[Federal Register Volume 61, Number 40 (Wednesday, February 28, 1996)]
[Rules and Regulations]
[Pages 7674-7682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4437]




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Part VI





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Parts 111 and 115



Regulatory Reinvention; Certification and Funding of State and Local 
Fair Housing Enforcement Agencies; Interim Rule

  Federal Register / Vol. 61, No. 40 / Wednesday, February 28, 1996 / 
Rules and Regulations   

[[Page 7674]]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Fair Housing and Equal 
Opportunity

24 CFR Parts 111 and 115

[Docket No. FR-3322-F-01]
RIN 2529-AA60


Regulatory Reinvention; Certification and Funding of State and 
Local Fair Housing Enforcement Agencies

AGENCY: Office of the Assistant Secretary for Fair Housing and Equal 
Opportunity, HUD.

ACTION: Interim rule.

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SUMMARY: This interim rule represents another step in HUD's continuing 
efforts to reinvent and streamline its regulations. The Fair Housing 
Act provides that the Secretary of HUD shall refer complaints alleging 
a discriminatory housing practice to State or local enforcement 
agencies certified by the Secretary. Currently, HUD's regulations at 24 
CFR part 115 set forth the criteria the Secretary will utilize to 
certify such agencies. HUD's regulations at 24 CFR part 111 establish 
the requirements for the Fair Housing Assistance Program (FHAP), 
through which HUD provides assistance to certified fair housing 
enforcement agencies. This interim rule consolidates parts 111 and 115, 
thus providing all necessary requirements in a single part and 
eliminating unnecessary or repetitive regulatory provisions.

DATES: Effective date: March 29, 1996.
    Comments due date: April 29, 1996.

ADDRESSES: Interested persons are invited to submit comments regarding 
the interim rule to the Office of the General Counsel, Rules Docket 
Clerk, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410-0500. Communications should 
refer to the above docket number and title. Facsimile (FAX) comments 
are not acceptable. A copy of each communication submitted will be 
available for public inspection and copying during regular business 
hours (7:30 a.m. to 5:30 p.m. Eastern Time) at the above address.

FOR FURTHER INFORMATION CONTACT: Marcella Brown, Director, Fair Housing 
Assistance Program Division, Office of Fair Housing and Equal 
Opportunity, Room 5218, Department of Housing and Urban Development, 
451 Seventh Street, SW, Washington, DC 20410, telephone (202) 708-0455. 
Hearing- or speech-impaired individuals may call HUD's TDD number (202) 
708-0113 or 1-800-877-8339 (Federal Information Relay Service TDD). 
(Except for the ``800'' number, these are not toll-free numbers.)

SUPPLEMENTARY INFORMATION:

I. Background

    The Fair Housing Act (42 U.S.C. 3600-3620) (the Act) provides that 
whenever a complaint alleges a discriminatory housing practice, arising 
in the jurisdiction of a State or local agency which has been certified 
by the Secretary under section 810(f) of the Act, HUD shall refer the 
complaint to that State or local agency. HUD has implemented section 
810(f) at 24 CFR part 115, which establishes the criteria the Secretary 
will utilize to certify State and local fair housing enforcement 
agencies.
    Section 817 of the Act provides that the Secretary may reimburse 
State and local fair housing enforcement agencies which assist the 
Secretary in enforcing the Act. HUD has implemented section 817 at 24 
CFR part 111, which sets forth the requirements for the Fair Housing 
Assistance Program (FHAP). Through the FHAP, HUD provides assistance to 
certified State and local fair housing enforcement agencies. This 
assistance is designed to provide support for complaint processing, 
training, technical assistance, data and information systems, and other 
fair housing projects.
    Pursuant to President Clinton's memorandum of March 4, 1995, 
Regulatory Reinvention, HUD conducted a comprehensive, page-by-page 
review of its regulations. This interim rule marks another step in 
HUD's continuing efforts to streamline, update and generally improve 
its regulations. Specifically, the rule consolidates parts 111 and 115, 
thus providing all necessary requirements for certification and FHAP 
participation in part 115. This interim rule also eliminates burdensome 
or redundant regulatory provisions currently located in parts 111 and 
115. The Department welcomes comments on how this interim rule may be 
made more understandable and less burdensome.

II. Justification for Interim Rulemaking

    It is HUD's policy to publish rules for public comment before their 
issuance for effect, in accordance with its own regulations on 
rulemaking found at 24 CFR part 10. However, part 10 provides that 
prior public comment will be omitted if HUD determines that it is 
``impracticable, unnecessary, or contrary to the public interest'' (24 
CFR 10.1). HUD finds that in this case prior public comment is contrary 
to the public interest, since immediate implementation of this interim 
rule will benefit the public. Specifically, this interim rule will 
assist FHAP participants by providing all necessary requirements in a 
single part and eliminating burdensome and redundant provisions. 
Further, the streamlining amendments made by this interim rule will 
allow HUD to administer the FHAP in a more efficient manner, thus 
strengthening its ability to enforce the Fair Housing Act.

III. Other Matters

A. Environmental Impact

    This rulemaking does not have an environmental impact. This 
rulemaking simply amends an existing regulation by consolidating and 
streamlining provisions and does not alter the environmental effect of 
the regulations being amended. A Finding of No Significant Impact with 
respect to the environment was made in accordance with HUD regulations 
in 24 CFR part 50 that implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of 
development of regulations implementing Section 214 of the Housing and 
Community Development Act of 1980. That Finding remains applicable to 
this rule, and is available for public inspection between 7:30 a.m. and 
5:30 p.m. weekdays in the Office of the Rules Docket Clerk, room 10276, 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410-0500.

B. Executive Order 12612, 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 interim 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. This 
interim rule merely consolidates in a single part the requirements for 
``substantially equivalent'' certification and participation in the 
FHAP. It effects no changes in the current relationships between the 
Federal government, the States and their political subdivisions in 
connection with HUD programs.

