[Federal Register Volume 62, Number 90 (Friday, May 9, 1997)]
[Proposed Rules]
[Pages 25728-25738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12080]



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Part IV





Department of Housing and Urban Development





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24 CFR Parts 960 and 966



Streamlining the Public Housing Admission and Occupancy Regulations; 
Proposed Rule

  Federal Register / Vol. 62, No. 90 / Friday, May 9, 1997 / Proposed 
Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 960 and 966

[Docket No. FR-4084-P-01]
RIN 2577-AB67


Streamlining the Public Housing Admission and Occupancy 
Regulations

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule will revise HUD's regulations that govern 
admission and occupancy issues in the public housing program to do the 
following: Remove rule text that is repetitive of statutory language 
and otherwise streamline the rule; respond to relevant recommendations 
of the Public and Assisted Housing Occupancy Task Force report of April 
1994; implement a recent statute regarding screening of applicants for 
admission and termination of tenancy; add important provisions 
concerning application processing, previously found only in a 
superseded Annual Contributions Contract between HUD and Housing 
Agencies and in HUD Handbooks; and clarify applicability of the part. 
The overall goal of this rule is to make the regulations clearer and 
more concise and to implement statutory directives.

DATES: Comments due date: July 8, 1997.
    The deadline for comments on the information collection 
requirements is July 8, 1997, although commenters are advised that a 
comment is best assured of having its full effect if it is received by 
the Office of Management and Budget (OMB) within 30 days of 
publication. See the Public Reporting Burden heading under the Findings 
and Certifications section of this preamble regarding the information 
collection burden.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Rules Docket Clerk, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410. Communications should refer 
to the above docket number and title. Facsimile (FAX) comments are not 
acceptable. A copy of each communication submitted will be available 
for public inspection and copying between 7:30 a.m. and 5:30 p.m. 
weekdays at the above address.
    Comments on the information collections contained in the rule, 
which are described in detail under the heading, FINDINGS AND 
CERTIFICATIONS, must refer to the docket number and title of the 
proposed rule and be sent to: Joseph F. Lackey, Jr., HUD Desk Officer, 
Office of Management and Budget, New Executive Office Building, 
Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Linda Campbell, Director, Marketing, 
Leasing and Management Division, Office of Public and Assisted Housing 
Operations, Room 4206, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410, telephone number (202) 708-
0744, extension 4020. (This telephone number is not toll-free.) For 
hearing-and speech-impaired persons, this number may be accessed via 
text telephone by dialing the Federal Information Relay Service at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Regulatory Reinvention Effort

    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 24 CFR, Part 960, Admission 
To, And Occupancy Of, Public Housing, can be improved and streamlined 
by eliminating unnecessary language. Throughout the part, this rule 
shortens and simplifies the provisions retained.
    The various subparts of part 960 currently contain their own 
sections on purpose, scope, and/or applicability. The statements of 
purpose and scope have been eliminated, since they were explanatory 
only and the information can be provided in HUD documents other than a 
rule. The applicability provisions have been consolidated into one 
section in a new subpart A, which deals with general topics. All 
statements of OMB approval numbers for information collection 
requirements have also been consolidated in that subpart.
    Sections on tenant selection policies and standards for tenant 
selection criteria (Secs. 960.204 and 960.205) have been streamlined 
and consolidated into one section (new Sec. 960.201) entitled, 
``Applicant admission policies.'' Examples have been removed, since 
they can be provided in HUD guidance documents.
    References in the codified rule to reserved subparts and sections 
have been removed, to eliminate confusion.
    A number of the changes made in this proposed rule increase the 
flexibility of housing agencies (``HAs'') administering the program. 
For example, Sec. 960.206 now explicitly authorizes HAs to verify 
information about an applicant's disability to determine appropriate 
accommodations, to verify information relative to qualification for a 
preference, and to determine deductions for calculating adjusted 
income. It clarifies that the HA makes the final determination of 
whether an applicant's failure to meet the HA's tenant selection 
criteria is outweighed with respect to these issues. Another example is 
the explicit authorization for HAs to adopt income limits for continued 
occupancy, found in Sec. 960.210. This responds to the desire of many 
HAs to adopt reasonable limits to avoid housing families who can obtain 
housing on the private market. In addition, language was removed from 
Sec. 960.208 that required a tenant's approval for direct payment of a 
utility reimbursement to a utility provider (see discussion below).

II. Statutory Change and Related Change to Bar Admission of Certain 
Evicted Tenants

    The statutory foundation for the public housing program is the 
United States Housing Act of 1937 (42 U.S.C. 1437a, et seq., ``1937 
Act''). On March 28, 1996, that Act was amended by the Housing 
Opportunity Program Extension Act of 1996 (Pub. L. 104-120, 110 Stat. 
834) (``Extender Act''). It makes ineligible for admission to public 
housing those individuals who have been evicted from housing assisted 
under the 1937 Act (including Section 8 assistance) for drug-related 
criminal activity for a three-year period, unless the evicted tenant 
has successfully completed a rehabilitation program or the 
circumstances leading to the eviction no longer exist.
    The statute also requires HAs to prohibit occupancy in any public 
housing dwelling unit by any person who the HA determines is illegally 
using a controlled substance, or whose pattern of illegal use of a 
controlled substance or pattern of alcohol abuse would interfere with 
the health, safety, or right to peaceful enjoyment of the premises by 
other residents of the project. In this connection, the statutory 
amendment authorizes the housing agency administering the program to 
determine whether an applicant has

[[Page 25729]]

been rehabilitated from drug or alcohol abuse.
    The amendment also provides some specific requirements about the 
administration of this applicant screening authority: (1) It requires 
law enforcement agencies to provide information to housing agencies 
concerning criminal convictions for purposes of applicant screening, 
lease enforcement, and eviction; (2) it requires the housing agency to 
provide anyone adversely affected by report of a criminal record an 
opportunity to dispute the accuracy and relevance of that record before 
any adverse action is taken; and (3) it requires that reports of 
criminal records be maintained confidentially. The first of these 
changes is not the subject of this rule but is the subject of current 
intergovernmental coordination efforts. The second and third changes 
are being implemented through revisions of the verification procedures 
contained in the section now designated as Sec. 960.206(e).

A. Ineligibility of Persons Previously Evicted

    This rule interprets the statute's ban on admission of a person 
previously evicted for drug-related criminal activity for three years 
to be a period of at least three years. Thus, an HA can determine the 
period of time it believes reasonable for particular types of drug-
related activity, as long as that period is at least three years long.
    This rule also proposes a related change in Sec. 960.201 to make 
tenants evicted from housing assisted under the 1937 Act for serious 
lease violations ineligible for admission to public housing for an 
appropriate period of time. For example, families evicted for 
committing crimes against persons or property, and other acts that 
affect the health, safety or right to peaceful enjoyment of the 
premises by other residents, would be barred from admission to public 
housing for a specified period. These proposals will facilitate HUD and 
HA efforts to crack down on crime and to impose tougher expectations on 
federally assisted tenants, holding them responsible for their actions.
    It is noted that in order to determine the eligibility of an 
applicant under this proposed rule, an HA needs to know whether the 
applicant was evicted from housing assisted under the 1937 Act and 
whether the eviction involved drug-related criminal activity. HUD is 
specifically requesting public comment on the best means to obtain 
information on evictions from privately owned assisted projects and 
ways HAs can share this information with each other.

