[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Rules and Regulations]
[Pages 8814-8822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4908]




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_______________________________________________________________________

Part V





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Parts 962 and 984



Family Self-Sufficiency Program; Streamlining Final Rule

  Federal Register / Vol. 61, No. 44 / Tuesday, March 5, 1996 / Rules 
and Regulations   

[[Page 8814]]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 962 and 984

[Docket No. FR-3989-F-01]
RIN 2577-AB61


Office of the Assistant Secretary for Public and Indian Housing; 
Family Self-Sufficiency Program; Streamlining Final Rule

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Final rule.

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

SUMMARY: This final rule amends HUD's regulations for the Family Self-
Sufficiency (FSS) Program. In an effort to comply with the President's 
regulatory reform initiatives, this rule will streamline the Family 
Self-Sufficiency Program regulations by consolidating the public 
housing and the Section 8 FSS regulations and by eliminating redundant 
or otherwise unnecessary provisions. This final rule will make the 
Family Self-Sufficiency regulations clearer and more concise.

EFFECTIVE DATE: April 4, 1996.

FOR FURTHER INFORMATION CONTACT: Louise K. Hunt, Director for Policies 
and Procedures, Room 4216, Department of Housing and Urban Development, 
451 Seventh Street, SW., Washington, DC 20410, telephone number (202) 
708-3887, ext. 330. This number may be accessed through TDD by calling 
the Federal Relay Service at (202) 708-9300 or 1-800-877-TDDY (1-800-
877-8389). (Other than the ``1-800'' number, these telephone numbers 
are not toll-free.)

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act Statement

    This rule does not alter existing information collection 
requirements. The information collection requirements contained in 
Secs. 962.201, 962.302, 962.305, and 962.401 of this rule were 
previously submitted to the Office of Management and Budget for review 
under the Paperwork Reduction Act of 1995 (42 U.S.C. 3501-3520) and had 
been approved under the control number 2577-0178. The Department's 
request for reinstatement of this control number is pending at OMB. 
(See notice published in the Federal Register on November 30, 1995, at 
60 FR 61563.) An agency may not conduct or sponsor, and person is not 
required to respond to a collection of information unless the 
collection displays a valid control number. The OMB control number, 
when reinstated, will be added by separate notice in the Federal 
Register.

Background

    On March 4, 1995, President Clinton issued a memorandum to all 
Federal departments and agencies regarding regulatory reinvention. In 
response to this memorandum, the Department of Housing and Urban 
Development conducted a page-by-page review of its regulations to 
determine which can be eliminated, consolidated, or otherwise improved. 
HUD has determined that the regulations for the public housing and 
Section 8 FSS Programs can be improved and streamlined by consolidating 
these regulations. The two current Code of Federal Regulations parts 
affected (part 962 for the public housing FSS Program and part 984 for 
the Section 8 FSS program) contain many identical provisions. 
Consolidating the parts should especially benefit HAs that operate both 
a public housing and a Section 8 FSS program.
    Some provisions in the regulations are not regulatory requirements. 
For example, several sections in the regulations contain nonbinding 
guidance or explanations. While this information is very helpful to 
recipients, HUD will more appropriately provide this information 
through handbook guidance or other materials rather than maintain it in 
the CFR.
    Section 984.201, Action Plan, contains revisions to conform to 
changes to administrative plan requirements in 24 CFR part 982 for the 
Section 8 Tenant-Based Assistance Program. (See 24 CFR 982.54, as added 
by 60 FR 34698, July 3, 1995, and the related preamble discussion of 
the FSS action plan at 60 FR 34661.) In conformity with those changes 
this rule removes the requirement in the current Section 8 FSS program 
regulation to include certain FSS policies in the administrative plan 
rather than in the action plan.
    This rule does not affect the Indian housing FSS Program, which is 
codified at 24 CFR part 950 with other Indian housing programs. This 
rule applies to Indian Housing Authorities that opt or have opted to 
participate in the Section 8 FSS Program.

Justification for Final Rulemaking

    HUD generally publishes a rule for public comment before issuing a 
rule for effect, in accordance with its own regulations on rulemaking 
in 24 CFR part 10. However, part 10 provides for exceptions to the 
general rule if the agency finds good cause to omit advance notice and 
public participation. The good cause requirement is satisfied when 
prior public procedure is ``impracticable, unnecessary, or contrary to 
the public interest'' (24 CFR 10.1). HUD finds that good cause exists 
to publish this rule for effect without first soliciting public 
comment. This rule merely consolidates existing CFR parts and removes 
unnecessary regulatory provisions and does not establish or affect 
substantive policy. Therefore, prior public comment is unnecessary.

Other Matters

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this final rule, and in so 
doing certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. This rule merely 
streamlines regulations by removing redundant or unnecessary 
provisions. The rule will have no adverse or disproportionate economic 
impact on small businesses.

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 initially implementing the FSS Program (HUD 
Docket No. FR-2961). 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, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that 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. No programmatic or policy changes 
will result from this rule that would affect the relationship between 
the Federal Government and State and local governments. 

[[Page 8815]]


Executive Order 12606, The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this rule will not have 
the potential for significant impact on family formation, maintenance, 
or general well-being, and thus is not subject to review under the 
Order. No significant change in existing HUD policies or programs will 
result from promulgation of this rule.

Catalog

    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by this proposed rule is 14.850, 14.855, and 14.887.

List of Subjects

24 CFR Part 962

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

24 CFR Part 984

    Grant programs--housing and community development, Housing, Rent 
subsidies, Reporting and recordkeeping requirements.
    Accordingly, under the authority of 42 U.S.C. 3535(d), parts 962 
and 984 of 24 Code of Federal Regulations are amended as follows:

PART 962--[REMOVED]

    1. Part 962 is removed.
    2. Part 984 is revised to read as follows:

PART 984--SECTION 8 AND PUBLIC HOUSING FAMILY SELF-SUFFICIENCY 
PROGRAM

Subpart A--General

Sec.
984.101  Purpose, scope, and applicability.
984.102  Program objectives.
984.103  Definitions.
984.104  Basic requirements of the FSS program.
984.105  Minimum program size.

Subpart B--Program Development and Approval Procedures

984.201  Action Plan.
984.202  Program Coordinating Committee (PCC).
984.203  FSS family selection procedures.
984.204  On-site facilities.

Subpart C--Program Operation

984.301  Program implementation.
984.302  Administrative fees.
984.303  Contract of participation.
984.304  Total tenant payment, family rent, and increases in family 
income.
984.305  FSS account.
984.306  Section 8 residency and portability requirements.

