[Federal Register Volume 61, Number 61 (Thursday, March 28, 1996)]
[Rules and Regulations]
[Pages 13986-13993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7272]




[[Page 13985]]

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Part V





Department of Housing and Urban Development





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24 CFR Part 261, et al.



Consolidated Drug Elimination Program Requirements for Assisted Housing 
and Public Housing; Final Rule

  Federal Register / Vol. 61, No. 61 / Thursday, March 28, 1996 / Rules 
and Regulations  

[[Page 13986]]


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 261, 761, and 961

[Docket No. FR-3997-F-01]
RIN 2501-AC18


Consolidated Drug Elimination Program Requirements for Assisted 
Housing and Public Housing

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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

SUMMARY: This final rule consolidates and streamlines HUD's regulations 
for the Assisted Housing Drug Elimination Program and the Public 
Housing Drug Elimination Program. This rule is part of HUD's efforts to 
comply with the President's regulatory reform initiatives. Since the 
requirements for the two programs are very similar, this consolidation 
will eliminate redundant and unnecessary provisions in HUD's 
regulations.

EFFECTIVE DATE: April 29, 1996.

FOR FURTHER INFORMATION CONTACT: For questions concerning the Assisted 
Housing Drug Elimination Program (AHDEP), contact: Michael E. Diggs, 
Office of Multifamily Housing Programs, Office of Housing, Room 6130, 
telephone number (202) 708-0614, ext. 2514.
    For questions concerning the Public Housing Drug Elimination 
Program (PHDEP), contact: Malcolm E. (Mike) Main, Crime Prevention and 
Security Division, Office of Community Relations and Involvement, 
Office of Public and Indian Housing, Room 4116, telephone (202) 708-
1197, ext. 4232.
    The address for the above persons is: Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC 20410. 
Hearing- or speech-impaired persons may call (800) 877-8339 (Federal 
Information Relay Service TDD). (Except for the ``800'' number, these 
telephone numbers are not toll-free.)

SUPPLEMENTARY INFORMATION:

I. Background

    The Public Housing Drug Elimination Program was first authorized by 
chapter 2, subtitle C, title V of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11901-11908). The purpose of the Drug Elimination Program is to 
make grants for use in eliminating drug-related crime and the problems 
associated with it. HUD first issued implementing regulations for this 
program in 24 CFR part 961 on July 3, 1990 (55 FR 27598). Under this 
original authorization, public housing agencies (PHAs) and Indian 
housing authorities (IHAs) were eligible to apply for and receive 
grants under the program. (IHAs and PHAs will be collectively referred 
to as HAs.)
    Section 581 of the National Affordable Housing Act (NAHA) (Pub. L. 
101-625, approved November 28, 1990) amended the Public Housing Drug 
Elimination Program in a number of ways, and HUD implemented these 
amendments through a final rule published on January 7, 1993 (58 FR 
3160). As described in the preamble to the January 7, 1993 final rule, 
that rule also implemented two amendments to the program from the 
Housing and Community Development Act of 1992 (Pub. L. 102-550, 
approved October 28, 1992).
    In addition to enhancing the Public Housing Drug Elimination 
Program, the National Affordable Housing Act included the authorization 
for the Assisted Housing Drug Elimination Program. Under the Assisted 
Housing Program, HUD can provide grants to private for-profit and 
nonprofit owners of Federally assisted low-income housing. For purposes 
of the Assisted Housing Drug Elimination Program, NAHA also permits HUD 
to establish other criteria, in addition to those applicable to the 
Public Housing Drug Elimination Program, for the evaluation of funding 
applications submitted by owners of Federally assisted low-income 
housing. HUD issued a final rule implementing the Assisted Housing Drug 
Elimination Program on January 26, 1995 (60 FR 5280). The January 26, 
1995 final rule followed the regulations for the Public Housing Drug 
Elimination Program very closely. The main difference from the Public 
Housing Program's regulations reflected the flexibility in the 
submission requirements and eligible activities provided by NAHA for 
the Assisted Housing Program.

II. Regulatory Reinvention

    In response to Executive Order 12866 and President Clinton's 
memorandum of March 4, 1995 to all Federal departments and agencies on 
the subject of regulatory reinvention, HUD has reviewed all its 
regulations to determine whether certain regulations can be eliminated, 
streamlined, or consolidated with other regulations. As part of this 
review, HUD determined that the regulations for the Assisted Housing 
Drug Elimination Program and the Public Housing Drug Elimination 
Program are very similar, and HUD can consolidate them into one part.
    Therefore, this final rule will consolidate the regulations in 
parts 261 (Assisted Housing Drug Elimination Program) and 961 (Public 
Housing Drug Elimination Program), into one set of regulations in part 
761 (in chapter VII of title 24 of the Code of Federal Regulations 
(CFR)). Chapter VII of HUD's regulations is an appropriate place for 
the Drug Elimination Program regulations, since that chapter has 
historically contained those regulations common to programs under the 
authority of the Assistant Secretary for Housing--Federal Housing 
Commissioner (such as the Assisted Housing Drug Elimination Program) 
and to programs under the authority of the Assistant Secretary for 
Public and Indian Housing (such as the Public Housing Drug Elimination 
Program).
    This final rule also streamlines the Drug Elimination Program 
regulations to the extent possible. For example, some of the provisions 
merely repeat language in the authorizing statute (42 U.S.C. 11901-
11908). It is unnecessary to maintain statutory requirements in the 
CFR, since those requirements are otherwise fully accessible and 
binding. Furthermore, if regulations contain statutory language, HUD 
must amend the regulations whenever Congress amends the statute. 
Therefore, this final rule will remove repetitious statutory language 
and replace it with a citation to the specific statutory section for 
easy reference.
    This rule also removes information in the regulations that is 
nonregulatory and would more appropriately appear in the separate 
Notices of Funding Availability (NOFAs) for the two programs, such as 
details about the selection criteria and examples of eligible 
activities. This final rule streamlines the regulations to provide that 
specific information on these topics will be included in the annual 
NOFAs.
    Specifically, this final rule accomplishes the following:
    1. Consolidates the regulations from parts 261 and 961 into part 
761;
    2. Removes the definitions of terms that are either not used in the 
regulations or are defined in the statute;
    3. Removes the nonregulatory examples from the definition of 
``program income'' and from the new Sec. 761.15--Applicants and 
activities; and
    4. Removes statutory language from the new Sec. 761.15--Applicants 
and activities.
    As a result of the streamlining efforts in this rule, HUD will 
eliminate approximately 7 pages of unnecessary regulations from the 
CFR.

