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  <FDSYS>
    <CFRTITLE>24</CFRTITLE>
    <CFRTITLETEXT>Housing and Urban Development</CFRTITLETEXT>
    <VOL>4</VOL>
    <DATE>2006-04-01</DATE>
    <ORIGINALDATE>2006-04-01</ORIGINALDATE>
    <COVERONLY>false</COVERONLY>
    <TITLE>OFFICE OF THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HOUSING ASSISTANCE PROGRAMS AND PUBLIC AND INDIAN HOUSING PROGRAMS)</TITLE>
    <GRANULENUM>VII</GRANULENUM>
    <HEADING>CHAPTER VII</HEADING>
    <ANCESTORS>
      <PARENT HEADING="Title 24" SEQ="0">Housing and Urban Development</PARENT>
    </ANCESTORS>
  </FDSYS>
  <CHAPTER>
    <TOC>
      <TOCHD>
        <PRTPAGE P="3"/>
        <HD SOURCE="HED">CHAPTER VII—OFFICE OF THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HOUSING ASSISTANCE PROGRAMS AND PUBLIC AND INDIAN HOUSING PROGRAMS)</HD>
      </TOCHD>
      <EDNOTE>
        <HD SOURCE="HED">Editorial Note:</HD>
        <P>Nomenclature changes to chapter VII appear at 59 FR 14090, Mar. 25, 1994.</P>
      </EDNOTE>
      <PTHD>Part</PTHD>
      <PGHD>Page</PGHD>
      <CHAPTI>
        <PT>700</PT>
        <SUBJECT>Congregate Housing Services Program</SUBJECT>
        <PG>5</PG>
        <PT>701-760</PT>
        <RESERVED>[Reserved]</RESERVED>
        <PT>761</PT>
        <SUBJECT>Drug Elimination Programs</SUBJECT>
        <PG>15</PG>
        <PT>762-790</PT>
        <RESERVED>[Reserved]</RESERVED>
        <PT>791</PT>
        <SUBJECT>Allocations of housing assistance funds</SUBJECT>
        <PG>28</PG>
        <PT>792</PT>
        <SUBJECT>Public housing agency section 8 fraud recoveries</SUBJECT>
        <PG>32</PG>
        <PT>793-798</PT>
        <RESERVED>[Reserved]</RESERVED>
      </CHAPTI>
    </TOC>
    <PART>
      <PRTPAGE P="5"/>
      <EAR>Pt. 700</EAR>
      <HD SOURCE="HED">PART 700—CONGREGATE HOUSING SERVICES PROGRAM</HD>
      <CONTENTS>
        <SECHD>Sec.</SECHD>
        <SECTNO>700.100</SECTNO>
        <SUBJECT>Purpose.</SUBJECT>
        <SECTNO>700.105</SECTNO>
        <SUBJECT>Definitions.</SUBJECT>
        <SECTNO>700.110</SECTNO>
        <SUBJECT>Announcement of fund availability, application process and selection.</SUBJECT>
        <SECTNO>700.115</SECTNO>
        <SUBJECT>Program costs.</SUBJECT>
        <SECTNO>700.120</SECTNO>
        <SUBJECT>Eligible supportive services.</SUBJECT>
        <SECTNO>700.125</SECTNO>
        <SUBJECT>Eligibility for services.</SUBJECT>
        <SECTNO>700.130</SECTNO>
        <SUBJECT>Service coordinator.</SUBJECT>
        <SECTNO>700.135</SECTNO>
        <SUBJECT>Professional assessment committee.</SUBJECT>
        <SECTNO>700.140</SECTNO>
        <SUBJECT>Participatory agreement.</SUBJECT>
        <SECTNO>700.145</SECTNO>
        <SUBJECT>Cost distribution.</SUBJECT>
        <SECTNO>700.150</SECTNO>
        <SUBJECT>Program participant fees.</SUBJECT>
        <SECTNO>700.155</SECTNO>
        <SUBJECT>Grant agreement and administration.</SUBJECT>
        <SECTNO>700.160</SECTNO>
        <SUBJECT>Eligibility and priority for 1978 Act recipients.</SUBJECT>
        <SECTNO>700.165</SECTNO>
        <SUBJECT>Evaluation of Congregate Housing Services Programs.</SUBJECT>
        <SECTNO>700.170</SECTNO>
        <SUBJECT>Reserve for supplemental adjustment.</SUBJECT>
        <SECTNO>700.175</SECTNO>
        <SUBJECT>Other Federal requirements.</SUBJECT>
      </CONTENTS>
      <AUTH>
        <HD SOURCE="HED">Authority:</HD>
        <P>42 U.S.C. 3535(d) and 8011.</P>
      </AUTH>
      <SOURCE>
        <HD SOURCE="HED">Source:</HD>
        <P>61 FR 42943, 42949, Aug. 19, 1996, unless otherwise noted.</P>
      </SOURCE>
      <SECTION>
        <SECTNO>§ 700.100</SECTNO>
        <SUBJECT>Purpose.</SUBJECT>
        <P>The requirements of this part augment the requirements of section 802 of the National Affordable Housing Act of 1990 (approved November 28, 1990, Public Law 101-625) (42 U.S.C. 8011), (hereinafter, section 802), as amended by the Housing and Community Development Act of 1992 (Public Law 102-550, approved October 28, 1992), which authorizes the Congregate Housing Services Program (hereinafter, CHSP or Program).</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.105</SECTNO>
        <SUBJECT>Definitions.</SUBJECT>
        <P>In addition to the definitions in section 802(k), the following definitions apply to CHSP:</P>
        <P>
          <E T="03">Activity of Daily Living (ADL)</E> means an activity regularly necessary for personal care.</P>
        <P>(1) The minimum requirements of ADLs include:</P>
        <P>(i) Eating (may need assistance with cooking, preparing or serving food, but must be able to feed self);</P>
        <P>(ii) Dressing (must be able to dress self, but may need occasional assistance);</P>
        <P>(iii) Bathing (may need assistance in getting in and out of the shower or tub, but must be able to wash self);</P>
        <P>(iv) Grooming (may need assistance in washing hair, but must be able to take care of personal appearance);</P>
        <P>(v) Getting in and out of bed and chairs, walking, going outdoors, using the toilet; and</P>
        <P>(vi) Household management activities (may need assistance in doing housework, grocery shopping or laundry, or getting to and from one location to another for activities such as going to the doctor and shopping, but must be mobile. The mobility requirement does not exclude persons in wheelchairs or those requiring mobility devices.)</P>

        <P>(2) Each of the Activities of Daily Living noted in paragraph (1) of this definition includes a requirement that a person must be able to perform at a specified minimal level (<E T="03">e.g.,</E> to satisfy the eating ADL, the person must be able to feed himself or herself). The determination of whether a person meets this minimal level of performance must include consideration of those services that will be performed by a person's spouse, relatives or other attendants to be provided by the individual. For example, if a person requires assistance with cooking, preparing or serving food plus assistance in feeding himself or herself, the individual would meet the minimal performance level and thus satisfy the eating ADL, if a spouse, relative or attendant provides assistance with feeding the person. Should such assistance become unavailable at any time, the owner is not obligated at any time to provide individualized services beyond those offered to the resident population in general. The Activities of Daily Living analysis is relevant only with regard to determination of a person's eligibility to receive <E T="03">supportive services</E> paid for by CHSP and is not a determination of eligibility for occupancy;</P>
        <P>
          <E T="03">Adjusted income</E> means adjusted income as defined in 24 CFR parts 813 or 913.</P>
        <P>
          <E T="03">Applicant</E> means a State, Indian tribe, unit of general local government, public housing authority (PHA), Indian housing authority (IHA) or local nonprofit housing sponsor. A State, Indian tribe, or unit of general local government may apply on behalf of a local <PRTPAGE P="6"/>nonprofit housing sponsor or a for-profit owner of eligible housing for the elderly.</P>
        <P>
          <E T="03">Area agency on aging</E> means the single agency designated by the State Agency on Aging to administer the program described in Title III of the Older Americans Act of 1965 (45 CFR chapter 13).</P>
        <P>
          <E T="03">Assistant Secretary</E> means the HUD Assistant Secretary for Housing-Federal Housing Commissioner or the HUD Assistant Secretary for Public and Indian Housing.</P>
        <P>
          <E T="03">Case management</E> means implementing the processes of: establishing linkages with appropriate agencies and service providers in the general community in order to tailor the needed services to the program participant; linking program participants to providers of services that the participant needs; making decisions about the way resources are allocated to an individual on the basis of needs; developing and monitoring of case plans in coordination with a formal assessment of services needed; and educating participants on issues, including, but not limited to, supportive service availability, application procedures and client rights.</P>
        <P>
          <E T="03">Eligible housing for the elderly</E> means any eligible project including any building within a mixed-use project that was designated for occupancy by elderly persons, or persons with disabilities at its inception or, although not so designated, for which the eligible owner or grantee gives preference in tenant selection (with HUD approval) for all units in the eligible project (or for a building within an eligible mixed-use project) to eligible elderly persons, persons with disabilities, or temporarily disabled individuals. For purposes of this part, this term does not include projects assisted under the Low-Rent Housing Homeownership Opportunity program (Turnkey III (24 CFR part 905, subpart G)).</P>
        <P>
          <E T="03">Eligible owner</E> means an owner of an eligible housing project.</P>
        <P>
          <E T="03">Excess residual receipts</E> mean residual receipts of more than $500 per unit in the project which are available and not committed to other uses at the time of application to HUD for CHSP. Such receipts may be used as matching funds and may be spent down to a minimum of $500/unit.</P>
        <P>
          <E T="03">For-profit owner of eligible housing for the elderly</E> means an owner of an eligible housing project in which some part of the project's earnings lawfully inure to the benefit of any private shareholder or individual.</P>
        <P>
          <E T="03">Grantee</E> or <E T="03">Grant recipient</E> means the recipient of funding under CHSP. Grantees under this Program may be states, units of general local government, Indian tribes, PHAs, IHAs, and local nonprofit housing sponsors.</P>
        <P>
          <E T="03">Local nonprofit housing sponsor</E> means an owner or borrower of eligible housing for the elderly; no part of the net earnings of the owning organization shall lawfully inure to the benefit of any shareholder or individual.</P>
        <P>
          <E T="03">Nonprofit</E> includes a public housing agency as that term is defined in section 3(b)(6) of the United States Housing Act of 1937.</P>
        <P>
          <E T="03">Person with disabilities</E> means a household composed of one or more persons, at least one of whom is an adult who has a disability.</P>
        <P>(1) A person shall be considered to have a disability if such person is determined under regulations issued by the Secretary to have a physical, mental, or emotional impairment which:</P>
        <P>(i) Is expected to be of long-continued and indefinite duration;</P>
        <P>(ii) Substantially impedes his or her ability to live independently; and</P>
        <P>(iii) Is of such a nature that the person's ability could be improved by more suitable housing conditions.</P>

        <P>(2) A person shall also be considered to have a disability if the person has a developmental disability as defined in section 102(5) of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001-7). Notwithstanding the preceding provisions of this paragraph, the terms “person with disabilities” or “temporarily disabled” include two or more persons with disabilities living together, one or more such persons living with another person who is determined (under regulations prescribed by the Secretary of HUD) to be essential to their care or well-being, and the surviving member or members of any household where at least one or more persons was an adult with a disability who was living, in a <PRTPAGE P="7"/>unit assisted under this section, with the deceased member of the household at the time of his or her death.</P>
        <P>
          <E T="03">Program participant</E> (participant) means any project resident as defined in section 802(e)(1) who is formally accepted into CHSP, receives CHSP services, and resides in the eligible housing project served by CHSP grant.</P>
        <P>
          <E T="03">Qualifying supportive services</E> means those services described in section 802(k)(16). Under this Program, “health-related services” mean non-medical supervision, wellness programs, preventive health screening, monitoring of medication consistent with state law, and non-medical components of adult day care. The Secretary concerned may also approve other requested supportive services essential for achieving and maintaining independent living.</P>
        <P>
          <E T="03">Rural Housing Service</E> (RHS) means a credit agency for rural housing and rural development in the U.S. Department of Agriculture (USDA).</P>
        <P>
          <E T="03">Secretary concerned</E> means (1) The Secretary of Housing and Urban Development, with respect to eligible federally assisted housing administered by HUD; and</P>
        <P>(2) The Secretary of Agriculture with reference to programs administered by the Administrator of the Rural Housing Service.</P>
        <P>
          <E T="03">Service coordinator</E> means CHSP staff person responsible for coordinating Program services as described in section 700.130.</P>
        <P>
          <E T="03">Service provider</E> means a person or organization licensed or otherwise approved in writing by a State or local agency (<E T="03">e.g.,</E> Department of Health, Department of Human Services or Welfare) to provide supportive services.</P>
        <P>
          <E T="03">State agency</E> means the State or an agency or instrumentality of the State.</P>
        <P>
          <E T="03">State agency on aging</E> means the single agency designated by the Governor to administer the program described in Title III of the Older Americans Act of 1965 (See 45 CFR part 13).</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.110</SECTNO>
        <SUBJECT>Announcement of fund availability, application process and selection.</SUBJECT>
        <P>(a) <E T="03">Notice of funding availability.</E> A Notice of Funding Availability (NOFA) will be published periodically in the <E T="04">Federal Register</E> by the Secretary concerned containing the amounts of funds available, allocation or distribution of funds available among eligible applicant groups, where to obtain and submit applications, the deadline for submissions, and further explanation of the selection criteria, review and selection process. The Secretary concerned will designate the maximum allowable size for grants.</P>
        <P>(b) <E T="03">Selection criteria</E> are set forth in section 802(h)(1) and shall include additional criteria specified by the Secretary concerned.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.115</SECTNO>
        <SUBJECT>Program costs.</SUBJECT>
        <P>(a) <E T="03">Allowable costs.</E> (1) Allowable costs for direct provision of supportive services includes the provision of supportive services and others approved by the Secretary concerned for:</P>
        <P>(i) Direct hiring of staff, including a service coordinator;</P>
        <P>(ii) Supportive service contracts with third parties;</P>
        <P>(iii) Equipment and supplies (including food) necessary to provide services;</P>
        <P>(iv) Operational costs of a transportation service (<E T="03">e.g.,</E> mileage, insurance, gasoline and maintenance, driver wages, taxi or bus vouchers);</P>
        <P>(v) Purchase or leasing of vehicles;</P>
        <P>(vi) Direct and indirect administrative expenses for administrative costs such as annual fiscal review and audit, telephones, postage, travel, professional education, furniture and equipment, and costs associated with self evaluation or assessment (not to exceed one percent of the total budget for the activities approved); and</P>
        <P>(vii) States, Indian tribes and units of general local government with more than one project included in the grant may receive up to 1% of the total cost of the grant for monitoring the projects.</P>
        <P>(2) Allowable costs shall be reasonable, necessary and recognized as expenditures in compliance with OMB Cost Policies, i.e., OMB Circular A-87, 24 CFR 85.36, and OMB Circular A-128.</P>
        <P>(b) <E T="03">Nonallowable costs.</E> (1) CHSP funds may not be used to cover expenses related to any grantee program, service, or activity existing at the time of application to CHSP.<PRTPAGE P="8"/>
        </P>
        <P>(2) Examples of nonallowable costs under the program are:</P>
        <P>(i) Capital funding (such as purchase of buildings, related facilities or land and certain major kitchen items such as stoves, refrigerators, freezers, dishwashers, trash compactors or sinks);</P>
        <P>(ii) Administrative costs that represent a non-proportional share of costs charged to the Congregate Housing Services Program for rent or lease, utilities, staff time;</P>
        <P>(iii) Cost of supportive services other than those approved by the Secretary concerned;</P>
        <P>(iv) Modernization, renovation or new construction of a building or facility, including kitchens;</P>
