting standards for:
    (1) Public housing agencies (PHAs) receiving assistance under 
sections 5, 9, or 14 of the 1937 Act (42 U.S.C. 1437c, 1437g, and 1437l) 
(Public Housing);
    (2) PHAs as contract administrators for any Section 8 project-based 
or tenant-based housing assistance payments program, which includes 
assistance under the following programs:
    (i) Section 8 project-based housing assistance payments programs, 
including, but not limited to, the Section 8 New Construction, 
Substantial Rehabilitation, Loan Management Set-Aside, Property 
Disposition, and Moderate Rehabilitation (including the Single Room 
Occupancy program for homeless individuals);
    (ii) Section 8 Project-Based Certificate programs;
    (iii) Any program providing Section 8 project-based renewal 
contracts; and
    (iv) Section 8 tenant-based assistance under the Section 8 
Certificate and Voucher program.
    (3) Owners of housing assisted under any Section 8 project-based 
housing assistance payments program:

[[Page 93]]

    (i) Including, but not limited to, the Section 8 New Construction, 
Substantial Rehabilitation, Loan Management Set-Aside, and Property 
Disposition programs;
    (ii) Excluding the Section 8 Moderate Rehabilitation Program (which 
includes the Single Room Occupancy program for homeless individuals) and 
the Section 8 Project-Based Certificate Program;
    (4) Owners of multifamily projects receiving direct or indirect 
assistance from HUD, or with mortgages insured, coinsured, or held by 
HUD, including but not limited to housing under the following HUD 
programs:
    (i) Section 202 Program of Supportive Housing for the Elderly;
    (ii) Section 811 Program of Supportive Housing for Persons with 
Disabilities;
    (iii) Section 202 loan program for projects for the elderly and 
handicapped (including 202/8 projects and 202/162 projects);
    (iv) Section 207 of the National Housing Act (NHA) (12 U.S.C. 1701 
et seq.) (Rental Housing Insurance);
    (v) Section 213 of the NHA (Cooperative Housing Insurance);
    (vi) Section 220 of the NHA (Rehabilitation and Neighborhood 
Conservation Housing Insurance);
    (vii) Section 221(d) (3) and (5) of the NHA (Housing for Moderate 
Income and Displaced Families);
    (viii) Section 221(d)(4) of the NHA (Housing for Moderate Income and 
Displaced Families);
    (ix) Section 231 of the NHA (Housing for Elderly Persons);
    (x) Section 232 of the NHA (Mortgage Insurance for Nursing Homes, 
Intermediate Care Facilities, Board and Care Homes);
    (xi) Section 234(d) of the NHA (Rental) (Mortgage Insurance for 
Condominiums);
    (xii) Section 236 of the NHA (Rental and Cooperative Housing for 
Lower Income Families);
    (xiii) Section 241 of the NHA (Supplemental Loans for Multifamily 
Projects); and
    (5) HUD-approved Title I and Title II nonsupervised lenders, 
nonsupervised mortgagees, and loan correspondents.
    (b) Submission of financial information. Entities (or individuals) 
to which this subpart is applicable must provide to HUD, on an annual 
basis, such financial information as required by HUD. This financial 
information must be:
    (1) Prepared in accordance with Generally Accepted Accounting 
Principles as further defined by HUD in supplementary guidance;
    (2) Submitted electronically to HUD through the internet, or in such 
other electronic format designated by HUD, or in such non-electronic 
format as HUD may allow if the burden or cost of electronic reporting is 
determined by HUD to be excessive; and
    (3) Submitted in such form and substance as prescribed by HUD.
    (c) Annual financial report filing dates. (1) For entities listed in 
paragraphs (a)(1) and (2) of this section, the financial information to 
be submitted to HUD in accordance with paragraph (b) of this section, 
must be submitted to HUD annually, no later than 60 days after the end 
of the fiscal year of the reporting period, and as otherwise provided by 
law (for public housing agencies, see also 24 CFR 903.33).
    (2) For entities listed in paragraphs (a)(3) and (4) of this 
section, the financial information to be submitted to HUD in accordance 
with paragraph (b) of this section, must be submitted to HUD annually, 
no later than 90 days after the end of the fiscal year of the reporting 
period, and as otherwise provided by law.
    (3) For those entities listed in paragraph (a)(5) of this section, 
the financial information to be submitted to HUD in accordance with 
paragraph (b) of this section must be submitted to HUD annually, no 
later than 90 days after the end of the fiscal year (or within an 
extended time if an extension is granted at the sole discretion of the 
Secretary). An extension request must be received no earlier than 45 
days and no later than 15 days prior to the submission deadline.
    (d) Reporting compliance dates. Entities (or individuals) that are 
subject to the reporting requirements in this section must commence 
compliance with these requirements as follows:

[[Page 94]]

    (1) For PHAs listed in paragraphs (a)(1) and (a)(2) of this section, 
the requirements of this section will begin with those PHAs with fiscal 
years ending September 30, 1999 and later. Unaudited financial 
statements will be required 60 days after the PHA's fiscal year end, and 
audited financial statements will then be required no later than 9 
months after the PHA's fiscal year end, in accordance with the Single 
Audit Act and OMB Circular A-133 (See 24 CFR 84.26). A PHA with a fiscal 
year ending September 30, 1999 that elects to submit its unaudited 
financial report earlier than the due date of November 30, 1999 must 
submit its report as required in this section. On or after September 30, 
1998, but prior to November 30, 1999 (except for a PHA with its fiscal 
year ending September 30, 1999), PHAs may submit their financial reports 
in accordance with this section.
    (2) For entities listed in paragraphs (a)(3) and (a)(4) of this 
section, the requirements of this section will begin with those entities 
with fiscal years ending December 31, 1998 and later. Entities listed in 
paragraphs (a)(3) and (a)(4) of this section with fiscal years ending 
December 31, 1998 that elect to submit their reports earlier than the 
due date must submit their financial reports as required in this 
section. On or after September 30, 1998 but prior to January 1, 1999, 
these entities may submit their financial reports in accordance with 
this section.
    (3) The requirements of this section apply to the entities listed in 
paragraph (a)(5) of this section with fiscal years ending on or after 
September 30, 2002. Audited financial statements submitted by lenders 
with fiscal years ending before September 30, 2002, may either be 
submitted in paper or electronically at the lenders' option. Audited 
financial statements submitted by lenders with fiscal years ending on or 
after September 30, 2002, must be submitted electronically.
    (e) Limitation on changing fiscal years. To allow for a period of 
consistent assessment of the financial reports submitted to HUD under 
this subpart part, PHAs listed in paragraphs (a)(1) and (a)(2) of this 
section will not be allowed to change their fiscal years for their first 
three full fiscal years following October 1, 1998.
    (f) Responsibility for submission of financial report. The 
responsibility for submission of the financial report due to HUD under 
this section rests with the individuals and entities listed in paragraph 
(a) of this section.

[63 FR 46591, Sept. 1, 1998, as amended at 64 FR 1505, Jan. 11, 1999; 64 
FR 33755, June 24, 1999; 65 FR 16295, Mar. 27, 2000; 67 FR 53451, Aug. 
15, 2002]



    Subpart I_Preventing Crime in Federally Assisted Housing_Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol Abuse

    Source: 66 FR 28792, May 24, 2001, unless otherwise noted.

                                 General



Sec. 5.850  Which subsidized housing is covered by this subpart?

    (a) If you are the owner of federally assisted housing, your 
federally assisted housing is covered, except as provided in paragraph 
(b) or (c) of this section.
    (b) If you are operating public housing, this subpart does not 
apply, but similar provisions applicable to public housing units are 
found in parts 960 and 966 of this title. If you administer tenant-based 
assistance under Section 8 or you are the owner of housing assisted with 
tenant-based assistance under Section 8, this subpart does not apply to 
you, but similar provisions that do apply are located in part 982 of 
this title.
    (c) If you own or administer housing assisted by the Rural Housing 
Administration under section 514 or section 515 of the Housing Act of 
1949, this subpart does not apply to you.



Sec. 5.851  What authority do I have to screen applicants and to evict 
tenants?

    (a) Screening applicants. You are authorized to screen applicants 
for the programs covered by this part. The provisions of this subpart 
implement statutory directives that either require

[[Page 95]]

or permit you to take action to deny admission to applicants under 
certain circumstances in accordance with established standards, as 
described in this subpart. The provisions of this subpart do not 
constrain your authority to screen out applicants who you determined are 
unsuitable under your standards for admission.
    (b) Terminating tenancy. You are authorized to terminate tenancy of 
tenants, in accordance with your leases and landlord-tenant law for the 
programs covered by this part. The provisions of this subpart implement 
statutory directives that either require or permit you to terminate 
tenancy under certain circumstances, as provided in 42 U.S.C. 1437f, 
1437n, and 13662, in accordance with established standards, as described 
in this subpart. You retain authority to terminate tenancy on any basis 
that is otherwise authorized.



Sec. 5.852  What discretion do I have in screening and eviction actions?

    (a) General. If the law and regulation permit you to take an action 
but do not require action to be taken, you may take or not take the 
action in accordance with your standards for admission and eviction. 
Consistent with the application of your admission and eviction 
standards, you may consider all of the circumstances relevant to a 
particular admission or eviction case, such as:
    (1) The seriousness of the offending action;
    (2) The effect on the community of denial or termination or the 
failure of the responsible entity to take such action;
    (3) The extent of participation by the leaseholder in the offending 
action;
    (4) The effect of denial of admission or termination of tenancy on 
household members not involved in the offending action;
    (5) The demand for assisted housing by families who will adhere to 
lease responsibilities;
    (6) The extent to which the leaseholder has shown personal 
responsibility and taken all reasonable steps to prevent or mitigate the 
offending action; and
    (7) The effect of the responsible entity's action on the integrity 
of the program.
    (b) Exclusion of culpable household member. You may require an 
applicant (or tenant) to exclude a household member in order to be 
admitted to the housing program (or continue to reside in the assisted 
unit), where that household member has participated in or been culpable 
for action or failure to act that warrants denial (or termination).
    (c) Consideration of rehabilitation. (1) In determining whether to 
deny admission or terminate tenancy for illegal use of drugs or alcohol 
abuse by a household member who is no longer engaged in such behavior, 
you may consider whether such household member is participating in or 
has successfully completed a supervised drug or alcohol rehabilitation 
program, or has otherwise been rehabilitated successfully (42 U.S.C. 
13661). For this purpose, you may require the applicant or tenant to 
submit evidence of the household member's current participation in, or 
successful completion of, a supervised drug or alcohol rehabilitation 
program or evidence of otherwise having been rehabilitated successfully.
    (2) If rehabilitation is not an element of the eligibility 
determination (see Sec. 5.854(a)(1) for the case where it must be 
considered), you may choose not to consider whether the person has been 
rehabilitated.
    (d) Length of period of mandatory prohibition on admission. If a 
statute requires that you prohibit admission of persons for a prescribed 
period of time after some disqualifying behavior or event, you may apply 
that prohibition for a longer period of time.
    (e) Nondiscrimination limitation. Your admission and eviction 
actions must be consistent with fair housing and equal opportunity 
provisions of Sec. 5.105.



Sec. 5.853  Definitions.

    (a) Terms found elsewhere. The following terms are defined in 
subpart A of this part: 1937 Act, covered person, drug, drug-related 
criminal activity, federally assisted housing, guest, household, HUD, 
other person under the tenant's control, premises, public housing, 
public

[[Page 96]]

housing agency (PHA), Section 8, violent criminal activity.
    (b) Additional terms used in this part are as follows.
    Currently engaging in. With respect to behavior such as illegal use 
of a drug, other drug-related criminal activity, or other criminal 
activity, currently engaging in means that the individual has engaged in 
the behavior recently enough to justify a reasonable belief that the 
individual's behavior is current.
    Owner. The owner of federally assisted housing.
    Responsible entity. For the Section 8 project-based certificate or 
project-based voucher program (part 983 of this title) and the Section 8 
moderate rehabilitation program (part 882 of this title), responsible 
entity means the PHA administering the program under an Annual 
Contributions Contract with HUD. For all other federally assisted 
housing, the responsible entity means the owner of the housing.

                           Denying Admissions



Sec. 5.854  When must I prohibit admission of individuals who have engaged 
in drug-related criminal activity?

    (a) You must prohibit admission to your federally assisted housing 
of an applicant for three years from the date of eviction if any 
household member has been evicted from federally assisted housing for 
drug-related criminal activity. However, you may admit the household if:
    (1) The evicted household member who engaged in drug-related 
criminal activity has successfully completed an approved supervised drug 
rehabilitation program; or
    (2) The circumstances leading to the eviction no longer exist (for 
example, the criminal household member has died or is imprisoned).
    (b) You must establish standards that prohibit admission of a 
household to federally assisted housing if:
    (1) You determine that any household member is currently engaging in 
illegal use of a drug; or
    (2) You determine that you have reasonable cause to believe that a 
household member's illegal use or a pattern of illegal use of a drug may 
interfere with the health, safety, or right to peaceful enjoyment of the 
premises by other residents.



Sec. 5.855  When am I specifically authorized to prohibit admission of 
individuals who have engaged in criminal activity?

    (a) You may prohibit admission of a household to federally assisted 
housing under your standards if you determine that any household member 
is currently engaging in, or has engaged in during a reasonable time 
before the admission decision:
    (1) Drug-related criminal activity;
    (2) Violent criminal activity;
    (3) Other criminal activity that would threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents; or
    (4) Other criminal activity that would threaten the health or safety 
of the PHA or owner or any employee, contractor, subcontractor or agent 
of the PHA or owner who is involved in the housing operations.
    (b) You may establish a period before the admission decision during 
which an applicant must not have engaged in the activities specified in 
paragraph (a) of this section (reasonable time).
    (c) If you previously denied admission to an applicant because of a 
determination concerning a member of the household under paragraph (a) 
of this section, you may reconsider the applicant if you have sufficient 
evidence that the members of the household are not currently engaged in, 
and have not engaged in, such criminal activity during a reasonable 
period, determined by you, before the admission decision.
    (1) You would have sufficient evidence if the household member 
submitted a certification that she or he is not currently engaged in and 
has not engaged in such criminal activity during the specified period 
and provided supporting information from such sources as a probation 
officer, a landlord, neighbors, social service agency workers and 
criminal records, which you verified. (See subpart J of this part for 
one method of checking criminal records.)
    (2) For purposes of this section, a household member is currently 
engaged in the criminal activity if the person

[[Page 97]]

has engaged in the behavior recently enough to justify a reasonable 
belief that the behavior is current.



Sec. 5.856  When must I prohibit admission of sex offenders?

    You must establish standards that prohibit admission to federally 
assisted housing if any member of the household is subject to a lifetime 
registration requirement under a State sex offender registration 
program. In the screening of applicants, you must perform necessary 
criminal history background checks in the State where the housing is 
located and in other States where the household members are known to 
have resided. (See Sec. 5.905.)



Sec. 5.857  When must I prohibit admission of alcohol abusers?

    You must establish standards that prohibit admission to federally 
assisted housing if you determine you have reasonable cause to believe 
that a household member's abuse or pattern of abuse of alcohol 
interferes with the health, safety, or right to peaceful enjoyment of 
the premises by other residents.

                           Terminating Tenancy



Sec. 5.858  What authority do I have to evict drug criminals?

    The lease must provide that drug-related criminal activity engaged 
in on or near the premises by any tenant, household member, or guest, 
and any such activity engaged in on the premises by any other person 
under the tenant's control, is grounds for you to terminate tenancy. In 
addition, the lease must allow you to evict a family when you determine 
that a household member is illegally using a drug or when you determine 
that a pattern of illegal use of a drug interferes with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.



Sec. 5.859  When am I specifically authorized to evict other criminals?

    (a) Threat to other residents. The lease must provide that the owner 
may terminate tenancy for any of the following types of criminal 
activity by a covered person:
    (1) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of the premises by other residents 
(including property management staff residing on the premises); or
    (2) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of their residences by persons residing in 
the immediate vicinity of the premises.
    (b) Fugitive felon or parole violator. The lease must provide that 
you may terminate the tenancy during the term of the lease if a tenant 
is:
    (1) Fleeing to avoid prosecution, or custody or confinement after 
conviction, for a crime, or attempt to commit a crime, that is a felony 
under the laws of the place from which the individual flees, or that, in 
the case of the State of New Jersey, is a high misdemeanor; or
    (2) Violating a condition of probation or parole imposed under 
Federal or State law.



Sec. 5.860  When am I specifically authorized to evict alcohol abusers?

    The lease must provide that you may terminate the tenancy if you 
determine that a household member's abuse or pattern of abuse of alcohol 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other residents.



Sec. 5.861  What evidence of criminal activity must I have to evict?

    You may terminate tenancy and evict the tenant through judicial 
action for criminal activity by a covered person in accordance with this 
subpart if you determine that the covered person has engaged in the 
criminal activity, regardless of whether the covered person has been 
arrested or convicted for such activity and without satisfying a 
criminal conviction standard of proof of the activity.



          Subpart J_Access to Criminal Records and Information

    Source: 66 FR 28794, May 24, 2001, unless otherwise noted.

[[Page 98]]



Sec. 5.901  To what criminal records and searches does this subpart apply?

    (a) General criminal records searches. This subpart applies to 
criminal conviction background checks by PHAs that administer the 
Section 8 and public housing programs when they obtain criminal 
conviction records, under the authority of section 6(q) of the 1937 Act 
(42 U.S.C. 1437d(q)), from a law enforcement agency to prevent admission 
of criminals to public housing and Section 8 housing and to assist in 
lease enforcement and eviction.
    (b) Sex offender registration records searches. This subpart applies 
to PHAs that administer the Section 8 and public housing programs when 
they obtain sex offender registration information from State and local 
agencies, under the authority of 42 U.S.C. 13663, to prevent admission 
of dangerous sex offenders to federally assisted housing.
    (c) Excluded records searches. The provisions of this subpart do not 
apply to criminal conviction information or sex offender information 
searches by a PHA or others of information from law enforcement agencies 
or other sources other than as provided under this subpart.



Sec. 5.902  Definitions.

    (a) Terms found elsewhere. The following terms used in this subpart 
are defined in subpart A of this part: 1937 Act, drug, federally 
assisted housing, household, HUD, public housing, public housing agency 
(PHA), Section 8.
    (b) Additional terms used in this subpart are as follows:
    Adult. A person who is 18 years of age or older, or who has been 
convicted of a crime as an adult under any Federal, State, or tribal 
law.
    Covered housing. Public housing, project-based assistance under 
section 8 (including new construction and substantial rehabilitation 
projects), and tenant-based assistance under section 8.
    Law enforcement agency. The National Crime Information Center 
(NCIC), police departments and other law enforcement agencies that hold 
criminal conviction records.
    Owner. The owner of federally assisted housing.
    Responsible entity. For the public housing program, the Section 8 
tenant-based assistance program (part 982 of this title), the Section 8 
project-based certificate or project-based voucher program (part 983 of 
this title), and the Section 8 moderate rehabilitation program (part 882 
of this title), responsible entity means the PHA administering the 
program under an Annual Contributions Contract with HUD. For all other 
Section 8 programs, responsible entity means the Section 8 owner.



Sec. 5.903  What special authority is there to obtain access to criminal 
records?

    (a) Authority. If you are a PHA that administers the Section 8 
program and/or the public housing program, this section authorizes you 
to obtain criminal conviction records from a law enforcement agency, as 
defined in Sec. 5.902. You may use the criminal conviction records that 
you obtain from a law enforcement agency under the authority of this 
section to screen applicants for admission to covered housing programs 
and for lease enforcement or eviction of families residing in public 
housing or receiving Section 8 project-based assistance.
    (b) Consent for release of criminal conviction records. (1) In order 
to obtain access to records under this section, as a responsible entity 
you must require every applicant family to submit a consent form signed 
by each adult household member.
    (2) By execution of the consent form, an adult household member 
consents that:
    (i) Any law enforcement agency may release criminal conviction 
records concerning the household member to a PHA in accordance with this 
section;
    (ii) The PHA may receive the criminal conviction records from a law 
enforcement agency, and may use the records in accordance with this 
section.
    (c) Procedure for PHA. (1) When the law enforcement agency receives 
your request, the law enforcement agency must promptly release to you a 
certified copy of any criminal conviction records concerning the 
household member in the possession or control of the law enforcement 
agency. NCIC

[[Page 99]]

records must be provided in accordance with NCIC procedures.
    (2) The law enforcement agency may charge you a reasonable fee for 
releasing criminal conviction records.
    (d) Owner access to criminal records--(1) General. (i) If an owner 
submits a request to the PHA for criminal records concerning an adult 
member of an applicant or resident household, in accordance with the 
provisions of paragraph (d) of this section, the PHA must request the 
criminal conviction records from the appropriate law enforcement agency 
or agencies, as determined by the PHA.
    (ii) If the PHA receives criminal conviction records requested by an 
owner, the PHA must determine whether criminal action by a household 
member, as shown by such criminal conviction records, may be a basis for 
applicant screening, lease enforcement or eviction, as applicable in 
accordance with HUD regulations and the owner criteria.
    (iii) The PHA must notify the owner whether the PHA has received 
criminal conviction records concerning the household member, and of its 
determination whether such criminal conviction records may be a basis 
for applicant screening, lease enforcement or eviction. However, except 
as provided in paragraph (e)(2)(ii) of this section, the PHA must not 
disclose the household member's criminal conviction record or the 
content of that record to the owner.
    (2) Screening. If you are an owner of covered housing, you may 
request that the PHA in the jurisdiction of the property obtain criminal 
conviction records of an adult household member from a law enforcement 
agency on your behalf for the purpose of screening applicants.
    (i) Your request must include a copy of the consent form, signed by 
the household member.
    (ii) Your request must include your standards for prohibiting 
admission of drug criminals in accordance with Sec. 5.854, and for 
prohibiting admission of other criminals in accordance with Sec. 5.855.
    (3) Eviction or lease enforcement. If you are an owner of a unit 
with Section 8 project-based assistance, you may request that the PHA in 
the location of the project obtain criminal conviction records of a 
household member from an appropriate law enforcement agency on your 
behalf in connection with lease enforcement or eviction.
    (i) Your request must include a copy of the consent form, signed by 
the household member.
    (ii) If you intend to use the PHA determination regarding any such 
criminal conviction records in connection with eviction, your request 
must include your standards for evicting drug criminals in accordance 
with Sec. 5.857, and for evicting other criminals in accordance with 
Sec. 5.858.
    (iii) If you intend to use the PHA determination regarding any such 
criminal conviction records for lease enforcement other than eviction, 
your request must include your standards for lease enforcement because 
of criminal activity by members of a household.
    (4) Fees. If an owner requests a PHA to obtain criminal conviction 
records in accordance with this section, the PHA may charge the owner 
reasonable fees for making the request on behalf of the owner and for 
taking other actions for the owner. The PHA may require the owner to 
reimburse costs incurred by the PHA, including reimbursement of any fees 
charged to the PHA by the law enforcement agency, the PHA's own related 
staff and administrative costs. The owner may not pass along to the 
applicant or tenant the costs of a criminal records check.
    (e) Permitted use and disclosure of criminal conviction records 
received by PHA--(1) Use of records. Criminal conviction records 
received by a PHA from a law enforcement agency in accordance with this 
section may only be used for the following purposes:
    (i) Applicant screening. (A) PHA screening of applicants for 
admission to public housing (part 960 of this title);
    (B) PHA screening of applicants for admission to the Housing Choice 
Voucher Program (section 8 tenant-based assistance) (part 982 of this 
title);
    (C) PHA screening of applicants for admission to the Section 8 
moderate rehabilitation program (part 882 of this title); or the Section 
8 project-based certificate or project-based voucher program (part 983 
of this title); or

[[Page 100]]

    (D) PHA screening concerning criminal conviction of applicants for 
admission to Section 8 project-based assistance, at the request of the 
owner. (For requirements governing use of criminal conviction records 
obtained by a PHA at the request of a Section 8 owner under this 
section, see paragraph (d) of this section.)
    (ii) Lease enforcement and eviction. (A) PHA enforcement of public 
housing leases and PHA eviction of public housing residents;
    (B) Enforcement of leases by a Section 8 project owner and eviction 
of residents by a Section 8 project owner. (However, criminal conviction 
records received by a PHA from a law enforcement agency under this 
section may not be used for lease enforcement or eviction of residents 
receiving Section 8 tenant-based assistance.)
    (2) PHA disclosure of records. (i) A PHA may disclose the criminal 
conviction records which the PHA receives from a law enforcement agency 
only as follows:
    (A) To officers or employees of the PHA, or to authorized 
representatives of the PHA who have a job-related need to have access to 
the information. For example, if the PHA is seeking to evict a public 
housing tenant on the basis of criminal activity as shown in criminal 
conviction records provided by a law enforcement agency, the records may 
be disclosed to PHA employees performing functions related to the 
eviction, or to a PHA hearing officer conducting an administrative 
grievance hearing concerning the proposed eviction.
    (B) To the owner for use in connection with judicial eviction 
proceedings by the owner to the extent necessary in connection with a 
judicial eviction proceeding. For example, criminal conviction records 
may be included in pleadings or other papers filed in an eviction 
action, may be disclosed to parties to the action or the court, and may 
be filed in court or offered as evidence.
    (ii) This disclosure may be made only if the following conditions 
are satisfied:
    (A) If the PHA has determined that criminal activity by the 
household member as shown by such records received from a law 
enforcement agency may be a basis for eviction from a Section 8 unit; 
and
    (B) If the owner certifies in writing that it will use the criminal 
conviction records only for the purpose and only to the extent necessary 
to seek eviction in a judicial proceeding of a Section 8 tenant based on 
the criminal activity by the household member that is described in the 
criminal conviction records.
    (iii) The PHA may rely on an owner's certification that the criminal 
record is necessary to proceed with a judicial eviction to evict the 
tenant based on criminal activity of the identified household member, as 
shown in the criminal conviction record.
    (iv) Upon disclosure as necessary in connection with judicial 
eviction proceedings, the PHA is not responsible for controlling access 
to or knowledge of such records after such disclosure.
    (f) Opportunity to dispute. If a PHA obtains criminal record 
information from a State or local agency under this section showing that 
a household member has been convicted of a crime relevant to applicant 
screening, lease enforcement or eviction, the PHA must notify the 
household of the proposed action to be based on the information and must 
provide the subject of the record and the applicant or tenant a copy of 
such information, and an opportunity to dispute the accuracy and 
relevance of the information. This opportunity must be provided before a 
denial of admission, eviction or lease enforcement action on the basis 
of such information.
    (g) Records management. Consistent with the limitations on 
disclosure of records in paragraph (e) of this section, the PHA must 
establish and implement a system of records management that ensures that 
any criminal record received by the PHA from a law enforcement agency 
is:
    (1) Maintained confidentially;
    (2) Not misused or improperly disseminated; and
    (3) Destroyed, once the purpose(s) for which the record was 
requested has been accomplished, including expiration of the period for 
filing a challenge to the PHA action without institution of a challenge 
or final disposition of any such litigation.

[[Page 101]]

    (h) Penalties for improper release of information--(1) Criminal 
penalty. Conviction for a misdemeanor and imposition of a penalty of not 
more than $5,000 is the potential for:
    (i) Any person, including an officer, employee, or authorized 
representative of any PHA or of any project owner, who knowingly and 
willfully requests or obtains any information concerning an applicant 
for, or tenant of, covered housing assistance under the authority of 
this section under false pretenses; or
    (ii) Any person, including an officer, employee, or authorized 
representative of any PHA or a project owner, who knowingly and 
willfully discloses any such information in any manner to any individual 
not entitled under any law to receive the information.
    (2) Civil liability. (i) A PHA may be held liable to any applicant 
for, or tenant of, covered housing assistance affected by either of the 
following:
    (A) A negligent or knowing disclosure of criminal records 
information obtained under the authority of this section about such 
person by an officer, employee, or authorized representative of the PHA 
if the disclosure is not authorized by this section; or
    (B) Any other negligent or knowing action that is inconsistent with 
this section.
    (ii) An applicant for, or tenant of, covered housing assistance may 
seek relief against a PHA in these circumstances by bringing a civil 
action for damages and such other relief as may be appropriate against 
the PHA responsible for such unauthorized action. The United States 
district court in which the affected applicant or tenant resides, in 
which the unauthorized action occurred, or in which the officer, 
employee, or representative alleged to be responsible resides, has 
jurisdiction. Appropriate relief may include reasonable attorney's fees 
and other litigation costs.



Sec. 5.905  What special authority is there to obtain access to sex 
offender registration information?

    (a) PHA obligation to obtain sex offender registration information. 
(1) A PHA that administers a Section 8 or public housing program under 
an Annual Contributions Contract with HUD must carry out background 
checks necessary to determine whether a member of a household applying 
for admission to any federally assisted housing program is subject to a 
lifetime sex offender registration requirement under a State sex 
offender registration program. This check must be carried out with 
respect to the State in which the housing is located and with respect to 
States where members of the applicant household are known to have 
resided.
    (2) If the PHA requests such information from any State or local 
agency responsible for the collection or maintenance of such 
information, the State or local agency must promptly provide the PHA 
such information in its possession or control.
    (3) The State or local agency may charge a reasonable fee for 
providing the information.
    (b) Owner's request for sex offender registration information--(1) 
General. An owner of federally assisted housing that is located in the 
jurisdiction of a PHA that administers a Section 8 or public housing 
program under an Annual Contributions Contract with HUD may request that 
the PHA obtain information necessary to determine whether a household 
member is subject to a lifetime registration requirement under a State 
sex offender registration requirement.
    (2) Procedure. If the request is made in accordance with the 
provisions of paragraph (b) of this section:
    (i) The PHA must request the information from a State or local 
agency;
    (ii) The State or local agency must promptly provide the PHA such 
information in its possession or control;
    (iii) The PHA must determine whether such information may be a basis 
for applicant screening, lease enforcement or eviction, based on the 
criteria used by the owner as specified in the owner's request, and 
inform the owner of the determination.
    (iv) The PHA must notify the owner of its determination whether sex 
offender registration information received by the PHA under this section 
concerning a household member may be a basis for applicant screening, 
lease enforcement or eviction in accordance with HUD requirements and 
the criteria used by the owner.

[[Page 102]]

    (3) Contents of request. As the owner, your request must specify 
whether you are asking the PHA to obtain the sex offender registration 
information concerning the household member for applicant screening, for 
lease enforcement, or for eviction and include the following 
information:
    (i) Addresses or other information about where members of the 
household are known to have lived.
    (ii) If you intend to use the PHA determination regarding any such 
sex offender registration information for applicant screening, your 
request must include your standards in accordance with Sec. 5.855(c) 
for prohibiting admission of persons subject to a lifetime sex offender 
registration requirement.
    (iii) If you intend to use the PHA determination regarding any such 
sex offender registration information for eviction, your request must 
include your standards for evicting persons subject to a lifetime 
registration requirement in accordance with Sec. 5.858.
    (iv) If you intend to use the PHA determination regarding any such 
sex offender registration information for lease enforcement other than 
eviction, your request must include your standards for lease enforcement 
because of criminal activity by members of a household.
    (4) PHA disclosure of records. The PHA must not disclose to the 
owner any sex offender registration information obtained by the PHA 
under this section.
    (5) Fees. If an owner asks a PHA to obtain sex offender registration 
information concerning a household member in accordance with this 
section, the PHA may charge the owner reasonable fees for making the 
request on behalf of the owner and for taking other actions for the 
owner. The PHA may require the owner to reimburse costs incurred by the 
PHA, including reimbursement of any fees charged to the PHA by a State 
or local agency for releasing the information, the PHA's own related 
staff and administrative costs. The owner may not pass along to the 
applicant or tenant the costs of a sex offender registration records 
check.
    (c) Records management. (1) The PHA must establish and implement a 
system of records management that ensures that any sex offender 
registration information record received by the PHA from a State or 
local agency under this section is:
    (i) Maintained confidentially;
    (ii) Not misused or improperly disseminated; and
    (iii) Destroyed, once the purpose for which the record was requested 
has been accomplished, including expiration of the period for filing a 
challenge to the PHA action without institution of a challenge or final 
disposition of any such litigation.
    (2) The records management requirements do not apply to information 
that is public information, or is obtained by a PHA other than under 
this section.
    (d) Opportunity to dispute. If a PHA obtains sex offender 
registration information from a State or local agency under paragraph 
(a) of this section showing that a household member is subject to a 
lifetime sex offender registration requirement, the PHA must notify the 
household of the proposed action to be based on the information and must 
provide the subject of the record, and the applicant or tenant, with a 
copy of such information, and an opportunity to dispute the accuracy and 
relevance of the information. This opportunity must be provided before a 
denial of admission, eviction or lease enforcement action on the basis 
of such information.



              Subpart K_Application submission requirements

    Source: 69 FR 15673, Mar. 26, 2004, unless otherwise noted.

    Effective Date Note: At 69 FR 15673, Mar. 26, 2004, Subpart K was 
added, effective Apr. 26, 2004.



Sec. 5.1001  Applicability.

    This subpart applies to all applicants for HUD grants, cooperative 
agreements, capital fund or operating fund subsidy, capital advance, or 
other assistance under HUD programs, including grant programs that are 
classified by OMB as including formula grant programs or activities, but 
excluding FHA insurance and loan guarantees that are not associated with 
a grant program or grant award.

[[Page 103]]



Sec. 5.1003  Use of a universal identifier for organizations applying 
for HUD grants.

