[Federal Register Volume 59, Number 152 (Tuesday, August 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19229]


[[Page Unknown]]

[Federal Register: August 9, 1994]


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Part V





Department of Housing and Urban Development





_______________________________________________________________________



Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner



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24 CFR Part 261




Federally Assisted Low Income Housing Drug Elimination Program; 
Proposed Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner

24 CFR Part 261

(Docket No. R-94-1741; FR-3467-P-01)
RIN 2502-AG07

 
Federally Assisted Low Income Housing Drug Elimination Program

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would implement the Assisted Housing Drug 
Elimination Program, as authorized by section 581 of the National 
Affordable Housing Act (NAHA) (approved November 28, 1990, Pub. L. 101-
625) and section 161 of the Housing and Community Development Act of 
1992 (HCDA 1992) (Pub. L. 102-550, approved October 28, 1992). The 
program authorizes HUD to make grants to owners of federally assisted 
low income housing for use in eliminating drug-related crime and/or the 
problems associated with it.

DATES: Comments due date: October 11, 1994.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Rules Docket Clerk, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, S.W., Washington, D.C. 20410. Communications should 
refer to the above docket number and title. A copy of each 
communication submitted will be available for public inspection and 
copying between 7:30 a.m. and 5:30 p.m. weekdays at the above address. 
Comments received by facsimile machine (FAX) will not be accepted.

FOR FURTHER INFORMATION CONTACT: Lessley Wiles, Office of Multifamily 
Housing Management, Operations Division, (202) 708-0216 (voice) or 
(202) 708-3938 (TDD for speech or hearing-impaired). (These are not 
toll free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    The information collection requirements contained in this rule have 
been approved by the Office of Management and Budget, under section 
3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520), 
and assigned OMB control number 2502-0476.

I. Background

    The Public Housing Drug Elimination Program was first authorized by 
Chapter 2, Subtitle C, Title V of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11901-11908). Implementing regulations for this program were 
issued by HUD and codified at 24 CFR 961. Applicants eligible to 
receive grants under this program were public housing agencies (PHAs), 
including Indian housing authorities (IHAs).
    Section 581 of the National Affordable Housing Act (NAHA) (approved 
November 28, 1990, Pub. L. 101-625) amended the Drug Elimination 
Program in a number of ways, including the addition of authorization to 
make grants to private, for-profit and nonprofit owners of federally 
assisted low-income housing for use in eliminating drug-related crime. 
The statutory program requirements for the Public and Indian Housing 
Drug Elimination Program and the Assisted Housing Drug Elimination 
Program are identical, although the Department is permitted to 
establish other criteria, in addition to those applicable to public and 
Indian housing, for the evaluation of funding applications submitted by 
owners of federally assisted low-income housing. The statute provides 
that such additional criteria shall be designed only to reflect--(1) 
relevant differences between the financial resources and other 
characteristics of public housing authorities and owners of federally 
assisted low-income housing, or (2) relevant differences between the 
problem of drug-related crime in public housing and the problem of 
drug-related crime in federally assisted low-income housing. Comments 
are specifically invited on what additional criteria consistent with 
the guidance, cited above, provided by the statute would be appropriate 
for selecting grant recipients.
    This rule would implement the Assisted Housing Drug Elimination 
Program. It follows the statute and the rule for the Public and Indian 
Housing Drug Elimination Program very closely. The main difference from 
the Public and Indian Housing Drug Elimination Program is in the level 
of detail provided in the rule. To permit the Department to be more 
responsive in the targeting of resources under this program, which have 
generally been made available at a much lower level than for public and 
Indian housing, this rule would provide for more flexibility in Notices 
of Funding Availability (NOFAs) concerning the scope of submission 
requirements and eligible activities for any particular funding round.

II. Other Matters

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with the Department's regulations at 24 CFR 
Part 50 which implement Section 102(2)(C) of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332). The Finding of No Significant 
Impact is available for public inspection between 7:30 a.m. and 5:30 
p.m. weekdays at the Office of the Rules Docket Clerk, Room 10276, 
Department of Housing and Urban Development, 451 Seventh Street, S.W., 
Washington, DC 20410.

Regulatory Flexibility Act

     The Secretary, in accordance with the Regulatory Flexibility Act 
(5 U.S.C. 605(b)), has reviewed this rule before publication and by 
approving it certifies that this rule does not have a significant 
economic impact on a substantial number of small entities. The rule 
would provide grants to eliminate drug-related crime in federally 
assisted low-income housing. Although small entities in the form of 
owners of federally assisted low-income housing could participate in 
the program, the rule is not intended to and would not have a 
significant economic impact on them.