        <P>(v) Any costs related to the development of the application and plan of operations before the effective date of CHSP grant award;</P>
        <P>(vi) Emergency medical services and ongoing and regular care from doctors and nurses, including but not limited to administering medication, purchase of medical supplies, equipment and medications, overnight nursing services, and other institutional forms of service, care or support;</P>
        <P>(vii) Occupational therapy and vocational rehabilitation services; or</P>
        <P>(viii) Other items defined as unallowable costs elsewhere in this part, in CHSP grant agreement, and OMB Circular A-87 or 122.</P>
        <P>(c) <E T="03">Administrative cost limitation.</E> Grantees are subject to the limitation in section 802(j)(4).</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.120</SECTNO>
        <SUBJECT>Eligible supportive services.</SUBJECT>
        <P>(a) Supportive services or funding for such services may be provided by state, local, public or private providers and CHSP funds. A CHSP under this section shall provide meal and other qualifying services for program participants (and other residents and nonresidents, as described in § 700.125(a)) that are coordinated on site.</P>
        <P>(b) Qualifying supportive services are those listed in section 802(k)(16) and in section 700.105.</P>
        <P>(c) Meal services shall meet the following guidelines:</P>
        <P>(1) <E T="03">Type of service.</E> At least one meal a day must be served in a group setting for some or all of the participants; if more than one meal a day is provided, a combination of a group setting and carry-out meals may be utilized.</P>
        <P>(2) <E T="03">Hot meals.</E> At least one meal a day must be hot. A hot meal for the purpose of this program is one in which the principal food item is hot at the time of serving.</P>
        <P>(3) <E T="03">Special menus.</E> Grantees shall provide special menus as necessary for meeting the dietary needs arising from the health requirements of conditions such as diabetes and hypertension. Grantees should attempt to meet the dietary needs of varying religious and ethnic backgrounds.</P>
        <P>(4) <E T="03">Meal service standards.</E> Grantees shall plan for and provide meals which are wholesome, nutritious, and each of which meets a minimum of one-third of the minimum daily dietary allowances as established by the Food and Nutrition Board of the National Academy of Sciences-National Research Council (or State or local standards, if these standards are higher). Grantees must have an annual certification, prepared and signed by a registered dietitian, which states that each meal provided under CHSP meets the minimum daily dietary allowances.</P>
        <P>(5) <E T="03">Food stamps and agricultural commodities.</E> In providing meal services grantees must apply for and use food stamps and agricultural commodities as set forth in section 802(d)(2)(A).</P>
        <P>(6) <E T="03">Preference for nutrition providers:</E> In contracting for or otherwise providing for meal services grantees must follow the requirements of section 802(d)(2)(B). These requirements do not preclude a grantee or owner from directly preparing and providing meals under its own auspices.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.125</SECTNO>
        <SUBJECT>Eligibility for services.</SUBJECT>
        <P>(a) <E T="03">Participants, other residents, and nonresidents.</E> Such individuals are eligible either to participate in CHSP or to receive CHSP services, if they qualify under section 802(e)(1), (4) and (5). Under this paragraph, temporarily disabled persons are also eligible.</P>
        <P>(b) <E T="03">Economic need.</E> In providing services under CHSP, grantees shall give priority to very low income individuals, and shall consider their service needs in selecting program participants.</P>
      </SECTION>
      <SECTION>
        <PRTPAGE P="9"/>
        <SECTNO>§ 700.130</SECTNO>
        <SUBJECT>Service coordinator.</SUBJECT>
        <P>(a) Each grantee must have at least one service coordinator who shall perform the responsibilities listed in section 802(d)(4).</P>
        <P>(b) The service coordinator shall comply with the qualifications and standards required by the Secretary concerned. The service coordinator shall be trained in the subject areas set forth in section 802(d)(4), and in any other areas required by the Secretary concerned.</P>
        <P>(c) The service coordinator may be employed directly by the grantee, or employed under a contract with a case management agency on a fee-for-service basis, and may serve less than full-time. The service coordinator or the case management agency providing service coordination shall not provide supportive services under a CHSP grant or have a financial interest in a service provider agency which intends to provide services to the grantee for CHSP.</P>
        <P>(d) The service coordinator shall:</P>
        <P>(1) Provide general case management and referral services to all potential participants in CHSP. This involves intake screening, upon referral from the grantee of potential program participants, and preliminary assessment of frailty or disability, using a commonly accepted assessment tool. The service coordinator then will refer to the professional assessment committee (PAC) those individuals who appear eligible for CHSP;</P>
        <P>(2) Establish professional relationships with all agencies and service providers in the community, and develop a directory of providers for use by program staff and program participants;</P>
        <P>(3) Refer proposed participants to service providers in the community, or those of the grantee;</P>
        <P>(4) Serve as staff to the PAC;</P>
        <P>(5) Complete, for the PAC, all paperwork necessary for the assessment, referral, case monitoring and reassessment processes;</P>
        <P>(6) Implement any case plan developed by the PAC and agreed to by the program participant;</P>
        <P>(7) Maintain necessary case files on each program participant, containing such information and kept in such form as HUD and RHS shall require;</P>
        <P>(8) Provide the necessary case files to PAC members upon request, in connection with PAC duties;</P>
        <P>(9) Monitor the ongoing provision of services from community agencies and keep the PAC and the agency providing the supportive service informed of the progress of the participant;</P>
        <P>(10) Educate grant recipient's program participants on such issues as benefits application procedures (e.g. SSI, food stamps, Medicaid), service availability, and program participant options and responsibilities;</P>
        <P>(11) Establish volunteer support programs with service organizations in the community;</P>
        <P>(12) Assist the grant recipient in building informal support networks with neighbors, friends and family; and</P>
        <P>(13) Educate other project management staff on issues related to “aging-in-place” and services coordination, to help them to work with and assist other persons receiving housing assistance through the grantee.</P>
        <P>(e) The service coordinator shall tailor each participant's case plan to the individual's particular needs. The service coordinator shall work with community agencies, the grantee and third party service providers to ensure that the services are provided on a regular, ongoing, and satisfactory basis, in accordance with the case plan approved by the PAC and the participant.</P>
        <P>(f) Service coordinators shall not serve as members of the PAC.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.135</SECTNO>
        <SUBJECT>Professional assessment committee.</SUBJECT>
        <P>(a) <E T="03">General.</E> (1) A professional assessment committee (PAC), as described in this section, shall recommend services appropriate to the functional abilities and needs of each eligible project resident. The PAC shall be either a voluntary committee appointed by the project management or an agency in the community which provides assessment services and conforms to section 802(e)(3)(A) and (B). PAC members are subject to the conflict of interest provisions in section 700.175(b).</P>

        <P>(2) The PAC shall utilize procedures that ensure that the process of determining eligibility of individuals for congregate services affords individuals fair treatment, due process, and a right <PRTPAGE P="10"/>of appeal of the determination of eligibility, and shall ensure the confidentiality of personal and medical records.</P>
        <P>(3) The dollar value of PAC members' time spent on regular assessments after initial approval of program participants may be counted as match. If a community agency discharges the duties of the PAC, staff time is counted as its imputed value, and if the members are volunteers, their time is counted as volunteer time, according to sections 700.145(c)(2) (ii) and (iv).</P>
        <P>(b) <E T="03">Duties of the PAC.</E> The PAC is required to:</P>

        <P>(1) Perform a formal assessment of each potential elderly program participant to determine if the individual is frail. To qualify as frail, the PAC must determine if the elderly person is deficient in at least three ADLs, as defined in section 700.105. This assessment shall be based upon the screening done by the service coordinator, and shall include a review of the adequacy of the informal support network (<E T="03">i.e.,</E> family and friends available to the potential participant to assist in meeting the ADL needs of that individual), and may include a more in-depth medical evaluation, if necessary;</P>
        <P>(2) Determine if non-elderly disabled individuals qualify under the definition of person with disabilities under section 700.105. If they do qualify, this is the acceptance criterion for them for CHSP. Persons with disabilities do not require an assessment by the PAC;</P>
        <P>(3) Perform a regular assessment and updating of the case plan of all participants;</P>
        <P>(4) Obtain and retain information in participant files, containing such information and maintained in such form, as HUD or RHS shall require;</P>
        <P>(5) Replace any members of the PAC within 30 days after a member resigns. A PAC shall not do formal assessments if its membership drops below three, or if the qualified medical professional leaves the PAC and has not been replaced.</P>
        <P>(6) Notify the grantee or eligible owner and the program participants of any proposed modifications to PAC procedures, and provide these parties with a process and reasonable time period in which to review and comment, before adoption of a modification;</P>
        <P>(7) Provide assurance of nondiscrimination in selection of CHSP participants, with respect to race, religion, color, sex, national origin, familial status or type of disability;</P>
        <P>(8) Provide complete confidentiality of information related to any individual examined, in accordance with the Privacy Act of 1974;</P>
        <P>(9) Provide all formal information and reports in writing.</P>
        <P>(c) <E T="03">Prohibitions relating to the PAC.</E> (1) At least one PAC member shall not have any direct or indirect relationship to the grantee.</P>
        <P>(2) No PAC member may be affiliated with organizations providing services under the grant.</P>
        <P>(3) Individuals or staff of third party organizations that act as PAC members may not be paid with CHSP grant funds.</P>
        <P>(d) <E T="03">Eligibility and admissions.</E> (1) Before selecting potential program participants, each grantee (with PAC assistance) shall develop a CHSP application form. The information in the individual's application is crucial to the PAC's ability to determine the need for further physical or psychological evaluation.</P>
        <P>(2) The PAC, upon completion of a potential program participant's initial assessment, must make a recommendation to the service coordinator for that individual's acceptance or denial into CHSP.</P>
        <P>(3) Once a program participant is accepted into CHSP, the PAC must provide a supportive services case plan for each participant. In developing this plan, the PAC must take into consideration the participant's needs and wants. The case plan must provide the minimum supportive services necessary to maintain independence.</P>
        <P>(e) <E T="03">Transition-out procedures.</E> The grantee or PAC must develop procedures for providing for an individual's transition out of CHSP to another setting. Transition out is based upon the degree of supportive services needed by an individual to continue to live independently. If a program participant leaves the program, but wishes to retain supportive services, he or she may do so, as long as he or she continues to live in an eligible project, pays the full <PRTPAGE P="11"/>cost of services provided, and management agrees (section 802(e)(4) and (5)). A participant can be moved out of CHSP if he or she:</P>
        <P>(1) Gains physical and mental health and is able to function without supportive services, even if only for a short time (in which case readmission, based upon reassessment to determine the degree of frailty or the disability, is acceptable);</P>
        <P>(2) Requires a higher level of care than that which can be provided under CHSP; or</P>
        <P>(3) Fails to pay services fees.</P>
        <P>(f) <E T="03">Procedural rights of participants.</E> (1) The PAC must provide an informal process that recognizes the right to due process of individuals receiving assistance. This process, at a minimum, must consist of:</P>
        <P>(i) Serving the participant with a written notice containing a clear statement of the reasons for termination;</P>
        <P>(ii) A review of the decision, in which the participant is given the opportunity to present written or oral objections before a person other than the person (or a subordinate of that person) who made or approved the termination decision; and</P>
        <P>(iii) Prompt written notification of the final decision to the participant.</P>
        <P>(2) Procedures must ensure that any potential or current program participant, at the time of initial or regular assessment, has the option of refusing offered services and requesting other supportive services as part of the case planning process.</P>
        <P>(3) In situations where an individual requests additional services, not initially recommended by the PAC, the PAC must make a determination of whether the request is legitimately a needs-based service that can be covered under CHSP subsidy. Individuals can pay for services other than those recommended by the PAC as long as the additional services do not interfere with the efficient operation of the program.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.140</SECTNO>
        <SUBJECT>Participatory agreement.</SUBJECT>
        <P>(a) Before actual acceptance into CHSP, potential participants must work with the PAC and the service coordinator in developing supportive services case plans. A participant has the option of accepting any of the services under the case plan.</P>
        <P>(b) Once the plan is approved by the PAC and the program participant, the participant must sign a participatory agreement governing the utilization of the plan's supportive services and the payment of supportive services fees. The grantee annually must renegotiate the agreement with the participant.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.145</SECTNO>
        <SUBJECT>Cost distribution.</SUBJECT>
        <P>(a) <E T="03">General.</E> (1) Grantees, the Secretary concerned, and participants shall all contribute to the cost of providing supportive services according to section 802(i)(A)(i). Grantees must contribute at least 50 percent of program cost, participants must contribute fees that in total are at least 10 percent of program cost, and the Secretary concerned will provide funds in an amount not to exceed 40 percent.</P>
        <P>(2) Section 802(i)(1)(B)(ii) creates a cost-sharing provision between grantee and the Secretary concerned if total participant fees collected over a year are less than 10 percent of total program cost. This provision is subject to availability of appropriated grant funds. If funds are not available, the grantee must assume the funding shortfall.</P>
        <P>(b) <E T="03">Prohibition on substitution of funds and maintenance of existing supportive services.</E> Grantees shall maintain existing funding for and provision of supportive services prior to the application date, as set forth in section 802(i)(1)(D). The grantee shall ensure that the activities provided to the project under a CHSP grant will be in addition to, and not in substitution for, these previously existing services. The value of these services do not qualify as matching funds. Such services must be maintained either for the time the participant remains in CHSP, or for the duration of CHSP grant. The grantee shall certify compliance with this paragraph to the Secretary concerned.</P>