[[Page 13987]]


II. Justification for Final Rulemaking

    HUD generally publishes a rule for public comment before issuing a 
rule for effect, in accordance with HUD's regulations on rulemaking 
found in 24 CFR part 10. However, part 10 provides for exceptions from 
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, in that prior public procedure is unnecessary. This final rule 
merely consolidates and streamlines two sets of similar regulations; it 
does not change HUD's policies or substantive requirements.

III. 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 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 existing regulations by consolidating and 
streamlining provisions and does not alter the environmental effect of 
the regulations being amended. Separate Findings of No Significant 
Impact with respect to the environment were 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 initial development of the regulations for the Drug Elimination 
Programs. The findings remain applicable to this rule, and are 
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.

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.

List of Subjects

24 CFR Part 261

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

24 CFR Part 761

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

24 CFR Part 961

    Drug abuse, Drug traffic control, Grant programs--housing and 
community development, Grant programs--Indians, Grant programs--low and 
moderate income housing, Indians, Public housing, Reporting and 
recordkeeping requirements.
    Accordingly, under the authority of 42 U.S.C. 3535(d), for the 
reasons stated in the preamble, in title 24 of the Code of Federal 
Regulations, parts 261 and 961 are removed, and part 761 is added as 
follows:

PART 261--[REMOVED]

    1. Part 261 is removed.
    2. In chapter VII, the heading is revised to read as follows:

CHAPTER VII--OFFICE OF THE SECRETARY, DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT (HOUSING ASSISTANCE PROGRAMS AND PUBLIC AND INDIAN HOUSING 
PROGRAMS)

    3. A new part 761 is added to read as follows:

PART 761--DRUG ELIMINATION PROGRAMS

Subpart A--General

Sec.
761.1  Purpose and scope.
761.5  Public and Indian housing; encouragement of resident 
participation.
761.10  Definitions.

Subpart B--Use of Grant Funds

761.15  Applicants and activities.

Subpart C--Application and Selection

761.20  Application selection and requirements.
761.25  Resident comments on grant application.

Subpart D--Grant Administration

761.30  Grant administration.
761.35  Periodic grantee reports.
761.40  Other Federal requirements.

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

Subpart A--General


Sec. 761.1  Purpose and scope.

    This part 761 contains the regulatory requirements for the Assisted 
Housing Drug Elimination Program and the Public Housing Drug 
Elimination Program. The purposes of these programs are to:
    (a) Eliminate drug-related crime and problems associated with it in 
and around the premises of Federally assisted low-income housing, and 
public and Indian housing developments;
    (b) Encourage owners of Federally assisted low-income housing, 
public housing agencies and Indian housing authorities (collectively 
referred to as HAs), and resident management corporations to develop a 
plan that includes initiatives that can be sustained over a period of 
several years for addressing drug-related crime and problems associated 
with it in and around the premises of housing proposed for funding 
under this part; and
    (c) Make available Federal grants to help owners of Federally 
assisted low-income housing, HAs, and RMCs carry out their plans.


Sec. 761.5  Public and Indian housing; encouragement of resident 
participation.

    For the purposes of the Public Housing Drug Elimination Program, 
the elimination of drug-related crime and problems associated with it 
within public housing developments requires the active involvement and 
commitment of public housing residents and their organizations. To 
enhance the ability of HAs to combat drug-related crime and problems 
associated with it within their developments, Resident Councils (RCs),

[[Page 13988]]
Resident Management Corporations (RMCs), and Resident Organizations 
(ROs) will be permitted to undertake management functions specified in 
this part, notwithstanding the otherwise applicable requirements of 24 
CFR parts 950 and 964.


Sec. 761.10  Definitions.