Subpart D--Reporting

984.401  Reporting.

    Authority: 42 U.S.C. 1437f, 1437u, and 3535(d).

Subpart A--General


Sec. 984.101  Purpose, scope, and applicability.

    (a) Purpose. (1) The purpose of the Family Self-Sufficiency (FSS) 
program is to promote the development of local strategies to coordinate 
the use of public and Indian housing assistance and housing assistance 
under the Section 8 rental certificate and rental voucher programs with 
public and private resources, to enable families eligible to receive 
assistance under these programs to achieve economic independence and 
self-sufficiency.
    (2) The purpose of this part is to implement the policies and 
procedures applicable to operation of a local FSS program, as 
established under section 23 of the 1937 Act (42 U.S.C. 1437u), under 
HUD's rental voucher, rental certificate, and public housing programs.
    (b) Scope. (1) Each PHA that received funding for public housing 
units under the FY 1991 and FY 1992 FSS incentive award competitions 
must operate a public housing FSS program.
    (2) Each HA that received funding for Section 8 rental certificates 
or rental vouchers under the combined FY 1991/1992 FSS incentive award 
competition must operate a Section 8 FSS program.
    (3) Unless the HA receives an exception from the program as 
provided in Sec. 984.105, each HA that, in FY 1993 or any subsequent 
FY, received or receives funding for additional rental certificates or 
rental vouchers must operate a Section 8 FSS program or for additional 
public housing units must operate a public housing FSS program.
    (c) Applicability--(1) Public housing. This part applies to public 
housing assisted under the 1937 Act.
    (2) Indian Housing Authorities. This part does not apply to Indian 
housing. The regulations governing Indian housing FSS programs are set 
forth in 24 CFR part 950, subpart R. The operation of a Section 8 FSS 
program is optional for Indian Housing Authorities (IHAs) that operate 
a certificate or voucher program. IHAs that elect to operate a Section 
8 FSS program are subject to the requirements of this part, except that 
Sec. 984.105(c) of this subpart A governing minimum program size does 
not apply to IHAs. Additionally, IHAs that received section 8 units 
under the FSS incentive award competitions and are operating a section 
8 FSS program are not subject to the minimum program size requirements.
    (3) Section 8. This part also applies to the Section 8 rental 
certificate program and the Section 8 rental voucher program authorized 
by Section 8 of the 1937 Act and implemented at 24 CFR parts 882, 887, 
and 982.


Sec. 984.102  Program objectives.

    The objective of the FSS program is to reduce the dependency of 
low-income families on welfare assistance and on Section 8, public or 
Indian housing assistance, or any Federal, State, or local rent or 
homeownership subsidies. Under the FSS program, low-income families are 
provided opportunities for education, job training, counseling, and 
other forms of social service assistance, while living in assisted 
housing, so that they may obtain the education, employment, and 
business and social skills necessary to achieve self-sufficiency, as 
defined in Sec. 984.103 of this subpart A. The Department will measure 
the success of a local FSS program not only by the number of families 
who achieve self-sufficiency, but also by the number of FSS families 
who, as a result of participation in the program, have family members 
who obtain their first job, or who obtain higher paying jobs; no longer 
need benefits received under one or more welfare programs; obtain a 
high school diploma or higher education degree; or accomplish similar 
goals that will assist the family in obtaining economic independence.


Sec. 984.103  Definitions.

    (a) The terms 1937 Act, Fair Market Rent, HUD, Indian Housing 
Authority (IHA), Public Housing Agency (PHA), Secretary, and Section 8, 
as used in this part, are defined in 24 CFR 5.100.
    (b) As used in this part:
    Certification means a written assertion based on supporting 
evidence, provided by the FSS family or the HA, as may be required 
under this part, and which:
    (1) Shall be maintained by the HA in the case of the family's 
certification, or by HUD in the case of the HA's certification;
    (2) Shall be made available for inspection by HUD, the HA, and the 
public, as appropriate; and
    (3) Shall be deemed to be accurate for purposes of this part, 
unless the Secretary or the HA, as applicable, determines otherwise 
after inspecting the evidence and providing due notice and opportunity 
for comment.
    Chief executive officer (CEO). The CEO of a unit of general local 
government means the elected official or 