        <P>(c) <E T="03">Eligible matching funds.</E> (1) All sources of matching funds must be directly related to the types of supportive services prescribed by the PAC or used for administration of CHSP.</P>
        <P>(2) Matching funds may include:<PRTPAGE P="12"/>
        </P>
        <P>(i) Cash (which may include funds from Federal, State and local governments, third party contributions, available payments authorized under Medicaid for specific individuals in CHSP, Community Development Block Grants or Community Services Block Grants, Older American Act programs or excess residual funds with the approval of the Secretary concerned),</P>
        <P>(ii) The imputed dollar value of other agency or third party-provided direct services or staff who will work with or provide services to program participants; these services must be justified in the application to assure that they are the new or expanded services of CHSP necessary to keep the program participants independent. If services are provided by the state, Indian tribe, unit of general local government, or local nonprofit housing sponsor, IHA, PHA, or for-profit or not-for-profit owner, any salary paid to staff from governmental sources to carry out the program of the grantee and any funds paid to residents employed by the Program (other than from amounts under a contract under section 700.155) is allowable match.</P>
        <P>(iii) In-kind items (these are limited to 10 percent of the 50 percent matching amount), such as the current market value of donated common or office space, utility costs, furniture, material, supplies, equipment and food used in direct provision of services. The applicant must provide an explanation for the estimated donated value of any item listed.</P>
        <P>(iv) The value of services performed by volunteers to CHSP, at the rate of $5.00 an hour.</P>
        <P>(d) <E T="03">Limitation.</E> (1) The following are not eligible for use as matching funds:</P>
        <P>(i) PHA operating funds;</P>
        <P>(ii) CHSP funds;</P>
        <P>(iii) Section 8 funds other than excess residual receipts;</P>
        <P>(iv) Funds under section 14 of the U.S. Housing Act of 1937, unless used for service coordination or case management; and</P>
        <P>(v) Comprehensive grant funds unless used for service coordination or case management;</P>
        <P>(2) Local government contributions are limited by section 802(i)(1)(E).</P>
        <P>(e) <E T="03">Annual review of match.</E> The Secretary concerned will review the infusion of matching funds annually, as part of the program or budget review. If there are insufficient matching funds available to meet program requirements at any point after grant start-up, or at any time during the term of the grant (<E T="03">i.e.,</E> if matching funds from sources other than program participant fees drop below 50 percent of total supportive services cost), the Secretary concerned may decrease the federal grant share of supportive services funds accordingly.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.150</SECTNO>
        <SUBJECT>Program participant fees.</SUBJECT>
        <P>(a) <E T="03">Eligible program participants.</E> The grantee shall establish fees consistent with section 700.145(a). Each program participant shall pay CHSP fees as stated in paragraphs (d) and (e) of this section, up to a maximum of 20 percent of the program participant's adjusted income. Consistent with section 802(d)(7)(A), the Secretary concerned shall provide for the waiver of fees for individuals who are without sufficient income to provide for any payment.</P>
        <P>(b) <E T="03">Fees shall include:</E> (1) Cash contributions of the program participant;</P>
        <P>(2) Food Stamps; and</P>
        <P>(3) Contributions or donations to other eligible programs acceptable as matching funds under section 700.145(c).</P>
        <P>(c) <E T="03">Older Americans Act programs.</E> No fee may be charged for any meals or supportive services under CHSP if that service is funded under an Older Americans Act Program.</P>
        <P>(d) <E T="03">Meals fees:</E> (1) For full meal services, the fees for residents receiving more than one meal per day, seven days per week, shall be reasonable and shall equal between 10 and 20 percent of the adjusted income of the project resident, or the cost of providing the services, whichever is less.</P>
        <P>(2) The fees for residents receiving meal services less frequently than as described in paragraph (d)(1) of this section shall be in an amount equal to 10 percent of the adjusted income of the project resident, or the cost of providing the services, whichever is less.</P>
        <P>(e) <E T="03">Other service fees.</E> The grantee may also establish fees for other supportive services so that the total fees collected <PRTPAGE P="13"/>from all participants for meals and other services is at least 10 percent of the total cost of CHSP. However, no program participants may be required to pay more than 20 percent of their adjusted incomes for any combination of services.</P>
        <P>(f) <E T="03">Other residents and nonresidents.</E> Fees shall be established for residents of eligible housing projects (other than eligible project residents) and for nonresidents who receive meals and other services from CHSP under section 700.125(a). These fees shall be in an amount equal to the cost of providing the services.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.155</SECTNO>
        <SUBJECT>Grant agreement and administration.</SUBJECT>
        <P>(a) <E T="03">General.</E> HUD will enter into grant agreements with grantees, to provide congregate services for program participants in eligible housing projects, in order to meet the purposes of CHSP.</P>
        <P>(b) <E T="03">Term of grant agreement and reservation of amount.</E> A grant will be for a term of five years and the Secretary concerned shall reserve a sum equal to the total approved grant amount for each grantee. Grants will be renewable at the expiration of a term, subject to the availability of funds and conformance with the regulations in this part, except as otherwise provided in section 700.160.</P>
        <P>(c) <E T="03">Monitoring of project sites by governmental units.</E> States, Indian tribes, and units of general local government with a grant covering multiple projects shall monitor, review, and evaluate Program performance at each project site for compliance with CHSP regulations and procedures, in such manner as prescribed by HUD or RHS.</P>
        <P>(d) <E T="03">Reports.</E> Each grantee shall submit program and fiscal reports and program budgets to the Secretary concerned in such form and at such times, as the Secretary concerned requires.</P>
        <P>(e) <E T="03">Enforcement.</E> The Secretary concerned will enforce the obligations of the grantee under the agreement through such action as may be necessary, including terminating grants, recapturing grant funds, and imposing sanctions.</P>
        <P>(1) These actions may be taken for:</P>
        <P>(i) A grantee's non-compliance with the grant agreement or HUD or RHS regulations;</P>
        <P>(ii) Failure of the grantee to provide supportive services within 12 months of execution of the grant agreement.</P>
        <P>(2) Sanctions include but are not limited to the following:</P>
        <P>(i) Temporary withholding of reimbursements or extensions or renewals under the grant agreement, pending correction of deficiencies by the grantee;</P>
        <P>(ii) Setting conditions in the contract;</P>
        <P>(iii) Termination of the grant;</P>
        <P>(iv) Substitution of grantee; and</P>
        <P>(v) Any other action deemed necessary by the Secretary concerned.</P>
        <P>(f) <E T="03">Renewal of grants.</E> Subject to the availability of funding, satisfactory performance, and compliance with the regulations in this part:</P>
        <P>(1) Grantees funded initially under this part shall be eligible to receive continued, non-competitive renewals after the initial five-year term of the grant.</P>
        <P>(2) Grantees will receive priority funding and grants will be renewed within time periods prescribed by the Secretary concerned.</P>
        <P>(g) <E T="03">Use of Grant Funds.</E> If during any year, grantees use less than the annual amount of CHSP funds provided to them for that year, the excess amount can be carried forward for use in later years.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.160</SECTNO>
        <SUBJECT>Eligibility and priority for 1978 Act recipients.</SUBJECT>
        <P>Grantees funded initially under 42 U.S.C. 8001 shall be eligible to receive continued, non-competitive funding subject to its availability. These grantees will be eligible to receive priority funding under this part if they comply with the regulations in this part and with the requirements of any NOFA issued in a particular fiscal year.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.165</SECTNO>
        <SUBJECT>Evaluation of Congregate Housing Services Programs.</SUBJECT>

        <P>(a) Grantees shall submit annually to the Secretary concerned, a report evaluating the impact and effectiveness of CHSPs at the grant sites, in such form as the Secretary concerned shall require.<PRTPAGE P="14"/>
        </P>
        <P>(b) The Secretaries concerned shall further review and evaluate the performance of CHSPs at these sites and shall evaluate the Program as a whole.</P>
        <P>(c) Each grantee shall submit a certification with its application, agreeing to cooperate with and to provide requested data to the entity responsible for the Program's evaluation, if requested to do so by the Secretary concerned.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.170</SECTNO>
        <SUBJECT>Reserve for supplemental adjustment.</SUBJECT>
        <P>The Secretary concerned may reserve funds subject to section 802(o). Requests to utilize supplemental funds by the grantee shall be transmitted to the Secretary concerned in such form as may be required.</P>
      </SECTION>
      <SECTION>
        <SECTNO>§ 700.175</SECTNO>
        <SUBJECT>Other Federal requirements.</SUBJECT>
        <P>In addition to the Federal Requirements set forth in 24 CFR part 5, the following requirements apply to grant recipient organizations in this program:</P>
        <P>(a) <E T="03">Office of Management and Budget (OMB) Circulars and Administrative Requirements.</E> The policies, guidelines, and requirements of OMB Circular No. A-87 and 24 CFR part 85 apply to the acceptance and use of assistance under this program by public body grantees. The policies, guidelines, and requirements of OMB Circular No. A-122 apply to the acceptance and use of assistance under this program by non-profit grantees. Grantees are also subject to the audit requirements described in 24 CFR part 44 (OMB Circular A-128).</P>
        <P>(b) <E T="03">Conflict of interest.</E> In addition to the conflict of interest requirements in OMB Circular A-87 and 24 CFR part 85, no person who is an employee, agent, consultant, officer, or elected or appointed official of the applicant, and who exercises or has exercised any function or responsibilities with respect to activities assisted with CHSP grant funds, or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract, or agreement with respect thereto, or any proceeds thereunder, either for himself or herself or for those with whom he or she has family or business ties during his or her tenure, or for one year thereafter. CHSP employees may receive reasonable salary and benefits.</P>
        <P>(c) <E T="03">Disclosures required by Reform Act.</E> Section 102(c) of the HUD Reform Act of 1989 (42 U.S.C. 3545(c)) requires disclosure concerning other government assistance to be made available with respect to the Program and parties with a pecuniary interest in CHSP and submission of a report on expected sources and uses of funds to be made available for CHSP. Each applicant shall include information required by 24 CFR part 12 on form HUD-2880 “Applicant/Recipient Disclosure/Update Report,” as required by the <E T="04">Federal Register</E> Notice published on January 16, 1992, at 57 FR 1942.</P>
        <P>(d) <E T="03">Nondiscrimination and equal opportunity.</E> (1) The fair housing poster regulations (24 CFR part 110) and advertising guidelines (24 CFR part 109);</P>
        <P>(2) The Affirmative Fair Housing Marketing Program requirements of 24 CFR part 200, subpart M, and the implementing regulations at 24 CFR part 108; and</P>
        <P>(3) Racial and ethnic collection requirements—Recipients must maintain current data on the race, ethnicity and gender of program applicants and beneficiaries in accordance with section 562 of the Housing and Community Development Act of 1987 and section 808(e)(6) of the Fair Housing Act.</P>
        <P>(e) <E T="03">Environmental requirements.</E> Support services, including the operating and administrative expenses described in section 700.115(a), are categorically excluded from the requirements of the National Environmental Policy Act (NEPA) of 1969. These actions, however, are not excluded from individual compliance requirements of other environmental statutes, Executive Orders, and agency regulations where appropriate. When the responsible official determines that any action under this part may have an environmental effect because of extraordinary circumstances, the requirements of NEPA shall apply.</P>
      </SECTION>
    </PART>
    <PART>
      <RESERVED>PARTS 701-760 [RESERVED]</RESERVED>
    </PART>
    <PART>
      <PRTPAGE P="15"/>
      <EAR>Pt. 761</EAR>
      <HD SOURCE="HED">PART 761—DRUG ELIMINATION PROGRAMS</HD>
      <CONTENTS>
        <SUBPART>
          <HD SOURCE="HED">Subpart A—General</HD>
          <SECHD>Sec.</SECHD>
          <SECTNO>761.1</SECTNO>
          <SUBJECT>Purpose and scope.</SUBJECT>
          <SECTNO>761.5</SECTNO>
          <SUBJECT>Public housing; encouragement of resident participation.</SUBJECT>
          <SECTNO>761.10</SECTNO>
          <SUBJECT>Definitions.</SUBJECT>
        </SUBPART>
        <SUBPART>
          <HD SOURCE="HED">Subpart B—Grant Funding</HD>
          <SECTNO>761.13</SECTNO>
          <SUBJECT>Amount of funding.</SUBJECT>
          <SECTNO>761.15</SECTNO>
          <SUBJECT>Qualifying for funding.</SUBJECT>
          <SECTNO>761.17</SECTNO>
          <SUBJECT>Eligible and ineligible activities for funding.</SUBJECT>
        </SUBPART>
        <SUBPART>
          <HD SOURCE="HED">Subpart C—Application and Selection</HD>
          <SECTNO>761.20</SECTNO>
          <SUBJECT>Selection requirements.</SUBJECT>
          <SECTNO>761.21</SECTNO>
          <SUBJECT>Plan requirement.</SUBJECT>
          <SECTNO>761.23</SECTNO>
          <SUBJECT>Grantee performance requirements.</SUBJECT>
          <SECTNO>761.25</SECTNO>
          <SUBJECT>Resident comments on grant application.</SUBJECT>
        </SUBPART>
        <SUBPART>
          <HD SOURCE="HED">Subpart D—Grant Administration</HD>
          <SECTNO>761.30</SECTNO>
          <SUBJECT>Grant administration.</SUBJECT>
          <SECTNO>761.35</SECTNO>
          <SUBJECT>Periodic grantee reports.</SUBJECT>
          <SECTNO>761.40</SECTNO>
          <SUBJECT>Other Federal requirements.</SUBJECT>
        </SUBPART>
      </CONTENTS>
      <AUTH>
        <HD SOURCE="HED">Authority:</HD>
        <P>42 U.S.C. 3535(d) and 11901 <E T="03">et seq.</E>
        </P>
      </AUTH>
      <EDNOTE>
        <HD SOURCE="HED">Editorial Note:</HD>
        <P>Nomenclature changes to part 761 appear at 64 FR 49917, Sept. 14, 1999.</P>
      </EDNOTE>
      <SOURCE>
        <HD SOURCE="HED">Source:</HD>
        <P>61 FR 13987, Mar. 28, 1996, unless otherwise noted.</P>
      </SOURCE>
      <SUBPART>
        <HD SOURCE="HED">Subpart A—General</HD>
        <SECTION>
          <SECTNO>§ 761.1</SECTNO>
          <SUBJECT>Purpose and scope.</SUBJECT>
          <P>This part 761 contains the regulatory requirements for the Assisted Housing Drug Elimination Program (AHDEP) and the Public Housing Drug Elimination Program (PHDEP). The purposes of these programs are to:</P>
          <P>(a) Eliminate drug-related and violent crime and problems associated with it in and around the premises of Federally assisted low-income housing, and public and Indian housing developments;</P>
          <P>(b) Encourage owners of Federally assisted low-income housing, public housing agencies and Indian housing authorities (collectively referred to as HAs), and resident management corporations to develop a plan that includes initiatives that can be sustained over a period of several years for addressing drug-related and violent crime and problems associated with it in and around the premises of housing proposed for funding under this part; and</P>
          <P>(c) Make available Federal grants to help owners of Federally assisted low-income housing, HAs, and RMCs carry out their plans.</P>
          <CITA>[61 FR 13987, Mar. 28, 1996, as amended at 64 FR 49917, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.5</SECTNO>
          <SUBJECT>Public housing; encouragement of resident participation.</SUBJECT>