    (a) Every application for a new or renewal of a grant, cooperative 
agreement, capital fund or operating fund subsidy, capital advance, or 
other assistance, including an application or plan under a grant program 
that is classified by OMB as including formula grant programs, must 
include a Data Universal Numbering System (DUNS) number for the 
applicant.
    (b) (1) Applicants or groups of applicants under a consortium 
arrangement must have a DUNS number for the organization that is 
submitting the application for federal assistance as the lead applicant 
on behalf of the other applicants. If each organization is submitting a 
separate application as part of a group of applications, then each 
organization must include its DUNS number with its application 
submission.
    (2) If an organization is submitting an application as a sponsor or 
on behalf of other applicants, and the other entities will be receiving 
funds directly from HUD, then the applicant or sponsor must submit an 
application for funding that includes the DUNS number of each applicant 
that would receive funds directly from HUD.
    (3) If an organization is managing funds for a group of 
organizations, a DUNS number must be submitted for the managing 
organization, if it is drawing down funds directly from HUD.
    (4) If an organization is drawing down funds directly from HUD and 
subsequently turning the funds over to a management organization, then 
the management organization must obtain a DUNS number and submit the 
number to HUD.
    (c) Individuals who would personally receive a grant or other 
assistance from HUD, independent from any business or nonprofit 
organization with which they may operate or participate, are exempt from 
this requirement.
    (d) In cases where individuals apply for funding, but the funding 
will be awarded to an institution or other entity on the individual's 
behalf, the institution or entity must obtain a DUNS number and the 
individual must submit the institution's DUNS number with the 
application.
    (e) Unless an exemption is granted by OMB, HUD will not consider an 
application as complete until a valid DUNS number is provided by the 
applicant. For classes of grants and grantees subject to this part, 
exceptions to this rule must be submitted to OMB for approval in 
accordance with procedures prescribed by the Department.



PART 6_NONDISCRIMINATION IN PROGRAMS AND ACTIVITIES RECEIVING ASSISTANCE 

UNDER TITLE I OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974
--Table of Contents



                      Subpart A_General Provisions

Sec.
6.1 Purpose.
6.2 Applicability.
6.3 Definitions.
6.4 Discrimination prohibited.
6.5 Discrimination prohibited--employment.
6.6 Records to be maintained.

                          Subpart B_Enforcement

6.10 Compliance information.
6.11 Conduct of investigations.
6.12 Procedure for effecting compliance.
6.13 Hearings and appeals.

    Authority: 42 U.S.C. 3535(d) 42 U.S.C. 5309.

    Source: 64 FR 3797, Jan. 25, 1999, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 6.1  Purpose.

    The purpose of this part is to implement the provisions of section 
109 of title I of the Housing and Community Development Act of 1974 
(Title I) (42 U.S.C. 5309). Section 109 provides that no person in the 
United States shall, on the ground of race, color, national origin, 
religion, or sex, be excluded from participation in, be denied the 
benefits of, or be subjected to discrimination under any program or 
activity funded in whole or in part with Federal financial assistance. 
Section 109 does not directly prohibit discrimination on the bases of 
age or disability, and the regulations in this part 6 do not apply to 
age or disability discrimination in

[[Page 104]]

Title I programs. Instead, section 109 directs that the prohibitions 
against discrimination on the basis of age under the Age Discrimination 
Act of 1975 (42 U.S.C. 6101-6107) (Age Discrimination Act) and the 
prohibitions against discrimination on the basis of disability under 
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) (Section 
504) apply to programs or activities funded in whole or in part with 
Federal financial assistance. Thus, the regulations of 24 CFR part 8, 
which implement Section 504 for HUD programs, and the regulations of 24 
CFR part 146, which implement the Age Discrimination Act for HUD 
programs, apply to disability and age discrimination in Title I 
programs.



Sec. 6.2  Applicability.

    (a) This part applies to any program or activity funded in whole or 
in part with funds under title I of the Housing and Community 
Development Act of 1974, including Community Development Block Grants--
Entitlement, State and HUD-Administered Small Cities, and Section 108 
Loan Guarantees; Urban Development Action Grants; Economic Development 
Initiative Grants; and Special Purpose Grants.
    (b) The provisions of this part and sections 104(b)(2) and 109 of 
Title I that relate to discrimination on the basis of race shall not 
apply to the provision of Federal financial assistance by grantees under 
this title to the Hawaiian Homelands (42 U.S.C. 5309).
    (c) The provisions of this part and sections 104(b)(2) and 109 of 
Title I that relate to discrimination on the basis of race and national 
origin shall not apply to the provision of Federal financial assistance 
to grant recipients under the Native American Housing Assistance and 
Self-Determination Act (25 U.S.C. 4101). See also, 24 CFR 1003.601(a).



Sec. 6.3  Definitions.

    The terms Department, HUD, and Secretary are defined in 24 CFR part 
5. Other terms used in this part 6 are defined as follows:
    Act means the Housing and Community Development Act of 1974, as 
amended (42 U.S.C. 5301-5320).
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity.
    Award Official means the HUD official who has been delegated the 
Secretary's authority to implement a Title I funded program and to make 
grants under that program.
    Complete complaint means a written statement that contains the 
complainant's name and address, identifies the Recipient against which 
the complaint is made, and describes the Recipient's alleged 
discriminatory action in sufficient detail to inform HUD of the nature 
and date of the alleged violation of section 109. It shall be signed by 
the complainant or by someone authorized to do so on his or her behalf. 
Complaints filed on behalf of classes or third parties shall describe or 
identify (by name, if possible) the alleged victims of discrimination.
    Federal financial assistance means: (1) Any assistance made 
available under title I of the Housing and Community Development Act of 
1974, as amended, and includes income generated from such assistance, 
and any grant, loan, contract, or any other arrangement, in the form of:
    (i) Funds;
    (ii) Services of Federal personnel; or
    (iii) Real or personal property or any interest in or use of such 
property, including:
    (A) Transfers or leases of the property for less than fair market 
value or for reduced consideration; and
    (B) 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.
    (2) Any assistance in the form of proceeds from loans guaranteed 
under section 108 of the Act, but does not include assistance made 
available through direct Federal procurement contracts or any other 
contract of insurance or guaranty.
    Program or activity (funded in whole or in part) means all of the 
operations of--
    (1)(i) A department, agency, special purpose district, or other 
instrumentality of a State or local government; or

[[Page 105]]

    (ii) The entity of a State or local government that distributes 
Federal financial assistance, and each department or agency (and each 
State or local government entity) to which the assistance is extended, 
in the case of assistance to a State or local government;
    (2)(i) A college, university, or other post-secondary institution, 
or a public system of higher education; or
    (ii) 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;
    (3)(i) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship--
    (A) If assistance is extended to the corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (B) Which is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (ii) 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
    (4) Any other entity that is described in paragraphs (1), (2), or 
(3) of this definition, any part of which is extended Federal financial 
assistance.
    Recipient 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, including any successor, assign, or transferee thereof. 
Recipient does not include any ultimate beneficiary under any program or 
activity.
    Responsible Official means the Assistant Secretary for Fair Housing 
and Equal Opportunity or his or her designee.
    Section 109 means section 109 of the Housing and Community 
Development Act of 1974, as amended.
    Title I means title I of the Housing and Community Development Act 
of 1974 (42 U.S.C. 5301-5321).



Sec. 6.4  Discrimination prohibited.

    (a) Section 109 requires that no person in the United States shall 
be excluded from participation in, be denied the benefits of, or be 
subjected to discrimination under any program or activity funded in 
whole or in part with Federal financial assistance, on the grounds of 
race, color, national origin, religion, or sex.
    (1) A Recipient under any program or activity to which this part 
applies may not, directly or through contractual, licensing, or other 
arrangements, take any of the following actions on the grounds of race, 
color, national origin, religion, or sex:
    (i) Deny any individual any facilities, services, financial aid, or 
other benefits provided under the program or activity;
    (ii) Provide any facilities, services, financial aid, or other 
benefits that are different, or are provided in a different form, from 
that provided to others under the program or activity;
    (iii) Subject an individual to segregated or separate treatment in 
any facility, or in any matter of process related to the receipt of any 
service or benefit under the program or activity;
    (iv) Restrict an individual's access to, or enjoyment of, any 
advantage or privilege enjoyed by others in connection with facilities, 
services, financial aid or other benefits under the program or activity;
    (v) Treat an individual differently from others in determining 
whether the individual satisfies any admission, enrollment, eligibility, 
membership, or other requirements or conditions that the individual must 
meet in order to be provided any facilities, services, or other benefit 
provided under the program or activity;
    (vi) Deny an individual an opportunity to participate in a program 
or activity as an employee;
    (vii) Aid or otherwise perpetuate discrimination against an 
individual by providing Federal financial assistance to an agency, 
organization, or person that discriminates in providing any housing, 
aid, benefit, or service;

[[Page 106]]

    (viii) Otherwise limit an individual in the enjoyment of any right, 
privilege, advantage, or opportunity enjoyed by other individuals 
receiving the housing, aid, benefit, or service;
    (ix) Use criteria or methods of administration that have the effect 
of subjecting persons to discrimination or have the effect of defeating 
or substantially impairing accomplishment of the objectives of the 
program or activity with respect to persons of a particular race, color, 
national origin, religion, or sex; or
    (x) Deny a person the opportunity to participate as a member of 
planning or advisory boards.
    (2) In determining the site or location of housing, accommodations, 
or facilities, a Recipient may not make selections that have the effect 
of excluding persons from, denying them the benefits of, or subjecting 
them to discrimination on the ground of race, color, national origin, 
religion, or sex. The Recipient may not make selections that have the 
purpose or effect of defeating or substantially impairing the 
accomplishment of the objectives of section 109 and of this part 6.
    (3)(i) In administering a program or activity in which the Recipient 
has discriminated on the grounds of race, color, national origin, 
religion or sex, the Recipient must take any necessary steps to overcome 
the effects of prior discrimination.
    (ii) In the absence of discrimination, a Recipient, in administering 
a program or activity, may take any steps necessary to overcome the 
effects of conditions that resulted in limiting participation by persons 
of a particular race, color, national origin, religion, or sex.
    (iii) After a finding of noncompliance, or after a Recipient has 
reasonable cause to believe that discrimination has occurred, a 
Recipient shall not be prohibited by this section from taking any action 
eligible under subpart C of 24 CFR part 570 to ameliorate an imbalance 
in benefits, services or facilities provided to any geographic area or 
specific group of persons within its jurisdiction, where the purpose of 
such action is to remedy discriminatory practices or usage.
    (iv)(A) Notwithstanding anything to the contrary in this part, 
nothing contained in this section shall be construed to prohibit any 
Recipient from maintaining or constructing separate living facilities or 
restroom facilities for the different sexes in order to protect personal 
privacy or modesty concerns. Furthermore, selectivity on the basis of 
sex is not prohibited when institutional or custodial services can, in 
the interest of personal privacy or modesty, only be performed by a 
member of the same sex as those receiving the services.
    (B) Section 109 of the Act does not directly prohibit discrimination 
on the basis of age or disability, but directs that the prohibitions 
against discrimination on the basis of age under the Age Discrimination 
Act and the prohibitions against discrimination on the basis of 
disability under Section 504 apply to Title I programs and activities. 
Accordingly, for programs or activities receiving Federal financial 
assistance, the regulations in this part 6 apply to discrimination on 
the bases of race, color, national origin, religion, or sex; the 
regulations at 24 CFR part 8 apply to discrimination on the basis of 
disability; and the regulations at 24 CFR part 146 apply to 
discrimination on the basis of age.
    (b) [Reserved]



Sec. 6.5  Discrimination prohibited--employment.

    (a) General. A Recipient may not, under any program or activity 
funded in whole or in part with Federal financial assistance, directly 
or through contractual agents or other arrangements including contracts 
and consultants, subject a person to discrimination in the terms and 
conditions of employment. Terms and conditions of employment include 
advertising, interviewing, selection, promotion, demotion, transfer, 
recruitment and advertising, layoff or termination, pay or other 
compensation, including benefits, and selection for training.
    (b) Determination of compliance status. The Assistant Secretary will 
follow the procedures set forth in this part and 29 CFR part 1691 and 
look to the substantive guidelines and policy of the

[[Page 107]]

Equal Employment Opportunity Commission when reviewing employment 
practices under Section 109.



Sec. 6.6  Records to be maintained.

    (a) General. Recipients shall maintain records and data as required 
by 24 CFR 91.105, 91.115, 570.490, and 570.506.
    (b) Employment. Recipients shall maintain records and data as 
required by the Equal Employment Opportunity Commission at 29 CFR part 
1600.
    (c) Recipients shall make available such records and any supporting 
documentation upon request of the Responsible Official.

(Approved by the Office of Management and Budget under control numbers 
2506-0117 and 2506-0077)



                          Subpart B_Enforcement



Sec. 6.10  Compliance information.

    (a) Cooperation and assistance. The Responsible Official and the 
Award Official will provide assistance and guidance to Recipients to 
help them comply voluntarily with this part.
    (b) Access to data and other sources of information. Each Recipient 
shall permit access by authorized representatives of HUD to its 
facilities, books, records, accounts, minutes and audio tapes of 
meetings, personnel, computer disks and tapes, and other sources of 
information as may be pertinent to a determination of whether the 
Recipient is complying with this part. Where information required of a 
Recipient is in the exclusive possession of any other agency, 
institution, or person, and that agency, institution, or person fails or 
refuses to furnish this information, the Recipient shall so certify in 
any requested report and shall set forth what efforts it has made to 
obtain the information. Failure or refusal to furnish pertinent 
information (whether maintained by the Recipient or some other agency, 
institution, or person) without a credible reason for the failure or 
refusal will be considered to be noncompliance under this part.
    (c) Compliance data. Each Recipient shall keep records and submit to 
the Responsible Official, timely, complete, and accurate data at such 
times and in such form as the Responsible Official may determine to be 
necessary to ascertain whether the Recipient has complied or is 
complying with this part.
    (d) Notification to employees, beneficiaries, and participants. Each 
Recipient shall make available to employees, participants, 
beneficiaries, and other interested persons 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 
Official finds necessary to apprise such persons of the protections 
against discrimination assured them by Section 109 and this part.



Sec. 6.11  Conduct of investigations.

    (a) Filing a complaint--(1) Who may file. Any person who believes 
that he or she has been subjected to discrimination prohibited by this 
part may file, or may have an authorized representative file on his or 
her behalf, a complaint with the Responsible Official. Any person who 
believes that any specific class of persons has been subjected to 
discrimination prohibited 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 Official.
    (2) Confidentiality. Generally, the Responsible Official shall hold 
in confidence the identity of any person submitting a complaint, unless 
the person submits written authorization otherwise. However, an 
exception to maintaining confidentiality of the identity of the person 
may be required to carry out the purposes of this part, including the 
conduct of any investigation, hearing, or proceeding under this part.
    (3) When to file. Complaints shall be filed within 180 days of the 
alleged act of discrimination, unless the Responsible Official waives 
this time limit for good cause. For purposes of determining when a 
complaint is filed under this part, a complaint mailed to the 
Responsible Official via the U.S. Postal Service will be deemed filed on 
the date it is postmarked. A complaint delivered to the Responsible 
Official in any other manner will be deemed filed on the date it is 
received by the Responsible Official.

[[Page 108]]

    (4) Where to file complaints. Complaints must be in writing, signed, 
addressed to the Responsible Official, and filed with (mailed to or 
otherwise delivered to) the Office of Fair Housing and Equal Opportunity 
at any HUD Office.
    (5) Content of complaints. Each complaint should contain the 
complainant's name, address, and phone number; a description or name, if 
available, of the Recipient alleged to have violated this part; an 
address where the violation occurred; and a description of the 
Recipient's alleged discriminatory action in sufficient detail to inform 
the Responsible Official of the nature and date of the alleged violation 
of this part.
    (6) Amendments to complaints. Amendments to complaints, such as 
clarification and amplification of allegations in a complaint or the 
addition of other Recipients, may be made by the complainant or the 
complainant's authorized representative at any time while the complaint 
is being considered, and any amendment shall be deemed to be made as of 
the original filing date.
    (7) Notification. To the extent practicable, the Responsible 
Official will notify the complainant and the Recipient of the 
Responsible Official's receipt of a complaint within 10 calendar days of 
receipt of a complete complaint. If the Responsible Official receives a 
complaint that is not complete, the Responsible Official will notify the 
complainant and specify the additional information that is needed to 
make the complaint complete. If the complainant fails to complete the 
complaint, the Responsible Official will close the complaint without 
prejudice and notify the complainant. When a complete complaint has been 
received, the Responsible Official, or his or her designee, will assess 
the complaint for acceptance, rejection, or referral to an appropriate 
Federal agency within 20 calendar days.
    (8) Resolution of complaints. After the acceptance of a complete 
complaint, the Responsible Official will investigate the complaint, 
attempt informal resolution, and, if resolution is not achieved, the 
Responsible Official will notify the Recipient and complainant, to the 
extent practicable within 180 days of the receipt of the complete 
complaint, of the results of the investigation in a letter of findings 
sent by certified mail, return receipt requested, containing the 
following:
    (i) Findings of fact and a finding of compliance or noncompliance;
    (ii) A description of an appropriate remedy for each violation 
believed to exist; and
    (iii) A notice of the right of the Recipient and the complainant to 
request a review of the letter of findings by the Responsible Official. 
A copy of the final investigative report will be made available upon 
request.
    (b) Compliance reviews--(1) Periodic compliance reviews. The 
Responsible Official may periodically review the practices of Recipients 
to determine whether they are complying with this part and may conduct 
on-site reviews. The Responsible Official will 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 before a final determination, to submit 
information that explains, validates, or otherwise addresses the 
practices under review. In addition, the Award Official will include, in 
normal program compliance reviews and monitoring procedures, appropriate 
actions to review and monitor compliance with general or specific 
program requirements designed to implement the requirements of this 
part.
    (2) Time period of the review. (i) For the Entitlement program, 
compliance reviews will cover the three years before the date of the 
review.
    (ii) For the Urban Development Action Grant (UDAG) program, the 
compliance review is applicable only to UDAG loan repayments or other 
payments or revenues classified as program income. UDAG repayments or 
other payments or revenues classified as miscellaneous revenue are not 
subject to compliance review under this part. (See 24 CFR 570.500(a).) 
The compliance review will cover the time period that program income is 
being repaid.

[[Page 109]]

    (iii) For the State and HUD-Administered Small Cities programs, the 
compliance review will cover the four years before the date of the 
review.
    (iv) For all other programs, the time period covered by the review 
will be four years before the date of the review.
    (v) On a case-by-case basis, at the discretion of the Responsible 
Official, the above time frames for review can be expanded where facts 
or allegations warrant further investigation.
    (3) Early compliance resolution. On the last day of the on-site 
visit, after the compliance review, the Recipient will be given an 
opportunity to supplement the record. Additionally, a prefinding 
conference may be held and a summary of the proposed findings may be 
presented to the Recipient. In those instances where the issue(s) cannot 
be resolved at a prefinding conference or with the supplemental 
information, a meeting will be scheduled to attempt a voluntary 
settlement.
    (4) Notification of findings. (i) The Assistant Secretary will 
notify the Recipient of Federal financial assistance of the results of 
the compliance review in a letter of findings sent by certified mail, 
return receipt requested.
    (ii) Letter of findings. The letter of findings will include the 
findings of fact and the conclusions of law; a description of a remedy 
for each violation found; and a notice that a copy of HUD's final report 
concerning its compliance review will be made available, upon request, 
to the Recipient.
    (c) Right to a review of the letter of findings. (1) Within 30 days 
of receipt of the letter of findings, any party may request that a 
review be made of the letter of findings, by mailing or delivering to 
the Responsible Official, Room 5100, Office of Fair Housing and Equal 
Opportunity, HUD, Washington, DC 20410, a written statement of the 
reasons why the letter of findings should be modified.
    (2) The Responsible Official will send by certified mail, return 
receipt requested, a copy of the request for review to all parties. 
Parties other than the party requesting review and HUD shall have 20 
days from receipt to respond to the request for review.
    (3) The Responsible Official will either sustain or modify the 
letter of findings or require that further investigation be conducted, 
within 60 days of the request for review. The Responsible Official's 
decision shall constitute the formal determination of compliance or 
noncompliance.
    (4) If no party requests that the letter of findings be reviewed, 
the Responsible Official, within 14 calendar days of the expiration of 
the time period in paragraph (a)(9)(i) of this section, will send a 
formal written determination of compliance or noncompliance to all 
parties.
    (d) Voluntary compliance time limits. The Recipient will have 10 
calendar days from receipt of the letter of findings of noncompliance, 
or such other reasonable time as specified in the letter, within which 
to agree, in writing, to come into voluntary compliance or to contact 
the Responsible Official for settlement discussions. If the Recipient 
fails to meet this deadline, HUD will proceed in accordance with 
Sec. Sec. 6.12 and 6.13.
    (e) Informal resolution/voluntary compliance--(1) General. It is the 
policy of HUD to encourage the informal resolution of matters. A 
complaint or a compliance review may be resolved by informal means at 
any time. If a letter of findings is issued, and the letter makes a 
finding of noncompliance, the Responsible Official will attempt to 
resolve the matter through a voluntary compliance agreement.
    (2) Objectives of informal resolution/voluntary compliance. In 
attempting informal resolution, the Responsible Official will 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. If a 
finding of noncompliance has been made, the terms of such an informal 
resolution shall be reduced to a written voluntary compliance agreement, 
signed by the Recipient and the Responsible Official, and be made part 
of the file. Such voluntary compliance agreements shall seek to protect

[[Page 110]]

the interests of the complainant (if any), other persons similarly 
situated, and the public.
    (3) Right to file a private civil action. At any time in the 
process, the complainant has the right to file a private civil action. 
If the complainant does so, the Responsible Official has the discretion 
to administratively close the investigation or continue the 
investigation, if he or she decides that it is in the best interests of 
the Department to do so. If the Responsible Official makes a finding of 
noncompliance and an agreement to voluntarily comply is not obtained 
from the Recipient, the procedures at Sec. Sec. 6.12 and 6.13 for 
effecting compliance shall be followed.
    (f) Intimidatory or retaliatory acts prohibited. 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, 
compliance review, proceeding, or hearing under this part.



Sec. 6.12  Procedure for effecting compliance.

    (a) Whenever the Assistant Secretary determines that a Recipient of 
Federal financial assistance has failed to comply with Section 109(a) or 
this part and voluntary compliance efforts have failed, the Secretary 
will notify the Governor of the State or the Chief Executive Officer of 
the unit of general local government of the findings of noncompliance 
and will request that the Governor or the Chief Executive Officer secure 
compliance. If within a reasonable period of time, not to exceed 60 
days, the Governor or the Chief Executive Officer fails or refuses to 
secure compliance, the Secretary will:
    (1) Refer the matter to the Attorney General with a recommendation 
that an appropriate civil action be instituted;
    (2) Exercise the powers and functions provided by Title VI;
    (3) Terminate or reduce payments under Title I, or limit the 
availability of payments under Title I to programs or activities not 
affected by the failure to comply; or
    (4) Take such other actions as may be provided by law, including but 
not limited to, the initiation of proceedings under 24 CFR part 24 or 
any applicable proceeding under State or local law.
    (b) Termination, reduction, or limitation of the availability of 
Title I payments. No order terminating, reducing, or limiting the 
availability of Title I payments under this part shall become effective 
until:
    (1) The Secretary has notified the Governor of the State or the 
Chief Executive Officer of the unit of general local government of the 
Recipient's failure to comply in accordance with paragraph (a) of this 
section and of the termination, reduction or limitation of the 
availability of Title I payments to be taken;
    (2) The Secretary has determined that compliance cannot be secured 
by voluntary means;
    (3) The Recipient has been extended an opportunity for a hearing in 
accordance with Sec. 6.13(a); and
    (4) A final agency notice or decision has been rendered in 
accordance with paragraph (c) of this section or 24 CFR part 180.
    (c) If a Recipient does not respond to the notice of opportunity for 
a hearing or does not elect to proceed with a hearing within 20 days of 
the issuance of the Secretary's actions listed in paragraphs (b)(1), (2) 
and (3) of this section, then the Secretary's approval of the 
termination, reduction or limitation of the availability of Title I 
payments is considered a final agency notice and the Recipient may seek 
judicial review in accordance with section 111(c) of the Act.



Sec. 6.13  Hearings and appeals.

    (a) When a Recipient requests an opportunity for a hearing, in 
accordance with Sec. 6.12(b)(3), the General Counsel will follow the 
notification procedures set forth in 24 CFR 180.415. The hearing, and 
any petition for review, will be conducted in accordance with the 
procedures set forth in 24 CFR part 180.
    (b) After a hearing is held and a final agency decision is rendered 
under 24 CFR part 180, the Recipient may seek judicial review in 
accordance with section 111(c) of the Act.

[[Page 111]]



PART 7_EQUAL EMPLOYMENT OPPORTUNITY; POLICY, PROCEDURES AND PROGRAMS
--Table of Contents


 Subpart A_Equal Employment Opportunity Without Regard to Race, Color, 
       Religion, Sex, National Origin, Age, Disability or Reprisal

                           General Provisions

Sec.
7.1 Policy.
7.2 Definitions.
7.3 Designations.
7.4 Affirmative employment programs.
7.5 EEO Alternative Dispute Resolution Program.

                            Responsibilities

7.10 Responsibilities of the Director of EEO.
7.11 Responsibilities of the EEO Officers.
7.12 Responsibilities of the EEO Counselors.
7.13 Responsibilities of the Assistant Secretary for Administration.
7.14 Responsibilities of the Office of Human Resources.
7.15 Responsibilities of managers and supervisors.
7.16 Responsibilities of employees.

                        Pre-Complaint Processing

7.25 Pre-complaint processing.
7.26 EEO Alternative Dispute Resolution Program.

                               Complaints

7.30 Presentation of complaint.
7.31 Who may file a complaint, with whom filed, and time limits.
7.32 Representation and official time.
7.33 Contents of the complaints.
7.34 Acceptability.
7.35 Processing.
7.36 Hearing.
7.37 Final action.
7.38 Appeals.

                  Other Complaint and Appeal Procedures

7.39 Negotiated grievance, MSPB appeal and administrative grievance 
          procedures.

                  Remedies, Enforcement and Compliance

7.40 Remedies and enforcement.
7.41 Compliance with EEOC final decisions.
7.42 Enforcement of EEOC final decisions.
7.43 Settlement agreements.
7.44 Interim relief.

                  Statistics and Reporting Requirements

7.45 EEO group statistics and reports.

Subpart B [Reserved]

    Authority: 29 U.S.C. 206(d), 633a, 791 and 794; 42 U.S.C. 2000e 
note, 2000e-16, 42 U.S.C. 3535(d); E.O. 11478 of Aug. 8, 1969; 34 FR 
19285, Aug. 12, 1969; E.O. 10577, 3 CFR 1954-1958; E.O. 11222, 3 CFR 
1964-1965.

    Source: 66 FR 20564, Apr. 23, 2001, unless otherwise noted.



  Subpart A_Equal Employment Opportunity Without Regard to Race, Color 
       Religion, Sex, National Origin, Age, Disability or Reprisal

                           General Provisions



Sec. 7.1  Policy.

    The Department's equal employment opportunity policy conforms with 
the policies expressed in title VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000d-2000d-4); the Civil Rights Act of 1991; Executive Order 
11478 of 1969 (34 FR 12985, 3 CFR 1966-1970 Comp., p. 803); the Age 
Discrimination in Employment Act of 1967 (ADEA) (29 U.S.C. et seq.); the 
Equal Pay Act of 1963 (29 U.S.C. 206d); sections 501 and 504 of the 
Rehabilitation Act of 1973, and reaffirming Executive Order 12871 (29 
U.S.C. 791, 794); the Civil Service Reform Act of 1978 (5 U.S.C. 1101 et 
seq.); Executive Order 13087 of 1998 (63 FR 30097); and with the EEOC's 
implementing regulations, codified under 29 CFR part 1614. It is HUD's 
policy to provide equality of opportunity in employment in the 
Department for all persons; to prohibit discrimination on the basis of 
race, color, religion, sex, national origin, age, disability or reprisal 
in all aspects of its personnel policies, programs, practices, and 
operations and in all its working conditions and relationships with 
current or former employees and applicants for employment; and to 
promote the full realization of equal opportunity in employment through 
continuing programs of affirmative employment at every level within the 
Department. Procedures for filing EEO claims are found in the EEOC 
regulations at 29 CFR part 1614. HUD is committed to promoting 
affirmative employment through the removal of barriers and by positive 
actions at every level, including the early resolution of EEO disputes.

[[Page 112]]



Sec. 7.2  Definitions.

    AE means affirmative employment.
    Aggrieved individual means a person who suffers a present harm or 
loss with respect to a term, condition, or privilege of employment for 
which there is a remedy. The terms ``aggrieved individual'' and 
``aggrieved person'', as used in this part, are interchangeable.
    Alternative Dispute Resolution (ADR) means a variety of approaches 
used to resolve conflict rather than traditional adjudicatory or 
adversarial methods such as litigation, hearings, and administrative 
processing and appeals. The approaches used may include, but are not 
limited to: negotiation, conciliation, facilitation, mediation, fact-
finding, peer review, mini-trial, arbitration, or ombudsman.
    Claim means action the agency has taken or is taking that causes the 
aggrieved person to believe that he or she is a victim of 
discrimination. This term replaces the formerly used term ``allegation'' 
and is used interchangeably with the term ``issue''.
    Comparable means a person designated as head of an organizational 
unit that is analogous to that headed by an Assistant Secretary.
    Conflict-of-interest complaint means an EEO complaint arising in the 
Department which names the Director of EEO or the Deputy Director of 
EEO, or both, as the responsible management officials.
    Director of Equal Employment Opportunity (EEO) means the Director of 
HUD's Office of Departmental Equal Employment Opportunity who is also 
designated as the Director of EEO in this part.
    Disability means the same as the term ``handicap'' under EEOC's 
regulations at 29 part 1614.
    Discrimination Complaint Manager (DCM) means the designee, appointed 
by the Assistant Secretary (EEO Officer) or the Assistant Secretary's 
comparable, who assists the EEO Officer in discharging his or her EEO 
responsibilities and is responsible for carrying out the EEO 
discrimination complaint process for the organizational unit pursuant to 
the applicable civil rights laws, the regulations at 29 CFR part 1614 
and this part.
    Diversity Program Manager means the designee appointed by the 
Assistant Secretary (EEO Officer) or the Assistant Secretary's 
comparable who assists the EEO Officer in promoting appreciation of the 
contributions of women, minorities, and persons with disabilities, and 
in promoting the value of all Department employees.
    EEO means equal employment opportunity.
    EEO Officer Pro Tem means the Chief of Staff or an official at a 
neutral federal agency designated to process an EEO claim that would be 
a conflict of interest for the Director of EEO or the Deputy Director of 
EEO, or both.
    EEOC and Commission mean the Equal Employment Opportunity 
Commission.
    Final action means the Department's issuance of a final decision or 
final order.
    Final decision means HUD's determination of the findings of fact and 
law on the merits or the procedural issues of an EEO complaint based 
upon the available record.
    Final order means the Department's final action which states whether 
the Department will fully implement the decision or order of an EEOC 
Administrative Judge, or both.
    Neutral means an individual who mediates or otherwise functions to 
specifically aid the parties in resolving the issues, and has no 
official, financial, or personal conflict of interest with respect to 
the issues being disputed, unless such interest is fully disclosed in 
writing to all parties and all parties agree that the neutral may serve.
    Organizational unit means the jurisdictional area of the 
Department's program offices such as the Office of the Secretary, the 
Office of General Counsel, etc.
    Record means all documents related to the EEO complaint as outlined 
in EEOC Management Directive 110.
    Reprisal means the action taken against a current or former employee 
or applicant in retaliation for previous EEO participation in protected 
EEO activity or for opposing employment practice or policy illegal under 
EEO statutes. The terms ``reprisal'' and ``retaliation'' are used 
interchangeably.

[[Page 113]]



Sec. 7.3  Designations.

    (a) Director of Equal Employment Opportunity. The Director of the 
Office of Departmental Equal Employment Opportunity (ODEEO) is 
designated as the Director of EEO, except for complaints naming the 
Director or Deputy Director of Departmental EEO, or both, as the 
responsible management official(s) in complaints arising in the ODEEO 
which present a conflict-of-interest. In such cases, the Director of EEO 
may:
    (1) Transfer the case to the Chief of Staff for processing; or
    (2) On behalf of the Department, enter into an agreement with one or 
more federal agencies for processing of the Department's conflict-of-
interest cases by the designated federal official chosen to serve as the 
EEO Officer Pro Tem.
    (b) Deputy Director of Equal Employment Opportunity. The Deputy 
Director of the ODEEO is designated as the Deputy Director of EEO and 
acts in the absence of the Director of EEO.
    (c) Equal Employment Opportunity Officer. The Director of EEO shall 
designate the Assistant Secretary or the Assistant Secretary's 
comparable as EEO Officer for the Department's respective organizational 
units for complaints arising in the respective Assistant Secretary's or 
Assistant Secretary's comparable organizational unit.
    (d) Equal Employment Opportunity Discrimination Complaint Manager 
(DCM). Each Assistant Secretary (EEO Officer) shall designate a DCM to 
represent the organizational unit in EEO matters and assist the EEO 
Officer in carrying out EEO responsibilities. The DCM shall be the 
Administrative Officer (AO) for the organizational unit or another 
designee of the EEO Officer.



Sec. 7.4  Affirmative employment programs.