[[Page 8816]]
the legally designated official, who has the primary responsibility for 
the conduct of that entity's governmental affairs. The CEO for an 
Indian tribe is the tribal governing official.
    Contract of participation means a contract in a form approved by 
HUD, entered into between a participating family and an HA operating an 
FSS program that sets forth the terms and conditions governing 
participation in the FSS program. The contract of participation 
includes all individual training and services plans entered into 
between the HA and all members of the family who will participate in 
the FSS program, and which plans are attached to the contract of 
participation as exhibits. For additional detail, see Sec. 984.303 of 
this subpart A.
    Earned income means income or earnings included in annual income 
from wages, tips, salaries, other employee compensation, and self-
employment. (See 24 CFR 813.106(b)(1), (2) and (8) and 913.106(b)(1), 
(2) and (8).) Earned income does not include any pension or annuity, 
transfer payments, any cash or in-kind benefits, or funds deposited in 
or accrued interest on the FSS escrow account established by an HA on 
behalf of a participating family.
    Effective date of contract of participation means the first day of 
the month following the month in which the FSS family and the HA 
entered into the contract of participation.
    Eligible families means:
    (1) For the public housing FSS program, current residents of public 
housing. Eligible families also include current residents of public 
housing who are participants in local public housing self-sufficiency 
programs; and
    (2) For Section 8 FSS program, current Section 8 rental certificate 
or rental voucher program participants, including participants in the 
Project Self-Sufficiency or Operation Bootstrap or other local self-
sufficiency programs.
    Enrollment means the date that the FSS family entered into the 
contract of participation with the HA.
    Family Self-Sufficiency program or FSS program means the program 
established by an HA within its jurisdiction to promote self-
sufficiency among participating families, including the provision of 
supportive services to these families, as authorized by section 23 of 
the 1937 Act.
    FSS account means the FSS escrow account authorized by section 23 
of the 1937 Act, and as provided by Sec. 984.305 of this subpart A.
    FSS credit means the amount credited by the HA to the participating 
family's FSS account.
    FSS family or participating family means a family that resides in 
public housing or receives assistance under the rental certificate or 
rental voucher programs, and that elects to participate in the FSS 
program, and whose designated head of the family has signed the 
contract of participation.
    FSS related service program means any program, publicly or 
privately sponsored, that offers the kinds of supportive services 
described in the definition of ``supportive services'' set forth in 
this Sec. 984.103.
    FSS slots refer to the total number of public housing units or the 
total number of rental certificates or rental vouchers that comprise 
the minimum size of an HA's respective public housing FSS program or 
Section 8 FSS program.
    FY means Federal Fiscal Year (starting with October 1, and ending 
September 30, and designated by the calendar year in which it ends).
    HA means a Housing Authority--either a Public Housing Agency (PHA) 
or an Indian Housing Authority (IHA).
    Head of FSS family means the adult member of the FSS family who is 
the head of the household for purposes of determining income 
eligibility and rent.
    Housing subsidies means assistance to meet the costs and expenses 
of temporary shelter, rental housing or homeownership, including rent, 
mortgage or utility payments.
    Individual training and services plan means a written plan that is 
prepared for the head of the FSS family, and each adult member of the 
FSS family who elects to participate in the FSS program, by the HA in 
consultation with the family member, and which sets forth:
    (1) The supportive services to be provided to the family member;
    (2) The activities to be completed by that family member; and
    (3) The agreed upon completion dates for the services and 
activities. Each individual training and services plan must be signed 
by the HA and the participating family member, and is attached to, and 
incorporated as part of the contract of participation. An individual 
training and services plan must be prepared for the head of the FSS 
family.
    JOBS Program means the Job Opportunities and Basic Skills Training 
Program authorized under part F of title IV of the Social Security Act 
(42 U.S.C. 402(a)(19)).
    JTPA means the Job Training Partnership Act (29 U.S.C. 1579(a)).
    Low-income family. See definitions in 24 CFR 813.102 and 913.102.
    Participating family. See definition for ``FSS family'' in this 
section.
    Program Coordinating Committee or PCC is the committee described in 
Sec. 984.202 of this part.
    Public housing means housing assisted under the 1937 Act, excluding 
housing assisted under Section 8 of the 1937 Act.
    Self-sufficiency means that an FSS family is no longer receiving 
Section 8, public or Indian housing assistance, or any Federal, State, 
or local rent or homeownership subsidies or welfare assistance. 
Achievement of self-sufficiency, although an FSS program objective, is 
not a condition for receipt of the FSS account funds. (See Sec. 984.305 
of this part.)
    Supportive services means those appropriate services that an HA 
will make available, or cause to be made available to an FSS family 
under a contract of participation, and may include:
    (1) Child care--child care of a type that provides sufficient hours 
of operation and serves an appropriate range of ages;
    (2) Transportation--transportation necessary to enable a 
participating family to receive available services, or to commute to 
their places of employment;
    (3) Education--remedial education; education for completion of 
secondary or post secondary schooling;
    (4) Employment--job training, preparation, and counseling; job 
development and placement; and follow-up assistance after job placement 
and completion of the contract of participation;
    (5) Personal welfare--substance/alcohol abuse treatment and 
counseling;
    (6) Household skills and management--training in homemaking and 
parenting skills; household management; and money management;
    (7) Counseling--counseling in the areas of:
    (i) The responsibilities of homeownership;
    (ii) Opportunities available for affordable rental and 
homeownership in the private housing market, including information on 
an individual's rights under the Fair Housing Act; and
    (iii) Money management; and
    (8) Other services--any other services and resources, including 
case management, reasonable accommodations for individuals with 
disabilities, that the HA may determine to be appropriate in assisting 
FSS families to achieve economic independence and self-sufficiency.
    Unit size or size of unit refers to the number of bedrooms in a 
dwelling unit.
    Very low-income family. See definitions in 24 CFR 813.102 and 
913.102. 

[[Page 8817]]

    Welfare assistance means income assistance from Federal or State 
welfare programs, and includes assistance provided under the Aid to 
Families with Dependent Children (AFDC) Program, Supplemental Security 
Income (SSI) that is subject to an income eligibility test; Medicaid, 
food stamps, general assistance, or other assistance provided under a 
Federal or State program directed to meeting general living expenses, 
such as food, health care, child care, but does not include assistance 
solely directed to meeting housing expenses, and does not include 
transitional welfare assistance provided to JOBS participants.


Sec. 984.104  Basic requirements of the FSS program.

    An FSS program established under this part shall be operated in 
conformity with:
    (a) The regulations of this part, and for a Section 8 FSS program, 
the rental certificate and rental voucher regulations, codified in 24 
CFR parts 882, 887, and 982 respectively, and for a public housing FSS 
program, the applicable public housing regulations, including the 
regulations in 24 CFR parts 913, 960, and 966;
    (b) An Action Plan, as described in Sec. 984.201, and provide 
comprehensive supportive services as defined in Sec. 984.103; and
    (c) An FSS program established under this part shall be operated in 
compliance with the nondiscrimination and equal opportunity 
requirements set forth in 24 CFR part 5, with the exception of 
Executive Orders 11246, 11625, 12432, and 12138.


Sec. 984.105  Minimum program size.