          <P>For the purposes of the Public Housing Drug Elimination Program, the elimination of drug-related and violent crime within public housing developments requires the active involvement and commitment of public housing residents and their organizations. To enhance the ability of PHAs to combat drug-related and violent crime within their developments, Resident Councils (RCs), Resident Management Corporations (RMCs), and Resident Organizations (ROs) will be permitted to undertake management functions specified in this part, notwithstanding the otherwise applicable requirements of part 964 of this title.</P>
          <CITA>[64 FR 49917, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.10</SECTNO>
          <SUBJECT>Definitions.</SUBJECT>
          <P>The definitions <E T="03">Department,</E>
            <E T="03">HUD,</E> and <E T="03">Public Housing Agency (PHA)</E> are defined in part 5 of this title.</P>
          <P>
            <E T="03">Controlled substance</E> shall have the meaning provided in section 102 of the Controlled Substance Act (21 U.S.C. 802).</P>
          <P>
            <E T="03">Drug intervention</E> means a process to identify assisted housing or public housing resident drug users, to assist them in modifying their behavior, and/or to refer them to drug treatment to reduce or eliminate drug abuse.</P>
          <P>
            <E T="03">Drug prevention</E> means a process to provide goods and services designed to alter factors, including activities, environmental influences, risks, and expectations, that lead to drug abuse.</P>
          <P>
            <E T="03">Drug-related and violent crime</E> shall have the meaning provided in 42 U.S.C. 11905(2).</P>
          <P>
            <E T="03">Drug treatment</E> means a program for the residents of an applicant's development that strives to end drug abuse and to eliminate its negative effects <PRTPAGE P="16"/>through rehabilitation and relapse prevention.</P>
          <P>
            <E T="03">Federally assisted low-income housing,</E> or <E T="03">assisted housing,</E> shall have the meaning provided in 42 U.S.C. 11905(4). However, sections 221(d)(3) and 221(d)(4) market rate projects with tenant-based assistance contracts and section 8 projects with tenant-based assistance are not considered federally assisted low-income housing and are not eligible for funding under this part 761.</P>
          <P>
            <E T="03">Governmental jurisdiction</E> means the unit of general local government, State, or area of operation of an Indian tribe in which the housing development administered by the applicant is located.</P>
          <P>
            <E T="03">In and around</E> means within, or adjacent to, the physical boundaries of a housing development.</P>
          <P>
            <E T="03">Indian tribe</E> means any tribe, band, pueblo, group, community, or nation of Indians, or Alaska Natives.</P>
          <P>
            <E T="03">Local law enforcement agency</E> means a police department, sheriff's office, or other entity of the governmental jurisdiction that has law enforcement responsibilities for the community at large, including the housing developments owned or administered by the applicant. In Indian jurisdictions, this includes tribal prosecutors that assume law enforcement functions analogous to a police department or the Bureau of Indian Affairs (BIA). More than one law enforcement agency may have these responsibilities for the jurisdiction that includes the applicant's developments.</P>
          <P>
            <E T="03">Problems associated with drug-related and violent crime</E> means the negative physical, social, educational, and economic impact of drug-related and violent crime on assisted housing residents or public and Indian housing residents, and the deterioration of the assisted housing or public and Indian housing environment because of drug-related and violent crime.</P>
          <P>
            <E T="03">Program income</E> means gross income received by a grantee and directly generated from the use of program funds. When program income is generated by an activity only partially assisted with program funds, the income shall be prorated to reflect the percentage of program funds used.</P>
          <P>
            <E T="03">Recipient of assistance under the Native American Housing Assistance and Self-Determination Act of 1996 (NAHASDA recipient)</E> shall have the same meaning as <E T="03">recipient</E> provided in section 4 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 <E T="03">et seq.</E>).</P>
          <P>
            <E T="03">Resident council (RC),</E> for purposes of the Public Housing Program, means an incorporated or unincorporated nonprofit organization or association that meets each of the following requirements:</P>
          <P>(1) It must be representative of the residents it purports to represent;</P>
          <P>(2) It may represent residents in more than one development or in all of the developments of a HA, but it must fairly represent residents from each development that it represents;</P>
          <P>(3) It must adopt written procedures providing for the election of specific officers on a regular basis (but at least once every three years); and</P>
          <P>(4) It must have a democratically elected governing board. The voting membership of the board must consist of residents of the development or developments that the resident organization or resident council represents.</P>
          <P>
            <E T="03">Resident Management Corporation (RMC),</E> for purposes of the Public Housing Program, means the entity that proposes to enter into, or that enters into, a management contract with a PHA under part 964 of this title in accordance with the requirements of that part.</P>
          <P>
            <E T="03">State</E> means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State exclusive of local governments. The term does not include any public or Indian housing agency under the United States Housing Act of 1937 (42 U.S.C. 1437 <E T="03">note</E>).</P>
          <P>
            <E T="03">Unit of general local government</E> means any city, county, town, municipality, township, parish, village, local public authority (including any public or Indian housing agency under the United States Housing Act of 1937) or other general purpose political subdivision of a State.</P>
          <CITA>[61 FR 13987, Mar. 28, 1996, as amended at 64 FR 49918, Sept. 14, 1999]</CITA>
        </SECTION>
      </SUBPART>
      <SUBPART>
        <PRTPAGE P="17"/>
        <HD SOURCE="HED">Subpart B—Grant Funding</HD>
        <SECTION>
          <SECTNO>§ 761.13</SECTNO>
          <SUBJECT>Amount of funding.</SUBJECT>
          <P>(a) <E T="03">PHDEP formula funding</E>—(1) <E T="03">Funding share formula</E>—(i) <E T="03">Per unit amount.</E> Subject to the availability of funding, the amount of funding made available each FFY to an applicant that qualifies for funding in accordance with § 761.15(a) is based upon the applicant's share of the total number of units of all applicants that qualify for funding, with a maximum award of $35 million and a minimum award of $25,000, except that qualified applicants with less than 50 units will not receive more than $500 per unit.</P>
          <P>(ii) <E T="03">Calculation of number of units.</E> For purposes of determining the number of units counted for purposes of the PHDEP formula, HUD shall count as one unit each existing rental and Section 23 bond-financed unit under the ACC. Units that are added to a PHA's inventory will be added to the overall unit count so long as the units are under ACC amendment and have reached DOFA by the date HUD establishes for the Federal Fiscal Year in which the PHDEP formula is being run (hereafter called the “reporting date”). Any such increase in units shall result in an adjustment upwards in the number of units under the PHDEP formula. New units reaching DOFA after this date will be counted for PHDEP formula purposes as of the following Federal Fiscal Year. Federalized units that are eligible for operating subsidy will be counted for PHDEP formula purposes based on the unit count reflected on the PHA's most recently approved Operating Budget (Form HUD-52564) and/or subsidy calculation (Form HUD-52723), or successor form submitted for that program. Units approved for demolition/disposition continue to be counted for PHDEP formula funding purposes until actual demolition/disposition of the unit.</P>
          <P>(2) <E T="03">Consortium funding.</E> The amount of funding made available to a consortium will be the total of the amounts that each individual member would otherwise qualify to receive under the PHDEP funding formula in accordance with paragraph (a)(1) of this section.</P>
          <P>(3) <E T="03">Adjustments to funding.</E> The amount of funding made available each FFY to an applicant in accordance with paragraphs (a)(1) and (a)(2) of this section may be adjusted as follows:</P>
          <P>(i) An applicant must submit a PHDEP plan that meets the requirements of § 761.21, as required by § 761.15(a)(5), each FFY year to receive that FFY's funding. An applicant that does not submit a PHDEP plan for a FFY as required will not receive that FFY's funding.</P>
          <P>(ii) Ineligible activities, described at § 761.17(b), are not eligible for funding. Activities proposed for funding in an applicant's PHDEP plan that are determined to be ineligible will not be funded, and the applicant's funding for that FFY may be reduced accordingly.</P>
          <P>(iii) In accordance with § 761.15(a)(6), an applicant that does not meet the performance requirements of § 761.23 will be subject to the sanctions listed in § 761.30(f)(2).</P>
          <P>(iv) Both the amount of and continuing eligibility for funding is subject to the sanctions in § 761.30(f).</P>
          <P>(v) Any amounts that become available because of adjustments to an applicant's funding will be distributed to every other applicant that qualifies for funding in accordance with paragraphs (a)(1) and (a)(2) of this section.</P>
          <P>(b) <E T="03">AHDEP funding.</E> Information concerning funding made available under AHDEP for a given FFY will be contained in Notices of Funding Availability (NOFAs) published in the <E T="04">Federal Register.</E>
          </P>
          <CITA>[64 FR 49918, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.15</SECTNO>
          <SUBJECT>Qualifying for funding.</SUBJECT>
          <P>(a) <E T="03">Qualifications for PHDEP funding</E>—(1) <E T="03">Eligible applicants.</E> The following are eligible applicants for PHDEP funding:</P>
          <P>(i) A PHA;</P>
          <P>(ii) An RMC; and</P>
          <P>(iii) A consortium of PHAs.</P>
          <P>(2) <E T="03">Preference PHAs.</E> A PHA that successfully competed for PHDEP funding under at least one of the PHDEP NOFAs for FFY 1996, FFY 1997 or FFY 1998 qualifies to receive PHDEP funding.</P>
          <P>(3) <E T="03">Needs qualification for funding.</E> An eligible applicant that does not qualify to receive PHDEP funding under paragraph (a)(2) of this section must be in one of the following needs categories to qualify for funding:<PRTPAGE P="18"/>
          </P>
          <P>(i) The eligible applicant must be in the top 50% of the unit-weighted distribution of an index of a rolling average rate of violent crimes of the community, as computed for each Federal Fiscal Year (FFY). The crime rate used in this needs determination formula is the rate, from the most recent years feasible, of FBI violent crimes per 10,000 residents of the community (or communities). If this information is not available for a particular applicant's community, HUD will use the average of data from recipients of a comparable State and size category of PHA (less than 500 units, 500 to 1249 units, and more than 1250 units). If fewer than five PHAs have data for a given size category within a State, then the average of PHAs for a given size category within the census region will be used; or</P>
          <P>(ii) The eligible applicant must have qualified for PHDEP funding, by receiving an application score of 70 or more points under any one of the PHDEP NOFAs for FFY 1996, FFY 1997 or FFY 1998, but not have received an award because of the unavailability of funds.</P>
          <P>(4) <E T="03">Consortium of eligible applicants.</E> Eligible applicants may join together and form a consortium to apply for funding, whether or not each member would individually qualify for PHDEP funding under paragraphs (a)(2) or (a)(3) of this section. The act of two or more eligible applicants joining together to form a consortium, and identifying related crime problems and eligible activities to address those problems pursuant to a consortium PHDEP plan, qualifies the consortium for PHDEP funding of an amount as determined under § 761.13(a)(2).</P>
          <P>(5) <E T="03">PHDEP plan requirement.</E> (i) <E T="03">PHAs.</E> Except as provided in paragraph (a)(5)(ii), below, of this section, to receive PHDEP funding, a PHA that qualifies to receive PHDEP funding for Federal Fiscal Year 2000 and beyond must include a PHDEP plan that meets the requirements of § 761.21 with its PHA Plan submitted pursuant to part 903 of this title for each Federal Fiscal Year for which it qualifies for funding.</P>
          <P>(ii) To receive PHDEP funding, a PHA that qualifies to receive PHDEP funding and is operating under an executed Moving To Work (MTW) agreement with HUD must submit a PHDEP plan that meets the requirements of § 761.21 with its required MTW plan for each Federal Fiscal Year for which it qualifies for funding.</P>
          <P>(iii) <E T="03">RMCs.</E> To receive PHDEP funding, an RMC operating in an PHA that qualifies to receive PHDEP funding must submit a PHDEP plan for the units managed by the RMC that meets the requirements of § 761.21 to its PHA. Upon agreement between the RMC and PHA, the PHA must submit to HUD, with its PHA Plan submitted pursuant to part 903 of this title, the RMC's PHDEP plan. The RMC will implement its plan as a subrecipient of the PHA.</P>
          <P>(iv) <E T="03">Consortia.</E> To receive PHDEP funding, the consortium members must prepare and submit a consortium PHDEP plan that meets the requirements of § 761.21, including the additional requirements that apply to consortia. Each member must submit the consortium plan with its PHA plan, submitted pursuant to part 903 of this title, or IHP, submitted pursuant to subpart C of part 1000 of this title, as appropriate.</P>
          <P>(6) An otherwise qualified recipient PHA, RMC or consortium may not be funded if HUD determines, on a case-by-case basis, that it does not meet the performance requirements of § 761.23.</P>
          <P>(b) <E T="03">Qualifications for AHDEP funding.</E> Under AHDEP, eligible applicants are owners of federally assisted low-income housing, as the term <E T="03">Federally assisted low-income housing</E> is defined in § 761.10. Notices of Funding Availability (NOFAs) published in the <E T="04">Federal Register</E> will contain specific information concerning funding requirements and eligible and ineligible applicants and activities.</P>
          <CITA>[64 FR 49918, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.17</SECTNO>
          <SUBJECT>Eligible and ineligible activities for funding.</SUBJECT>
          <P>(a) <E T="03">Eligible activities.</E> One or more of the eligible activities described in 42 U.S.C. 11903 and in this § 761.17(a) are eligible for funding under PHDEP or AHDEP, as further explained or limited in paragraph (b) of this section and, for AHDEP, in separate annual Notices of <PRTPAGE P="19"/>Funding Availability (NOFAs). All personnel funded by these programs in accordance with an eligible activity must meet, and demonstrate compliance with, all relevant Federal, State, tribal, or local government insurance, licensing, certification, training, bonding, or other similar law enforcement requirements.</P>
          <P>(1) <E T="03">Employment of security personnel,</E> as provided in 42 U.S.C. 11903(a)(1), with the following additional requirements:</P>
          <P>(i) <E T="03">Security guard personnel.</E> (A) Contract security personnel funded by this program must perform services not usually performed by local law enforcement agencies on a routine basis. The applicant must identify the baseline services provided by the local law enforcement agency.</P>
          <P>(B) The applicant, the provider (contractor) of the security personnel and, only if the local law enforcement agency is receiving any PHDEP funds from the applicant, the local law enforcement agency, are required, as a part of the security personnel contract, to enter into and execute a written agreement that describes the following:</P>
          <P>(<E T="03">1</E>) The activities to be performed by the security personnel, their scope of authority, and how they will coordinate their activities with the local law enforcement agency;</P>
          <P>(<E T="03">2</E>) The types of activities that the security personnel are expressly prohibited from undertaking.</P>