    The Office of the Secretary, each Assistant Secretary, the General 
Counsel, the Inspector General, the President of the Government National 
Mortgage Association, the Chief Financial Officer, the Chief Procurement 
Officer, the Chief Information Officer, the Director of Lead Hazard 
Control, the Director of the Office of Multifamily Housing Assistance 
Restructuring, the Director of the Departmental Enforcement Center, the 
Director of the Real Estate Assessment Center, and the Director of the 
Office of Federal Housing Enterprise Oversight and other positions that 
may be established and are comparable to an Assistant Secretary, shall 
establish, maintain and carry out a plan of affirmative employment (AE) 
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, is subject to approval by the Director of EEO and 
shall be developed within the framework of Department-wide guidelines 
published by the Director of EEO.



Sec. 7.5  EEO Alternative Dispute Resolution Program.

    In accordance with the Secretary's Policy Statement regarding 
Alternative Dispute Resolution (ADR) located on the Department's website 
and 29 CFR 1614.102(b)(2), the Department shall establish and maintain 
an ADR program that addresses, at a minimum, EEO matters at the pre-
complaint and formal complaint stages of the EEO process. ADR is a non-
adversarial process that does not render a judgment with respect to the 
dispute. With the assistance of an impartial and neutral third party, 
ADR offers parties involved the opportunity to reach early and informal 
resolution of EEO matters in a mutually satisfactory fashion.
    (a) Program availability. In appropriate cases, the EEO ADR Program 
is made available to an aggrieved person or Complainant during the pre-
complaint and the formal complaint processing periods. Participation in 
the program by the parties is knowing and voluntary. Agency managers 
have a duty to cooperate in an ADR proceeding once the agency has 
determined that a matter is appropriate for

[[Page 114]]

ADR and the aggrieved person/complainant has elected to participate in 
ADR. At the formal stage, the complainant may request participation in 
the ADR Program. However, a determination of the appropriateness of ADR 
at the time of the request will be made on a case-by-case basis by the 
appropriate ODEEO official designated by the Director of EEO and does 
not affect the processing of the formal complaint, including the 
investigation.
    (b) EEO ADR program procedures. The ODEEO shall establish and 
maintain all EEO ADR Program procedures which include appropriate 
consultations.
    (c) ADR training. Training and education on the EEO ADR Program will 
be provided to all Department employees, managers and supervisors, and 
other persons protected under the applicable laws.
    (d) Pre-complaint ADR election process. The appropriateness of a 
particular EEO matter or EEO complaint for the Department's ADR Program 
shall be determined on a case-by-case basis by the ODEEO official 
designated by the Director of EEO. The EEO Counselor shall advise the 
aggrieved person that the aggrieved person may choose between 
participation in the EEO ADR Program or the EEO traditional counseling 
activities provided for at 29 CFR 1614.105(c). The aggrieved person's 
election to proceed through ADR instead of EEO counseling is final.
    (e) ADR counseling requirements. (1) The minimum information to be 
provided by the EEO Counselor about the Department's ADR Program 
includes the following:
    (i) Definition of the term ADR;
    (ii) An explanation of the stages in the EEO process at which ADR 
may be available;
    (iii) A description of the ADR technique(s) used by the Department;
    (iv) A description of how the program is consistent with the EEO ADR 
core principles that ensure fairness and require voluntariness, 
neutrality, confidentiality, and enforceability;
    (v) An explanation of procedural and substantive alternatives; and
    (vi) All time frames for the EEO administrative process including 
ADR.
    (2) The EEO Counselor shall have no further involvement in resolving 
the EEO matter after the referral to the EEO ADR program.
    (f) Extension of pre-complaint processing period for ADR. Where the 
aggrieved person chooses to participate in ADR, the pre-complaint 
processing period shall not exceed 90 days from the date of initial 
contact with the EEO Office.
    (1) The aggrieved person shall be informed in writing by the EEO 
Counselor, no later than the thirtieth day after contacting the EEO 
Counselor, of the right to file a discrimination complaint, if the 
matter presented by the aggrieved person has not been resolved.
    (2) Prior to the end of the 30-day period from the date of initial 
contact with the EEO Office, the aggrieved person may agree, in writing, 
with the Department to postpone the final interview and extend the pre-
complaint period for an additional period of no more than 60 days if the 
matter is not resolved. If the matter has not been resolved before the 
conclusion of the agreed extension, the notice of right to file a 
discrimination complaint shall be issued no later than the 90th day of 
initial contact with the EEO Office. The notice shall inform the 
aggrieved person of the right to file a discrimination complaint within 
15 days of receipt of the notice, of the appropriate official with whom 
to file a complaint and of the aggrieved person's duty to assure that 
the Department is informed immediately if the aggrieved person retains 
counsel or a representative and if the aggrieved person changes address.
    (g) EEO ADR Program's relationship to negotiated grievance, MSPB 
appeal and administrative grievance procedures. Participation in the EEO 
ADR program does not preclude the aggrieved person or Complainant from 
exercising rights under any of the Department's other complaint or 
appeal procedures, when no resolution is reached. When participation in 
ADR results in a settlement agreement and the aggrieved person or 
Complainant believes the Department has failed to comply with its terms, 
the aggrieved person or Complainant may exercise the right of appeal 
pursuant to 29 CFR 1614.504.

[[Page 115]]

                            Responsibilities



Sec. 7.10  Responsibilities of the Director of EEO.

    The Director and Deputy Director of EEO are responsible for:
    (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 policy and the Department's 
EEO/ADR/AE programs;
    (b) Developing and maintaining plans, procedures, and regulations 
necessary to carry out the Department's EEO programs, including a 
Department-wide program of affirmative employment developed in 
coordination with other officials; and approving programs of affirmative 
employment established by each EEO Officer or comparable organizational 
head;
    (c) Evaluating, at least annually, the sufficiency of each 
organizational unit's EEO/ADR/AE program and providing reports 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 ensure their conformity with the policies of the 
Government's and the Department's EEO program;
    (e) Making changes in programs and procedures designed to eliminate 
discriminatory practices and improve the Department's EEO/ADR/AE 
programs;
    (f) Selecting EEO Counselors;
    (g) Providing for counseling by an EEO Counselor to a current or 
former employee or applicant for employment who believes that he or she 
has been discriminated against because of race, color, religion, sex, 
national origin, age, disability, or in retaliation for participation in 
protected EEO activity; or for opposing a policy or practice illegal 
under EEO statutes;
    (h) Providing for the prompt, fair and impartial processing of 
individual complaints involving claims 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 warranted in circumstances where an employee has 
been found to have engaged in a discriminatory practice.
    (j) Executing settlement agreements to resolve EEO complaints;
    (k) Making available an ADR Program for EEO matters at both the pre-
complaint and formal EEO complaint stages of the EEO administrative 
process;
    (l) Developing and providing annual mandatory EEO and ADR training 
for EEO Counselors, and all supervisors and managers in conjunction with 
HUD Training Academy, Office of Human Resources, and the Office of 
General Counsel, other federal agencies and resources with ADR 
information and expertise; and
    (m) Publicizing to all employees and posting at all times the names, 
business telephone numbers and addresses of the EEO Counselors, EEO 
Director, EEO Officers, and Diversity Program Managers, notice of EEO 
complaint processing time limits and the requirements of contacting an 
EEO Counselor and completing the counseling phase before filing a 
complaint.



Sec. 7.11  Responsibilities of the EEO Officers.

    Each EEO Officer is responsible for:
    (a) Advising the Director of EEO on all matters affecting the 
implementation of the Department's EEO/ADR/AE policies and programs in 
the organizational unit;
    (b) Developing and maintaining a program of affirmative employment 
for the organizational unit and ensuring that the program is carried out 
in an exemplary manner;
    (c) Publicizing to all employees of the organizational unit the name 
and address of the Director of EEO, the EEO Officer(s), and the EEO 
Counselor(s), the EEO Discrimination Complaint Manager(s), the 
Affirmative Employment Program (AEP) Manager, the Diversity Program 
Manager, ADR Officials, and the EEO complaint procedures;
    (d) Informing all managers and supervisors in the organizational 
unit of the

[[Page 116]]

responsibilities and objectives of the EEO Counselors, DCMs, ADR 
officials, EEO investigators, and of the EEO complaint process and the 
importance of cooperating and coordinating with all appropriate 
Department personnel to informally find solutions to problems brought to 
the EEO Officer's attention by current or former employees and 
applicants;
    (e) Evaluating and documenting the performance by the managers and 
supervisors in the organizational unit in carrying out their 
responsibilities under this subpart;
    (f) Seeking a resolution of EEO matters brought to their attention;
    (g) Designating a senior level Affirmative Employment Program (AEP) 
Manager in Headquarters responsible for preparing the AEP plan; managing 
the plan; providing advice and guidance to managers and supervisors in 
removing barriers to EEO/AE/ADR and in implementing all of their EEO/AE 
responsibilities; and reviewing all recruitment and personnel actions 
taken by managers and supervisors to ensure the achievement of AEP 
objectives;
    (h) Designating the Administrative Officer (AO) or other 
Headquarters organizational unit official as the DCM to manage and 
direct the organization's EEO responsibilities. In making such 
designation, the EEO Officer shall ensure that the designation as the 
DCM does not otherwise conflict with the official duties of the employee 
so designated;
    (i) Designating a senior level Diversity Program Manager in HUD 
Headquarters to manage and direct the organization's Diversity Program 
and providing resources for diversity activities for its employees;
    (j) Ensuring the successful operation of the EEO/AE/ADR Program by 
requiring management's support;
    (k) Approving and making reasonable accommodation to the known 
physical or mental limitations of qualified employees with disabilities 
unless the accommodation would impose an undue hardship on the 
operations of Department; and
    (l) Adhering to and implementing the Department's policy on 
religious accommodation.



Sec. 7.12  Responsibilities of the EEO Counselors.

    The EEO Counselor is responsible for counseling and attempting 
resolution of matters brought to the EEO Counselor's attention pursuant 
to Sec. Sec. 7.25 and 7.30 and 29 CFR part 1614, by any current or 
former employee or applicant for employment who believes that he or she 
has been discriminated against because of race, color, religion, sex, 
national origin, age, disability or in reprisal for participating in EEO 
activity or opposing policies and practices that are illegal under the 
EEO statutes. These responsibilities include, but are not limited to:
    (a) Advising individuals, in writing, of their rights and 
responsibilities, including:
    (1) The right to request a hearing and decision from EEOC or an 
immediate final decision from the agency after an investigation;
    (2) Election rights;
    (3) The right to file a notice of intent to sue and a lawsuit under 
the ADEA instead of an administrative complaint of age discrimination; 
and
    (4) The duty to mitigate damages;
    (5) Relevant time frames.
    (b) EEO Counselors shall advise aggrieved persons that only the 
claims raised in pre-complaint counseling (or issues or claims like or 
related to claims raised in pre-complaint counseling) may be alleged in 
a subsequent complaint filed with the Department.
    (c) EEO Counselors shall advise aggrieved persons of their duty to 
keep the Department and EEOC informed of their current address and the 
name of the representative, if applicable, and to serve copies of 
hearing and appeal notices on the Department.
    (d) EEO Counselors shall provide to the aggrieved person the notice 
of the right to file an individual or a class complaint. If the 
aggrieved person informs the EEO Counselor that the aggrieved person 
wishes to file a class complaint, the EEO Counselor shall explain the 
class complaint procedures and the responsibilities of a class agent and 
provide class complaint counseling prior to the issuance of the notice 
of right to file a complaint.

[[Page 117]]

    (e) EEO Counselors shall advise aggrieved persons that, where the 
Department agrees to offer ADR in a particular case, they may choose 
between participation in the EEO ADR Program and the traditional EEO 
counseling process. The EEO Counselor shall conduct the final interview 
with the aggrieved person within 30 days of the date the aggrieved 
person initially contacted the Department's EEO office to request 
counseling, unless the aggrieved person agrees to a longer counseling 
period or if the aggrieved person elects the ADR program and agrees to 
extend the initial 30-day pre-complaint period for an additional period 
of no more than 60 days.
    (f) If the matter has not been resolved before the conclusion of the 
agreed extension, the EEO Counselor shall issue the notice of right to 
file a discrimination complaint no later than the 90th day of the 
aggrieved person's initial contact with the EEO Office. The notice shall 
inform the aggrieved person of the right to file a discrimination 
complaint within 15 days of receipt of the notice; of the appropriate 
official with whom to file a complaint; and of the aggrieved person's 
duty to assure that the Department is informed immediately if the 
aggrieved person retains counsel or a representative and if the 
aggrieved person changes address.
    (g) EEO Counselors shall prepare a report sufficient to document the 
fact that the required counseling actions were taken and an attempt to 
resolve any jurisdictional questions was made. The report shall include 
a precise description of the claim(s) and the basis(es) identified by 
the aggrieved person; pertinent documents gathered during the inquiry, 
specific information concerning timeliness of the initial counseling 
contact, and a statement as to whether a resolution attempt was 
undertaken, and if so, the disposition.
    (h) EEO Counselors shall not attempt in any way to dissuade the 
aggrieved person from filing an EEO complaint. The EEO Counselor shall 
not reveal to the responsible management officials the identity of an 
aggrieved person who consulted the EEO Counselor, except when authorized 
to do so by the aggrieved person, or until the Department has received a 
formal discrimination complaint from that person involving that same 
matter.



Sec. 7.13  Responsibilities of the Assistant Secretary for Administration.

    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 ensure 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 ensure the effective implementation of the 
personnel management policies, programs, automated systems, and EEO 
procedures;
    (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 affect employability;
    (d) Prepare and implement plans for recruitment and reports in 
accordance with the Federal Equal Opportunity Recruitment Program 
(FEORP) and the Disabled Veterans Affirmative Action Program (DVAAP);
    (e) Provide reasonable accommodations to the known physical or 
mental limitations of qualified employees with disabilities unless the 
accommodations would impose an undue hardship on the operation of the 
Department's programs;
    (f) Adhere to and implement the Department's policy on religious 
accommodation;
    (g) Designate a senior level Disability Program Manager to promote 
EEO/ADR/AE for persons with disabilities; to assure the accessibility of 
all HUD facilities and programs; and to manage the resources for 
providing reasonable accommodation;
    (h) In conjunction with the Director of EEO, provide and coordinate 
mandatory EEO Counselor training;

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    (i) Provide and coordinate mandatory supervisors' and managers' EEO/
AE/ADR training;
    (j) Provide applicant data to ODEEO for analysis; and
    (k) Designate a DCM to represent the organizational unit in EEO 
matters. The DCM shall be the AO for the organizational unit or another 
designee of the EEO Officer.



Sec. 7.14  Responsibilities of the Office of Human Resources.

    In accordance with guidelines issued by the Assistant Secretary for 
Administration, Human Resources Officers shall:
    (a) Appraise job structure and employment practices to ensure 
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 EEO 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) Upon request, provide personnel information to EEO Counselors 
and other authorized officials or agents of the agency who are involved 
in the processing of a discrimination complaint;
    (d) Evaluate hiring methods and practices to ensure impartial 
consideration for all job applicants;
    (e) Ensure that new employee orientation programs contain 
appropriate references to the Department's EEO/ADR/AE policies, 
procedures and programs and accomplishment of EEO objectives under the 
Department's Performance, Accountability, Communications System (PACS) 
or other Departmental performance appraisal system;
    (f) Participate in the preparation and distribution of such 
educational materials as may be necessary to adequately inform all 
employees of their rights and responsibilities as described in this 
part, including the Department's EEO program directives;
    (g) In coordination with the Director of the HUD Training Academy, 
develop an on-going training program for supervisors and managers to 
ensure understanding of the Departmental EEO/ADR/AE programs, policy and 
other requirements which foster effective teamwork and high morale;
    (h) In coordination with the Director of the HUD Training Academy, 
the Office of General Counsel, the Office of Administration and the 
Director of EEO, develop an on-going training program for managers and 
supervisors to ensure understanding of the Department's EEO and ADR 
programs. At a minimum, the training should include:
    (1) The Civil Rights Act of 1964 (42 U.S.C. 2000d);
    (2) Sections 501 and 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 791, 794);
    (3) The Administrative Dispute Resolution Act of 1996 (5 U.S.C. 556, 
571) and its amendments emphasizing the federal government's interest in 
encouraging mutual resolution of disputes and the benefits associated 
with using ADR;
    (4) EEOC's regulations and policy guidance concerning EEO, AE and 
ADR;
    (5) The ADR methods employed by the Department;
    (6) An explanation of how to draft a settlement agreement that 
complies with the standards required by ODEEO and 29 CFR part 1614;
    (7) An explanation of the recourse available where noncompliance by 
the Department is alleged; and
    (8) Training on EEO policy, programs and procedures;
    (i) In coordination with the Director of the HUD Training Academy, 
the Office of General Counsel, the Office of Administration, and the 
Director of EEO, the Department may enter into agreements to have EEO/
AE/ADR mandatory annual supervisory and management training provided by 
other federal agencies or other resources;
    (j) Decide all personnel actions on merit principles and in a manner 
which will demonstrate affirmative EEO for the organization;
    (k) Ensure to the greatest possible utilization and development of 
the skills and potential abilities of all employees;

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    (l) Track applicant flow and promptly take or recommend appropriate 
action to overcome any impediment to achieving the objectives of the 
EEO/ADR/AE programs and accomplishing the EEO objectives under the 
Performance, Accountability, Communications System (PACS) or other 
Departmental performance appraisal system;
    (m) Provide applicant data to ODEEO for analysis; and
    (n) Provide recognition to employees, supervisors, managers and 
units demonstrating superior accomplishments in EEO.



Sec. 7.15  Responsibilities of managers and supervisors.

    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 and documenting subordinate managers and supervisors 
on their performance of EEO/ADR/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 workforce;
    (d) Ensuring 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 ADR, the Upward 
Mobility Program, the Mentoring Program and the implementation of 
Individual Development Plans;
    (e) Encouraging and authorizing staff participation in the various 
Diversity Program observances and training opportunities;
    (f) Being proactive in addressing EEO/ADR/AE issues, and maintaining 
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 ADR techniques;
    (h) Making reasonable accommodations to the known physical and 
mental limitations of applicants and employees with disabilities when 
those accommodations can be made without undue hardship on the business 
of the Department;
    (i) Attending mandatory annual supervisory and management training; 
and
    (j) Adhering to and implementing the Department's policy on 
religious accommodations.



Sec. 7.16  Responsibilities of employees.

    All employees of the Department are responsible for:
    (a) Being informed as to the Department's EEO/ADR/AE programs;
    (b) Adopting an attitude of full acceptance and respect for 
minorities, females, persons with disabilities, veterans and others of 
diverse characteristics in the workforce, and support for and 
participation in ADR;
    (c) Providing equality of treatment and service to all persons with 
whom they come in contact in carrying out their job responsibilities;
    (d) Providing assistance to supervisors and managers in carrying out 
their responsibilities in the EEO/ADR/AE programs; and
    (e) Cooperating during EEO investigations and throughout the entire 
EEO ADR process.

                        Pre-Complaint Processing



Sec. 7.25  Pre-complaint processing.

    (a) An ``aggrieved person'' must request counseling in accordance 
with 29 CFR 1614.105(a). The aggrieved person must initiate contact with 
an EEO Counselor within 45 days of the date of the matter alleged to be 
discriminatory or, in the case of a personnel action, within 45 days of 
the effective date of the action. EEOC's regulation at 29 CFR 1614.105 
shall govern the Department's pre-complaint processing.
    (b) The Department or the EEOC shall extend the 45-day time limit in 
paragraph (a) of this section when the individual shows that the 
individual was not notified of the time limits and was not otherwise 
aware of them, that the individual did not know and reasonably should 
not have known that the discriminatory matter or personnel

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action occurred, that despite due diligence the individual was prevented 
by circumstances beyond the individual's control from contacting the EEO 
Counselor within the time limits, or for other reasons considered 
sufficient by the ODEEO or the EEOC.
    (c) At the initial counseling session, EEO Counselors must advise 
individuals, in writing, of their rights and responsibilities, 
including:
    (1) The right to request a hearing and decision from an 
Administrative Judge of the EEOC or an immediate final decision from the 
Department following an investigation in accordance with 29 CFR 
1614.108(f);
    (2) Election rights pursuant to 29 CFR 1614.301 and 29 CFR 1614.302;
    (3) The right to file a notice of intent to sue pursuant to 29 CFR 
1614.201(a) and a lawsuit under the ADEA instead of an administrative 
complaint of age discrimination under this subpart;
    (4) The duty to mitigate damages;
    (5) Relevant time frames; and
    (6) The requirement that only the claims raised in pre-complaint 
counseling (or claims like or related to claims raised in pre-complaint 
counseling) may be alleged in a subsequent complaint filed with the 
Department.



Sec. 7.26  EEO Alternative Dispute Resolution Program.

    (a) The aggrieved person may elect to participate in the EEO ADR 
Program or the traditional EEO counseling procedures. When ADR is 
chosen, the EEO Counselor shall advise the aggrieved person that if the 
dispute is resolved during the ADR process, the terms of the agreement 
must be in writing and signed by both the aggrieved person and the 
appropriate Department representative. The Director of EEO may execute 
ADR settlement agreements that are initiated in the EEO process. The EEO 
Counselor shall advise the aggrieved person that if no resolution is 
reached under the EEO ADR Program, or if the matter has not been 
resolved 90 days from the initial contact with the EEO Office, the 
aggrieved person will receive a final interview and the notice of right 
to file a formal complaint shall be issued by the EEO Counselor. Nothing 
said or done during attempts to resolve the complaint through ADR may be 
included in any EEO complaint (should ADR be unsuccessful) nor can the 
ADR proceedings be disclosed.
    (b) In appropriate cases (as determined by the Director of EEO on a 
case-by-case basis), ADR is available during the formal complaint 
process. Participation in ADR at the formal complaint stage does not 
affect the normal processing of the formal complaint, including the 
investigation. Should ADR be initiated at the formal complaint stage, 
the time period for processing the complaint may be extended by 
agreement for not more than 90 days. If ADR does not resolve the 
issue(s), the complaint must be processed within the extended time 
period agreed upon by the parties, but no later than the 90th day.

                               Complaints



Sec. 7.30  Presentation of complaint.

    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 part 1614.



Sec. 7.31  Who may file a complaint, with whom filed, and time limits.

    (a) Who may file a complaint. Any aggrieved person (referred to 
elsewhere in this part as the Complainant in the formal complaint stage) 
who has satisfied the requirements of Sec. 7.25, may file a complaint, 
unless there is an executed settlement agreement or amended complaint of 
like or similar issues. The complaint must be filed with the Director of 
EEO within 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 of 29 CFR part 
1614.
    (b) Filing and computation of time. (1) All time periods in this 
subpart stated in terms of days are calendar days unless otherwise 
stated.

[[Page 121]]

    (2) A document shall be deemed timely if the document is received or 
postmarked before the expiration of the applicable filing period, or, in 
the absence of a legible postmark, if the document is received by mail 
within five days of the expiration of the applicable filing period.
    (3) The time limits in this part are subject to waiver, estoppel and 
equitable tolling.
    (4) The first day counted shall be the day after the event from 
which the time period begins to run and the last day of the period shall 
be included, unless the last day falls on a Saturday, Sunday or Federal 
holiday, in which case the period shall be extended to include the next 
business day.



Sec. 7.32  Representation and official time.

    (a) At any stage in the processing of an EEO complaint, including 
the counseling stage under 29 CFR 1614.105 and during participation in 
the EEO ADR Program, the Complainant shall have the right to be 
accompanied, represented, and advised by a representative of 
Complainant's choice, except as limited by 29 CFR part 1614.
    (b) If the Complainant is an employee of the Department, the 
Complainant shall have a reasonable amount of official time, if 
otherwise on duty, to prepare the complaint and to respond to Department 
and EEOC requests for information if the Complainant is otherwise in 
active duty status. If the Complainant is an employee of the Department 
and the Complainant designates another employee of the Department as the 
Complainant's representative, the representative shall have a reasonable 
amount of official time, if otherwise on duty, to prepare the complaint 
and respond to Department and EEOC requests for information.
    (c) The Department is not obligated to change work schedules, incur 
overtime wages, or pay travel expenses to facilitate the choice of a 
specific representative or to allow the Complainant and representative 
to confer. The Complainant and the Complainant's representative, if 
employed by the Department and otherwise in a pay status, shall be on 
official time, regardless of their tour of duty, when their presence is 
authorized or required by the Department or the EEOC during the 
investigation, informal adjustment, or hearing on the complaint.
    (d) In cases where the representation of a Complainant or the 
Department would conflict with the official or collateral duties of the 
representative, the EEOC or the Department may, after giving the 
representative an opportunity to respond, disqualify the representative.
    (e) Unless the Complainant states otherwise in writing, after the 
Department has received written notice of the name, address and 
telephone number of a representative for the Complainant, all official 
correspondence shall be with the representative with copies to the 
Complainant. When the Complainant designates an attorney as 
representative, service of all official correspondence shall be made on 
the attorney and the Complainant, but time frames for receipt of 
materials shall be computed from the time of receipt by the attorney. 
The Complainant must serve all official correspondence on the designated 
representative of the Department and shall notify the Department of any 
changes of the representative and Complainant's address.
    (f) The Complainant shall at all times be responsible for proceeding 
with the complaint and cooperating in the entire EEO complaint process, 
whether or not the Complainant has designated a representative.
    (g) Witnesses who are Federal employees, regardless of their tour of 
duty and regardless of whether they are employed by the Department or 
some other Federal agency, shall be in a duty status when their presence 
is authorized or required by EEOC or Department officials in connection 
with an EEO complaint.



Sec. 7.33  Contents of the complaint.

    (a) Information to be included in complaint. (1) The complaint filed 
should include the following information:
    (i) The specific claim or personnel matter which is alleged to be 
discriminatory;
    (ii) The date the act or matter occurred;
    (iii) The protected basis or bases on which the alleged 
discrimination occurred;

[[Page 122]]

    (iv) Facts and other pertinent information to support the claim(s) 
of discrimination; and
    (v) The relief desired.
    (2) To expedite the processing of complaints of discrimination, the 
Complainant may use the HUD EEO-1 Complaint Form to file the complaint.
    (b) Amendments. (1) A Complainant may amend a complaint at any time 
prior to the conclusion of the investigation to include issues or claims 
like or related to those raised in the complaint. After requesting a 
hearing, a Complainant may file a motion with the EEOC Administrative 
Judge to amend a complaint to include issues or claims like or related 
to those raised in the complaint.
    (2) The Department shall acknowledge receipt of a complaint or an 
amendment to a complaint in writing and inform the Complainant of the 
date on which the complaint or amendment was filed. The Department shall 
advise the Complainant in the acknowledgment of the EEOC office and its 
address where a request for a hearing shall be sent. Such acknowledgment 
shall also advise the Complainant that:
    (i) The Complainant has the right to appeal the dismissal of or 
final action on a complaint; and
    (ii) The Department is required to conduct an impartial and 
appropriate investigation of the complaint within 180 days of the filing 
of the complaint unless the parties agree in writing to extend the time 
period. When a complaint has been amended, the Department shall complete 
its investigation within the earlier of 180 days after the last 
amendment to the complaint or 360 days after the filing of the original 
complaint, except that the Complainant may request a hearing from an 
EEOC Administrative Judge on the consolidated complaints any time after 
180 days from the date of the first filed complaint.
    (c) Joint processing and consolidation. (1) Complaints of 
discrimination filed by two or more Complainants consisting of 
substantially similar allegations of discrimination or relating to the 
same matter may be consolidated by the Department or the EEOC for joint 
processing after appropriate notification to the parties.
    (2) Two or more complaints of discrimination filed by the same 
Complainant shall be consolidated by the Department for joint processing 
after appropriate notification to the Complainant. When a complaint has 
been consolidated with one or more earlier filed complaints, the 
Department shall complete its investigation within the earlier of 180 
days after the filing of the last complaint or 360 days after the filing 
of the original complaint, except that the Complainant may request a 
hearing from an EEOC Administrative Judge on the consolidated complaints 
any time after 180 days from the date of the first filed complaint.
    (3) EEOC Administrative Judges or the EEOC may, in their discretion, 
consolidate two or more complaints of discrimination filed by the same 
Complainant.
    (d) Class complaints. (1) Definitions. (i) A class is a group of 
employees, former employees or applicants for employment who, it is 
alleged, have been or are being adversely affected by the Department's 
personnel management policy or practice that discriminates against the 
group on the basis of their common race, color, religion, sex, national 
origin, age, disability, or in reprisal for participating in protected 
EEO activity or for opposing a practice made illegal under the EEO 
statutes.
    (ii) A class complaint is a written complaint of discrimination 
filed on behalf of a class by the agent of the class that satisfies the 
requirements of 29 CFR 1614.204.
    (2) Pre-complaint processing. A current or former employee or 
applicant who wishes to file a class complaint must be counseled in 
accordance with 29 CFR 1614.105. A Complainant may move for class 
certification at any reasonable point in the process when it becomes 
apparent that there are class implications to the claim raised in an 
individual complaint. If a Complainant moves for class certification 
after completing the counseling process in 29 CFR 1614.105, no 
additional counseling is required. Class certification shall be denied 
by the EEOC Administrative

[[Page 123]]

Judge, when the Complainant has unduly delayed in moving for 
certification.
    (3) Certification. Class complaints are certified by an EEOC 
Administrative Judge in accordance with the provisions of 29 CFR 
1614.204.
    (e) Mixed case complaints. (1) Definitions. A mixed case complaint 
is a complaint of employment discrimination filed with a Federal agency 
based on race, color, religion, sex, national origin, age, disability, 
or in reprisal for participating in protected EEO activity or for 
opposing a policy or practice made illegal by the EEO statutes, related 
to or stemming from an action that can be appealed to the Merit Systems 
Protection Board (MSPB). The complaint may contain only a claim of 
employment discrimination or the complaint may contain additional claims 
that the MSPB has jurisdiction to address.
    (2) Election. An aggrieved person may initially file a mixed case 
complaint with the Department pursuant to this section or an appeal on 
the same matter with the MSPB pursuant to 5 CFR 1201.151, but not both. 
The Department shall inform every employee who is the subject of an 
action that is appealable to the MSPB and who has either orally or in 
writing raised the issue of discrimination during the processing of the 
action of the right to file either a mixed case complaint with the 
Department or to file a mixed case appeal with the MSPB. If a person 
files a mixed case appeal with the MSPB instead of a mixed case 
complaint and the MSPB dismisses the appeal for jurisdictional reasons, 
the Department shall promptly notify the individual in writing of the 
right to contact an EEO counselor within 45 days of receipt of this 
notice and to file an EEO complaint, subject to 29 CFR 1614.107.
    (3) Procedures for agency processing of mixed case complaints. When 
a complainant elects to proceed initially under 29 CFR part 1614, 
subpart C, rather than with the MSPB, the procedures in 29 CFR part 
1614, subpart A, shall govern the processing of the mixed case complaint 
with the following exceptions:
    (i) At the time the Department advises a Complainant of the 
acceptance of a mixed case complaint, the Department shall also advise 
the Complainant that:
    (A) If a final decision is not issued within 120 days of the date of 
filing of the mixed case complaint, the Complainant may appeal the 
matter to the MSPB at any time thereafter as specified at 5 CFR 
1201.154(b)(2) or may file a civil action as specified at 29 CFR 
1614.310(g), but not both; and
    (B) If the Complainant is dissatisfied with the Department's final 
decision on the mixed case complaint, the Complainant may appeal the 
matter to MSPB (not EEOC) within 30 days of receipt of the Department's 
final decision;
    (ii) Upon completion of the investigation, the notice provided the 
Complainant in accordance with 29 CFR 1614.108(f) will advise the 
Complainant that a final decision will be issued within 45 days without 
a hearing; and
    (iii) At the time that the Department issues its final decision on a 
mixed case complaint, the Department shall advise the Complainant of the 
right to appeal the matter to the MSPB (not EEOC) within 30 days of 
receipt and of the right to file a civil action as provided at 29 CFR 
1614.310(a).
    (4) Dismissal. The Department may dismiss a mixed case complaint for 
the reasons provided in, and under the conditions prescribed in 29 CFR 
1614.107. If MSPB's Administrative Judge finds that MSPB does not have 
jurisdiction over the matter, the Department shall resume processing of 
the complaint as a non-mixed case EEO complaint.



Sec. 7.34  Acceptability.

    (a) The Director of EEO shall determine whether a complaint comes 
within the purview of 29 CFR part 1614 and shall advise the Complainant 
and Complainant's representative, if applicable, in writing of the 
acceptance or dismissal of the claims(s) of the complaint. The Notice of 
Receipt is provided to the Complainant, Complainant's representative, if 
applicable, and to the organizational unit through the appropriate EEO 
Officer and DCM.
    (b) Dismissals of complaints are governed by the notice requirements 
and procedures in 29 CFR 1614.106(e)(1) and 29 CFR 1614.107.

[[Page 124]]

    (c) Prior to a request for a hearing in a case, the Department shall 
dismiss an entire complaint for any of the reasons provided in 29 CFR 
1614.107(a)(1) through (9), including a complaint that alleges 
dissatisfaction with the processing of a previously filed complaint; or 
where the Department, strictly applying the criteria in EEOC decisions, 
finds that the complaint is part of a clear pattern of misuse of the EEO 
process for a purpose other than the prevention and elimination of 
employment discrimination. A clear pattern of misuse of the EEO process 
requires:
    (1) Evidence of multiple complaint filings; and
    (2) Claims that are similar or identical, lack specificity or 
involve matters previously resolved; or
    (3) Evidence of circumventing other administrative processes, 
retaliating against the Department's in-house administrative processes 
or overburdening the EEO complaint system.
    (d) Where the Director of EEO believes that some, but not all, of 
the claims in a complaint should be dismissed for the reasons provided 
in this section and 29 CFR 1614.107(a)(1) through (9), the Department 
shall notify the Complainant in writing of its determination, the 
rationale for that determination and that those claims will not be 
investigated, and shall place a copy of the notice in the investigative 
file. A determination under 29 CFR 1614.107(b)(1) that some claims 
should be dismissed is reviewable by an EEOC Administrative Judge if a 
hearing is requested on the remainder of the complaint, but is not 
appealable until final action is taken on the remainder of the 
complaint.