C. Executive Order 12606, the Family

    The General Counsel, as the Designated Official under Executive 

[[Page 7675]]
    Order 12606, The Family, has determined that this interim rule will not 
have a potential significant impact on family formation, maintenance, 
and general well-being and, thus, is not subject to review under the 
Order. This interim rule only affects State and local fair housing 
enforcement agencies which seek certification under section 810(f) of 
the Act and participation in the FHAP. No significant change in 
existing HUD policies or programs will result from promulgation of this 
interim rule, as those policies and programs relate to family concerns.

D. Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this interim rule, and in so 
doing certifies that this interim rule will not have a significant 
economic impact on a substantial number of small entities.

List of Subjects

24 CFR Part 111

    Fair housing, Grant programs--housing and community development, 
Reporting and recordkeeping requirements.

24 CFR Part 115

    Administrative practice and procedure, Aged, Fair housing, 
Individuals with disabilities, Intergovernmental relations, Mortgages, 
Reporting and recordkeeping requirements.

    Accordingly, under the authority at 42 U.S.C. 3535(d) 24 CFR parts 
111 and 115 are amended as follows:

PART 111--[REMOVED]

    1. Part 111 is removed.
    2. Part 115 is revised to read as follows:

PART 115--CERTIFICATION AND FUNDING OF STATE AND LOCAL FAIR HOUSING 
ENFORCEMENT AGENCIES

Subpart A--General

Sec.
115.100  Definitions.
115.101  Program administration.
115.102  Public notices.

Subpart B--Certification of Substantially Equivalent Agencies

115.200  Purpose.
115.201  Basis of determination.
115.202  Criteria for Adequacy of Law.
115.203  Performance standards.
115.204  Consequences of Certification.
115.205  Technical assistance.
115.206  Request for certification.
115.207  Procedure for interim certification.
115.208  Suspension of interim certification.
115.209  Denial of interim certification.
115.210  Procedure for certification.
115.211  Suspension of certification.
115.212  Withdrawal of certification.

Subpart C--Fair Housing Assistance Program (FHAP)

115.300  Purpose.
115.301  Agency eligibility criteria.
115.302  Capacity Building Funds.
115.303  Eligible activities for Capacity Building Funds.
115.304  Agencies eligible for contributions funds.
115.305  Special Enforcement Effort (SEE) funds.
115.306  Training funds.
115.307  Additional requirements for participation in the FHAP.
115.308  Standards for FHAP program review.
115.309  Reporting and recordkeeping requirements.
115.310  Subcontracting under the FHAP.
115.311  Corrective and remedial action.

    Authority: 42 U.S.C. 3600-3620 and 3535(d).

Subpart A--General


Sec. 115.100  Definitions.

    (a) The terms ``Fair Housing Act'' and ``HUD'', as used in this 
part, are defined in 24 CFR 5.100.
    (b) The terms ``Aggrieved person'', ``Complainant'', 
``Conciliation'', ``Conciliation agreement'', ``Discriminatory housing 
practice'', ``Dwelling'', ``Handicap'', ``Person'', ``Respondent'', 
``Secretary'', and ``State'', as used in this part, are set forth in 
section 802 of the Fair Housing Act.
    (c) Other definitions. The following definitions also apply to this 
part:
    Act means the Fair Housing Act, as defined in 24 CFR 5.100.
    Assistant Secretary means the Assistant Secretary for Fair Housing 
and Equal Opportunity.
    Certified Agency is an agency to which the Assistant Secretary for 
Fair Housing and Equal Opportunity has granted interim certification or 
certification, in accordance with the requirements of this part.
    Cooperative Agreement is the assistance instrument HUD will use to 
provide funds. The Cooperative Agreement will contain attachments and 
appendices establishing requirements relating to the operation or 
performance of the agency.
    Cooperative Agreement Officer (CAO) is the administrator of the 
funds awarded pursuant to this part and is the Director of a Fair 
Housing Enforcement Center in the Office of Fair Housing and Equal 
Opportunity.
    Director of FHEO means a Director of a Fair Housing Enforcement 
Center.
    Dual-Filed Complaint means a housing discrimination complaint which 
has been filed with both the Fair Housing Enforcement Center and the 
certified agency.
    FHEO means the Office of Fair Housing and Equal Opportunity.
    FHAP means the Fair Housing Assistance Program.


Sec. 115.101  Program administration.

    (a) Authority and Responsibility. The Secretary has delegated the 
authority and responsibility for administering this part to the 
Assistant Secretary.
    (b) Delegation of Authority. The Assistant Secretary delegates the 
authority and responsibility for administering this part to each 
Director of a Fair Housing Enforcement Center. However, with respect to 
the duties and responsibilities for administering subpart B of this 
part, the Assistant Secretary retains the right to make final decisions 
concerning the granting and maintenance of substantial equivalency 
certification and interim certification.


Sec. 115.102  Public notices.

    (a) Periodically, the Assistant Secretary will publish the 
following public notices in the Federal Register:
    (1) A list of all agencies which have interim certification or 
certification; and
    (2) A list of agencies to which a notice of denial of interim 
certification has been issued or for which withdrawal of certification 
is being proposed.
    (b) The Assistant Secretary will publish in the Federal Register a 
notice soliciting public comment before granting certification to a 
State or local agency. The notice will invite the public to comment on 
the relevant State and local laws, as well as on the performance of the 
agency in enforcing its law. All comments will be considered before a 
final decision on certification is made.

Subpart B--Certification of Substantially Equivalent Agencies


Sec. 115.200   Purpose.

    This subpart implements section 810(f) of the Fair Housing Act. The 
purpose of this subpart is to set forth:
    (a) The basis for agency interim certification and certification;
    (b) The procedure by which a determination to certify is made by 
the Assistant Secretary;
    (c) The basis and procedures for denial of interim certification;
    (d) The basis and procedures for withdrawal of certification;
    (e) The consequences of certification;
    (f) The basis and procedures for suspension of interim 
certification or certification; and
    (g) The funding criteria for interim certified and certified 
agencies. 

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Sec. 115.201  Basis of determination.

