[Federal Register Volume 64, Number 178 (Wednesday, September 15, 1999)]
[Rules and Regulations]
[Pages 50140-50231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23016]



[[Page 50139]]

_______________________________________________________________________

Part II





Department of Housing and Urban Development





_______________________________________________________________________



24 CFR Part 35, et al.



Requirements for Notification, Evaluation and Reduction of Lead-Based 
Paint Hazards in Federally Owned Residential Property and Housing 
Receiving Federal Assistance; Final Rule

  Federal Register / Vol. 64, No. 178 / Wednesday, September 15, 1999 / 
Rules and Regulations  

[[Page 50140]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 35, 91, 92, 200, 203, 206, 280, 291, 511, 570, 572, 
573, 574, 576, 582, 583, 585, 761, 881, 882, 883, 886, 891, 901, 
906, 941, 965, 968, 970, 982, 983, 1000, 1003, and 1005

[Docket No. FR-3482-F-06]
RIN 2501-AB57


Requirements for Notification, Evaluation and Reduction of Lead-
Based Paint Hazards in Federally Owned Residential Property and Housing 
Receiving Federal Assistance

AGENCY: Office of the Secretary-Office of Lead Hazard Control, HUD.

ACTION: Final rule.

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

SUMMARY: The purpose of this rule is to ensure that housing receiving 
Federal assistance and federally owned housing that is to be sold does 
not pose lead-based paint hazards to young children. It implements 
sections 1012 and 1013 of the Residential Lead-Based Paint Hazard 
Reduction Act of 1992, which is Title X of the Housing and Community 
Development Act of 1992. The requirements of this rule are based on the 
practical experience of cities, states and others who have been 
controlling lead-based paint hazards in low-income privately-owned 
housing and public housing through HUD assistance. It also reflects the 
results of new scientific and technological research and innovation on 
the sources, effects, costs, and methods of evaluating and controlling 
lead hazards. With today's action, HUD's lead-based paint requirements 
for all Federal programs are now consolidated in one part of title 24 
of the Code of Federal Regulations.

DATES: Effective Dates: Section 35.140 is effective on November 15, 
1999. All other provisions of the rule are effective on September 15, 
2000.

FOR FURTHER INFORMATION CONTACT: For questions on this rule, call (202) 
755-1785, ext. 104 (this is not a toll-free number) or e-mail your 
inquiry to [email protected]. For lead-based paint program 
information, contact Steve Weitz, Office of Lead Hazard Control, 
Department of Housing and Urban Development, 451 7th Street, SW, Room 
B-133, Washington, DC 20410-0500. For legal questions, contact John B. 
Shumway, Office of General Counsel, Room 9262, Department of Housing 
and Urban Development. Hearing and speech-impaired persons may access 
the above telephone number via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

A. Lead Poisoning 
B. Legislative and Regulatory History
C. HUD Reinvention
D. Public Input on Rulemaking
1. HUD Guidelines
2. Title X Task Force
3. Meetings with HUD Clients
4. Comments on Proposed Rule
E. Related Actions by EPA and HUD 
1. Disclosure Rule
2. EPA Certification Requirements and Work Practices Standards
3. EPA Standards for Hazardous Levels of Lead in Paint, Dust and 
Soil
4. EPA Laboratory Accreditation Program
5. Possible EPA Regulations on Renovation and Remodeling

II. Summary of Public Comments on Proposed Rule

A. Diversity of Comments
B. Commenters' Broad Concerns 
1. ``Missed Opportunities''
2. Cost of Compliance
3. Legality of Portions of the Rule
4. Perceived HUD Overreaching

III. Response to Public Comments and Final Rule Provisions

A. Scope and Applicability 
1. Housing Receiving Less Than $5,000 in Project-Based Rental 
Assistance
2. Tenant-Based Rental Assistance
3. Federally Owned Housing and the Availability of Appropriations
4. Soil and Dust Standards
    a. Legal Issues
    b. Coordination With EPA Rulemaking
5. Exemptions
    a. Housing for the Elderly
    b. Absence of Lead-Based Paint or Prior Hazard Reduction
    c. Housing To Be Demolished
    d. Nonresidential Property
    e. Rehabilitation Disturbing Little or No Painted Surface
    f. Emergency Actions and Natural Disasters
    g. Law Enforcement Seized Property
    h. Emergency Rental and Foreclosure Prevention Assistance
    i. Adverse Weather
    j. Historic Properties
    k. Insufficient Appropriations
6. Deference to Other Agencies
7. Changes and Deletions to Current HUD Regulations
8. Indian Housing Programs
9. Applicability of Subparts to Programs and Dwelling Units
B. Structure of the Rule
1. Organization
2. Simplicity and Overall Strategy
3. Prescriptiveness
C. Effective Date
D. Other General Issues
1. Policy on Abatement
2. Cost of Compliance
3. Use of Task Force Recommendations
4. De Minimis Exceptions
5. Distinction Between HUD Programs and Those of Other Federal 
Agencies
6. Response to Children With Lead Poisoning
7. Fair Housing Requirements
8. Qualification Requirements
9. Paint Stabilization vs. Paint Repair
E. Subparts
1. Subpart A--Disclosure of Known Lead-Based Paint Hazards Upon Sale 
or Lease of Residential Property
2. Subpart B--General Lead-Based Paint Requirements and Definitions 
for All Programs
    a. Definitions
    b. Exemptions
    c. Options
    d. Notice of Evaluation and Hazard Reduction Activities
    e. Lead Hazard Information Pamphlet
    f. Use of Paint Containing Lead
    g. Prohibited Methods of Paint Removal
    h. Compliance With Other, State, Tribal, and Local Laws
    i. Minimum Requirements
    j. Waivers
    k. Prior Evaluation or Hazard Reduction
    l. Enforcement
    m. Records
3. Subpart C--Disposition of Residential Property Owned by a Federal 
Agency Other Than HUD
4. Subpart D--Project-Based Assistance Provided by a Federal Agency 
Other Than HUD
5. Subpart E--Reserved
6. Subpart F--HUD-Owned Single Family Property
7. Subpart G--Multifamily Mortgage Insurance
8. Subpart H--Project-Based Rental Assistance
9. Subpart I--HUD-Owned and Mortgagee-in-Possession Multifamily 
Property
10. Subpart J--Rehabilitation
11. Subpart K--Acquisition, Leasing, Support Services, or Operation
12. Subpart L--Public Housing Programs
13. Subpart M--Tenant-Based Rental Assistance
14. Subparts N-Q--Reserved
15. Subpart R--Methods and Standards for Lead-Based Paint Hazard 
Evaluation and Reduction Activities
    a. Standards
    b. Adequacy of Dust-Lead Standards
    c. Summary Notice Formats
    d. Interim Controls
    e. Standard Treatments
    f. Clearance
    g. Occupant Protection and Worksite Preparation
    h. Safe Work Practices
    i. Ongoing Lead-Based Paint Maintenance and Reevaluation

IV. Deletions of Current Regulations

V. Additional Public Comment

VI. Regulatory Assessment

A. Economic Analysis
1. Summary and Methodology of Cost-Benefit Analysis
2. Regulatory Costs
3. Monetized Benefits
4. Monetized Net Benefits
5. Data Sources

[[Page 50141]]

6. Public Comments
B. Paperwork Reporting Act Statement
C. Regulatory Flexibility Act--Final Regulatory Flexibility Analysis
1. Need For and Objectives of the Final Rule
2. Public Comments
    a. Information Not Adequate
    b. Capital vs. Operating Costs
    c. Costs Will Be Higher Than HUD Assumes
    d. There Will Be a Significant Impact
    e. Owners Whose Entire Portfolio Is Affected May Be Impacted 
Especially Hard
    3. Impact on Small Entities
    a. Number of Small Entities Affected by the Rule
    b. Economic Impact
4. Final Rule Requirements
    a. Lead Hazard Information Pamphlet
    b. Resident Notice
    c. Evaluation
    d. Hazard Reduction Activities
    e. Ongoing Lead-Based Paint Maintenance and Reevaluation
    f. Response To a Child With an Elevated Blood Lead Level
    g. Record Keeping
5. Description of Alternatives and Minimization of Economic Impact
    a. Effective Date
    b. Stringency of Requirements in Relation to Amount of Federal 
Assistance and Nature of Program
    c. De Minimis Area of Deteriorated Paint
    d. Qualifications
    e. Options to Provide Greater Flexibility
    f. Avoidance of Duplication

VII. Findings and Certifications

A. Unfunded Mandates Reform Act
B. Environmental Impact
C. Executive Order 12866, Regulatory Planning and Review
D. Executive Order 12612, Federalism
E. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks
F. Congressional Review of Major Final Rules

VIII. References

IX. List of Subjects

I. Background

A. Lead Poisoning

    Childhood lead poisoning causes reduced intelligence, low attention 
span, reading and learning disabilities, and has been linked to 
juvenile delinquency, behavioral problems, and many other adverse 
health effects. Over the past 20 years, the removal of lead from 
gasoline, food canning and other sources has been successful in 
reducing population blood lead levels by over 80 percent. Nearly 1 
million children, however, still have excessive levels of lead in their 
blood, making lead poisoning a major childhood environmental disease 
(See CDC 1997a). Lead-based paint in housing is the major remaining 
source of exposure and is responsible for most cases of childhood lead 
poisoning today.
    HUD estimates that over 60 million occupied homes, or approximately 
80 percent of all homes built before 1980, have some lead-based paint. 
Many of those 60 million homes have only small amounts of such paint, 
however; generally, the older the home, the greater the amount of lead-
based paint. The use of lead in paint was highest in housing built 
before 1960. It was completely banned for residential use in 1978 by 
the Consumer Product Safety Commission.
    Higher childhood blood lead levels are associated with lower 
household income, residence in large urban areas, non-Hispanic African 
American race, and living in older homes. Recent data from the period 
1991-1994 indicate that over 16 percent of young children of less than 
6 years of age from low income families had blood levels above the 
level of concern set by the Centers for Disease Control and Prevention 
(CDC), compared with only one percent for young children from high 
income families. Over 8 percent of all young children living in housing 
built before 1946 had blood lead levels over the CDC level of concern 
compared to only 1.6 percent for those living in housing built after 
1973. Over 11 percent of non-Hispanic African American children were 
above the CDC level of concern compared to 2.3 percent for non-Hispanic 
white children. Twenty-two percent of non-Hispanic African American 
children living in pre-1946 housing were over the CDC level of concern.
    Childhood lead poisoning is ``the most common environmental disease 
of young children,'' (CDC 1990) eclipsing all other environmental 
health hazards found in the residential environment (ATSDR 1988). Lead 
is highly toxic and affects virtually every system of the body. At high 
exposure levels, lead poisoning can cause coma, convulsions, and death. 
While adults can suffer from excessive lead exposures, the groups most 
at risk are fetuses, infants, and children under age 6. At low levels, 
the neurotoxic effects of lead have the greatest impact on children's 
developing brains and nervous systems, causing reductions in IQ and 
attention span, reading and learning disabilities, hyperactivity, and 
behavioral problems. These effects have been identified in many 
carefully controlled research studies (National Academy of Sciences 
1993; HUD 1997). The vast majority of childhood lead-poisoning cases, 
however, go undiagnosed and untreated, since most poisoned children 
have no obvious symptoms.
    The Residential Lead-Based Paint Hazard Reduction Act of 1992 (Pub. 
L. 101-550; 42 U.S.C. 4851 et seq.), which hereafter is referred to as 
``Title X'' because it is Title X of the Housing and Community 
Development Act of 1992, redefines the concept of ``lead-based paint 
hazards.'' Under prior Federal legislation, a lead-based paint hazard 
was defined as any paint greater than or equal to one milligram of lead 
per square centimeter (mg/cm\2\), regardless of its condition or 
location. Title X states that a lead-based paint hazard is ``any 
condition that causes exposure to lead from lead-contaminated dust, 
lead-contaminated soil or lead-contaminated paint that is deteriorated 
or present in chewable surfaces, friction surfaces, or impact surfaces 
that would result in adverse human health effects.'' Thus, under this 
definition, intact lead-based paint on most surfaces is not considered 
a ``hazard,'' although the condition of the paint should be monitored 
and maintained to ensure that it does not become deteriorated.
    Title X defines two methods of ``evaluating'' lead-based paint 
hazards or lead-based paint. One method, ``risk assessment,'' includes 
dust wipe sampling and other environmental sampling to identify lead-
based paint hazards. The other, ``inspection'' (or ``lead-based paint 
inspection''), determines the presence only of lead-based paint. 
Evaluation may also be accomplished by a combination of the two 
methods. The combination approach results in an identification of all 
lead-based paint and lead-based paint hazards. Title X provides for 
three types of lead-based paint ``hazard reduction'': Interim controls, 
abatement of lead-based paint hazards, and complete abatement of all 
lead-based paint. Interim controls are ``measures designed to reduce 
temporarily human exposure or likely exposure to lead-based paint 
hazards.'' Abatement means ``a set of measures designed to permanently 
eliminate lead-based paint hazards'' or lead-based paint. To ensure 
that evaluation and hazard reduction are carried out safely and 
effectively, Title X authorizes new requirements for consistency and 
quality control.