    (a) General. Unless otherwise excepted from operation of an FSS 
program as provided in paragraph (c) of this section, or from operation 
of an FSS program of the minimum size as provided in paragraph (d) of 
this section, an HA shall operate an FSS program of the minimum size as 
determined in this section.
    (1) Determining minimum program size. The minimum size of a FSS 
program:
    (i) For a public housing FSS program, is equal to:
    (A) The total number of public housing units reserved in FY 1993, 
and each subsequent FY; plus (if applicable)
    (B) The number of public housing units reserved in FY 1991 and FY 
1992 under the FSS incentive award competitions;
    (ii) For a Section 8 FSS program, is equal to:
    (A) The total number of rental certificates and rental vouchers 
reserved in FY 1993, and each subsequent FY; plus (if applicable)
    (B) The number of rental certificates and rental vouchers reserved 
under the combined FY 1991/1992 FSS incentive award competition.
    (2) Applicable units and certificates and vouchers. In determining 
minimum program size, for a public housing FSS program, all new public 
housing rental units reserved will be counted and, for a Section 8 FSS 
program, all rental certificates and rental vouchers reserved will be 
counted, except those used to replace rental certificates or rental 
vouchers (renewals).
    (b) Maintaining minimum program size. As the contracts of 
participation for FSS families are completed or terminated, replacement 
FSS families must be selected to maintain the minimum program size. A 
replacement family must be selected in accordance with the FSS family 
selection procedures set forth in Sec. 984.203.
    (c) Exception to program operation. (1) Upon approval by HUD, an HA 
will not be required to establish and carry out a public housing or a 
Section 8 FSS program if the HA provides to HUD a certification, as 
defined in Sec. 984.103, that the establishment and operation of such 
an FSS program is not feasible because of local circumstances, which 
may include, but are not limited to:
    (i) Lack of accessible supportive services funding, including lack 
of the availability of programs under JTPA or JOBS;
    (ii) Lack of funding for reasonable administrative costs;
    (iii) Lack of cooperation by other units of State or local 
government; or
    (iv) Lack of interest in participating in the FSS program on the 
part of eligible families.
    (2) An exception will not be granted if HUD determines that local 
circumstances do not preclude the HA from effectively operating an FSS 
program that is smaller than the minimum program size.
    (d) Reduction in program size. Upon approval by HUD, an HA may be 
permitted to operate a public housing or a Section 8 FSS program that 
is smaller than the minimum program size if the HA provides to HUD a 
certification, as defined in Sec. 984.103, that the operation of an FSS 
program of the minimum program size is not feasible because of local 
circumstances, which may include, but are not limited to:
    (1) Decrease in or lack of accessible supportive services, 
including decrease in the availability of programs under JTPA or JOBS;
    (2) Decrease in or lack of funding for reasonable administrative 
costs;
    (3) Decrease in or lack of cooperation by other units of State or 
local government;
    (4) Decrease in or lack of interest in participating in the FSS 
program on the part of eligible families.
    (e) Review of certification records. HUD reserves the right to 
examine, during its management review of the HA, or at any time, the 
documentation and data that an HA relied on in certifying to the 
unfeasibility of its establishing and operating an FSS program, or of 
operating an FSS program of less than minimum program size.

Subpart B--Program Development and Approval Procedures


Sec. 984.201  Action Plan.

    (a) Requirement for Action Plan--(1) General. To participate in the 
FSS program, an HA must have a HUD-approved Action Plan that complies 
with the requirements of this section.
    (2) [Reserved]
    (b) Development of Action Plan. The Action Plan shall be developed 
by the HA in consultation with the chief executive officer of the 
applicable unit of general local government, and the Program 
Coordinating Committee.
    (c) Initial submission and revisions--(1) Initial submission. 
Unless the dates set forth in this paragraph (c) are extended by HUD 
for good cause, an HA that is establishing its first FSS program must 
submit an Action Plan to HUD for approval within 90 days of 
notification by HUD of approval of:
    (i) The HA's application for incentive award units; or
    (ii) If the HA did not apply for FSS incentive award units, other 
funding that establishes the obligation to operate an FSS program.
    (2) Revision. Following initial approval of the Action Plan by HUD, 
no further approval of the Action Plan is required unless the HA 
proposes to make policy changes to the Action Plan, or changes are 
required by HUD. Any changes to the Action Plan must be submitted to, 
and approved by, HUD.
    (d) Contents of Plan. The Action Plan shall describe the policies 
and procedures of the HA for operation of a local FSS program, and 
shall contain, at a minimum, the following information:
    (1) Family demographics. A description of the number, size, 
characteristics, and other demographics (including racial and ethnic 
data), and the supportive service needs of the families expected to 
participate in the FSS program;
    (2) Estimate of participating families. A description of the number 
of eligible 

[[Page 8818]]
FSS families who can reasonably be expected to receive supportive 
services under the FSS program, based on available and anticipated 
Federal, tribal, State, local, and private resources;
    (3) Eligible families from other self-sufficiency program. If 
applicable, the number of families, by program type, who are 
participating in Operation Bootstrap, Project Self-Sufficiency, or any 
other local self-sufficiency program who are expected to agree to 
execute an FSS contract of participation.
    (4) FSS family selection procedures. A statement indicating the 
procedures to be utilized to select families for participation in the 
FSS program, subject to the requirements governing the selection of FSS 
families, set forth in Sec. 984.203. This statement must include a 
description of how the HA's selection procedures ensure that families 
will be selected without regard to race, color, religion, sex, 
handicap, familial status, or national origin.
    (5) Incentives to encourage participation--a description of the 
incentives that the HA intends to offer eligible families to encourage 
their participation in the FSS program (incentives plan). The 
incentives plan shall provide for the establishment of the FSS account 
in accordance with the requirements set forth in Sec. 984.305, and 
other incentives, if any, designed by the HA. The incentives plan shall 
be part of the Action Plan.
    (6) Outreach efforts. A description of:
    (i) The HA's efforts, including notification and outreach efforts, 
to recruit FSS participants from among eligible families; and
    (ii) The HA's actions to be taken to assure that both minority and 
non-minority groups are informed about the FSS program, and how the HA 
will make this information known.
    (7) FSS activities and supportive services. A description of the 
activities and supportive services to be provided by both public and 
private resources to FSS families, and identification of the public and 
private resources which are expected to provide the supportive 
services.
    (8) Method for identification of family support needs. A 
description of how the FSS program will identify the needs and deliver 
the services and activities according to the needs of the FSS families;
    (9) Program termination; withholding of services; and available 
grievance procedures. A description of the HA's policies concerning: 
terminating participation in the FSS program, withholding of supportive 
services, or terminating or withholding Section 8 assistance, on the 
basis of a family's failure to comply with the requirements of the 
contract of participation; and the grievance and hearing procedures 
available for FSS families.
    (10) Assurances of non-interference with rights of non-
participating families. An assurance that a family's election not to 
participate in the FSS program will not affect the family's admission 
to public housing or to the Section 8 program or the family's right to 
occupancy in accordance with its lease.
    (11) Timetable for program implementation. A timetable for 
implementation of the FSS program, as provided in Sec. 984.301(a)(1), 
including the schedule for filling FSS slots with eligible FSS 
families, as provided in Sec. 984.301;
    (12) Certification of coordination. A certification that 
development of the services and activities under the FSS program has 
been coordinated with the JOBS Program; the programs provided under the 
JTPA; and any other relevant employment, child care, transportation, 
training, and education programs (e.g., Job Training for the Homeless 
Demonstration program) in the applicable area, and that implementation 
will continue to be coordinated, in order to avoid duplication of 
services and activities; and
    (13) Optional additional information. Such other information that 
would help HUD determine the soundness of the HA's proposed FSS 
program.
    (e) Eligibility of a combined program. An HA that wishes to operate 
a joint FSS program with other HAs may combine its resources with one 
or more HAs to deliver supportive services under a joint Action Plan 
that will provide for the establishment and operation of a combined FSS 
program that meets the requirements of this part.
    (f) Single action plan. HAs implementing both a Section 8 FSS 
program and a public or Indian housing FSS program may submit one 
Action Plan.