    A determination to certify an agency as substantially equivalent 
involves a two-phase procedure. The determination requires examination 
and an affirmative conclusion by the Assistant Secretary on two 
separate inquiries:
    (a) Whether the law, administered by the agency, on its face, 
satisfies the criteria set forth in section 810(f)(3)(A) of the Act; 
and
    (b) Whether the current practices and past performance of the 
agency demonstrate that, in operation, the law in fact provides rights 
and remedies which are substantially equivalent to those provided in 
the Act.


Sec. 115.202  Criteria for Adequacy of Law.

    (a) In order for a determination to be made that a State or local 
fair housing agency administers a law which, on its face, provides 
rights and remedies for alleged discriminatory housing practices that 
are substantially equivalent to those provided in the Act, the law or 
ordinance must:
    (1) Provide for an administrative enforcement body to receive and 
process complaints and provide that:
    (i) Complaints must be in writing;
    (ii) Upon the filing of a complaint the agency shall serve notice 
upon the complainant acknowledging the filing and advising the 
complainant of the time limits and choice of forums provided under the 
law;
    (iii) Upon the filing of a complaint the agency shall promptly 
serve notice on the respondent or person charged with the commission of 
a discriminatory housing practice advising of his or her procedural 
rights and obligations under the law or ordinance together with a copy 
of the complaint;
    (iv) A respondent may file an answer to a complaint.
    (2) Delegate to the administrative enforcement body comprehensive 
authority, including subpoena power, to investigate the allegations of 
complaints, and power to conciliate complaints, and require that:
    (i) The agency commence proceedings with respect to the complaint 
before the end of the 30th day after receipt of the complaint;
    (ii) The agency investigate the allegations of the complaint and 
complete the investigation within the time-frame established by section 
810(a)(1)(B)(iv) of the Act or comply with the notification 
requirements of section 810(a)(1)(C) of the Act.
    (iii) The agency make final administrative disposition of a 
complaint within one year of the date of receipt of a complaint, unless 
it is impracticable to do so. If the agency is unable to do so it shall 
notify the parties, in writing, of the reasons for not doing so;
    (iv) Any conciliation agreement arising out of conciliation efforts 
by the agency shall be an agreement between the respondent, the 
complainant, and the agency and shall require the approval of the 
agency;
    (v) Each conciliation agreement shall be made public unless the 
complainant and respondent otherwise agree and the agency determines 
that disclosure is not required to further the purposes of the law or 
ordinance.
    (3) Not place any excessive burdens on the complainant that might 
discourage the filing of complaints, such as:
    (i) A provision that a complaint must be filed within any period of 
time less than 180 days after an alleged discriminatory housing 
practice has occurred or terminated;
    (ii) Anti-testing provisions;
    (iii) Provisions that could subject a complainant to costs, 
criminal penalties or fees in connection with filing of complaints.
    (4) Not contain exemptions that substantially reduce the coverage 
of housing accommodations as compared to section 803 of the Act.
    (5) Provide the same protections as those afforded by sections 804, 
805, 806, and 818 of the Act, consistent with HUD's implementing 
regulations found at 24 CFR part 100.--
    (i) As used in section 804(f)(3)(C) of the Act, the term ``covered 
multifamily dwellings'' means buildings consisting of four or more 
units if such buildings have one or more elevators and ground floor 
units in other buildings consisting of four or more units.
    (ii) The law or ordinance administered by the State or local fair 
housing agency may provide that compliance with the appropriate 
requirements of the American National Standard for buildings and 
facilities providing accessibility and usability for physically 
handicapped people (commonly cited as ``ANSI A117.1-1986'') suffices to 
satisfy the requirements of section 804(f)(3)(C)(iii) of the Act.
    (b) In addition to the factors described in paragraph (a) of this 
section, the provisions of the State or local law must afford 
administrative and judicial protection and enforcement of the rights 
embodied in the law.
    (1) The agency must have authority to:
    (i) Grant or seek prompt judicial action for appropriate temporary 
or preliminary relief pending final disposition of a complaint if such 
action is necessary to carry out the purposes of the law or ordinance;
    (ii) Issue and seek enforceable subpoenas;
    (iii) Grant actual damages in an administrative proceeding or 
provide adjudication in court at agency expense to allow the award of 
actual damages to an aggrieved person;
    (iv) Grant injunctive or other equitable relief, or be specifically 
authorized to seek such relief in a court of competent jurisdiction;
    (v) Provide an administrative proceeding in which a civil penalty 
may be assessed or provide an adjudication in court at agency expense, 
allowing the assessment of punitive damages against the respondent.
    (2) Agency actions must be subject to judicial review upon 
application by any party aggrieved by a final agency order.
    (3) Judicial review of a final agency order must be in a court with 
authority to grant to the petitioner, or to any other party, such 
temporary relief, restraining order, or other order as the court 
determines is just and proper; affirm, modify, or set aside, in whole 
or in part, the order, or remand the order for further proceedings; and 
enforce the order to the extent that the order is affirmed or modified.
    (c) The requirement that the state or local law prohibit 
discrimination on the basis of familial status does not require that 
the state or local law limit the applicability of any reasonable local, 
state or Federal restrictions regarding the maximum number of occupants 
permitted to occupy a dwelling.
    (d) The state or local law may assure that no prohibition based on 
discrimination because of familial status applies to housing for older 
persons substantially as described in 24 CFR part 100, subpart E.
    (e) A determination of the adequacy of a state or local fair 
housing law ``on its face'' is intended to focus on the meaning and 
intent of the text of the law, as distinguished from the effectiveness 
of its administration. Accordingly, this determination is not limited 
to an analysis of the literal text of the law but must take into 
account all relevant matters of state or local law. Regulations, 
directives, rules of procedure, judicial decisions, or interpretations 
of the fair housing law by competent authorities will be considered in 
making this determination.
    (f) A law will be found inadequate ``on its face'' if it permits 
any of the agency's decision-making authority to be contracted out or 
delegated to a non-governmental authority. For the 

[[Page 7677]]
purposes of this paragraph, ``decision-making authority'' shall 
include:
    (1) Acceptance of the complaint;
    (2) Approval of the conciliation agreement;
    (3) Dismissal of a complaint;
    (4) Any action specified in Secs. 115.202(a)(2)(iii) or 
115.202(b)(1); and
    (5) Any decision-making regarding whether the matter will or will 
not be pursued.
    (g) The state or local law must provide for civil enforcement of 
the law or ordinance by an aggrieved person by the commencement of an 
action in an appropriate court at least one year after the occurrence 
or termination of an alleged discriminatory housing practice. The court 
must be empowered to:
    (1) Award the plaintiff actual and punitive damages;
    (2) Grant as relief, as it deems appropriate, any temporary or 
permanent injunction, temporary restraining order or other order;
    (3) Allow reasonable attorney's fees and costs.