B. Legislative and Regulatory History

    The existing lead-based paint regulations pertaining to the 
Department's programs, as well as to all federally owned residential 
property at the time of sale, were written pursuant to the passage of 
the Lead-Based Paint Poisoning Prevention Act of 1971, as amended prior 
to 1992 (42 U.S.C. 4821 et seq.). This legislation required the 
Secretary to ``establish procedures to eliminate as far as practicable 
the hazards of lead-based paint poisoning

[[Page 50142]]

with respect to any existing housing which may present such hazards and 
which is covered by an application for mortgage insurance or housing 
assistance payments under a program administered by the Secretary.'' 
HUD interpreted the phrase ``housing assistance payments'' broadly and 
therefore in 1976 drafted regulations to eliminate the hazards of lead-
based paint for virtually all of its programs. Part 35 of the 
Department's regulations in title 24 of the Code of Federal Regulations 
was promulgated setting forth general procedures for the inspection and 
treatment of defective paint surfaces in HUD-associated housing. The 
regulation at 24 CFR 35.5(c), however, gave each Assistant Secretary 
the authority to develop regulations pertaining to their specific areas 
of responsibility, and varying program regulations concerning lead-
based paint now exist throughout title 24.
    The Department's lead-based paint regulations have been amended 
from time to time in response to changes in the law, court orders and 
increased knowledge about the hazards and treatment of lead-based 
paint. The most recent Department-wide regulatory revisions pertaining 
to lead-based paint were made in 1986, 1987 and 1988. Some additional 
revisions specific to the public and Indian housing programs were 
issued in 1991, and important changes were made in 1995 to the Housing 
Quality Standards (HQS) that apply to Section 8 tenant-based rental 
assistance and certain other HUD programs.
    Title X represents a new and sweeping approach to the problem of 
lead-based paint poisoning of children, necessitating a comprehensive 
revision of HUD's lead-based paint regulations. Title X amends what had 
previously been general language contained in the Lead-Based Paint 
Poisoning Prevention Act and sets out specific requirements for 
federally owned residential property and housing receiving Federal 
assistance. Title X stresses identification of hazards, notification to 
occupants of the existence of these hazards, and control of those 
hazards. This final rule also reflects current knowledge of the causes 
of lead poisoning and current lead-based paint hazard evaluation and 
reduction technologies and practices. The presence of lead-based paint 
will be more accurately identified, with fewer false negatives or false 
positives. Likewise, the existence, nature, severity and location of 
lead-based paint hazards (in dust, soil and deteriorated paint) will be 
more accurately identified and reported. By improving lead-based paint 
hazard evaluation, decisions about hazard reduction activities will be 
more fully informed, and available resources will be better targeted to 
reduce exposure to occupants and to the environment.

C. HUD Reinvention

    The Department has launched a major restructuring to meet the 
changing housing and development needs of communities across the 
country. The restructuring includes program consolidation, 
organizational changes within the Department, and relocation of some 
cross-cutting functions outside of Washington, D.C. HUD's reinvention 
efforts are taking place in the context of a broader, government-wide 
reinvention process, the National Performance Review, initiated by 
President Clinton and Vice-President Gore. The goal of the reinvention 
is to give State, tribal and local decisionmakers maximum flexibility 
to tailor Federal resources in response to local circumstances, needs 
and priorities.
    In order to keep pace with the changes HUD is undertaking, the 
Department's program regulations must also change. Although this lead-
based paint rule was developed to implement the statutory requirements 
of Title X for federally owned residential property and housing 
receiving Federal assistance, the Department saw this as an opportunity 
to revise all of its lead-based paint regulations to keep pace with 
changes in the scientific understanding of how childhood lead poisoning 
occurs, lead-based paint technology and in HUD service delivery.
    The rule consolidates numerous lead-based paint regulations found 
throughout HUD's program regulations into part 35 of title 24 of the 
Code of Federal Regulations. This eliminates redundant lead-based paint 
regulations and achieves consistency among the lead-based paint 
requirements for different HUD programs. Before this rule, many HUD 
clients received funding from several HUD programs with separate and 
sometimes inconsistent sets of program regulations.
    This rule groups HUD programs by the type of assistance provided to 
make it easier to understand and implement. For instance, a client 
receiving HUD funds for rehabilitation will find only one 
rehabilitation subpart. In addition, grouping HUD programs by type of 
assistance allows greater flexibility for local governments and 
recipients of HUD funds.
    Finally, the rule reflects HUD's efforts to balance the practical 
need for cost-effective, affordable lead-based paint hazard 
notification, evaluation and reduction measures with the statutory 
requirements of Title X as well as with HUD's duty to protect children 
living in a residential property that is owned or assisted by the 
Federal government.

D. Public Input on Rulemaking

    Consistent with Executive Order 12866, Regulatory Planning and 
Review, and with Executive Order 13045 on Protection of Children From 
Environmental Health Risks and Safety Risks, HUD has increased public 
participation in the regulatory development process, with attention to 
the special needs of children. Because of the magnitude of the changes 
required in HUD's lead-based paint regulations and the potential impact 
of these changes, public involvement was crucial to the rulemaking 
process. The three main avenues for public involvement in the 
development of the proposed rule were the HUD Guidelines for the 
Evaluation and Control of Lead-Based Paint Hazards in Housing (June 
1995) (HUD Guidelines), the recommendations from the Task Force on 
Lead-Based Paint Hazard Reduction and Financing (Task Force), and three 
major meetings of HUD clients to seek input on the implementation of 
Title X. In addition to these three methods of public involvement, 
there was, of course, the opportunity for public comment on the 
proposed rule.
    1. HUD Guidelines. The HUD Guidelines were mandated by section 1017 
of Title X. They were developed by housing, public health and 
environmental professionals with broad experience in lead-based paint 
hazard identification and control. The HUD Guidelines form the basis 
for many of the lead-based paint evaluation and reduction methods 
described in subpart R, and are intended to help property owners, 
government agencies and private contractors sharply reduce children's 
exposure to lead-based paint hazards, without adding unnecessarily to 
the cost of housing.
    2. Title X Task Force. The Task Force on Lead-Based Paint Hazard 
Reduction and Financing (Task Force) was mandated by section 1015 of 
Title X. The Task Force submitted its report with recommendations, 
Putting the Pieces Together: Controlling Lead Hazards in the Nation's 
Housing, to then-HUD Secretary Henry Cisneros and EPA Administrator 
Carol Browner in July 1995. Members of the Task Force included 
representatives from Federal agencies, the Federal Home Loan Mortgage 
Corporation, the Federal National Mortgage Association, the building 
and construction industry, landlords, tenants, primary lending

[[Page 50143]]

institutions, private mortgage insurers, single family and multifamily 
real estate interests, nonprofit housing developers, property liability 
insurers, public housing agencies, low-income housing advocacy 
organizations, lead-poisoning prevention advocates and community-based 
organizations serving communities at high-risk for childhood lead 
poisoning. The mandate of the Task Force was to address sensitive 
issues related to lead-based paint hazards in private housing, 
including standards of evaluation and control, financing, and liability 
and insurance for rental property owners and hazard control 
contractors. Methods found in this rule for ongoing lead-based paint 
maintenance and the option for standard treatments are drawn from the 
Task Force recommendations. Further discussion of ways the Department 
used the Task Force recommendations in developing this rule is provided 
below under ``Other General Issues.''
    3. Meetings with HUD Clients. Prior to the development of the 
proposed rule, the Department held three meetings with HUD clients on 
the potential implications of Title X on HUD programs. The meetings 
involved HUD constituents, grantees, and field staff of the Offices of 
Public and Indian Housing (PIH), Community Planning and Development 
(CPD), and Housing, as well as advocacy and tenant representatives. 
Participants shared their thoughts on several Title X issues including: 
Risk assessment and interim controls, hazard reduction activities 
during the course of rehabilitation, occupant notice of evaluation and 
hazard reduction activities, and responding to children with elevated 
blood-lead levels. Additional written comments were accepted from 
participants after the meetings.
    4. Comments on Proposed Rule. Under the authority of Title X, HUD 
published a proposed rule in the Federal Register of June 7, 1996 (61 
FR 29170). The proposed rule set forth new requirements for lead-based 
paint hazard notification, evaluation, and reduction for federally 
owned residential property and housing receiving Federal assistance. 
Comments on the proposed rule were requested on or before September 5, 
1996.
    Most of the 93 comments were from persons representing 
organizations that would be directly affected by the rule. More than a 
third of the comments (34) came from agencies of State or local 
government: Community development agencies, public housing authorities, 
planners, mayors, health departments and other organizations directly 
or indirectly involved with federally assisted programs involving 
housing. Groups representing the housing and community development 
industry, or segments of it, accounted for an additional nine comments.
    Fourteen Federal agencies submitted comments on the rule, including 
11 agencies affected by it as potential regulated entities, and three 
others with their own regulatory role in some aspect of health and 
safety regulations associated with lead poisoning. Four comments were 
received from hospitals, physicians or health agencies other than those 
included in the count of State or local agencies, above. Four lead 
poisoning prevention advocacy groups submitted comments, along with 
three more broadly based environmental groups and five law firms or 
legal aid organizations.
    Housing developers, or representatives of developers, accounted for 
five comments. Eight others were received from persons identifying 
themselves as consultants or experts on some aspect of the rule, or 
individuals who did not explain the basis of their interest in the 
rule. In addition, two comments were received from standards-setting 
entities, and one each from a bank, a secondary mortgage market 
organization, a coalition of tenant action groups, a child welfare 
group, and an advocacy group representing industries that manufacture 
or use lead.
    Comments are summarized below in Section II of this preamble and 
described in more detail in Section III of this preamble.

E. Related Actions by EPA and HUD

    Title X requires EPA and HUD to take other very important actions 
that are complementary to and in some cases binding on this final rule. 
Five such actions are: (1) The HUD-EPA regulation on notification and 
disclosure during real estate transactions; (2) the EPA standards for 
certification of firms and individuals performing lead-based paint 
activities, and associated work practices standards; (3) EPA standards 
for determining hazardous levels of lead in paint, dust and soil; (4) 
the EPA program for the accreditation of laboratories for analysis of 
lead in paint, dust and soil; and (5) EPA requirements applying to 
renovation and remodeling activities.
    1. Disclosure Rule. Section 1018 of Title X (42 U.S.C. 4852d) 
directs EPA and HUD to issue joint regulations requiring disclosure of 
known lead-based paint or lead-based paint hazards by persons selling 
or leasing most housing built before 1978. Under that authority, the 
two agencies published a final rule on March 6, 1996, which became 
effective on September 6, 1996 for owners of more than four dwelling 
units and on December 6, 1996 for owners of four or fewer dwelling 
units. The rule requires that, before completing the transaction, 
sellers and lessors of applicable housing must: (1) Provide purchasers 
and lessees (tenants) with the lead hazard information pamphlet 
approved by EPA; (2) disclose all known information about the presence 
of lead-based paint or lead-based paint hazards; (3) provide purchasers 
and lessees with any available records or reports pertaining to the 
presence of lead-based paint or lead-based paint hazards; (4) include, 
as an attachment to the contract or lease, certain disclosure and 
acknowledgement language and a warning statement about the dangers of 
lead-based paint; and (5) include certain disclosure and acknowledgment 
language in the contract or lease. In addition, sellers must allow 
purchasers a ten-day opportunity to inspect the dwelling for lead-based 
paint or lead-based paint hazards. Purchasers and sellers are free to 
negotiate another mutually-agreeable time period and all other aspects 
of the inspection or risk assessment. Agents must ensure compliance 
with these requirements. Section 1018 does not require either the buyer 
or the seller to conduct an inspection, nor does it require either the 
buyer or the seller to take action to reduce any lead-based paint or 
lead-based paint hazards. Also, with lease agreements, neither the 
landlord nor the tenant is required by section 1018 to conduct any type 
of inspection or hazard reduction.
    Section 1012 of Title X (42 U.S.C. 4822) directs HUD to require 
that tenants and purchasers of ``target housing'' receiving Federal 
assistance be provided the same EPA-approved pamphlet that must be used 
in compliance with the section 1018 notification and disclosure 
regulation. (``Target housing'' is a statutorily defined term in Title 
X that means housing constructed before 1978, except housing for the 
elderly and persons with disabilities unless a child of less than 6 
years of age resides or is expected to reside in the housing, and 
except any zero-bedroom dwelling.) As described below, HUD has avoided 
duplication of pamphlet dissemination requirements if the pamphlet has 
already been provided in compliance with the disclosure rule.
    2. EPA Certification Requirements and Work Practices Standards. 
Title IV of the Toxic Substances Control Act (TSCA, 15 U.S.C. 2681-
2692), as

[[Page 50144]]

amended by Title X, section 402(a) (15 U.S.C. 2682(a)) requires EPA to 
establish a regulatory framework governing lead-based paint activities 
that will ensure that individuals engaged in risk assessments, 
inspections and abatement are properly trained, that contractors are 
certified (licensed), and that training programs are accredited. TSCA 
section 404 (15 U.S.C. 2684) mandates a process under which EPA will 
approve State programs for training and certification of individuals 
and firms under section 402. In States lacking their own programs, EPA 
must establish, administer and enforce Federal programs. EPA published 
a final rule on August 29, 1996 (40 CFR part 745, subparts L and Q, 61 
FR 45777-45830) implementing sections 402 and 404 as they pertain to 
target housing and ``child-occupied facilities'' (generally, certain 
facilities regularly visited by children under 6 years). The 
regulations contain the following requirements: Training and 
certification to ensure the proficiency of individuals who offer to 
conduct lead-based paint inspections, risk assessments or abatement 
services; accreditation requirements to ensure that training programs 
provide quality instruction; work practice standards to ensure that 
lead-based paint activities are conducted safely, reliably and 
effectively; and procedures for States and Tribes to apply to EPA for 
authorization to administer these elements. It is expected that many 
States and Tribes will have EPA-authorized certification programs in 
place prior to the effective date for the 402/404 rule, which is August 
29, 1999. Regardless of the status of EPA authorizations, however, 
after that time, all lead-based paint inspections, risk assessments and 
abatements must be conducted by individuals and contractors certified 
in accordance with the EPA rule and the work must be in accordance with 
the work practice standards contained in that rule.
    HUD requires that lead-based paint inspections, risk assessments 
and abatements done in compliance with its final rule on lead-based 
paint activities in federally owned and assisted housing be conducted 
in accordance with the EPA rule implementing TSCA sections 402 and 404, 
i.e., that individuals and firms be certified and the work be done in 
accordance with the work practices standards. It should be noted that 
the EPA regulation is not applicable to interim controls. It has been 
necessary, therefore, for HUD to include basic standards for such 
procedures in this rule.
    3. EPA Standards for Hazardous Levels of Lead in Paint, Dust and 
Soil.  TSCA section 403 (15 U.S.C. 2683) requires EPA to issue 
regulations identifying, for the purposes of Title X, levels of lead in 
paint, dust and soil that are considered hazardous. EPA published a 
proposed rule on June 3, 1998. When promulgated and effective, the 
final rule implementing section 403 will contain standards that affect 
the risk assessments required in this rule. In the meantime, the 
interim levels of lead in paint, dust and soil set forth in this rule 
issued by HUD shall be followed in housing covered by the rule. When 
the TSCA 403 rule is effective, HUD will issue any technical amendments 
that are needed to make clear what standards are applicable to this 
rule at that time.
    4. EPA Laboratory Accreditation Program. Under TSCA section 405(b) 
(15 U.S.C. 2685(b)), EPA has established the National Lead Laboratory 
Accreditation Program (NLLAP). NLLAP recognizes laboratories which have 
demonstrated the ability to accurately analyze lead in paint, dust, and 
soil samples. To be NLLAP recognized, laboratories must successfully 
participate in the Environmental Lead Proficiency Analytical Testing 
(ELPAT) program and undergo a systems audit. EPA has recognized the 
American Association for Laboratory Accreditation (A2LA) and the 
American Industrial Hygiene Association (AIHA) as NLLAP accrediting 
organizations. The National Lead Information Center Clearinghouse (1-
800-424-LEAD) provides the public with a continually updated list of 
NLLAP recognized laboratories. In this rule on lead-based paint 
requirements in housing receiving Federal assistance and federally 
owned housing, HUD is requiring the use of NLLAP recognized 
laboratories for laboratory-based analysis of lead in paint, dust and 
soil samples.
    5. Possible EPA Regulations Pertaining to Renovation and 
Remodeling. TSCA section 402(c) (15 U.S.C. 2682(c)) requires EPA to 
study the extent to which various types of renovation activities create 
a lead-based paint exposure hazard for workers or occupants where the 
work is being conducted. The same section directs EPA to revise the 
regulations implementing section 402(a) to apply to renovation and 
remodeling activities or to determine that such regulations are not 
required. EPA has not yet made the determination as to whether 
regulatory revision is necessary. If EPA does decide to issue such 
regulations, it is possible that they would apply to interim controls, 
which are a type of hazard reduction activity commonly required in this 
HUD rule but not currently regulated by EPA. Other types of work may 
also be affected. Until EPA promulgates and makes effective a new 
regulation under TSCA section 402(c), the requirements in this rule 
issued by HUD shall be followed in housing covered by the rule.