Sec. 984.202  Program Coordinating Committee (PCC).

    (a) General. Each participating HA must establish a PCC whose 
functions will be to assist the HA in securing commitments of public 
and private resources for the operation of the FSS program within the 
HA's jurisdiction, including assistance in developing the Action Plan 
and in implementing the program.
    (b) Membership--(1) Required membership. The PCC must: (i) For a 
public housing FSS program, consist of representatives of the PHA, and 
the residents of public housing. The public housing resident 
representatives shall be solicited from one or more of the following 
groups:
    (A) An area-wide or city-wide resident council, if one exists;
    (B) If the PHA will be transferring FSS participants to vacant 
units in a specific public housing development, the resident council or 
resident management corporation, if one exists, of the public housing 
development where the public housing FSS program is to be carried out;
    (C) Any other public housing resident group, which the PHA believes 
is interested in the FSS program, and would contribute to the 
development and implementation of the FSS program; and
    (ii) For a Section 8 FSS program, consist of representatives of the 
HA, and of residents assisted under the section 8 rental certificate or 
rental voucher program or under HUD's public or Indian housing 
programs.
    (2) Recommended membership. Membership on the PCC also may include 
representatives of the unit of general local government served by the 
HA, local agencies (if any) responsible for carrying out JOBS training 
programs, or programs under the JTPA, and other organizations, such as 
other State, local or tribal welfare and employment agencies, public 
and private education or training institutions, child care providers, 
nonprofit service providers, private business, and any other public and 
private service providers with resources to assist the FSS program.
    (c) Alternative committee. The HA may, in consultation with the 
chief executive officer of the unit of general local government served 
by the HA, utilize an existing entity as the PCC if the membership of 
the existing entity consists or will consist of the individuals 
identified in paragraph (b)(1) of this section, and also includes 
individuals from the same or similar organizations identified in 
paragraph (b)(2) of this section.


Sec. 984.203  FSS family selection procedures.

    (a) Preference in the FSS selection process. An HA has the option 
of giving a selection preference for up to 50 percent of its public 
housing FSS slots and of its Section 8 FSS slots respectively to 
eligible families, as defined in Sec. 984.103, who have one or more 
family members currently enrolled in an FSS related service program or 
on the waiting list for such a program. The HA may limit the selection 
preference given to participants in and applicants for FSS related 
service programs to one or more eligible FSS related service 

[[Page 8819]]
programs. An HA that chooses to exercise the selection preference 
option must include the following information in its Action Plan:
    (1) The percentage of FSS slots, not to exceed 50 percent of the 
total number of FSS slots for each of its FSS programs, for which it 
will give a selection preference;
    (2) The FSS related service programs to which it will give a 
selection preference to the programs' participants and applicants; and
    (3) The method of outreach to, and selection of, families with one 
or more members participating in the identified programs.
    (b) FSS selection without preference. For those FSS slots for which 
the HA chooses not to exercise the selection preference provided in 
paragraph (a) of this section, the FSS slots must be filled with 
eligible families in accordance with an objective selection system, 
such as a lottery, the length of time living in subsidized housing, or 
the date the family expressed an interest in participating in the FSS 
program. The objective system to be used by the HA must be described in 
the HA's Action Plan.
    (c) Motivation as a selection factor--(1) General. An HA may screen 
families for interest, and motivation to participate in the FSS 
program, provided that the factors utilized by the HA are those which 
solely measure the family's interest, and motivation to participate in 
the FSS program.
    (2) Permissible motivational screening factors. Permitted 
motivational factors include requiring attendance at FSS orientation 
sessions or preselection interviews, and assigning certain tasks which 
indicate the family's willingness to undertake the obligations which 
may be imposed by the FSS contract of participation. However, any tasks 
assigned shall be those which may be readily accomplishable by the 
family, based on the family members' educational level, and 
disabilities, if any. Reasonable accommodations must be made for 
individuals with mobility, manual, sensory, speech impairments, mental 
or developmental disabilities.
    (3) Prohibited motivational screening factors. Prohibited 
motivational screening factors include the family's educational level, 
educational or standardized motivational test results, previous job 
history or job performance, credit rating, marital status, number of 
children, or other factors, such as sensory or manual skills, and any 
factors which may result in discriminatory practices or treatment 
toward individuals with disabilities or minority or non-minority 
groups.


Sec. 984.204  On-site facilities.

    Each HA may, subject to the approval of HUD, make available and 
utilize common areas or unoccupied dwelling units in public housing 
projects (or for IHAs, in Indian housing projects) to provide 
supportive services under an FSS program, including a Section 8 FSS 
program.

Subpart C--Program Operation


Sec. 984.301  Program implementation.

    (a) Program implementation deadline--(1) Program start-up. Except 
as provided in paragraph (a)(3) of this section, operation of a local 
FSS program must begin within 12 months of the earlier of notification 
to the HA of HUD's approval of the incentive award units or of other 
funding that establishes the obligation to operate an FSS program. 
Operation means that activities such as outreach, participant 
selection, and enrollment have begun. Full delivery of the supportive 
services to be provided to the total number of families required to be 
served under the program need not occur within 12 months, but must 
occur by the deadline set forth in paragraph (a)(2) of this section.
    (2) Full enrollment and delivery of service. Except as provided in 
paragraph (a)(3) of this section, the HA must have completed enrollment 
of the total number of families required to be served under the FSS 
program (based on the minimum program size), and must have begun 
delivery of the supportive services within two years from the date of 
notification of approval of the application for new public housing 
units for a public housing FSS program or for new rental certificates 
or rental vouchers for a Section 8 FSS program.
    (3) Extension of program deadlines for good cause. HUD may extend 
the deadline set forth in either paragraph (a)(1) or paragraph (a)(2) 
of this section if the HA requests an extension, and HUD determines 
that, despite best efforts on the part of the HA, the development of 
new public housing units will not occur within the deadlines set forth 
in this paragraph (a), the commitment by public or private resources to 
deliver supportive services has been withdrawn, the delivery of such 
services has been delayed, or other local circumstances warrant an 
extension of the deadlines set forth in this paragraph (a).
    (b) Program administration. An HA may employ appropriate staff, 
including a service coordinator or program coordinator to administer 
its FSS program, and may contract with an appropriate organization to 
establish and administer the FSS program, including the FSS account, as 
provided by Sec. 984.305.