          <P>(ii) <E T="03">Employment of HA police.</E> (A) If additional HA police are to be employed for a service that is also provided by a local law enforcement agency, the applicant must undertake and retain a cost analysis that demonstrates the employment of HA police is more cost efficient than obtaining the service from the local law enforcement agency.</P>
          <P>(B) Additional HA police services to be funded under this program must be over and above those that the existing HA police, if any, provides, and the tribal, State or local government is contractually obligated to provide under its Cooperation Agreement with the applying HA (as required by the HA's Annual Contributions Contract). An applicant seeking funding for this activity must first establish a baseline by describing the current level of services provided by both the local law enforcement agency and the HA police, if any (in terms of the kinds of services provided, the number of officers and equipment and the actual percent of their time assigned to the developments proposed for funding), and then demonstrate that the funded activity will represent an increase over this baseline.</P>
          <P>(C) If the local law enforcement agency is receiving any PHDEP funds from the applicant, the applicant and the local law enforcement agency are required to enter into and execute a written agreement that describes the following:</P>
          <P>(<E T="03">1</E>) The activities to be performed by the HA police, their scope of authority, and how they will coordinate their activities with the local law enforcement agency;</P>
          <P>(<E T="03">2</E>) The types of activities that the HA police are expressly prohibited from undertaking.</P>
          <P>(2) <E T="03">Reimbursement of local law enforcement agencies for additional security and protective services,</E> as provided in 42 U.S.C. 11903(a)(2), with the following additional requirements:</P>
          <P>(i) Additional security and protective services to be funded must be over and above those that the tribal, State, or local government is contractually obligated to provide under its Cooperation Agreement with the applying HA (as required by the HA's Annual Contributions Contract). An application seeking funding for this activity must first establish a baseline by describing the current level of services (in terms of the kinds of services provided, the number of officers and equipment, and the actual percent of their time assigned to the developments proposed for funding) and then demonstrate that the funded activity will represent an increase over this baseline.</P>

          <P>(ii) Communications and security equipment to improve the collection, analysis, and use of information about drug-related or violent criminal activities in a public housing community may be eligible items if used exclusively in connection with the establishment of a law enforcement substation on the funded premises or scattered site developments of the applicant. Funds for activities under this section may not be drawn until the grantee has <PRTPAGE P="20"/>executed a contract for the additional law enforcement services.</P>
          <P>(3) <E T="03">Physical improvements to enhance security,</E> as provided in 42 U.S.C. 11903(a)(3). For purposes of PHDEP, the following provisions in paragraphs (a)(3)(i) through (a)(3)(iv) of this section apply:</P>
          <P>(i) An activity that is funded under any other HUD program shall not also be funded by this program.</P>
          <P>(ii) Funding is not permitted for physical improvements that involve the demolition of any units in a development.</P>
          <P>(iii) Funding is not permitted for any physical improvements that would result in the displacement of persons.</P>
          <P>(iv) Funding is not permitted for the acquisition of real property.</P>
          <P>(4) <E T="03">Employment of investigating individuals,</E> as provided in 42 U.S.C. 11903(a)(4). For purposes of PHDEP, the following provisions in paragraphs (a)(4)(i) and (a)(4)(ii) of this section apply:</P>
          <P>(i) If one or more investigators are to be employed for a service that is also provided by a local law enforcement agency, the applicant must undertake and retain a cost analysis that demonstrates the employment of investigators is more cost efficient than obtaining the service from the local law enforcement agency.</P>
          <P>(ii) The applicant, the investigator(s) and, only if the local law enforcement agency is receiving any PHDEP funds from the applicant, the local law enforcement agency, are required, before any investigators are employed, to enter into and execute a written agreement that describes the following:</P>
          <P>(A) The nature of the activities to be performed by the investigators, their scope of authority, and how they will coordinate their activities with the local law enforcement agency;</P>
          <P>(B) The types of activities that the investigators are expressly prohibited from undertaking.</P>
          <P>(5) <E T="03">Voluntary tenant patrols,</E> as provided in 42 U.S.C. 11903(a)(5). For purposes of PHDEP, the following provisions in paragraphs (a)(5)(i) through (a)(5)(iv) of this section apply:</P>
          <P>(i) The provision of training, communications equipment, and other related equipment (including uniforms), for use by voluntary tenant patrols acting in cooperation with officials of local law enforcement agencies is permitted. Grantees are required to obtain liability insurance to protect themselves and the members of the voluntary tenant patrol against potential liability for the activities of the patrol. The cost of this insurance will be considered an eligible program expense.</P>
          <P>(ii) The applicant, the members of the tenant patrol and, only if the local law enforcement agency is receiving any PHDEP funds from the applicant, the local law enforcement agency, are required, before putting the tenant patrol into effect, to enter into and execute a written agreement that describes the following:</P>
          <P>(A) The nature of the activities to be performed by the tenant patrol, the patrol's scope of authority, and how the patrol will coordinate its activities with the local law enforcement agency;</P>
          <P>(B) The types of activities that a tenant patrol is expressly prohibited from undertaking, to include but not limited to, the carrying or use of firearms or other weapons, nightsticks, clubs, handcuffs, or mace in the course of their duties under this program;</P>
          <P>(C) The type of initial tenant patrol training and continuing training the members receive from the local law enforcement agency (training by the local law enforcement agency is required before putting the tenant patrol into effect).</P>
          <P>(iii) Tenant patrol members must be advised that they may be subject to individual or collective liability for any actions undertaken outside the scope of their authority and that such acts are not covered under a HA's or RMC's liability insurance.</P>
          <P>(iv) Grant funds may not be used for any type of financial compensation for voluntary tenant patrol participants. However, the use of program funds for a grant coordinator for volunteer tenant foot patrols is permitted.</P>
          <P>(6) <E T="03">Drug prevention, intervention, and treatment programs,</E> as provided in 42 U.S.C. 11903(a)(6).</P>
          <P>(7) <E T="03">Funding resident management corporations (RMCs), resident councils (RCs), and resident organizations (ROs).</E> For purposes of the Public Housing Program, funding may be provided for PHAs that receive grants to contract <PRTPAGE P="21"/>with RMCs and incorporated RCs and ROs to develop security and drug abuse prevention programs involving site residents, as provided in 42 U.S.C. 11903(a)(7).</P>
          <P>(8) <E T="03">Youth sports.</E> Sports programs and sports activities that serve primarily youths from public or other federally assisted low-income housing projects and are operated in conjunction with, or in furtherance of, an organized program or plan designed to reduce or eliminate drugs and drug-related problems in and around such projects, as provided in 42 U.S.C. 11903(a)(8).</P>
          <P>(9) <E T="03">Eliminating drug-related and violent crime in PHA-owned housing,</E> under the Public Housing Program, as provided in 42 U.S.C. 11903(b).</P>
          <P>(b) <E T="03">Ineligible activities.</E> For purposes of PHDEP, funding is not permitted:</P>
          <P>(1) For activities not included under paragraph (a) of this section;</P>
          <P>(2) For costs incurred before the effective date of the grant agreement;</P>
          <P>(3) For the costs related to screening or evicting residents for drug-related crime. However, investigators funded under this program may participate in judicial and administrative proceedings;</P>
          <P>(4) For previously funded activities determined by HUD on a case-by-case basis to be unworthy of continuation.</P>
          <CITA>[64 FR 49919, Sept. 14, 1999]</CITA>
        </SECTION>
      </SUBPART>
      <SUBPART>
        <HD SOURCE="HED">Subpart C—Application and Selection</HD>
        <SECTION>
          <SECTNO>§ 761.20</SECTNO>
          <SUBJECT>Selection requirements.</SUBJECT>
          <P>(a) <E T="03">PHDEP selection.</E> Every PHA, RMC and consortium that meets the requirements of § 761.15 in a FFY will be selected for funding in that FFY and, subject to meeting the performance requirements of § 761.23, for four additional FFYs.</P>
          <P>(b) <E T="03">AHDEP selection.</E> HUD will publish specific Notices of Funding Availability (NOFAs) in the <E T="04">Federal Register</E> to inform the public of the availability of AHDEP grant amounts under this part 761. The NOFAs will provide specific guidance with respect to the grant process, including identifying the eligible applicants; deadlines for the submission of grant applications; the limits (if any) on maximum grant amounts; the information that must be submitted to permit HUD to score each of the selection criteria; the maximum number of points to be awarded for each selection criterion; the contents of the plan for addressing drug-related and violent crime that must be included with the application; the listing of any certifications and assurances that must be submitted with the application; and the process for ranking and selecting applicants. NOFAs will also include any additional information, factors, and requirements that HUD has determined to be necessary and appropriate to provide for the implementation and administration of AHDEP under this part 761.</P>
          <CITA>[64 FR 49920, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.21</SECTNO>
          <SUBJECT>Plan requirement.</SUBJECT>
          <P>(a) <E T="03">General requirement.</E> To receive funding under this part, each PHDEP qualified recipient or AHDEP applicant must submit to HUD, for Federal Fiscal Year (FFY) 2000 and each following FFY, a plan for addressing the problem of drug-related and violent crime in and around the housing covered by the plan. If the plan covers more than one development, it does not have to address each development separately if the same activities will apply to each development. The plan must address each development separately only where program activities will differ from one development to another. The plan must include a description of the planned activity or activities, a description of the role of plan partners and their contributions to carrying out the plan, a budget and timetable for implementation of the activities, and the funding source for each activity, identifying in particular all activities to be funded under this part. In addition, the plan must set measurable performance goals and interim milestones for the PHDEP-supported activities and describe the system for monitoring and evaluating these activities. Measurable goals must be established for each category of funded activities, including drug prevention, drug intervention, drug treatment, tenant patrols, and physical improvements. The plan under this section serves as the application for PHDEP funding, and an otherwise qualified recipient that does not <PRTPAGE P="22"/>submit a PHDEP plan as required will not be funded. For AHDEP funding, NOFAs published in the <E T="04">Federal Register</E> may provide additional information on plan requirements for purposes of this section. Plans must meet the requirements of this section before grant funds are distributed. HUD will review the submitted plans for a determination of whether they meet the requirements of this section.</P>
          <P>(b) <E T="03">Additional requirements for consortia.</E> In addition to meeting the requirements of paragraph (a) of this section, to receive funding under this part, a consortium's plan must include a copy of the consortium agreement between the PHAs which are participating in the consortium, and a copy of the payment agreement between the consortium and HUD.</P>
          <CITA>[64 FR 49920, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.23</SECTNO>
          <SUBJECT>Grantee performance requirements.</SUBJECT>
          <P>(a) <E T="03">Basic grantee requirements</E>—(1) <E T="03">Compliance with civil rights requirements.</E> Grantees must be in compliance with all fair housing and civil rights laws, statutes, regulations, and executive orders as enumerated in 24 CFR 5.105(a). Federally recognized Indian tribes must comply with the Age Discrimination Act of 1975 and the Indian Civil Rights Act.</P>
          <P>(2) <E T="03">Adherence to the grant agreement.</E> The grant agreement between HUD and the grantee incorporates the grantee's application and plan for the implementation of grant-funded activities.</P>
          <P>(3) <E T="03">Compliance with “baseline” funding requirement.</E> Grantees may not use grant funds to reimburse law enforcement agencies for “baseline” community safety services. Grantees must adhere to § 761.17(a)(2)(i), reimbursement of local law enforcement agencies for additional security and protective services. In addition, grantees must provide to HUD a description of the baseline of services for the unit of general local government in which the jurisdiction of the agency is located.</P>
          <P>(4) <E T="03">Partnerships.</E> Grantees must provide HUD with evidence of partnerships—in particular, firm commitments by organizations providing funding, services, or other in-kind resources for PHDEP-funded activities (e.g., memorandum of agreement, letter of firm commitment). The partnership agreement must cover the applicable funding period.</P>
          <P>(5) <E T="03">MTCS reporting.</E> Grantees must maintain a level of compliance with MTCS reporting requirements that is satisfactory to HUD.</P>
          <P>(b) <E T="03">Planning and reporting requirements</E>—(1) <E T="03">Planning consistency.</E> PHDEP funded activities must be consistent with the most recent HUD-approved PHA Plan or Indian Housing Plan, as appropriate. AHDEP funded activities must be consistent with the most recent Consolidated Plan under part 91 of this title for the community.</P>
          <P>(2) <E T="03">Demonstration of coordination with other law enforcement efforts.</E> Each grantee must consult with local law enforcement authorities and other local entities in the preparation of its plan for addressing the problem of drug-related and violent crime under § 761.21 and must maintain documentation of such consultation. Furthermore, a grantee must coordinate its grant-funded activities with other anti-crime and anti-drug programs, such as Operation Safe Home, Operation Weed and Seed, and the Safe Neighborhoods Action Program operating in the community, if applicable and maintain documentation of such coordination.</P>
          <P>(3) <E T="03">Compliance with reporting requirements.</E> Grantees must provide periodic reports consistent with this part at such times and in such form as is required by HUD.</P>
          <P>(4) <E T="03">Reporting on drug-related and violent crime.</E> Grantees must report any change or lack of change in crime statistics—especially drug-related crime and violent crime—or other relevant indicators drawn from the applicant's or grantee's evaluation and monitoring plan, IHP or PHA Plan. The grantee must also indicate, if applicable, how it is adequately addressing any recommendations emanating from other anti-crime and anti-drug programs, such as Operation Safe Home, Operation Weed and Seed, and the Safe Neighborhoods Action Program, operating in the community and is taking appropriate actions, in view of available resources, such as post-enforcement measures, to take full advantage of these programs.<PRTPAGE P="23"/>
          </P>
          <P>(c) <E T="03">Funding and evaluation requirements</E>—(1) <E T="03">Timely obligation and expenditure of grant funds.</E> The HA must obligate and expend funds in compliance with all funding notifications, regulations, notices, and grant agreements. In addition, the HA must obligate at least 50 percent of funds under a particular grant within 12 months of the execution of the grant agreement, and must expend at least 25 percent of funds under a particular grant within 12 months of the execution of the grant agreement.</P>