II. Summary of Public Comments on Proposed Rule

A. Diversity of Comments

    With only a few exceptions, commenters on the proposed rule agreed 
that lead-based paint hazards are a serious health problem deserving to 
be addressed. There was, however, an extraordinary diversity of views 
regarding how best to control lead-based paint and its associated 
risks. Additionally, commenters varied widely on the question of what 
relative priority lead-based paint control efforts should enjoy, given 
the shortage of resources for the provision of housing services 
generally, and the costs associated with lead hazard control measures.
    Commenters also perceived the proposed rule in different ways. Some 
considered it biased in favor of lead-based paint abatement as opposed 
to less expensive interim control procedures. Several argued that in 
recent years interim controls have become accepted as a wiser response 
to lead hazards than more elaborate abatement processes. Other 
commenters, however, warned against what they saw as undue readiness in 
the proposed rule to undertake limited measures to control hazards in 
circumstances where, these commenters believed, such measures would be 
inadequate and would afford only temporary solutions of unknown 
duration.
    Spokespersons for State and local funded agencies, despite 
providing many comments on ways to make the rule more effective, were 
concerned that the cost of compliance with the rule would severely 
affect their housing programs.
    Most, although not all, of the commenters representing the health 
industry or environmental concerns pleaded for a stronger rule, for 
more rapid effectiveness, and for a more strenuous program of hazard 
control than the proposed rule required.
    Regulated Federal agencies, like their State and local 
counterparts, worried about costs and often advocated wider discretion. 
Many State and Federal commenters advocated more deference on HUD's 
part to hazard control programs, present or future, that have been or 
will be developed elsewhere.
    Commenters from varying backgrounds suggested that HUD's rule

[[Page 50145]]

was likely to become the nationwide ``standard'' for compliance, i.e., 
that courts (through tort litigation) and lending institutions (through 
underwriting standards) eventually would establish a standard of care 
applicable to private housing suppliers that was closely patterned 
after the standards set out in this rule. Most often, this observation 
was accompanied by expressions of concern that the proposed rule was 
not adequate to provide the appropriate standard of care for the 
nation's housing stock.

B. Commenters' Broad Concerns

    Following is a brief description of the most common concerns 
expressed by the commenters. The Department's response to these 
concerns is described and explained in Section IV of this preamble 
below.
    1. ``Missed Opportunities''. Some argued that the proposed rule was 
misdirected, set the wrong priorities, spent limited resources less 
wisely than they could be spent, or failed to take important additional 
considerations into account. Most typical are comments suggesting that 
the rule:
    (1) Should stress abatement more (or less);
    (2) Is inadequately focused on controlling lead in units currently 
occupied by small children;
    (3) Pays insufficient attention to soil-related hazards;
    (4) Pays too little deference to EPA and/or private-sector 
standards-setters;
    (5) Stresses liability risk-management over health-based hazard 
control measures; or
    (6) Otherwise misses an opportunity to apply the most effective 
possible rule to an acknowledged problem.
    2. Cost of Compliance. A very large number of commenters expressed 
concerns about costs. Cost-related comments took many forms, but the 
most frequently raised assertions were variations on the following:
    (1) The cost-benefit analysis in the Economic Analysis is 
inaccurate and grossly underestimates the impact the rule will have on 
the ability of federally funded entities to carry out their programs.
    (2) Because of high costs, the regulation will divert resources 
that could be better used to meet other critical housing needs.
    (3) Costs will be so extreme that many housing programs currently 
in existence will be forced to close down or drastically curtail their 
productivity.
    (4) The rule will cause existing housing to deteriorate as it 
becomes too expensive to rehabilitate, or will distort local selection 
processes by steering them away from older dwellings most in need of 
rehabilitation.
    (5) Landlords in HUD's tenant-based rental assistance program will 
not accept the additional financial burden of participating in the 
program.
    3. Legality of Portions of the Rule. Two of the issues presented 
raised challenges to the legitimacy of portions of the rule, asserting 
that:
    (1) Lead hazard controls in the tenant-based subsidy programs and 
controls on properties receiving less than $5,000 in project-based 
assistance are beyond the scope of the statute.
    (2) The rule's soil-testing and soil-abatement/control provisions 
are outside the scope of HUD's authority, to the extent they fail to 
differentiate the sources of lead in dust.
    4. Perceived HUD Overreaching. Beyond the aforementioned legal 
challenges, some commenters thought that the rule exceeded proper 
bounds. They asserted that:
    (1) The rule is an ``unfunded mandate,'' in that it would require 
expensive undertakings by those regulated, without the offer of a new 
source of financial assistance.
    (2) The rule, by imposing new risk assessment requirements and/or 
new obligations to control hazards, would endanger existing contracts.
    (3) The underlying statute makes no distinction between HUD-
assisted and other housing receiving Federal assistance, while the rule 
provides for this dichotomy without providing any justification.
    (4) The rule fails to provide real support to local hazard control 
efforts, instead imposing requirements that fail to recognize important 
community concerns.

III. Response to Public Comments and Final Rule Provisions

A. Scope and Applicability

    This rule implements the requirements of the Lead-Based Paint 
Poisoning Prevention Act (LPPPA), as amended by section 1012 and 
section 1013 of Title X.
    Throughout this rule, lead-based paint hazard notification, 
evaluation, and reduction requirements represent the minimum activities 
required. Parties may voluntarily undertake more extensive lead-based 
paint activities if appropriate or permitted under the specific housing 
program with which the dwelling unit or residential property is 
associated.
    If the requirements of this rule for a dwelling unit or residential 
property differ from those of the State, tribal or local government, 
the more protective requirement applies.
    Section 302 of the LPPPA requires HUD ``to establish procedures to 
eliminate as far as practicable the hazards of lead-based paint 
poisoning with respect to any existing housing which may present such 
hazards and which is covered by an application for mortgage insurance 
or housing assistance payments under a program administered by the 
Secretary or otherwise receives more than $5,000 in project-based 
assistance under a Federal housing program.'' In addition, the LPPPA 
requires HUD to establish procedures for the inspection and reduction 
of lead-based paint hazards in Federally owned housing at disposition. 
Accordingly, this final rule covers all target housing that: (1) HUD is 
associated with; (2) receives more than $5,000 in project-based 
assistance under a program of an agency other than HUD; and (3) is 
being disposed of by the Federal government.
    Since 1975, when it first proposed regulations implementing section 
302, HUD has taken a broad interpretation of the phrase ``covered by an 
application for mortgage insurance or housing assistance payments under 
a program administered by the Secretary.'' The scope of HUD's lead-
based paint regulations has always included all HUD-associated housing, 
and this final rule continues that policy. The phrase, ``or otherwise 
receives more than $5,000 in project-based assistance under a Federal 
housing program,'' was added to section 302 by Title X in 1992. HUD's 
interpretation of that phrase is explained below.
    1. Housing Receiving Less Than $5,000 in Project-Based Rental 
Assistance. Section 1012(a) amends the first sentence of the Lead-Based 
Paint Poisoning Prevention Act to add the phrase ``or otherwise 
receives more than $5,000 in project-based assistance under a Federal 
housing program'' so that 42 U.S.C. 4822(a) now reads as follows: ``The 
Secretary of Housing and Urban Development * * * shall establish 
procedures to eliminate as far as practicable the hazards of lead-based 
paint poisoning with respect to any existing housing which may present 
such hazards and which is covered by an application for mortgage 
insurance or housing assistance payments under a program administered 
by the Secretary or otherwise receives more than $5,000 in project-
based assistance under a Federal housing program.''
    One commenter asserted that HUD is ``clearly outside of its 
statutory authority'' in imposing requirements on multifamily 
properties receiving less than $5,000 in project-based assistance. 
Quoting the 1992 amendments, the

[[Page 50146]]

commenter declared that despite HUD's imposing only minimal procedures 
on these under-$5,000 properties, the rule would result in additional 
costs and regulatory burdens on property owners that the Congress 
``never intended to regulate.''
    HUD disagrees. The statute does not prohibit the Department from 
establishing lead-based paint hazard reduction requirements for housing 
receiving less than $5,000 in project-based assistance under a program 
administered by the Secretary of HUD. The legislative history makes 
this clear. The Senate committee report accompanying the bill states, 
``Title X would expand the coverage of the LPPPA to include pre-1978 
housing suitable for occupancy by families * * * which is covered by an 
application for mortgage insurance or housing assistance payments under 
a HUD program or receives more than $5,000 in housing assistance 
through another federal program'' (emphasis added, Senate Report 102-
332, page 117).
    Although the statute gives HUD authority to impose the same 
requirements on HUD assisted housing receiving less than $5,000 as on 
that receiving more than $5,000, the Department recognizes that the 
Congress intended that the stringency of the requirements would be 
related generally to the amount of financial assistance from the 
Government. HUD is not requiring, therefore, housing receiving 
multifamily project-based rental assistance of $5,000 or less per unit 
per year to comply with the statutorily specified requirements for 
multifamily housing receiving project-based rental assistance of more 
than $5,000 per unit per year. Instead, the rule requires such housing 
to comply with the less stringent procedures established for tenant-
based rental assistance.
    2. Tenant-Based Rental Assistance. Some commenters thought that the 
Congress never intended for the rule to impose duties on landlords in 
the tenant-based rental assistance programs. This group argued that 
there exists a ``statutory, program-wide exemption for housing 
receiving tenant-based Section 8 assistance.''
    The statute is silent on whether the new minimum procedures for 
lead-based paint hazard notification, evaluation and reduction apply to 
tenant-based rental assistance. Congress did not amend the first 
sentence of the Lead-Based Paint Poisoning Prevention Act, set out 
above, to delete or amend the phrase ``housing assistance payments.'' 
HUD has historically interpreted this general phrase to cover virtually 
all types of housing assistance, including tenant-based rental 
assistance--the type of assistance that it seems to cover most 
obviously. The legislative history for Title X states, however, that 
housing receiving tenant-based rental assistance would be exempt from 
the Lead-Based Paint Poisoning Prevention Act, as amended by Title X. 
Congress was concerned that, due to the tendency of residential 
properties to pass in and out of tenant-based Federal assistance 
programs, it would be unworkable and inequitable to impose greater 
burdens on owners of such properties than on other private landlords 
(Senate Report 102-332, page 117).
    Clearly, Congress did not intend for HUD to apply the new minimum 
procedures set out in section 1012(a) of Title X to tenant-based rental 
assistance. HUD does not believe, however, that Congress intended to 
abolish HUD's current procedures, which serve to protect, in a minimal 
way, the children in families receiving this type of housing 
assistance. Rather, HUD infers that Congress intended for the 
Department to effectively retain its present lead-based paint 
requirements for tenant-based rental assistance. In its current 
regulations, HUD requires units with tenant-based rental assistance 
occupied by families with children under 6 to meet the minimal standard 
for lead-based paint found in its Housing Quality Standards (HQS) (see 
24 CFR 982.401). In this rule, then, HUD continues to require tenant-
based rental property to meet HQS. To streamline requirements, HUD has 
modified the lead-based paint requirements in the current HQS slightly, 
in order to be consistent with recent scientific information on how to 
protect children who are exposed to lead-based paint hazards. The 
requirements in this rule for tenant-based rental assistance continue 
to apply only to units in which children of less than 6 years of age 
reside. HUD does not believe Congress intended that Federal funds be 
used to subsidize housing that can poison children.
    3. Federally Owned Housing and the Availability of Appropriations. 
Section 1013 of Title X amends the Lead-Based Paint Poisoning 
Prevention Act at section 302 to modify existing requirements for the 
sale (disposition) of all residential property constructed before 1978 
and owned by a Federal agency. Section 302(a)(3)(C) (42 U.S.C. 
4822(a)(3)(C)) states that:

    ``To the extent that subparagraphs (A) and (B) (which contain 
evaluation and abatement requirements for pre-1960 housing, and 
evaluation and notification requirements for housing constructed 
between 1960 and 1978) increase the cost to the Government of 
outstanding direct loan obligations or loan guarantee commitments, 
such activities shall be treated as modifications under section 
504(e) of the Federal Credit Reform Act of 1990 and shall be subject 
to the availability of appropriations. To the extent that paragraphs 
(A) and (B) impose additional costs to the Resolution Trust 
Corporation and the Federal Deposit Insurance Corporation, its 
requirements shall be carried out only if appropriations are 
provided in advance in an appropriations Act. In the absence of 
appropriations sufficient to cover the costs of subparagraphs (A) 
and (B), these requirements shall not apply to the affected agency 
or agencies.''