Sec. 984.302  Administrative fees.

    (a) Public housing FSS program. The performance funding system 
(PFS), provided under section 9(a) of the 1937 Act, shall provide for 
the inclusion of reasonable and eligible administrative costs incurred 
by PHAs in carrying out the minimum program size of the public housing 
FSS programs. These costs are subject to appropriations by the 
Congress. However, a PHA may use other resources for this purpose.
    (b) Section 8 FSS program. The administrative fees paid to HAs for 
HUD-approved costs associated with operation of an FSS program are 
established by the Congress and subject to appropriations.


Sec. 984.303  Contract of participation.

    (a) General. Each family that is selected to participate in an FSS 
program must enter into a contract of participation with the HA that 
operates the FSS program in which the family will participate. The 
contract of participation shall be signed by the head of the FSS 
family.
    (b) Form and content of contract--(1) General. The contract of 
participation, which incorporates the individual training and services 
plan(s), shall be in the form prescribed by HUD, and shall set forth 
the principal terms and conditions governing participation in the FSS 
program, including the rights and responsibilities of the FSS family 
and of the HA, the services to be provided to, and the activities to be 
completed by, the head of the FSS family and each adult member of the 
family who elects to participate in the program.
    (2) Interim goals. The individual training and services plan, 
incorporated in the contract of participation, shall establish specific 
interim and final goals by which the HA, and the family, may measure 
the family's progress toward fulfilling its obligations under the 
contract of participation, and becoming self-sufficient. For each 
participating FSS family that is a recipient of welfare assistance, the 
HA must establish as an interim goal that the family become independent 
from welfare assistance and remain independent from welfare assistance 
at least one year before the expiration of the term of the contract of 
participation, including any extension thereof.
    (3) Compliance with lease terms. The contract of participation 
shall provide that one of the obligations of the FSS family is to 
comply with the terms and 

[[Page 8820]]
conditions of the respective public housing lease or Section 8-assisted 
lease.
    (4) Employment obligation--(i) Head of family's obligation. The 
head of the FSS family shall be required under the contract of 
participation to seek and maintain suitable employment during the term 
of the contract and any extension thereof. Although other members of 
the FSS family may seek and maintain employment during the term of the 
contract, only the head of the FSS family is required to seek and 
maintain suitable employment.
    (ii) Seek employment. The obligation to seek employment means that 
the head of the FSS family has applied for employment, attended job 
interviews, and has otherwise followed through on employment 
opportunities.
    (iii) Determination of suitable employment. A determination of 
suitable employment shall be made by the HA based on the skills, 
education, and job training of the individual that has been designated 
the head of the FSS family, and based on the available job 
opportunities within the jurisdiction served by the HA.
    (5) Consequences of noncompliance with the contract. The contract 
of participation shall specify that if the FSS family fails to comply, 
without good cause, with the terms and conditions of the contract of 
participation, which includes compliance with the public housing lease 
or the Section 8-assisted lease, the HA may:
    (i) Withhold the supportive services;
    (ii) Terminate the family's participation in the FSS program; or
    (iii) For the Section 8 FSS program, terminate or withhold the 
family's Section 8 assistance, except in the case where the only basis 
for noncompliance with the contract of participation is noncompliance 
with the lease, or failure to become independent from welfare 
assistance. However, failure to become independent from welfare 
assistance because of failure of the head of household to meet the 
employment obligation described in paragraph (a)(4) of this section, or 
failure of the FSS family to meet any other obligation under the 
contract of participation, except the interim goal concerning welfare 
assistance, is grounds for the HA to terminate or withhold Section 8 
assistance.
    (c) Contract term. The contract of participation shall provide that 
each FSS family will be required to fulfill those obligations to which 
the participating family has committed itself under the contract of 
participation no later than 5 years after the effective date of the 
contract.
    (d) Contract extension. The HA shall, in writing, extend the term 
of the contract of participation for a period not to exceed two years 
for any FSS family that requests, in writing, an extension of the 
contract, provided that the HA finds that good cause exists for 
granting the extension. The family's written request for an extension 
must include a description of the need for the extension. As used in 
this paragraph (d), ``good cause'' means circumstances beyond the 
control of the FSS family, as determined by the HA, such as a serious 
illness or involuntary loss of employment. Extension of the contract of 
participation will entitle the FSS family to continue to have amounts 
credited to the family's FSS account in accordance with Sec. 984.304.
    (e) Unavailability of supportive services--(1) Good faith effort to 
replace unavailable services. If a social service agency fails to 
deliver the supportive services pledged under an FSS family member's 
individual training and services plan, the HA shall make a good faith 
effort to obtain these services from another agency.
    (2) Assessment of necessity of services. If the HA is unable to 
obtain the services from another agency, the HA shall reassess the 
family member's needs, and determine whether other available services 
would achieve the same purpose. If other available services would not 
achieve the same purpose, the HA shall determine whether the 
unavailable services are integral to the FSS family's advancement or 
progress toward self-sufficiency. If the unavailable services are:
    (i) Determined not to be integral to the FSS family's advancement 
toward self-sufficiency, the HA shall revise the individual training 
and services plan to delete these services, and modify the contract of 
participation to remove any obligation on the part of the FSS family to 
accept the unavailable services, in accordance with paragraph (f) of 
this section; or
    (ii) Determined to be integral to the FSS family's advancement 
toward self-sufficiency (which may be the case if the affected family 
member is the head of the FSS family), the HA shall declare the 
contract of participation null and void. Nullification of the contract 
of participation on the basis of unavailability of supportive services 
shall not be grounds for termination of Section 8 assistance.
    (f) Modification. The HA and the FSS family may mutually agree to 
modify the contract of participation. The contract of participation may 
be modified in writing with respect to the individual training and 
services plans, the contract term in accordance with paragraph (d) of 
this section, and designation of the head of the family.
    (g) Completion of the contract. The contract of participation is 
considered to be completed, and a family's participation in the FSS 
program is considered to be concluded when one of the following occurs:
    (1) The FSS family has fulfilled all of its obligations under the 
contract of participation on or before the expiration of the contract 
term, including any extension thereof; or
    (2) 30 percent of the monthly adjusted income of the FSS family 
equals or exceeds the published existing housing fair market rent for 
the size of the unit for which the FSS family qualifies based on the 
HA's occupancy standards. The contract of participation will be 
considered completed and the family's participation in the FSS program 
concluded on this basis even though the contract term, including any 
extension thereof, has not expired, and the family members who have 
individual training and services plans have not completed all the 
activities set forth in their plans.
    (h) Termination of the contract. The contract of participation is 
automatically terminated if the family's Section 8 assistance is 
terminated in accordance with HUD requirements. The contract of 
participation may be terminated before the expiration of the contract 
term, and any extension thereof, by:
    (1) Mutual consent of the parties;
    (2) The failure of the FSS family to meet its obligations under the 
contract of participation without good cause, including in the Section 
8 FSS program the failure to comply with the contract requirements 
because the family has moved outside the jurisdiction of the HA;
    (3) The family's withdrawal from the FSS program;
    (4) Such other act as is deemed inconsistent with the purpose of 
the FSS program; or
    (5) Operation of law.
    (i) Option to terminate Section 8 housing and supportive service 
assistance. The HA may terminate or withhold Section 8 housing 
assistance, the supportive services, and the FSS family's participation 
in the FSS program, if the HA determines, in accordance with the 
hearing procedures provided in 24 CFR 982.555 that the FSS family has 
failed to comply without good cause with the requirements of the 
contract of participation as provided in paragraph (b)(5) of this 
section. 