    The definitions ``Department'', ``HUD'', ``Indian'', ``Indian 
Housing Authority (IHA)'', and ``Public Housing Agency (PHA)'' are 
defined in 24 CFR part 5.
    Controlled substance shall have the meaning provided in section 102 
of the Controlled Substance Act (21 U.S.C. 802).
    Drug intervention means a process to identify assisted housing or 
public housing resident drug users, to assist them in modifying their 
behavior, and/or to refer them to drug treatment to reduce or eliminate 
drug abuse.
    Drug prevention means a process to provide goods and services 
designed to alter factors, including activities, environmental 
influences, risks, and expectations, that lead to drug abuse.
    Drug-related crime shall have the meaning provided in 42 U.S.C. 
11905(2).
    Drug treatment means a program for the residents of an applicant's 
development that strives to end drug abuse and to eliminate its 
negative effects through rehabilitation and relapse prevention.
    Federally assisted low-income housing, or assisted housing, shall 
have the meaning provided in 42 U.S.C. 11905(4). However, sections 
221(d)(3) and 221(d)(4) market rate projects with tenant-based 
assistance contracts and section 8 projects with tenant-based 
assistance are not considered federally assisted low-income housing and 
are not eligible for funding under this part 761.
    Governmental jurisdiction means the unit of general local 
government, State, or area of operation of an Indian tribe in which the 
housing development administered by the applicant is located.
    In and around means within, or adjacent to, the physical boundaries 
of a housing development.
    Indian tribe means any tribe, band, pueblo, group, community, or 
nation of Indians, or Alaska Natives.
    Local law enforcement agency means a police department, sheriff's 
office, or other entity of the governmental jurisdiction that has law 
enforcement responsibilities for the community at large, including the 
housing developments owned or administered by the applicant. In Indian 
jurisdictions, this includes tribal prosecutors that assume law 
enforcement functions analogous to a police department or the Bureau of 
Indian Affairs (BIA). More than one law enforcement agency may have 
these responsibilities for the jurisdiction that includes the 
applicant's developments.
    Problems associated with drug-related crime means the negative 
physical, social, educational, and economic impact of drug-related 
crime on assisted housing residents or public and Indian housing 
residents, and the deterioration of the assisted housing or public and 
Indian housing environment because of drug-related crime.
    Program income means gross income received by a grantee and 
directly generated from the use of program funds. When program income 
is generated by an activity only partially assisted with program funds, 
the income shall be prorated to reflect the percentage of program funds 
used.
    Resident council (RC), for purposes of the Public Housing Program, 
means an incorporated or unincorporated nonprofit organization or 
association that meets each of the following requirements:
    (1) It must be representative of the residents it purports to 
represent;
    (2) It may represent residents in more than one development or in 
all of the developments of a HA, but it must fairly represent residents 
from each development that it represents;
    (3) It must adopt written procedures providing for the election of 
specific officers on a regular basis (but at least once every three 
years); and
    (4) It must have a democratically elected governing board. The 
voting membership of the board must consist of residents of the 
development or developments that the resident organization or resident 
council represents.
    Resident Management Corporation (RMC), for purposes of the Public 
Housing Program, means the entity that proposes to enter into, or that 
enters into, a management contract with a PHA under 24 CFR part 964 in 
accordance with the requirements of that part, or with an IHA under 24 
CFR part 950, or with an IHA in accordance with the requirements of 
this part 761. The corporation must have each of the following 
characteristics:
    (1) It must be a nonprofit organization that is incorporated under 
the laws of the State or the Indian tribe in which it is located;
    (2) It may be established by more than one resident organization or 
resident council, so long as each such organization or council:
    (i) Approves the establishment of the corporation, and;
    (ii) Has representation on the Board of Directors of the 
corporation;
    (3) It must have an elected Board of Directors;
    (4) Its by-laws must require the Board of Directors to include 
representatives of each resident organization or resident council 
involved in establishing the corporation;
    (5) Its voting members must be residents of the development or 
developments it manages;
    (6) It must be approved by the resident council or resident 
organization. If there is no council or organization, a majority of the 
households of the development must approve the establishment of such an 
organization to determine the feasibility of establishing a corporation 
to manage the development; and
    (7) It may serve as both the resident management corporation and 
the resident council or the resident organization, so long as the 
corporation meets the requirements of part 964 of this chapter for a 
resident council or the requirements of this part for a resident 
organization.
    Resident organization (RO) shall have the same meaning as Resident 
council (RC), as defined in this Sec. 761.10.
    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments. The term does not include any 
public or Indian housing agency under the United States Housing Act of 
1937 (42 U.S.C. 1437 note).
    Unit of general local government means any city, county, town, 
municipality, township, parish, village, local public authority 
(including any public or Indian housing agency under the United States 
Housing Act of 1937) or other general purpose political subdivision of 
a State.

Subpart B--Use of Grant Funds


Sec. 761.15  Applicants and activities.

    In any particular funding round, the separate Notices of Funding 
Availability (NOFAs) published in the Federal Register will contain 
specific information concerning eligible and ineligible applicants and 
activities.
    (a) Eligible applicants. (1) Under the Public Housing Drug 
Elimination Program (PHDEP), specific information with regard to 
eligible applicants will appear in the NOFA for each funding round.
    (2) Under the Assisted Housing Program (AHDEP), eligible applicants