          <P>(2) <E T="03">Operational monitoring and evaluation system.</E> The grantee must demonstrate that it has a fully operational system for monitoring and evaluating its grant-funded activities. A monitoring and evaluation system must collect quantitative evidence of the number of persons and units served, including youth served as a separate category, types of services provided, and the impact of such services on the persons served. Also, the monitoring and evaluation system must collect quantitative and qualitative evidence of the impact of grant-funded activities on the public housing or other housing, the community and the surrounding neighborhood.</P>
          <P>(3) <E T="03">Reduction of violent crime and drug use.</E> The grantee must demonstrate that it has established, and is attaining, measurable goals including the overall reduction of violent crime and drug use.</P>
          <P>(d) <E T="03">Other requirements.</E> HUD reserves the right to add additional performance factors consistent with this rule and other related statutes and regulations on a case-by-case basis.</P>
          <P>(e) <E T="03">Sanctions.</E> A grantee that fails to satisfy the performance requirements of this section will be subject to the sanctions listed in § 761.30(f)(2).</P>
          <CITA>[64 FR 49921, Sept. 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.25</SECTNO>
          <SUBJECT>Resident comments on grant application.</SUBJECT>
          <P>The applicant must provide the residents of developments proposed for funding under this part 761, as well as any RMCs, RCs, or ROs that represent those residents (including any HA-wide RMC, RC, or RO), if applicable, with a reasonable opportunity to comment on its application for funding under these programs. The applicant must give these comments careful consideration in developing its plan and application, as well as in the implementation of funded programs. Grantees must maintain copies of all written comments submitted for three years.</P>
        </SECTION>
      </SUBPART>
      <SUBPART>
        <HD SOURCE="HED">Subpart D—Grant Administration</HD>
        <SECTION>
          <SECTNO>§ 761.30</SECTNO>
          <SUBJECT>Grant administration.</SUBJECT>
          <P>(a) <E T="03">General.</E> Each grantee is responsible for ensuring that grant funds are administered in accordance with the requirements of this part 761, any specific Notices of Funding Availability (NOFAs) issued for these programs, 24 CFR part 85 (as applicable), applicable laws and regulations, applicable OMB circulars, HUD fiscal and audit controls, grant agreements, grant special conditions, the grantee's approved budget (SF-424A), budget narrative, plan, and activity timetable.</P>
          <P>(b) <E T="03">Grant term extensions</E>—(1) <E T="03">Grant term.</E> Terms of the grant agreement may not exceed 12 months for the Assisted Housing Program, and 24 months for the Public Housing Program, unless an extension is approved by the local HUD Office or local HUD Office of Native American Programs. Any funds not expended at the end of the grant term shall be remitted to HUD.</P>
          <P>(2) <E T="03">Extension.</E> HUD may grant an extension of the grant term in response to a written request for an extension stating the need for the extension and indicating the additional time required. HUD will not consider requests for retroactive extension of program periods. HUD will permit only one extension. HUD will only consider extensions if the grantee meets the extension criteria of paragraph (b)(5) of this section at the time the grantee submits for approval the request for the extension.</P>
          <P>(3) <E T="03">Receipt.</E> The request must be received by the local HUD Office or local HUD Office of Native American Programs prior to the termination of the grant, and requires approval by the local HUD Office or local HUD Office of Native American Programs with jurisdiction over the grantee.</P>
          <P>(4) <E T="03">Term.</E> The maximum extension allowable for any program period is 6 months.<PRTPAGE P="24"/>
          </P>
          <P>(5) <E T="03">Extension criteria.</E> The following criteria must be met by the grantee when submitting a request to extend the expenditure deadline for a program or set of programs.</P>
          <P>(i) <E T="03">Financial status reports.</E> There must be on file with the local HUD Office or local HUD Office of Native American Programs current and acceptable Financial Status Reports, SF-269As.</P>
          <P>(ii) <E T="03">Grant agreement special conditions.</E> The grantee must have satisfied all grant agreement special conditions except those conditions that the grantee must fulfill in the remaining period of the grant. This also includes the performance and resolution of audit findings in a timely manner.</P>
          <P>(iii) <E T="03">Justification.</E> The grantee must submit a narrative justification with the program extension request. The justification must provide complete details, including the circumstances that require the proposed extension, and an explanation of the impact of denying the request.</P>
          <P>(6) <E T="03">HUD action.</E> The local HUD Office or local HUD Office of Native American Programs will attempt to take action on any proposed extension request within 15 days after receipt of the request.</P>
          <P>(c) <E T="03">Duplication of funds.</E> To prevent duplicate funding of any activity, the grantee must establish controls to assure that an activity or program that is funded by other HUD programs, or programs of other Federal agencies, shall not also be funded by the Drug Elimination Program. The grantee must establish an auditable system to provide adequate accountability for funds that it has been awarded. The grantee is responsible for ensuring that there is no duplication of funds.</P>
          <P>(d) <E T="03">Insurance.</E> Each grantee shall obtain adequate insurance coverage to protect itself against any potential liability arising out of the eligible activities under this part. In particular, applicants shall assess their potential liability arising out of the employment or contracting of security personnel, law enforcement personnel, investigators, and drug treatment providers, and the establishment of voluntary tenant patrols; evaluate the qualifications and training of the individuals or firms undertaking these functions; and consider any limitations on liability under tribal, State, or local law. Grantees shall obtain liability insurance to protect the members of the voluntary tenant patrol against potential liability as a result of the patrol's activities under § 761.15(b)(5). Voluntary tenant patrol liability insurance costs are eligible program expenses. Subgrantees shall obtain their own liability insurance.</P>
          <P>(e) <E T="03">Failure to implement program.</E> If the grant plan, approved budget, and timetable, as described in the approved application, are not operational within 60 days of the grant agreement date, the grantee must report by letter to the local HUD Office or the local HUD Office of Native American Programs the steps being taken to initiate the plan and timetable, the reason for the delay, and the expected starting date. Any timetable revisions that resulted from the delay must be included. The local HUD Office or local HUD Office of Native American Programs will determine if the delay is acceptable, approve/disapprove the revised plan and timetable, and take any additional appropriate action.</P>
          <P>(f) <E T="03">Sanctions.</E> (1) HUD may impose sanctions if the grantee:</P>
          <P>(i) Is not complying with the requirements of this part 761, or of other applicable Federal law;</P>
          <P>(ii) Fails to make satisfactory progress toward its drug elimination goals, as specified in its plan and as reflected in its performance and financial status reports;</P>
          <P>(iii) Does not establish procedures that will minimize the time elapsing between drawdowns and disbursements;</P>
          <P>(iv) Does not adhere to grant agreement requirements or special conditions;</P>
          <P>(v) Proposes substantial plan changes to the extent that, if originally submitted, the applications would not have been selected for funding;</P>
          <P>(vi) Engages in the improper award or administration of grant subcontracts;</P>
          <P>(vii) Does not submit reports; or</P>
          <P>(viii) Files a false certification.</P>
          <P>(2) HUD may impose the following sanctions:<PRTPAGE P="25"/>
          </P>
          <P>(i) Temporarily withhold cash payments pending correction of the deficiency by the grantee or subgrantee;</P>
          <P>(ii) Disallow all or part of the cost of the activity or action not in compliance;</P>
          <P>(iii) Wholly or partly suspend or terminate the current award for the grantee's or subgrantee's program;</P>
          <P>(iv) Require that some or all of the grant amounts be remitted to HUD;</P>
          <P>(v) Condition a future grant and elect not to provide future grant funds to the grantee until appropriate actions are taken to ensure compliance;</P>
          <P>(vi) Withhold further awards for the program; or</P>
          <P>(vii) Take other remedies that may be legally available.</P>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.35</SECTNO>
          <SUBJECT>Periodic grantee reports.</SUBJECT>
          <P>Grantees are responsible for managing the day-to-day operations of grant and subgrant supported activities. Grantees must monitor grant and subgrant supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program, function or activity of the grant.</P>
          <P>(a) <E T="03">Semi-annual (nonconstruction) performance reports.</E> For purposes of the Public Housing Program only, the following provisions in paragraph (a) of this section apply:</P>
          <P>(1) In accordance with 24 CFR 85.40(b)(1)(2) and 85.50(b), grantees are required to provide the local HUD Office or the local HUD Office of Native American Programs with a semi-annual performance report that evaluates the grantee's performance against its plan. These reports shall include (but are not limited to) the following in summary form:</P>
          <P>(i) Any change or lack of change in crime statistics or other indicators drawn from the applicant's plan assessment and an explanation of any difference;</P>
          <P>(ii) Successful completion of any of the strategy components identified in the applicant's plan;</P>
          <P>(iii) A discussion of any problems encountered in implementing the plan and how they were addressed;</P>
          <P>(iv) An evaluation of whether the rate of progress meets expectations;</P>
          <P>(v) A discussion of the grantee's efforts in encouraging resident participation; and</P>
          <P>(vi) A description of any other programs that may have been initiated, expanded, or deleted as a result of the plan, with an identification of the resources and the number of people involved in the programs and their relation to the plan.</P>
          <P>(2) <E T="03">Reporting period.</E> Semi-annual performance reports (for periods ending June 30 and December 31) are due to the local HUD Office or the local HUD Office of Native American Programs on July 30 and January 31 of each year. If the reports are not received by the local HUD Office or the local HUD Office of Native American Programs on or before the due date, grant funds will not be advanced until the reports are received.</P>
          <P>(b) <E T="03">Final performance report.</E> For purposes of both the Assisted Housing Program and the Public Housing Program, the following provisions in paragraph (b) of this section apply:</P>
          <P>(1) <E T="03">Evaluation.</E> Grantees are required to provide the local HUD Office or the local HUD Office of Native American Programs, as applicable, with a final cumulative performance report that evaluates the grantee's overall performance against its plan. This report shall include (but is not limited to) the information listed in paragraphs (a)(1)(i) through (a)(1)(vi) of this section, in summary form.</P>
          <P>(2) <E T="03">Reporting period.</E> The final performance report shall cover the period from the date of the grant agreement to the termination date of the grant agreement. The report is due to the local HUD Office or the local HUD Office of Native American Programs, as applicable, within 90 days after termination of the grant agreement.</P>
          <P>(c) <E T="03">Semi-annual financial status reporting requirements.</E> For purposes of both the Assisted Housing Program and the Public Housing Program, the following provisions in paragraph (c) of this section apply, as specified below:</P>
          <P>(1) <E T="03">Forms.</E> The grantee shall provide a semi-annual financial status report. For purposes of the Public Housing Program, this report shall be in accordance with 24 CFR 85.41 (b) and (c). For both the Assisted Housing and Public <PRTPAGE P="26"/>Housing Programs, the grantee shall use the form SF-269A, Financial Status Report-Long Form, to report the status of funds for nonconstruction programs. The grantee shall use SF-269A, block 12, “Remarks,” to report on the status of programs, functions, or activities within the program.</P>
          <P>(2) <E T="03">Reporting period.</E> Semi-annual financial status reports (SF-269A) must be submitted as follows:</P>
          <P>(i) For purposes of the Assisted Housing Program, semi-annual financial status reports covering the first 180 days of funded activities must be submitted to the local HUD Office between 190 and 210 days after the date of the grant agreement. If the SF-269A is not received on or before the due date (210 days after the date of the grant agreement) by the local HUD Office, grant funds will not be advanced until the reports are received.</P>
          <P>(ii) For purposes of the Public Housing Program, semi-annual financial status reports (for periods ending June 30 and December 31) must be submitted to the local HUD Office or the local Office of Indian Programs, as applicable, by July 30 and January 31 of each year. If the local HUD Office or the local HUD Office of Native American Programs, as applicable, does not receive the SF-269A on or before the due date, the grant funds will not be advanced until the reports are received.</P>
          <P>(d) <E T="03">Final financial status report (SF-269A).</E> For purposes of both the Assisted Housing Program and the Public Housing Program, the following provisions in paragraph (d) of this section apply:</P>
          <P>(1) <E T="03">Cumulative summary.</E> The final report will be a cumulative summary of expenditures to date and must indicate the exact balance of unexpended funds. The grantee shall remit all Drug Elimination Program funds owed to HUD, including any unexpended funds, as follows:</P>
          <P>(i) For purposes of the Assisted Housing Program, the grantee must remit such funds to HUD within 90 days after the termination of the grant agreement.</P>
          <P>(ii) For purposes of the Public Housing Program, the local HUD Office or the local HUD Office of Native American Programs shall notify the grantee, in writing, of the requirement to remit such funds to HUD. The grantee shall remit such funds prior to or upon receipt of the notice.</P>
          <P>(2) <E T="03">Reporting period.</E> The final financial status report shall cover the period from the date of the grant agreement to the termination date of the grant agreement. The report is due to the local HUD Office or the local HUD Office of Native American Programs, as applicable, within 90 days after the termination of the grant agreement.</P>
        </SECTION>
        <SECTION>
          <SECTNO>§ 761.40</SECTNO>
          <SUBJECT>Other Federal requirements.</SUBJECT>
          <P>In addition to the nondiscrimination and equal opportunity requirements set forth in 24 CFR part 5, subpart A, use of grant funds requires compliance with the following Federal requirements:</P>
          <P>(a) <E T="03">Labor standards.</E> (1) When grant funds are used to undertake physical improvements to increase security under § 761.15(b)(3), the following labor standards apply:</P>
          <P>(i) The grantee and its contractors and subcontractors must pay the following prevailing wage rates, and must comply with all related rules, regulations and requirements:</P>
          <P>(A) For laborers and mechanics employed in the program, the wage rate determined by the Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a et seq.) to be prevailing in the locality with respect to such trades;</P>