Family

    The General Counsel, as the Designated Official for Executive Order 
12606, the Family, has determined that the provisions of this rule have 
the potential for a positive, although indirect, impact on family 
formation, maintenance and general well-being within the meaning of the 
Order. The proposed rule would implement a program that would encourage 
owners of federally assisted low-income housing to develop a plan for 
addressing the problem of drug-related crime, and to make available 
grants to carry out this plan. As such, the program is intended to 
improve the quality of life of federally assisted low-income housing 
residents, including families, by reducing the incidence of drug-
related crime.

Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule will not have substantial direct effects on 
States or their political subdivisions, or the relationship between the 
Federal government and the States, or on the distribution of power and 
responsibilities among the various levels of government and, therefore, 
the provisions of this rule do not have ``federalism implications'' 
within the meaning of the Order. The rule implements a program that 
encourages owners of federally assisted low-income housing to develop a 
plan for addressing the problem of drug-related crime, and makes 
available grants to help them carry out their plans. As such, the 
program would help combat serious drug-related crime problems in their 
housing. In addition, further review under the Order is unnecessary, 
since the rule generally tracks the statute and involves little 
implementing discretion.
    This proposed rule was listed as Item No. 1562 in the Department's 
Semiannual Agenda of Regulations published on April 25, 1994 (59 FR 
20424, 20442) under Executive Order 12866 and the Regulatory 
Flexibility Act.
    The Assisted Housing Drug Elimination Program is listed in the 
Catalog of Federal Domestic Assistance as number 14-854.

List of Subjects in 24 CFR Part 261

    Drug abuse, Drug traffic control, Grant programs--housing and 
community development, Grant programs--low and moderate income housing, 
Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, title 24, chapter II, of 
the Code of Federal Regulations is amended by adding part 261, 
consisting of Sec. Sec. 261.1 through 261.29, to read as follows:

PART 261--ASSISTED HOUSING DRUG ELIMINATION PROGRAM

Subpart A--General

Sec.
261.1 Purpose and scope.
261.5 Definitions.

Subpart B--Use of Grant Funds

261.10 Applicants and activities.

Subpart C--Application and Selection

261.15 Application selection and requirements.
261.18 Resident comments on grant application.

Subpart D--Grant Administration

261.26 Grant administration.
261.28 Grantee reports.
261.29 Other Federal requirements.

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

Subpart A--General


Sec. 261.1  Purpose and scope.

    The purposes of the Assisted Housing Drug Elimination Program are 
to:
    (a) Eliminate drug-related crime and the problems associated with 
it in and around the premises of federally assisted, low-income 
housing;
    (b) Encourage owners of federally assisted, low-income housing to 
develop a plan that includes initiatives that can be sustained over a 
period of several years for addressing drug-related crime and/or the 
problems associated with it in and around the premises of assisted 
housing proposed for funding under this part; and
    (c) Make available federal grants to help owners of federally 
assisted, low-income housing carry out their plans.


Sec. 961.5  Definitions.