[[Page 13989]]
are owners of federally assisted low-income housing, as the term 
``Federally assisted low-income housing'' is defined in Sec. 761.10.
    (b) Eligible activities. An application for funding under the 
Assisted Housing Program or the Public Housing Program may be for one 
or more of the eligible activities described in 42 U.S.C. 11903, as 
further explained or limited in paragraph (b) of this section and in 
the separate annual Notices of Funding Availability (NOFAs) for each 
program. All personnel funded by these programs in accordance with an 
eligible activity must meet, and demonstrate compliance with, all 
relevant Federal, State, tribal, or local government insurance, 
licensing, certification, training, bonding, or other similar law 
enforcement requirements.
    (1) Employment of security personnel, as provided in 42 U.S.C. 
11903(a)(1). For purposes of the Public Housing Program, the following 
provisions in paragraphs (b)(1)(i) and (b)(1)(ii) of this section 
apply:
    (i) Security guard personnel. (A) Contract security personnel 
funded by this program must perform services not usually performed by 
local law enforcement agencies on a routine basis.
    (B) The applicant, the cooperating local law enforcement agency, 
and the provider (contractor) of the security personnel are required, 
as a part of the security personnel contract, to enter into and execute 
a written agreement that describes the following:
    (1) The activities to be performed by the security personnel, their 
scope of authority, and how they will coordinate their activities with 
the local law enforcement agency;
    (2) The types of activities that the security personnel are 
expressly prohibited from undertaking.
    (ii) Employment of HA police. (A) If additional HA police are to be 
employed for a service that is also provided by a local law enforcement 
agency, the applicant must provide a cost analysis that demonstrates 
the employment of HA police is more cost efficient than obtaining the 
service from the local law enforcement agency.
    (B) Additional HA police services to be funded under this program 
must be over and above those that the existing HA police, if any, 
provides, and the tribal, State or local government is contractually 
obligated to provide under its Cooperation Agreement with the applying 
HA (as required by the HA's Annual Contributions Contract). An 
applicant seeking funding for this activity must first establish a 
baseline by describing the current level of services provided by both 
the local law enforcement agency and the HA police, if any (in terms of 
the kinds of services provided, the number of officers and equipment 
and the actual percent of their time assigned to the developments 
proposed for funding), and then demonstrate to what extent the funded 
activity will represent an increase over this baseline.
    (C) The applicant and the cooperating local law enforcement agency 
are required to enter into and execute a written agreement that 
describes the following:
    (1) The activities to be performed by the HA police, their scope of 
authority, and how they will coordinate their activities with the local 
law enforcement agency;
    (2) The types of activities that the HA police are expressly 
prohibited from undertaking.
    (2) Reimbursement of local law enforcement agencies for additional 
security and protective services, as provided in 42 U.S.C. 11903(a)(2). 
For purposes of the Public Housing Program, the following provisions in 
paragraphs (b)(2)(i) and (b)(2)(ii) of this section apply:
    (i) Additional security and protective services to be funded must 
be over and above those that the tribal, State, or local government is 
contractually obligated to provide under its Cooperation Agreement with 
the applying HA (as required by the HA's Annual Contributions 
Contract). An application seeking funding for this activity must first 
establish a baseline by describing the current level of services (in 
terms of the kinds of services provided, the number of officers and 
equipment, and the actual percent of their time assigned to the 
developments proposed for funding) and then demonstrate to what extent 
the funded activity will represent an increase over this baseline.
    (ii) Communications and security equipment to improve the 
collection, analysis, and use of information about drug-related 
criminal activities in a public housing community may be eligible items 
if used exclusively in connection with the establishment of a law 
enforcement substation on the funded premises or scattered site 
developments of the applicant. Funds for activities under this section 
may not be drawn until the grantee has executed a contract for the 
additional law enforcement services.
    (3) Physical improvements to enhance security, as provided in 42 
U.S.C. 11903(a)(3). For purposes of the Public Housing Program, the 
following provisions in paragraphs (b)(3)(i) through (b)(3)(iv) of this 
section apply:
    (i) An activity that is funded under any other HUD program shall 
not also be funded by this program.
    (ii) Funding is not permitted for physical improvements that 
involve the demolition of any units in a development.
    (iii) Funding is not permitted for any physical improvements that 
would result in the displacement of persons.
    (iv) Funding is not permitted for the acquisition of real property.
    (4) Employment of investigating individuals, as provided in 42 
U.S.C. 11903(a)(4). For purposes of the Public Housing Program, the 
following provisions in paragraphs (b)(4)(i) and (b)(4)(ii) of this 
section apply:
    (i) If one or more investigators are to be employed for a service 
that is also provided by a local law enforcement agency, the applicant 
must provide a cost analysis that demonstrates the employment of 
investigators is more cost efficient than obtaining the service from 
the local law enforcement agency.
    (ii) The applicant, the cooperating local law enforcement agency, 
and the investigator(s) are required, before any investigators are 
employed, to enter into and execute a written agreement that describes 
the following:
    (A) The nature of the activities to be performed by the 
investigators, their scope of authority, and how they will coordinate 
their activities with the local law enforcement agency;
    (B) The types of activities that the investigators are expressly 
prohibited from undertaking.
    (5) Voluntary tenant patrols, as provided in 42 U.S.C. 11903(a)(5). 
For purposes of the Public Housing Program, the following provisions in 
paragraphs (b)(5)(i) through (b)(5)(iv) of this section apply:
    (i) The provision of training, communications equipment, and other 
related equipment (including uniforms), for use by voluntary tenant 
patrols acting in cooperation with officials of local law enforcement 
agencies is permitted. Grantees are required to obtain liability 
insurance to protect themselves and the members of the voluntary tenant 
patrol against potential liability for the activities of the patrol. 
The cost of this insurance will be considered an eligible program 
expense.
    (ii) The applicant, the cooperating local law enforcement agency, 
and the members of the tenant patrol are required, before putting the 
tenant patrol into effect, to enter into and execute a written 
agreement that describes the following:
    (A) The nature of the activities to be performed by the tenant 
patrol, the patrol's scope of authority, and how the