[[Page 8821]]

    (j) Transitional supportive service assistance. An HA may continue 
to offer to a former FSS family who has completed its contract of 
participation and whose head of family is employed, appropriate FSS 
supportive services in becoming self-sufficient (if the family still 
resides in public housing, or Section 8-assisted housing), or in 
remaining self-sufficient (if the family no longer resides in public, 
Section 8-assisted housing, or other assisted housing).


Sec. 984.304  Total tenant payment, family rent, and increases in 
family income.

    (a)(1) Public housing FSS program: Calculation of total tenant 
payment. Total tenant payment for a family participating in the public 
housing FSS program is determined in accordance with the regulations 
set forth in 24 CFR part 913.
    (2) Section 8 FSS program: Calculation of family rent. For the 
rental certificate program, total tenant payment for a family 
participating in the Section 8 FSS program and the amount of the 
housing assistance payment is determined in accordance with the 
regulations set forth in 24 CFR parts 813 and 882. For the rental 
voucher program, the housing assistance payment for a family 
participating in the FSS program is determined in accordance with the 
regulations set forth in 24 CFR part 887.
    (b) Increases in FSS family income. Any increase in the earned 
income of an FSS family during its participation in an FSS program may 
not be considered as income or a resource for purposes of eligibility 
of the FSS family for other benefits, or amount of benefits payable to 
the FSS family, under any other program administered by HUD, unless the 
income of the FSS family equals or exceeds 80 percent of the median 
income of the area (as determined by HUD, with adjustments for smaller 
and larger families).


Sec. 984.305  FSS account.

    (a) Establishment of FSS account--(1) General. The HA shall deposit 
the FSS account funds of all families participating in the HA's FSS 
program into a single depository account. The HA must deposit the FSS 
account funds in one or more of the HUD-approved investments.
    (2) Accounting for FSS account funds--(i) Accounting records. The 
total of the combined FSS account funds will be supported in the HA 
accounting records by a subsidiary ledger showing the balance 
applicable to each FSS family. During the term of the contract of 
participation, the HA shall credit periodically, but not less than 
annually, to each family's FSS account, the amount of the FSS credit 
determined in accordance with paragraph (b) of this section.
    (ii) Proration of investment income. The investment income for 
funds in the FSS account will be prorated and credited to each family's 
FSS account based on the balance in each family's FSS account at the 
end of the period for which the investment income is credited.
    (iii) Reduction of amounts due by FSS family. If the FSS family has 
not paid the family contribution towards rent, or other amounts, if 
any, due under the public housing or section 8-assisted lease, the 
balance in the family's FSS account shall be reduced by that amount (as 
reported by the owner to the HA in the Section 8 FSS program) before 
prorating the interest income. If the FSS family has fraudulently 
under-reported income, the amount credited to the FSS account will be 
based on the income amounts originally reported by the FSS family.
    (3) Reporting on FSS account. Each HA will be required to make a 
report, at least once annually, to each FSS family on the status of the 
family's FSS account. At a minimum, the report will include:
    (i) The balance at the beginning of the reporting period;
    (ii) The amount of the family's rent payment that was credited to 
the FSS account, during the reporting period;
    (iii) Any deductions made from the account for amounts due the HA 
before interest is distributed;
    (iv) The amount of interest earned on the account during the year; 
and
    (v) The total in the account at the end of the reporting period.
    (b) FSS credit--(1) Computation of amount. For purposes of 
determining the FSS credit, ``family rent'' is: for the public housing 
program, the total tenant payment as defined in 24 CFR part 913; for 
the rental certificate program, the total tenant payment as defined in 
24 CFR part 813; and for the rental voucher program, 30 percent of 
adjusted monthly income. The FSS credit shall be computed as follows:
    (i) For FSS families who are very low-income families, the FSS 
credit shall be the amount which is the lesser of:
    (A) Thirty percent of current monthly adjusted income less the 
family rent, which is obtained by disregarding any increases in earned 
income (as defined in Sec. 984.103) from the effective date of the 
contract of participation; or
    (B) The current family rent less the family rent at the time of the 
effective date of the contract of participation.
    (ii) For FSS families who are low-income families but not very low-
income families, the FSS credit shall be the amount determined 
according to paragraph (b)(1)(i) of this section, but which shall not 
exceed the amount computed for 50 percent of median income.
    (2) Ineligibility for FSS credit. FSS families who are not low-
income families shall not be entitled to any FSS credit.
    (3) Cessation of FSS credit. The HA shall not make any additional 
credits to the FSS family's FSS account when the FSS family has 
completed the contract of participation, as defined in Sec. 984.303(g), 
or when the contract of participation is terminated or otherwise 
nullified.
    (c) Disbursement of FSS account funds--(1) General. The amount in 
an FSS account, in excess of any amount owed to the HA by the FSS 
family, as provided in paragraph (a)(3)(iii) of this section, shall be 
paid to the head of the FSS family when the contract of participation 
has been completed as provided in Sec. 984.303(g), and if, at the time 
of contract completion, the head of the FSS family submits to the HA a 
certification, as defined in Sec. 984.103, that, to the best of his or 
her knowledge and belief, no member of the FSS family is a recipient of 
welfare assistance.
    (2) Disbursement before expiration of contract term. (i) If the HA 
determines that the FSS family has fulfilled its obligations under the 
contract of participation before the expiration of the contract term, 
and the head of the FSS family submits a certification that, to the 
best of his or her knowledge, no member of the FSS family is a 
recipient of welfare assistance, the amount in the family's FSS 
account, in excess of any amount owed to the HA by the FSS family, as 
provided in paragraph (a)(3)(iii) of this section, shall be paid to the 
head of the FSS family.
    (ii) If the HA determines that the FSS family has fulfilled certain 
interim goals established in the contract of participation and needs a 
portion of the FSS account funds for purposes consistent with the 
contract of participation, such as completion of higher education 
(i.e., college, graduate school), or job training, or to meet start-up 
expenses involved in creation of a small business, the HA may, at the 
HA's sole option, disburse a portion of the funds from the family's FSS 
account to assist the family meet those expenses.
    (3) Verification of family certification. Before disbursement of 
the FSS account funds to the family, the HA may verify that the FSS 
family is no longer a recipient of welfare assistance by 