    Act means The United States Housing Act of 1937 (42 U.S.C. 1437 et 
seq.)
    Chief executive officer of a State or a unit of general local 
government means the elected official, or the legally designated 
official, who has the primary responsibility for the conduct of that 
entity's governmental affairs. Examples of the ``chief executive 
officer'' of a unit of general local government are: the elected mayor 
of a municipality; the elected county executive of a county; the 
chairperson of a county commission or board in a county that has no 
elected county executive; or the official designated pursuant to law by 
the governing body of the unit of general local government. The chief 
executive officer of an Indian tribe is the tribal governing official.
    Controlled substance means a drug or other substance or immediate 
precursor included in schedule I, II, III, IV, or V of section 102 of 
the Controlled Substances Act (21 U.S.C. 802). The term does not 
include distilled spirits, wine, malt beverages or tobacco as those 
terms are defined in Subtitle E of the Internal Revenue Code of 1954.
    Drug intervention means a process to identify assisted housing 
resident drug users and assist them in modifying their behavior and/or 
refer them to drug treatment to eliminate drug abuse.
    Drug prevention means a process to provide goods and services 
designed to alter factors, including activities, environmental 
influences, risks and expectations, that lead to drug abuse.
    Drug-related crime means the illegal manufacture, sale, 
distribution, use, or possession with intent to manufacture, sell, 
distribute, or use, a controlled substance.
    Drug treatment means a program for the residents of an applicant's 
development that strives to end drug abuse and to eliminate its 
negative effects through rehabilitation and relapse prevention.
    Federally assisted, low-income housing (includes the term 
``assisted housing'' as used in this rule) means housing assisted 
under:
    (1) Section 221(d)(3), section 221(d)(4) or 236 of the National 
Housing Act (12 U.S.C. 1701 et seq.). (Note: However, section 221(d)(4) 
and section 221(d)(3) market rate projects without project-based 
assistance contracts are not considered federally assisted low-income 
housing. Therefore, section 221(d)(4) and section 221(d)(3) market rate 
projects with tenant-based assistance contracts are not considered 
federally assisted low-income housing and are not eligible for 
funding.);
    (2) Section 101 of the Housing and Urban Development Act of 1965 
(12 U.S.C. 1701s); or
    (3) Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f note) (not including tenant-based assistance).
    Governmental jurisdiction 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.
    HUD or Department means the United States Department of Housing and 
Urban Development.
    In and around means within, or adjacent to, the physical boundaries 
of a housing development.
    Local law enforcement agency 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 by the applicant.
    Problems associated with drug-related crime means the negative 
physical, social, educational and economic impact of drug-related crime 
on assisted housing residents, and the deterioration of the assisted 
housing environment because of drug-related crime.
    Resident Organization (RO) means an incorporated or unincorporated 
nonprofit organization or association that meets each of the following 
requirements:
    (1) It must be representative of the residents it purports to 
represent;
    (2) It may represent residents in more than one housing 
development, but it must fairly represent residents from each 
development that it represents;
    (3) It must adopt written procedures providing for the election of 
specific officers on a regular basis (but at least once every three 
years);
    (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 represents.
    Single State Agency means an agency responsible for licensing and 
monitoring State or tribal drug abuse programs.
    State 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 et seq.)
    Unit of general local government means any city, county, town, 
municipality, township, parish, village, local public authority or 
other general purpose political subdivision of a State.

Subpart B--Use of Grant Funds


Sec. 261.10  Applicants and activities.

    Applicants and activities eligible for funding under the Assisted 
Housing Drug Elimination Program are listed in this section. The 
applicants and activities eligible under any particular funding round 
may be limited in a Notice of Funding Availability (NOFA) published in 
the Federal Register. Additional details concerning eligible and 
ineligible applicants and activities will also be published in the 
NOFAs for this program.
    (a) Eligible applicants. The applicant must be the owner of a 
federally assisted low-income housing project under: (1) Section 
221(d)(3), section 221(d)(4) or 236 of the National Housing Act (12 
U.S.C. 1701 et seq.). (Note: However, section 221(d)(4) and section 
221(d)(3) market rate projects without project-based assistance 
contracts are not considered federally assisted low-income housing. 
Therefore, section 221(d)(4) and section 221(d)(3) market rate projects 
with tenant-based assistance contracts are not considered federally 
assisted low-income housing and are not eligible for funding.);
    (2) Section 101 of the Housing and Urban Development Act of 1965 
(12 U.S.C. 1701s); or
    (3) Section 8 of the United States Housing Act of 1937 (42 U.S.C. 
1437f note) (not including tenant-based assistance).
    (b) Eligible activities. An application for funding under this 
program may be for one or more of the following eligible activities, as 
further specified in program NOFAs:
    (1) Employment of security personnel.
    (2) Reimbursement of local law enforcement agencies for additional 
security and protective services.
    (3) Physical improvements to enhance security.
    (4) Employment of one or more individuals:
    (i) To investigate drug-related crime, and the problems associated 
with it, on or about the real property comprising any federally 
assisted, low-income housing project; and
    (ii) To provide evidence relating to such crime in any 
administrative or judicial proceeding.
    (5) The provision of training, communications equipment, and other 
related equipment for use by voluntary tenant patrols acting in 
cooperation with local law enforcement officials.
    (6) Drug-abuse prevention, intervention and treatment programs to 
reduce the use of drugs.
    (7) Continuation of current program activities. Current or previous 
Assisted Housing Drug Elimination Program grant recipients may apply, 
on the same basis as other applicants, for grants to continue their 
grant activities or implement other program activities. The Department 
will evaluate an applicant's performance under any previous Drug 
Elimination Program grants within the past five years. Subject to 
evaluation and review are the applicant's financial and program 
performance; reporting and special condition compliance; accomplishment 
of stated goals and objectives under the previous grant; and program 
adjustments made in response to previous ineffective performance. If 
the evaluation discloses a pattern under past grants of ineffective 
performances with no corrective measures attempted, it will result in a 
deduction of points from the current application. Since this is a 
competitive program, HUD does not guarantee continued funding of any 
previously funded Drug Elimination Program Grant.