[[Page 13990]]
patrol will coordinate its activities with the local law enforcement 
agency;
    (B) The types of activities that a tenant patrol is expressly 
prohibited from undertaking, to include but not limited to, the 
carrying or use of firearms or other weapons, nightsticks, clubs, 
handcuffs, or mace in the course of their duties under this program;
    (C) The type of initial tenant patrol training and continuing 
training the members receive from the local law enforcement agency 
(training by the local law enforcement agency is required before 
putting the tenant patrol into effect).
    (iii) Tenant patrol members must be advised that they may be 
subject to individual or collective liability for any actions 
undertaken outside the scope of their authority and that such acts are 
not covered under a HA's or RMC's liability insurance.
    (iv) Grant funds may not be used for any type of financial 
compensation for voluntary tenant patrol participants. However, the use 
of program funds for a grant coordinator for volunteer tenant foot 
patrols is permitted.
    (6) Drug prevention, intervention, and treatment programs, as 
provided in 42 U.S.C. 11903(a)(6).
    (7) Funding resident management corporations (RMCs), resident 
councils (RCs), and resident organizations (ROs). For purposes of the 
Public Housing Program, funding may be provided for HAs that receive 
grants to contract with RMCs and incorporated RCs and ROs to develop 
security and drug abuse prevention programs involving site residents, 
as provided in 42 U.S.C. 11903(a)(7).
    (8) Eliminating drug-related crime in HA-owned housing, under the 
Public Housing Program, as provided in 42 U.S.C. 11903(b).
    (c) Continuation of current program activities. For purposes of 
both drug elimination programs, the Department will evaluate an 
applicant's performance under any previous Drug Elimination Program 
grants within the past five years. Subject to evaluation and review are 
the applicant's financial and program performance; reporting and 
special condition compliance; accomplishment of stated goals and 
objectives under the previous grant; and program adjustments made in 
response to previous ineffective performance. If the evaluation 
discloses a pattern under past grants of ineffective performance with 
no corrective measures attempted, it will result in a deduction of 
points from the current application.
    (d) Ineligible activities. For purposes of the Public Housing 
Program, the following provisions in paragraph (d) of this section 
apply:
    (1) Joint applications are not eligible for funding under this 
program.
    (2) Funding is not permitted for costs incurred before the 
effective date of the grant agreement, including, but not limited to, 
consultant fees for surveys related to the application or the actual 
writing of the application.
    (3) Funding is not permitted for the costs related to screening or 
evicting residents for drug-related crime. However, investigators 
funded under this program may participate in judicial and 
administrative proceedings.

Subpart C--Application and Selection


Sec. 761.20  Application selection and requirements.

    (a) Selection criteria. HUD will review each application that it 
determines meets the requirements of this part 761 and evaluate it by 
assigning points in accordance with the selection criteria in 42 U.S.C. 
11904 and in the separate NOFAs published for each program.
    (b) Plan requirement. Each application must include a plan for 
addressing the problem of drug-related crime and/or the problems 
associated with it on the premises of the housing for which the 
application is being submitted. For applications that cover more than 
one development, the plan does not have to address each development 
separately if the same activities will apply to each development. The 
plan must address each development separately only where program 
activities will differ from one development to another.
    (c) Notices of Funding Availability. HUD will publish specific 
Notices of Funding Availability (NOFAs) in the Federal Register as 
appropriate for each program to inform the public of the availability 
of grant amounts under this part 761. The NOFAs will provide specific 
guidance with respect to the grant process, including the deadlines for 
the submission of grant applications; the limits (if any) on maximum 
grant amounts; the information that must be submitted to permit HUD to 
score each of the selection criteria; the maximum number of points to 
be awarded for each selection criterion; the contents of the plan for 
addressing drug-related crime and problems associated with it that must 
be included with the application; the listing of any certifications and 
assurances that must be submitted with the application; and the process 
for ranking and selecting applicants. NOFAs will also include any 
additional information, factors, and requirements that HUD has 
determined to be necessary and appropriate to provide for the 
implementation and administration of the program under this part 761.
    (d) Environmental review. Grants under this part 761 are 
categorically excluded from review under the National Environmental 
Policy Act of 1969 (NEPA) (42 U.S.C. 4321), in accordance with 24 CFR 
50.20(p). However, prior to an award of grant funds under this part, 
HUD will perform an environmental review to the extent required by 
HUD's environmental regulations in 24 CFR part 50, including the 
applicable related authorities in 24 CFR 50.4.


Sec. 761.25  Resident comments on grant application.

    The applicant must provide the residents of developments proposed 
for funding under this part 761, as well as any RMCs, RCs, or ROs that 
represent those residents (including any HA-wide RMC, RC, or RO), if 
applicable, with a reasonable opportunity to comment on its application 
for funding under these programs. The applicant must give these 
comments careful consideration in developing its plan and application, 
as well as in the implementation of funded programs. Grantees must 
maintain copies of all written comments submitted for three years.

Subpart D--Grant Administration

Sec. 761.30  Grant administration.