Sec. 115.203  Performance standards.

    A state or local fair housing enforcement agency must meet all of 
the performance standards listed below in order to obtain or maintain 
certification.
    (a) Engage in timely, comprehensive and thorough fair housing 
complaint investigation, conciliation and enforcement activities. The 
performance assessment will consider the following to determine the 
effectiveness of an agency's fair housing complaint processing, 
consistent with such guidance as may be issued by HUD:
    (1) The agency's case processing procedures;
    (2) The thoroughness of the agency's case processing;
    (3) A review of cause and no cause determinations for quality of 
investigations and consistency with appropriate standards;
    (4) A review of conciliation agreements and other settlements; and
    (5) A review of the agency's administrative closures; and
    (6) A review of the agency's enforcement procedures.
    (b)(1) Commence proceedings with respect to a complaint:
    (i) Before the end of the 30th day after receipt;
    (ii) Carry forward such proceedings with reasonable promptness;
    (iii) Make final administrative disposition within one year; and
    (iv) Within 100 days of receipt of the complaint complete the 
identified proceedings.
    (2) To meet this standard, the performance assessment will consider 
the timeliness of the agency's actions with respect to its complaint 
processing, including, but not limited to:
    (i) Whether the agency began its processing of fair housing 
complaints within 30 days of receipt;
    (ii) Whether the agency completes the investigative activities with 
respect to a complaint within 100 days from the date of receipt or, if 
it is impracticable to do so, notifies the parties in writing of the 
reason(s) for the delay;
    (iii) Whether the agency administratively disposes of a complaint 
within one year from the date of receipt or, if it is impracticable to 
do so, notifies the parties in writing of the reasons for the delay; 
and
    (iv) Whether the agency completed the investigation of the 
complaint and prepared a complete final investigative report.
    (3) The performance assessment will also consider documented 
conciliation attempts and activities and a review of the bases for 
administrative disposition of complaints.
    (c) Conduct compliance reviews of settlements, conciliation 
agreements and orders issued by or entered into to resolve 
discriminatory housing practices. The performance assessment will 
include, but not be limited to:
    (1) An assessment of the agency's procedures for conducting 
compliance reviews;
    (2) Terms and conditions of agreements and orders issued;
    (3) application of its authority to seek actual damages, as 
appropriate; and
    (4) Application of its authority to seek and assess civil penalties 
or punitive damages.
    (d) Consistently and affirmatively seek and obtain the type of 
relief designed to prevent recurrences of such practices. The 
performance assessment will include, but not be limited to:
    (1) An assessment of the types of relief sought and obtained by the 
agency with consideration of the inclusion of affirmative provisions 
designed to protect the public interest;
    (2) The adequacy of the disposition of the complaint;
    (3) The relief sought and awarded;
    (4) The number of complaints closed with relief and the number 
closed without relief; and
    (5) Whether all the issues and bases were investigated adequately 
and appropriately disposed of.
    (e) Consistently and affirmatively seek the elimination of all 
prohibited practices under its fair housing law. An assessment under 
this standard will include, but not be limited to:
    (1) A discussion and confirmation of the law or ordinance 
administered by the agency;
    (2) The identification of any amendments, court decisions or other 
rulings or documentation that may affect the agency's ability to carry 
out provisions of its fair housing law or ordinance;
    (3) Identification of the education and outreach efforts of the 
agency; and
    (4) Identification and discussion of any special requirements of 
the fair housing law or ordinance.


Sec. 115.204  Consequences of Certification.

    (a) Whenever a complaint received by the Assistant Secretary 
alleges violations of a state or local fair housing law or ordinance 
administered by an agency that has been certified as substantially 
equivalent, the complaint will be referred to the agency, and no 
further action shall be taken by the Assistant Secretary with respect 
to such complaint except as provided for by the Act, this part, 24 CFR 
part 103, subpart C, and any written agreements executed by the Agency 
and the Assistant Secretary.
    (b) If HUD determines that a complaint has not been processed in a 
timely manner in accordance with the performance standards set forth in 
Sec. 115.203, HUD may reactivate the complaint, conduct its own 
investigation and conciliation efforts, and make a determination 
consistent with 24 CFR part 103.
    (c) Notwithstanding paragraph (a) of this section, whenever the 
Assistant Secretary has reason to believe that a complaint demonstrates 
a basis for the commencement of proceedings against any respondent 
under section 814(a) of the Act or for proceedings by any governmental 
licensing or supervisory authorities, the Assistant Secretary shall 
transmit the information upon which such belief is based to the 
Attorney General, Federal financial regulatory agencies, other Federal 
agencies, or other appropriate governmental licensing or supervisory 
authorities.


Sec. 115.205  Technical assistance.

    (a) The Assistant Secretary, through the FHEO Field Office, may 
provide technical assistance to the agencies. The agency may request 
such technical assistance or the FHEO Field Office may determine the 
necessity for technical assistance and require the agency's cooperation 
and participation.
    (b) The Assistant Secretary, through FHEO Headquarters or Field 
staff, will require that the agency participate in training conferences 
and seminars that will enhance the agency's ability to process 
complaints alleging discriminatory housing practices.

[[Page 7678]]



Sec. 115.206  Request for certification.