Subpart C--Application and Selection


Sec. 261.15  Application selection and requirements.

    (a) Selection criteria. HUD will review each application that it 
determines meets the requirements of this part and assign points in 
accordance with the selection criteria. The number of points that an 
application receives will depend on the extent to which the application 
is responsive to the information requested in Notices of Funding 
Availability (NOFAs) published for this program. Each application 
submitted for a grant under this part will be evaluated on the basis of 
the following selection criteria:
    (1) First criterion: the extent of the drug-related crime problem 
in the applicant's development or developments proposed for assistance.
    (2) Second criterion: the quality of the plan to address the crime 
problem in the developments proposed for assistance, including the 
extent to which the plan includes initiatives that can be sustained 
over a period of several years.
    (3) Third criterion: the capability of the applicant to carry out 
the plan.
    (4) Fourth criterion: the extent to which tenants, the local 
government and the local community support and participate in the 
design and implementation of the activities proposed to be funded under 
the application.
    (b) Plan requirement. Each application must include a plan for 
addressing the problem of drug-related crime and/or the problems 
associated with drug-related crime on the premises of the housing for 
which the application is being submitted. For applications that cover 
more than one housing development, the plan does not have to address 
each development separately if the same activities will apply to each 
development. Only where program activities will differ from one 
development to another must the plan address each development 
separately.
    (c) Notice of Funding Availability. HUD will publish Notices of 
Funding Availability (NOFAs) in the Federal Register, as appropriate, 
to inform the public of the availability of grant amounts under this 
part. NOFAs will provide specific guidance with respect to the grant 
process, including the deadlines for the submission of grant 
applications; the limits (if any) on maximum grant amounts; the 
eligible applicants and activities; 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 the problem of drug-related 
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 the Department has determined to be necessary and 
appropriate to provide for the implementation and administration of the 
program under this part.
(Approved by the Office of Management and Budget under control number 
2502-0476).
    (d) Environmental review. Grants under this part are categorically 
excluded from review under the National Environmental Policy Act of 
1969 (NEPA) (42 U.S.C. 4321), in accordance with 24 CFR 50.20(p). 
However, prior to an award of grant funds under this part, HUD will 
perform an environmental review to the extent required by HUD's 
environmental regulations at 24 CFR part 50, including the applicable 
related authorities at 24 CFR 50.4.


Sec. 261.18  Resident comments on grant application.

    The applicant must provide the residents of developments proposed 
for funding under this part, as well as any resident organizations that 
represent those residents, with a reasonable opportunity to comment on 
its application for funding under this program. The applicant must give 
these comments careful consideration in developing its plan and 
application as well as in the implementation of funded programs. Copies 
of all written comments submitted must be maintained by the grantee for 
three years.

Subpart D--Grant Administration


Sec. 261.26  Grant administration.