Sec. 7.35  Processing.

    (a) The Director of EEO will process complaints filed under 29 CFR 
part 1614 for the Department with the assistance of the EEO Officer, 
DCM, the EEO Counselor and the full cooperation of all other Department 
managers, supervisors and other employees.
    (b) The Director of EEO shall, in accordance with 29 CFR part 1614, 
provide for the development of an impartial and appropriate factual 
record upon which to make findings on the claims raised by the written 
complaint. An appropriate factual record is one that allows a reasonable 
fact finder to draw conclusions as to whether discrimination occurred. 
The person assigned to develop the factual record may use an exchange of 
letters or memoranda, interrogatories, investigations, fact-finding 
conferences or any other fact-finding methods that efficiently and 
thoroughly address the matters at issue and is encouraged, in accordance 
with 29 CFR 1614.108(b), to incorporate ADR techniques into the 
investigative efforts in order to promote early resolution of 
complaints.
    (c) The Director of EEO will provide the Complainant and 
Complainant's representative, if applicable, and the EEO Officer a copy 
of the record developed. Within 180 days from the filing of the 
complaint, or where a complaint was amended, within the earlier of 180 
days after the last amendment to the complaint or 360 days after the 
filing of the original complaint, within the time period contained in an 
order from the Office of Federal Operations on an appeal from a 
dismissal, or within any period of extension provided for in 29 CFR 
1614.108(f), the Department shall provide the Complainant with a copy of 
the investigative file, and shall notify the Complainant that, within 30 
days of receipt of the investigative file, the Complainant has the right 
to request a hearing and decision from an EEOC Administrative Judge or 
may request an immediate final decision pursuant to 29 CFR 1614.110 from 
the Department.



Sec. 7.36  Hearing.

    (a) Notification of right to request a hearing. The Director of EEO 
will notify the Complainant, the General Counsel, EEO Officer, DCM and 
Complainant's representative, where applicable, of the Complainant's 
right to request an administrative hearing and decision before the EEOC 
or the Department's final decision and the time frames for executing the 
right to request an administrative hearing. Note: Where a mixed case 
complaint is filed, the Complainant has no right to a hearing before an 
EEOC Administrative Judge unless the MSPB has dismissed the mixed case 
complaint or appeal for jurisdictional reasons. (See 29 CFR 
1614.302(2)(b).)

[[Page 125]]

    (b) Requesting a hearing. Where the Complainant has received the 
notice required in Sec. 7.35(c) and 29 CFR 1614.108(f) or at any time 
after 180 days have elapsed from the filing of the complaint, the 
Complainant may request a hearing by submitting a written request for a 
hearing directly to the EEOC office indicated in the Department's 
acknowledgment letter. The Complainant shall send a copy of the request 
for a hearing to the Department's EEO office. Within 15 days of receipt 
of a copy of complainant's request for a hearing, or the docketing 
notice from the EEOC, whichever is earlier, the Director of EEO shall 
provide a copy of the complaint file to EEOC and, if not previously 
provided, to the Complainant, Complainant's representative, if 
applicable, and the appropriate Office of General Counsel.
    (c) EEOC appointment of EEOC Administrative Judge. When a 
Complainant requests a hearing, the EEOC shall appoint an EEOC 
Administrative Judge to conduct a hearing in accordance with this 
section. Upon appointment, the EEOC Administrative Judge shall assume 
full responsibility for the adjudication of the complaint, including 
overseeing the development of the record. Any hearing will be conducted 
by an EEOC Administrative Judge or hearing examiner with appropriate 
security clearances.
    (d) Dismissals. EEOC Administrative Judges may dismiss complaints 
pursuant to 29 CFR 1614.107, on their own initiative, after notice to 
the parties, or upon the Department's motion to dismiss a complaint.
    (e) Offer of resolution. Any time after the filing of the written 
complaint but not later than the date an EEOC Administrative Judge is 
appointed to conduct a hearing, the Department may make an offer of 
resolution to a Complainant who is represented by an attorney.
    (1) Any time after the parties have received notice that an EEOC 
Administrative Judge has been appointed to conduct a hearing, but not 
later than 30 days prior to the hearing, the Department may make an 
offer of resolution to the Complainant, whether represented by an 
attorney or not.
    (2) The offer of resolution shall be in writing and shall include a 
notice explaining the possible consequences of failing to accept the 
offer. The Department's offer, to be effective, must include attorney's 
fees and costs and must specify any non-monetary relief.
    (3) With regard to monetary relief, the Department may make a lump 
sum offer covering all forms of monetary liability, or the Department 
may itemize the amounts and types of monetary relief being offered.
    (4) The Complainant shall have 30 days from receipt of the offer of 
resolution to accept the offer of resolution. If the Complainant fails 
to accept an offer of resolution and the relief awarded in the EEOC 
Administrative Judge's decision, the Department's final decision, or the 
EEOC decision on appeal is not more favorable than the offer, then, 
except where the interest of justice would not be served, the 
Complainant shall not receive payment from the Department of attorney's 
fees or costs incurred after the expiration of the 30-day acceptance 
period.
    (5) An acceptance of an offer must be in writing and will be timely 
if postmarked or received within the 30-day period. Where a Complainant 
fails to accept an offer of resolution, the Department may make other 
offers of resolution and either party may seek to negotiate a settlement 
of the complaint at any time.
    (f) Orders to produce evidence and failure to comply. (1) The 
Complainant, the Department, and any employee of the Department shall 
produce such documentary and testimonial evidence as the EEOC 
Administrative Judge deems necessary. The EEOC Administrative Judge 
shall serve all orders to produce evidence on both parties.
    (2) When the Complainant, or the agency against which a complaint is 
filed, or its employees fail without good cause shown to respond fully 
and in timely fashion to an order of an EEOC Administrative Judge, or 
requests for the investigative file, for documents, records, comparative 
data, statistics, affidavits, or the attendance of witness(es), the EEOC 
Administrative Judge shall, in appropriate circumstances:

[[Page 126]]

    (i) Draw an adverse inference that the requested information, or the 
testimony of the requested witness, would have reflected unfavorably on 
the party refusing to provide the requested information;
    (ii) Consider the matters to which the requested information or 
testimony pertains to be established in favor of the opposing party;
    (iii) Exclude other evidence offered by the party failing to produce 
the requested information or witness;
    (iv) Issue a decision fully or partially in favor of the opposing 
party; or
    (v) Take such other actions as appropriate.
    (g) Discovery, conduct and record of hearing. (1) Discovery. The 
EEOC Administrative Judge shall notify the parties of the right to seek 
discovery prior to the hearing and may issue such discovery orders as 
are appropriate. Unless the parties agree in writing concerning the 
methods and scope of discovery, the party seeking discovery shall 
request authorization from the EEOC Administrative Judge prior to 
commencing discovery. Both parties are entitled to reasonable 
development of evidence on matters relevant to the issues raised in the 
complaint, but the EEOC Administrative Judge may limit the quantity and 
timing of discovery. Evidence may be developed through interrogatories, 
depositions, and requests for admissions, stipulations or production of 
documents. Grounds for objection to producing evidence shall be that the 
information sought by either party is irrelevant, overburdensome, 
repetitious, or privileged.
    (2) Conduct of hearing. The Department shall provide for the 
attendance at a hearing of all employees approved as witnesses by an 
EEOC Administrative Judge. Attendance at hearings will be limited to 
persons determined by the EEOC Administrative Judge to have direct 
knowledge relating to the complaint. Hearings are part of the 
investigative process and are thus closed to the public. The EEOC 
Administrative Judge shall have the power to regulate the conduct of a 
hearing, limit the number of witnesses where testimony would be 
repetitious, and exclude any person from the hearing for contumacious 
conduct or misbehavior that obstructs the hearing. The EEOC 
Administrative Judge shall receive into evidence information or 
documents relevant to the complaint. Rules of evidence shall not be 
applied strictly, but the EEOC Administrative Judge shall exclude 
irrelevant or repetitious evidence. The EEOC Administrative Judge or the 
Commission may refer to the Disciplinary Committee of the appropriate 
Bar Association any attorney or, upon reasonable notice and an 
opportunity to be heard, suspend or disqualify from representing 
Complainants or agencies in EEOC hearings any representative who refuses 
to follow the orders of an EEOC Administrative Judge, or who otherwise 
engages in improper conduct.
    (3) Record of hearing. The hearing shall be recorded and the 
Department shall arrange and pay for verbatim transcripts. All documents 
submitted to, and accepted by, the EEOC Administrative Judge at the 
hearing shall be made part of the record of the hearing. If the 
Department submits a document that is accepted, the Department shall 
furnish a copy of the document to the Complainant. If the Complainant 
submits a document that is accepted, the EEOC Administrative Judge shall 
make the document available to the Department representative for 
reproduction.



Sec. 7.37  Final action.

    (a) Department final decision without a hearing. The Director of EEO 
shall make the final decision for the Department based on the record 
developed through the processing of the complaint. The Director of EEO 
may consult with the General Counsel, the Assistant Secretary of 
Administration, the Office of Human Resources, the EEO Officer, the DCM, 
the EEO Counselor, other managers and supervisors, all designees and 
comparables, and all other persons the Director of EEO deems necessary. 
The decision, where appropriate, shall include the remedial and 
corrective action necessary to ensure that the Department is in 
compliance with the EEO statutes and to promote the Department's policy 
of equal employment opportunity. When the

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Department dismisses an entire complaint under 29 CFR 1614.107, receives 
a request for an immediate final decision or does not receive a reply to 
the notice issued under 29 CFR 1614.108(f), the Department shall take 
final action by issuing a final decision. The final decision shall 
consist of findings by the Department on the merits of each issue in the 
complaint, or, as appropriate, the rationale for dismissing any claims 
in the complaint and, when discrimination is found, appropriate remedies 
and relief in accordance with 29 CFR part 1614, subpart E. The 
Department shall issue the final decision within 60 days of receiving 
notification that a Complainant has requested an immediate decision from 
the Department, or within 60 days of the end of the 30-day period for 
the Complainant to request a hearing or an immediate final decision 
where the Complainant has not requested either a hearing or a decision. 
The final action shall contain notice of the right to appeal the final 
action to the EEOC, the right to file a civil action in federal district 
court, the name of the proper defendant in any such lawsuit and the 
applicable time limits for appeals and lawsuits. A copy of the Notice of 
Appeal Petition (EEOC Form 573) shall be attached to the final action.
    (b) Department final order after decision by EEOC Administrative 
Judge. When an EEOC Administrative Judge has issued a decision under 29 
CFR 1614.109 (b), (g) or (i), the Department shall take final action on 
the complaint by issuing a final order within 40 days of receipt of the 
hearing file and the EEOC Administrative Judge's decision. The final 
order shall notify the Complainant whether or not the Department will 
fully implement the decision of the EEOC Administrative Judge and shall 
contain notice of the Complainant's right to appeal to the EEOC, the 
right to file a civil action in federal district court, the name of the 
proper defendant in any such lawsuit and the applicable time limits for 
appeals and lawsuits. If the final order does not fully implement the 
decision of the EEOC Administrative Judge, then the Department shall 
simultaneously file an appeal in accordance with 29 CFR 1614.403 and 
append a copy of the appeal to the final order. A copy of EEOC Form 573 
shall be attached to the final order.
    (c) Decision and final order by EEOC Administrative Judge after 
hearing. Unless the EEOC Administrative Judge makes a written 
determination that good cause exists for extending the time for issuing 
a decision, an EEOC Administrative Judge shall issue a decision on the 
complaint, and shall order appropriate remedies and relief where 
discrimination is found, within 180 days of receipt by the EEOC 
Administrative Judge of the complaint file from the Department. The EEOC 
Administrative Judge shall send copies of the hearing record, including 
the transcript, and the decision to the parties. If the Department does 
not issue a final order within 40 days of receipt of the EEOC 
Administrative Judge's decision in accordance with 29 CFR 1614.110, then 
the decision of the EEOC Administrative Judge shall become the final 
action of the Department.
    (d) Decision and final order by EEOC Administrative Judge without 
hearing. (1) If a party believes that some or all material facts are not 
in genuine dispute and there is no genuine issue as to credibility, the 
party may, at least 15 days prior to the date of the hearing or at such 
earlier time as required by the EEOC Administrative Judge, file a 
statement with the EEOC Administrative Judge prior to the hearing 
setting forth the fact or facts and referring to the parts of the record 
relied on to support the statement. The statement must demonstrate that 
there is no genuine issue as to any such material fact. The party shall 
serve the statement on the opposing party.
    (2) The opposing party may file an opposition within 15 days of 
receipt of the statement in 29 CFR 1614.109(g)(1). The opposition may 
refer to the record in the case to rebut the statement that a fact is 
not in dispute or may file an affidavit stating that the party cannot, 
for reasons stated, present facts to oppose the request. After 
considering the submissions, the EEOC Administrative Judge may order 
that discovery be permitted on the fact or facts involved, limit the 
hearing to the issues remaining in dispute, issue a decision without

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a hearing or make such other ruling as is appropriate.
    (3) If the EEOC Administrative Judge determines that some or all 
facts are not in genuine dispute, the EEOC Administrative Judge may, 
after giving notice to the parties and providing them an opportunity to 
respond in writing within 15 days, issue an order limiting the scope of 
the hearing or issue a decision without holding a hearing.



Sec. 7.38  Appeals.

    (a) Appeals to the EEOC. (1) A Complainant may appeal the 
Department's final action or dismissal of a complaint. The regulations 
at 29 CFR part 1614, subpart D, govern a Complainant's right of appeal.
    (2) The Department may appeal as provided in 29 CFR 1614.110(a).
    (3) A class agent or the Department may appeal an EEOC 
Administrative Judge's decision accepting or dismissing all or part of a 
class complaint; a class agent may appeal a final decision on a class 
complaint; a class member may appeal a final decision on a claim for 
individual relief under a class complaint; and a class member, a class 
agent or the Department may appeal a final decision on a petition 
pursuant to 29 CFR 1614.204(g)(4).
    (b) Time limits for appeals to the EEOC. Appeals described in 29 CFR 
1614.401 (a) and (c) must be filed within 30 days of Complainant's 
receipt of the dismissal, final action or decision, or within 30 days of 
receipt by the attorney of record, if represented. Appeals described in 
29 CFR 1614.401(b) must be filed within 40 days of receipt of the 
hearing file and decision. Where a Complainant has notified the Director 
of EEO of alleged noncompliance with a settlement agreement in 
accordance with 29 CFR 1614.504, the Complainant may file an appeal 35 
days after service of the allegations of noncompliance, but no later 
than 30 days after receipt of the Department's determination.
    (c) How to appeal. (1) The Complainant, the Department, a class 
agent, grievant or individual class claimant (referred to elsewhere in 
this part as the appellant) must file an appeal with the Director, 
Office of Federal Operations, Equal Employment Opportunity Commission, 
at P.O. Box 19848, Washington, DC 20036, or by personal delivery or 
facsimile. The appellant should use EEOC Form 573, Notice of Appeal/
Petition, and should indicate what is being appealed.
    (2) The appellant shall furnish a copy of the appeal to the opposing 
party at the same time the appeal is filed with the EEOC. In or attached 
to the appeal to the EEOC, the appellant must certify the date and 
method by which service was made on the opposing party.
    (3) If an appellant does not file an appeal within the time limits 
of this section, the appeal shall be dismissed by the EEOC as untimely.
    (4) Any statement or brief on behalf of a Complainant in support of 
the appeal must be submitted to the Office of Federal Operations within 
30 days of filing the notice of appeal. Any statement or brief on behalf 
of the Department in support of its appeal must be submitted to the 
Office of Federal Operations within 20 days of filing the notice of 
appeal. The Office of Federal Operations will accept statements or 
briefs in support of an appeal by facsimile transmittal, provided they 
are no more than 10 pages long.
    (5) The Department must submit the complaint file to the Office of 
Federal Operations within 30 days of initial notification that the 
Complainant has filed an appeal or within 30 days of submission of an 
appeal by the Department.
    (6) The Department may be represented by the Office of General 
Counsel in appeals before the Office of Federal Operations.
    (7) Any statement or brief in opposition to an appeal must be 
submitted to the EEOC and served on the opposing party within 30 days of 
receipt of the statement or brief supporting the appeal, or, if no 
statement or brief supporting the appeal is filed, within 60 days of 
receipt of the appeal. The Office of Federal Operations will accept 
statements or briefs in opposition to an appeal by facsimile provided 
they are no more than 10 pages long.
    (d) Request for reconsideration. A decision issued under paragraph 
(a) of Sec. 1614.405 is final within the meaning of

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29 CFR 1614.407 unless the EEOC reconsiders the case. A party may 
request reconsideration within 30 days of receipt of a decision of the 
EEOC, which the EEOC in its discretion may grant, if the party 
demonstrates that:
    (1) The appellate decision involved a clearly erroneous 
interpretation of material fact or law; or
    (2) The decision will have a substantial impact on the policies, 
practices or operations of the Department.

                  Other Complaint and Appeal Procedures



Sec. 7.39  Negotiated grievance, MSPB appeal and administrative grievance 
procedures.

    (a) Negotiated grievance procedure. An aggrieved person 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 section is indicated only by the 
filing of a written complaint. An election to proceed under a negotiated 
grievance procedure is indicated by the filing of a timely grievance. 
(See 29 CFR 1614.301.)
    (b) MSPB appeal procedure. (1) Who can file appeal and when. An 
aggrieved person alleging discrimination on basis of race, color, 
religion, sex, national origin, age or reprisal because of participation 
in related to or stemming from an action that can be appealed to the 
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. (See 29 CFR 
1614.302 through 29 CFR 1614.309.)
    (2) Right to file civil action about MSPB appeal or decision. The 
procedures of this section are governed by 29 CFR Sec. 1614.310.
    (3) MSPB appeal rights. The provisions of 29 CFR part 1614, subpart 
C, shall govern MSPB appeal rights.
    (c) Administrative grievance procedure. (1) Grievance. A request by 
an employee, or by a group of employees acting as individuals, for 
personal relief in a matter of concern or dissatisfaction related to 
employment with the Department and over which the Department has 
control, including an allegation of coercion, reprisal or retaliation. 
The range of matters is limited to those for which no other means of 
administrative review is provided.
    (2) Covered employee. Any non-bargaining unit employee, including a 
former employee or applicant for whom a remedy can be provided.
    (3) Responsibilities of participants in the grievance procedure. 
Each employee has the responsibility for making a maximum effort to 
achieve informal settlement of a personal grievance.
    (4) Grievance requirements. The procedures, responsibilities and 
processes to be followed by an employee wishing to file an 
administrative grievance are found in HUD Handbook 771.2 REV-2, 
Administrative Grievances.

                  Remedies, Enforcement and Compliance



Sec. 7.40  Remedies and enforcement.

    (a) Remedies and relief. When the Department, or the EEOC, in an 
individual case of discrimination, finds that a current or former 
employee or applicant has been discriminated against, the Department 
shall provide full relief in accordance with 29 CFR 1614.501.
    (b) Attorney's fees and costs. In a decision or final action, the 
Department, EEOC Administrative Judge or the EEOC may award the 
applicant or current or former employee reasonable attorney's fees 
(including expert witness fees) and other costs incurred in the 
processing of the complaint.
    (1) Full relief in Title VII and Rehabilitation Act cases may 
include compensatory damages, an award of attorney's fees (including 
expert witness fees) and costs when requested and verified, in 
accordance with the requirements of 29 CFR 1614.501(e).
    (2) Time period and persons covered. Attorney's fees shall be paid 
for services performed by an attorney after the filing of a written 
complaint, provided that the attorney provides reasonable notice of 
representation to the Department, EEOC Administrative Judge or EEOC, 
except that fees are allowable for a reasonable period of time prior to 
the notification of representation for

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any services performed in reaching a determination to represent the 
Complainant. The Department is not required to pay attorney's fees for 
services performed during the pre-complaint process, except that fees 
are allowable when the EEOC affirms on appeal an EEOC Administrative 
Judge's decision finding discrimination after the Department takes final 
action by not implementing an EEOC Administrative Judge's decision or 
when the parties agree the Department will pay for attorney's fees for 
pre-complaint representation.
    (c) Notice of representation. Written submissions to the Department 
that are signed by the representative shall be deemed to constitute 
notice of representation.
    (d) Nonattorney fees and costs. Reporter, witness, printing and 
other related fees and costs may be awarded, in accordance with 29 CFR 
1614.501(e)(1)(iii) and 1614.501(e)(2)(ii)(C).



Sec. 7.41  Compliance with EEOC final decisions.

    (a) Relief ordered in a final EEOC decision is mandatory and binding 
on the Department except as provided in this section. The Department's 
failure to implement ordered relief shall be subject to judicial 
enforcement, as specified in 29 CFR 1614.503(g).
    (b) Notwithstanding paragraph (a) of this section, when the 
Department requests reconsideration and the case involves removal, 
separation, or suspension continuing beyond the date of the request for 
reconsideration, and when the decision orders retroactive restoration, 
the Department shall comply with the decision to the extent of the 
temporary or conditional restoration of the employee to duty status in 
the position specified by the EEOC, pending the outcome of the 
Department's request for reconsideration.
    (1) Service under the temporary or conditional restoration 
provisions of paragraph (b) of this section shall be credited toward the 
completion of a probationary or trial period, eligibility for a within-
grade increase, or the completion of the service requirement for career 
tenure, if the EEOC upholds its decision after reconsideration.
    (2) When the Department requests reconsideration, the Department may 
delay the payment of any amounts ordered to be paid to the Complainant 
until after the request for reconsideration is resolved. If the 
Department delays payment of any amount pending the outcome of the 
request to reconsider and the resolution of the request requires the 
Department to make the payment, then the Department shall pay interest 
from the date of the original appellate decision until payment is made.
    (3) The Department shall notify the EEOC and the employee in writing 
at the same time the Department requests reconsideration that the relief 
the Department provides is temporary or conditional and, if applicable, 
that the Department will delay the payment of any amounts owed but will 
pay interest as specified in paragraph (b)(2) of this section. Failure 
of the Department to provide notification will result in the dismissal 
of the Department's request.
    (4) When no request for reconsideration is filed or when a request 
for reconsideration is denied, the Department shall provide the relief 
ordered and there is no further right to delay implementation of the 
ordered relief. The relief shall be provided in full not later than 60 
days after receipt of the final decision, unless otherwise ordered in 
the decision.



Sec. 7.42  Enforcement of EEOC final decisions.

    (a) Petition for enforcement. A Complainant may petition the EEOC 
for enforcement of a decision issued under the EEOC's appellate 
jurisdiction. The petition shall be submitted to the Office of Federal 
Operations. The petition shall specifically provide the reasons that led 
the Complainant to believe that the Department is not complying with the 
decision.
    (b) Referral to the EEOC. Where the Director, Office of Federal 
Operations, is unable to obtain satisfactory compliance with the final 
decision, the Director shall submit appropriate findings and 
recommendations for enforcement to the EEOC, or, as directed by the 
EEOC, refer the matter to another appropriate Department.

[[Page 131]]

    (c) EEOC notice to show cause. The EEOC may issue a notice to the 
Secretary that the Department has failed to comply with a decision and 
to show cause why there is noncompliance. Such notice may request the 
head of the Department or a representative to appear before the EEOC or 
to respond to the notice in writing with adequate evidence of compliance 
or with compelling reasons for non-compliance.
    (d) Notification to complainant of completion of administrative 
efforts. Where the EEOC has determined that the Department is not 
complying with a prior decision, or where the Department has failed or 
refused to submit any required report of compliance, the EEOC shall 
notify the Complainant of the right to file a civil action for 
enforcement of the decision pursuant to title VII, the ADEA, the Equal 
Pay Act or the Rehabilitation Act and to seek judicial review of the 
Department's refusal to implement the ordered relief in accordance with 
the Administrative Procedure Act (5 U.S.C. 701 et seq.), and the 
mandamus statute (28 U.S.C. 1361), or to commence new proceedings in 
accordance with the appropriate statutes.



Sec. 7.43  Settlement agreements.

    (a) The Department shall make reasonable efforts to voluntarily 
settle complaints of discrimination as early as possible in, and 
throughout, the administrative processing of complaints, including the 
pre-complaint counseling stage. These efforts shall include ADR. Any 
settlement reached shall:
    (1) Be in writing;
    (2) Identify the claims resolved;
    (3) Be signed by both parties and/or their designees; and
    (4) Otherwise comply with 29 CFR part 1614.
    (b) Any settlement agreement knowingly and voluntarily agreed to by 
the parties, reached at any stage of the complaint process, shall be 
binding on both parties. Final action that has not been the subject of 
an appeal or civil action shall be binding on the Department. If the 
Complainant believes that the Department has failed to comply with the 
terms of a settlement agreement or decision, the Complainant shall 
notify the Director of EEO, in writing, of the alleged noncompliance 
within 30 days of when the Complainant knew or should have known of the 
alleged noncompliance. The Complainant may request that the terms of the 
settlement agreement be specifically implemented or, alternatively, that 
the complaint be reinstated for further processing from the point 
processing ceased.
    (c) The Department shall resolve the matter and respond to the 
Complainant, in writing. If the Department has not responded to the 
Complainant, in writing, or if the Complainant is not satisfied with the 
Department's attempt to resolve the matter, the Complainant may appeal 
to the EEOC for a determination as to whether the Department has 
complied with the terms of the settlement agreement or final decision. 
The Complainant may file such an appeal 35 days after the Complainant 
has served the Department with the allegations of noncompliance, but 
must file an appeal within 30 days of the Complainant's receipt of the 
Department's determination. The Complainant must serve a copy of the 
appeal on the Department and the Department may submit a response to the 
EEOC within 30 days of receiving notice of the appeal.



Sec. 7.44  Interim relief.

    (a) When the Department appeals and the case involves removal, 
separation, or suspension continuing beyond the date of the appeal, and 
when the EEOC Administrative Judge's decision orders retroactive 
restoration, the Department shall comply with the decision to the extent 
of the temporary or conditional restoration of the employee to duty 
status in the position specified in the decision, pending the outcome of 
the Department appeal. The employee may decline the offer of interim 
relief.
    (b) Service under the temporary or conditional restoration 
provisions of paragraph (a) of this section shall be credited toward the 
completion of a probationary or trial period, eligibility for a within-
grade increase, or the completion of the service requirement for career 
tenure, if the EEOC upholds the decision on appeal. Such service shall 
not be credited toward the completion of any applicable probationary or 
trial period or the completion of the service

[[Page 132]]

requirement for career tenure, if the EEOC reverses the decision on 
appeal.
    (c) When the Department appeals, the Department may delay the 
payment of any amount, other than prospective pay and benefits, ordered 
to be paid to the Complainant until after the appeal is resolved. If the 
Department delays payment of any amount pending the outcome of the 
appeal and the resolution of the appeal requires the Department to make 
the payment, then the Department shall pay interest from the date of the 
original decision until payment is made.
    (d) The Department shall notify the EEOC and the employee in writing 
at the same time the Department appeals that the relief the Department 
provides is temporary or conditional and, if applicable, that the 
Department will delay the payment of any amounts owed but will pay 
interest as specified in paragraph (c) of this section. Failure of the 
Department to provide notification will result in the dismissal of the 
Department's appeal.
    (e) The Department may, by notice to the Complainant, decline to 
return the Complainant to the Complainant's place of employment if the 
Department determines that the return or presence of the Complainant 
will be unduly disruptive to the work environment. However, prospective 
pay and benefits must be provided. The determination not to return the 
Complainant to the Complainant's place of employment is not reviewable. 
A grant of interim relief does not insulate a Complainant from 
subsequent disciplinary or adverse action.
    (f) If the Department files an appeal and has not provided required 
interim relief, the Complainant may request dismissal of the 
Department's appeal. Any such request must be filed with the Office of 
Federal Operations within 25 days of the date of service of the 
Department's appeal. A copy of the request must be served on the 
Department at the same time the request is filed with EEOC. The 
Department may respond with evidence and argument to the Complainant's 
request to dismiss within 15 days of the date of service of the request.

                  Statistics and Reporting Requirements



Sec. 7.45  EEO group statistics and reports.

    (a) The Department shall establish a system to collect and maintain 
accurate employment information on the race, national origin, sex and 
disability of its employees and applicant flow in accordance with 29 CFR 
1614.601 through 29 CFR 1614.602 and the Department shall report to the 
EEOC on employment by race, national origin, sex and disability, in the 
form and at such times as the EEOC may require.
    (b) The Department shall report to the EEOC information concerning 
pre-complaint counseling and the status, processing and disposition of 
complaints under this part, at such times and in such manner as the EEOC 
prescribes.
    (c) The Department shall advise the EEOC whenever the Department is 
served with a Federal court complaint based upon a complaint that is 
pending on appeal at the EEOC.
    (d) The Department shall submit annual written national equal 
employment opportunity plans of action for the review and approval of 
the EEOC. Plans shall be submitted in a format prescribed by the EEOC 
and in accordance with 29 CFR 1614.602.

Subpart B [Reserved]



PART 8_NONDISCRIMINATION BASED ON HANDICAP IN FEDERALLY ASSISTED PROGRAMS 
AND ACTIVITIES OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
--Table of Contents



                      Subpart A_General Provisions

Sec.
8.1 Purpose.
8.2 Applicability.
8.3 Definitions.
8.4 Discrimination prohibited.
8.5 [Reserved]
8.6 Communications.

                          Subpart B_Employment

8.10 General prohibitions against employment discrimination.
8.11 Reasonable accommodation.

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8.12 Employment criteria.
8.13 Preemployment inquiries.

                     Subpart C_Program Accessibility

8.20 General requirement concerning program accessibility.
8.21 Non-housing facilities.
8.22 New construction--housing facilities.
8.23 Alterations of existing housing facilities.
8.24 Existing housing programs.
8.25 Public housing and multi-family Indian housing.
8.26 Distribution of accessible dwelling units.
8.27 Occupancy of accessible dwelling units.
8.28 Housing certificate and housing voucher programs.
8.29 Homeownership programs (sections 235(i) and 235(j), Turnkey III and 
          Indian housing mutual self-help programs).
8.30 Rental rehabilitation program.
8.31 Historic properties.
8.32 Accessibility standards.
8.33 Housing adjustments.

                          Subpart D_Enforcement

8.50 Assurances required.
8.51 Self-evaluation.
8.52 Remedial and affirmative action.
8.53 Designation of responsible employee and adoption of grievance 
          procedures.
8.54 Notice.
8.55 Compliance information.
8.56 Conduct of investigations.
8.57 Procedure for effecting compliance.
8.58 Hearings.

    Authority: 29 U.S.C. 794; 42 U.S.C. 3535(d) and 5309.

    Source: 53 FR 20233, June 2, 1988, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 8.1  Purpose.

    (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 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 Sec. 8.57(a)).



Sec. 8.2  Applicability.

    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.



Sec. 8.3  Definitions.

    As used in this part:
    Accessible, 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 
accessible to and usable by is synonomous with accessible.
    Accessible, 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 
Sec. 8.32 is accessible 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

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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.
    Accessible route 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 Sec. 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.
    Adaptability 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.
    Alteration 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.
    Applicant for assistance 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.
    Auxiliary aids 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 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.
    Department or HUD means the Department of Housing and Urban 
Development.
    Facility 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.
    Federal financial assistance 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.
    Federal financial assistance 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.
    Handicap means any condition or characteristic that renders a person 
an individual with handicaps.
    Historic preservation programs or activities means programs or 
activities receiving Federal financial assistance

[[Page 135]]

that have preservation of historic properties as a primary purpose.
    Historic properties 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.
    Individual with handicaps 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) Physical or mental impairment 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 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, mental retardation, emotional illness, drug addiction 
and alcoholism.
    (b) Major life activities means functions such as caring for one's 
self, performing manual tasks, walking, seeing, hearing, speaking, 
breathing, learning and working.
    (c) 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.
    (d) Is regarded as having an impairment 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.
    Multifamily housing project means a project containing five or more 
dwelling units.
    Primary recipient 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.
    Program or activity 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

[[Page 136]]

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;

any part of which is extended Federal financial assistance.
    Project 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.
    Qualified individual with handicaps 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
    (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. 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 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 qualified 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 
qualified for a project lacking such services.
    Recipient 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.
    Replacement cost of the completed facility 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

[[Page 137]]

cost of land, demolition, site improvements, non-dwelling facilities and 
administrative costs for project development activities.
    Secretary means the Secretary of Housing and Urban Development.
    Section 504 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.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.

[53 FR 20233, June 2, 1988; 54 FR 8188, Feb. 27, 1989]



Sec. 8.4  Discrimination prohibited.

    (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.
    (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

[[Page 138]]

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 handicapped person that are more restrictive than the definition of 
individual with handicaps contained in Sec. 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 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.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]



Sec. 8.5  [Reserved]



Sec. 8.6  Communications.

    (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

[[Page 139]]

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.



                          Subpart B_Employment



Sec. 8.10  General prohibitions against employment discrimination.

    (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 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.



Sec. 8.11  Reasonable accommodation.

    (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

[[Page 140]]

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.



Sec. 8.12  Employment criteria.

    (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).



Sec. 8.13  Preemployment inquiries.

    (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 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.



                     Subpart C_Program Accessibility



Sec. 8.20  General requirement concerning program accessibility.

    Except as otherwise provided in Sec. Sec. 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

[[Page 141]]

discrimination under any program or activity that receives Federal 
financial assistance.



Sec. 8.21  Non-housing facilities.