    (a) General. Each grantee is responsible for ensuring that grant 
funds are administered in accordance with the requirements of this part 
761, any specific Notices of Funding Availability (NOFAs) issued for 
these programs, 24 CFR part 85 (as applicable), applicable laws and 
regulations, applicable OMB circulars, HUD fiscal and audit controls, 
grant agreements, grant special conditions, the grantee's approved 
budget (SF-424A), budget narrative, plan, and activity timetable.
    (b) Grant term extensions. (1) Grant term. Terms of the grant 
agreement may not exceed 12 months for the Assisted Housing Program, 
and 24 months for the Public Housing Program, unless an extension is 
approved by the local HUD Office or local HUD Office of Native American 
Programs. Any funds not expended at the end of the grant term shall be 
remitted to HUD.
    (2) Extension. HUD may grant an extension of the grant term in 
response to a written request for an extension stating the need for the 
extension and indicating the additional time required. HUD will not 
consider requests for retroactive extension of program periods. HUD 
will permit only one

[[Page 13991]]
extension. HUD will only consider extensions if the grantee meets the 
extension criteria of paragraph (b)(5) of this section at the time the 
grantee submits for approval the request for the extension.
    (3) Receipt. The request must be received by the local HUD Office 
or local HUD Office of Native American Programs prior to the 
termination of the grant, and requires approval by the local HUD Office 
or local HUD Office of Native American Programs with jurisdiction over 
the grantee.
    (4) Term. The maximum extension allowable for any program period is 
6 months.
    (5) Extension criteria. The following criteria must be met by the 
grantee when submitting a request to extend the expenditure deadline 
for a program or set of programs.
    (i) Financial status reports. There must be on file with the local 
HUD Office or local HUD Office of Native American Programs current and 
acceptable Financial Status Reports, SF-269As.
    (ii) Grant agreement special conditions. The grantee must have 
satisfied all grant agreement special conditions except those 
conditions that the grantee must fulfill in the remaining period of the 
grant. This also includes the performance and resolution of audit 
findings in a timely manner.
    (iii) Justification. The grantee must submit a narrative 
justification with the program extension request. The justification 
must provide complete details, including the circumstances that require 
the proposed extension, and an explanation of the impact of denying the 
request.
    (6) HUD action. The local HUD Office or local HUD Office of Native 
American Programs will attempt to take action on any proposed extension 
request within 15 days after receipt of the request.
    (c) Duplication of funds. To prevent duplicate funding of any 
activity, the grantee must establish controls to assure that an 
activity or program that is funded by other HUD programs, or programs 
of other Federal agencies, shall not also be funded by the Drug 
Elimination Program. The grantee must establish an auditable system to 
provide adequate accountability for funds that it has been awarded. The 
grantee is responsible for ensuring that there is no duplication of 
funds.
    (d) Insurance. Each grantee shall obtain adequate insurance 
coverage to protect itself against any potential liability arising out 
of the eligible activities under this part. In particular, applicants 
shall assess their potential liability arising out of the employment or 
contracting of security personnel, law enforcement personnel, 
investigators, and drug treatment providers, and the establishment of 
voluntary tenant patrols; evaluate the qualifications and training of 
the individuals or firms undertaking these functions; and consider any 
limitations on liability under tribal, State, or local law. Grantees 
shall obtain liability insurance to protect the members of the 
voluntary tenant patrol against potential liability as a result of the 
patrol's activities under Sec. 761.15(b)(5). Voluntary tenant patrol 
liability insurance costs are eligible program expenses. Subgrantees 
shall obtain their own liability insurance.
    (e) Failure to implement program. If the grant plan, approved 
budget, and timetable, as described in the approved application, are 
not operational within 60 days of the grant agreement date, the grantee 
must report by letter to the local HUD Office or the local HUD Office 
of Native American Programs the steps being taken to initiate the plan 
and timetable, the reason for the delay, and the expected starting 
date. Any timetable revisions that resulted from the delay must be 
included. The local HUD Office or local HUD Office of Native American 
Programs will determine if the delay is acceptable, approve/disapprove 
the revised plan and timetable, and take any additional appropriate 
action.
    (f) Sanctions. (1) HUD may impose sanctions if the grantee:
    (i) Is not complying with the requirements of this part 761, or of 
other applicable Federal law;
    (ii) Fails to make satisfactory progress toward its drug 
elimination goals, as specified in its plan and as reflected in its 
performance and financial status reports;
    (iii) Does not establish procedures that will minimize the time 
elapsing between drawdowns and disbursements;
    (iv) Does not adhere to grant agreement requirements or special 
conditions;
    (v) Proposes substantial plan changes to the extent that, if 
originally submitted, the applications would not have been selected for 
funding;
    (vi) Engages in the improper award or administration of grant 
subcontracts;
    (vii) Does not submit reports; or
    (viii) Files a false certification.
    (2) HUD may impose the following sanctions:
    (i) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee;
    (ii) Disallow all or part of the cost of the activity or action not 
in compliance;
    (iii) Wholly or partly suspend or terminate the current award for 
the grantee's or subgrantee's program;
    (iv) Require that some or all of the grant amounts be remitted to 
HUD;
    (v) Condition a future grant and elect not to provide future grant 
funds to the grantee until appropriate actions are taken to ensure 
compliance;
    (vi) Withhold further awards for the program; or
    (vii) Take other remedies that may be legally available.


Sec. 761.35  Periodic grantee reports.