    (a) A request for certification under this subpart B shall be filed 
with the Assistant Secretary by the State or local official having 
principal responsibility for administration of the State or local fair 
housing law. The request shall be supported by the following materials 
and information:
    (1) The text of the jurisdiction's fair housing law, the law 
creating and empowering the agency, any regulations and directives 
issued under the law, and any formal opinions of the State Attorney 
General or the chief legal officer of the jurisdiction that pertain to 
the jurisdiction's fair housing law.
    (2) Organizational information of the agency responsible for 
administering and enforcing the law.
    (3) Funding and personnel made available to the agency for 
administration and enforcement of the fair housing law during the 
current operating year, and not less than the preceding three operating 
years (or such lesser number during which the law was in effect).
    (4) If available, data demonstrating that the agency's current 
practices and past performance comply with the performance standards 
described in Sec. 115.203.
    (5) Any additional information which the submitting official may 
wish to be considered.
    (b) The request and supporting materials shall be filed with the 
Assistant Secretary for Fair Housing and Equal Opportunity, Department 
of Housing and Urban Development, 451 7th Street, SW., Washington, DC 
20410. A copy of the request and supporting materials will be kept 
available for public examination and copying at:
    (1) The office of the Assistant Secretary; and
    (2) The HUD Field Office in whose jurisdiction the State or local 
jurisdiction seeking recognition is located; and
    (3) The office of the State or local agency charged with 
administration and enforcement of the State or local law.


Sec. 115.207  Procedure for interim certification.

    (a) Upon receipt of a request for certification filed under 
Sec. 115.206 of this part, the Assistant Secretary may request further 
information necessary for a determination to be made under this 
section. The Assistant Secretary may consider the relative priority 
given to fair housing administration, as compared to the agency's other 
duties and responsibilities, as well as the compatibility or potential 
conflict of fair housing objectives with these other duties and 
responsibilities.
    (b) Interim certification. If the Assistant Secretary determines, 
after application of the criteria set forth in Sec. 115.202 that the 
State or local law or ordinance, on its face, provides substantive 
rights, procedures, remedies, and judicial review procedures for 
alleged discriminatory housing practices that are substantially 
equivalent to those provided in the Act, the Assistant Secretary may 
offer to enter into an Agreement for the Interim Referral of Complaints 
and Other Utilization of Services (Interim Agreement). The interim 
agreement will outline the procedures and authorities upon which the 
interim certification is based.
    (c) Such interim agreement, after it is signed by all appropriate 
signatories, will result in the agency receiving interim certification.
    (d)(1) Interim agreements shall be for a term of no more than three 
years. The Assistant Secretary, through the FHEO Field Office, will 
conduct one or more on-site assessments to determine whether the agency 
administers its fair housing law or ordinance in a manner that is 
substantially equivalent to the Act.
    (2) Performance Improvement Plan. If the agency is not 
administering its law or ordinance in a manner that is substantially 
equivalent, the Assistant Secretary, may, but need not, offer a 
Performance Improvement Plan (PIP) to the agency. The PIP will outline 
the agency's deficiencies, identify necessary corrective actions, and 
include a timetable for completion.
    (3) If the agency receives a PIP, funding under the FHAP may be 
suspended for the duration of the PIP. Once the agency has implemented 
corrective actions to eliminate the deficiencies, and such corrective 
actions are accepted by the Assistant Secretary, funding may be 
reinstated.


Sec. 115.208  Suspension of interim certification.

    (a)(1) The Assistant Secretary will suspend the agency's interim 
certification if the Assistant Secretary has reason to believe that the 
State or locality may have limited the effectiveness of the agency's 
implementation of the fair housing law or ordinance by:
    (i) Amending the fair housing law or ordinance;
    (ii) Adopting rules or procedures concerning the fair housing law 
or ordinance; or
    (iii) Issuing judicial or other authoritative interpretations of 
the fair housing law or ordinance.
    (2) If the Assistant Secretary suspends interim certification under 
paragraph (a)(1) of this section, such suspension will remain in effect 
until the Assistant Secretary conducts a review of the changes in 
language and/or interpretation and determines whether the law or 
ordinance remains substantially equivalent to the Act on its face or in 
its operations.
    (i) If the Assistant Secretary determines that, notwithstanding the 
actions taken by the State or locality as described in paragraph (a)(1) 
of this section, the law or ordinance remains substantially equivalent 
on its face and in operation to the Act, the Assistant Secretary will 
rescind the suspension and reinstate the agency's interim certification 
and/or recommend the agency for certification. HUD will provide 
reimbursement for cases processed during the period of the suspension.
    (ii) If the Assistant Secretary determines that the actions taken 
by the State or locality do limit the agency's effectiveness interim 
certification will be denied pursuant to Sec. 115.209.
    (b)(1) The Assistant Secretary will suspend the interim 
certification of an agency charged with the administration of a fair 
housing law or ordinance if the Assistant Secretary has reason to 
believe that the agency's performance does not comply with the criteria 
set forth by this part. Such suspension shall not exceed 180 days.
    (2) If the agency is suspended pursuant to paragraph (b) of this 
section, the FHEO Field Office will not provide payment for complaints 
processed within that period of time unless and until the Assistant 
Secretary determines that the agency is fully in compliance with 
Sec. 115.203. The FHEO Field Office will provide technical assistance 
to the agency during this period of time.--
    (i) During the period of a suspension the Assistant Secretary shall 
not refer complaints to the agency.
    (ii) Suspension under this section also renders the agency 
ineligible to receive Fair Housing Assistance Program Funds under 
subpart C of this part, pending correction of the deficiencies by the 
agency.
    (3) Before the end of the suspension, a final performance 
assessment will be provided to the Assistant Secretary upon which a 
determination will be made as to the adequacy of the agency's 
performance. 

[[Page 7679]]



Sec. 115.209  Denial of interim certification.