    (a) New construction. New non-housing facilities shall be designed 
and constructed to be readily accessible to and usable by individuals 
with handicaps.
    (b) Alterations to facilities. 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 to the maximum extent feasible 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) Existing non-housing facilities--(1) General. 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) Methods--(i) General. 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 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) Historic preservation programs or activities. In meeting the 
requirements of Sec. 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 Sec. 
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) Time period for compliance. 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) Transition plan. 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.

[[Page 142]]

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.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 
FR 37645, Sept. 12, 1989]



Sec. 8.22  New construction--housing facilities.

    (a) New multifamily housing projects (including public housing and 
Indian housing projects as required by Sec. 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 Sec. 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 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.

[53 FR 20233, June 2, 1988, as amended at 56 FR 920, Jan. 9, 1991]



Sec. 8.23  Alterations of existing housing facilities.

    (a) Substantial alteration. If alterations are undertaken to a 
project (including a public housing project as required by Sec. 
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 Sec. 8.22 shall apply.
    (b) Other alterations. (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

[[Page 143]]

this paragraph, the phrase to the maximum extent feasible 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.



Sec. 8.24  Existing housing programs.

    (a) General. 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) Methods. 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 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) Time period for compliance. 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 Sec. 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) Transition plan and time period for structural changes. Except 
as provided in Sec. 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--

[[Page 144]]

    (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.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988, as amended at 54 
FR 37645, Sept. 12, 1989]



Sec. 8.25  Public housing and multi-family Indian housing.

    (a) Development and alteration of public housing and multi-family 
Indian housing. (1) The requirements of Sec. 8.22 shall apply to all 
newly constructed public housing and multi-family Indian housing.
    (2) The requirements of Sec. 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) Existing public housing and multi-family Indian housing--
general. The requirements of Sec. 8.24(a) shall apply to public housing 
and multi-family Indian housing programs.
    (c) Existing public housing and multi-family Indian housing--needs 
assessment and transition plan. 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 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.

[[Page 145]]

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.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989; 
56 FR 920, Jan. 9, 1991]



Sec. 8.26  Distribution of accessible dwelling units.

    Accessible dwelling units required by Sec. 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.



Sec. 8.27  Occupancy of accessible dwelling units.

    (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.



Sec. 8.28  Housing certificate and housing voucher programs.

    (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;

[[Page 146]]

    (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 as a reasonable accommodation for a person with 
disabilities, approve a family request for an exception rent under Sec. 
982.504(b)(2) for a regular tenancy under the Section 8 certificate 
program so that the program is readily accessible to and usable by 
persons with disabilities.
    (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.

[53 FR 20233, June 2, 1988, as amended at 63 FR 23853, Apr. 30, 1998]



Sec. 8.29  Homeownership programs (sections 235(i) and 235(j), Turnkey III 
and Indian housing mutual self-help programs).

    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 Sec. 8.32, those features 
shall comply with the standards prescribed in Sec. 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 on to the prospective homebuyer, subject to maximum 
sales price limitations (see 24 CFR 235.320.)



Sec. 8.30  Rental rehabilitation program.

    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.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]



Sec. 8.31  Historic properties.

    If historic properties become subject to alterations to which this 
part applies the requirements of Sec. 4.1.7 of the standards of Sec. 
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.



Sec. 8.32  Accessibility standards.

    (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 Sec. Sec. 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

[[Page 147]]

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 Sec. 
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 Sec. 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 Sec. Sec. 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.

[53 FR 20233, June 2, 1988, as amended at 61 FR 5203, Feb. 9, 1996]



Sec. 8.33  Housing adjustments.

    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 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.



                          Subpart D_Enforcement



Sec. 8.50  Assurances required.

    (a) Assurances. 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) Duration of obligation. (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.

[[Page 148]]

    (3) In all other cases the assurance will obligate the recipient for 
the period during which Federal financial assistance is extended.
    (c) Covenants. (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.



Sec. 8.51  Self-evaluation.

    (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 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.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]



Sec. 8.52  Remedial and affirmative action.

    (a) Remedial action. (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) Voluntary action. 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.

[[Page 149]]



Sec. 8.53  Designation of responsible employee and adoption of grievance 
procedures.

    (a) Designation of responsible employee. A recipient that employs 
fifteen or more persons shall designate at least one person to 
coordinate its efforts to comply with this part.
    (b) Adoption of grievance procedures. 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.



Sec. 8.54  Notice.

    (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 Sec. 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 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.



Sec. 8.55  Compliance information.

    (a) Cooperation and assistance. 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) Compliance reports. 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) Access to sources of information. 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

[[Page 150]]

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) Information to beneficiaries and participants. 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.

(Approved by the Office of Management and Budget under control number 
2529-0034)

[53 FR 20233, June 2, 1988, as amended at 54 FR 37645, Sept. 12, 1989]



Sec. 8.56  Conduct of investigations.

    (a) Periodic compliance reviews. 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) Investigations. 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) Filing a complaint--(1) Who may file. 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 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) Confidentiality. 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) When to file. 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) Where to file complaints. 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) Contents of complaints. 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) Amendments of complaints. Complaints may be reasonably and 
fairly amended at any time. Amendments to complaints such as 
clarification and

[[Page 151]]

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) Notification. 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) Complaint processing procedures. 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) Dismissal of complaint. 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) Letter of findings. 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;
    (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) Right to review of the letter of findings. (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) Voluntary compliance time limits. 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

[[Page 152]]

this deadline, HUD shall proceed under Sec. 8.57.
    (j) Informal resolution/voluntary compliance--(1) General. 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) Objectives of informal resolution/voluntary compliance. 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) Intimidatory or retaliatory acts prohibited. 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.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988; 53 FR 34634, 
Sept. 7, 1988]



Sec. 8.57  Procedure for effecting compliance.

    (a) General. 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. 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) Noncompliance with Sec. 8.50. 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 
Sec. 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) Termination of or refusal to grant or to continue Federal 
financial assistance. 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;

[[Page 153]]

    (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) Notice to State or local government. 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) Other means authorized by law. 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.

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 program designed to effectuate the objectives of this 
part.

[53 FR 20233, June 2, 1988; 53 FR 28115, July 26, 1988]



Sec. 8.58  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec. 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 Sec. 8.57(c) and consent to the making of a 
decision on the basis of available information.

[[Page 154]]

    (b) Hearing procedures. Hearings shall be conducted in accordance 
with 24 CFR part 180.

[53 FR 20233, June 2, 1988, as amended at 61 FR 52218, Oct. 4, 1996]



PART 9_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF DISABILITY IN 

PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT--Table of Contents



Sec.
9.101 Purpose.
9.102 Applicability.
9.103 Definitions.
9.110 Self-evaluation.
9.111 Notice.
9.112-9.129 [Reserved]
9.130 General prohibitions against discrimination.
9.131 Direct threat.
9.132-9.139 [Reserved]
9.140 Employment.
9.141-9.148 [Reserved]
9.149 Program accessibility: discrimination prohibited.
9.150 Program accessibility: existing facilities.
9.151 Program accessibility: new construction and alterations.
9.152 Program accessibility: alterations of Property Disposition Program 
          multifamily housing facilities.
9.153 Distribution of accessible dwelling units.
9.154 Occupancy of accessible dwelling units.
9.155 Housing adjustments.
9.160 Communications.
9.170 Compliance procedures.

    Authority: 29 U.S.C. 794; 42 U.S.C. 3535(d).

    Source: 59 FR 31047, June 16, 1994, unless otherwise noted.



Sec. 9.101  Purpose.

    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.



Sec. 9.102  Applicability.

    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.



Sec. 9.103  Definitions.

    For purposes of this part:
    Accessible: (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 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 Sec. 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.
    Accessible route 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.
    ADA means the Americans with Disabilities Act of 1990 (42 U.S.C. 
12101 through 12213)

[[Page 155]]

    ADA Accessibility Guidelines (ADAAG) means the Accessibility 
Guidelines issued under the ADA, and which are codified in the Appendix 
to 39 CFR part 1191.
    Adaptability 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.
    Agency means the Department of Housing and Urban Development.
    Alteration 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.
    Assistant Attorney General means the Assistant Attorney General, 
Civil Rights Division, United States Department of Justice.
    Assistant Secretary means the Assistant Secretary of Housing and 
Urban Development for Fair Housing and Equal Opportunity.
    Auxiliary aids 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.
    Complete complaint 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 
her behalf. Complaints filed on behalf of classes or third parties shall 
describe or identify (by name, if possible) the alleged victims of 
discrimination.
    Current illegal use of drugs 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.
    Drug means a controlled substance, as defined in schedules I through 
V of section 202 of the Controlled Substances Act (21 U.S.C. 812).
    Facility 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.
    Historic properties 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.
    Illegal use of drugs 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.
    Individual with disabilities means any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a

[[Page 156]]

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:
    (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 Sec. 
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

[[Page 157]]

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.
    Multifamily housing project means a project containing five or more 
dwelling units.
    Official or Responsible Official means the Assistant Secretary of 
HUD for Fair Housing and Equal Opportunity.
    PDP housing facility means a housing facility administered under 
HUD's Property Disposition Program.
    Project 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.
    Property Disposition Program (PDP) 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.
    Qualified individual with disabilities 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 Sec. 9.140.
    Replacement cost of the completed facility 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.
    Secretary means the Secretary of Housing and Urban Development.
    Section 504 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.
    Substantial impairment means a significant loss of the integrity of 
finished materials, design quality, or special character resulting from 
a permanent alteration.
    UFAS 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.



Sec. 9.110  Self-evaluation.

    (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.

[[Page 158]]

    (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.



Sec. 9.111  Notice.

    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.



Sec. Sec. 9.112-9.129  [Reserved]



Sec. 9.130  General prohibitions against discrimination.

    (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 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.

[[Page 159]]

    (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 Sec. 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.
    (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.



Sec. 9.131  Direct threat.

    (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.



Sec. Sec. 9.132-9.139  [Reserved]



Sec. 9.140  Employment.

    No qualified individual with disabilities shall, on the basis of 
disability, be

[[Page 160]]

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.



Sec. Sec. 9.141-9.148  [Reserved]



Sec. 9.149  Program accessibility: discrimination prohibited.

    Except as otherwise provided in Sec. 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.



Sec. 9.150  Program accessibility: existing facilities.

    (a) General. 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 Sec. 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.
    (b) Methods. 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) Time period for compliance. 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.

[[Page 161]]

    (d) Transition plan. 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.



Sec. 9.151  Program accessibility: new construction and alterations.

    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.



Sec. 9.152  Program accessibility: alterations of Property Disposition 
Program multifamily housing facilities.

    (a) Substantial alteration. 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) Other alteration. (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

[[Page 162]]

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.



Sec. 9.153  Distribution of accessible dwelling units.

    Accessible dwelling units required by Sec. 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.



Sec. 9.154  Occupancy of accessible dwelling units.

    (a) The agency shall adopt suitable means to assure that information 
regarding the availability of accessible 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.



Sec. 9.155  Housing adjustments.

    (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,

[[Page 163]]

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.



Sec. 9.160  Communications.

    (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 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 Sec. 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.



Sec. 9.170  Compliance procedures.

    (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.

[[Page 164]]

    (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 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 Sec. 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.

[[Page 165]]

    (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.



PART 10_RULEMAKING: POLICY AND PROCEDURES--Table of Contents



                            Subpart A_General

Sec.
10.1 Policy.
10.2 Definitions.
10.3 Applicability.
10.4 Rules docket.

                          Subpart B_Procedures

10.6 Initiation of rulemaking.
10.7 Advance Notice of Proposed Rulemaking.
10.8 Notice of proposed rulemaking.
10.10 Participation by interested persons.
10.12 Additional rulemaking proceedings.
10.14 Hearings.
10.16 Adoption of a final rule.
10.18 Petitions for reconsideration.
10.20 Petition for rulemaking.

    Authority: 42 U.S.C. 3535(d).

    Source: 44 FR 1606, Jan. 5, 1979, unless otherwise noted.



                            Subpart A_General



Sec. 10.1  Policy.

    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 
Federal Register 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. 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.

[44 FR 1606, Jan. 5, 1979, as amended at 47 FR 56625, Dec. 20, 1982]



Sec. 10.2  Definitions.

    (a) Rule or Regulation 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 regulation is sometimes applied to a rule which 
has been published in the Code of Federal Regulations.
    (b) Rulemaking means the Departmental process for considering and 
formulating the issuance, modification, or repeal of a rule.

[[Page 166]]

    (c) Secretary 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.



Sec. 10.3  Applicability.

    (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'').

[44 FR 1606, Jan. 5, 1979, as amended at 61 FR 13273, Mar. 26, 1996]



Sec. 10.4  Rules docket.

    (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).



                          Subpart B_Procedures



Sec. 10.6  Initiation of rulemaking.

    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.



Sec. 10.7  Advance Notice of Proposed Rulemaking.

    An Advance Notice of Proposed Rulemaking issued in accordance with 
Sec. 10.1 of this part is published in the Federal Register 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.



Sec. 10.8  Notice of proposed rulemaking.

    Each notice of proposed rulemaking required by statute or by Sec. 
10.1 is published in the Federal Register 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

[[Page 167]]

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.



Sec. 10.10  Participation by interested persons.

    (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 Sec. 
10.12.



Sec. 10.12  Additional rulemaking proceedings.

    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.



Sec. 10.14  Hearings.

    (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 hearing 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.



Sec. 10.16  Adoption of a final rule.

    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.



Sec. 10.18  Petitions for reconsideration.

    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 Sec. 10.20.



Sec. 10.20  Petition for rulemaking.

    (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.



PART 13_USE OF PENALTY MAIL IN THE LOCATION AND RECOVERY OF MISSING 
CHILDREN--Table of Contents



Sec.
13.1 Purpose.
13.2 Procedures for obtaining and disseminating data.
13.3 Withdrawal of data.
13.4 Reports.

    Authority: 39 U.S.C. 3220(a)(2); 5 U.S.C. 301.

    Source: 51 FR 19830, June 3, 1986, unless otherwise noted.

[[Page 168]]



Sec. 13.1  Purpose.

    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.

[51 FR 19830, June 3, 1986; 51 FR 43608, Dec. 3, 1986]



Sec. 13.2  Procedures for obtaining and disseminating data.

    (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\1/2\ x 9\1/
2\);
    (2) Document-size envelopes (9\1/2\ x 12, 9\1/
2\ x 11\1/2\, 10 x 13); and
    (3) Other envelopes (miscellaneous size).
    (b) Missing children information shall not be placed on the Penalty 
Indicia, OCR Read Area, Bar Code Read Area, and Return Address 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.



Sec. 13.3  Withdrawal of data.

    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 
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.



Sec. 13.4  Reports.

    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 Official Mail Use in the 
Location and Recovery of Missing Children along with recommendations for 
future Departmental action.



PART 14_IMPLEMENTATION OF THE EQUAL ACCESS TO JUSTICE ACT IN ADMINISTRATIVE 
PROCEEDINGS--Table of Contents



                      Subpart A_General Provisions

Sec.
14.50 Definitions.
14.100 Time computation.
14.105 Purpose of these rules.
14.110 When the Act applies.
14.115 Proceedings covered.
14.120 Eligibility of applicants.
14.125 Standards for awards.
14.130 Allowable fees and expenses.
14.135 Rulemaking on maximum rates for attorney fees.
14.140 Awards against other agencies.

             Subpart B_Information Required From Applicants

14.200 Contents of application.
14.205 Net worth exhibit.
14.210 Documentation of fees and expenses.
14.215 When an application may be filed.

            Subpart C_Procedures for Considering Applications

14.300 Jurisdiction of adjudicative officer.
14.305 Filing and service of documents.
14.310 Answer to application.
14.315 Comments by other parties.
14.320 Settlement.
14.325 Extensions of time and further proceedings.
14.330 Decision.
14.335 Departmental review.
14.340 Judicial review.
14.345 Payment of award.


[[Page 169]]


    Authority: 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)).

    Source: 52 FR 27126, July 17, 1987, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 14.50  Definitions.

    Act. 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.
    Adjudicative officer. 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.
    Adversary adjudication. (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).
    Agency counsel (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.
    Department. The Department of Housing and Urban Development, or the 
organizational unit within the Department responsible for conducting an 
adversary adjudication subject to this part.
    Proceeding. An adversary adjudication as defined above.
    Secretary. The Secretary of Housing and Urban Development.



Sec. 14.100  Time computation.

    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.



Sec. 14.105  Purpose of these rules.

    The Act provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are parties to certain 
administrative proceedings (adversary adjudications) 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.



Sec. 14.110  When the Act applies.

    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.



Sec. 14.115  Proceedings covered.

    (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 et seq., 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

[[Page 170]]

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 et seq., 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.

[52 FR 27126, July 17, 1987, as amended at 54 FR 3283, Jan. 23, 1989]



Sec. 14.120  Eligibility of applicants.

    (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 party 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;
    (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 individual rather than a sole owner of an 
unincorporated business 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

[[Page 171]]

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.



Sec. 14.125  Standards for awards.

    (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.



Sec. 14.130  Allowable fees and expenses.

    (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, 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.



Sec. 14.135  Rulemaking on maximum rates for attorney fees.

    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).



Sec. 14.140  Awards against other agencies.

    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.

[[Page 172]]



             Subpart B_Information Required From Applicants



Sec. 14.200  Contents of application.

    (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 or authorized officer's 
information and belief.

(Approved by the Office of Management and Budget under control number 
2510-0001)



Sec. 14.205  Net worth exhibit.

    (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 Sec. 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

[[Page 173]]

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.

(Approved by the Office of Management and Budget under control number 
2510-0001)



Sec. 14.210  Documentation of fees and expenses.

    (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.

(Approved by the Office of Management and Budget under control number 
2510-0001)



Sec. 14.215  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed 
in the 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.



            Subpart C_Procedures for Considering Applications



Sec. 14.300  Jurisdiction of adjudicative officer.

    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.

[[Page 174]]



Sec. 14.305  Filing and service of documents.

    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 Sec. 14.205(c) for confidential financial 
information.



Sec. 14.310  Answer to application.

    (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 Sec. 14.325.



Sec. 14.315  Comments by other parties.

    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.



Sec. 14.320  Settlement.

    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 a proposed settlement of an 
award before an application has been filed, the application shall be 
filed with the proposed settlement.



Sec. 14.325  Extensions of time and further proceedings.

    (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.

[[Page 175]]



Sec. 14.330  Decision.

    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 party 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.

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.



Sec. 14.335  Departmental review.

    (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.



Sec. 14.340  Judicial review.

    Judicial review of final departmental decisions on awards may be 
sought as provided in 5 U.S.C. 504(c)(2).



Sec. 14.345  Payment of award.

    An applicant seeking payment of an award shall submit a copy of the 
final 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.



PART 15_PUBLIC ACCESS TO HUD RECORDS UNDER THE FREEDOM OF INFORMATION 

ACT AND TESTIMONY AND PRODUCTION OF INFORMATION BY HUD EMPLOYEES--Table 
of Contents



                      Subpart A_Purpose and Policy

Sec.
15.1 What is the purpose of this part?
15.2 What definitions apply to this part?
15.3 What exemptions are authorized by 5 U.S.C. 552?

                Subpart B_FOIA Disclosure of Information

15.101 What is HUD's overall policy concerning disclosing identifiable 
          records?
15.102 Where and when may I inspect and copy records that FOIA requires 
          HUD to make regularly available to the public?
15.103 How can I get other records from HUD?
15.104 What are the time periods for HUD to respond to my request for 
          records?

[[Page 176]]

15.105 How will HUD process my request?
15.106 How will HUD respond to my request?
15.107 How does HUD handle requests that involve classified records?
15.108 What are HUD's policies concerning designating confidential 
          commercial or financial information under Exemption 4 of the 
          FOIA and responding to requests for business information?
15.109 How will HUD respond to a request for information from Form HUD-
          92410 (Statement of Profit and Loss)?
15.110 What fees will HUD charge?
15.111 How do I appeal a denial of my request for records or a fee 
          determination?
15.112 How will HUD respond to my appeal?

 Subpart C_Production in Response to Subpoenas or Demands of Courts or 
                            Other Authorities

15.201 Purpose and scope.
15.202 Production or disclosure prohibited unless approved by the 
          Secretary.
15.203 Procedure in the event of a demand for production or disclosure.
15.204 Procedure in the event of an adverse ruling.

          Subpart D_Testimony of Employees in Legal Proceedings

15.301 Purpose.
15.302 Testimony in proceedings in which the United States is a party.
15.303 Legal proceedings among non-federal litigants; general rule.
15.304 Legal proceedings among private litigants; subpoenas.
15.305 Legal proceedings among non-federal litigants; expert or opinion 
          testimony.

Appendix A to Part 15--HUD FOIA Reading Rooms

    Authority: 42 U.S.C. 3535(d).
    Subpart A also issued under 5 U.S.C. 552.
    Section 15.107 also issued under E.O. 12958, 60 FR 19825, 3 CFR 
Comp., p. 333.
    Subparts C and D also issued under 5 U.S.C. 301.

    Source: 40 FR 48123, Oct. 14, 1975, unless otherwise noted.



                      Subpart A_Purpose and Policy

    Source: 66 FR 6967, Jan. 22, 2001, unless otherwise noted.



Sec. 15.1  What is the purpose of this part?

    (a) Subpart B of this part. Subpart B of this part describes the 
procedures by which HUD makes documents available under the Freedom of 
Information Act (FOIA) (5 U.S.C. 552). Subpart A of this part applies to 
all HUD organizational units; however, applicability of subpart A to the 
Office of the Inspector General is subject to parts 2002 and 2004 of the 
title.
    (b) Subpart C of this part. Subpart C of this part describes the 
procedures HUD follows in responding to subpoenas or demands of courts 
and other agencies to produce or disclose documents.
    (c) Subpart D of this part. Subpart D of this part describes the 
procedures HUD follows concerning the testimony of its employees in 
legal proceedings.
    (d) Inapplicability of subparts B and C to Office of Inspector 
General. Subparts B and C of this part do not apply to employees in the 
Office of the Inspector General. The procedures that apply to employees 
in the Office of the Inspector General are described in part 2004 of 
this title.



Sec. 15.2  What definitions apply to this part?

    The following definitions apply to this part.
    (a) Terms defined in part 5 of this title. The terms HUD, Secretary, 
and Organizational unit are defined in part 5 of this title.
    (b) Other terms used in this part. As used in this part:
    Business information means commercial or financial information 
provided to HUD by a submitter that arguably is protected from 
disclosure under Exemption 4 (42 U.S.C. 552(b)(4)) of FOIA.
    Duplication 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, microfilm, audio-visual materials, or machine readable 
documentation (e.g., magnetic tape or disk), among others.
    Educational institution means:
    (1) A preschool;
    (2) A public or private elementary or secondary school;
    (3) An institution of graduate higher education;
    (4) An institution of undergraduate higher education;
    (5) An institution of professional education; or
    (6) An institution of vocational education, that primarily (or 
solely) operates a program or programs of scholarly research.

[[Page 177]]

    Employee of the Department means a current or former officer or 
employee of the United States appointed by or subject to the supervision 
of the Secretary, but does not include an officer or employee covered by 
part 2004 of this title.
    FOIA means the Freedom of Information Act (5 U.S.C. 552).
    Legal proceeding 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.
    Legal proceeding among private litigants means any legal proceeding 
in which the United States is not a party.
    Legal proceeding in which the United States is a party 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.
    News means information that is about current events or that would be 
of current interest to the public.
    Person means person as defined in 5 U.S.C. 551(2). It includes 
corporations and organizations as well as individuals.
    Review means the process of examining a document located in response 
to a request to determine whether any portion of it may be withheld, 
excising portions to be withheld, and otherwise preparing the document 
for release. Review time includes time HUD spends considering any formal 
objection to disclosure made by a submitter under Sec. 15.108. Review 
does not include time spent resolving general legal or policy issues 
regarding the application of exemptions.
    Search includes all time spent looking manually or by automated 
means for material that is responsive to a request, including page-by-
page or line-by-line identification of material within documents.
    Submitter means any person or entity who provides business 
information, directly or indirectly, to HUD. The term includes, but is 
not limited to, corporations, State governments, and foreign 
governments.



Sec. 15.3  What exemptions are authorized by 5 U.S.C. 552?

    (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) 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:
    (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;

[[Page 178]]

    (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.



                Subpart B_FOIA Disclosure of Information

    Source: 66 FR 6968, Jan. 22, 2001, unless otherwise noted.



Sec. 15.101  What is HUD's overall policy concerning disclosing 
identifiable records?

    HUD will fully and responsibly disclose its identifiable records and 
information consistent with competing public interests concerning the 
national security, personal privacy, agency deliberative process, and 
obligations of confidentiality as are recognized by FOIA. HUD will make 
a record available in the form or format requested, if the record is 
readily reproducible in that format.



Sec. 15.102  Where and when may I inspect and copy records that FOIA 
requires HUD to make regularly available to the public?

    (a) You may inspect and copy hardcopy records, including indices of 
the records, that section 552(a)(2) of FOIA requires HUD make available 
to the public at HUD's reading rooms. HUD has reading rooms in 
Headquarters in Washington, DC and in each of the Secretary's 
Representative's offices. These reading rooms are open during the 
business hours for the HUD office in which they are located.
    (b) For records created on or after November 1, 1996, this 
information is also available to you through HUD's Internet web site at 
http://www.hud.gov/ogc/bshelf2a.html.



Sec. 15.103  How can I get other records from HUD?

    (a) Generally. You may submit a written request for copies of 
records in person or by mail.
    (b) Records located in a HUD field office. If you are submitting a 
request for records located in a HUD field office, you should deliver or 
mail your request to the FOIA Liaison in the appropriate HUD Field 
Office.
    (c) Records located in HUD headquarters. If you are submitting a 
request for records located in HUD Headquarters, you should deliver or 
mail your request to the FOIA Division, Office of the General Counsel. 
You may also use the FOIA electronic request form on HUD's Internet web 
site at http://www.hud.gov/ogc/foiafree.html.
    (d) What should I include in my FOIA request? In your FOIA request 
you should:
    (1) Clearly state that you are making a FOIA request. Although 
Federal agencies are required to process all requests for documents as 
Freedom of Information Act requests, whether or not specifically 
designated as FOIA requests, failure to clearly state that you are 
making a FOIA request could unduly delay the initial handling of your 
correspondence through HUD's FOIA processing;
    (2) Reasonably describe the records you seek. Include information 
that you may know about the documents you are requesting;
    (3) Indicate the form or format in which you would like the record 
made available;
    (4) State your agreement to pay the fee. You may specify a dollar 
amount above which you want HUD to consult with you before you will 
agree to pay the fee;
    (5) Indicate the fee category that you believe applies to you (see 
Sec. 15.110);
    (6) If you are making a request on behalf of another person for 
information

[[Page 179]]

about that person, include a document signed by that person authorizing 
you to request the information on his or her behalf; and
    (7) If you are requesting expedited processing, your request should 
set out the facts you believe show that there is a compelling need (see 
Sec. 15.104(d)) to expedite processing of your request.



Sec. 15.104  What are the time periods for HUD to respond to my request 
for records?

    (a) What time limits generally apply? If you have met the fee 
requirements of Sec. 15.110, HUD, in general, will respond within 20 
working days after the correct office receives your request. If you have 
sent your request to the wrong office, that office will send it to the 
correct office within 10 working days and will send you an 
acknowledgment letter.
    (b) What time limits apply to requests made on behalf of another 
person? The time limits described in paragraph (a) of this section also 
apply to requests you make on behalf of another person for information 
about that person. However, the time limits will not commence to run 
until HUD's receipt of the document signed by that person authorizing 
you to request information on his or her behalf. If you make your 
request on behalf of another person without including such signed 
authorization, HUD will inform you of the authorization needed.
    (c) What time limits apply in unusual circumstances? If you have 
requested an especially large number of records, the records are not 
located in the office handling the request, or HUD needs to consult with 
another government office, HUD will notify you that extra time is 
required and provide an estimate of that time. If the extra time needed 
is more than 10 working days beyond the general time limit set out in 
paragraph (a) of this section, HUD will offer you any opportunity to 
limit the scope of your request so that HUD may process it within the 
extra 10 working day period.
    (d) What time limits apply to my request for expedited processing? 
If you requested expedited processing, HUD will notify you within 10 
working days after it receives your request whether it will grant 
expediting processing.



Sec. 15.105  How will HUD process my request?

    (a) Multitracking. (1) HUD places each request in one of two tracks. 
HUD places requests in its simple or complex track based on the amount 
of work and time involved in processing the request. Factors HUD will 
consider in assigning a request in the simple or complex track will 
include whether the request involves the processing of voluminous 
documents and/or whether the request involves responsive documents from 
three or more organizational units. Within each track, HUD processes 
requests in the order in which they are received.
    (2) For requests that have been sent to the wrong office, HUD will 
assign the request within each track using the earlier of either:
    (i) The date on which the request was referred to the appropriate 
office; or,
    (ii) The end of the 10 working day period in which the request 
should have been referred to the appropriate office under Sec. 
15.104(a).
    (b) Expedited processing. HUD may take your request or appeal out of 
normal order if HUD determines that you have a compelling need for the 
records or in other cases as determined by the agency. If HUD grants 
your request for expedited processing, HUD will give your request 
priority and will process it as soon as practicable. HUD will consider a 
compelling need to exist if:
    (1) Your failure to obtain the requested records on an expedited 
basis could reasonably be expected to pose an imminent threat to the 
life or physical safety of an individual or a threatened loss of 
substantial due process rights; or,
    (2) You are primarily engaged in disseminating information and there 
is an urgency to inform the public concerning actual or alleged Federal 
Government activity.



Sec. 15.106  How will HUD respond to my request?

    (a) Who will respond to my request? (1) The FOIA Division of the 
Office of General Counsel in HUD Headquarters and the FOIA liaisons in 
each HUD Field

[[Page 180]]

Office are authorized to release copies of any HUD records unless 
disclosure is clearly not appropriate under FOIA.
    (2) The FOIA Division in HUD Headquarters and the FOIA liaisons in 
each HUD Field Office may deny a request for a record in accordance with 
the provisions of FOIA and this part.
    (b) What type of a response will I receive? Within the time limit 
described in Sec. 15.103, HUD will either:
    (1) Agree to give you all the records you requested;
    (2) Advise you that HUD will not give you some or all of the records 
you requested. Any denial or partial denial of a requested record must 
be concurred in by the FOIA Division in Headquarters, by counsel in the 
Field Offices, or by counsel in HUD's Departmental Enforcement Center 
Satellite Offices. In this case, HUD will:
    (i) Explain why it has decided not to comply fully with your 
request, citing specific exemptions where applicable;
    (ii) Describe the records denied or, if there are fewer than 21 
records denied, list them specifically;
    (iii) Estimate the volume of the records denied unless doing so 
would harm a protected interest; and
    (iv) Explain how to appeal that decision, and provide the name and 
address of the HUD official to whom you should submit your appeal.
    (3) Tell you that HUD's estimate of the fee is more than you have 
agreed to pay and ask to confer within 10 days to see if you can 
reformulate your request so that HUD can meet your request at a fee that 
is acceptable to you; or
    (4) Tell you that you will not receive a response until you have 
either paid your fee or committed to the amount of fee you will pay, as 
applicable, and will provide you 10 days to pay, or commit to pay, the 
fee.
    (5) If you requested expedited processing, advise you whether your 
request is granted or denied and, if your request is denied, advise you 
of your right to appeal.
    (c) What action may HUD take if I fail to respond? If you fail to 
respond within a period specified in this subpart, HUD may consider your 
request for records withdrawn and may terminate processing of your 
request.



Sec. 15.107  How does HUD handle requests that involve classified records?

    If your request involves the release of documents that are 
classified under Executive Order 12958, HUD will refer your request and 
the pertinent documents to the originating agency for processing 
according to the requirements of Sec. 15.104(a). HUD may refuse to 
confirm or deny the existence of the requested information if the 
originating agency determines that the fact of its existence is itself 
classified.



Sec. 15.108  What are HUD's policies concerning designating confidential 

commercial or financial information under Exemption 4 of the FOIA and 
responding to requests for business information?

    (a) HUD's general policy concerning business information which may 
be considered as confidential commercial or financial information. 
Except as provided in this section or otherwise required by law, HUD 
officers and employees may not disclose business information which is 
considered as confidential commercial or financial information to anyone 
other than to HUD officers or employees who are properly entitled to the 
information to perform their official duties.
    (b) How does a submitter make a claim that business information is 
confidential commercial or financial information? (1) If you are a 
submitter, you may request confidential treatment of business 
information at the time the information is submitted to HUD or within a 
reasonable time after it is submitted.
    (2) To obtain a designation of confidentiality, you must:
    (i) Support your request with an authorized statement or a 
certification giving the facts and the legal justification for your 
request and stating that the information has not been made public; and
    (ii) Clearly designate the information that you consider 
confidential.
    (3) Your designation of confidentiality will expire 10 years after 
the date the information was submitted to HUD, unless you have provided 
a reasonable explanation for a later expiration date.