    In the proposed rule, the Department interpreted this language to 
mean that HUD (and other Federal agencies that own residential 
property) need not comply with the requirements set out in section 
302(a)(3) if sufficient funds are not appropriated to the agency for 
this purpose. The Department then proposed in the absence of sufficient 
appropriations to include requirements to identify and treat 
deteriorated paint in HUD-owned properties (similar to current 
procedures), even if funding is not made available to the Department to 
carry out more extensive lead-based paint evaluation and reduction.
    Commenters expressed strong objections to basing the rule's 
requirements on the adequacy of appropriations. Several commenters 
questioned whether a determination that appropriations were 
``inadequate'' would or could ever be made. There was also sentiment 
against using such a two-pronged system for determining regulatory 
responsibility at all: ``Letting our standards be set by appropriation 
levels is dreadful public policy when the health of children [is] at 
stake.''
    A commenter urged HUD to retain high standards in the regulations 
and ``let the legislative process deal with the fiscal responsibility 
[for] this community health issue.'' If more costly requirements are 
optional, money will not be appropriated, predicted another commenter. 
Others agreed, saying that since adequate (separate) appropriations are 
not at all likely to be forthcoming for each program, contemplating 
them confuses ``an already complex regulation.''
    State and local funded agencies and others expressed their 
resentment concerning the ``adequate appropriations'' approach taken in 
the subparts affecting HUD and other Federal agency responsibilities in 
the proposed rule: ``HUD has two standards, depending on whether there 
is a Federal appropriation. We find this interesting as HUD has refused 
to seek an

[[Page 50147]]

appropriation since the legislation was passed in 1992. Instead, 
subpart G (HUD without appropriations) will be used.''
    Two commenters posed the question, ``may CDBG and HOME recipients 
ignore their regulations if there is not additional or sufficient 
funding to properly do the work?''
    Another commenter roundly condemned the appropriations-based 
dichotomy as ``seriously misguided'':

    `` * * * There will never be explicit `sufficient' 
appropriations, and the Secretary is unlikely ever to make an 
explicit pronouncement that appropriations are `insufficient.' HUD 
should be adopting a single set of requirements that stipulate 
minimum levels of hazard controls as part of the price of doing 
business, not as a matter of fiscal convenience.''

    An environmental health advocacy group discussed the statutory 
exception that is provided for the disposition of certain federally 
owned housing--where inspection and risk assessment is called for 
(under section 302(a)(3)) except when compliance would increase the 
cost to the Government of outstanding direct loan obligations or loan 
guarantee commitments (or would impose additional costs on RTC or 
FDIC)--and there are no appropriations to fund those increased costs.
    The described exception, the commenter maintained, was the only 
such exception/exemption in the statute:

    `` * * * Absolutely no evidence exists to support the contention 
that Congress implied or otherwise intended that HUD should be able 
to grant federal agencies broad discretion to opt out of lead hazard 
evaluation and control requirements. Such an interpretation would 
allow federal agencies such as the General Services Administration 
and the Department of Defense to simply dispose of their properties 
without paying heed to their condition or habitability * * *.''

    The group urged that, in its final property disposition 
regulations, HUD clearly limit waiver availability only to those 
agencies that qualify, based on the cited statutory exemptions. The 
commenter also urged that HUD revise the regulation to describe 
``minimum steps'' that even agencies entitled to the waiver must 
undertake. A ``sweeping exemption'' is clearly unacceptable, the group 
declared, and HUD ``must not condone such an irresponsible policy and 
must instead set some floor of minimum requirements with which all 
federal agencies must comply, regardless of appropriations.''
    HUD acknowledges the validity of many of these comments. In the 
final rule, the Department includes single subparts for HUD-owned 
single family property and HUD-owned multifamily property, rather than 
providing separate subparts for when HUD has sufficient appropriations 
and when HUD does not have sufficient appropriations. An additional 
subpart is included for residential property owned by Federal agencies 
other than HUD; the requirements in this subpart are identical to those 
in Title X. Each affected agency must decide whether the requirements 
of Title X apply to it; HUD feels that it is inappropriate for the 
Department to decide this issue for other agencies.
    HUD maintains, however, that the language of section 302(a)(3)(C) 
makes the lead-based paint requirements for HUD-owned residential 
property conditional on the sufficiency of appropriated funds to be 
used to conduct inspections and abate lead-based paint hazards in HUD-
owned residential property. HUD has never received such an 
appropriation for these purposes and it did not receive such a line 
item in the most recent appropriations act. Therefore, in the 
Department's view, ``appropriations'' are not presently sufficient to 
conduct the lead-based paint activities required under section 
302(a)(3)(A) and (B) and HUD is not required to implement these 
procedures. If sufficient appropriations become available at a later 
time, this final rule may have to be amended.
    It should be noted that HUD interprets the first sentence of 
section 302(a)(3)(C) to apply only to HUD programs where the cost of 
conducting lead-based paint evaluation or abatement activities under 
section 302(a)(3)(A) and (B) increase HUD's outstanding direct loan 
obligations or loan guarantee commitments. Since appropriations are not 
sufficient for the Department to conduct inspections and abatement of 
lead-based paint hazards in accordance with section 302(a)(3)(A) and 
(B), a determination of the effect of such activities on HUD's direct 
loan obligations or loan guarantee commitments is unnecessary.
    Although HUD has made the determination for purposes of section 
302(a)(3) that it does not have ``sufficient appropriations'' and 
therefore, the Department is not required to implement the procedures 
set out in section 302(a)(3) for its HUD-owned properties, the 
Department nevertheless has included lead-based paint procedures in 
this final rule which the Department can afford to implement and which, 
in HUD's view, are fully protective. While Congress under Title X did 
not require the Department to carry out the requirements in section 
302(a)(3)(A) and (B) in the absence of sufficient appropriations, 
Congress was silent concerning what activities the Department should 
carry out to reduce lead-based paint hazards in HUD-held properties in 
the absence of appropriations. This created a ``gap'' for HUD's 
interpretation. Under Chevron U.S.A., Inc. v. National Resources 
Defense Council, 467 U.S. 837 (1984), where a statute is silent or 
ambiguous on a specific issue, the Department's interpretation of the 
statute will be upheld if it is based on a permissible or reasonable 
construction of the statute. The Department believes that Congress did 
not intend for HUD to ignore lead-based paint in its properties, even 
in the absence of sufficient appropriations. As a consequence, HUD has 
developed procedures for HUD-owned properties, as set forth in subparts 
F and I, which it believes are reasonable.
    4. Soil and Dust Standards. a. Legal Issues. A legal question 
raised by commenters had to do with the Department's authority to 
regulate in the area of dust and soil. Two basic questions were raised: 
authority to regulate in the asserted absence of a nexus with lead-
based paint, and authority to regulate in the absence of EPA 
regulations defining hazardous levels of lead in dust and soil under 
section 403 of the Toxic Substances Control Act.
    One commenter claimed that HUD is exceeding its authority and has 
moved ``arbitrarily and capriciously'' by setting interim controls and 
abatement levels for lead in soil and dust without reference to the 
risk posed by the type of lead contained in soil or dust, or to the 
bioavailability of the lead. Because HUD's action is in advance of 
EPA's statutorily mandated determinations of soil cleanup levels, HUD 
is overreaching, in the commenter's opinion, because the Congress 
intended that EPA's regulatory action--identifying what are hazardous 
levels of lead in dust and soil--was to be the ``first step'' in 
rulemaking on that subject matter. According to the commenter, the 
Congress gave HUD and EPA authority to implement interim controls and 
abatement with respect to hazards from lead-based paint, including the 
dust from lead-based paint and soil contaminated by lead-based paint. 
Thus, HUD set ad hoc standards for lead dust and soil in the absence of 
any EPA study results and without any nexus to lead-based paint.
    Further, the commenter stated that HUD was attempting to 
``decouple'' dust and soil testing and abatement from any necessary 
relation to lead-based paint itself. The ``unstated premise'' of HUD's 
rule would be that all lead in dust is

[[Page 50148]]

assumed to come from paint, although this is not the case. HUD's 
approach would unfairly burden property owners with the costs of 
cleaning up soil and dust which may have become contaminated from 
``sources not under the property owner's control.'' This regulatory 
requirement, the commenter asserted, would raise the constitutional 
questions of a ``taking without just compensation and deprivation of 
property without due process of law under the Fifth Amendment * * *''
    The commenter concluded that HUD should not ``decouple'' lead found 
in dust and soil from the source of that lead, and should reconsider 
its imposition of a single dust-lead standard unrelated to the source 
of the lead or its bioavailability. Where there is a source of dust 
related to lead paint, HUD's standards may be workable, the commenter 
acknowledged, although waiting for EPA's upcoming standards under 
section 403 of the 1992 Act ``would have been more consistent with 
Congress' intent.'' HUD's proposed standards, however, would be 
``unfair'' to the extent there are other sources of lead involved, 
because the Department assertedly lacks authority to regulate lead that 
is from non-paint sources, and because the regulations would bear ``no 
relationship to cause or risk.''
    HUD and EPA, after careful consideration, do not agree with the 
commenter's argument. EPA, which has the relevant regulatory authority 
under TSCA section 403, has concluded that the language of Title X 
supports an interpretation that dust and soil lead are covered 
regardless of the source of the lead. Definitions in Title X do not 
limit the source of lead in soil or dust to lead from lead-based paint. 
The definitions of ``lead-contaminated dust'' and ``lead-contaminated 
soil'' do not specify that the source of lead in the dust or soil must 
be lead-based paint. In fact, the definition of ``lead-based paint 
hazard'' specifies lead-contaminated dust and soil as sources of lead 
contamination separate from and not explicitly linked to lead-
contaminated paint.
    Furthermore, as a practical matter, it is not possible to determine 
through routine chemical analysis the source of the lead in the dust 
and soil at any given site, not to mention every site of pre-1978 
housing in the nation. Also, it is well known that the scientific 
literature has determined that lead in dust is an important source of 
childhood lead exposure and that dust lead is well correlated with 
paint lead (Lanphear, 1996). It is unlikely, therefore, that the 
Congress meant to curtail the reduction of lead in dust at each 
individual property covered by this regulation until it is established 
that paint is the source of the lead in dust at the site.
    HUD acknowledges, however, that owners cannot be expected to have 
protected their properties from dust-lead deriving from such sources as 
gasoline combustion, nearby bridge repainting, or nearby industrial 
activity. It is reasonable that this final rule should give the highest 
priority to the reduction of lead in old residential paint that may 
cause lead exposure in children. As explained below in Section 
III.A.5.b of this preamble, HUD has exempted from the requirements of 
this final rule residential properties that are found not to contain 
lead-based paint or that have had all lead-based paint removed. (This 
exemption is consistent with a similar exemption in the real estate 
notification and disclosure rule that was issued jointly by HUD and EPA 
on March 6, 1996.) Thus, in this final rule, dust-lead hazards and 
soil-lead hazards are regulated only in properties in which lead-based 
paint is known or presumed to be present.
    b. Coordination With EPA Rulemaking. With regard to coordination 
with EPA rulemaking on hazardous levels of lead in dust and soil, HUD 
agrees that the standards set forth in final regulations promulgated 
and made effective by EPA pursuant to TSCA section 403 will be relevant 
to this rule. The final rule states that the section 403 standards 
shall be referenced when such standards are promulgated and effective. 
There may be a period of time, however, between the effective date of 
this final rule and the 403 regulations. Therefore, the Department is 
including in this final rule interim standards for levels of lead in 
dust and soil that are based on a recently-completed, peer-reviewed, 
pooled analysis of virtually all available epidemiological studies that 
directly measure the relationship between lead in children's blood and 
lead in dust and soil (Lanphear et al. 1998). This ensures that HUD's 
interim standards are scientifically valid. The interim standards 
promulgated in this rule are reasonably consistent with the standards 
recently proposed by EPA. For further discussion of the interim 
standards, see Sections III.E.15.a and b of this preamble, below.
    The Department does not agree with the comment (cited above in 
Section III.A.4.a of this preamble) that it should delay all regulatory 
action pertaining to lead in dust and soil until final 403 regulations 
are promulgated. HUD has previously established standards for dust lead 
and soil lead to ensure that hazard controls are properly targeted and 
are effective in the housing it assists or owns. Such standards were 
published in Lead-Based Paint: Interim Guidelines for Hazard 
Identification and Abatement in Public and Indian Housing, September 
1990 (Interim Guidelines); and again in Guidelines for the Evaluation 
and Control of Lead-Based Paint Hazards in Housing, June 1995 (HUD 
Guidelines). These standards have already been widely used in HUD 
programs. The scientific literature has confirmed that lead in dust and 
soil are important pathways to childhood lead exposure, as discussed 
below in Section III.E.15.b of this preamble.
    When EPA regulations implementing TSCA section 403 are final and 
effective, they will apply to this HUD rule and will supersede most of 
the HUD interim standards for dust and soil. If the final section 403 
rule does not establish a standard for an activity or situation that is 
covered by the HUD interim standards, there may be a question as to 
whether that aspect of the interim standards is retained. HUD expects 
that, after the section 403 rule is published, the Department will 
publish a technical amendment to this rule or engage in additional 
rulemaking to make clear what the applicable standards are.
    5. Exemptions. a. Housing for the Elderly. This rule applies most 
broadly to ``target housing,'' which is defined in Title X as housing 
constructed prior to 1978, except housing for the elderly or persons 
with disabilities (unless any child who is less than 6 years of age 
resides or is expected to reside in the unit) or any 0-bedroom dwelling 
unit. As in the proposed rule, HUD interprets the exemptions for 
elderly and disabled housing to apply only to residential property 
which is designated exclusively for elderly or disabled use.
    Some commenters complained about this restrictive interpretation 
and urged that it should be enough that elderly or disabled persons 
reside in a dwelling unit and that no young children are expected to 
reside there. After careful consideration, HUD has decided to retain 
the interpretation of the exemption that was adopted in the proposed 
rule. This is consistent with the definition of target housing used in 
all regulations issued pursuant to Title X. The statute has never been 
interpreted as providing an exemption for each dwelling that happens to 
be occupied by elderly or disabled persons. Such a policy, in the 
judgment of the Department, would be contrary to the intent of the 
statute, which is to eliminate as far as practicable lead-based paint 
hazards in all housing receiving Federal assistance and in federally 
owned housing at disposition.