B. Ineligibility of Persons Involved in Drug or Alcohol Abuse

    The Extender Act requires that HAs prohibit occupancy in public 
housing by any person engaged in illegal use of a controlled substance 
or any person that the HA has reasonable cause to believe is engaged in 
a pattern of illegal use of a controlled substance or abuse (or a 
pattern of abuse) of alcohol that ``may interfere with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents of the project.'' This rule implements that provision by 
requiring HAs to establish screening criteria to prevent admission of 
such ineligible persons and by requiring HAs to establish standards for 
evicting tenants related to illegal drug use and alcohol abuse. (See 
Secs. 960.201(c)(1).) Since the Extender Act makes these same standards 
the basis for termination of tenancy as well as for denial of 
admission, this rulemaking revises the provisions of current 
regulations pertaining to grounds for termination of tenancy, 
Sec. 966.4(l), to add them.
    In addition, consonant with the Department's overall efforts to 
make public housing safe and following the pattern of Section 8 
regulations (Sec. 982.553), this proposed rule provides that the HA may 
deny admission or evict a tenant at any time if the HA determines that 
any family member has engaged in drug-trafficking or violent criminal 
activity. (Definitions of these terms are added to the rule.)

C. Criminal Background Checks

    The rule currently requires, at Sec. 960.206(a), that ``[a]dequate 
procedures must be developed to obtain and verify information with 
respect to each applicant.'' It also suggests as sources of information 
``parole officers, court records, drug treatment centers, clinics, 
physicians or police departments where warranted by the particular 
circumstances.'' That section is being revised to provide, at paragraph 
(c)(1), that verification procedures include a ``criminal background 
check of all adult household members to identify any recent history of 
crimes of physical violence to persons or property and other activities 
that would adversely affect the health, safety or welfare of others.''
    The enactment of the Extender Act makes it clear that Congress 
wants applicants who are admitted to public housing to be carefully 
screened for criminal and antisocial behavior, so that public housing 
developments will be more desirable places to live. HUD concludes that 
HAs must carefully screen applicants to assure that they are carrying 
out the new statutory provisions making ineligible for admission 
persons involved in drug use and alcohol abuse or previously evicted 
for drug-related activity and requiring that law enforcement agencies 
make available information about criminal records.
    To assure that screening is thorough and is not conducted in a 
discriminatory way, the proposed rule provides that HAs must do a 
criminal background check on all adult household members of each 
applicant family. The rule requires HAs to access an individual's 
criminal history records from a local, State, or Federal government 
entity with law enforcement responsibility. The type of criminal 
background check done is left to the discretion of the HA, based on 
local circumstances.
    This approach was discussed at a meeting in the summer of 1996 with 
representatives of housing agency officials (National Association of 
Housing and Redevelopment Officials, Council of Large Public Housing 
Authorities, and Public Housing Authority Directors Association). 
Although there was not unanimous support for this position among those 
officials, the Department has determined that benefits will outweigh 
the costs, as described below, and that the policy should be 
implemented. Of course, public comments are invited on this subject, as 
on other elements of this proposed rule.
    When considering what type of check to do, an HA may consider 
factors described in this rule preamble. Local and county records, 
which may contain records of misdemeanors, as well as felonies, are 
generally available free or for only a small fee. This type of 
background check may be appropriate for long-term residents of the 
locality or county. State records are available, for fees that vary 
widely, and may be appropriate to check on the background of an 
applicant that has moved from other localities within a State. In some 
parts of the country, states have created networks through which HAs 
can access criminal records from all participating states through one 
request.
    Another possible source is the National Crime Information Center 
(NCIC), which provides information about felonies and many 
misdemeanors. At this point, most HAs do not have access to NCIC 
records, but HUD is working with other Federal agencies to develop 
procedures so that this option can be pursued where it is deemed 
appropriate.

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    A large number of HAs have residency preferences (including New 
York, Puerto Rico, and Chicago--administering a total of 284,000 
units), which, combined with long waiting lists, result in admission 
primarily of local residents, or those who work in the locality. 
Background checks on local residents can often be done through local, 
county, or State systems. In the HAs that have residency preferences, 
non-local residents rarely reach the top of the waiting list and the 
stage of screening that involves the criminal background check.
    The range of effort an HA undertakes may vary from having the 
applicant get a document from the local police department or sheriff's 
office that indicates whether or not the applicant has a criminal 
record, and the nature of any such record, to having the applicant 
fingerprinted and checking these prints and other pertinent data with 
the NCIC. The former method has the advantage that applicants who know 
they have a criminal history may choose to withdraw their applications, 
thus screening themselves out of the applicant pool. The cost may range 
from nothing, to $1 for a name check with local authorities using a 
diskette for computerized access, to $10 for a name check with NCIC, to 
$25 for a fingerprint check with NCIC. In no event will the applicant 
be charged to cover the cost of the criminal background check.
    The cost to HAs, in the aggregate, to conduct the required 
background check, which many are already doing under the existing 
regulations, is estimated as follows. There are approximately 1.3 
million public housing households. Of these, there is turnover in 13% 
of the units each year, producing a need to do applicant screening to 
fill 169,000 units per year. Considering that criminal background 
checks will be done on the adults in applicant households that have 
already passed other standard screening procedures, it is likely that 
1.5 households will be checked for each of the 169,000 admissions. That 
results in 253,000 households being checked. At an average of 1.2 
adults per household, the requirement to check all adult members of an 
applicant household would require 303,600 individuals to be checked.
    We estimate that 95% of these criminal background checks could be 
done at the local, county, or State level. The cost of this type of 
check varies widely, from about $1 to more than $15. Using a relatively 
high estimate of approximately $10 per person, the total annual cost 
for this category of background check would be $2,884,200. Another 3% 
of the checks would probably be done through a name check with the 
NCIC, at a ballpark estimate of $10 per person--for a total cost of 
$91,080. The last 2% would be checked via the fingerprint check with 
the NCIC, at an approximate cost of $25 (not including the cost of 
obtaining the applicant's fingerprints)--for a total cost of $151,800. 
Altogether, the cost then would be $3,127,080.
    The HAs cover the cost of all their screening activities, as well 
as the cost of other operations, such as evictions, through HUD 
operating subsidy and rental and other income. If an HA does not 
properly screen applicants, both tangible and intangible costs will be 
incurred. The tangible costs to the HA will include the cost of 
evicting a tenant involved in criminal activity.
    Costs associated with an eviction, if the HA uses its own counsel, 
are estimated to be in the range of $450 to $700 for each eviction, 
provided there is no appeal. If there is an appeal or a jury trial, the 
HA is likely to spend, at a minimum, $2,000 per eviction. These 
estimates do not include the HA staff time devoted to documentation of 
problems with the tenant family that takes place before the 
commencement of an eviction action.
    The cost of doing adequate screening at the point of admission (at 
$1-$25 per adult) is an investment in effective management of public 
housing developments. Lease enforcement--via eviction--is much more 
costly. Using the high estimate of $25 per adult, the cost per 
household of universal adult screening is $30, which compares very 
favorably with an eviction cost of $450 to $2,000.
    The intangible costs associated with failing to do adequate 
criminal background checks would include the effect on neighbors in the 
development whose peaceful enjoyment of the premises would be impeded 
by the presence of tenant families involved in criminal activity. These 
neighbors' dissatisfaction with the development might produce an 
undesirable image for the development and increased turnover and 
vacancies in the development. Of course, such turnover would result in 
costs for cleaning units and additional applicant screening to fill the 
units, and if units could not be filled because of a negative image of 
the development, loss in rental income resulting from vacancies. 
Complaints to the HA staff about tenants who might have been prevented 
from being admitted if a criminal background check had been completed 
would require staff to devote time to meet with affected families to 
attempt to resolve the situation, as well as action necessary to evict 
the families whose illegal activities could not be terminated by any 
other means.
    The Department concludes that, in fulfillment of the statutory 
mandate to screen applicants to prevent admission of those who are 
involved in illegal drug use and drug-related criminal activity or who 
have been evicted previously for such activity and to terminate the 
tenancy of persons whose use of illegal drugs or abuses of alcohol 
interferes with the use of the premises by other residents, applicants 
must be screened for criminal activity. Considering the costs 
associated with criminal background checks and the tangible and 
intangible costs of failure to do adequate criminal background checks, 
the Department has determined that requiring such checks on all adults 
in applicant households before admission of a family is justified as a 
means of satisfying the statutory objective.