    (a) General. Each grantee is responsible for ensuring that grant 
funds are administered in accordance with the requirements of this 
part, any Notice of Funding Availability (NOFA) issued for this 
program, 24 CFR part 85, 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.
    (b) Grant term extensions. (1) Grant term. Terms of the grant 
agreement may not exceed 12 months, unless an extension is approved by 
the local HUD Office. The maximum extension allowable for any grant is 
6 months. Any funds not expended at the end of the grant term shall be 
remitted to HUD.
    (2) Extension. Grantees may be granted 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.
    (3) Receipt. The request must be received by the local HUD Office 
before the termination of the grant, and requires approval by the local 
HUD Office with jurisdiction over the grantee.
    (4) Term. The maximum extension allowable for any program period is 
6 months. Requests for retroactive extension of program periods will 
not be considered. Only one extension will be permitted. Extensions 
will only be considered if the extension criteria of paragraph (5) of 
this section are met by the grantee at the time the request for the 
extension of the deadline is submitted for approval.
    (5) Extension criteria. 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.
    (i) Financial status reports. There must be on file with the local 
HUD Office current and acceptable Financial Status Reports, SF-269As.
    (ii) Grant agreement special conditions. All grant agreement 
special conditions must be satisfied except those conditions that must 
be fulfilled in the remaining period of the grant. This also includes 
the performance and resolution of audit findings in a timely manner.
    (iii) Justification. A narrative justification must be submitted 
with the program extension request. Complete details must be provided, 
including the circumstances which require the proposed extension, and 
explanation of the impact of denying the request.
    (6) HUD action. The local HUD Office will take action on an 
extension request within 15 working days after receipt of the request.
    (c) Duplication of funds. 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.
    (d) Insurance. Each grantee is required to obtain adequate 
insurance coverage to protect itself against any potential liability 
arising out of the eligible activities under this part. In particular, 
applicants are required to 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; to evaluate the 
qualifications and training of the individuals or firms undertaking 
these functions; and to consider any limitations on liability under 
State or local law. Grantees are required to obtain liability insurance 
to protect the members of the voluntary tenant patrol against potential 
liability as a result of the patrol's activities under 
Sec. 261.10(b)(5). Voluntary tenant patrol liability insurance costs 
are eligible program expenses. Subgrantees are required to obtain their 
own liability insurance.
    (e) Failure to implement program. 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 the steps being taken to 
initiate the plan and timetable, the reason for the delay, and the 
expected starting date. Any timetable revisions which resulted from the 
delay must be included. The local HUD Office will determine if the 
delay is acceptable, approve/disapprove the revised plan and timetable, 
and take any additional appropriate action.
    (f) Sanctions. (1) HUD may impose sanctions if the grantee:
    (i) Is not complying with the requirements of 24 CFR part 261 or of 
other applicable Federal law;
    (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 under Sec. 261.28;
    (iii) Does not establish procedures that will minimize the time 
elapsing between drawdowns and disbursements;
    (iv) Does not adhere to grant agreement requirements or special 
conditions;
    (v) Proposes substantial plan changes to the extent that, if 
originally submitted, would have resulted in the application not being 
selected for funding;
    (vi) Engages in the improper award or administration of grant 
subcontracts;
    (vii) Does not submit reports; or
    (viii) Files a false certification.
    (2) HUD may impose the following sanctions:
    (i) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee;
    (ii) Disallow all or part of the cost of the activity or action not 
in compliance;
    (iii) Wholly or partly suspend or terminate the current award for 
the grantee's or subgrantee's program;
    (iv) Require that some or all of the grant amounts be remitted to 
HUD;
    (v) Condition a future grant and elect not to provide future grant 
funds to the grantee until appropriate actions are taken to ensure 
compliance;
    (vi) Withhold further awards for the program or
    (vii) Take other remedies that may be legally available.


Sec. 261.28  Grantee reports.

    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.
    (a) Final performance report. (1) Evaluation. Grantees are required 
to provide the local HUD Office with a final cumulative performance 
report that evaluates the grantee's overall performance against its 
plan. This report shall include in summary form (but is not limited to) 
the following: any change or lack of change in crime statistics or 
other indicators drawn from the applicant's plan assessment (such as 
vandalism, etc.) and an explanation of any difference; successful 
completion of any of the strategy components identified in the 
applicant's plan; a discussion of any problems encountered in 
implementing the plan and how they were addressed; an evaluation of 
whether the rate of progress meets expectations; a discussion of the 
grantee's efforts in encouraging resident participation; 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.
    (2) Reporting period. 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 within 
90 days after termination of the grant agreement.
    (b) Semi-annual financial status reporting requirements.
    (1) Form. The grantee shall provide a semi-annual financial status 
report. The grantee shall use the SF-269A, Financial Status Report-Long 
Form, to report the status of funds for non-construction programs. The 
grantee shall use SF-269A, Block 12, ``Remarks,'' to report on the 
status of programs, functions or activities within the program.
    (2) Reporting period. Semi-annual financial status reports (SF-
269A) 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.
    (c) Final financial status report (SF-269A).
    (1) Cumulative summary. The final report will be a cumulative 
summary of expenditures to date and must indicate the exact balance of 
unexpended funds. The grantee must remit all Drug Elimination Program 
funds (including any unexpended funds) owed to HUD within 90 days after 
the termination of the grant agreement.
    (2) Reporting period. 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 
within 90 days after the termination of the grant agreement.
    (d) Report submission. The grantee shall submit all required 
reports to the local HUD Office.


Sec. 261.29  Other Federal requirements.