[[Page 50149]]

Most dwellings currently occupied by elderly persons or persons with 
disabilities will probably be occupied by a child in the future.
    The Department defines the phrase ``expected to reside'' in the 
statutory definition of target housing as meaning that there is actual 
knowledge that a child is expected to reside, rather than a general 
presumption that a child will probably reside in the dwelling unit 
sometime in the future. If a woman residing in the dwelling unit is 
known to be pregnant, there is actual knowledge that a child is 
expected to reside in that unit. However, in the context of most 
residential real estate transactions it is not advisable to inquire as 
to whether a woman is pregnant. The term ``expected to reside'' is used 
in the statutory definition of ``target housing'' in Title X, but it is 
not defined there. It would not be unreasonable for people seeking to 
comply with the law to think that the term might refer to the distant 
future, that is ``expected to reside at some time, however far in the 
future.'' That uncertain potentiality is not part of HUD's 
interpretation of statutory intent. Therefore HUD is providing this 
tightened definition to minimize confusion.
    b. Absence of Lead-Based Paint, or Prior Hazard Reduction. The 
proposed rule provided exemptions from certain requirements if a 
residential property was found to contain no lead-based paint, but such 
exemptions did not apply to all programs. To streamline the final rule, 
exemptions are provided for properties found not to have lead-based 
paint by a certified lead-based paint inspector and for properties in 
which all lead-based paint has been identified and removed in 
accordance with procedures established by an EPA-authorized State or 
tribal program or by EPA in accordance with 40 CFR part 745, subparts L 
and Q. If the method of abatement is enclosure or encapsulation, this 
exemption does not apply because lead-based paint is still present.
    An owner or recipient of Federal assistance hoping to qualify for 
this exemption may question whether correcting for possibly incorrect 
(or outdated) positive findings during lead-based paint inspections is 
permissible. In the rule, the owner or recipient always retains the 
option of having additional tests performed by a certified lead-based 
paint inspector. Nothing in the regulation is intended to revoke or 
restrict that option. An additional test can sometimes clarify whether 
lead-based paint is or is not present. Actions may be taken based on 
the results of the most recent inspection by a certified lead-based 
paint inspector, provided appropriate technology is used. Laboratory 
analysis of a properly taken paint sample is a more reliable method of 
measurement than the use of a portable X-ray fluorescence (XRF) 
analyzer on site. Therefore a new laboratory analysis of a paint sample 
can overturn either an old portable XRF reading or an old laboratory 
test, but a new portable XRF reading can overturn only an old portable 
XRF reading.
    These general exemptions are intended to apply only if the entire 
residential property is free of lead-based paint or has had all lead-
based paint removed. The term ``residential property'' is defined in 
the rule as including such things as outbuildings, fences, and play 
equipment affixed to the property as well as dwelling units and common 
areas.
    HUD is providing this exemption to assure that the highest priority 
in the use of scarce lead-based paint hazard control resources is given 
to residential properties with lead-based paint. The Department 
recognizes that some properties have dust-lead hazards and/or soil-lead 
hazards but do not have any lead-based paint. These properties are 
expected to be a small proportion of the total affected stock, however.
    c. Housing To Be Demolished. In response to questions from various 
sources, the rule provides that housing to be demolished is exempt, 
provided the housing remains unoccupied until demolition. Owners should 
be aware, of course, that other local, State and Federal regulations 
pertaining to environmental protection and occupational safety and 
health may apply to demolitions.
    d. Nonresidential Property. The final rule also states explicitly 
that property that is not and will not be used for human habitation is 
exempt. In the case of a mixed use property, HUD intends that only 
those parts of the property normally associated with residential use 
shall be covered by this rule. For example, retail and office 
establishments in an apartment building would not be covered, but 
hallways leading to such uses would be covered if the hallways also 
service dwelling units that are covered by the rule.
    e. Rehabilitation Disturbing Little or No Painted Surface. 
Commenters also complained that existing exemptions in HUD rules for 
weatherization, emergency repairs, water/sewer hookups, installation of 
security devices, and other special work were no longer included in the 
rule, even though, the commenters said, these were ``realistic and 
necessary'' exemptions. The commenters were concerned primarily with 
rehabilitation activities funded under the Community Development Block 
Grant or HOME programs.
    With regard to weatherization, the Department believes this is too 
broad a category on which to base an exemption from this rule. 
Weatherization often includes window replacement, which can generate 
lead dust and therefore should be performed with safe work practices. 
With regard to such activities as water and sewer hookups and 
installation of security devices, HUD has provided in subpart B of the 
final rule an exemption for rehabilitation that does not disturb a 
painted surface. Also, activities that disturb painted surfaces of no 
more than a ``de minimis'' amount of 2 square feet in any one interior 
room, 20 square feet on exterior surfaces, or 10 percent of the total 
surface area on an interior or exterior component with a small surface 
area are not required to use ``safe work practices,'' and worksite 
clearances are not required for such work. (This de minimis is stated 
in the section on safe work practices in subpart R of the rule.) 
Therefore, installation of security devices under rehabilitation 
assistance will generally not require special precautions usually 
associated with lead-based paint hazard reduction. Furthermore, in 
situations in which security devices are being installed as a part of 
the operation and maintenance of a residential property that is 
required under this rule to incorporate ongoing lead-based paint 
maintenance as a part of the everyday maintenance of the property, the 
same ``de minimis'' exemption applies.
    f. Emergency Actions and Natural Disasters. The proposed rule 
provided a general exemption for properties undergoing emergency 
repairs in response to natural disaster. The Department believes that 
there are circumstances in which the time required for compliance could 
adversely affect life or property and, consequently, an appropriately 
tailored exemption is needed.
    Two commenters requested additional exemptions beyond the ``natural 
disaster'' exemption set out in the proposed rule. They believed it was 
too narrow in scope, arguing that any form of disaster should be the 
basis for an exemption from the rule's requirements. On the other hand, 
others claimed that no justification existed for exempting damaged 
properties. At a minimum, these properties need risk assessment and 
full disclosure before any sale, one commenter said.

[[Page 50150]]

    In the final rule, HUD has provided in subpart B a more carefully 
worded provision that provides an exception for ``emergency actions 
immediately necessary to safeguard against an imminent danger to human 
life, health or safety, or protect property from further structural 
damage (such as when a property has been damaged by a natural disaster, 
fire, or structural collapse) * * *'' The exemption states, however, 
that in such cases ``occupants shall be protected from exposure to lead 
in dust and debris generated by such emergency actions to the extent 
practicable.'' It is HUD's intent that such protection would include a 
thorough cleanup. The exemption extends only to the completion of 
repairs necessary to respond to the emergency; after that, the 
requirements of the rule apply.
    g. Law Enforcement Seized Property. A spokesperson for the Treasury 
Department's Asset Forfeiture Program urged that law enforcement 
agencies seizing real properties should be able to dispose of those 
properties without the financial burden of compliance with the rule, 
with only a duty to warn potential transferees or purchasers of the 
possible presence of a lead-based paint hazard. The Justice 
Department's U.S. Marshals Service made similar comments, adding that 
the regulations will create ``an economic disincentive to seizing and 
forfeiting pre-1978 residential property.''
    In view of the special nature of law enforcement, HUD has added a 
provision in subpart B of the final rule that exempts seized properties 
owned for 270 days or less from the evaluation and hazard reduction 
requirements of subpart C of this rule, which sets requirements for the 
disposition of residential properties owned by Federal agencies other 
than HUD. For seized properties owned longer than 270 days, the 
requirements of subpart C will apply. Ownership begins upon receipt of 
a judicial order of forfeiture. Approximately 400 seized, pre-1978 
dwelling units are disposed of annually by the Department of the 
Treasury and the Federal Marshals Service of the Department of Justice 
combined. HUD expects that the Federal law enforcement agencies, in 
exercising their managerial responsibilities over seized residential 
property, will make every reasonable effort to maintain the property in 
a lead-safe condition.
    h. Emergency Rental and Foreclosure Prevention Assistance. Some 
State and local agencies urged that programs providing emergency rental 
assistance or foreclosure prevention assistance be exempted. The final 
rule provides a limited exemption for such programs subject to subpart 
K, Acquisition, Leasing, Support Services, or Operation. The exemption 
for any specific dwelling unit expires after 100 days. HUD does not 
intend that multiple households receiving emergency assistance can be 
recycled through a unit without subjecting the unit to the requirements 
of subpart K.
    i. Adverse Weather. In the proposed rule, the subparts covering 
disposition of HUD-owned single family property included an exception 
allowing delay of repainting if weather conditions make such work 
infeasible. In the final rule, the concept behind this exception has 
been broadened to apply to evaluation and reduction activities under 
all subparts, allowing delay ``for a reasonable time during a period 
when weather conditions are unsuitable for conventional construction 
activities.'' HUD intends that this exception will allow reasonable 
delay only and will not be an excuse for noncompliance.
    j. Historic Properties. The National Park Service commented that 
HUD should provide greater flexibility to allow a balance to be 
achieved in specific cases between the objectives of the National 
Historic Preservation Act and those of the Lead-Based Paint Poisoning 
Prevention Act. Conflicts between the two goals, the protection of 
historically significant buildings and the creation of lead-safe 
housing, may occur where abatement is required. For example, the use of 
artificial siding and the replacement of historic trim and doors is 
generally not appropriate for historic buildings. In response, HUD has 
added a general exception in subpart B that allows designated parties 
to use interim controls instead of abatement methods, if requested by 
the State Historic Preservation Office, on properties listed or 
determined to be eligible for listing in the National Register of 
Historic Places or contributing to a National Register Historic 
District. If interim controls are conducted, ongoing maintenance and 
reevaluation shall be conducted as required by the applicable subpart. 
For comprehensive guidance on eliminating lead-based paint hazards from 
historic housing without removing historically significant features, 
see Chapter 18 of the HUD Guidelines or the National Parks Service 
publication, ``Preservation Brief 37: Appropriate Methods for Reducing 
Lead Paint Hazards in Historic Housing,'' by S.C. Park and D.C. Hicks, 
National Parks Service, Washington, DC 20013-7127 (1995).
    k. Insufficient Appropriations. In the proposed rule, the 
Department included in the subpart covering disposition of residential 
property by a Federal agency other than HUD an exemption from that 
subpart if a Federal agency determines that sufficient funds are not 
appropriated to carry out the requirements of the subpart. In the final 
rule, this exemption, which implements a provision of section 1013 
Title X, has been moved to the Exemptions section of subpart B (See 
Section III.A.3 of this preamble).
    6. Deference to Other Agencies. Commenters sought, in varying 
forms, ``exemptions'' providing for deference to State or local 
agencies or other Federal agencies based on State lead-control laws or 
an agency's demonstrated performance.
    In the final rule, the Department has provided such deference in 
specific situations. First, HUD is requiring that inspections, risk 
assessments and abatements be conducted in accordance with the work 
practices standards of a State or Indian Tribe with a program 
authorized by EPA under subpart Q of 40 CFR part 745 or, in the absence 
of such a program, with EPA's standards at 40 CFR part 745, subpart L. 
Therefore HUD is in effect incorporating the opportunity that is built 
into the EPA regulations for States to determine, within the EPA 
framework, procedures for evaluation and reduction. With regard to the 
policies of Federal agencies other than HUD, the final rule gives such 
agencies the authority to determine whether appropriations are 
sufficient to implement the requirements of section 1013 of Title X. 
(See further discussion of this matter in Section III.A.3 of this 
preamble, above.)
    One agency suggested that high-performing public housing agencies 
with good property maintenance records should be exempt from the 
additional evaluations provided in the rule. Because the current 
performance rating instrument used by HUD and public housing agencies 
does not include a specific grade for lead-based paint activities, HUD 
does not believe it has a valid way to identify ``high-performing 
public housing agencies'' for the purposes of this rule. It is not 
possible, therefore, to provide such a broad exemption at this time.
    7. Changes and Deletions to Current HUD Regulations. In the 
proposed rule, HUD did not include specific provisions for the deletion 
of existing part 35 provisions being replaced by this rule or the 
numerous lead-based paint requirements set out in various program 
regulations in Title 24. It was stated, however, in the preamble to the 
proposed rule that such deletions would be made, and this final rule 
provides such changes and deletions.

[[Page 50151]]

    8. Indian Housing Programs. In the proposed rule, two subparts were 
applicable to Indian housing programs: the one pertaining to 
rehabilitation (which was to apply to the Indian Community Development 
Block Grant Program), and the one pertaining to public and Indian 
housing programs (which was to apply to housing owned and operated by 
Indian housing authorities under public and Indian housing programs). 
With the enactment of the Native American Housing Assistance and Self 
Determination Act of 1996 (NAHASDA, Pub. L. 104-330, 25 U.S.C. 4101 et 
seq.), it has been necessary to revise the way this rule applies to 
Indian housing programs. NAHASDA separated Indian housing from public 
housing and made funding for Indian housing under the United States 
Housing Act of 1937 unavailable. The primary program created by NAHASDA 
is the Indian Housing Block Grant Program, which can be used for many 
different forms of housing assistance. Therefore the following subparts 
have been made applicable to the Indian Housing Block Grant program: 
Subpart H, Project-Based Rental Assistance; subpart J, Rehabilitation 
(also applicable to the Indian Community Development Block Grant 
program); subpart K, Acquisition, Leasing, Support Services, or 
Operation (also applicable to the Indian Community Development Block 
Grant Program); and subpart M, Tenant-Based Rental Assistance. Tribes 
and tribally designated housing entities receiving funds from the 
Indian Housing Block Grant and Indian Community Development Block Grant 
programs must determine which subpart of this final rule applies based 
on the type of activity being conducted or assistance being provided to 
a particular dwelling unit or residential property. If more than one 
type of assistance is being provided, the most protective requirements 
apply.
    9. Applicability of Subparts to Programs and Dwelling Units. 
Subparts C, D, and F through M of the final rule each set forth 
requirements for a specific type of Federal housing activity or 
assistance, such as mortgage insurance, rehabilitation assistance, 
project-based rental assistance, tenant-based rental assistance, or 
public housing. Each of these subparts applies to more than one 
program. For example, there are at least five HUD programs that provide 
tenant-based rental assistance, so all five are therefore subject to 
subpart M, which states the lead-based paint requirements for housing 
receiving tenant-based rental assistance.
    In the proposed rule, HUD listed in the applicability section of 
each subpart the programs to which the subpart was to be applicable. 
This led to concern within the Department that such lists may be 
incomplete or go out of date. Therefore, in the final rule these lists 
have been removed from the applicability sections. In the applicability 
sections, care has been taken to try to describe clearly what types of 
housing assistance is and is not covered by each subpart. A current 
list of programs covered by each subpart is available on the internet 
at www.hud.gov, or by mail from the National Lead Information Center at 
1-800-424-LEAD.
    Several HUD housing assistance programs have more than one type of 
eligible activity, so some programs are subject to more than one 
subpart of this rule, as was mentioned above in regard to the Indian 
Housing Block Grant program. In fact, there are at least nine such 
programs at the time of this writing. These programs, with the subpart 
designations in parentheses, are as follows: Indian Housing Block Grant 
program (H, J, K, and M), Indian Community Development Block Grant 
program (J and K), Home Investment Partnerships program (HOME) (J, K, 
and M), Community Development Block Grant program (J and K), Supportive 
Housing Program (H, J, and K), Shelter Plus Care (H and M), Housing 
Opportunities for Persons With AIDS (HOPWA) (J and M), Homeownership of 
Multifamily Units (HOPE 2) (J and K), and HOPE for Homeownership of 
Single Family Homes (HOPE 3) (J and K). Grantees, participating 
jurisdictions, Indian tribes and other entities administering these 
flexible programs must decide which subpart or section of this rule 
applies to the type of assistance being provided to a particular 
dwelling unit or residential property. If more than one subpart or 
section applies, the one with the most protective requirements applies. 
To assist in making this judgment, HUD is providing in subpart B of the 
rule a table listing subparts and sections in order from the most to 
least protective initial hazard reduction requirements. In some cases, 
more than one program as well as more than one subpart or section may 
apply to a property or dwelling unit. In this case also the most 
protective requirements apply.
    A multifamily residential property may have some dwelling units 
subject to one set of requirements and other units subject to other 
requirements. In this case, the owner has the choice of either 
operating the property with different sets of requirements or operating 
the entire property at the most protective level. An example of this 
situation is provided in subpart B of the rule.