III. Annual Contributions Contract and Handbook Provisions

    The Department revised the standard contract between it and housing 
agencies, called the Annual Contributions Contract (``ACC''), in the 
July 1995 revision streamlining and replacing the November 1969 
version. The 1969 standard ACC contained requirements that are no 
longer found in the new ACC but are still to be kept in force. 
Therefore, this rule is adding to part 960 some requirements formerly 
found in the ACC, or in HUD Handbooks, on the subject of applications, 
waiting lists, and tenant selection and assignment.
    A new subpart C requires HAs to obtain a written application from 
each applicant, and it builds on the framework established in 24 CFR 
1.4 for tenant selection and assignment plans and use of waiting lists.

IV. Occupancy Task Force

    In 1993, the Secretary established a task force to review all 
rules, policy statements, handbooks, technical assistance memoranda, 
and other relevant documents issued by the Department on the standards 
and obligations governing residency in federally assisted housing, to 
comply with Section 643 of the Housing and Community Development Act of 
1992 (42 U.S.C. 13603).
    This task force was comprised of individuals representing the 
interests of owners, managers, and tenants of federally assisted 
housing, HAs, owner and tenant advisory organizations, persons with 
disabilities and disabled families, organizations assisting homeless 
individuals, and social

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service, mental health and other nonprofit servicers and providers who 
serve federally assisted housing. Members of the task force were 
directed to review all existing standards, regulations, and guidelines 
governing occupancy and tenant selection policies in federally assisted 
housing, as well as lease provisions and other rules of occupancy for 
federally assisted housing, to determine whether the standards, 
regulations and guidelines provide sufficient guidance to owners and 
managers of federally assisted housing to:
    (1) Develop procedures for preselection inquiries sufficient to 
determine the capacity of the applicants to comply with reasonable 
lease terms and conditions of occupancy;
    (2) Use leases that prohibit behavior which endangers the health 
and safety of other tenants or HA employees or violates the rights of 
other tenants to peaceful enjoyment of the premises;
    (3) Assess the need to provide, and appropriate measures for 
providing, reasonable accommodations required under the Fair Housing 
Act and Section 504 of the Rehabilitation Act of 1973 for persons with 
various types of disabilities; and
    (4) Comply with civil rights laws and regulations.
    The task force made the necessary review, conducted several public 
hearings across the country, and received written comments. As 
mandated, the task force submitted to the Secretary and Congress a 
final report on April 7, 1994 that set forth the task force's 
recommendations for occupancy criteria in federally assisted housing, 
standards for the reasonable performance and behavior of tenants of 
federally assisted housing, compliance standards consistent with the 
reasonable accommodation of the requirements of the Fair Housing Act 
and section 504 of the Rehabilitation Act of 1973, standards for 
compliance with other civil rights laws, and procedures for the 
eviction of tenants not complying with such standards consistent with 
sections 6 and 8 of the 1937 Act.
    Some of the recommendations were directed to the Congress, and 
others would require the appropriation of funds for their 
implementation. Those recommendations are not covered by this proposed 
rule.
    Most of the remaining recommendations do not require implementation 
through the rulemaking process but rather through the promulgation of 
guidance. The Department is committed to minimizing the regulatory 
burden on the housing agencies. As a result, the only recommendations 
that are covered in this proposed rule are those related to 24 CFR part 
960 that require an explicit, enforceable requirement on the HAs or for 
which the existing regulation must be modified to be consistent with 
Task Force recommendations. The Department intends to address and adopt 
other Task Force recommendations in future revisions of other 
regulations, such as 24 CFR part 966, covering leases and grievance 
procedures, and in future training.
    The Task Force recommended that HUD provide broader coverage with 
respect to requiring that HAs provide reasonable accommodations to 
applicants whose applications would be denied, considering what 
accommodations could be provided that would permit the applicants to 
comply with program requirements. The revised Sec. 960.206 addresses 
this issue.
    The Task Force recommended that HUD require all housing providers 
to ask all applicants at the point of initial contact whether they need 
another form of communication other than plain language paperwork. Some 
alternatives recommended were providing sign language interpretation; 
having material explained orally by staff, either in person or by 
phone; providing large type materials; offering information on tape; or 
having some third party representative (a friend, relative or advocate, 
named by the applicant) accompany the applicant to receive, interpret 
and explain housing materials and be present at all meetings and 
discussions. The Department has decided to require that applicants be 
informed of alternative forms of communication that can be used, upon 
the request of an applicant. The provision (in Sec. 960.207) is worded 
in the form of providing information to applicants instead of asking 
applicants what they need, to respect their privacy.
    The Task Force recommended that HUD require housing providers to 
include in all letters rejecting applicants a notice asking applicants 
with disabilities who are being rejected to request an interview to 
determine whether a reasonable accommodation would enable them to 
comply with essential lease provisions. This recommendation has been 
accepted and embodied in the same section.

V. Description of Specific Changes

A. General

    The entire part has been rewritten, instead of amending some of the 
existing parts. The new subpart A describes the applicability of the 
part, clarifying a possible confusion about what leased housing 
projects are covered--units leased by the HA from a private owner and 
then subleased to tenants under the Section 23 or the Section 10(c) 
programs are covered. This subpart also describes the authorization for 
information collections.