          <P>(B) For laborers and mechanics employed in carrying out nonroutine maintenance in the program, the HUD-determined prevailing wage rate. As used in paragraph (a) of this section, nonroutine maintenance means work items that ordinarily would be performed on a regular basis in the course of upkeep of a property, but have become substantial in scope because they have been put off, and that involve expenditures that would otherwise materially distort the level trend of maintenance expenses. Nonroutine maintenance may include replacement of equipment and materials rendered unsatisfactory because of normal wear and tear by items of substantially the same kind. Work that constitutes reconstruction, a substantial improvement in the quality or kind of original <PRTPAGE P="27"/>equipment and materials, or remodeling that alters the nature or type of housing units is not nonroutine maintenance.</P>
          <P>(ii) The employment of laborers and mechanics is subject to the provisions of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333).</P>
          <P>(2) The provisions of paragraph (a)(1) of this section shall not apply to labor contributed under the following circumstances:</P>
          <P>(i) Upon the request of any resident management corporation, HUD may, subject to applicable collective bargaining agreements, permit residents (for purposes of the Public Housing Program, residents of a program managed by the resident management corporation) to volunteer a portion of their labor.</P>
          <P>(ii) An individual may volunteer to perform services if:</P>
          <P>(A) The individual does not receive compensation for the voluntary services, or is paid expenses, reasonable benefits, or a nominal fee for voluntary services; and</P>
          <P>(B) Is not otherwise employed at any time in the work subject to paragraphs (a)(1)(i)(A) or (a)(1)(i)(B) of this section.</P>
          <P>(b) <E T="03">Flood insurance.</E> Grants will not be awarded for proposed activities that involve acquisition, construction, reconstruction, repair or improvement of a building or mobile home located in an area that has been identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards unless:</P>
          <P>(1) The community in which the area is situated is participating in the National Flood Insurance Program in accordance with 44 CFR parts 59 through 79; or</P>
          <P>(2) Less than a year has passed since FEMA notification to the community regarding such hazards; and</P>
          <P>(3) Flood insurance on the structure is obtained in accordance with section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4001).</P>
          <P>(c) <E T="03">Lead-based paint.</E> The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing regulations at part 35, subparts A, B, H, and R of this title.</P>
          <P>(d) <E T="03">Conflicts of interest.</E> In addition to the conflict of interest requirements in 24 CFR part 85 for the Public Housing Program, no person, as described in paragraphs (d)(1) and (d)(2) of this section, may obtain a personal or financial interest or benefit from an activity funded under these drug elimination programs, or have an interest in any contract, subcontract, or agreement with respect thereto, or the proceeds thereunder, either for him or herself or for those with whom he or she has family or business ties, during his or her tenure, or for one year thereafter:</P>
          <P>(1) Who is an employee, agent, consultant, officer, or elected or appointed official of the grantee, that receives assistance under the program and who exercises or has exercised any functions or responsibilities with respect to assisted activities; or</P>
          <P>(2) Who is in a position to participate in a decisionmaking process or gain inside information with regard to such activities.</P>
          <P>(e) <E T="03">For IHAs,</E> § 950.115 of this title, “Applicability of civil rights requirements,” and § 950.120 of this title, “Compliance with other Federal requirements,” apply and control to the extent they may differ from other requirements of this section;</P>
          <P>(f) <E T="03">Intergovernmental Review.</E> The requirements of Executive Order 12372 (3 CFR, 1982 Comp., p. 197) and the regulations issued under the Order in part 52 of this title, to the extent provided by <E T="04">Federal Register</E> notice in accordance with 24 CFR 52.3, apply to these programs.</P>
          <P>(g) <E T="03">Environmental review.</E> Certain eligible activities under this part 761 are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321) and are not subject to review under related laws, in accordance with 24 CFR 50.19(b)(4), (b)(12), or (b)(13). If the PHDEP plan proposes the use of grant funds to assist any non-exempt activities, HUD will perform an environmental review to the extent required by 24 CFR part 50, prior to grant award.</P>
          <CITA>[61 FR 13987, Mar. 28, 1996, as amended at 64 FR 49921, Sept. 14, 1999; 64 FR 50227, Sept. 15, 1999]</CITA>
        </SECTION>
      </SUBPART>
    </PART>
    <PART>
      <PRTPAGE P="28"/>
      <RESERVED>PARTS 762-790 [RESERVED]</RESERVED>
    </PART>
    <PART>
      <EAR>Pt. 791</EAR>
      <HD SOURCE="HED">PART 791—ALLOCATIONS OF HOUSING ASSISTANCE FUNDS</HD>
      <CONTENTS>
        <SUBPART>
          <HD SOURCE="HED">Subpart A—General Provisions</HD>
          <SECHD>Sec.</SECHD>
          <SECTNO>791.101</SECTNO>
          <SUBJECT>Applicability and scope.</SUBJECT>
          <SECTNO>791.102</SECTNO>
          <SUBJECT>Definitions.</SUBJECT>
        </SUBPART>
        <SUBPART>
          <RESERVED>Subparts B-C [Reserved]</RESERVED>
        </SUBPART>
        <SUBPART>
          <HD SOURCE="HED">Subpart D—Allocation of Budget Authority for Housing Assistance</HD>
          <SECTNO>791.401</SECTNO>
          <SUBJECT>General.</SUBJECT>
          <SECTNO>791.402</SECTNO>
          <SUBJECT>Determination of low-income housing needs.</SUBJECT>
          <SECTNO>791.403</SECTNO>
          <SUBJECT>Allocation of housing assistance.</SUBJECT>
          <SECTNO>791.404</SECTNO>
          <SUBJECT>Field Office allocation planning.</SUBJECT>
          <SECTNO>791.405</SECTNO>
          <SUBJECT>Reallocations of budget authority.</SUBJECT>
          <SECTNO>791.406</SECTNO>
          <SUBJECT>Competition.</SUBJECT>
          <SECTNO>791.407</SECTNO>
          <SUBJECT>Headquarters Reserve.</SUBJECT>
        </SUBPART>
      </CONTENTS>
      <AUTH>
        <HD SOURCE="HED">Authority:</HD>
        <P>42 U.S.C. 1439 and 3535(d).</P>
      </AUTH>
      <SOURCE>
        <HD SOURCE="HED">Source:</HD>
        <P>61 FR 10849, Mar. 15, 1996, unless otherwise noted.</P>
      </SOURCE>
      <SUBPART>
        <HD SOURCE="HED">Subpart A—General Provisions</HD>
        <SECTION>
          <SECTNO>§ 791.101</SECTNO>
          <SUBJECT>Applicability and scope.</SUBJECT>
          <P>This part describes the role and responsibility of HUD in allocation of budget authority (pursuant to section 213 of the Housing and Community Development Act of 1974 (42 U.S.C. 1439)) for housing assistance under the United States Housing Act of 1937 (Section 8 and public housing) and under section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 1701s), and of budget authority for housing assistance under section 202 of the Housing Act of 1959 (12 U.S.C. 1710q). This part does not apply to budget authority for the public housing operating fund or capital fund.</P>
          <CITA>[64 FR 26639, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 791.102</SECTNO>
          <SUBJECT>Definitions.</SUBJECT>
          <P>
            <E T="03">Act.</E> The Housing and Community Development Act of 1974 (42 U.S.D. 1437), as amended.</P>
          <P>
            <E T="03">Allocation area.</E> A municipality, county, or group of municipalities or counties identified by the HUD field office for the purpose of allocating housing assistance.</P>
          <P>
            <E T="03">Assistant Secretary.</E> The Assistant Secretary for Housing or the Assistant Secretary for Public and Indian Housing, as appropriate to the housing assistance under consideration.</P>
          <P>
            <E T="03">Budget authority.</E> The maximum amount authorized by the Congress for payments over the term of assistance contracts.</P>
          <P>
            <E T="03">Fiscal year.</E> The official operating period of the Federal government, beginning on October 1 and ending on September 30.</P>
          <P>
            <E T="03">Metropolitan area.</E> See MSA.</P>
          <P>
            <E T="03">MSA.</E> A metropolitan statistical area established by the Office of Management and Budget. The term also includes primary metropolitan statistical areas (PMSAs), which are the component parts of larger urbanized areas designated as consolidated metropolitan statistical areas (CMSAs). Where an MSA is divided among two or more field offices, references to an MSA mean the portion of the MSA within the State/Area Office jurisdiction.</P>
          <P>
            <E T="03">Public housing agency (PHA).</E> (1) Any State, county, municipality, or other governmental entity or public body which is authorized to administer a program under the 1937 Act (or an agency or instrumentality of such an entity).</P>
          <P>(2) In addition, for purposes of the program of Section 8 tenant-based assistance under part 982 of this title, the term PHA also includes any of the following:</P>
          <P>(i) A consortia of housing agencies, each of which meets the qualifications in paragraph (1) of this definition, that HUD determines has the capacity and capability to efficiently administer the program (in which case, HUD may enter into a consolidated ACC with any legal entity authorized to act as the legal representative of the consortia members);</P>
          <P>(ii) Any other public or private non-profit entity that was administering a Section 8 tenant-based assistance program pursuant to a contract with the contract administrator of such program (HUD or a PHA) in effect on October 21, 1998; or</P>

          <P>(iii) For any area outside the jurisdiction of a PHA that is administering a tenant-based program, or where HUD determines that such PHA is not administering the program effectively, a <PRTPAGE P="29"/>private non-profit entity or a governmental entity or public body that would otherwise lack jurisdiction to administer the program in such area.</P>
          <CITA>[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26639, May 14, 1999]</CITA>
        </SECTION>
      </SUBPART>
      <SUBPART>
        <RESERVED>Subparts B-C [Reserved]</RESERVED>
      </SUBPART>
      <SUBPART>
        <HD SOURCE="HED">Subpart D—Allocation of Budget Authority for Housing Assistance</HD>
        <SECTION>
          <SECTNO>§ 791.401</SECTNO>
          <SUBJECT>General.</SUBJECT>
          <P>This subpart D establishes the procedures for allocating budget authority under section 213(d) of the Act for the programs identified in § 791.101. It describes the allocation of budget authority by the appropriate Assistant Secretary to the applicable Program Office Director in the HUD field office, and by the Program Office Director to allocation areas within their jurisdiction.</P>
          <CITA>[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26639, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 791.402</SECTNO>
          <SUBJECT>Determination of low-income housing needs.</SUBJECT>
          <P>(a) Before budget authority is allocated, the Assistant Secretary for Policy Development and Research shall determine the relative need for low-income housing assistance in each HUD field office jurisdiction. This determination shall be based upon data from the most recent, available decennial census and, where appropriate, upon more recent data from the Bureau of the Census or other Federal agencies, or from the American Housing Survey.</P>
          <P>(b) Except for paragraph (c) of this section, the factors used to determine the relative need for assistance shall be based upon the following criteria:</P>
          <P>(1) <E T="03">Population.</E> The renter population;</P>
          <P>(2) <E T="03">Poverty.</E> The number of renter households with annual incomes at or below the poverty level, as defined by the Bureau of the Census;</P>
          <P>(3) <E T="03">Housing overcrowding.</E> The number of renter-occupied housing units with an occupancy ratio of 1.01 or more persons per room;</P>
          <P>(4) <E T="03">Housing vacancies.</E> The number of renter housing units that would be required to maintain vacancies at levels typical of balanced market conditions;</P>
          <P>(5) <E T="03">Substandard housing.</E> The number of housing units built before 1940 and occupied by renter households with annual incomes at or below the poverty level, as defined by the Bureau of the Census; and</P>
          <P>(6) <E T="03">Other objectively measurable conditions.</E> Data indicating potential need for rental housing assistance, such as the number of renter households with incomes below specified levels and paying a gross rent of more than 30 percent of household income.</P>
          <P>(c) For the section 202 elderly program, the data used shall reflect relevant characteristics of the elderly population. The data shall use the criteria specified in paragraph (b)(1) and (6) of this section, as modified to apply specifically to the needs of the elderly population.</P>
          <P>(d) Based on the criteria in paragraphs (b) and (c) of this section, the Assistant Secretary for Policy Development and Research shall establish housing needs factors for each county and independent city in the field office jurisdiction, and shall aggregate the factors for such jurisdiction. The field office total for each factor is then divided by the respective national total for that factor. The resulting housing needs ratios under paragraph (b) of this section are then weighted to provide housing needs percentages for each field office, using the following weights: population—20 percent; poverty—20 percent; housing overcrowding—10 percent; housing vacancies—10 percent; substandard housing—20 percent; other objectively measurable conditions—20 percent. For the section 202 elderly program, the two criteria described in paragraph (c) of this section are weighted equally.</P>
          <P>(e) The Assistant Secretary for Policy Development and Research shall adjust the housing needs percentages derived in paragraph (d) of this section to reflect the relative cost of providing housing among the field office jurisdictions.</P>
          <CITA>[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26639, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <PRTPAGE P="30"/>
          <SECTNO>§ 791.403</SECTNO>
          <SUBJECT>Allocation of housing assistance.</SUBJECT>
          <P>(a) The total budget authority available for any fiscal year shall be determined by adding any available unreserved budget authority from prior fiscal years to any newly appropriated budget authority for each housing program.</P>
          <P>(b) Budget authority available for the fiscal year, except for that retained pursuant to § 791.407, shall be allocated to the field offices as follows:</P>
          <P>(1) Budget authority shall be allocated as needed for uses that the Secretary determines are incapable of geographic allocation by formula, including—</P>
          <P>(i) Amendments of existing contracts, renewal of assistance contracts, assistance to families that would otherwise lose assistance due to the decision of the project owner to prepay the project mortgage or not to renew the assistance contract, assistance to prevent displacement or to provide replacement housing in connection with the demolition or disposition of public housing, assistance in support of the property disposition and loan management functions of the Secretary;</P>
          <P>(ii) Assistance which is—</P>
          <P>(A) The subject of a line item identification in the HUD appropriations law, or in the table customarily included in the Conference Report on the appropriation for the Fiscal Year in which the funds are to be allocated;</P>
          <P>(B) Reported in the Operating Plan submitted by HUD to the Committees on Appropriations; or</P>
          <P>(C) Included in an authorization statute where the nature of the assistance, such as a prescribed set-aside, is, in the determination of the Secretary, incapable of geographic allocation by formula,</P>
          <P>(iii) Assistance determined by the Secretary to be necessary in carrying out the following programs authorized by the Cranston-Gonzalez National Affordable Housing Act: the Homeownership and Opportunity Through HOPE Act under title IV and HOPE for Elderly Independence under section 803.</P>
          <P>(2) Budget authority remaining after carrying out allocation steps outlined in paragraph (b)(1) of this section shall be allocated in accordance with the housing needs percentages calculated under paragraphs (b), (c), (d), and (e) of § 791.402. HUD may allocate assistance under this paragraph in such a manner that each State shall receive not less than one-half of one percent of the amount of funds available for each program referred to in § 791.101(a) in each fiscal year. If the budget authority for a particular program is insufficient to fund feasible projects, or to promote meaningful competition, at the field office level, budget authority may be allocated among the ten geographic areas of the country. The funds so allocated will be assigned by Headquarters to the field office(s) with the highest ranked applications within the ten geographic areas.</P>