    Use of grant funds requires compliance with the following 
additional Federal requirements:
    (a) Nondiscrimination and equal opportunity. The following 
nondiscrimination and equal opportunity requirements apply to this 
program:
    (1) The requirements of The Fair Housing Act (42 U.S.C. 3601-19) 
and implementing regulations issued at 24 CFR part 100; Executive Order 
11063 (Equal Opportunity in Housing) and implementing regulations at 24 
CFR Part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs) and 
implementing regulations issued at 24 CFR part 1;
    (2) The prohibitions against discrimination on the basis of age 
under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and 
implementing regulations at 24 CFR part 146, and the prohibitions 
against discrimination against handicapped individuals under section 
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing 
regulations at 24 CFR part 8;
    (3) The requirements of Executive Order 11246 (Equal Employment 
Opportunity) and the regulations issued under the Order at 41 CFR 
chapter 60;
    (4) The requirements of section 3 of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701u), (Employment Opportunities 
for Lower Income Persons in Connection with Assisted Projects); and
    (5) The requirements of Executive Orders 11625, 12432, and 12138. 
Consistent with HUD's responsibilities under these Orders, recipients 
must make efforts to encourage the use of minority and women's business 
enterprises in connection with funded activities.
    (b) Use of debarred, suspended or ineligible contractors. Use of 
grant funds under this program requires compliance with the provisions 
of 24 CFR part 24 relating to the employment, engagement of services, 
awarding of contracts, or funding of any contractors or subcontractors 
during any period of debarment, suspension, or placement in 
ineligibility status.
    (c) Flood insurance. 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:
    (1) The community in which the area is situated is participating in 
the National Flood Insurance Program in accordance with 44 CFR parts 
59-79; or
    (2) Less than a year has passed since FEMA notification to the 
community regarding such hazards; and
    (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).
    (d) Lead-based paint. (1) Scope. The provisions of section 302 of 
the Lead-Based Paint Poisoning Prevention Act, 42 U.S.C. 4821-4846, and 
implementing regulations apply to all housing constructed or 
substantially rehabilitated before January 1, 1978, and for which 
assistance under this part is being used for physical improvements to 
enhance security under Sec. 261.10(b)(3).
    (2) Exceptions. The following activities are not covered by this 
section:
    (i) Installation of security devices;
    (ii) Other similar types of single-purpose programs that do not 
involve physical repairs or remodeling of applicable surfaces of 
residential structures; or
    (iii) Any non-single purpose rehabilitation that does not involve 
applicable surfaces and that does not exceed $3,000 per unit.
    (e) Conflicts of interest. No person, as described in paragraphs 
(1) and (2) of this section, may obtain a personal or financial 
interest or benefit from an activity funded under this program, 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:
    (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
    (2) Who is in a position to participate in a decision making 
process or gain inside information with regard to such activities.
    (f) Drug Free Workplace Act of 1988. The requirements of the Drug-
Free Workplace Act of 1988 at 24 CFR part 24, subpart F apply to this 
program.
    (g) Anti-lobbying provisions under section 319. The use of funds 
under this part is subject to the disclosure requirements and 
prohibitions of section 319 of the Department of the Interior and 
Related Agencies Appropriations Act for Fiscal Year 1990 (31 U.S.C. 
1352), and implementing regulations at 24 CFR part 87. These 
authorities prohibit recipients and subrecipients of Federal contracts, 
grants, cooperative agreements and loans from using appropriated funds 
for lobbying the Executive or Legislative Branches of the Federal 
Government in connection with a specific, contract, grant, or loan. The 
prohibition also covers the awarding of contracts, grants, cooperative 
agreements, or loans unless the recipient has made an acceptable 
certification regarding lobbying. Under 24 CFR part 87, applicants, 
recipients, and subrecipients of assistance exceeding $100,000 must 
certify that no Federal funds have been or will be spent on lobbying 
activities in connection with the assistance. However, since grantees 
sometimes may expect to receive additional grant funds through 
reallocations, all potential grantees are required to submit the 
certification, and to make the required disclosure if the grant amount 
exceeds $100,000. The law provides substantial monetary penalties for 
failure to file the required certification or disclosure.
    (h) Intergovernmental review. The requirements of Executive Order 
12372 and the regulations issued under the order at 24 CFR part 52, to 
the extent provided by Federal Register notice in accordance with 24 
CFR 52.3 apply to this program.

    Dated: June 30, 1994.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 94-19229 Filed 8-8-94; 8:45 am]
BILLING CODE 4210-27-P