B. Subpart B--Admission, Rent, and Reexamination of Income

    When the rule governing Federal preferences was issued, on March 6, 
1996, it removed Sec. 960.203 covering nondiscrimination requirements 
when it added a provision (Sec. 5.410(i)) imposing the requirements 
with respect to administration of selection preferences. However, the 
scope of that provision did not clearly apply to all tenant selection 
and occupancy determinations made by an HA. Therefore, this rule 
restores a Sec. 960.203 to apply those nondiscrimination provisions to 
all such activities. To minimize repetition of lists of statutory 
references in its rules, the Department cross-references the list 
already stated in that rule.
    While that change restores language previously removed, another 
change to this subpart eliminates reference to utility reimbursements, 
in Sec. 960.208. Utility reimbursements are payments to, or on behalf 
of, tenants who pay their own utility bills in cases where the utility 
allowance applicable to their unit exceeds their payment for rent, 
based on their income. Currently, six percent of the total population 
of public housing residents have a utility allowance that is greater 
than their payment for rent (``total tenant payment'' under 24 CFR part 
5). These households are, therefore, entitled to receive a utility 
reimbursement. This means that HAs currently send out approximately 
75,000 checks monthly to tenants, if tenants have not consented to 
direct payment to the utility company.
    The method of paying utility reimbursements is now covered in both 
part 960 and the rule defining income that is applicable to the public 
housing program, now found in 24 CFR part 5 (a broader rule applicable 
to all programs administered under the 1937 Act). The current 
provisions require that before an HA can pay a utility reimbursement 
directly to the utility company, it must obtain the consent of the 
tenant.
    This proposed rule eliminates reference to utility reimbursements 
from part 960, so that treatment of these reimbursements will be 
covered in only one part. The final rule based on this proposed rule 
will include a revision to the income reimbursement provision in part 5 
to permit an HA, with the consent

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of the utility company--but without obtaining consent of the tenant--to 
pay the reimbursement directly to the utility company on the tenant's 
behalf. This change is intended to assure that the funds are used for 
their intended purpose and to save HAs money by consolidating the 
number of utility reimbursement checks they must issue from several to 
one. The Department believes that the change will have no adverse 
impact on tenants, but specifically invites public comments on this 
change.
    As mentioned above with respect to Task Force recommendations, 
Sec. 960.207 has been significantly revised. The title reflects that 
change. It is no longer ``Notification to Applicants'' but is 
``Communication With Applicants.''
    With respect to reexamination of family income and composition, 
Sec. 960.209, the rule is being revised to provide that the HA shall 
prescribe the conditions under which changes in circumstances between 
annual reexaminations must be reported.

C. Subpart C--Applications, Waiting List, Tenant Selection and 
Assignment

    This subpart prescribes requirements for waiting lists and tenant 
selection and assignment policies adopted pursuant to 24 CFR 
1.4(b)(2)(ii). Section 1.4 requires HAs to use a community-wide waiting 
list, but permits HAs to seek an exception from this requirement where 
the exception would be consistent with title VI of the Civil Rights Act 
of 1964, 42 U.S.C. 2000d-1, and the purposes of 24 CFR part 1.
    In the waiting list section of this rule, Sec. 960.303, 
clarification is given that HAs may divide their waiting list into 
separate categories for general occupancy projects, for mixed 
population projects, for projects designated for elderly families, and 
for projects designated for disabled families, provided that all 
applicants are given an opportunity to be on the waiting list for any 
category of project for which they are qualified. This provision is 
intended to permit operation of projects that were previously approved 
as projects designated for elderly and disabled families in accordance 
with their designation, while permitting families eligible for that 
housing to also seek admission to other projects.
    The tenant selection and assignment provisions of 24 CFR 1.4 have 
been augmented in Sec. 960.304 by a provision that explicitly permits 
an HA to deal with an applicant who refuses offered units a prescribed 
number of times by removing the applicant from the waiting list 
entirely. This additional option provides an HA with greater 
flexibility in administering its program. This new section also 
specifies that the number of offers to be given an applicant before 
such action shall not exceed three. Of course, the HA's tenant 
selection and assignment plan remains subject to HUD review, in 
accordance with 24 CFR 1.4.
    The provisions concerning a preference for elderly families and 
disabled families in mixed population projects now found in subpart D 
of part 960 are consolidated into one section (Sec. 960.307) in this 
subpart.

D. Subpart D--Exemption From Eligibility Requirements for Police 
Officers and Other Security Personnel

    This subpart permits the admission to public housing of police 
officers and other security personnel, who are not otherwise eligible 
under any other admission requirements, under a plan submitted by a 
housing agency (HA) and approved by the Department, to increase their 
visible presence to serve as a deterrent to criminal activity in and 
around public housing.

VI. Findings and Certifications

A. Public Reporting Burden

    The information collection requirements contained in this rule, as 
described in Secs. 960.201, 960.206, 960.207, 960.209, 960.301, 
960.303, 960.304, and 960.405 are being submitted to the Office of 
Management and Budget for review under the Paperwork Reduction Act of 
1995 (42 U.S.C. 3501-3520).
    1. In accordance with 5 CFR 1320.5(a)(1)(iv), the Department is 
setting forth the following concerning the proposed collections of 
information:
    (a) Title of the information collection proposal: Public Housing 
Admission and Occupancy Policies.
    (b) Summary of the collection of information: The information 
collected covers the following: (1) Policies on applicant admission, 
including procedures for selection of applicants, verification of 
applicant data and criminal history records, communication with 
applicants, maintenance of waiting lists, and tenant selection and 
assignment; (2) provision for reexamination of family income; and (3) a 
plan for housing security officers.
    (c) Description of the need for the information and its proposed 
use: The information collected is needed to monitor compliance with HUD 
public housing program requirements authorized by statute to assure 
that sound management practices will be followed in the operation of 
the projects, consistent with the obligations of the HAs under the 
United States Housing Act of 1937, 42 U.S.C. 1437, et seq.
    (d) Description of the likely respondents, including the estimated 
number of likely respondents, and proposed frequency of response to the 
collection of information: The likely respondents are the approximately 
3,300 HAs that administer public housing units. The information is 
collected only once, unless an HA changes its policy.
    (e) Estimate of the total reporting and recordkeeping burden that 
will result from the collection of information: The total number of 
burden hours for this collection of information is estimated to be 
344,800 hours, including the time for reviewing instructions, gathering 
and maintaining the data. The actual burden to HAs is minimal, since 
the collections are already a part of the day-to-day operation of the 
HAs. The only collections actually sent to HUD are those described in 
Sec. 960.201 (Applicant Admission Policies), in Sec. 960.304 (Tenant 
Selection and Assignment Plan) and in Sec. 960.405 (Plan Standards and 
Criteria for Admission of Police Officers). All other collections are 
developed and maintained at the HA. It is difficult to determine a cost 
per hour due to the different organizational structure of HAs and the 
various collections being performed by different individuals. No 
outside consultation was necessary to ascertain data collection 
requirements. The information is not reported to the Department on a 
form.