[[Page 181]]

    (c) How will HUD respond to a request for business information? If 
the information requested has been designated in good faith by the 
submitter as information to be protected under 5 U.S.C. 552(b)(4) 
(``Exemption 4'') or if HUD has reason to believe that the information 
may be protected by Exemption 4, HUD shall:
    (1) Unless an exception in paragraph (c)(2) of this section applies, 
promptly notify the submitter about the request or the administrative 
appeal and give the submitter 10 working days to submit a written 
objection to disclosure. HUD will describe the requested business 
information or will provide copies of all or a portion of the records;
    (2) If any of the following circumstances apply, HUD will not notify 
the submitter:
    (i) HUD determines that the information should not be disclosed;
    (ii) The information has been published lawfully or has been made 
available officially to the public;
    (3) A law other than FOIA requires HUD to disclose the information;
    (4) A HUD regulation requires HUD to disclose the information. The 
regulation must:
    (i) Have been adopted pursuant to notice and public comment; and
    (ii) Specify narrow classes of records submitted to HUD that are to 
be released under the FOIA.
    (d) Notice to requester. At the same time HUD notifies the 
submitter, HUD will 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.
    (e) Opportunity to object to disclosure. If the submitter timely 
objects to disclosure, HUD will consider the submitter's objections, but 
will not be bound by them. HUD generally will not consider conclusory 
statements that particular information would be useful to competitors or 
would impair sales, or other similar statements, sufficient to justify 
confidential treatment. Information provided by a submitter or its 
designee may itself be subject to disclosure under the FOIA.
    (f) Notice of intent to disclose. If after considering the 
submitter's objections, HUD decides to disclose business information 
over the objection of a submitter, HUD will send a written notice of 
intent to disclose to both the submitter and the requester. HUD will 
send these notices at least 10 working days before the specified 
disclosure date. The notices will include:
    (1) A statement of the reasons why HUD rejected the submitter's 
disclosure objections;
    (2) A description of the business information to be disclosed; and
    (3) A disclosure date.
    (g) What other policies apply to a submitter?
    (1) HUD notice of FOIA lawsuit. HUD will promptly notify the 
submitter of any suit to compel HUD to disclose business information.
    (2) Determination of confidentiality. HUD will not determine the 
validity of any request for confidentiality until HUD receives a request 
for disclosure of the information.
    (3) Current mailing address for the submitter. Each submitter must 
give HUD a mailing address for receipt of any notices under this 
section, and must notify HUD of any change of address.



Sec. 15.109  How will HUD respond to a request for information from 
Form HUD-92410 (Statement of Profit and Loss)?

    (a) To whom will HUD disclose the information? HUD will release 
information from Form HUD-92410 (or a HUD approved substitute form that 
the mortgagor may have submitted) only to eligible potential purchasers 
and only during the period specified by HUD for the mortgage sale.
    (b) Under what conditions will HUD release such information? HUD 
will release the information only if all of the following three 
conditions are met:
    (1) The information concerns a project that is subject to a HUD-held 
mortgage which HUD is selling under the authority of sections 207 (k) 
and (l) of the National Housing Act (12 U.S.C. 1713 (k) and (l)) or 
section 7(i)(3) of the Department of Housing and Urban Development Act 
(42 U.S.C. 3535(i)(3)).
    (2) The eligible potential purchasers have agreed to:
    (i) Keep the information confidential;
    (ii) Disclose the information only to potential investors in the 
mortgage and only for the period specified by

[[Page 182]]

HUD for the mortgage sale and to notify those potential purchasers of 
their obligations under this section;
    (iii) Use the information only to evaluate the mortgage in 
connection with the mortgage sale; and
    (iv) To follow disclosure procedures for that sale that have been 
established by the Secretary.
    (3) The potential investors in the mortgage have agreed to keep the 
information confidential and to use the information only to evaluate the 
mortgage in connection with their investment decision.
    (c) To whom may potential investors disclose such information? 
Potential investors in the mortgage may disclose the information to 
other entities only if the disclosure is:
    (1) Necessary for the investor's evaluation of the mortgage;
    (2) Made in accordance with disclosure procedures for the specific 
sale that have been established by HUD; and
    (3) Limited to the period specified by HUD for the mortgage sale.
    (d) What sanctions are available for improper disclosure of such 
information? An eligible potential purchaser or a potential investor 
(who has received the information from a potential purchaser and has 
been notified by that entity of its obligations under paragraph (b) of 
this section), who discloses information from Form HUD-92410 in 
violation of this section, may be subject to sanctions under part 24 of 
this title.



Sec. 15.110  What fees will HUD charge?

    (a) How will HUD determine your fee? HUD will determine your fee 
based on which category of requester you are in and on the other 
provisions of this section. With your request, you should submit 
information to help HUD determine the proper category. If HUD cannot 
tell from your request, or if HUD has reason to doubt the use to which 
the records will be put, HUD will ask you to provide additional 
information before assigning the request to a specific category.
    (b) What are the categories of requesters? (1) Commercial use 
requester. You are a commercial use requester if you request information 
for a use or purpose that furthers your commercial, trade, or profit 
interests or those interests of the person on whose behalf you have made 
the request. In determining whether your request properly belongs in 
this category, HUD determines the use to which you will put the 
documents requested.
    (2) Educational requester. You are an educational requester if your 
request is on behalf of an educational institution and you do not seek 
the records for a commercial use, but to further scholarly research.
    (3) Non-commercial scientific requester. You are a non-commercial 
scientific requester if you are not a commercial use requester and your 
request is on behalf of an organization that is operated solely for the 
purpose of conducting scientific research the results of which are not 
intended to promote any particular product or industry.
    (4) Representative of the news media requester. (i) You are a 
representative of the news media requester if you actively gather news 
for an entity that is primarily organized and operated to publish or 
broadcast news to the public.
    (ii) 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 news) who make their products available for purchase or 
subscription by the general public.
    (iii) Freelance 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 employed 
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.
    (iv) If you are a representative of the news media requester, HUD 
will not consider you to be a commercial use requester.
    (5) Other requester. You are considered an ``other'' requester if 
you do not fall within the categories of requesters described in this 
paragraph (b).
    (c) FOIA Fee Schedule. The following table sets out the Fee Schedule 
that HUD uses to determine your fee. The rates for professional and 
clerical

[[Page 183]]

search and review includes the salary of the employee performing the 
work. The duplication cost includes the cost of operating duplicating 
machinery. The computer run time includes the cost of operating a 
central processing unit for that portion of the operating time 
attributable to searching for responsive records, as well as the costs 
of operator/programmer salary apportionable to the search. HUD's fee 
schedule does not include overhead expenses such as costs of space and 
heating or lighting the facility in which the records are stored.

                                                FOIA Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                                              News media,
                                                                              educational
            Activity                     Rate           Commercial use       research, or       Other requester
                                                           requester          scientific
                                                                          research requester
----------------------------------------------------------------------------------------------------------------
(1) Professional search.........  $37.00 per hour...  Applies...........  Does not apply....  Applies. No charge
                                                                                               for first two
                                                                                               hours of
                                                                                               cumulative search
                                                                                               time.
(2) Professional review.........  $37.00 per hour...  Applies...........  Does not apply....  Does not apply.
(3) Clerical search.............  $16.35 per hour...  Applies...........  Does not apply....  Applies. No charge
                                                                                               for first two
                                                                                               hours of
                                                                                               cumulative search
                                                                                               time.
(4) Clerical review.............  $16.35 per hour...  Applies...........  Does not apply....  Does not apply.
(5) Programming services........  $35.00 per hour...  Applies...........  Does not apply....  Applies.
(6) Computer run time (includes   The direct cost of  Applies...........  Does not apply....  Applies.
 only mainframe search time not    conducting the
 printing).                        search.
(7) Duplication costs...........  $0.15 per page....  Applies...........  Applies. No charge  Applies. No charge
                                                                           for first 100       for first 100
                                                                           pages.              pages.
(8) Duplication costs--tape, CD   Actual Cost.......  Applies...........  Applies...........  Applies.
 ROM or diskette.
----------------------------------------------------------------------------------------------------------------

    (d) How does HUD assess review charges? HUD will assess review 
charges only for the first time it analyzes the applicability of a 
specific exemption to a particular record or portion of a record. HUD 
will not charge for its review at the administrative appeal level of an 
exemption already applied. If HUD has withheld in full a record or 
portions of a record under an exemption which is subsequently determined 
not to apply, HUD will assess charges for its review to determine the 
applicability of other exemptions not previously considered.
    (e) How does HUD handle multiple requests? If you, or others acting 
with you, make multiple requests at or about the same time for the 
purpose of dividing one request into a series of requests for the 
purpose of evading the assessment of fees, HUD will aggregate your 
requests for records. In no case will HUD give you more than the first 
two hours of search time, or more than the first 100 pages of 
duplication without charge.
    (f) Unsuccessful searches. If HUD's search for records is 
unsuccessful, HUD will still bill you for the search.
    (g) No charge for costs under $25. HUD will not charge you a fee if 
the total amount calculated under this section is less than $25.00.
    (h) Reducing fees in the public interest. If HUD determines that 
disclosure of the information you seek is in the public interest because 
it is likely to contribute significantly to public understanding of the 
operations or activities of the government, and that you are not seeking 
the information for your own commercial interests, HUD may waive or 
reduce the fee.
    (i) When do I pay the fee? HUD will bill you when it responds to 
your request. You must pay within thirty-one calendar days. If the fee 
is more than $250.00 or you have a history of failing to pay FOIA fees 
in a timely manner, HUD will ask you to remit the estimated amount and 
any past due charges before sending you the records.
    (j) What happens if I do not pay the fees? (1) If you do not pay by 
the thirty-

[[Page 184]]

first day after the billing date, HUD will charge interest at the 
maximum rate allowed under 31 U.S.C. 3717.
    (2) If you do not pay the amount due within ninety calendar days of 
the due date, HUD may notify consumer credit reporting agencies of your 
delinquency.
    (3) If you owe fees for previous FOIA responses, HUD will not 
respond to further requests unless you pay the amount due.
    (k) Contract services. HUD will contract with private sector sources 
to locate, reproduce and disseminate records in response to FOIA 
requests when that is the most efficient method. When doing so HUD will 
charge the cost to the requester that the private sector source has 
charged HUD for performing these tasks. In some instances, these costs 
may be higher than the charges HUD would ordinarily charge if the 
processing tasks had been done by the agency itself. 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.



Sec. 15.111  How do I appeal a denial of my request for records or a 
fee determination?

    (a) To what address do I submit my appeals? You must submit your 
appeal, in writing, to the address specified in HUD's notice responding 
to your FOIA request (see Sec. 15.106(a)(2)(iv)). If you send your 
appeal to the wrong HUD office, that office will forward it to the 
correct office. That office will also notify you that it has so 
forwarded your appeal and advise you that, for processing purposes, the 
time of receipt will be when the appropriate office receives your 
appeal.
    (b) How much time do I have to submit an appeal? Your written appeal 
must be postmarked within 30 calendar days of the date of the HUD 
determination from which you are appealing. If your appeal is 
transmitted by other than the United States Postal Service (i.e., 
facsimile, messenger or delivery service) it must be received in the 
appropriate office by close of business on the 30th calendar day after 
the date of the HUD determination.
    (c) What information must I provide if I am appealing a denial of 
request for information? If you are appealing a denial of your request 
for information, the appeal must contain the following information:
    (1) A copy of your original request;
    (2) A copy of the written denial of your request; and
    (3) Your statement of the facts and legal arguments supporting 
disclosure.
    (d) What information must I provide if I am appealing a fee 
determination? If you are appealing a fee determination, including a 
denial of your request for HUD to waive the fee, the appeal must contain 
the following information:
    (1) The address of the office which made the fee determination from 
which you are appealing;
    (2) The fee that office charged;
    (3) The fee, if any, you believe should have been charged;
    (4) The reasons you believe that your fee should be lower than the 
fee which the Agency charged or should have been waived; and
    (5) A copy of the initial fee determination and copies of any 
correspondence concerning the fee.
    (e) What information must I provide if I am appealing a denial of 
expedited processing? If you are appealing a denial of your request for 
expedited processing, your appeal must contain the following 
information:
    (1) A copy of your original request;
    (2) A copy of the written denial of your request; and
    (3) Your statement of the facts and legal arguments supporting 
expedited processing.



Sec. 15.112  How will HUD respond to my appeal?

    (a) How much time does HUD have to decide my appeal? HUD will decide 
your appeal of a denial of expedited processing within 10 working days 
after its

[[Page 185]]

receipt. For any other type of appeal, HUD will decide your appeal 
within 20 working days after its receipt. HUD may have an additional 10 
working days if unusual circumstances require.
    (b) What action will HUD take if it grants my appeal?
    (1) Appeal of a denial of request for information. If you are 
appealing a decision to deny your request for records, HUD will either:
    (i) Give you the records you requested or advise you that the 
records will be provided by the originating office;
    (ii) Give you some of the records you requested while declining to 
give you other records you requested, tell you why HUD has concluded 
that the documents were exempt from disclosure under FOIA, and tell you 
how to obtain judicial review of HUD's decision; or
    (iii) Decline to give you the records you requested, tell you why 
HUD has concluded that the records were exempt from disclosure under 
FOIA, and tell you how to obtain judicial review of HUD's decision.
    (2) Appeal of a fee determination. If you are appealing a fee 
determination, HUD will either:
    (i) Waive the fee or charge the fee that you have requested;
    (ii) Modify the original fee charged, and explain why it has 
determined that the modified fee is appropriate; or
    (iii) Advise you that the original fee charged was appropriate, and 
explain why it has determined that the fee is appropriate.
    (3) Appeal of a denial of expedited processing. If you are appealing 
a denial of your request for expedited processing, HUD will either:
    (i) Agree to expedited processing of your request; or
    (ii) Advise you that the decision to deny expedited processing has 
been affirmed, and tell you how to obtain judicial review of HUD's 
decision.



 Subpart C_Production in Response to Subpoenas or Demands of Courts or 
                            Other Authorities

    Source: Redesignated at 66 FR 6973, Jan. 22, 2001.



Sec. 15.201  Purpose and scope.

    (a) 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 demand) 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 employee of the 
Department 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, files of the 
Department do not include files of the Office of Inspector General 
covered by part 2004 of this title.
    (b) The term ``legal proceeding'' has the meaning given in Sec. 
15.301(b).

[49 FR 11160, Mar. 26, 1984, as amended at 60 FR 58456, Nov. 27, 1995; 
66 FR 6973, Jan. 22, 2001]



Sec. 15.202  Production or disclosure prohibited unless approved by 
the Secretary.

    (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.

[[Page 186]]

    (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.

[52 FR 12160, Apr. 15, 1987]



Sec. 15.203  Procedure in the event of a demand for production or disclosure.

    (a) Whenever a demand is made upon an employee of the Department for 
the production of material or the disclosure of information described in 
Sec. 15.201, the employee shall immediately notify the Secretary and 
either the General Counsel or the appropriate Regional Counsel. The 
appropriate Regional Counsel 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.

[52 FR 12160, Apr. 15, 1987, as amended at 66 FR 6973, Jan. 22, 2001]



Sec. 15.204  Procedure in the event of an adverse ruling.

    If the court or other authority declines to stay the effect of the 
demand in response to a request made in accordance with Sec. 15.203(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 (United 
States ex rel. Toughy v. Ragen, 340 U.S. 462).

[52 FR 12161, Apr. 15, 1987, as amended at 66 FR 6973, Jan. 22, 2001]



          Subpart D_Testimony of Employees in Legal Proceedings

    Source: 52 FR 12161, Apr. 15, 1987, unless otherwise noted. 
Redesignated at 66 FR 6973, Jan. 22, 2001.



Sec. 15.301  Purpose.

    (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 employee of the 
Department 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.

[52 FR 12161, Apr. 15, 1987, as amended at 60 FR 58457, Nov. 27, 1995]



Sec. 15.302  Testimony in proceedings in which the United States is a party.

    (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 unless 
specifically authorized by the Secretary or the General Counsel for good 
cause shown. An

[[Page 187]]

employee may be called by a 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.

[52 FR 12161, Apr. 15, 1987. Redesignated at 66 FR 6973, Jan. 22, 2001, 
and amended at 67 FR 65276, Oct. 23, 2002]



Sec. 15.303  Legal proceedings among non-federal litigants; general rule.

    (a) In any legal proceeding exclusively among non-federal litigants, 
no employee of the Department may, unless specifically authorized by the 
Secretary or General Counsel for good cause shown, 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.
    (b) For purposes of this subpart, ``good cause'' includes action 
necessary to prevent a miscarriage of justice or to promote a 
significant interest of the Department.

[67 FR 65276, Oct. 23, 2002]



Sec. 15.304  Legal proceedings among private litigants; subpoenas.

    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 Sec. Sec. 15.201through15.204 
shall be applicable.

[52 FR 12161, Apr. 15, 1987. Redesignated and amended at 66 FR 6973, 
Jan. 22, 2001]



Sec. 15.305  Legal proceedings among non-federal litigants; expert or 
opinion testimony.

    If, while testifying in a legal proceeding exclusively among non-
federal litigants, an employee of the Department is asked for expert or 
opinion testimony, the employee shall, unless specifically authorized by 
the Secretary or General Counsel in accordance with Sec. 15.303, 
decline to answer on the grounds that he or she is forbidden to do so by 
this part.

[67 FR 65277, Oct. 23, 2002]

              Appendix A to Part 15--HUD FOIA Reading Rooms

    The Department maintains a reading room in Headquarters, 451 Seventh 
Street, SW., Washington, DC 20410 and in each of its Secretary's 
Representative's Offices as follows:
    New England, Boston Office--Room 375, Thomas P. O'Neill, Jr. Federal 
Building, 10 Causeway Street, Boston, Massachusetts 02222-1092. The New 
England Office oversees jurisdiction for HUD Offices located in Maine, 
New Hampshire, Vermont, Massachusetts, Connecticut, and Rhode Island.
    New York/New Jersey, New York Office--26 Federal Plaza, New York, 
New York 10278-0068. The New York/New Jersey Office oversees 
jurisdiction for HUD Offices located in New York and New Jersey.
    Mid Atlantic, Philadelphia Office--Liberty Square Building, 105 
South 7th Street, Philadelphia, Pennsylvania 19106-3392. The Mid 
Atlantic Office oversees jurisdiction for HUD Offices located in 
Pennsylvania, Delaware, Maryland, Virginia, and West Virginia.
    Southeast/Caribbean, Atlanta Office--Five Points Plaza Building, 40 
Marietta St., Atlanta, Georgia 30303. The Southeast/Caribbean Office 
oversees jurisdiction for HUD Offices located in Kentucky, Tennessee, 
North Carolina, South Carolina, Georgia, Alabama, Mississippi, Florida, 
and Puerto Rico.
    Midwest, Chicago Office--Ralph Metcalfe Federal Building, 77 West 
Jackson Boulevard, Chicago, Illinois 60604-3507. The Midwest Office 
oversees jurisdiction for HUD Offices located in Illinois, Indiana, 
Ohio, Michigan, Wisconsin, and Minnesota.
    Southwest, Fort Worth Office--Burnett Plaza Building, 801 Cherry 
Street, Fort Worth, Texas 76102. The Southwest Office oversees 
jurisdiction for HUD Offices located in Oklahoma, Texas, Arkansas, 
Louisiana, and New Mexico.
    Great Plains, Kansas City Office--Room 200, Gateway Tower II, 400 
State Avenue, Kansas City, Kansas 66101-2406. The Great Plains Office 
oversees jurisdiction for HUD Offices located in Missouri, Iowa, Kansas, 
and Nebraska.
    Rocky Mountain, Denver Office--633 17th Street, Denver, Colorado 
80202-3607. The Rocky Mountain Office oversees jurisdiction for HUD 
Offices located in Colorado, Utah, Wyoming, North Dakota, South Dakota, 
and Montana.
    Pacific/Hawaii, San Francisco Office--Philip Burton Federal Building 
& U.S. Courthouse, 450 Golden Gate Avenue, PO Box 36003, San Francisco, 
California 94102-3448. The Pacific/Hawaii Office oversees jurisdiction 
for HUD Offices located in California, Nevada, Arizona, and Hawaii.
    Northwest/Alaska, Seattle Office--Suite 200, Seattle Federal Office 
Building, 909 First Avenue, Seattle, Washington 98104-1000. The

[[Page 188]]

Northwest/Alaska Office oversees jurisdiction for HUD Offices located in 
Alaska, Washington, Oregon, and Idaho.

[66 FR 6973, Jan. 22, 2001]



PART 16_IMPLEMENTATION OF THE PRIVACY ACT OF 1974--Table of Contents



Sec.
16.1 Purpose and statement of policy.
16.2 Definitions.
16.3 Procedures for inquiries.
16.4 Requests for access; requirements.
16.5 Disclosure of requested information to individuals.
16.6 Initial denial of access.
16.7 Administrative review of initial denial of access.
16.8 Request for correction or amendment to record.
16.9 Agency procedures upon request for correction or amendment of 
          record.
16.10 Appeal of initial adverse agency determination on correction or 
          amendment.
16.11 Disclosure of record to person other than the individual to whom 
          it pertains.
16.12 Fees.
16.13 Penalties.
16.14 General exemptions.
16.15 Specific exemptions.

    Authority: 5 U.S.C. 552(a); 42 U.S.C. 3535(d).

    Source: 40 FR 39729, Aug. 28, 1975, unless otherwise noted.



Sec. 16.1  Purpose and statement of policy.

    (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 Federal Register 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) A Privacy Act request from an individual for records about that 
individual and not contained in a Privacy Act Records System 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

[[Page 189]]

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) A Freedom of Information Act request from an individual for 
records about that individual contained in a Privacy Act Records System 
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 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 reasonable 
description.
    (3) A Freedom of Information Act request from an individual for 
records about another individual contained in a Privacy Act Records 
System 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. Sec. 552a(b).
    (4) A Privacy Act request from an individual for records about 
another individual 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 Sec. 16.1(e)(1) of this 
section.

[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976]



Sec. 16.2  Definitions.

    (a) The definitions of 5 U.S.C. 552a apply in this part.
    (b) As used in this part:
    (1) Act means the Privacy Act of 1974, Pub. L. 93-579.
    (2) Privacy Act Officer 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) Privacy Appeals Officer means the General Counsel.
    (4) Inquiry 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) Request for access 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) Request for correction or amendment 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) Appeal 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.

[40 FR 39729, Aug. 28, 1975, as amended at 41 FR 13917, Apr. 1, 1976; 61 
FR 5204, Feb. 9, 1996]



Sec. 16.3  Procedures for inquiries.

    (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

[[Page 190]]

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;
    (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 Federal 
Register;
    (vi) Location of the system of records, as published in the Federal 
Register;
    (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.

The Department reserves the right to require compliance with the 
identification procedures appearing at Sec. 16.4(d) where circumstances 
warrant.
    (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 Federal Register; 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

[[Page 191]]

may indicate that additional information would facilitate processing or 
that further information is necessary to process the inquiry.



Sec. 16.4  Requests for access; requirements.

    (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 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) In person. 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 
Sec. 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) Not in person. If the individual making a request does not 
appear in person before a Privacy Act Officer, the information set forth 
in Sec. 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:

City of --------------------
County of --------------------:

    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 --------------------.

------------------------------------
 (signature)


If the request follows inquiry under Sec. 16.3, this should be 
indicated in the request for access in order to facilitate processing.
    (3) Parents of minors and legal guardians. 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

[[Page 192]]

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 Sec. 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, 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.



Sec. 16.5  Disclosure of requested information to individuals.

    (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. Unusual circumstances 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) Grant of access--(1) Notification. An individual shall be 
granted access to a record pertaining to him or her, except where the 
provisions of Sec. 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 Sec. 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) Methods of access. 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 Sec. 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

[[Page 193]]

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 individual of his or her 
choice. Accompanied 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.



Sec. 16.6  Initial denial of access.

    (a) Grounds. 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 Sec. 16.14, Sec. 
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) Notification. 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).

[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 20297, Apr. 19, 1977]



Sec. 16.7  Administrative review of initial denial of access.

    (a) Review shall be available only from a written denial of a 
request for access issued under Sec. 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.

[[Page 194]]

    (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 Sec. 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 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 Sec. 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).



Sec. 16.8  Request for correction or amendment to record.

    (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 Sec. 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 Sec. 16.3(b) (2) and (3) apply to the 
information obtained under paragraph (e) of this section.



Sec. 16.9  Agency procedures upon request for correction or amendment 
of record.

    (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

[[Page 195]]

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 Sec. 
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 Sec. 
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 Sec. 
16.10, including the name and address of the Privacy Appeals Officer. 
The term promptly in this Sec. 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

[[Page 196]]

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.



Sec. 16.10  Appeal of initial adverse agency determination on correction 
or amendment.

    (a) Appeal shall be available only from a written denial of a 
request for correction or amendment of a record issued under Sec. 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 Sec. 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 Sec. 16.9(a)(2)(i) and 
Sec. 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

[[Page 197]]

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;
    (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 Sec. 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 Sec. 16.3(b) (2) and (3) apply to the 
information obtained under paragraphs (e) and (i)(1) of this section.



Sec. 16.11  Disclosure of record to person other than the individual to 
whom it pertains.

    (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 Sec. 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:

    (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;

[[Page 198]]

    (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.

    (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:
    (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 Sec. 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.



Sec. 16.12  Fees.

    (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:

$0.10 Each copy of each page, up to 8\1/2\x14 made 
by photocopy or similar process.
$0.20 Each page of computer printout without regard to the number of 
carbon copies concurrently printed.

    (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

[[Page 199]]

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.

[40 FR 39729, Aug. 28, 1975, as amended at 42 FR 29479, June 9, 1977]



Sec. 16.13  Penalties.

    (a) The Act provides, in pertinent part:

    Any person who knowingly and willfully requests or obtains any 
record concerning an 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))

    (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.



Sec. 16.14  General exemptions.

    (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.

[40 FR 39729, Aug. 28, 1975, as amended at 49 FR 20486, May 15, 1984]



Sec. 16.15  Specific exemptions.

    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 Federal 
Register 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 Federal Register 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

[[Page 200]]

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 Federal 
Register 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 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

[[Page 201]]

could impede future cooperation by sources, and could result in 
harassment or harm to such sources.

[42 FR 49810, Sept. 28, 1977, as amended at 59 FR 9407, Feb. 28, 1994]



PART 17_ADMINISTRATIVE CLAIMS--Table of Contents



    Subpart A_Claims Against Government Under Federal Tort Claims Act

                           General Provisions

Sec.
17.1 Scope; definitions.

                               Procedures

17.2 Administrative claim; when presented; appropriate HUD office.
17.3 Administrative claim; who may file.
17.4 Administrative claim; evidence and information to be submitted.
17.5 Investigations.
17.6 Claims investigation.
17.7 Authority to adjust, determine, compromise, and settle claims.
17.8 Limitations on authority.
17.9 Referral to Department of Justice.
17.11 Final denial of claim.
17.12 Action on approved claim.

  Subpart B_Claims Under the Military Personnel and Civilian Employees 
                           Claims Act of 1964

17.40 Scope and purpose.
17.41 Claimants.
17.42 Time limitations.
17.43 Allowable claims.
17.44 Restrictions on certain claims.
17.45 Unallowable claims.
17.46 Claims involving carriers or insurers.
17.47 Settlement of claims.
17.48 Computation of amount of award.
17.49 Attorney's fees.
17.50 Claims procedures.

   Subpart C_Procedures for the Collection of Claims by the Government

                           General Provisions

17.60 Scope and definitions.
17.61 Incorporation of joint standards by reference.
17.62 Subdivision and joining of claims.
17.63 Authority of offices to attempt collection of claims.
17.64 Referral of claims to the Assistant Secretary for Administration.
17.65 Authority of offices to compromise claims or suspend or terminate 
          collection action.
17.66 Department claims officer.
17.67 Claims files.
17.68 Monthly report of collection action.
17.69 Accounting control.
17.70 Record retention.
17.71 Suspension or revocation of eligibility.
17.72 Methods of collection and imposition of late charges.
17.73 Standards for compromise of claims.
17.74 Standards for suspension or termination of collection action.
17.75 Referral to GAO or Justice Department.
17.76 Disclosure to a consumer reporting agency.
17.77 Contracts for collection services.

                    Administrative Offset Provisions

17.100 Scope.
17.101 Coordinating administrative offset with another Federal agency.
17.102 Notice requirements before offset.
17.103 Exceptions to notice requirements.
17.104 Review within the Department of a determination of indebtedness.
17.105 Review of departmental records related to the debt.
17.106 Written agreement to repay debt as alternative to administrative 
          offset.
17.107 Stay of offset.
17.108 Types of review.
17.109 Review procedures.
17.110 Determination of indebtedness and appeal from determination.
17.111 Procedures for administrative offset: single debt.
17.112 Procedures for administrative offset: multiple debts.
17.113 Procedures for administrative offset: interagency cooperation.
17.114 Procedures for administrative offset: time limitation.
17.115 Procedures for administrative offset: offset against amounts 
          payable from Civil Service Retirement and Disability Fund.
17.116 Procedures for administrative offset: offset of debtor's judgment 
          against the United States.
17.117 Procedures for administrative offset: imposition of interest.
17.118 Miscellaneous provisions: correspondence with the Department.

                        Salary Offset Provisions

17.125 Scope.
17.126 Coordinating offset with another Federal agency.
17.127 Determination of indebtedness.
17.128 Notice requirements before offset.
17.129 Request for a hearing.
17.130 Result if employee fails to meet deadlines.
17.131 Written decision following a hearing.
17.132 Review of departmental records related to the debt.
17.133 Written agreement to repay debt as alternative to salary offset.

[[Page 202]]

17.134 Procedures for salary offset: when deductions may begin.
17.135 Procedures for salary offset: types of collection.
17.136 Procedures for salary offset: methods of collection.
17.137 Procedures for salary offset: imposition of interest.
17.138 Non-waiver of rights.
17.139 Refunds.
17.140 Miscellaneous provisions: correspondence with the Department.

IRS Tax Refund and Federal Payment Offset Provisions and Administrative 
                            Wage Garnishment

17.150 Scope.
17.151 Notice requirements before offset.
17.152 Review within the Department of a determination that an amount is 
          past-due and legally enforceable.
17.153 Determination of the Administrative Judge.
17.154 Postponements, withdrawals and extensions of time.
17.155 Review of departmental records related to the debt.
17.156 Stay of offset.
17.157 Application of offset funds: Single debt.
17.158 Application of offset funds: Multiple debts.
17.159 Application of offset funds: Federal payment is insufficient to 
          cover amount of debt.
17.160 Time limitation for notifying the Department of the Treasury to 
          request offset of Federal payments due.
17.161 Correspondence with the Department.

                     Administrative Wage Garnishment

17.170 Administrative wage garnishment.

    Authority: 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).



    Subpart A_Claims Against Government Under Federal Tort Claims Act

    Authority: 5 U.S.C. 5514; 28 U.S.C. 2672; 31 U.S.C. 3711, 3716-3718, 
3721; 42 U.S.C. 3535(d).

    Source: 36 FR 24427, Dec. 22, 1971, unless otherwise noted.

                           General Provisions



Sec. 17.1  Scope; definitions.

    (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 Department and Organizational unit are defined in 24 
CFR part 5.

[36 FR 24427, Dec. 22, 1971, as amended at 61 FR 5204, Feb. 9, 1996]

                               Procedures



Sec. 17.2  Administrative claim; when presented; appropriate HUD office.

    (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 Claim for Damages or Injury, 
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

[[Page 203]]

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.



Sec. 17.3  Administrative claim; who may file.

    (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.
    (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.



Sec. 17.4  Administrative claim; evidence and information to be submitted.

    (a) Personal injury. 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) Death. 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;

[[Page 204]]

    (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 responsibility of the United States for the death or the 
damages claimed.
    (c) Property damage. 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.



Sec. 17.5  Investigations.

    The Department may investigate, or may request any other Federal 
agency to investigate, a claim filed under this subpart.



Sec. 17.6  Claims investigation.

    (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.



Sec. 17.7  Authority to adjust, determine, compromise, and settle claims.

    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.



Sec. 17.8  Limitations on authority.

    (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

[[Page 205]]

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 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.



Sec. 17.9  Referral to Department of Justice.

    When Department of Justice approval or consultation is required 
under Sec. 17.8, the referral or request shall be transmitted to the 
Department of Justice by the General Counsel of the Department or his 
designee.



Sec. 17.11  Final denial of claim.

    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.



Sec. 17.12  Action on approved claim.

    (a) Payment of a claim approved under this subpart is contingent on 
claimant's execution of: (1) A Claim for Damage or Injury, Standard Form 
95; (2) a claims settlement agreement; and (3) a Voucher for Payment, 
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.



  Subpart B_Claims Under the Military Personnel and Civilian Employees 
                           Claims Act of 1964

    Authority: Sec. 3, 78 Stat. 767 (31 U.S.C. 3721).

    Source: 36 FR 24427, Dec. 22, 1971, unless otherwise noted.



Sec. 17.40  Scope and purpose.

    (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

[[Page 206]]

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.

[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]



Sec. 17.41  Claimants.

    (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.
    (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.



Sec. 17.42  Time limitations.

    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.



Sec. 17.43  Allowable claims.

    (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 Sec. Sec. 17.44 and 
17.45:
    (1) Property loss or damage in quarters or other authorized places. 
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;

[[Page 207]]

    (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) Transportation or travel losses. 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) Manufactured homes. 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 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) Enemy action or public service. 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) Property used for benefit of the Government. 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) Clothing and accessories. 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.

[36 FR 24427, Dec. 22, 1971, as amended at 50 FR 9268, Mar. 7, 1985]



Sec. 17.44  Restrictions on certain claims.

    Claims of the type described in this section are only allowable 
subject to the restrictions noted:
    (a) Money or currency. 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 Sec. 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) Government property. 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) Estimate fees. 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) Automobiles and other motor vehicles. 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

[[Page 208]]

    (2) Shipment of such motor vehicles was being furnished or provided 
by the Government, subject to the provisions of Sec. 17.46.



Sec. 17.45  Unallowable claims.