    (a) If the Assistant Secretary determines, after application of the 
criteria set forth in this Part that the State and local law or 
ordinance, on its face or in its operation, does not provide 
substantive rights, procedures, remedies, and availability of judicial 
review for alleged discriminatory housing practices which are 
substantially equivalent to those provided in the Fair Housing Act, the 
Assistant Secretary shall inform the State or local official in writing 
of the reasons for that determination.
    (b) The agency, within 20 days from the date of the receipt of this 
notice, may submit, in writing, any opposition to the planned denial of 
Interim Certification to the Assistant Secretary. The Assistant 
Secretary will evaluate all pertinent written comments, information, 
and documentation. If, after reviewing all materials submitted by the 
agency, the Assistant Secretary is still of the opinion that interim 
certification should be denied, the Assistant Secretary will inform the 
agency in writing of that determination.
    (c) If the agency does not, within 20 days of receipt of the 
Assistant Secretary's notice of denial of interim certification, make a 
request of the Assistant Secretary under paragraph (b) of this section 
to submit additional data, views, or comments, no further action shall 
be required of the Assistant Secretary and denial of interim 
certification shall occur.


Sec. 115.210  Procedure for certification.

    (a)(1) Certification. If the Assistant Secretary determines, after 
application of the criteria set forth in Secs. 115.202, 115.203 and 
this section, that the State or local law or ordinance, both ``on its 
face'' and ``in operation,'' provides substantive rights, procedures, 
remedies, and judicial review procedures for alleged discriminatory 
housing practices that are substantially equivalent to those provided 
in the Act, the Assistant Secretary may enter into a Memorandum of 
Understanding (MOU) with the agency. The MOU is a written agreement 
providing for the referral of complaints to the agency and for 
communication procedures between the agency and HUD that are adequate 
to permit the Assistant Secretary to monitor the agency's continuing 
substantial equivalency certification. A MOU, after it is signed by all 
appropriate signatories, may authorize an agency to be a certified 
agency for a period of not more than five years.
    (2) Performance Improvement Plan. If the agency is not 
administering its law or ordinance in a manner that is substantially 
equivalent, the Assistant Secretary, may, but need not, offer a 
Performance Improvement Plan (PIP) to the agency. The PIP will outline 
the agency's deficiencies, identify necessary corrective actions, and 
include a timetable for completion.
    (3) If the agency receives a PIP, funding under the FHAP may be 
suspended for the duration of the PIP. Once the agency has implemented 
corrective actions to eliminate the deficiencies, and such corrective 
actions are accepted by the Assistant Secretary, funding may be 
reinstated.
    (b) The Assistant Secretary shall annually assess the performance 
of an agency to determine whether it continues to qualify for 
certification under this part. If the Assistant Secretary affirmatively 
concludes that the agency's law and performance have complied with the 
requirements of this part in each of the five years, the Assistant 
Secretary may offer the agency an updated Memorandum of Understanding.
    (c) An agency shall receive interim certification prior to 
receiving certification.


Sec. 115.211  Suspension of certification.

    (a)(1) The Assistant Secretary will suspend the agency's 
certification if the Assistant Secretary has reason to believe that the 
State or locality may have limited the effectiveness of the agency's 
implementation of the fair housing law or ordinance by:
    (i) Amending the fair housing law or ordinance;
    (ii) Adopting rules or procedures concerning the fair housing law 
or ordinance; or
    (iii) Issuing judicial or other authoritative interpretations of 
the fair housing law or ordinance.
    (2) If the Assistant Secretary suspends certification under 
paragraph (a)(1) of this section, such suspension will remain in effect 
until the Assistant Secretary conducts a review of the changes in 
language and/or interpretation and determines whether the law or 
ordinance remains substantially equivalent on its face and in its 
operation to the Act.--
    (i) If the Assistant Secretary determines that the law or ordinance 
remains substantially equivalent on its face and in operation to the 
Act, the Assistant Secretary will rescind the suspension and reinstate 
the agency's interim certification and/or recommend the agency for 
certification. HUD will provide reimbursement for cases processed 
during the period of the suspension.
    (ii) If the Assistant Secretary determines that the actions taken 
by the State or locality do limit the agency's effectiveness, 
certification will be withdrawn pursuant to Sec. 115.212.
    (b)(1) The Assistant Secretary will suspend the certification of an 
agency charged with the administration of a fair housing law or 
ordinance, if the Assistant Secretary has reason to believe that the 
agency's performance does not comply with the criteria set forth by 
this part. Such suspension shall not exceed 180 days.
    (2) If the agency is suspended pursuant to paragraph (b) of this 
section, the FHEO Field Office will not provide payment for complaints 
processed within that period of time unless and until the Assistant 
Secretary determines that the agency is fully in compliance with 
115.202 of this part. The FHEO Field Office will provide technical 
assistance to the agency during this period of time.--
    (i) During the period of a suspension the Assistant Secretary shall 
not refer complaints to the agency.
    (ii) Suspension under this section also renders the agency 
ineligible to receive Fair Housing Assistance Program Funds under 
subpart C of this part, pending correction of the deficiencies by the 
agency.
    (3) Before the end of the suspension, a final performance 
assessment will be provided to the Assistant Secretary upon which a 
determination will be made as to the adequacy of the agency's 
performance.


Sec. 115.212  Withdrawal of certification.

    (a) If the Assistant Secretary finds, as a result of a review 
undertaken in accordance with this part, that the agency's fair housing 
law or ordinance no longer meets the requirements of this part, the 
Assistant Secretary shall propose to withdraw the certification 
previously granted.
    (b) The Assistant Secretary will propose withdrawal of 
certification under paragraph (a) of this section unless further review 
and information or documentation establishes that the current law and/
or the agency's administration of the law meets the criteria set out in 
this part.
    (c) If the Assistant Secretary determines, after application of the 
criteria set forth in this Part, that the state or local law or 
ordinance, in operation, does not provide substantive rights, 
procedures, remedies, and availability of judicial review for alleged 
discriminatory housing practices which are substantially equivalent to 
those provided in the Fair Housing Act, the Assistant Secretary shall 
inform the 

[[Page 7680]]
State or local official in writing of the reasons for that 
determination.

Subpart C--Fair Housing Assistance Program (FHAP)


Sec. 115.300  Purpose.