[[Page 25733]]



                                                Reporting Burden                                                
----------------------------------------------------------------------------------------------------------------
                                                                                         Est. ave.              
      Type of collection         Proposed section of 24 CFR    Number of    Frequency     response      Annual  
                                          affected            respondents  of response  time (hrs.)  burden hrs.
----------------------------------------------------------------------------------------------------------------
Policies on Applicant           960.201, 960.206, 960.207,          3,300            1           68      224,400
 Admission.                      960.209, 960.304                                                               
Procedures for Applications &   960.301, 960.303                    3,300            1           36      118,800
 Waiting Lists.                                                                                                 
Submission of Plan to Exempt    960.405                               800            1            2        1,600
 Police Officers from                                                                                           
 Eligibility Requirements.                                                                                      
                               ---------------------------------------------------------------------------------
    Total Burden..............  ............................  ...........  ...........  ...........      344,800
----------------------------------------------------------------------------------------------------------------

    2. In accordance with 5 CFR 1320.8(b)(3), the Department makes the 
following statement:
    The reason for collecting the information is to permit housing 
agencies to collect necessary information from program applicants to 
determine their eligibility for participation in the program, and to 
permit HUD to monitor housing agencies' activities. HUD uses the 
information it collects to ensure that the policies and procedures 
adopted by the housing agencies in administration of the public housing 
program are consistent with requirements of the authorizing legislation 
and applicable nondiscrimination laws. The information submitted to HUD 
is public information and does not lend itself to confidentiality. 
Information submitted to a housing agency in the verification of 
applicant data is not public information and is subject to statutory 
requirements concerning confidentiality (42 U.S.C. 1437d(q)(4)). In 
accordance with the Paperwork Reduction Act, HUD may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless the collection displays a currently valid OMB 
control number.
    3. In accordance with 5 CFR 1320.8(d)(1), the Department is 
soliciting comments from members of the public and affected agencies 
(see DATES and ADDRESSES sections above) concerning the proposed 
collection of information to:
    (a) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (b) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (c) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (d) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.

B. Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this proposed rule, and in so 
doing certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. This proposed rule 
would amend occupancy and tenant selection policies in the Public 
Housing program. The Department recognizes that uniform application of 
requirements on entities of differing sizes may place a 
disproportionate burden on small entities. Therefore, the Department 
invites small entities to suggest alternatives ways of compliance with 
the basic provisions of this proposed rule about how they might comply 
in a way less burdensome to them.

C. Environmental Impact

    This proposed rulemaking does not have an environmental impact. 
This proposed 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 has been 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).

D. Federalism Impact

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this proposed rule do not have significant impact on 
States or their political subdivisions, or the relationship between the 
Federal Government and State and local governments, or on the 
distribution of power and responsibilities among the various levels of 
government. As a result, the proposed rule is not subject to review 
under the Order. The proposed rule merely streamlines existing 
regulations and implements certain statutory requirements with respect 
to admission and occupancy of housing funded by the Federal Government 
but administered by local entities.

E. Impact on the Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this proposed 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.

F. Unfunded Mandates Reform Act

    The Secretary, in accordance with the Unfunded Mandates Reform Act 
of 1995, 2 U.S.C. 1532, has reviewed this proposed rule before 
publication and by approving it certifies that this proposed rule does 
not impose a Federal mandate that will result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any one year.

G. Regulatory Review

    This proposed rule was reviewed by the Office of Management and 
Budget under Executive Order 12866, not on the basis of impact in 
excess of $100 million but on the basis of its importance. Any changes 
made in this proposed rule as a result of that review are clearly 
identified in the docket file for this proposed rule, which is 
available for public inspection in the HUD's Office of the Rules Docket 
Clerk, Room 10276, 451 Seventh Street, SW., Washington, DC 20410-0500.
Catalog
    The Catalog of Federal Domestic Assistance number for the program 
affected by this proposed rule is 14.850.

[[Page 25734]]

List of Subjects

24 CFR Part 960

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Reporting and recordkeeping 
requirements, Public housing.

24 CFR Part 966

    Grant programs--housing and community development, Public housing.
    Accordingly, in title 24 of the Code of Federal Regulations, parts 
960 and 966 are proposed to be amended as follows:
    1. Part 960 is revised to read as follows:

PART 960--ADMISSION TO, AND OCCUPANCY OF, PUBLIC HOUSING

Subpart A--General

Sec.
960.101  Applicability.
960.105  Approved information collections.

Subpart B--Admission, Rent, and Reexamination

960.201  Applicant admission policies.
960.203  Nondiscrimination requirements.
960.206  Verification procedures.
960.207  Communication with applicants.
960.208  Rent.
960.209  Reexamination of family income and composition.
960.210  Continued occupancy limits.

Subpart C--Applications, Waiting List, Tenant Selection, and Assignment

960.301  Applications.
960.303  Waiting lists.
960.304  Tenant selection and assignment.
960.307  Mixed population projects.

Subpart D--Exemption From Eligibility Requirements for Police Officers 
and Other Security Personnel

960.401  Exemption from eligibility requirements.
960.402  Definitions.
960.405 Plan standards and criteria.
960.409  Special rent requirements and other terms and conditions.
960.411  Applicability of the annual contributions contract; effect 
on the Performance Funding System.

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, and 3535(d).

Subpart A--General


Sec. 960.101  Applicability.

    This part is applicable to all dwelling units assisted under the 
1937 Act in projects owned by or leased to HAs and leased or subleased 
by HAs to tenants, including Section 23 and Section 10(c) leased 
housing projects directly operated by the HA. This subpart is not 
applicable to the Low-Rent Housing Homeownership Opportunities Program 
(Turnkey III); to the Indian Housing Rental, Turnkey III and Mutual 
Help Homeownership Opportunities Program; or to units assisted under 
Section 8 of the 1937 Act, 42 U.S.C. 1437f.


Sec. 960.105  Approved information collections.

    The following sections of the part have been approved by the Office 
of Management and Budget in accordance with the Paperwork Reduction Act 
of 1995 and assigned the OMB approval number indicated:

------------------------------------------------------------------------
           Approval No.                           Sections              
------------------------------------------------------------------------
2577-............................  960.201, 960.206, 960.207, 960.301,  
                                    960.303, 60.304, and 960.405        
2577-............................  960.209                              
------------------------------------------------------------------------

Subpart B--Admission, Rent, and Reexamination of Income


Sec. 960.201  Applicant admission policies.