    Claims are not allowable for the following:
    (a) Unassigned quarters in United States. 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) Business property. Property used for business or profit.
    (c) Unserviceable property. Wornout or unserviceable property.
    (d) Illegal possession. Property acquired, possessed, or transported 
in violation of law or in violation of applicable regulations or 
directives.
    (e) Articles of extraordinary value. 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 claimant or articles properly checked, 
provided that reasonable protection or security measures have been taken 
by claimant.
    (f) Minimum amount. Loss or damage amounting to less than $10.



Sec. 17.46  Claims involving carriers or insurers.

    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

[[Page 209]]

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 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.



Sec. 17.47  Settlement of claims.

    (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 Sec. 
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.



Sec. 17.48  Computation of amount of award.

    (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.



Sec. 17.49  Attorney's fees.

    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

[[Page 210]]

attorney on account of services rendered in connection with that claim.



Sec. 17.50  Claims procedures.

    (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 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.

[36 FR 24427, Dec. 22, 1971, as amended at 48 FR 6536, Feb. 14, 1983]



   Subpart C_Procedures for the Collection of Claims by the Government

    Authority: 5 U.S.C. 5514; 31 U.S.C. 3701, 3711, 3716-3720E; and 42 
U.S.C. 3535(d).

    Source: 36 FR 24427, Dec. 22, 1971, unless otherwise noted. 
Redesignated at 49 FR 32349, Aug. 14, 1984.

                           General Provisions



Sec. 17.60  Scope and definitions.

    (a) Scope. 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 et seq.) (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) Definitions. As used in this subpart:
    Administrative offset 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
    Agency 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.
    Claim means the same as Debt.
    Consumer Reporting Agency 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

[[Page 211]]

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.
    Debt 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.
    Debtor means the same as person.
    Department means the Department of Housing and Urban Development.
    Department Claims Officer: (see Sec. 17.66).
    Determination means the point at which the Secretary decides that 
the debt is valid.
    Disposable pay 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.
    Employee 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.
    Office means the organization of each Assistant Secretary, the 
Government National Mortgage Association (GNMA), the Solar Energy and 
Energy Conservation Bank and each Field Office.
    Pay means basic pay, special pay, income pay, retired pay, retainer 
pay, or,

[[Page 212]]

in case of an employee not entitled to basic pay, other authorized pay.
    Person 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.
    Salary offset 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.
    Secretary means the Secretary of the Department of Housing and Urban 
Development or his or her designee.
    United States includes an agency of the United States.
    Waiver 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, 32 U.S.C. 716, 
or 5 U.S.C. 8346(b), or any other law.

[36 FR 24427, Dec. 22, 1971. Redesignated and amended at 49 FR 32349, 
Aug. 14, 1984; 59 FR 34579, July 6, 1994]



Sec. 17.61  Incorporation of joint standards by reference.

    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.



Sec. 17.62  Subdivision and joining of claims.

    (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.

[59 FR 34579, July 6, 1994]



Sec. 17.63  Authority of offices to attempt collection of claims.

    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.

[40 FR 28599, July 7, 1975. Redesignated at 49 FR 32349, Aug. 14, 1984]



Sec. 17.64  Referral of claims to the Assistant Secretary for Administration.

    (a) Authority of the Assistant Secretary for Administration. 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 Sec. 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) Exclusions. 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

[[Page 213]]

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.

[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984 
(interim), as amended at 59 FR 34580, July 6, 1994]



Sec. 17.65  Authority of offices to compromise claims or suspend or 
terminate collection action.

    (a) Small claims. 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) Claims arising under certain programs. (1) The office primarily 
responsible for the following programs of the Department is authorized, 
in those cases where initial collection attempts 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 Sec. 17.64(b).

[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]



Sec. 17.66  Department claims officer.

    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.

[40 FR 28599, July 7, 1975. Redesignated at 49 FR 32349, Aug. 14, 1984]



Sec. 17.67  Claims files.

    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.



Sec. 17.68  Monthly report of collection action.

    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 Sec. 
17.64(a).
    (d) Claims returned to this Department by the Justice Department for

[[Page 214]]

further collection action because Justice's handling was not warranted.



Sec. 17.69  Accounting control.

    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.



Sec. 17.70  Record retention.

    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.



Sec. 17.71  Suspension or revocation of eligibility.

    (a) Where a contractor, grantee, or other participant in programs 
sponsored by the Department fails to pay 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.



Sec. 17.72  Methods of collection and imposition of late charges.

    (a) Demand for payment. Appropriate written demands shall be made 
upon the debtor which shall include information relating to the 
consequences of his failure to cooperate.
    (b) Methods of collection: Administrative and salary offset. 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 Sec. Sec. 17.100 through 17.118. For specific procedures on 
salary offset see Sec. Sec. 17.125 through 17.140.
    (c) Method of collection: Liquidation of collateral. 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) Collection in installments. 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) Interest. 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 Federal 
Register, 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) Omission not a defense. Failure of HUD to comply with any 
standard prescribed in 4 CFR parts 101 through 105

[[Page 215]]

or in this subpart shall not be available as a defense to any debtor.

[36 FR 24427, Dec. 22, 1971. Redesignated and amended at 49 FR 32349, 
32350, Aug. 14, 1984; 59 FR 34580, July 6, 1994]



Sec. 17.73  Standards for compromise of claims.

    (a) Compromise offer. 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.
    (b) Documentary evidence of compromise. 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.



Sec. 17.74  Standards for suspension or termination of collection action.

    (a) Suspension of collection action. 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) Termination of collection action. 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.



Sec. 17.75  Referral to GAO or Justice Department.

    (a) Claims referred. 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) Prompt referral. 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.



Sec. 17.76  Disclosure to a consumer reporting agency.

    (a) Definition. For purposes of this section, individual means a 
natural person.
    (b) Conditions for disclosure. 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;

[[Page 216]]

    (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 individual and agreed to by 
the Secretary nor has filed for review of the claim under paragraph (c) 
of this section.
    (c) Limitations on disclosure. 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) Additional responsibilities of the Department. 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.

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.

[49 FR 32350, Aug. 14, 1984]



Sec. 17.77  Contracts for collection services.

    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.

[49 FR 32350, Aug. 14, 1984]

                    Administrative Offset Provisions

    Source: Sections 17.100 through 17.118, 49 FR 32351, appear at Aug. 
14, 1984, unless otherwise noted.

[[Page 217]]



Sec. 17.100  Scope.

    (a) The standards set forth in Sec. Sec. 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.
    (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.



Sec. 17.101  Coordinating administrative offset with another Federal agency.

    (a) When HUD is owed the debt. 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) When another agency is owed the debt. 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.



Sec. 17.102  Notice requirements before offset.

    Except as provided in Sec. 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 
Sec. 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 Sec. 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 
Sec. 17.106).



Sec. 17.103  Exceptions to notice requirements.

    (a) In cases where the notice requirements specified in Sec. 17.102 
already have

[[Page 218]]

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 
Sec. 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.



Sec. 17.104  Review within the Department of a determination of indebtedness.

    (a) Notification by debtor. A debtor who receives a Notice of Intent 
has the right to request Departmental review 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) Secretary's response. 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.



Sec. 17.105  Review of departmental records related to the debt.

    (a) Notification by debtor. 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) Secretary's response. 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.



Sec. 17.106  Written agreement to repay debt as alternative to 
administrative offset.

    (a) Notification by debtor. 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) Secretary's response. 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.



Sec. 17.107  Stay of offset.

    If the debtor timely notifies the Secretary that he or she is 
exercising a right described in Sec. 17.104 or Sec. 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.

[[Page 219]]



Sec. 17.108  Types of review.

    (a) Hearing. 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) Review of the record. 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).



Sec. 17.109  Review procedures.

    (a) Hearings. (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.
    (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) Review of the record. 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.



Sec. 17.110  Determination of indebtedness and appeal from determination.

    (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.

[36 FR 24427, Dec. 22, 1971. Redesignated at 49 FR 32349, Aug. 14, 1984 
(interim), as amended at 59 FR 34580, July 6, 1994]



Sec. 17.111  Procedures for administrative offset: single debt.

    (a) Offset will commence 31 days after the debtor receives the 
Notice of Intent, unless the debtor has requested a hearing (see Sec. 
17.104) or has entered into a repayment agreement (see Sec. 17.106).
    (b) When there is review of the debt within the Department, offset 
will begin after the DAS determination has been issued under Sec. 
17.110 and a copy of the determination is received by the Department's 
Office of Finance and Accounting.



Sec. 17.112  Procedures for administrative offset: multiple debts.

    The Secretary will use the procedures identified in Sec. 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.



Sec. 17.113  Procedures for administrative offset: interagency cooperation.

    The Department will make use of all possible methods of cooperating 
with

[[Page 220]]

other Federal agencies in effecting collections by offset.



Sec. 17.114  Procedures for administrative offset: time limitation.

    (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.)



Sec. 17.115  Procedures for administrative offset: offset against amounts 
payable from Civil Service Retirement and Disability Fund.

    (a) Unless otherwise prohibited by law, the Secretary may request 
that moneys which are due and payble to a 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.



Sec. 17.116  Procedures for administrative offset: offset of debtor's 
judgment against the United States.

    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.



Sec. 17.117  Procedures for administrative offset: imposition of interest.

    Interest will be charged in accordance with Sec. 17.72.



Sec. 17.118  Miscellaneous provisions: correspondence with the Department.

    (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.

                        Salary Offset Provisions

    Source: Sections 17.125 through 17.140, appear at 49 FR 32353, Aug. 
14, 1984, unless otherwise noted.



Sec. 17.125  Scope.

    (a) The provisions set forth in Sec. Sec. 17.125 through 17.140 are 
the Department's procedures for the collection by salary offset of a 
Federal employee's

[[Page 221]]

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 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).



Sec. 17.126  Coordinating offset with another Federal agency.

    (a) When HUD is owed the debt. 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) When another agency is owed the debt. 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.



Sec. 17.127  Determination of indebtedness.

    In determining that an employee is indebted, the Secretary will 
review the debt to make sure that it is valid and past due.



Sec. 17.128  Notice requirements before offset.

    Except as provided in Sec. 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 Sec. 
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

[[Page 222]]

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 Sec. 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.
    (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.



Sec. 17.129  Request for a hearing.

    (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 Sec. 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).



Sec. 17.130  Result if employee fails to meet deadlines.

    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 Sec. 
17.129; or
    (b) Is scheduled to appear and fails to appear at the hearing.



Sec. 17.131  Written decision following a hearing.

    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.



Sec. 17.132  Review of departmental records related to the debt.

    (a) Notification by employee. An employee who intends to inspect or 
copy departmental records related to the

[[Page 223]]

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) Secretary's response. 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.



Sec. 17.133  Written agreement to repay debt as alternative to salary 
offset.

    (a) Notification by employee. 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.
    (b) Secretary's response. 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.



Sec. 17.134  Procedures for salary offset: when deductions may begin.

    (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 Sec. 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 
Sec. Sec. 17.100 through 17.118).



Sec. 17.135  Procedures for salary offset: types of collection.

    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.



Sec. 17.136  Procedures for salary offset: methods of collection.

    (a) General. 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) Installment deductions. 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) Sources of deductions. 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.

[[Page 224]]



Sec. 17.137  Procedures for salary offset: imposition of interest.

    Interest will be charged in accordance with Sec. 17.72.



Sec. 17.138  Non-waiver of rights.

    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.



Sec. 17.139  Refunds.

    The Department will refund promptly to the appropriate individual 
amounts offset under these regulations when:
    (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.



Sec. 17.140  Miscellaneous provisions: correspondence with the Department.

    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.

IRS Tax Refund and Federal Payment Offset Provisions and Administrative 
                            Wage Garnishment

    Source: Sections 17.150 through 17.161 appear at 51 FR 39750, Oct. 
31, 1986, unless otherwise noted.



Sec. 17.150  Scope.

    (a) The standards set forth in Sec. Sec. 17.150 through 17.161 are 
the Department's procedures for requesting the Department of the 
Treasury to offset Federal payments due debtors who have a past-due debt 
obligation to the Department. These procedures apply to the collection 
of debts under common law, 31 U.S.C. 3716 or other statutory authority.
    (b) The Secretary will use the Department of the Treasury's Federal 
payment offset to collect claims which are certain in amount, past due 
and legally enforceable, and which are eligible for tax refund or 
Federal payment offset under regulations issued by the Secretary of the 
Treasury.
    (c) The Secretary will report debts to the Department of the 
Treasury for the purpose of using the offset procedures described in 
Sec. Sec. 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 cancelled debt on Form 1099C. (Form 1099C is an information return 
which Government agencies file with the IRS and the Department of the 
Treasury to report forgiven debt, and the forgiven amount is considered 
income to the taxpayer.) (See Sec. 17.159.)

[67 FR 47435, July 18, 2002]



Sec. 17.151  Notice requirements before offset.

    A request for deduction from a Federal payment 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 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 
Department of Treasury to reduce any amounts payable to the debtor by an 
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

[[Page 225]]

that the debt is past due and legally enforceable (see Sec. 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 Sec. 17.155.)

[51 FR 39750, Oct. 31, 1986, as amended at 67 FR 47435, July 18, 2002]



Sec. 17.152  Review within the Department of a determination that an 
amount is past-due and legally enforceable.

    (a) Notification by debtor. 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 days from the date of the Department's Notice 
of Intent that he or she intends to present evidence. (See Sec. 
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) Submission of evidence. 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) Review of the record. 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) Previous decision by Board of Contract Appeals. 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, except 
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.



Sec. 17.153  Determination of the Administrative Judge.

    (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 Department of the Treasury after the Administrative Judge's 
determination has been issued under paragraph (a) of this

[[Page 226]]

section and a copy of the determination is received by the Department's 
Chief Financial Officer. No referral will be made to the IRS or the 
Department of the Treasury if review of the debt by the Administrative 
Judge reverses the initial decision that the debt is past due and 
legally enforceable.

[51 FR 39750, Oct. 31, 1986, as amended at 67 FR 47435, July 18, 2002]



Sec. 17.154  Postponements, withdrawals and extensions of time.

    (a) Postponements and withdrawals. The Secretary may, for good 
cause, postpone or withdraw referral of the debt to the Department of 
Treasury. (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) Extensions of time. At the discretion of the Administrative 
Judge, time limitations required in these procedures may be extended in 
appropriate circumstances for good cause shown.

[51 FR 39750, Oct. 31, 1986, as amended at 67 FR 47435, July 18, 2002]



Sec. 17.155  Review of departmental records related to the debt.

    (a) Notification by debtor. 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) Department's response. 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.



Sec. 17.156  Stay of offset.

    If the debtor timely notifies the Secretary that he or she is 
exercising a right described in Sec. 17.152(a) and timely submits 
evidence in accordance with Sec. 17.152(b), any notice to the IRS or 
the Department of the Treasury 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.

[67 FR 47435, July 18, 2002]



Sec. 17.157  Application of offset funds: Single debt.

    If the debtor does not timely notify the Secretary that he or she is 
exercising a right described in Sec. 17.152, the Secretary will notify 
the Department of the Treasury 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 Department of the Treasury as a Federal payment. 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.

[67 FR 47435, July 18, 2002]



Sec. 17.158  Application of offset funds: Multiple debts.

    The Secretary will use the procedures set out in Sec. 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.



Sec. 17.159  Application of offset funds: Federal payment is insufficient 
to cover amount of debt.

    If an offset of a Federal payment is insufficient to satisfy a debt, 
the Secretary will continue the certification to the Department of the 
Treasury 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 
cancelled debt in accordance with Sec. 17.150(d).

[67 FR 47435, July 18, 2002]

[[Page 227]]



Sec. 17.160  Time limitation for notifying the Department of the Treasury 
to request offset of Federal payments due.

    (a) The Secretary may not initiate offset of Federal payments 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.)

[51 FR 39750, Oct. 31, 1986, as amended at 67 FR 47436, July 18, 2002]



Sec. 17.161  Correspondence with the Department.

    (a) All correspondence from the debtor to the Board concerning the 
right to review as described in Sec. 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 the Chief Financial Officer, Department of 
Housing and Urban Development, 451 Seventh Street, SW, Washington, DC 
20410.

[51 FR 39750, Oct. 31, 1986, as amended at 59 FR 59647, Nov. 18, 1994; 
67 FR 47436, July 18, 2002]

                     Administrative Wage Garnishment



Sec. 17.170  Administrative wage garnishment.

    (a) General. The Secretary may collect a debt by using 
administrative wage garnishment. Regulations in 31 CFR 285.11 governs 
collection through administrative wage garnishment. To the extent 
situations arise that are not covered by 31 CFR 285.11, those situations 
shall be governed by part 26, subpart A of this title.
    (b) Hearing official. Any hearing required to establish the 
Secretary's right to collect a debt through administrative wage 
garnishment shall be conducted by an Administrative Judge of the HUD 
Board of Contract Appeals.

[67 FR 47436, July 18, 2002]



PART 18_INDEMNIFICATION OF HUD EMPLOYEES--Table of Contents



    Authority: 5 U.S.C. 301; 42 U.S.C. 3535(d).

    Source: 62 FR 6096, Feb. 10, 1997, unless otherwise noted.



Sec. 18.1  Policy.

    (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

[[Page 228]]

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 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.



PART 20_BOARD OF CONTRACT APPEALS--Table of Contents



Subpart A_Development of Housing and Urban Development Board of Contract 
                                 Appeals

Sec.
20.1 Scope of part.
20.2 Establishment of Board.
20.3 Organization and location of the Board.
20.4 Jurisdiction of the Board.
20.5 Board powers.

Subpart B_Rules of the Department of Housing and Urban Development Board 
                           of Contract Appeals

20.10 Rules.

                         Preliminary Procedures

Rules
1. Appeals, how taken.
2. Notice of appeal, contents of.
3. Docketing of appeals.
4. Preparation, content, organization, forwarding, and status of appeal 
          file.
5. Dismissal for lack of jurisdiction.
6. Pleadings.
7. Amendments of pleadings or record.
8. Hearing election and motions.
9. Prehearing briefs.
10. Prehearing or presubmission conference.
11. Submission without a hearing.
12. Optional small claims (expedited) and accelerated procedures. (These 
          procedures

[[Page 229]]

          are available solely at the election of the appellant.)
12.1 Elections to utilize small claims (expedited) and accelerated 
          procedure.
12.2 The small claims (expedited) procedure.
12.3 The accelerated procedure.
12.4 Motions for reconsideration in Rule 12 cases.
13. Settling the record.
14. Discovery--depositions.
15. Interrogatories to parties, admission of facts, and production and 
          inspection of documents.
16. Filing and service of papers other than subpoenas.

                                Hearings

17. Where and when held.
18. Notice of hearings.
19. Unexcused absence of a party.
20. Hearings: conduct; examination of witnesses.
21. Subpoenas.
22. Copies of papers.
23. Posthearing briefs.
24. Transcript of proceedings.
25. Withdrawal of exhibits.

                             Representation

26. Appellant.
27. Government.

                                Decisions

28. Decisions.

                       Motion for Reconsideration

29. Motion for reconsideration.

                         Dismissals and Defaults

30. Dismissal without prejudice.
31. Dismissal or default for failure to prosecute or defend.

                                 Remand

32. Remand from court.

                                Sanctions

33. Sanctions.

                        Miscellaneous Procedures

34. Applicability.
35. Time, computation, and extensions.
36. Ex parte communications.

    Authority: 41 U.S.C. 601-613; 42 U.S.C. 3535(d).



Subpart A_Department of Housing and Urban Development Board of Contract 
                                 Appeals

    Source: 50 FR 45911, Nov. 5, 1985, unless otherwise noted.



Sec. 20.1  Scope of part.

    This part establishes a Board of Contract Appeals, sets forth its 
function, policies and procedures regarding matters to be considered by 
the Board, and prescribes the rules of the Board.



Sec. 20.2  Establishment of Board.

    There is established in the Office of the Secretary, the Housing and 
Urban Development Board of Contract Appeals (``the Board'').



Sec. 20.3  Organization and location of the Board.

    (a) Location. The Board is located at 1707 H Street, NW., Eleventh 
Floor, Washington, DC 20006. Mail and non-postal delivery may be sent to 
the Board at this address. Mail also may be addressed to: Board of 
Contract Appeals, U.S. Department of Housing and Urban Development, Room 
2131, 451 Seventh Street, SW., Washington, DC 20410-0001. The telephone 
number of the Board is (202) 254-0000. (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) 254-0011.
    (b) Organization. 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

[[Page 230]]

procedural determinations as are necessary to the proper disposition of 
the appeal.

[50 FR 45911, Nov. 5, 1985, as amended at 61 FR 13280, Mar. 26, 1996; 67 
FR 15112, Mar. 29, 2002]



Sec. 20.4  Jurisdiction of the Board.

    (a) Contract appeals. 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) Other matters. 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.



Sec. 20.5  Board powers.

    (a) Board powers. 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) Disqualification. 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.



Subpart B_Rules of the Department of Housing and Urban Development Board 
                           of Contract Appeals

    Source: 50 FR 45912, Nov. 5, 1985, unless otherwise noted.



Sec. 20.10  Rules.

    (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) Filing Requirements. A party shall file with the Board one 
original of any pleading or motion. That party shall simultaneously 
serve upon the other 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) Alternative Disputes Resolution. 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) Equal Access to Justice Act. 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. Sec. 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.

                         Preliminary Procedures

                       Rule 1. Appeals, how taken.

    (a) General. 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) Contracting officer's failure to act-claim of $100,000 or less. 
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

[[Page 231]]

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) Contracting officer's failure to act-claim in excess of 
$100,000. 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) Unreasonable delay by contracting officer. 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) Stay of proceedings. 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.

                 Rule 2. Notice of appeal, contents of.

    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)].

                      Rule 3. Docketing of appeals.

    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.

 Rule 4. Preparation, content, organization, forwarding, and status of 
                              appeal file.

    (a) Duties of contracting officer. 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;
    (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.

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.
    (b) Duties of appellant. 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) Organization of appeal file. 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) Unusual documents. 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) Status of documents in appeal file. 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) Waiver of filing of documents. 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.

[[Page 232]]

               Rule 5. Dismissal for lack of jurisdiction.

    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.

                           Rule 6. Pleadings.

    (a) Appellant. 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) Government. 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.

               Rule 7. Amendments of pleadings or record.

    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.

                  Rule 8. Hearing election and motions.

    (a) Hearing election. 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 elects to submit its 
case on the record without a hearing, as prescribed in Rule 11.
    (b) Motions. (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.

                       Rule 9. Prehearing briefs.

    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.

[[Page 233]]

            Rule 10. Prehearing or presubmission conference.

    (a) Conference. 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) Results of conference. 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.

                 Rule 11. Submission without a hearing.

    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.

 Rule 12. Optional small claims (expedited) and accelerated procedures. 
     (These procedures are available solely at the election of the 
                               appellant.)

Rule 12.1 Elections to utilize small claims (expedited) and accelerated 
                               procedure.

    (a) Election-dispute involving $50,000 or less. 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) Election-dispute involving $100,000 or less. In appeals where 
the amount in dispute is $100,000 or less, the appellant may elect to 
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) Notice of election. 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) Determination of amount in dispute. 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.

            Rule 12.2 The small claims (expedited) procedure.

    (a) Document submission and prehearing conference. 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) Pleadings, discovery and other prehearing activity. Pleadings, 
discovery and other prehearing activity will be allowed only as 
consistent with the requirement to conduct the

[[Page 234]]

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) Decision. 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) Effect of decision. 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.

                  Rule 12.3 The accelerated procedure.

    (a) Waiver of pleadings, discovery and briefs. 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) Pleadings, discovery, and other prehearing activity. 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) Decision. 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 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.

         Rule 12.4 Motions for reconsideration in Rule 12 cases.

    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.

                      Rule 13. Settling the record.

    (a) Contents of record. 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) Closing of record. 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) Weight of evidence. 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.

                    Rule 14. Discovery--depositions.

    (a) General policy and protective orders. 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

[[Page 235]]

the secrecy of confidential information or documents.
    (b) When depositions permitted. 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) Orders on depositions. 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) Use as evidence. 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) Expenses. Each party shall bear its own expenses associated with 
the taking of any depositions.

Rule 15. Interrogatories to parties, admission of facts, and production 
                      and inspection of documents.

    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.

       Rule 16. Filing and service of papers other than subpoenas.

    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.

                                Hearings

                      Rule 17. Where and when held.

    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.

                      Rule 18. Notice of hearings.

    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).

                 Rule 19. Unexcused absence of a party.

    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.

          Rule 20. Hearings: conduct; examination of witnesses.

    (a) Conduct of hearings. 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) Examination of witnesses. 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

[[Page 236]]

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.

                           Rule 21. Subpoenas.

    (a) General. 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) Voluntary cooperation. 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) Requests for subpoenas. (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) Requests to quash or modify. 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) Form; issuance. (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 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) Service. (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) Contumacy or refusal to obey subpoena. 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.

                       Rule 22. Copies of papers.

    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.

                      Rule 23. Posthearing briefs.

    The presiding Administrative Judge may order the parties to submit 
post hearing briefs to the Board.

[[Page 237]]

                   Rule 24. Transcript of proceedings.

    Testimony and argument at hearings shall be reported verbatim, 
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.

                    Rule 25. Withdrawal of exhibits.

    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.

                             Representation

                           Rule 26. Appellant.

    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.

                          Rule 27. Government.

    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.

                                Decisions

                           Rule 28. Decisions.

    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).

                       Motion for Reconsideration

                  Rule 29. Motion for reconsideration.

    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.

                         Dismissals and Defaults

                  Rule 30. Dismissal without prejudice.

    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.

    Rule 31. Dismissal or default for failure to prosecute or defend.

    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.

                                 Remand

                       Rule 32. Remand from court.

    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.

[[Page 238]]

                                Sanctions

                           Rule 33. Sanctions.

    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.

                        Miscellaneous Procedures

                         Rule 34. Applicability.

    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.

               Rule 35. Time, computation, and extensions.

    (a) General. 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) Computation. 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.

                    Rule 36. Ex parte communications.

    (a) Definition. 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) Prohibition of ex parte communications. Ex parte communications 
are prohibited.
    (c) Procedure after receipt of ex parte communications. 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. Unauthorized ex parte communications 
shall not be taken into consideration in deciding any matter in issue.

[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]



PART 21_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
--Table of Contents



                     Subpart A_Purpose and Coverage

Sec.
21.100 What does this part do?
21.105 Does this part apply to me?
21.110 Are any of my federal assistance awards exempt from this part?
21.115 Does this part affect the federal contracts that I receive?

      Subpart B_Requirements for Recipients Other Than Individuals

21.200 What must I do to comply with this part?
21.205 What must I include in my drug-free workplace statement?
21.210 To whom must I distribute my drug-free workplace statement?
21.215 What must I include in my drug-free awareness program?
21.220 By when must I publish my drug-free workplace statement and 
          establish my drug-free awareness program?
21.225 What actions must I take concerning employees who are convicted 
          of drug violations in the workplace?
21.230 How and when must I identify workplaces?

        Subpart C_Requirements for Recipients Who Are Individuals

21.300 What must I do to comply with this part if I am an individual 
          recipient?
21.301 [Reserved]

          Subpart D_Responsibilities of HUD Awarding Officials

21.400 What are my responsibilities as a HUD awarding official?

           Subpart E_Violations of This Part and Consequences

21.500 How are violations of this part determined for recipients other 
          than individuals?
21.505 How are violations of this part determined for recipients who are 
          individuals?
21.510 What actions will the federal government take against a recipient 
          determined to have violated this part?
21.515 Are there any exceptions to those actions?

[[Page 239]]

                          Subpart F_Definitions

21.605 Award.
21.610 Controlled substance.
21.615 Conviction.
21.620 Cooperative agreement.
21.625 Criminal drug statute.
21.630 Debarment.
21.635 Drug-free workplace.
21.640 Employee.
21.645 Federal agency or agency.
21.650 Grant.
21.655 Individual.
21.660 Recipient.
21.665 State.
21.670 Suspension.

    Authority: 41 U.S.C. 701; 42 U.S.C. 3535(d).

    Source: 68 FR 66557, 66594, Nov. 26, 2003, unless otherwise noted.



                     Subpart A_Purpose and Coverage



Sec. 21.100  What does this part do?

    This part carries out the portion of the Drug-Free Workplace Act of 
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also 
applies the provisions of the Act to cooperative agreements and other 
financial assistance awards, as a matter of Federal Government policy.



Sec. 21.105  Does this part apply to me?

    (a) Portions of this part apply to you if you are either--
    (1) A recipient of an assistance award from the Department of 
Housing and Urban Development; or
    (2) A(n) HUD awarding official. (See definitions of award and 
recipient in Sec. Sec. 21.605 and 21.660, respectively.)
    (b) The following table shows the subparts that apply to you:

------------------------------------------------------------------------
            If you are . . .                    see subparts . . .
------------------------------------------------------------------------
(1) A recipient who is not an            A, B and E.
 individual.
(2) A recipient who is an individual...  A, C and E.
(3) A(n) HUD awarding official.........  A, D and E.
------------------------------------------------------------------------



Sec. 21.110  Are any of my Federal assistance awards exempt from this part?

    This part does not apply to any award that the Secretary or designee 
determines that the application of this part would be inconsistent with 
the international obligations of the United States or the laws or 
regulations of a foreign government.



Sec. 21.115  Does this part affect the Federal contracts that I receive?

    It will affect future contract awards indirectly if you are debarred 
or suspended for a violation of the requirements of this part, as 
described in Sec. 21.510(c). However, this part does not apply directly 
to procurement contracts. The portion of the Drug-Free Workplace Act of 
1988 that applies to Federal procurement contracts is carried out 
through the Federal Acquisition Regulation in chapter 1 of Title 48 of 
the Code of Federal Regulations (the drug-free workplace coverage 
currently is in 48 CFR part 23, subpart 23.5).



      Subpart B_Requirements for Recipients Other Than Individuals



Sec. 21.200  What must I do to comply with this part?

    There are two general requirements if you are a recipient other than 
an individual.
    (a) First, you must make a good faith effort, on a continuing basis, 
to maintain a drug-free workplace. You must agree to do so as a 
condition for receiving any award covered by this part. The specific 
measures that you must take in this regard are described in more detail 
in subsequent sections of this subpart. Briefly, those measures are to--
    (1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Sec. Sec. 21.205 through 
21.220); and
    (2) Take actions concerning employees who are convicted of violating 
drug statutes in the workplace (see Sec. 21.225).

[[Page 240]]

    (b) Second, you must identify all known workplaces under your 
Federal awards (see Sec. 21.230).



Sec. 21.205  What must I include in my drug-free workplace statement?

    You must publish a statement that--
    (a) Tells your employees that the unlawful manufacture, 
distribution, dispensing, possession, or use of a controlled substance 
is prohibited in your workplace;
    (b) Specifies the actions that you will take against employees for 
violating that prohibition; and
    (c) Lets each employee know that, as a condition of employment under 
any award, he or she:
    (1) Will abide by the terms of the statement; and
    (2) Must notify you in writing if he or she is convicted for a 
violation of a criminal drug statute occurring in the workplace and must 
do so no more than five calendar days after the conviction.



Sec. 21.210  To whom must I distribute my drug-free workplace statement?

    You must require that a copy of the statement described in Sec. 
21.205 be given to each employee who will be engaged in the performance 
of any Federal award.



Sec. 21.215  What must I include in my drug-free awareness program?

    You must establish an ongoing drug-free awareness program to inform 
employees about--
    (a) The dangers of drug abuse in the workplace;
    (b) Your policy of maintaining a drug-free workplace;
    (c) Any available drug counseling, rehabilitation, and employee 
assistance programs; and
    (d) The penalties that you may impose upon them for drug abuse 
violations occurring in the workplace.



Sec. 21.220  By when must I publish my drug-free workplace statement 
and establish my drug-free awareness program?

    If you are a new recipient that does not already have a policy 
statement as described in Sec. 21.205 and an ongoing awareness program 
as described in Sec. 21.215, you must publish the statement and 
establish the program by the time given in the following table:

------------------------------------------------------------------------
                If . . .                          then you . . .
------------------------------------------------------------------------
(a) The performance period of the award  must have the policy statement
 is less than 30 days.                    and program in place as soon
                                          as possible, but before the
                                          date on which performance is
                                          expected to be completed.
(b) The performance period of the award  must have the policy statement
 is 30 days or more.                      and program in place within 30
                                          days after award.
(c) You believe there are extraordinary  may ask the HUD awarding
 circumstances that will require more     official to give you more time
 than 30 days for you to publish the      to do so. The amount of
 policy statement and establish the       additional time, if any, to be
 awareness program.                       given is at the discretion of
                                          the awarding official.
------------------------------------------------------------------------



Sec. 21.225  What actions must I take concerning employees who are convicted 
of drug violations in the workplace?

    There are two actions you must take if an employee is convicted of a 
drug violation in the workplace:
    (a) First, you must notify Federal agencies if an employee who is 
engaged in the performance of an award informs you about a conviction, 
as required by Sec. 21.205(c)(2), or you otherwise learn of the 
conviction. Your notification to the Federal agencies must--
    (1) Be in writing;
    (2) Include the employee's position title;
    (3) Include the identification number(s) of each affected award;
    (4) Be sent within ten calendar days after you learn of the 
conviction; and
    (5) Be sent to every Federal agency on whose award the convicted 
employee was working. It must be sent to every awarding official or his 
or her official designee, unless the Federal agency has specified a 
central point for the receipt of the notices.
    (b) Second, within 30 calendar days of learning about an employee's 
conviction, you must either--
    (1) Take appropriate personnel action against the employee, up to 
and including termination, consistent with the

[[Page 241]]

requirements of the Rehabilitation Act of 1973 (29 U.S.C. 794), as 
amended; or
    (2) Require the employee to participate satisfactorily in a drug 
abuse assistance or rehabilitation program approved for these purposes 
by a Federal, State or local health, law enforcement, or other 
appropriate agency.