B. Structure of the Rule

    1. Organization. In the interests of simplicity and streamlining, 
all of the Department's lead-based paint requirements, including the 
disclosure rule, are now located in part 35. The proposed rule set 
forth lead-based paint requirements in three parts, including new parts 
36 and 37 that, together with part 35, subpart H, were to comprise all 
of HUD's regulatory requirements for lead-based paint in a single 
place. Part 36 was to describe the lead-based paint requirements for 
each program covered under the Lead-Based Paint Poisoning Prevention 
Act, grouped in subparts according to the agency or office responsible 
and the type of assistance. Part 37 was to describe the standards and 
procedures for conducting the lead-based paint evaluation and hazard 
reduction activities required in part 36, with different activities 
described in different subparts.
    In the preamble to the proposed rule, however, HUD indicated that 
it was considering consolidating parts 36 and 37 in the final rule. 
This has been done. The entire rule consists of 12 subparts (B, C, D, F 
through M, and R, with E and N through Q reserved), all in part 35. 
Subpart A of part 35 is the rule requiring disclosure of known lead-
based paint hazards upon sale or lease of residential property 
(disclosure rule), which was promulgated on March 6, 1996. EPA 
published the same rule at 40 CFR part 745, subpart F. In this current 
rulemaking, HUD is moving the location of the disclosure rule from 
subpart H to subpart A of 24 CFR part 35. No text or section number 
changes are being made to the disclosure rule. The general requirements 
found in subpart A of the proposed rule are located under subpart B of 
today's final rule.
    Subpart B of the final rule provides all the general requirements, 
definitions, exemptions, and options that apply to subparts B, C, D, F 
through M, and R. Subpart B does not apply to the Disclosure Rule in 
subpart A. All residential properties and dwelling units subject to 
this final rule are also subject to the Disclosure Rule. Subparts C, D, 
and F through M set forth the requirements for each program or type of 
assistance. Subpart R of the final rule contains the required standards 
and methods for conducting evaluation and hazard reduction activities 
formerly found in part 37 of the proposed rule. The provisions of 
subpart R are referenced in subparts B, C, D, and F through M. As 
explained below, the standards and methods requirements of

[[Page 50152]]

this rule have been streamlined considerably.
    One commenter suggested that the requirements for notice to 
residents of the results of evaluation and hazard reduction be located 
at the beginning of the rule so that they need not be repeated for each 
program or type of housing. This has been done. The notice requirements 
are found in subpart B at Sec. 35.125 and are referenced in the 
program-specific subparts.
    2. Simplicity and Overall Strategy. Several commenters complained 
that, despite the effort to consolidate lead-paint regulations in a 
single rule, the format of the proposed rule remained ``program 
specific''. Others called it ``cumbersome''. Because community 
development and housing administrators must work with a variety of 
programs, they will be required to operate under different subparts. 
Calling the rule lengthy and technical, one commenter said it would be 
helpful if it could be organized ``in a more user-friendly fashion,'' 
using cross-references. Several commenters regarded the rule as 
``confusing'' or in need of further consolidation.
    One commenter complained that there remained ``at least 14 
different requirements,'' based on the program authority or on the 
amount of assistance provided.
    In the final rule there are seven evaluation and hazard reduction 
strategies for HUD housing programs. These strategies vary in 
stringency, costliness, and lasting effectiveness in preventing 
childhood lead poisoning. They are applied to the various forms of 
housing assistance, based generally on: (1) The amount, nature and 
duration of financial assistance provided under the program; (2) the 
risk of childhood lead poisoning in the housing (based on year of 
construction); and (3) whether the housing is generally rental or 
owner-occupied.
    There are two primary differences between the strategies of the 
final rule and those of the proposed rule: (1) Paint repair has been 
replaced by paint stabilization; and (2) clearance is required in the 
final rule after paint stabilization, and the clearance requirement has 
replaced the dust-testing requirement for pre-1950 housing with tenant-
based rental assistance.
    In order from least to most stringent, the seven strategies are:
    (1) Safe work practices during rehabilitation;
    (2) Ongoing lead-based paint maintenance practices to assure that 
paint is maintained so that it remains intact, and that safe work 
practices are used (similar to the ``essential maintenance practices'' 
recommended by the Task Force);
    (3) Visual assessment and paint stabilization;
    (4) Risk assessment and interim controls (with the option of 
performing specified standard treatments);
    (5) Lead-based paint inspection and risk assessment, and interim 
controls;
    (6) Risk assessment and abatement of lead-based paint hazards; and
    (7) Lead-based paint inspection, and abatement of all lead-based 
paint.
    These strategies include the following fundamental principles. 
Whenever hazard reduction methods are employed (except for disturbances 
of only a small area of paint surface) clearance is required to ensure 
that the job is done properly. Second, ongoing lead-based paint 
maintenance practices are required in rental housing whenever HUD has a 
continuing relationship with the property. Third, to ensure that the 
controls are still intact and effective over time, reevaluation is 
required whenever a risk assessment and interim controls are required 
and there is a continuing HUD subsidy or ownership of rental housing. 
Fourth, special procedures are required in programs with a continuing 
subsidy or HUD ownership of rental housing whenever a child is 
identified with a blood lead level that calls for environmental 
assessment and intervention (called an ``environmental intervention 
blood lead level'' in the rule).
    The first strategy, safe work practices during rehabilitation, is 
applied only to rehabilitation assistance of no more than $5,000 per 
unit. This is a ``do no harm'' policy that is intended to assure that 
low-cost rehabilitation does not generate lead-based paint hazards. It 
allows low-cost rehabilitation to go forward without costly lead-based 
paint requirements; but it does not necessarily determine whether or 
not the entire dwelling unit or property is ``lead safe,'' because, for 
this strategy, clearance must be conducted only for the worksite, which 
may not include the entire unit.
    The goal of the second strategy, ongoing lead-based paint 
maintenance only, is to ensure that paint is kept stabilized and that 
the work is done in a safe manner. Clearance is required only of the 
worksite. This strategy does not provide full assurance that a property 
is free of lead-based paint hazards, but it will minimize such hazards 
over time. It is applied to properties that are subject to an 
application for multifamily mortgage insurance and were built between 
1960 and 1977. These are rental properties with no subsidy, only 
mortgage insurance, but there is a continuing relationship between the 
Department, the borrower and the lender through the insurance 
agreement. These properties were built toward the end of the period 
when lead-based paint was used in housing and are less likely to have 
lead-based paint hazards than older housing. This strategy is also 
applied as a transitional requirement for multifamily properties 
receiving project-based assistance during the phase-in period before a 
risk assessment is conducted.
    The third strategy, visual assessment, paint stabilization and 
clearance, provides assurance that the housing to which it is applied 
is ``lead safe.'' To provide such assurance, HUD intends that clearance 
be unit-wide, not just for the worksite. It should be noted that 
clearance is required only if paint stabilization is performed, so a 
unit that passes the initial visual assessment (i.e. no deteriorated 
paint is identified) undergoes no dust testing. Also, if the housing is 
in poor physical condition, or if there are high levels of lead in the 
soil, lead-based paint hazards may reappear. Therefore, ongoing 
maintenance is required whenever HUD has a continuing relationship with 
rental property. The final rule applies this strategy to HUD-owned 
single family housing that is sold with a mortgage insured by HUD; 
properties with acquisition, leasing, support services, or operation 
assistance; tenant-based rental assistance programs where a child of 
less than 6 years of age resides; multifamily housing receiving up to 
and including $5,000 per unit per year in project-based rental 
assistance; and single family properties assisted under the project-
based certificate or voucher program, the moderate rehabilitation 
program, or another HUD-funded project-based rental assistance program.
    The fourth strategy, risk assessment and interim controls, with the 
option to conduct standard treatments, provides assurance that all 
lead-based paint hazards have been eliminated. Unit-wide clearance is 
always required. Ongoing maintenance of painted surfaces is required 
whenever HUD has a continuing relationship with the property; and 
reevaluation is required if HUD is the owner, if there is project-based 
rental assistance in a multifamily property exceeding $5,000 per unit 
per year, and in public housing. This strategy is applied to properties 
that are subject to an application for multifamily mortgage insurance 
and were built before 1960, housing receiving multifamily project-based 
assistance of more than $5,000 per unit annually, and housing receiving 
rehabilitation

[[Page 50153]]

assistance of $5,000--$25,000 per unit. A risk assessment and interim 
controls are also required in public housing developments that have 
lead-based paint that has not yet been abated.
    The fifth strategy, lead-based paint inspection, risk assessment, 
and interim controls, is applied only to HUD-owned multifamily housing. 
It differs from the fourth strategy in that it requires a lead-based 
paint inspection as well as a risk assessment. Most of these properties 
are being sold, frequently without HUD mortgage insurance, so HUD will 
not have a continuing relationship with them and thus will not be able 
to ensure that ongoing lead-based paint maintenance practices and 
reevaluation are practiced. With a lead-based paint inspection, HUD 
will provide the buyer with information on the location of any 
remaining lead-based paint on the property that the buyer and later 
owners can use to avoid generating dust-lead hazards in the future.
    The sixth strategy involves risk assessment and abatement of lead-
based paint hazards. This strategy is used when Federal rehabilitation 
assistance is greater than $25,000 per unit. When Federal funds are 
used to make such a substantial investment in a property, it is logical 
that long-term hazard control measures be implemented at a time when 
substantial concurrent rehabilitation is being done. Paint testing of 
surfaces to be disturbed during rehabilitation is called for to ensure 
that new lead-based paint hazards are not inadvertently created, but 
the designated party has the option to presume the presence of lead-
based paint on such surfaces.
    The objective of the seventh strategy, lead-based paint inspection 
and abatement of lead-based paint, is abatement of all lead-based 
paint. This strategy applies to public housing and to properties that 
are being converted from nonresidential to residential use or are 
subject to major rehabilitation and are being financed with HUD/FHA 
multifamily mortgage insurance. This is not a new requirement for 
public housing. Current public housing regulations require a lead-based 
paint inspection and, at the time of modernization, abatement of all 
lead-based paint. However, because complete modernization (and 
therefore complete abatement) may not occur for many years in some 
housing developments, and because modernization (and therefore 
abatement of lead-based paint) can occur on a piecemeal basis (e.g., 
kitchens one year, bathrooms another), the final rule, like the 
proposed rule, adds the requirements of strategy four, risk assessment 
and interim controls, during the period prior to completion of 
abatement to assure that all public housing occupied by families will 
be free of lead-based paint hazards. The requirement for conversions 
and major rehabilitations financed with multifamily mortgage insurance 
is new, however. HUD believes that such properties, after undergoing 
such substantial renovation, should be as free as reasonably possible 
of any future lead-based paint hazards.
    3. Prescriptiveness. There were several comments to the effect that 
the rule was too prescriptive. These commenters generally recommended a 
movement toward ``performance-based'' requirements, arguing that a 
performance-based rule would stand up better to future technical 
innovations.
    One commenter recognized that adopting performance-based standards 
was not always a simple matter. Decisions to do so must be made 
``requirement-by-requirement,'' but the commenter urged looking for 
means to use such standards wherever feasible, and cautioned against 
``locking in'' requirements which new technology or research may well 
show to be inappropriate in the future. For example, the commenter 
recommended against specifying HEPA vacuuming in the rule, indicating 
that research underway may suggest that in some cases less specialized 
equipment or less extensive procedures can be just as effective. 
Another commenter suggested basing requirements on performance, but 
including a more prescriptive ``safe harbor'' optional alternative. 
Sometimes, the commenter observed, performance-based standards are 
simply unhelpful to those regulated due to lack of clarity or 
information about the method of obtaining the desired performance.
    Several commenters recommended against ``too rigid'' regulatory 
requirements that would require ``full-blown'' future rule making 
proceedings to overturn. Some suggested incorporation of guidelines 
into the rule by reference.
    Although the proposed rule included prescriptive requirements, 
Sec. 37.1(b) of the proposed rule stated that those requirements did 
not apply to lead-based paint inspections, risk assessments and 
abatements performed by inspectors, risk assessors, abatement 
supervisors and workers certified in accordance with EPA regulations 
under the Toxic Substances Control Act (TSCA). Rather, the prescriptive 
standards in proposed part 37 were to apply only when such activities 
were performed by individuals who were not certified in accordance with 
EPA requirements, should certification mechanisms not be in place.
    The effective date of the EPA certification requirements and the 
EPA work practices standards is August 31, 1999. By that date, 
individuals conducting inspections, risk assessments and abatement must 
be certified and all such activities must be performed pursuant to the 
work practices standards in that regulation or in requirements of EPA-
authorized State or Tribal programs. There is no need for HUD to issue 
detailed requirements for risk assessment, inspection and abatement. 
They have been omitted, therefore, from the final rule, except for 
interim dust and soil standards.
    This leaves the question of whether the proposed requirements for 
interim controls and related procedures that are not covered by the EPA 
regulations are too prescriptive. Related procedures include standard 
treatments, occupant protection and worksite preparation, clearance, 
ongoing lead-based paint maintenance, reevaluation, and safe work 
practices. In the final rule, HUD has tried to strike a balance between 
the need to assure that the procedures will be effective in preventing 
childhood lead poisoning and the goal of providing flexibility and 
avoiding rigidity.