    Grantees are responsible for managing the day-to-day operations of 
grant and subgrant supported activities. Grantees must monitor grant 
and subgrant supported activities to assure compliance with applicable 
Federal requirements and that performance goals are being achieved. 
Grantee monitoring must cover each program, function or activity of the 
grant.
    (a) Semi-annual (nonconstruction) performance reports. For purposes 
of the Public Housing Program only, the following provisions in 
paragraph (a) of this section apply:
    (1) In accordance with 24 CFR 85.40(b)(1)(2) and 85.50(b), grantees 
are required to provide the local HUD Office or the local HUD Office of 
Native American Programs with a semi-annual performance report that 
evaluates the grantee's performance against its plan. These reports 
shall include (but are not limited to) the following in summary form:
    (i) Any change or lack of change in crime statistics or other 
indicators drawn from the applicant's plan assessment and an 
explanation of any difference;
    (ii) Successful completion of any of the strategy components 
identified in the applicant's plan;
    (iii) A discussion of any problems encountered in implementing the 
plan and how they were addressed;
    (iv) An evaluation of whether the rate of progress meets 
expectations;
    (v) A discussion of the grantee's efforts in encouraging resident 
participation; and
    (vi) A description of any other programs that may have been 
initiated, expanded, or deleted as a result of the plan, with an 
identification of the resources and the number of people involved in 
the programs and their relation to the plan.
    (2) Reporting period. Semi-annual performance reports (for periods 
ending June 30 and December 31) are due to the local HUD Office or the 
local HUD Office of Native American Programs on July 30 and January 31 
of each year. If

[[Page 13992]]
the reports are not received by the local HUD Office or the local HUD 
Office of Native American Programs on or before the due date, grant 
funds will not be advanced until the reports are received.
    (b) Final performance report. For purposes of both the Assisted 
Housing Program and the Public Housing Program, the following 
provisions in paragraph (b) of this section apply:
    (1) Evaluation. Grantees are required to provide the local HUD 
Office or the local HUD Office of Native American Programs, as 
applicable, with a final cumulative performance report that evaluates 
the grantee's overall performance against its plan. This report shall 
include (but is not limited to) the information listed in paragraphs 
(a)(1)(i) through (a)(1)(vi) of this section, in summary form.
    (2) Reporting period. The final performance report shall cover the 
period from the date of the grant agreement to the termination date of 
the grant agreement. The report is due to the local HUD Office or the 
local HUD Office of Native American Programs, as applicable, within 90 
days after termination of the grant agreement.
    (c) Semi-annual financial status reporting requirements. For 
purposes of both the Assisted Housing Program and the Public Housing 
Program, the following provisions in paragraph (c) of this section 
apply, as specified below:
    (1) Forms. The grantee shall provide a semi-annual financial status 
report. For purposes of the Public Housing Program, this report shall 
be in accordance with 24 CFR 85.41 (b) and (c). For both the Assisted 
Housing and Public Housing Programs, the grantee shall use the form SF-
269A, Financial Status Report-Long Form, to report the status of funds 
for nonconstruction programs. The grantee shall use SF-269A, block 12, 
``Remarks,'' to report on the status of programs, functions, or 
activities within the program.
    (2) Reporting period. Semi-annual financial status reports (SF-
269A) must be submitted as follows:
    (i) For purposes of the Assisted Housing Program, semi-annual 
financial status reports covering the first 180 days of funded 
activities must be submitted to the local HUD Office between 190 and 
210 days after the date of the grant agreement. If the SF-269A is not 
received on or before the due date (210 days after the date of the 
grant agreement) by the local HUD Office, grant funds will not be 
advanced until the reports are received.
    (ii) For purposes of the Public Housing Program, semi-annual 
financial status reports (for periods ending June 30 and December 31) 
must be submitted to the local HUD Office or the local Office of Indian 
Programs, as applicable, by July 30 and January 31 of each year. If the 
local HUD Office or the local HUD Office of Native American Programs, 
as applicable, does not receive the SF-269A on or before the due date, 
the grant funds will not be advanced until the reports are received.
    (d) Final financial status report (SF-269A). For purposes of both 
the Assisted Housing Program and the Public Housing Program, the 
following provisions in paragraph (d) of this section apply:
    (1) Cumulative summary. The final report will be a cumulative 
summary of expenditures to date and must indicate the exact balance of 
unexpended funds. The grantee shall remit all Drug Elimination Program 
funds owed to HUD, including any unexpended funds, as follows:
    (i) For purposes of the Assisted Housing Program, the grantee must 
remit such funds to HUD within 90 days after the termination of the 
grant agreement.
    (ii) For purposes of the Public Housing Program, the local HUD 
Office or the local HUD Office of Native American Programs shall notify 
the grantee, in writing, of the requirement to remit such funds to HUD. 
The grantee shall remit such funds prior to or upon receipt of the 
notice.
    (2) Reporting period. The final financial status report shall cover 
the period from the date of the grant agreement to the termination date 
of the grant agreement. The report is due to the local HUD Office or 
the local HUD Office of Native American Programs, as applicable, within 
90 days after the termination of the grant agreement.


Sec. 761.40  Other Federal requirements.