    The purpose of the Fair Housing Assistance Program (FHAP) is to 
provide assistance to State and local fair housing enforcement 
agencies. The intent of this funding program is to build a coordinated 
intergovernmental enforcement effort to further fair housing and to 
encourage the agencies to assume a greater share of the responsibility 
for the administration and enforcement of their fair housing laws and 
ordinances. This financial assistance is designed to provide support 
for:
    (a) The processing of dual-filed complaints;
    (b) Training under the Fair Housing Act and the agencies' fair 
housing law;
    (c) The provision of technical assistance;
    (d) The creation and maintenance of data and information systems; 
and
    (e) The development and enhancement of other fair housing 
enforcement projects.


Sec. 115.301  Agency eligibility criteria.

    Any agency with certification or interim certification under 
subpart A of this part, and which has entered into a MOU or interim 
agreement, is eligible to participate in the FHAP.


Sec. 115.302  Capacity Building Funds.

    (a) Capacity Building Funds (CBF) are funds that HUD may provide to 
an agency with interim certification during the agency's first three 
years of participation in the FHAP. Agencies receiving CBF are not 
eligible to receive contributions funds under Sec. 115.304.
    (b) Capacity Building Funds will be provided in a fixed annual 
amount to be utilized for the eligible activities established pursuant 
to Sec. 115.303. However, in the second and third year of the agency's 
participation in the FHAP, HUD has the option to permit the agency to 
receive Capacity Building funding on a per case basis, rather than in a 
single annual amount.
    (c) In order to receive capacity building funds, agencies will be 
required to submit a statement of work which identifies:
    (1) The objectives and activities to be carried out with the CBFs 
received;
    (2) A plan for training all of the agency's employees involved in 
the administration of the agency's fair housing law or ordinance;
    (3) A statement of the agency's intention to participate in HUD-
sponsored training in accordance with the training requirements set out 
in the cooperative agreement;
    (4) A description of the agency's complaint processing data and 
information system or, alternatively, whether the agency plans to use 
capacity building funds to purchase and install a data system; and
    (5) A description of any other fair housing activities that the 
agency will undertake with its capacity building funds.--
    (i) All such activities must address matters affecting fair housing 
enforcement which are cognizable under the Fair Housing Act. Any 
activities which do not address the implementation of the agency's fair 
housing law or ordinance, and which are therefore not cognizable under 
the Fair Housing Act, will be disapproved.
    (ii) Reserved.


Sec. 115.303  Eligible activities For Capacity Building Funds.

    The primary purposes of capacity building funding is to provide for 
complaint activities and to support activities that produce increased 
awareness of fair housing rights and remedies. All such activities must 
support the agency's administration of its fair housing law or 
ordinance and address matters affecting fair housing which are 
cognizable under the Fair Housing Act. HUD will periodically publish a 
list of eligible activities in the Federal Register.


Sec. 115.304  Agencies Eligible for Contributions Funds.

    (a) An agency that has received Capacity Building Funds for three 
consecutive years is eligible for contributions funding. Contributions 
funding consists of three categories:
    (1) Complaint Processing (CP) Funds;
    (2) Administrative Costs (AC) Funds; and
    (3) Special Enforcement Efforts (SEE) Funds (Sec. 115.305 sets 
forth the requirements for SEE funding).
    (b) Complaint Processing Funds. (1) Agencies receiving CP funds 
will receive such support based solely on the number of complaints 
processed by the agency and accepted for payment by the Director of 
FHEO during a consecutive, specifically identified, 12-month period. 
Normally this period will be the previous year's funding cycle.
    (2) Funding for agencies in their fourth year of participation in 
the FHAP will be based on the number of complaints acceptably processed 
by the agency during the agency's third year of participation in the 
FHAP.
    (c) Administrative Cost (AC) Funds. Agencies which acceptably 
process 100 or more cases will receive no less than 10 percent of the 
agency's annual FHAP payment amount for the preceding year, in addition 
to case processing funds, contingent on fiscal year appropriations. 
Agencies that acceptably process fewer than 100 cases will receive a 
flat rate contingent on fiscal year appropriations.
    (1) Agencies will be required to provide HUD with a statement of 
how they intend to use the AC funds. HUD may require that some or all 
AC funding be directed to activities designed to create, modify, or 
improve local, regional, or national information systems concerning 
fair housing matters (including the purchase of state of the art 
computer systems and getting on line or internet access, etc.).
    (2) [Reserved.]


Sec. 115.305  Special Enforcement Effort (SEE) funds.

    (a) SEE funds are funds that HUD will provide to an agency to 
enhance enforcement activities of the agency's fair housing law or 
ordinance. SEE funds will be a maximum of 20% of the agency's total 
FHAP cooperative agreement for the previous contract year, based on 
approval of eligible activity or activities, and based on the 
appropriation of funds. All agencies receiving contributions funds are 
eligible to receive SEE funds if they meet three of the six criteria 
set out below:
    (1) The agency has taken action to enforce a subpoena or make use 
of its prompt judicial action authority within the past year;
    (2) The agency has held at least one administrative hearing or has 
had at least one case on a court's docket for civil proceedings during 
the past year;
    (3) At least ten percent of the agency's fair housing caseload 
resulted in written conciliation agreements providing monetary relief 
for the complainant as well as remedial action, monitoring, reporting 
and public interest relief provisions;
    (4) The agency has had in the most recent three years, or is 
currently handling, at least one major fair housing systemic 
investigation requiring an exceptional amount of expenditure of funds;
    (5) The agency's administration of its fair housing law or 
ordinance received meritorious mention for its complaint processing or 
other fair housing activities that were innovative; or
    (6) The agency must have fully investigated 10 fair housing 
complaints during the previous funding year.
    (b) Notwithstanding the eligibility criteria set forth in paragraph 
(a) of this section, an agency will be ineligible for 

[[Page 7681]]
SEE funds if 20% or more of an agency's fair housing complaints result 
in administrative closures.
    (c) SEE funding amounts are subject to the FHAP appropriation by 
Congress and will be described in writing in the cooperative agreements 
annually. HUD will periodically publish a list of activities eligible 
for SEE funding in the Federal Register.


Sec. 115.306  Training funds.