    (a) General. The HA must admit to public housing only families that 
are qualified for admission, as follows:
    (1) They are eligible in terms of income, family composition and 
citizenship or immigration status;
    (2) Their past behavior indicates that they can be reasonably 
expected to comply with the lease;
    (3) No family member has been evicted from housing assisted under 
the 1937 Act for drug-related criminal activity during a reasonable 
time period specified by the HA, which is not less than three years 
from the date of the eviction. Notwithstanding the immediately 
preceding sentence, the HA may, in its discretion, determine that the 
family is eligible for admission if the HA determines that the evicted 
family member who was engaged in drug-related criminal activity has 
successfully completed a rehabilitation program approved by the HA or 
that the circumstances leading to the eviction no longer exist (e.g., 
the evicted family member involved in drugs is no longer in the 
household because of incarceration); and
    (4) No family member has been evicted from housing assisted under 
the 1937 Act for other serious violations of the lease during a 
reasonable time period specified by the HA, unless the HA determines 
that the circumstances leading to the eviction no longer exist.
    (b) Criminal activity by family members. At any time, the HA may 
deny admission to an applicant if the HA determines that any family 
member has engaged in drug-trafficking or violent criminal activity. 
For purposes of this section, drug-trafficking means the illegal 
manufacture, sale, or distribution, or the possession with intent to 
manufacture, sell, or distribute, of a controlled substance (as defined 
in section 102 of the Controlled Substances Act (21 U.S.C. 802)). For 
purposes of this section, violent criminal activity means any illegal 
criminal activity that has as one of its elements the use, attempted 
use, or threatened use of physical force against the person or property 
of another.
    (c) Written policies and procedures. The HA must adopt and 
implement written policies for admission of tenants and procedures 
identifying standards and criteria for tenant selection that comply 
with the provisions of the 1937 Act, 42 U.S.C. 1437d, and applicable 
civil rights requirements, including the following elements:
    (1) Policies on illegal drug use and abuse of alcohol.
    (i) The HA must establish standards for denying admission if the HA 
determines that:
    (A) Any Family member is illegally using a controlled substance; or
    (B) There is reasonable cause to believe that a Family member's 
illegal use or pattern of illegal use of a controlled substance or 
abuse or pattern of abuse of alcohol may interfere with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.
    (ii) In determining whether to deny admission for illegal use or 
pattern of use of a controlled substance or for abuse or pattern of 
abuse of alcohol, the HA may consider whether the person:
    (A) Is no longer engaging in the illegal use of a controlled 
substance or in abuse of alcohol (as applicable); or
    (B) Has successfully completed a supervised drug or alcohol 
rehabilitation program (as applicable), has otherwise been 
rehabilitated successfully, or is participating in a supervised drug or 
alcohol rehabilitation program (as applicable).
    (2) Requirements for applications and waiting lists. (See 24 CFR 
1.4 and subpart C of this part). A dwelling unit must not be allowed to 
remain vacant for the purpose of awaiting an application from a family 
falling within a particular income range or for any other preference;
    (3) Policies for selection of applicants from the waiting list. 
Selection policies must include:
    (i) Preferences. Federal preferences (if any), and any ranking or 
local preferences, and how they are applied. (See 24 CFR part 5, 
subpart D, for applicable requirements.)
    (ii) Tenant selection and assignment plan. The organization of the 
waiting

[[Page 25735]]

list, how applicants are assigned to specific projects and dwelling 
units, and the precedence of transfers over admissions;
    (iii) General screening criteria. Applicant screening criteria and 
information to be considered must be reasonably related to each 
applicant's individual attributes and behavior, and not imputed to a 
particular group or category of persons of which an applicant may be a 
member. These criteria must be related to whether an applicant's 
conduct would be likely to interfere with other residents by adversely 
affecting their health, safety or welfare or the physical environment 
or the financial stability of the project if the applicant were 
admitted.
    (4) Policies for participant transfer between units, projects, and 
programs. These shall include a policy on the transfer to a standard 
unit of an applicant who was admitted to an accessible unit but does 
not need its special features when an applicant who does need the 
unit's special features is being admitted.
    (d) Availability of policies. These policies must be available in 
each office where applications are received and be furnished to 
applicants or tenants upon request, free or at their expense, at the 
discretion of the HA. A copy must be submitted to HUD upon request.
    (e) Tenant Advisory Boards. The HA may establish Tenant Advisory 
Boards for consultation in connection with the tenant selection 
process.


Sec. 960.203  Nondiscrimination requirements.

    The HA must administer its system of tenant selection and 
determinations concerning continued assistance in accordance with the 
nondiscrimination requirements specified with respect to selection 
preferences in 24 CFR 5.410.


Sec. 960.206  Verification procedures.

    (a) General. (1) The HA must develop procedures to obtain and 
verify information with respect to each applicant's qualification for 
admission. (See 24 CFR part 5, subpart B.) Information relative to the 
acceptance or rejection of an applicant and the granting or denial of a 
preference under 24 CFR part 5 must be documented and placed in the 
applicant's file. The methods of verification and documentation must be 
specified in writing.
    (2) Relevant information to verify with respect to an applicant's 
qualification may include, but is not limited to:
    (i) An applicant's past performance in meeting financial 
obligations, especially rent; and
    (ii) A record of violent criminal activity, drug-trafficking, 
destruction of property, disturbance of neighbors, or living or 
housekeeping habits that may adversely affect the health, safety or 
welfare of others.
    (b) Disabilities. (1) With respect to applicants claiming that they 
have a disability, the HA may verify the claim only to the extent 
necessary to ensure:
    (i) That applicants are qualified for the housing for which they 
are applying;
    (ii) That applicants are qualified for the deductions used in 
determining adjusted income;
    (iii) That applicants are entitled to any preference they may 
claim; and
    (iv) That applicants who have requested a reasonable accommodation 
have a need for the requested accommodation. For purposes of this part, 
``reasonable accommodation'' means special action(s) to overcome 
barriers to equal access in order to provide access to the HA's 
programs and activities for a person with a disability.
    (2) An applicant who does not want to be considered on the basis of 
a disability does not have to reveal the existence of a disability. The 
HA may not inquire about a disability if none is revealed by the 
applicant.
    (3) If an applicant does not satisfy the HA's tenant selection 
criteria because of a disability, the HA must, if requested by the 
applicant:
    (i) Consider whether any mitigating circumstances related to the 
disability could be verified to explain and overcome the problematic 
conduct; and
    (ii) Make a reasonable accommodation that will allow the applicant 
to meet the HA's tenant selection criteria.
    (c) Criminal activity.--(1) Background check. The HA must perform a 
criminal background check of all adult household members to identify 
any recent history of crimes of physical violence to persons or 
property and other activities that would adversely affect the health, 
safety or welfare of others. The type of criminal background check done 
is within the discretion of the HA. For purposes of this paragraph 
(c)(1), a criminal background check is accessing an individual's 
criminal history records from a local, State, or Federal government 
entity with law enforcement responsibility or with responsibility for 
maintaining governmental records relating to criminal acts.
    (2) Standard of evidence. In determining whether to deny admission 
to a family based on drug-related criminal activity or violent criminal 
activity, the HA may act where the preponderance of evidence indicates 
that a family member has engaged in such activity, regardless of 
whether the family member has been arrested or convicted.
    (d) Documentation of rehabilitation from drug or alcohol abuse. The 
HA may require a family member who has engaged in the illegal use of a 
controlled substance, or in abuse of alcohol that interfered with the 
health, safety, and peaceful enjoyment of the premises by other 
residents, to submit evidence of current participation in, or 
successful completion of, a supervised drug or alcohol rehabilitation 
program (as applicable) as a condition to admission.
    (e) Treatment of unfavorable information.--(1) General. If 
unfavorable information is received about an applicant's ability to 
meet the tenant selection criteria, consideration must be given to 
mitigating circumstances such as the time, nature, and extent of the 
applicant's conduct and to factors that in the judgment of the HA 
indicate a reasonable probability of favorable future conduct.
    (2) Criminal record. If the unfavorable information is a criminal 
record, the HA must safeguard the record in accordance with 42 U.S.C. 
1437d(q) (4) and must provide the applicant a copy of the record and an 
opportunity to dispute the accuracy and relevance of the record.
    (f) Final determination. After appropriate verification, the HA 
makes the final determination as to whether a claim of mitigating 
circumstances or a proposed accommodation is sufficient to overcome a 
failure to meet the HA's tenant selection criteria.


Sec. 960.207  Communication with applicants.