    In addition to the nondiscrimination and equal opportunity 
requirements set forth in 24 CFR part 5, subpart A, use of grant funds 
requires compliance with the following Federal requirements:
    (a) Labor standards. (1) When grant funds are used to undertake 
physical improvements to increase security under Sec. 761.15(b)(3), the 
following labor standards apply:
    (i) The grantee and its contractors and subcontractors must pay the 
following prevailing wage rates, and must comply with all related 
rules, regulations and requirements:
    (A) For laborers and mechanics employed in the program, the wage 
rate determined by the Secretary of Labor pursuant to the Davis-Bacon 
Act (40 U.S.C. 276a et seq.) to be prevailing in the locality with 
respect to such trades;
    (B) For laborers and mechanics employed in carrying out nonroutine 
maintenance in the program, the HUD-determined prevailing wage rate. As 
used in paragraph (a) of this section, nonroutine maintenance means 
work items that ordinarily would be performed on a regular basis in the 
course of upkeep of a property, but have become substantial in scope 
because they have been put off, and that involve expenditures that 
would otherwise materially distort the level trend of maintenance 
expenses. Nonroutine maintenance may include replacement of equipment 
and materials rendered unsatisfactory because of normal wear and tear 
by items of substantially the same kind. Work that constitutes 
reconstruction, a substantial improvement in the quality or kind of 
original equipment and materials, or remodeling that alters the nature 
or type of housing units is not nonroutine maintenance.
    (ii) The employment of laborers and mechanics is subject to the 
provisions of the Contract Work Hours and Safety Standards Act (40 
U.S.C. 327-333).
    (2) The provisions of paragraph (a)(1) of this section shall not 
apply to labor contributed under the following circumstances:
    (i) Upon the request of any resident management corporation, HUD 
may, subject to applicable collective bargaining agreements, permit 
residents (for purposes of the Public Housing Program, residents of a 
program managed by the resident management corporation) to volunteer a 
portion of their labor.
    (ii) An individual may volunteer to perform services if:
    (A) The individual does not receive compensation for the voluntary 
services, or is paid expenses, reasonable benefits, or a nominal fee 
for voluntary services; and
    (B) Is not otherwise employed at any time in the work subject to 
paragraphs (a)(1)(i)(A) or (a)(1)(i)(B) of this section.
    (b) Flood insurance. Grants will not be awarded for proposed 
activities that involve acquisition, construction, reconstruction, 
repair or improvement of a building or mobile home located in an area 
that has been identified by the Federal Emergency Management Agency 
(FEMA) as having special flood hazards unless:
    (1) The community in which the area is situated is participating in 
the National Flood Insurance Program in accordance with 44 CFR parts 59 
through 79; or
    (2) Less than a year has passed since FEMA notification to the 
community regarding such hazards; and

[[Page 13993]]

    (3) Flood insurance on the structure is obtained in accordance with 
section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4001).
    (c) Lead-based paint. The provisions of section 302 of the Lead-
Based Paint Poisoning Prevention Act, 42 U.S.C. 4821-4846, and 
implementing regulations in 24 CFR part 965, subpart H apply to 
activities under these programs as set out in this paragraph (c). 
Paragraph (c) of this section is promulgated pursuant to the authority 
granted in 24 CFR 35.24(b)(4) and supersedes, with respect to all 
housing to which it applies, the requirements (not including 
definitions) prescribed by subpart C of 24 CFR part 35.
    (1) Applicability. The provisions of paragraph (c) of this section 
shall apply to all developments constructed or substantially 
rehabilitated before January 1, 1978, and for which assistance under 
this part is being used for physical improvements to enhance security 
under Sec. 761.15(b)(3).
    (2) Definitions. The term ``applicable surfaces'' means all intact 
and nonintact interior and exterior painted surfaces of a residential 
structure.
    (3) Exceptions. The following activities are not covered by this 
section:
    (i) Installation of security devices;
    (ii) Other similar types of single-purpose programs that do not 
involve physical repairs or remodeling of applicable surfaces of 
residential structures; or
    (iii) Any non-single-purpose rehabilitation that does not involve 
applicable surfaces and that does not exceed $3,000 per unit.
    (d) Conflicts of interest. In addition to the conflict of interest 
requirements in 24 CFR part 85 for the Public Housing Program, no 
person, as described in paragraphs (d)(1) and (d)(2) of this section, 
may obtain a personal or financial interest or benefit from an activity 
funded under these drug elimination programs, or have an interest in 
any contract, subcontract, or agreement with respect thereto, or the 
proceeds thereunder, either for him or herself or for those with whom 
he or she has family or business ties, during his or her tenure, or for 
one year thereafter:
    (1) Who is an employee, agent, consultant, officer, or elected or 
appointed official of the grantee, that receives assistance under the 
program and who exercises or has exercised any functions or 
responsibilities with respect to assisted activities; or
    (2) Who is in a position to participate in a decisionmaking process 
or gain inside information with regard to such activities.
    (e) For IHAs, Sec. 950.115 of this title, ``Applicability of civil 
rights requirements,'' and Sec. 950.120 of this title, ``Compliance 
with other Federal requirements,'' apply and control to the extent they 
may differ from other requirements of this section;
    (f) Indian preference. For purposes of the Public Housing Program, 
applicants are subject to the Indian Civil Rights Act (24 U.S.C. 1301), 
the provisions of section 7(b) of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450e(b)), and the Indian preference 
rules in the IHA procurement regulations at 24 CFR 950, subpart B. 
These provisions require that, to the greatest extent feasible, 
preference and opportunities for training and employment be given to 
Indians, and that preference in the award of subcontracts and subgrants 
be given to Indian Organizations and Indian Owned Economic Enterprises.
    (g) Intergovernmental Review. The requirements of Executive Order 
12372 (3 CFR, 1982 Comp., p. 197) and the regulations issued under the 
Order in 24 CFR part 52, to the extent provided by Federal Register 
notice in accordance with 24 CFR 52.3, apply to these programs.

PART 961--[REMOVED]

    4. Part 961 is removed.

    Dated: March 15, 1996.
Henry G. Cisneros,
Secretary.
[FR Doc. 96-7272 Filed 3-27-96; 8:45 am]
BILLING CODE 4210-32-P