C. Effective Date

    The proposed rule included an effective date of 12 months after 
publication of the final rule, and the Department explained in the 
preamble that this time period was chosen to allow all affected parties 
time to prepare for implementation of the new requirements.
    Some commenters urged that the effective dates in the rule be moved 
up in whole or in part, while others asked for a further delay to allow 
affected parties to secure expert assistance or training opportunities. 
One commenter urged waiting to make the rule effective until EPA's 
upcoming rule on health-based standards for lead in dust and soil was 
promulgated and made effective.
    Advocates of rapid effectiveness pointed out that the rule already 
was ``overdue,'' and claimed that important health benefits could be 
realized by the regulation's becoming operational sooner rather than 
later. Several commenters advocated immediate effectiveness for 
portions of the rule dealing with occupant protection, worksite 
preparation and the prohibitions against unsafe practices.
    HUD considered imposing an immediate effective date because the 
statutory effective date of January 1, 1995 had already passed and 
because of the risk to the health of children from

[[Page 50154]]

a further delay in implementing these requirements. On the other hand, 
HUD noted that program administrators at all levels of government, as 
well as property owners and contractors performing lead-based paint 
activities, would not have adequate time for education, training, 
planning and budgeting to implement fully the new technical standards, 
requirements and procedures with an effective date earlier than 
proposed.
    After thorough consideration of these varying points of view HUD 
has decided to retain the proposed 12-month time period following 
publication for a phasing in of the effective date of the final rule, 
with one exception: the prohibition of certain methods of paint removal 
or surface preparation set forth in Sec. 35.140 shall be effective 60 
days after publication of this final rule. In addition, designated 
parties may choose to comply with the requirements of this final rule 
before the effective date, instead of complying with existing 
requirements, if they desire and provided there is not a programmatic 
limitation that would preclude such an action.
    The exception to the 12-month phase-in policy is appropriate for 
prohibited practices. These are already well known; many are in HUD's 
current regulations and guidance and are prohibited by the EPA final 
rule on training and certification, which was published on August 29, 
1996. Many States already prohibit these practices, and other safer 
paint removal methods are well known. (See Section III.E.2.g. of this 
preamble.)
    One commenter requested clarification of the effective date's 
impact on pre-rule lead-based paint control activities already 
undertaken and partially completed, and urged that it be made clear 
that this ongoing work could be carried forward after the effective 
date ``without revision.'' The Department's policy on this matter 
varies somewhat from program to program, because of differences in 
regulations and administrative procedures. Therefore the applicability 
sections of subparts F through M include statements specific to each 
program. In subpart F, pertaining to HUD-owned single family housing, 
any property to be sold with a HUD-insured mortgage and which is 
offered for sale on or after the effective date of this final rule must 
comply with the requirements of the rule. In the case of subpart G, 
pertaining to multifamily mortgage insurance, any property for which a 
HUD or FHA commitment is made on or after the effective date must 
comply with the rule. With regard to subpart H, project-based rental 
assistance, properties that are receiving Section 8 assistance on or 
after the effective date of this rule must comply. In the case of 
competitively awarded grants under the HOPWA, Supportive Housing, and 
Shelter Plus Care programs, the requirements apply to grants awarded 
pursuant to NOFAs issued on or after October 1, 1999. For formula 
grants under HOPWA, the requirements apply to activities for which 
program funds are first obligated on or after September 15, 2000. 
Subpart I states that HUD-owned multifamily properties and properties 
for which HUD is mortgagee-in-possession must comply with the rule if 
they are offered for sale or held or managed by HUD on or after the 
effective date of this rule. Subpart J, pertaining to rehabilitation 
assistance, includes program-specific information on the effective date 
for projects funded under the HOME program, the Community Development 
Block Grant (CDBG) programs, the Indian Housing Block Grant (IHBG) 
program, HUD-administered homelessness assistance programs, and the 
Indian Community Development Block Grant program. Project-specific 
effective date policies for housing subject to subpart K, Acquisition, 
Leasing, Support Services, or Operation, are the same as for subpart J. 
With regard to public housing, subpart L states that all housing to 
which the subpart applies is covered by the rule as of the effective 
date of this final rule. Finally, subpart M, which pertains to tenant-
based rental assistance, states that housing receiving such assistance 
becomes subject to the requirements of this rule at the time of an 
initial or periodic inspection that occurs on or after the effective 
date of this final rule. (The initial or periodic inspection referred 
to in the previous sentence is the inspection conducted by the public 
housing agency (PHA) or other administering agency to determine whether 
the housing unit meets the requirements of the program. It is not a 
lead-based paint inspection.)

D. Other General Issues

    1. Policy on Abatement. Some commenters saw in the proposed rule an 
undue emphasis on abatement, as opposed to more limited lead hazard 
control measures. ``As such,'' one organization declared, ``the rule 
appears inadequately protective of children's health, and unlikely to 
realize the full benefits predicted by the Economic Analysis as 
justification for the costs of compliance.'' Abatement should not be a 
defined term in the rule, nor used at all, this commenter stated. The 
recommended term was ``hazard abatement,'' used to mean ``any set of 
measures to permanently eliminate lead-based paint hazards.'' This 
should be the ``maximum requirement'' of the rule. While abatement of 
intact lead-based paint would always remain an option, it need not and 
should not be required, the commenter urged.
    The same commenter urged that the definition of abatement should 
not include reference to lead-based paint (i.e., intact paint). By 
doing so, there is a deviation from the definition of abatement in 
Title X itself. Failing to make the distinction between intact LBP and 
lead hazards is likely to ``recreate * * * the scenarios that Title X 
was supposed to end: Paralyzed non-compliance because of the costs and 
burdens of performing abatement of non-hazardous intact LBP.''
    A commenter who felt the rule didn't stress abatement enough was 
``troubled by the rule's implicit acceptance that it is infeasible to 
abate lead paint from housing.'' Arguing that the societal returns more 
than justified the cost, the commenter declared that the obstacles to 
abatement as a predominant policy were ``not economic, but political.''
    HUD agrees that abatement should be targeted toward hazards, not 
the mere presence of lead-based paint, except in public housing, where 
lead-based paint abatement is required by statute, and for conversions 
and major rehabilitation projects seeking HUD/FHA multifamily mortgage 
insurance. The final rule defines abatement accordingly but retains the 
existing lead-based paint abatement requirements for public housing. 
The legislative history of Title X shows that Congress did not intend 
for the existing public housing program requirements to be changed.
    2. Cost of Compliance. Many commenters--particularly State and 
local funded agencies, housing developers, and their national and 
regional spokespersons--expressed serious concerns about the rule's 
cost.
    While many suggestions for change in details of the rule were 
provided by these commenters, the tenor of their comments was not so 
much against the rule as against the idea of carrying out its mandate 
without separate funds earmarked solely for that purpose.
    Some commenters felt that HUD had grossly underestimated the costs 
of compliance and that these costs, in many circumstances, would divert 
already-limited funding from its principal purpose of providing 
shelter. Rural housing suppliers, especially, lamented the anticipated 
problems the rule would bring. One commenter expressed the fear that 
the rule would ``severely hamper rehabilitation in rural,

[[Page 50155]]

small communities and would potentially drive the cost of doing 
business so high that many communities may decide that it is simply not 
worth it to try and repair existing, older substandard housing.''
    Some commenters suggested that the dangers of lead paint were 
exaggerated or that local health department controls were adequate to 
locate children with high blood lead levels and cope with the problem 
on a case-by-case basis.
    Other public agency commenters were more positively disposed toward 
the goal of preventing childhood lead poisoning before a child is 
poisoned, instead of waiting until the damage has already been done, 
but still worried about funding. Typical of these comments was that of 
a middle sized city with an active lead-hazard control program. Calling 
the rule (and Title X) an ``unfunded mandate,'' the commenter cited the 
staff costs associated with the rule's monitoring expectations, calling 
them unrealistic: ``If additional funds were provided for hard and soft 
rehabilitation as well as staff costs, this [rule] would be a good 
policy initiative that we could fully support and implement. However, 
without additional funds, * * * it presents a major problem for cities 
trying to address an overall need for affordable housing.''
    A frequent suggestion was that the rule would cause ``redundant and 
unnecessary'' lead-based paint work to be performed. The focus, these 
commenters argued, should be on reducing and controlling lead hazards 
in units occupied by small children or children who had already been 
lead poisoned.
    A major housing industry organization asserted that the proposal 
contains unnecessary impediments to the performance of paint repair 
work and interim control tasks by employees of owners and managers, or 
by the owners themselves, and urged the Department to eliminate these 
wherever feasible.
    One commenter, a municipal health department lead poisoning 
prevention program, predicted that the proposed rule's changes would 
``seem daunting'' to community-based agencies at first. The commenter 
generally agreed with the rule's approach and predicted that compliance 
costs would be ``minimal.'' The commenter said, however, that 
``government support and leadership to ensure that training, 
inspection/risk assessment services, and dust wipe resources are 
available and sometimes subsidized could prove to be instrumental in 
effective implementation.''
    In response to these comments, HUD does not believe that the 
childhood lead poisoning problem has been ``overblown,'' in light of 
the results of the National Health and Nutrition Evaluation Survey 
(described in Section II.A of this preamble, above) showing that 
approximately 900,000 children still have blood lead levels equal to or 
greater than 10 g/dL, the CDC level of concern. HUD also 
disagrees that the rule should impose requirements only on units 
housing young children. HUD believes that it is not practical in most 
housing programs to expect managers to know when children are or are 
not residing in particular units, especially in light of the 
significant resident turnover rates and inconsistencies in program 
administration among comparable units receiving comparable Federal 
assistance. Title X holds that it is far better to identify and correct 
lead-based paint hazards before a child is poisoned. Such prevention is 
especially important, because some effects of lead poisoning appear to 
be irreversible. The one exception to this policy is in the tenant-
based rental assistance programs, in which income certification 
requirements facilitate the determination of childhood occupancy and 
for which there is legislative history indicating Congressional concern 
that lead-based paint requirements could deter landlords from program 
participation.
    With regard to the cost of the rehabilitation requirements, it is 
important to note that the requirements of the rule are limited for 
housing receiving up to and including $5,000 per unit in rehabilitation 
assistance. Also, the option to perform standard treatments instead of 
a risk assessment and interim controls may reduce costs in certain 
situations. (See further discussion below in Section III.E.10 of this 
preamble.) HUD intends to work closely with local housing and community 
development agencies to further develop ways to efficiently meld lead-
based paint hazard reduction with rehabilitation.
    With regard to the public housing program, HUD does not believe 
that long-term annual cost increases will be significant, although 
there will be one-time risk assessment and interim control costs in the 
short term for some housing agencies. HUD encourages public housing 
agencies to schedule completion of abatement of lead-based paint in 
order to put this issue behind them.
    3. TUse of Task Force Recommendations. Numerous commenters called 
upon HUD to assure that the rule maintain consistency with the 1995 
report of the Task Force on Lead-Based Paint Hazard Reduction and 
Financing (Task Force), which was a Federal advisory committee 
appointed by the Secretary of HUD pursuant to section 1015 of Title X.
    Two recommendations of particular interest are the standards or 
procedures referred to as ``essential maintenance practices'' and 
``standard treatments.'' These procedures were directed toward rental 
housing. Essential maintenance practices are the steps the recommended 
steps that a landlord should take to reduce the risk of childhood lead 
poisoning in pre-1978 dwelling units and associated common areas. 
Standard treatments are more aggressive measures to assure that 
possible lead-based paint hazards are controlled in older housing. 
These procedures were not incorporated by name in the proposed rule, 
although many of their elements or concepts were included.
    In the final rule, HUD is requiring that all rental housing which 
has a continuing financial or regulatory involvement with HUD must be 
maintained in a manner similar to that recommended in the Task Force's 
essential maintenance practices. Also, the Department has adopted the 
concept of standard treatments, as set forth in the Task Force report, 
as an option to the basic requirement of a risk assessment and interim 
controls. This option is set forth in Sec. 35.120(a). Clearance testing 
is required after standard treatments as well as interim controls.
    Another Task Force recommendation mentioned favorably by some 
commenters is the ``lead hazard control plan,'' which is a plan to be 
developed by a property owner that lays out when and where certain 
hazard control measures will be conducted within a residential 
property. The plan allows an owner to prioritize the work and undertake 
the most important tasks or dwelling units first, followed by lower 
priority work later, as for example at apartment turnover. The proposed 
rule did provide for a hazard reduction plan for multifamily properties 
receiving more than $5,000 per unit in HUD project-based assistance.
    Although the lead hazard control plan was intended to provide 
property owners with flexibility in scheduling lead-hazard control 
work, many commenters perceived the plan requirement as ``red tape'' of 
limited value and questioned whether HUD would have the staff resources 
and expertise to review and approve such plans on a timely basis. HUD 
shares these concerns and, in the interests of regulatory streamlining, 
has decided to