[[Page 8822]]
requesting copies of any documents which may indicate whether the 
family is receiving any welfare assistance, and contacting welfare 
agencies.
    (d) Succession to FSS account. If the head of the FSS family ceases 
to reside with other family members in the public housing or the 
Section 8-assisted unit, the remaining members of the FSS family, after 
consultation with the HA, shall have the right to designate another 
family member to receive the funds in accordance with paragraph (c) (1) 
or (2) of this section.
    (e) Use of FSS account funds for homeownership. A public housing 
FSS family may use its FSS account funds for the purchase of a home, 
including the purchase of a home under one of HUD's homeownership 
programs, or other Federal, State, or local homeownership programs 
unless such use is prohibited by the statute or regulations governing 
the particular homeownership program.
    (f) Forfeiture of FSS account funds--(1) Conditions for forfeiture. 
Amounts in the FSS account shall be forfeited upon the occurrence of 
the following:
    (i) The contract of participation is terminated, as provided in 
Sec. 984.303(e) or Sec. 984.303(h); or
    (ii) The contract of participation is completed by the family, as 
provided in Sec. 984.303(g), but the FSS family is receiving welfare 
assistance at the time of expiration of the term of the contract of 
participation, including any extension thereof.
    (2) Treatment of forfeited FSS account funds--(i) Public housing 
FSS program. FSS account funds forfeited by the FSS family will be 
credited to the PHA's operating reserves and counted as other income in 
the calculation of the PFS operating subsidy eligibility for the next 
budget year.
    (ii) Section 8 FSS program. FSS account funds forfeited by the FSS 
family will be treated as program receipts for payment of program 
expenses under the HA budget for the applicable Section 8 program, and 
shall be used in accordance with HUD requirements governing the use of 
program receipts.


Sec. 984.306  Section 8 residency and portability requirements.

    (a) Relocating FSS family. For purposes of this section, the term 
``relocating FSS family'' refers to an FSS family that moves from the 
jurisdiction of an HA at least 12 months after signing its contract of 
participation.
    (b) Initial occupancy. A family participating in the Section 8 FSS 
program must lease an assisted unit, for a minimum period of 12 months 
after the effective date of the contract of participation, in the 
jurisdiction of the HA which selected the family for the FSS program. 
Thereafter, the FSS family may move outside the jurisdiction of the 
initial HA consistent with the regulations of 24 CFR part 982.
    (c) Portability: relocation but continued participation in the FSS 
program of the initial HA--(1) General. A relocating FSS family may 
continue in the FSS program of the initial HA if the family 
demonstrates to the satisfaction of the initial HA that, 
notwithstanding the move, the relocating FSS family will be able to 
fulfill its responsibilities under the initial or modified contract of 
participation at its new place of residence. (For example, the FSS 
family may be able to commute to the supportive services specified in 
the contract of participation, or the family may move to obtain 
employment as specified in the contract.)
    (2) Single contract of participation. If the relocating family 
remains in the FSS program of the initial HA, there will only be one 
contract of participation, which shall be the contract executed by the 
initial HA.
    (d) Portability: relocation and participation in the FSS program of 
the receiving HA--(1) General. A relocating FSS family may participate 
in the FSS program of the receiving HA, if the receiving HA allows the 
family to participate in its program. An HA is not obligated to enroll 
a relocating FSS family in its FSS program.
    (2) Two contracts of participation. If the receiving HA allows the 
relocating FSS family to participate in its FSS program, the receiving 
HA will enter into a new contract of participation with the FSS family 
for the term on the remaining contract with the initial HA. The initial 
HA will terminate its contract of participation with the family.
    (e) Single FSS account. Regardless of whether the relocating FSS 
family remains in the FSS program of the initial HA or is enrolled in 
the FSS program of the receiving HA, there will be a single FSS account 
which will be maintained by the initial HA. When an FSS family will be 
absorbed by the receiving HA, the initial HA will transfer the family's 
FSS account to the receiving HA.
    (f) FSS program termination; loss of FSS account; and termination 
of Section 8 assistance. (1) If an FSS family that relocates to another 
jurisdiction, as provided under this section, is unable to fulfill its 
obligations under the contract of participation, or any modifications 
thereto, the HA, which is party to the contract of participation, may:
    (i) Terminate the FSS family from the FSS program and the family's 
FSS account will be forfeited; and
    (ii) Terminate the FSS family's Section 8 assistance on the ground 
that the family failed to meet its obligations under the contract of 
participation.
    (2) In the event of forfeiture of the family's FSS account, the 
funds in the family's FSS account will revert to the HA maintaining the 
FSS account for the family.

Subpart D--Reporting


Sec. 984.401  Reporting.

    Each HA that carries out an FSS program under this part shall 
submit to HUD, in the form prescribed by HUD, a report regarding its 
FSS program. The report shall include the following information:
    (a) A description of the activities carried out under the program;
    (b) A description of the effectiveness of the program in assisting 
families to achieve economic independence and self-sufficiency;
    (c) A description of the effectiveness of the program in 
coordinating resources of communities to assist families to achieve 
economic independence and self-sufficiency; and
    (d) Any recommendations by the HA or the appropriate local program 
coordinating committee for legislative or administrative action that 
would improve the FSS program and ensure the effectiveness of the 
program.

    Dated: February 26, 1996.
Kevin E. Marchman,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 96-4908 Filed 3-4-96; 8:45 am]
BILLING CODE 4210-33-P