Sec. 21.230  How and when must I identify workplaces?

    (a) You must identify all known workplaces under each HUD award. A 
failure to do so is a violation of your drug-free workplace 
requirements. You may identify the workplaces--
    (1) To the HUD official that is making the award, either at the time 
of application or upon award; or
    (2) In documents that you keep on file in your offices during the 
performance of the award, in which case you must make the information 
available for inspection upon request by HUD officials or their 
designated representatives.
    (b) Your workplace identification for an award must include the 
actual address of buildings (or parts of buildings) or other sites where 
work under the award takes place. Categorical descriptions may be used 
(e.g., all vehicles of a mass transit authority or State highway 
department while in operation, State employees in each local 
unemployment office, performers in concert halls or radio studios).
    (c) If you identified workplaces to the HUD awarding official at the 
time of application or award, as described in paragraph (a)(1) of this 
section, and any workplace that you identified changes during the 
performance of the award, you must inform the HUD awarding official.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec. 21.300  What must I do to comply with this part if I am an individual 
recipient?

    As a condition of receiving a(n) HUD award, if you are an individual 
recipient, you must agree that--
    (a) You will not engage in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance in conducting 
any activity related to the award; and
    (b) If you are convicted of a criminal drug offense resulting from a 
violation occurring during the conduct of any award activity, you will 
report the conviction:
    (1) In writing.
    (2) Within 10 calendar days of the conviction.
    (3) To the HUD awarding official or other designee for each award 
that you currently have, unless Sec. 21.301 or the award document 
designates a central point for the receipt of the notices. When notice 
is made to a central point, it must include the identification number(s) 
of each affected award.



Sec. 21.301  [Reserved]



          Subpart D_Responsibilities of HUD Awarding Officials



Sec. 21.400   What are my responsibilities as a(n) HUD awarding official?

    As a(n) HUD awarding official, you must obtain each recipient's 
agreement, as a condition of the award, to comply with the requirements 
in--
    (a) Subpart B of this part, if the recipient is not an individual; 
or
    (b) Subpart C of this part, if the recipient is an individual.



           Subpart E_Violations of this Part and Consequences



Sec. 21.500  How are violations of this part determined for recipients 
other than individuals?

    A recipient other than an individual is in violation of the 
requirements of this part if the Secretary or designee determines, in 
writing, that--
    (a) The recipient has violated the requirements of subpart B of this 
part; or
    (b) The number of convictions of the recipient's employees for 
violating criminal drug statutes in the workplace is large enough to 
indicate that the recipient has failed to make a good faith effort to 
provide a drug-free workplace.

[[Page 242]]



Sec. 21.505  How are violations of this part determined for recipients 
who are individuals?

    An individual recipient is in violation of the requirements of this 
part if the Secretary or designee determines, in writing, that--
    (a) The recipient has violated the requirements of subpart C of this 
part; or
    (b) The recipient is convicted of a criminal drug offense resulting 
from a violation occurring during the conduct of any award activity.



Sec. 21.510  What actions will the Federal Government take against a 
recipient determined to have violated this part?

    If a recipient is determined to have violated this part, as 
described in Sec. 21.500 or Sec. 21.505, the Department of Housing and 
Urban Development may take one or more of the following actions--
    (a) Suspension of payments under the award;
    (b) Suspension or termination of the award; and
    (c) Suspension or debarment of the recipient under 24 CFR part 24, 
for a period not to exceed five years.

[68 FR 66557, 66594, Nov. 26, 2003; 69 FR 11314, Mar. 10, 2004]



Sec. 21.515  Are there any exceptions to those actions?

    The Secretary may waive with respect to a particular award, in 
writing, a suspension of payments under an award, suspension or 
termination of an award, or suspension or debarment of a recipient if 
the Secretary determines that such a waiver would be in the public 
interest. This exception authority cannot be delegated to any other 
official.



                          Subpart F_Definitions



Sec. 21.605  Award.

    Award means an award of financial assistance by the Department of 
Housing and Urban Development or other Federal agency directly to a 
recipient.
    (a) The term award includes:
    (1) A Federal grant or cooperative agreement, in the form of money 
or property in lieu of money.
    (2) A block grant or a grant in an entitlement program, whether or 
not the grant is exempted from coverage under the Governmentwide rule 24 
CFR part 24 that implements OMB Circular A-102 (for availability, see 5 
CFR 1310.3) and specifies uniform administrative requirements.
    (b) The term award does not include:
    (1) Technical assistance that provides services instead of money.
    (2) Loans.
    (3) Loan guarantees.
    (4) Interest subsidies.
    (5) Insurance.
    (6) Direct appropriations.
    (7) 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).

[68 FR 66557, 66594, Nov. 26, 2003; 69 FR 11314, Mar. 10, 2004]



Sec. 21.610  Controlled substance.

    Controlled substance 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.



Sec. 21.615  Conviction.

    Conviction 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.



Sec. 21.620  Cooperative agreement.

    Cooperative agreement means an award of financial assistance that, 
consistent with 31 U.S.C. 6305, is used to enter into the same kind of 
relationship as a grant (see definition of grant in Sec. 21.650), 
except that substantial involvement is expected between the Federal 
agency and the recipient when carrying out the activity contemplated by 
the award. The term does not include cooperative research and 
development agreements as defined in 15 U.S.C. 3710a.

[[Page 243]]



Sec. 21.625  Criminal drug statute.

    Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, use, or 
possession of any controlled substance.



Sec. 21.630  Debarment.

    Debarment means an action taken by a Federal agency to prohibit a 
recipient from participating in Federal Government procurement contracts 
and covered nonprocurement transactions. A recipient so prohibited is 
debarred, in accordance with the Federal Acquisition Regulation for 
procurement contracts (48 CFR part 9, subpart 9.4) and the common rule, 
Government-wide Debarment and Suspension (Nonprocurement), that 
implements Executive Order 12549 and Executive Order 12689.



Sec. 21.635  Drug-free workplace.

    Drug-free workplace means a site for the performance of work done in 
connection with a specific award at which employees of the recipient are 
prohibited from engaging in the unlawful manufacture, distribution, 
dispensing, possession, or use of a controlled substance.



Sec. 21.640  Employee.

    (a) Employee means the employee of a recipient directly engaged in 
the performance of work under the award, including--
    (1) All direct charge employees;
    (2) All indirect charge employees, unless their impact or 
involvement in the performance of work under the award is insignificant 
to the performance of the award; and
    (3) Temporary personnel and consultants who are directly engaged in 
the performance of work under the award and who are on the recipient's 
payroll.
    (b) This definition does not include workers not on the payroll of 
the recipient (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).



Sec. 21.645  Federal agency or agency.

    Federal agency or agency 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.



Sec. 21.650  Grant.

    Grant means an award of financial assistance that, consistent with 
31 U.S.C. 6304, is used to enter into a relationship--
    (a) The principal purpose of which is to transfer a thing of value 
to the recipient to carry out a public purpose of support or stimulation 
authorized by a law of the United States, rather than to acquire 
property or services for the Federal Government's direct benefit or use; 
and
    (b) In which substantial involvement is not expected between the 
Federal agency and the recipient when carrying out the activity 
contemplated by the award.



Sec. 21.655  Individual.

    Individual means a natural person.



Sec. 21.660  Recipient.

    Recipient means any individual, corporation, partnership, 
association, unit of government (except a Federal agency) or legal 
entity, however organized, that receives an award directly from a 
Federal agency.



Sec. 21.665  State.

    State means any of the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, or any territory or 
possession of the United States.



Sec. 21.670  Suspension.

    Suspension means an action taken by a Federal agency that 
immediately prohibits a recipient from participating in Federal 
Government procurement contracts and covered nonprocurement transactions 
for a temporary period, pending completion of an investigation and any 
judicial or administrative proceedings that may

[[Page 244]]

ensue. A recipient so prohibited is suspended, in accordance with the 
Federal Acquisition Regulation for procurement contracts (48 CFR part 9, 
subpart 9.4) and the common rule, Government-wide Debarment and 
Suspension (Nonprocurement), that implements Executive Order 12549 and 
Executive Order 12689. Suspension of a recipient is a distinct and 
separate action from suspension of an award or suspension of payments 
under an award.



PART 24_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
--Table of Contents




Sec.
24.25 How is this part organized?
24.50 How is this part written?
24.75 Do terms in this part have special meanings?

                            Subpart A_General

24.100 What does this part do?
24.105 Does this part apply to me?
24.110 What is the purpose of the nonprocurement debarment and 
          suspension system?
24.115 How does an exclusion restrict a person's involvement in covered 
          transactions?
24.120 May we grant an exception to let an excluded person participate 
          in a covered transaction?
24.125 Does an exclusion under the nonprocurement system affect a 
          person's eligibility for federal procurement contracts?
24.130 Does exclusion under the federal procurement system affect a 
          person's eligibility to participate in nonprocurement 
          transactions?
24.135 May the Department of Housing and Urban Development exclude a 
          person who is not currently participating in a nonprocurement 
          transaction?
24.140 How do I know if a person is excluded?
24.145 Does this part address persons who are disqualified, as well as 
          those who are excluded from nonprocurement transactions?

                     Subpart B_Covered Transactions

24.200 What is a covered transaction?
24.205 Why is it important to know if a particular transaction is a 
          covered transaction?
24.210 Which nonprocurement transactions are covered transactions?
24.215 Which nonprocurement transactions are not covered transactions?
24.220 Are any procurement contracts included as covered transactions?
24.225 How do I know if a transaction in which I may participate is a 
          covered transaction?

    Subpart C_Responsibilities of Participants Regarding Transactions

                    Doing Business With Other Persons

24.300 What must I do before I enter into a covered transaction with 
          another person at the next lower tier?
24.305 May I enter into a covered transaction with an excluded or 
          disqualified person?
24.310 What must I do if a federal agency excludes a person with whom I 
          am already doing business in a covered transaction?
24.315 May I use the services of an excluded person as a principal under 
          a covered transaction?
24.320 Must I verify that principals of my covered transactions are 
          eligible to participate?
24.325 What happens if I do business with an excluded person in a 
          covered transaction?
24.330 What requirements must I pass down to persons at lower tiers with 
          whom I intend to do business?

            Disclosing Information--Primary Tier Participants

24.335 What information must I provide before entering into a covered 
          transaction with the Department of Housing and Urban 
          Development?
24.340 If I disclose unfavorable information required under Sec. 
          24.335, will I be prevented from entering into the 
          transaction?
24.345 What happens if I fail to disclose the information required under 
          Sec. 24.335?
24.350 What must I do if I learn of the information required under Sec. 
          24.335 after entering into a covered transaction with the 
          Department of Housing and Urban Development?

             Disclosing Information--Lower Tier Participants

24.355 What information must I provide to a higher tier participant 
          before entering into a covered transaction with that 
          participant?
24.360 What happens if I fail to disclose the information required under 
          Sec. 24.355?
24.365 What must I do if I learn of information required under Sec. 
          24.355 after entering into a covered transaction with a higher 
          tier participant?

[[Page 245]]

   Subpart D_Responsibilities of HUD Officials Regarding Transactions

24.400 May I enter into a transaction with an excluded or disqualified 
          person?
24.405 May I enter into a covered transaction with a participant if a 
          principal of the transaction is excluded?
24.410 May I approve a participant's use of the services of an excluded 
          person?
24.415 What must I do if a federal agency excludes the participant or a 
          principal after I enter into a covered transaction?
24.420 May I approve a transaction with an excluded or disqualified 
          person at a lower tier?
24.425 When do I check to see if a person is excluded or disqualified?
24.430 How do I check to see if a person is excluded or disqualified?
24.435 What must I require of a primary tier participant?
24.440 What method do I use to communicate those requirements to 
          participants?
24.445 What action may I take if a primary tier participant knowingly 
          does business with an excluded or disqualified person?
24.450 What action may I take if a primary tier participant fails to 
          disclose the information required under Sec. 24.335?
24.455 What may I do if a lower tier participant fails to disclose the 
          information required under Sec. 24.355 to the next higher 
          tier?

                 Subpart E_Excluded Parties List System

24.500 What is the purpose of the Excluded Parties List System (EPLS)?
24.505 Who uses the EPLS?
24.510 Who maintains the EPLS?
24.515 What specific information is in the EPLS?
24.520 Who places the information into the EPLS?
24.525 Whom do I ask if I have questions about a person in the EPLS?
24.530 Where can I find the EPLS?

   Subpart F_General Principles Relating to Suspension and Debarment 
                                 Actions

24.600 How do suspension and debarment actions start?
24.605 How does suspension differ from debarment?
24.610 What procedures does the Department of Housing and Urban 
          Development use in suspension and debarment actions?
24.615 How does the Department of Housing and Urban Development notify a 
          person of a suspension or debarment action?
24.620 Do federal agencies coordinate suspension and debarment actions?
24.625 What is the scope of a suspension or debarment action?
24.630 May the Department of Housing and Urban Development impute the 
          conduct of one person to another?
24.635 May the Department of Housing and Urban Development settle a 
          debarment or suspension action?
24.640 May a settlement include a voluntary exclusion?
24.645 Do other federal agencies know if the Department of Housing and 
          Urban Development agrees to a voluntary exclusion?

                          Subpart G_Suspension

24.700 When may the suspending official issue a suspension?
24.705 What does the suspending official consider in issuing a 
          suspension?
24.710 When does a suspension take effect?
24.715 What notice does the suspending official give me if I am 
          suspended?
24.720 How may I contest a suspension?
24.725 How much time do I have to contest a suspension?
24.730 What information must I provide to the suspending official if I 
          contest a suspension?
24.735 Under what conditions do I get an additional opportunity to 
          challenge the facts on which the suspension is based?
24.740 Are suspension proceedings formal?
24.745 How is fact-finding conducted?
24.750 What does the suspending official consider in deciding whether to 
          continue or terminate my suspension?
24.755 When will I know whether the suspension is continued or 
          terminated?
24.760 How long may my suspension last?

                           Subpart H_Debarment

24.800 What are the causes for debarment?
24.805 What notice does the debarring official give me if I am proposed 
          for debarment?
24.810 When does a debarment take effect?
24.815 How may I contest a proposed debarment?
24.820 How much time do I have to contest a proposed debarment?
24.825 What information must I provide to the debarring official if I 
          contest a proposed debarment?
24.830 Under what conditions do I get an additional opportunity to 
          challenge the facts on which the proposed debarment is based?
24.835 Are debarment proceedings formal?
24.840 How is fact-finding conducted?
24.845 What does the debarring official consider in deciding whether to 
          debar me?
24.850 What is the standard of proof in a debarment action?
24.855 Who has the burden of proof in a debarment action?

[[Page 246]]

24.860 What factors may influence the debarring official's decision?
24.865 How long may my debarment last?
24.870 When do I know if the debarring official debars me?
24.875 May I ask the debarring official to reconsider a decision to 
          debar me?
24.880 What factors may influence the debarring official during 
          reconsideration?
24.885 May the debarring official extend a debarment?

                          Subpart I_Definitions

24.900 Adequate evidence.
24.905 Affiliate.
24.910 Agency.
24.915 Agent or representative.
24.920 Civil judgment.
24.925 Conviction.
24.930 Debarment.
24.935 Debarring official.
24.940 Disqualified.
24.945 Excluded or exclusion.
24.947 Hearing officer.
24.950 Excluded Parties List System.
24.955 Indictment.
24.960 Ineligible or ineligibility.
24.965 Legal Proceedings.
24.970 Nonprocurement transaction.
24.975 Notice.
24.980 Participant.
24.985 Person.
24.990 Preponderance of the evidence.
24.995 Principal.
24.1000 Respondent.
24.1005 State.
24.1010 Suspending official.
24.1015 Suspension.
24.1017 Ultimate beneficiaries.
24.1020 Voluntary exclusion or voluntarily excluded.

Subpart J--Limited Denial of Participation

24.1100 What is a limited denial of participation?
24.1105 Who may issue a limited denial of participation?
24.1110 When may a HUD official issue a limited denial of participation?
24.1115 When does a limited denial of participation take effect?
24.1120 How long may a limited denial of participation last?
24.1125 How does a limited denial of participation start?
24.1130 How may I contest my limited denial of participation?
24.1135 Do federal agencies coordinate limited denial of participation 
          actions?
24.1140 What is the scope of a limited denial of participation?
24.1145 May HUD impute the conduct of one person to another in a limited 
          denial of participation?
24.1150 What is the effect of a suspension or debarment on a limited 
          denial of participation?
24.1155 What is the effect of a limited denial of participation on a 
          suspension or a debarment?
24.1160 May a limited denial of participation be terminated before the 
          term of the limited denial of participation expires?
24.1165 How is a limited denial of participation reported?

Appendix to Part 24--Covered Transactions

    Authority: 41 U.S.C. 701 et seq.; 42 U.S.C. 3535(d); Sec. 2455, Pub. 
L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549 (3 CFR, 
1986 Comp., p. 189); E.O. 12689 (3 CFR, 1989 Comp., p. 235).

    Source: 68 FR 66544, 66594, Nov. 26, 2003, unless otherwise noted.



Sec. 24.25  How is this part organized?

    (a) This part is subdivided into ten subparts. Each subpart contains 
information related to a broad topic or specific audience with special 
responsibilities, as shown in the following table:

------------------------------------------------------------------------
       In subpart . . .        You will find provisions related to . . .
------------------------------------------------------------------------
A............................  general information about this rule.
B............................  the types of HUD transactions that are
                                covered by the Governmentwide
                                nonprocurement suspension and debarment
                                system.
C............................  the responsibilities of persons who
                                participate in covered transactions.
D............................  the responsibilities of HUD officials who
                                are authorized to enter into covered
                                transactions.
E............................  the responsibilities of Federal agencies
                                for the Excluded Parties List System
                                (Disseminated by the General Services
                                Administration).
F............................  the general principles governing
                                suspension, debarment, voluntary
                                exclusion and settlement.
G............................  suspension actions.
H............................  debarment actions.
I............................  definitions of terms used in this part.
J............................  limited denial of Participation.
------------------------------------------------------------------------


[[Page 247]]

    (b) The following table shows which subparts may be of special 
interest to you, depending on who you are:

------------------------------------------------------------------------
             If you are . . .                   See subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a         A, B, C, and I.
 nonprocurement transaction.
(2) a respondent in a suspension action...  A, B, F, G and I.
(3) a respondent in a debarment action....  A, B, F, H and I.
(4) a suspending official.................  A, B, D, E, F, G and I.
(5) a debarring official..................  A, B, D, E, F, H and I.
(6) a (n) HUD official authorized to enter  A, B, D, E and I.
 into a covered transaction.
(7) involved in HUD transactions..........  J.
------------------------------------------------------------------------


[68 FR 66544, 66594, Nov. 26, 2003; 69 FR 11314, Mar. 10, 2004]



Sec. 24.50  How is this part written?

    (a) This part uses a ``plain language'' format to make it easier for 
the general public and business community to use. The section headings 
and text, often in the form of questions and answers, must be read 
together.
    (b) Pronouns used within this part, such as ``I'' and ``you,'' 
change from subpart to subpart depending on the audience being 
addressed. The pronoun ``we'' always is the Department of Housing and 
Urban Development.
    (c) The ``Covered Transactions'' diagram in the appendix to this 
part shows the levels or ``tiers'' at which the the Department of 
Housing and Urban Development enforces an exclusion under this part.



Sec. 24.75  Do terms in this part have special meanings?

    This part uses terms throughout the text that have special meaning. 
Those terms are defined in Subpart I of this part. For example, three 
important terms are--
    (a) Exclusion or excluded, which refers only to discretionary 
actions taken by a suspending or debarring official under this part or 
the Federal Acquisition Regulation (48 CFR part 9, subpart 9.4);
    (b) Disqualification or disqualified, which refers to prohibitions 
under specific statutes, executive orders (other than Executive Order 
12549 and Executive Order 12689), or other authorities. 
Disqualifications frequently are not subject to the discretion of an 
agency official, may have a different scope than exclusions, or have 
special conditions that apply to the disqualification; and
    (c) Ineligibility or ineligible, which generally refers to a person 
who is either excluded or disqualified.



                            Subpart A_General



Sec. 24.100  What does this part do?

    This part adopts a governmentwide system of debarment and suspension 
for HUD nonprocurement activities. It also provides for reciprocal 
exclusion of persons who have been excluded under the Federal 
Acquisition Regulation, and provides for the consolidated listing of all 
persons who are excluded, or disqualified by statute, executive order, 
or other legal authority. This part satisfies the requirements in 
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3 CFR 
1986 Comp., p. 189), Executive Order 12689, ``Debarment and Suspension'' 
(3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public 
Law 103-355, 108 Stat. 3327).



Sec. 24.105  Does this part apply to me?

    Portions of this part (see table at Sec. 24.25(b)) apply to you if 
you are a(n)--
    (a) Person who has been, is, or may reasonably be expected to be, a 
participant or principal in a covered transaction;
    (b) Respondent (a person against whom the Department of Housing and 
Urban Development has initiated a debarment or suspension action);
    (c) HUD debarring or suspending official; or
    (d) HUD official who is authorized to enter into covered 
transactions with non-Federal parties.



Sec. 24.110  What is the purpose of the nonprocurement debarment and 
suspension system?

    (a) To protect the public interest, the Federal Government ensures 
the integrity of Federal programs by conducting business only with 
responsible persons.
    (b) A Federal agency uses the nonprocurement debarment and 
suspension system to exclude from Federal programs persons who are not 
presently responsible.

[[Page 248]]

    (c) An exclusion is a serious action that a Federal agency may take 
only to protect the public interest. A Federal agency may not exclude a 
person or commodity for the purposes of punishment.



Sec. 24.115  How does an exclusion restrict a person's involvement in 
covered transactions?

    With the exceptions stated in Sec. Sec. 24.120, 24.315, and 24.420, 
a person who is excluded by the Department of Housing and Urban 
Development or any other Federal agency may not:
    (a) Be a participant in a(n) HUD transaction that is a covered 
transaction under subpart B of this part;
    (b) Be a participant in a transaction of any other Federal agency 
that is a covered transaction under that agency's regulation for 
debarment and suspension; or
    (c) Act as a principal of a person participating in one of those 
covered transactions.



Sec. 24.120  May we grant an exception to let an excluded person 
participate in a covered transaction?

    (a) The Secretary or designee may grant an exception permitting an 
excluded person to participate in a particular covered transaction. If 
the Secretary or designee grants an exception, the exception must be in 
writing and state the reason(s) for deviating from the governmentwide 
policy in Executive Order 12549.
    (b) An exception granted by one agency for an excluded person does 
not extend to the covered transactions of another agency.



Sec. 24.125  Does an exclusion under the nonprocurement system affect 
a person's eligibility for Federal procurement contracts?

    If any Federal agency excludes a person under its nonprocurement 
common rule on or after August 25, 1995, the excluded person is also 
ineligible to participate in Federal procurement transactions under the 
FAR. Therefore, an exclusion under this part has reciprocal effect in 
Federal procurement transactions.



Sec. 24.130  Does exclusion under the Federal procurement system affect 
a person's eligibility to participate in nonprocurement transactions?

    If any Federal agency excludes a person under the FAR on or after 
August 25, 1995, the excluded person is also ineligible to participate 
in nonprocurement covered transactions under this part. Therefore, an 
exclusion under the FAR has reciprocal effect in Federal nonprocurement 
transactions.



Sec. 24.135  May the Department of Housing and Urban Development exclude 
a person who is not currently participating in a nonprocurement transaction?

    Given a cause that justifies an exclusion under this part, we may 
exclude any person who has been involved, is currently involved, or may 
reasonably be expected to be involved in a covered transaction.



Sec. 24.140  How do I know if a person is excluded?

    Check the Excluded Parties List System (EPLS) to determine whether a 
person is excluded. The General Services Administration (GSA) maintains 
the EPLS and makes it available, as detailed in subpart E of this part. 
When a Federal agency takes an action to exclude a person under the 
nonprocurement or procurement debarment and suspension system, the 
agency enters the information about the excluded person into the EPLS.



Sec. 24.145  Does this part address persons who are disqualified, as well 
as those who are excluded from nonprocurement transactions?

    Except if provided for in Subpart J of this part, this part--
    (a) Addresses disqualified persons only to--
    (1) Provide for their inclusion in the EPLS; and
    (2) State responsibilities of Federal agencies and participants to 
check for disqualified persons before entering into covered 
transactions.
    (b) Does not specify the--
    (1) HUD transactions for which a disqualified person is ineligible. 
Those transactions vary on a case-by-case basis, because they depend on 
the language of the specific statute, Executive

[[Page 249]]

order, or regulation that caused the disqualification;
    (2) Entities to which the disqualification applies; or
    (3) Process that the agency uses to disqualify a person. Unlike 
exclusion, disqualification is frequently not a discretionary action 
that a Federal agency takes.



                     Subpart B_Covered Transactions



Sec. 24.200  What is a covered transaction?

    A covered transaction is a nonprocurement or procurement transaction 
that is subject to the prohibitions of this part. It may be a 
transaction at--
    (a) The primary tier, between a Federal agency and a person (see 
appendix to this part); or
    (b) A lower tier, between a participant in a covered transaction and 
another person.
    (c) In the case of employment contracts that are covered 
transactions, each salary payment under the contract is a separate 
covered transaction.

[68 FR 66544, 66594, 66596, Nov. 26, 2003]



Sec. 24.205  Why is it important if a particular transaction is a 
covered transaction?

    The importance of a covered transaction depends upon who you are.
    (a) As a participant in the transaction, you have the 
responsibilities laid out in Subpart C of this part. Those include 
responsibilities to the person or Federal agency at the next higher tier 
from whom you received the transaction, if any. They also include 
responsibilities if you subsequently enter into other covered 
transactions with persons at the next lower tier.
    (b) As a Federal official who enters into a primary tier 
transaction, you have the responsibilities laid out in subpart D of this 
part.
    (c) As an excluded person, you may not be a participant or principal 
in the transaction unless--
    (1) The person who entered into the transaction with you allows you 
to continue your involvement in a transaction that predates your 
exclusion, as permitted under Sec. 24.310 or Sec. 24.415; or
    (2) A(n) HUD official obtains an exception from the Secretary or 
designee to allow you to be involved in the transaction, as permitted 
under Sec. 24.120.



Sec. 24.210  Which nonprocurement transactions are covered transactions?

    All nonprocurement transactions, as defined in Sec. 24.970, are 
covered transactions unless listed in Sec. 24.215. (See appendix to 
this part.)



Sec. 24.215  Which nonprocurement transactions are not covered transactions?

    The following types of nonprocurement transactions are not covered 
transactions:
    (a) A direct award to--
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization;
    (3) An entity owned (in whole or in part) or controlled by a foreign 
government; or
    (4) Any other entity consisting wholly or partially of one or more 
foreign governments or foreign governmental entities.
    (b) A benefit 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). For example, if 
a person receives social security benefits under the Supplemental 
Security Income provisions of the Social Security Act, 42 U.S.C. 1301 et 
seq., those benefits are not covered transactions and, therefore, are 
not affected if the person is excluded.
    (c) Federal employment.
    (d) A transaction that the Department of Housing and Urban 
Development needs to respond to a national or agency-recognized 
emergency or disaster.
    (e) A permit, license, certificate, or similar instrument issued as 
a means to regulate public health, safety, or the environment, unless 
the Department of Housing and Urban Development specifically designates 
it to be a covered transaction.
    (f) An incidental benefit that results from ordinary governmental 
operations.
    (g) Any other transaction if the application of an exclusion to the 
transaction is prohibited by law.

[[Page 250]]



Sec. 24.220  Are any procurement contracts included as covered transactions?

    (a) Covered transactions under this part--
    (1) Do not include any procurement contracts awarded directly by a 
Federal agency; but
    (2) Do include some procurement contracts awarded by non-Federal 
participants in nonprocurement covered transactions (see appendix to 
this part).
    (b) Specifically, a contract for goods or services is a covered 
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement 
transaction that is covered under Sec. 24.210, and the amount of the 
contract is expected to equal or exceed $25,000.
    (2) The contract requires the consent of a(n) HUD official. In that 
case, the contract, regardless of the amount, always is a covered 
transaction, and it does not matter who awarded it. For example, it 
could be a subcontract awarded by a contractor at a tier below a 
nonprocurement transaction, as shown in the appendix to this part.
    (3) The contract is for federally-required audit services.



Sec. 24.225  How do I know if a transaction in which I may participate 
is a covered transaction?

    As a participant in a transaction, you will know that it is a 
covered transaction because the agency regulations governing the 
transaction, the appropriate agency official, or participant at the next 
higher tier who enters into the transaction with you, will tell you that 
you must comply with applicable portions of this part.



    Subpart C_Responsibilities of Participants Regarding Transactions

                    Doing Business With Other Persons



Sec. 24.300  What must I do before I enter into a covered transaction 
with another person at the next lower tier?

    When you enter into a covered transaction with another person at the 
next lower tier, you must verify that the person with whom you intend to 
do business is not excluded or disqualified. You do this by:
    (a) Checking the EPLS; or
    (b) Collecting a certification from that person if allowed by this 
rule; or
    (c) Adding a clause or condition to the covered transaction with 
that person.
    (d) You, as a participant, are responsible for determining whether 
you are entering into a covered transaction with an excluded or 
disqualified person. You may decide the method by which you do so. You 
may, but are not required to, check the EPLS.
    (e) In the case of an employment contract, HUD does not require 
employers to check the EPLS prior to making salary payments pursuant to 
that contract.

[68 FR 66544, 66594, 66596, Nov. 26, 2003]



Sec. 24.305  May I enter into a covered transaction with an excluded 
or disqualified person?

    (a) You as a participant may not enter into a covered transaction 
with an excluded person, unless the Department of Housing and Urban 
Development grants an exception under Sec. 24.120.
    (b) You may not enter into any transaction with a person who is 
disqualified from that transaction, unless you have obtained an 
exception under the disqualifying statute, Executive order, or 
regulation.



Sec. 24.310  What must I do if a Federal agency excludes a person with 
whom I am already doing business in a covered transaction?

    (a) You as a participant may continue covered transactions with an 
excluded person if the transactions were in existence when the agency 
excluded the person. However, you are not required to continue the 
transactions, and you may consider termination. You should make a 
decision about whether to terminate and the type of termination action, 
if any, only after a thorough review to ensure that the action is proper 
and appropriate.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless the Department of 
Housing and Urban Development grants an exception under Sec. 24.120.

[[Page 251]]



Sec. 24.315  May I use the services of an excluded person as a principal 
under a covered transaction?

    (a) You as a participant may continue to use the services of an 
excluded person as a principal under a covered transaction if you were 
using the services of that person in the transaction before the person 
was excluded. However, you are not required to continue using that 
person's services as a principal. You should make a decision about 
whether to discontinue that person's services only after a thorough 
review to ensure that the action is proper and appropriate.
    (b) You may not begin to use the services of an excluded person as a 
principal under a covered transaction unless the Department of Housing 
and Urban Development grants an exception under Sec. 24.120.



Sec. 24.320  Must I verify that principals of my covered transactions 
are eligible to participate?

    Yes, you as a participant are responsible for determining whether 
any of your principals of your covered transactions is excluded or 
disqualified from participating in the transaction. You may decide the 
method and frequency by which you do so. You may, but you are not 
required to, check the EPLS.



Sec. 24.325  What happens if I do business with an excluded person in 
a covered transaction?

    If as a participant you knowingly do business with an excluded 
person, we may disallow costs, annul or terminate the transaction, issue 
a stop work order, debar or suspend you, or take other remedies as 
appropriate.



Sec. 24.330  What requirements must I pass down to persons at lower tiers 
with whom I intend to do business?

    Before entering into a covered transaction with a participant at the 
next lower tier, you must require that participant to--
    (a) Comply with this subpart as a condition of participation in the 
transaction. You may do so using any method(s), unless Sec. 24.440 
requires you to use specific methods.
    (b) Pass the requirement to comply with this subpart to each person 
with whom the participant enters into a covered transaction at the next 
lower tier.

            Disclosing Information--Primary Tier Participants



Sec. 24.335  What information must I provide before entering into a covered 
transaction with the Department of Housing and Urban Development?

    Before you enter into a covered transaction at the primary tier, you 
as the participant must notify the HUD office that is entering into the 
transaction with you, if you know that you or any of the principals for 
that covered transaction:
    (a) Are presently excluded or disqualified;
    (b) Have been convicted within the preceding three years of any of 
the offenses listed in Sec. 24.800(a) or had a civil judgment rendered 
against you for one of those offenses within that time period;
    (c) Are presently indicted for or otherwise criminally or civilly 
charged by a governmental entity (Federal, State or local) with 
commission of any of the offenses listed in Sec. 24.800(a); or
    (d) Have had one or more public transactions (Federal, State, or 
local) terminated within the preceding three years for cause or default.



Sec. 24.340  If I disclose unfavorable information required under 
Sec. 24.335, will I be prevented from participating in the transaction?

    As a primary tier participant, your disclosure of unfavorable 
information about yourself or a principal under Sec. 24.335 will not 
necessarily cause us to deny your participation in the covered 
transaction. We will consider the information when we determine whether 
to enter into the covered transaction. We also will consider any 
additional information or explanation that you elect to submit with the 
disclosed information.



Sec. 24.345  What happens if I fail to disclose information required 
under Sec. 24.335?

    If we later determine that you failed to disclose information under 
Sec. 24.335 that you knew at the time you entered into the covered 
transaction, we may--

[[Page 252]]

    (a) Terminate the transaction for material failure to comply with 
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and 
debarment.



Sec. 24.350  What must I do if I learn of information required under 

Sec. 24.335 after enteri