    (a) Form of communication. At the initial point of contact with 
each applicant, the HA must inform the applicant that forms of 
communication other than standard written communication, such as oral 
explanation, sign language, large print, audiotape, or braille, can be 
made available to the applicant, upon request. If the applicant 
requests that the HA use an alternative form of communication, the HA 
must use the agreed upon alternative form, in addition to its written 
communication, until the applicant requests another form of 
communication or notifies the HA that an alternative form of 
communication is no longer necessary.
    (b) Notification of denial. The HA must promptly notify any 
applicant determined unqualified for admission to a project of the 
basis for such

[[Page 25736]]

determination, and must provide the applicant upon request, within a 
reasonable time after the determination is made, with an opportunity to 
meet with a representative of the HA to review the determination. This 
meeting may be conducted by any person or persons designated by the HA, 
including the person who made or reviewed the original determination. 
The notification must inform the applicant of the HA's responsibility 
to make reasonable accommodation for applicants with disabilities and 
the applicant's right to propose a reasonable accommodation to enable 
the applicant to comply with eligibility criteria.
    (c) Notification of acceptance. When the HA determines that an 
applicant is qualified for admission, the applicant must be notified of 
the approximate date of occupancy insofar as that date can be 
reasonably determined. Notification of the waiting period of similar 
applicants who are currently being admitted will meet this requirement.


Sec. 960.208  Rent.

    The amount of rent payable by the tenant to the HA is the Tenant 
Rent, as defined in part 5 of this title.


Sec. 960.209  Reexamination of family income and composition.

    (a) Regular reexaminations. When the HA reexamines the income and 
composition of tenant families in accordance with 24 CFR part 5, 
subpart F, it must determine whether the family's unit size is still 
appropriate. In accordance with that rule, after consultation with the 
family and upon verification of the information, the HA must make 
appropriate adjustments in tenant rent. See requirements concerning 
consent forms for income and eligibility requirements (including 
citizenship or immigration status) in 24 CFR part 5, subparts B and E.
    (b) Interim redeterminations. The HA must adopt policies 
prescribing when and under what conditions tenant changes in 
circumstances must be reported and prescribing the effective date of 
rent changes resulting from interim redeterminations. The tenants must 
comply with provisions in the lease regarding interim reporting of 
changes. If the HA receives information concerning a change in the 
tenant income or other circumstances between regularly scheduled 
reexaminations that would require a redetermination under its policy, 
the HA must consult with the family and make any adjustments determined 
to be appropriate. Any change in the family's circumstances that 
results in adjustment in the Tenant Rent must be verified. See 24 CFR 
part 5 for other applicable requirements. At any interim 
redetermination when there is a new family member, the HA must follow 
the requirements of 24 CFR part 5 concerning obtaining and processing 
information on the citizenship or eligible immigration status of the 
new family member.
    (c) Termination. For provisions requiring termination of tenancy 
for failure to establish citizenship or eligible immigration status, 
and for provisions concerning assistance to certain mixed families 
(families whose members include those with citizenship and eligible 
immigration status and those without eligible immigration status) in 
lieu of termination of tenancy, see 24 CFR part 5.


Sec. 960.210  Continued occupancy limits.

    (a) General. The HA may adopt reasonable income limits for 
continued occupancy of its dwelling units. The limits must not be less 
than the low income limit determined by HUD, in accordance with 24 CFR 
part 5.
    (b) Action based on ineligibility. No HA may commence eviction 
proceedings, or refuse to renew a lease, based on the income of the 
tenant family unless:
    (1) It has identified, for possible rental by the family, a decent, 
safe, and sanitary unit of suitable size available at a rent not 
exceeding the tenant rent as defined and calculated in accordance with 
24 CFR part 5; or
    (2) It is required to do so by local law.

Subpart C--Applications, Waiting List, Tenant Selection and 
Assignment


Sec. 960.301  Applications.

    (a) The HA must have a written application before placing any 
applicant on the waiting list. The HA must, if requested, provide 
assistance to the applicant in completing the application.
    (b) The application must provide sufficient information to the HA 
for it to make a preliminary determination of the applicant's 
eligibility, type and size of dwelling requirement, and rent.
    (c) The HA must record the date and time of receipt of all 
applications and process them centrally.
    (d) Unless the waiting list is closed, the HA must give an 
applicant an opportunity to submit a written application, even if 
informal discussion suggests that the applicant is not eligible.


Sec. 960.303  Waiting lists.

    See 24 CFR 1.4 for requirements concerning selection of tenants for 
all of the public housing projects under an HA's jurisdiction from a 
community-wide waiting list. The HA may divide its waiting list into 
separate categories for general occupancy projects, for mixed 
population projects, for projects designated for elderly families, and 
for projects designated for disabled families, provided that all 
applicants are given an opportunity to be on the waiting list for any 
category of project for which they are qualified.


Sec. 960.304  Tenant selection and assignment.

    (a) Assignment of applicants and units must be conducted in 
accordance with a Tenant Selection and Assignment Plan that meets the 
requirements of 24 CFR 1.4(b)(2)(ii) and is approved by HUD.
    (b) Unit assignments must be in sequence and must be based on the 
type of project, size and type of unit required, applicable Federal and 
local preferences, and date and time of application. See 24 CFR 
1.4(b)(2) and 24 CFR part 5, subpart D.
    (c) The HA may move to the bottom of the waiting list or remove 
from the waiting list the name of any applicant who refuses more than 
the number of offers of suitable units prescribed in the HA's plan. The 
HA may prohibit any applicant whose name was removed in accordance with 
such a policy from reapplying for a period of time specified in the 
plan. The number of offers allowed under the plan must not exceed 
three.
    (d) An applicant who is dropped from the waiting list because a 
disability interfered with the ability to respond to an HA request can 
be reinstated as a reasonable accommodation.


Sec. 960.307  Mixed population projects.

    (a) For purposes of this section, a ``mixed population project'' is 
a public housing project, or portion of a project, that either was 
reserved for elderly families and disabled families at its inception 
(and has retained that character), or was approved by HUD for 
preference in tenant selection to elderly families and disabled 
families.
    (b) Elderly families and disabled families must be given a 
preference over all other applicants for admission to dwelling units in 
a mixed population project.
    (c) Preference must be given to elderly families and disabled 
families equally in determining priority for admission to mixed 
population projects. An HA may not establish a limit on the number of 
elderly families or disabled families who may be accepted for occupancy 
in a mixed population project.
    (d) In offering available units to elderly families and disabled 
families in

[[Page 25737]]

mixed population projects, units with accessible features must be 
offered first to persons with disabilities who require the 
accessibility features of the unit in accordance with the requirements 
of 24 CFR 8.27 and 24 CFR 100.202(c)(3).
    (e) If Federal preferences are in effect, elderly families and 
disabled families who do not qualify for a Federal preference and who 
are given preference for admission under paragraph (b) of this section 
over non-elderly families and non-disabled families that qualify for a 
Federal preference, are not subject to the statutory limitation on 
admission of families without a Federal preference over families with 
such a Federal preference that may initially receive assistance in any 
one-year period.

Subpart D--Exemption From Eligibility Requirements for Police 
Officers and Other Security Personnel


Sec. 960.401  Exemption from eligibility requirements.

    HUD may exempt officers from the eligibility requirements for 
admission to public housing, provided that:
    (a) The officers would not be eligible, under any other admission 
requirements or procedures, for admission to the public housing 
development without such an exemption; and
    (b) The exemption is given under a plan, as described in 
Sec. 960.402, that has been approved by HUD.