    (a) All agencies are eligible to receive training funds. Training 
funds are fixed amounts based on the number of agency employees to be 
trained and shall be allocated based on the FHAP appropriation. 
Training funds may be used only for HUD-approved or HUD-sponsored 
training. Agency initiated training or other formalized training may be 
included in this category. However, such training must first be 
approved by the Cooperative Agreement Officer (CAO) and the Government 
Technical Representative (GTR). Specifics on the amount of training 
funds that an agency will receive and, if applicable, amounts that may 
be deducted, will be set out in the cooperative agreement each year.
    (b) All staff of the agency responsible for the administration of 
the fair housing law or ordinance must participate in mandatory FHAP 
training sponsored by HUD at the national and field office levels. If 
the agency does not participate in the mandatory national and field 
office HUD-sponsored training, training funds will be deducted from 
their overall training amount.


Sec. 115.307  Additional requirements for participation in the FHAP.

    (a) Agencies which participate in the FHAP must:
    (1) Conform to reporting and record maintenance requirements 
determined by the Assistant Secretary;
    (2) Agree to on-site technical assistance and guidance and 
implementation of corrective actions set out by the Department in 
response to deficiencies found during the technical assistance or 
performance assessment evaluations of the agency's operations;
    (3) Agree to implement and adhere to policies and procedures (as 
their laws and ordinances will allow) provided to the agencies by the 
Assistant Secretary, including but not limited to guidance on 
investigative techniques, case file preparation and organization, 
implementation of data elements for complaint tracking, etc.;
    (4) Spend at least twenty (20) percent of its total annual budget 
on fair housing activities; and
    (5) Not unilaterally reduce the level of financial resources 
currently committed to fair housing complaint processing (budget and 
staff reductions or other actions outside the control of the agency 
will not, alone, result in a negative determination for the agency's 
participation in the FHAP).
    (b) The agency's refusal to provide information, assist in 
implementation, or carry out the requirements of paragraph (a) of this 
section may result in the denial or interruption of its receipt of FHAP 
funds.


Sec. 115.308  Standards for FHAP program review.

    HUD will conduct reviews of the agency's cooperative agreement 
implementation. This review will also identify:
    (a) How the agency used the FHAP funds received;
    (b) Whether its draw-down of funds was timely;
    (c) Whether the agency has been audited and received copies of the 
audit reports in accordance with applicable rules and regulations for 
State and local governmental entities; and
    (d) If the agency complied with all certifications and assurances 
required by HUD in the cooperative agreement.


Sec. 115.309  Reporting and recordkeeping requirements.

    (a) The agency shall establish and maintain records demonstrating:
    (1) Its financial administration of the FHAP funds; and
    (2) Its performance under the FHAP.
    (b) In accordance with the cooperative agreement in effect between 
the agency and HUD, the agency will provide to HUD the agency reports 
maintained pursuant to paragraph (a) of this section. The agency will 
provide reports to HUD in accordance with the cooperative agreement in 
effect between the agency and HUD for frequency and content, regarding 
complaint processing, training, data and information systems, 
enforcement and other activities explaining how FHAP funds were 
expended and used.
    (c) The agency will permit reasonable public access to its records, 
consistent with the jurisdiction's requirements for release of 
information. Documents relevant to the agency's participation in FHAP 
must be made available at the agency's office during normal working 
hours (except that documents with respect to ongoing fair housing 
complaint investigations are exempt from public review consistent with 
Federal and/or State law).
    (d) The Secretary, the Inspector General of HUD, and the 
Comptroller General of the United States, or any of their duly 
authorized representatives, shall have access to all pertinent books, 
accounts, reports, files, and other payments for surveys, audits, 
examinations, excerpts, and transcripts as they relate to the agency's 
participation in FHAP.
    (e) All files will be kept in such fashion as to permit audits 
under applicable procurement regulations and guidelines and the Single 
Audit requirements for State and local agencies.
    (f) The FHAP financial records and files will be kept at least 
three years on-site after any cooperative agreement has terminated.


Sec. 115.310  Subcontracting under the FHAP.

    If an agency subcontracts to a public or private agency any 
activity for which the subcontractor will receive FHAP funds, the 
agency must ensure and certify in writing that the subcontractor is:
    (a) Using services and facilities that are accessible in accordance 
with the Americans with Disability Act (ADA) (29 U.S.C. 706) and 
Section 504 of the 1973 Rehabilitation Act (29 U.S.C. 792);
    (b) Complying with the standards of Section 3 of the Housing and 
Urban Development Act (12 U.S.C. 1701u); and
    (c) Furthering fair housing.


Sec. 115.311  Corrective and remedial action.

    (a) If HUD makes a preliminary determination that an agency has not 
complied with Sec. 115.309, the agency will be given written notice of 
this determination and an opportunity to show, through demonstrable 
facts and data, that it has done so within a time prescribed by HUD.
    (b) If an agency fails to demonstrate to HUD's satisfaction that it 
has met program review standards, HUD will request the agency to submit 
and comply with proposals for action to correct, mitigate, or prevent 
performance deficiencies, including, but not limited to:
    (1) Preparing and/or following a schedule of actions for carrying 
out the affected fair housing activities;
    (2) Establishing and/or following a management plan that assigns 
responsibilities for carrying out the actions required;
    (3) Canceling or revising activities likely to be affected by a 
performance deficiency before expending FHAP funds for the activities; 
and
    (4) Redistributing or suspending disbursement of FHAP funds that 
have not yet been disbursed.
    (c) HUD may condition the use of FHAP award amounts with respect to 
an agency's succeeding fiscal year's allocation on the satisfactory 

[[Page 7682]]
completion by the agency of appropriate corrective actions. When the 
use of funds is so conditioned, HUD will specify the deficiency(ies), 
the required corrective action(s), and the time allowed for taking 
these actions. Failure of the agency to complete the actions as 
specified will result in a reduction or withdrawal of the FHAP 
allocation in an amount not to exceed the amount conditionally granted.

    Dated: January 31, 1996.
Elizabeth K. Julian,
Acting Assistant Secretary for Fair Housing and Equal Opportunity.
[FR Doc. 96-4437 Filed 2-27-96; 8:45 am]
BILLING CODE 4210-28-P