          <P>(c) At least annually HUD will publish a notice in the <E T="04">Federal Register</E> informing the public of all allocations under § 791.403(b)(2).</P>
          <CITA>[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26640, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 791.404</SECTNO>
          <SUBJECT>Field Office allocation planning.</SUBJECT>
          <P>(a) <E T="03">General objective.</E> The allocation planning process should provide for the equitable distribution of available budget authority, consistent with the relative housing needs of each allocation area within the field office jurisdiction.</P>
          <P>(b) <E T="03">Establishing allocation areas.</E> Allocation areas, consisting of one or more counties or independent cities, shall be established by the field office in accordance with the following criteria:</P>

          <P>(1) Each allocation shall be to the smallest practicable area, but of sufficient size so that at least three eligible entities are viable competitors for funds in the allocation area, and so that all applicable statutory requirements can be met. (It is expected that in many instances individual MSAs will be established as metropolitan allocation areas.) For the section 202 program for the elderly, the allocation area must include sufficient units to promote a meaningful competition among disparate types of providers of such housing (e.g., local as well as national sponsors, minority as well as non-minority sponsors). The preceding <PRTPAGE P="31"/>sentence shall not apply to projects acquired from the Resolution Trust Corporation under section 21A(c) of the Federal Home Loan Bank Act.</P>
          <P>(2) Each allocation area shall also be of sufficient size, in terms of population and housing need, that the amount of budget authority being allocated to the area will support at least one feasible program or project.</P>
          <P>(3) In establishing allocation areas, counties and independent cities within MSAs should not be combined with counties that are not in MSAs.</P>
          <P>(c) <E T="03">Determining the amount of budget authority.</E> Where the field office establishes more than one allocation area, it shall determine the amount of budget authority to be allocated to each allocation area, based upon a housing needs percentage which represents the needs of that area relative to the field office jurisdiction. For each program, a composite housing needs percentage developed under § 791.402 for those counties and independent cities comprising the allocation area shall be aggregated into allocation area totals.</P>
          <P>(d) <E T="03">Planning for the allocation.</E> The field office should develop an allocation plan which reflects the amount of budget authority determined for each allocation area in paragraph (c). The plan should include a map or maps clearly showing the allocation areas within the field office jurisdiction. The relative share of budget authority by individual program type need not be the same for each allocation area, so long as the total amount of budget authority made available to the allocation area is not significantly reduced.</P>
          <CITA>[61 FR 10849, Mar. 15, 1996, as amended at 64 FR 26640, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 791.405</SECTNO>
          <SUBJECT>Reallocations of budget authority.</SUBJECT>
          <P>(a) The field office shall make every reasonable effort to use the budget authority made available for each allocation area within such area. If the Program Office Director determines that not all of the budget authority allocated for a particular allocation area is likely to be used during the fiscal year, the remaining authority may be allocated to other allocation areas where it is likely to be used during that fiscal year.</P>
          <P>(b) If the Assistant Secretary determines that not all of the budget authority allocated to a field office is likely to be used during the fiscal year, the remaining authority may be reallocated to another field office where it is likely to be used during that fiscal year.</P>
          <P>(c) Any reallocations of budget authority among allocation areas or field offices shall be consistent with the assignment of budget authority for the specific program type and established set-asides.</P>
          <P>(d) Notwithstanding the requirements of paragraphs (a) through (c) of this section, budget authority shall not be reallocated for use in another State unless the Program Office Director or the Assistant Secretary has determined that other allocation areas within the same State cannot use the available authority during the fiscal year.</P>
        </SECTION>
        <SECTION>
          <SECTNO>§ 791.406</SECTNO>
          <SUBJECT>Competition.</SUBJECT>

          <P>(a) All budget authority allocated pursuant to § 791.403(b)(2) shall be reserved and obligated pursuant to a competition. Any such competition shall be conducted pursuant to specific criteria for the selection of recipients of assistance. These criteria shall be contained in a regulation promulgated after notice and public comment or, to the extent authorized by law, a notice published in the <E T="04">Federal Register.</E>
          </P>
          <P>(b) This section shall not apply to assistance referred to in §§ 791.403(b)(1) and 791.407.</P>
        </SECTION>
        <SECTION>
          <SECTNO>§ 791.407</SECTNO>
          <SUBJECT>Headquarters Reserve.</SUBJECT>
          <P>(a) A portion of the budget authority available for the housing programs listed in § 791.101(a), not to exceed an amount equal to five percent of the total amount of budget authority available for the fiscal year for programs under the United States Housing Act of 1937 listed in § 791.101(a), may be retained by the Assistant Secretary for subsequent allocation to specific areas and communities, and may only be used for:</P>

          <P>(1) Unforeseen housing needs resulting from natural and other disasters, including hurricanes, tornadoes, storms, high water, wind driven water, tidal waves, tsunamis, earthquakes, volcanic eruptions, landslides, <PRTPAGE P="32"/>mudslides, snowstorms, drought, fires, floods, or explosions, which in the determination of the Secretary cause damage of sufficient severity and magnitude to warrant Federal housing assistance;</P>
          <P>(2) Housing needs resulting from emergencies, as certified by the Secretary, other than disasters described in paragraph (a)(1) of this section. Emergency housing needs that can be certified are only those that result from unpredictable and sudden circumstances causing housing deprivation (such as physical displacement, loss of Federal rental assistance, or substandard housing conditions) or causing an unforeseen and significant increase in low-income housing demand in a housing market (such as influx of refugees or plant closings);</P>
          <P>(3) Housing needs resulting from the settlement of litigation; and</P>
          <P>(4) Housing in support of desegregation efforts.</P>

          <P>(b) Applications for funds retained under paragraph (a) of this section shall be made to the field office, which will make recommendations to Headquarters for approval or rejection of the application. Applications generally will be considered for funding on a first-come, first-served basis. Specific instructions governing access to the Headquarters Reserve shall be published by notice in the <E T="04">Federal Register,</E> as necessary.</P>
          <P>(c) Any amounts retained in any fiscal year under paragraph (a) of this section that are not reserved by the end of such fiscal year shall remain available for the following fiscal year in the program under § 791.101(a) from which the amount was retained. Such amounts shall be allocated pursuant to § 791.403(b)(2).</P>
        </SECTION>
      </SUBPART>
    </PART>
    <PART>
      <EAR>Pt. 792</EAR>
      <HD SOURCE="HED">PART 792—PUBLIC HOUSING AGENCY SECTION 8 FRAUD RECOVERIES</HD>
      <CONTENTS>
        <SUBPART>
          <HD SOURCE="HED">Subpart A—General Provisions</HD>
          <SECHD>Sec.</SECHD>
          <SECTNO>792.101</SECTNO>
          <SUBJECT>Purpose.</SUBJECT>
          <SECTNO>792.102</SECTNO>
          <SUBJECT>Applicability.</SUBJECT>
          <SECTNO>792.103</SECTNO>
          <SUBJECT>Definitions.</SUBJECT>
        </SUBPART>
        <SUBPART>
          <HD SOURCE="HED">Subpart B—Recovery of Section 8 Funds</HD>
          <SECTNO>792.201</SECTNO>
          <SUBJECT>Conduct of litigation.</SUBJECT>
          <SECTNO>792.202</SECTNO>
          <SUBJECT>PHA retention of proceeds.</SUBJECT>
          <SECTNO>792.203</SECTNO>
          <SUBJECT>Application of amounts recovered.</SUBJECT>
          <SECTNO>792.204</SECTNO>
          <SUBJECT>Recordkeeping and reporting.</SUBJECT>
        </SUBPART>
      </CONTENTS>
      <AUTH>
        <HD SOURCE="HED">Authority:</HD>
        <P>42 U.S.C. 1437f note and 3535(d).</P>
      </AUTH>
      <SOURCE>
        <HD SOURCE="HED">Source:</HD>
        <P>59 FR 9409, Feb. 28, 1994, unless otherwise noted.</P>
      </SOURCE>
      <EDNOTE>
        <HD SOURCE="HED">Editorial Note:</HD>
        <P>Nomenclature changes to part 792 appear at 64 FR 26640, May 14, 1999.</P>
      </EDNOTE>
      <SUBPART>
        <HD SOURCE="HED">Subpart A—General Provisions</HD>
        <SECTION>
          <SECTNO>§ 792.101</SECTNO>
          <SUBJECT>Purpose.</SUBJECT>
          <P>The purpose of this part is to encourage public housing agencies (PHAs) to investigate and pursue instances of tenant and owner fraud and abuse in the operation of the Section 8 housing assistance payments programs.</P>
          <CITA>[64 FR 26640, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 792.102</SECTNO>
          <SUBJECT>Applicability.</SUBJECT>
          <P>(a) This part applies to a PHA acting as a contract administrator under an annual contributions contract with HUD in any section 8 housing assistance payments program. To be eligible to retain section 8 tenant or owner fraud recoveries, the PHA must be the principal party initiating or sustaining an action to recover amounts from families.</P>
          <P>(b) This part applies only to those instances when a tenant or owner committed fraud, and the fraud recoveries are obtained through litigation brought by the PHA (including settlement of the lawsuit), a court-ordered restitution pursuant to a criminal proceeding, or an administrative repayment agreement with the family or owner as a result of a PHA administrative grievance procedure pursuant to, or incorporating the requirements of, § 982.555 of this title. This part does not apply to cases of owner fraud in PHA-owned or controlled units, or where incorrect payments were made or benefits received because of calculation errors instead of willful fraudulent activities.</P>

          <P>(c) This part applies to all tenant and owner fraud recoveries resulting from litigation brought by the PHA (including settlement of the lawsuit), or a court-ordered restitution pursuant to a <PRTPAGE P="33"/>criminal proceeding obtained on or after October 8, 1986, and to all tenant and owner fraud recoveries obtained through administrative repayment agreements signed on or after October 28, 1992.</P>
          <CITA>[59 FR 9409, Feb. 28, 1994, as amended at 64 FR 26640, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 792.103</SECTNO>
          <SUBJECT>Definitions.</SUBJECT>
          <P>
            <E T="03">Fraud and abuse.</E> Fraud and abuse means a single act or pattern of actions:</P>
          <P>(1) That constitutes false statement, omission, or concealment of a substantive fact, made with intent to deceive or mislead; and</P>
          <P>(2) That results in payment of section 8 program funds in violation of section 8 program requirements.</P>
          <P>The terms <E T="03">Public Housing Agency (PHA)</E> and <E T="03">Indian Housing Authority (IHA)</E> are defined in 24 CFR part 5.</P>
          <P>
            <E T="03">Judgment.</E> Judgment means a provision for recovery of section 8 program funds obtained through fraud and abuse, by order of a court in litigation or by a settlement of a claim in litigation, whether or not stated in a court order.</P>
          <P>
            <E T="03">Litigation.</E> A lawsuit brought by a PHA to recover section 8 program funds obtained as a result of fraud and abuse.</P>
          <P>
            <E T="03">Principal party in initiating or sustaining an action to recover.</E> Principal party in initiating or sustaining an action to recover means the party that incurs more than half the costs incurred in:</P>
          <P>(1) Recertifying tenants who fraudulently obtained section 8 rental assistance;</P>
          <P>(2) Recomputing the correct amounts owed by tenants; and</P>
          <P>(3) Taking needed actions to recoup the excess benefits received, such as initiating litigation.</P>
          <P>Costs incurred to detect potential excessive benefits in the routine day-to-day operations of the program are excluded in determining the principal party in initiating or sustaining an action to recover. For example, the cost of income verification during an annual recertification would not be counted in determining the principal party in initiating or sustaining an action to recover.</P>
          <P>
            <E T="03">Public housing agency (PHA).</E> A public housing agency as defined in § 791.102.</P>
          <P>
            <E T="03">Repayment agreement.</E> Repayment agreement means a formal document signed by a tenant or owner and provided to a PHA in which a tenant or owner acknowledges a debt, in a specific amount, and agrees to repay the amount due at specific time period(s).</P>
          <CITA>[59 FR 9409, Feb. 28, 1994, as amended at 61 FR 5212, Feb. 9, 1996; 64 FR 26640, May 14, 1999]</CITA>
        </SECTION>
      </SUBPART>
      <SUBPART>
        <HD SOURCE="HED">Subpart B—Recovery of Section 8 Funds</HD>
        <SECTION>
          <SECTNO>§ 792.201</SECTNO>
          <SUBJECT>Conduct of litigation.</SUBJECT>
          <P>The PHA must obtain HUD approval before initiating litigation in which the PHA is requesting HUD assistance or participation.</P>
        </SECTION>
        <SECTION>
          <SECTNO>§ 792.202</SECTNO>
          <SUBJECT>PHA retention of proceeds.</SUBJECT>
          <P>(a) Where the PHA is the principal party initiating or sustaining an action to recover amounts from tenants that are due as a result of fraud and abuse, the PHA may retain, the greater of:</P>
          <P>(1) Fifty percent of the amount it actually collects from a judgment, litigation (including settlement of lawsuit) or an administrative repayment agreement pursuant to, or incorporating the requirements of, § 982.555 of this title; or</P>
          <P>(2) Reasonable and necessary costs that the PHA incurs related to the collection from a judgment, litigation (including settlement of lawsuit) or an administrative repayment agreement pursuant to, or incorporating the requirements of, § 982.555 of this title. Reasonable and necessary costs include the costs of the investigation, legal fees and collection agency fees.</P>
          <P>(b) If HUD incurs costs on behalf of the PHA in obtaining the judgment, these costs must be deducted from the amount to be retained by the PHA.</P>
          <CITA>[59 FR 9409, Feb. 28, 1994, as amended at 64 FR 26640, May 14, 1999]</CITA>
        </SECTION>
        <SECTION>
          <SECTNO>§ 792.203</SECTNO>
          <SUBJECT>Application of amounts recovered.</SUBJECT>

          <P>(a) The PHA may only use the amount of the recovery it is authorized to retain in support of the section 8 program in which the fraud occurred.<PRTPAGE P="34"/>
          </P>
          <P>(b) The remaining balance of the recovery proceeds (i.e., the portion of recovery the PHA is not authorized to retain) must be applied as directed by HUD.</P>
        </SECTION>
        <SECTION>
          <SECTNO>§ 792.204</SECTNO>
          <SUBJECT>Recordkeeping and reporting.</SUBJECT>
          <P>To permit HUD to audit amounts retained under this part, an PHA must maintain all records required by HUD, including:</P>
          <P>(a) Amounts recovered on any judgment or repayment agreement;</P>
          <P>(b) The nature of the judgment or repayment agreement; and</P>
          <P>(c) The amount of the legal fees and expenses incurred in obtaining the judgment or repayment agreement and recovery.</P>
          <APPRO>(Approved by the Office of Management and Budget under Control Number 2577-0053)</APPRO>
        </SECTION>
      </SUBPART>
    </PART>
    <PART>
      <RESERVED>PARTS 793-798 [RESERVED]</RESERVED>
    </PART>
  </CHAPTER>
</CFRGRANULE>