Sec. 960.402  Definitions.

    Officer means a professional police officer or other professional 
security provider. Police officers and other security personnel are 
considered professional if they are employed full time, i.e., not less 
than 35 hours per week, by a governmental unit or a private employer 
and compensated expressly for providing police or security services. As 
used in this subpart, ``Officer'' may refer to the Officer as so 
defined or to the Officer and his or her family taken together, 
depending on the context.
    Plan means the written plan submitted by a housing agency (HA) to 
the Department, under which, if approved, the Department will exempt 
Officers from the normal eligibility requirements for residence in 
public housing and allow Officers, who are otherwise not eligible, to 
reside in public housing units. An HA may have only one plan in effect 
at any one time, which will govern exemptions under this subpart for 
all public housing managed by that HA.


Sec. 960.405  Plan standards and criteria.

    (a) Minimum requirements. To be approved, a plan must satisfy the 
following requirements:
    (1) The plan must identify the number of units under management by 
the HA and the number and location of the units the HA intends to use 
for officers and the amount of rent to be charged and a basis for 
determining that it is reasonable;
    (2) The plan must identify the specific benefits to the community 
and to the HA that will result from the presence of the officer in each 
affected development;
    (3) The plan must describe the existing physical and social 
conditions in and around each affected development sufficient for HUD 
to make an informed assessment of the level of need for increased 
security; and
    (4) The plan will provide information sufficient for HUD to 
determine that granting an exemption will:
    (i) Increase security for other public housing residents;
    (ii) Result in a limited loss of income to the HA; and
    (iii) Not result in a significant reduction of units available for 
residence by qualified families.
    (b) Certifications by HA. The HA must certify that:
    (1) The dwelling units proposed to be allocated to officers are 
situated so as to place the officers in close physical proximity to 
other residents;
    (2) No resident families will have to be transferred to other 
dwelling units in order to make available the units proposed to be 
allocated to officers;
    (3) The dwelling units proposed to be allocated to officers will be 
rented under a lease that enforces the provisions of Sec. 960.409; and
    (4) The number of dwelling units proposed to be allocated to 
officers under the plan does not exceed a reasonable number, as 
determined on the basis of total number of units under management by 
the HA, in consultation with HUD.


Sec. 960.409  Special rent requirements and other terms and conditions.

    The HA must lease units to officers under a lease agreement that is 
consistent with the requirements of this section and with part 966 of 
this chapter. If there is any inconsistency between the requirements of 
part 966 and this section, the provisions of this section shall govern.
    (a) Reasonable rent. The lease must provide for a reasonable rent.
    (b) Continued employment. The lease must provide that the officer's 
right of occupancy is dependent on the continuation of the employment 
that qualified the officer for residency in the development under the 
plan and provide that the officer will move from the unit within a 
reasonably prompt time, to be established in the lease, after 
termination of such employment.


Sec. 960.411  Applicability of the annual contributions contract; 
effect on the Performance Funding System.

    (a) Annual contributions contract. Public housing units occupied by 
Officers in accordance with a plan submitted and approved under this 
subpart will be subject to the terms and conditions of the annual 
contributions contract (ACC) between the HA and HUD. This subpart does 
not override any of the terms and conditions of the ACC except insofar 
as they are inconsistent with the provisions of this subpart.
    (b) Performance funding system. For purposes of the operating 
subsidy under the Performance Funding System (PFS) described in part 
990, subpart A, of this chapter, dwelling units allocated to Officers 
in accordance with this subpart are excluded from the total unit months 
available, as defined in Sec. 990.102 of this chapter. Also for 
purposes of the operating subsidy under the PFS, the full amount of any 
rent paid by Officers in accordance with this subpart is included in 
other income, as defined in Sec. 990.102 of this chapter. HAs may 
receive operating subsidy for one unit per housing development to 
promote economic self-sufficiency services or anti-drug programs, 
including housing police officers and security personnel. An HA may 
request consideration of such units in its calculation of operating 
subsidy eligibility through the appropriate local HUD Office. (See 
Sec. 990.108(b) of this chapter.)

PART 966--LEASE AND GRIEVANCE PROCEDURES

    2. The authority citation for part 966 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437d note, and 3535(d).

    3. In Sec. 966.4, paragraph (l)(2) is revised to read as follows:


Sec. 966.4  Lease requirements.

* * * * *
    (l) * * *
    (2) Grounds for termination. The PHA shall not terminate or refuse 
to renew the lease other than for serious or repeated violation of 
material terms of the lease or for other good cause.
    (i) General. Failure to make payments due under the lease or to 
fulfill the tenant obligations set forth in Sec. 966.4(f)

[[Page 25738]]

would constitute grounds for termination of tenancy.
    (ii) Crime. (A) At any time, the PHA may terminate the lease if the 
PHA determines that any family member has engaged in drug-trafficking 
or violent criminal activity. For purposes of this section, drug-
trafficking means the illegal manufacture, sale, or distribution, or 
the possession with intent to manufacture, sell, or distribute, of a 
controlled substance (as defined in section 102 of the Controlled 
Substances Act (21 U.S.C. 802)). For purposes of this section, violent 
criminal activity means any illegal criminal activity that has as one 
of its elements the use, attempted use, or threatened use of physical 
force against the person or property of another.
    (B) The PHA may terminate the lease if the PHA determines that any 
family member, a guest, or another person under the tenant's control, 
is engaged in any criminal activity that threatens the health, safety 
or right of peaceful enjoyment of the PHA's public housing premises by 
other residents or any drug-related criminal activity.
    (iii) Illegal drug use and alcohol abuse. (A) The PHA must 
establish standards for determining whether to terminate program 
assistance if the PHA determines that:
    (1) Any family member is illegally using a controlled substance; or
    (2) A family member's use of a controlled substance or abuse of 
alcohol interferes with the health, safety, or right to peaceful 
enjoyment of the premises by other residents.
    (B) In determining whether to deny or terminate program assistance 
for illegal use or pattern of use of a controlled substance or for 
abuse or pattern of abuse of alcohol by a family member, the PHA may 
consider whether the person:
    (1) Is no longer engaging in the illegal use of a controlled 
substance or in abuse of alcohol (as applicable); or
    (2) Has successfully completed a supervised drug or alcohol 
rehabilitation program (as applicable), has otherwise been 
rehabilitated successfully, or is participating in a supervised drug or 
alcohol rehabilitation program (as applicable).
    (C) The PHA may require a family member who has engaged in the 
illegal use of a controlled substance, or in alcohol abuse activity 
that interfered with the health, safety, and peaceful enjoyment of the 
premises by other residents, to submit evidence of current 
participation in, or successful completion of, a supervised drug or 
alcohol rehabilitation program (as applicable) as a condition to being 
allowed to reside in the unit.
    (D) In determining whether to terminate the lease based on drug-
related criminal activity or violent criminal activity, the PHA may act 
when the preponderance of evidence indicates that the person has 
engaged in such activity, regardless of whether the person has been 
arrested or convicted.
* * * * *
    Dated: April 9, 1997.
Kevin Emanuel Marchman,
Acting Assistant Secretary for Public and Indian Housing.
[FR Doc. 97-12080 Filed 5-8-97; 8:45 am]
BILLING CODE 4210-33-P