[[Page 50156]]

delete the plan requirement. The Department continues to believe that 
it would be a useful document for property managers, especially those 
with responsibility for large multifamily developments, and encourages 
owners to develop such plans. The American Society for Testing and 
Materials (ASTM, West Conshohocken, PA 19428-2959) has developed a 
Standard Guide for Evaluation, Management, and Control of Lead Hazards 
in Facilities, and is developing an accompanying user guidebook. These 
materials can provide the basis for developing a lead hazard control 
plan. They are particularly appropriate for owners of multifamily 
dwellings.
    4. De Minimis Exceptions. The proposed rule included de minimis 
levels of paint deterioration, consistent with the HUD Guidelines, 
below which no action would be required. These de minimis levels were 
defined as not more than 10 square feet of deteriorated paint on an 
exterior wall; not more than 2 square feet on an interior component 
with a large surface area including, but not limited to, interior 
walls, ceilings, floors and doors; or not more than 10 percent of the 
total surface area on an interior or exterior component with a small 
surface area including, but not limited to, window sills, baseboards 
and trim.
    Commenters objected to the de minimis levels on four grounds: (1) 
That the de minimis exception is arbitrary and not supported by 
science; (2) that the levels are too large, potentially allowing a 
total of over ten square feet of defective paint per room (counting 
four walls plus a ceiling plus small components); (3) that some owners 
or inspectors may use the de minimis exception as an excuse for 
overlooking hazardous conditions; and (4) that it is likely to shift 
the attention of workers from the importance of practicing lead hazard 
control and maintaining painted surfaces in a lead-safe manner to 
measuring the size of defective paint surfaces in order to document 
that surfaces fall above or below the de minimis level.
    HUD acknowledges the merit of these comments, and after careful 
consideration has decided to eliminate the de minimis exception for 
deteriorated paint from the final rule. All deteriorated lead-based 
paint (either known or presumed to be lead-based paint) must be 
addressed. This will simplify the rule's implementation considerably. 
HUD did retain, however, a de minimis exemption for safe work practices 
and clearance, which is consistent with the EPA provision at 40 CFR 
745.227(e) that allows dry scraping during abatement on surfaces 
totaling no more than 2 square feet per room or 20 square feet on 
exterior surfaces. This de minimis exemption is separate from the 
safety-related exception allowing dry scraping in conjunction with the 
use of heat guns or within 1 foot of electrical outlets; that is, the 
area covered by the safety-based exception is not part of the area 
covered by the safe work practices de minimis exemption).
    5. Distinction Between HUD Programs and Those of Other Federal 
Agencies. Several commenters asserted that the rule distinguishes 
between HUD-assisted housing and that assisted by other Federal 
agencies without any statutory basis and without providing any 
justification. The Department's response is that, although the 
Secretary is given authority to develop regulations for other agencies 
(with respect to project-based assistance and Federally-owned 
property), HUD cannot and should not make lead-based paint policy 
decisions for other agencies beyond what is set forth in Title X. HUD 
does not have the knowledge of other agencies' housing programs that is 
necessary to draft detailed lead-based paint regulations for all other 
Federal agencies, and achieving consensus among all agencies on such 
regulations is unlikely. The sections concerning HUD project-based 
assistance and HUD-owned property, therefore, should remain separate 
from the sections provided for other agencies. Other Federal agencies 
can be expected to develop their own regulations or guidance, using 
HUD's regulations as a starting point.
    6. Response to Children with Lead Poisoning. The Department's 
primary focus in this rule is on prevention of childhood lead 
poisoning, not on case management of children who have already been 
poisoned. Title X specifically calls for the identification and 
correction of hazards in all housing. Nevertheless, HUD feels special 
requirements are needed for lead-poisoned children who have already 
been poisoned by lead-based paint hazards. HUD cannot ignore the 
possible connection between a child's blood lead level and the 
condition of the dwelling unit where the child lives, particularly in 
view of research on the relation of dust-lead to blood-lead levels (see 
Section III.E.15.b of the preamble, below). Therefore, in housing where 
the Federal Government maintains a continuing financial or ownership 
relationship, requirements were included in the proposed rule to 
evaluate and reduce lead-based paint hazards when a child with an 
elevated blood lead level (EBL) is identified. Such requirements have 
existed in current HUD regulations for many years. In the final rule, 
as in the proposed rule, they are included in the subparts pertaining 
to project-based rental assistance, disposition of HUD-owned and 
mortgagee-in-possession multifamily housing, public housing, and 
tenant-based rental assistance.
    Commenters addressing EBL-related requirements raised several 
different concerns: The measurement standards that trigger 
environmental intervention, the terminology used to refer to such a 
level, information exchange requirements between housing authorities 
and health departments, hazard control requirements for units occupied 
by young children with an EBL condition, reoccupancy requirements for 
dwelling units that were previously occupied by an EBL child but have 
not undergone evaluation or hazard reduction, relocation requirements, 
and the potential for discrimination by landlords against families with 
young children generally and EBL children in particular.
    In the proposed rule, HUD defined ``elevated blood lead level (EBL) 
(requiring the evaluation of lead hazards)'' as meaning ``an excessive 
absorption of lead that is a confirmed concentration of lead in whole 
blood of 20 g/dL (micrograms of lead per deciliter of whole 
blood) for a single venous test or of 15-19 g/dL in two 
consecutive venous tests taken 3 to 4 months apart.'' One commenter 
argued that HUD should not use a standard other than 10 g/dL, 
which is the basic CDC level of concern, because it is ``illogical to 
take no action when we know a child is poisoned * * * but instead to 
wait until the child is more poisoned,'' and because defining an EBL at 
a level higher than that known to cause adverse effects will create 
potential liability for public housing authorities and assisted owners.
    HUD has consulted again with CDC and has concluded, as it did prior 
to issuance of the proposed rule, that CDC did not and does not intend 
to recommend a full home inspection or assessment in response to blood 
lead levels below 15 g/dL. CDC advises that a blood lead level 
of 10-14 g/dL should trigger monitoring, certain parental 
actions, and perhaps community-wide education, but not hazard control 
in an individual child's home. CDC recommends follow-up blood lead 
testing of such children in about 3 months, the provision of 
information to parents on lead hazards, nutrition and housekeeping if 
appropriate, and the taking of an environmental history to try to 
identify

[[Page 50157]]

an obvious source of lead exposure (CDC 1997).
    EPA noted that it is confusing to define the term ``elevated blood 
lead level'' or ``EBL'' differently than normal usage. The agency 
pointed out that CDC, in their 1997 screening guidelines, uses the term 
to refer 10 g/dL or greater and that most public health 
agencies and others in the field of lead poisoning prevention do the 
same. HUD agrees that this is potentially confusing and has therefore 
substituted in the final rule the term ``environmental intervention 
blood lead level'' to replace ``elevated blood lead level'' or ``EBL'' 
when the latter terms refer to the blood lead level requiring 
evaluation and hazard reduction of the child's home.
    One State public health department urged HUD to modify the rule's 
standards for determining when environmental intervention is needed. 
Requiring tests showing two blood lead levels of 15-19 micrograms per 
deciliter in consecutive tests three to four months apart is 
``problematic,'' the commenter said, because many children do not get 
follow-up tests at the required three-four month interval, but rather 
more frequently--or less. Two tests showing levels of 15 or higher, 
whether or not consecutive, and whether or not at a fixed time 
interval, should be adequate to identify the child, and it is important 
that the rule not define the test intervals too strictly. It is not in 
the best interests of the child to recognize test results that come in 
only at precise intervals, the commenter said. A child may have two 
tests of 15-19 g/dL, but because of seasonal variations in 
lead exposure, the high-level results may not be consecutive. At least 
two commenters recommended that this standard should be consistent with 
CDC guidance.
    HUD agrees. In the final rule, the Department has defined 
environmental intervention blood lead level to conform to the new 
guidelines by CDC issued in 1997 (CDC 1997b). The revised definition is 
``a confirmed concentration of lead in whole blood equal to or greater 
than 20 g/dL (micrograms of lead per deciliter) for a single 
test or of 15-19 g/dL in two tests taken at least 3 months 
apart.'' This revision removes the word, ``consecutive,'' and allows 
for nonconsecutive readings that are more than 3 months apart. The 
final rule has also removed the requirement that blood lead levels be 
determined only by venous blood specimens. This decision is best left 
to the child's health care provider, and may be affected by 
technological advances. HUD expects housing agencies, grantees, 
property owners, and other parties to which this rule applies to rely 
on medical health care providers where judgment is required in 
interpreting this definition.
    Another issue is how best to make housing agencies aware of when 
there is a child with an environmental intervention blood lead level 
living in a dwelling unit under tenant-based rental assistance or under 
another program to which the requirements of subpart M of this rule 
apply. The proposed rule required that, to the extent practicable, the 
housing agency or other administering agency would attempt to obtain 
annually from the State or local health department the names and 
addresses of children less than age 6 identified with environmental 
intervention blood lead levels. The housing agency was then required to 
match this information with the names and addresses of families 
receiving Federal assistance. If a match occurred, the agency was to 
require a risk assessment and interim controls in the child's home. 
These requirements are similar to those currently in HUD regulations 
pertaining to tenant-based rental assistance. They were issued in 
response to the United States General Accounting Office report entitled 
``Children in Section 8 Tenant-Based Housing are not Adequately 
Protected'' (GAO/RCED-94-137, May 13, 1994). The intent of this 
requirement is to ensure that families with young children that receive 
tenant-based rental assistance are obtaining housing free of lead-based 
paint hazards. At the same time, the CDC is urging local public health 
departments to provide environmental intervention blood lead level-
related information to housing agencies.
    A few commenters indicated that they had encountered difficulty in 
securing the cooperation of health authorities in making these records 
available because of the authorities' concerns about the privacy of 
medical information. While these access problems can be overcome, one 
commenter said, by securing a release signed by the child's parent or 
guardian, there are other concerns besides the question of invasion of 
privacy. If the agency administering the tenant-based assistance 
program has information concerning the environmental intervention blood 
lead level status of a family's children and the information is 
disclosed to potential landlords, the information ``becomes a barrier 
for the family in its housing search,'' because some landlords may 
illegally refuse to rent to the family.
    Several other commenters expressed concern about the potential for 
housing discrimination against families with children in general, and 
those with children with identified environmental intervention blood 
lead levels in particular. These comments ranged from suggestions to 
penalize the landlords involved to indications that, in the absence of 
funding assistance, it was unfair to ``penalize (owners) for 
participating in the Section 8 (Voucher and Certificate) Program in a 
way not required of owners in the private market.'' (Emphasis in 
original.) In response, HUD believes that the environmental 
intervention blood lead level requirements in this rule are not in fact 
fundamentally different than those covering private-sector owners who 
do not receive subsidies. Local ordinances often permit health or 
housing departments to order lead hazard control work in any home where 
an environmental intervention blood lead level child is identified. For 
an explanation of the antidiscrimination provisions of the Fair Housing 
Act, see Section IV.D.7 of this preamble.
    The Department has concluded that it is very important that local 
housing agencies know when there is a child with an environmental 
intervention blood lead level residing in an assisted unit and that 
owners comply with requirements designed to make the units free of 
lead-based paint hazards. It is well known that, while local health 
departments are able to identify poisoned children, they often do not 
have the resources to correct the cause.
    HUD is making, therefore, the following changes to the requirements 
pertaining to exchange of information on environmental intervention 
blood lead level conditions:
    (1) The housing agency or other local agency administering tenant-
based rental assistance must attempt at least quarterly (instead of 
annually as in the proposed rule) to obtain from the State or local 
public health department, or the Indian Health Service as applicable, 
the names and/or addresses of children of less than 6 years of age with 
environmental intervention blood lead levels. This change is being made 
to assure that poisoned children will receive help on a more timely 
basis. The Department encourages health departments and housing 
agencies to voluntarily enter into agreements to exchange information 
more frequently, e.g., monthly, especially in jurisdictions in which 
childhood lead poisoning is a frequent occurrence in housing occupied 
by families receiving tenant-based rental assistance.
    (2) Also on a quarterly basis, the housing agency or other local 
agency administering the tenant-based rental assistance must provide 
health departments with addresses of assisted units (as well as attempt 
to obtain

[[Page 50158]]

addresses of environmental intervention blood lead level children from 
the health department), except that such a report to the health 
department is not required if the health department states that it does 
not wish to receive it.
    (3) The address match may be done by either the housing or the 
health agency. HUD's intent is to encourage workable cooperative 
arrangements between the two types of agencies for the purpose of 
matching environmental intervention blood lead level and housing 
assistance information on a timely basis.
    With regard to the evaluation and hazard reduction that must be 
done if a child with an environmental intervention blood lead level is 
found to be residing in a HUD-assisted or HUD-owned unit, the final 
rule sets one uniform requirement for all programs: risk assessment and 
interim controls, followed by ongoing lead-based paint maintenance. One 
commenter complained that the proposed rule failed to require anything 
beyond interim controls--a standard, the commenter said, that is ``too 
low and ineffective in the face of a poisoned child.'' Current 
information shows that interim controls are as effective as abatement 
methods in the short term and will continue to provide adequate 
protection if continuing maintenance standards are met (National Center 
1998). In the final rule, ongoing lead-based paint maintenance is 
required in all HUD housing programs for which there is also a 
requirement that interim controls be conducted in response to a case of 
a child with an environmental intervention blood lead level. To ensure 
that these requirements are not avoided, the rule states that the 
requirements apply regardless of whether the child with the 
environmental intervention blood lead level is or is not still living 
in the assisted unit. Furthermore, it is HUD's intent that the 
requirements apply to the unit even if no child of less than six years 
of age resides in the unit, because the requirements were triggered 
when a child was in residence. Also, if a public health department 
performs the evaluation of the dwelling unit or, after the hazard 
reduction work is performed, certifies the unit to be lead safe, it is 
not necessary for the housing agency or other designated party to 
perform those functions. Finally, in the case of housing to which 
subpart M (tenant-based rental assistance) applies, if the hazard 
reduction is not performed, the unit does not meet Housing Quality 
Standards.
    Some local housing agencies have asked for guidance on what their 
response should be to information on a child's blood lead level if the 
information is brought to the agency by a party other than a medical 
health care provider. In response, the Department is including a 
provision requiring verification of such data with the public health 
department or other medical health care provider. If it is verified 
that a child has an environmental intervention blood lead level, the 
agency, owner, or HUD (as the case may be) must complete a risk 
assessment and conduct interim controls of identified hazards.
    7. Fair Housing Requirements. Several commenters expressed concern 
about the potential for housing discrimination against families with 
children in general, and those with children with environmental 
intervention blood lead levels in particular. Therefore HUD is 
providing the following discussion of the application of the Fair 
Housing Act and other laws pertaining to persons with disabilities to 
lead-based paint issues.
    The Fair Housing Act prohibits discrimination in housing based on 
race, color, national origin, religion, sex, disability, and familial 
status. Familial status, for purposes of the Fair Housing Act, includes 
children under 18 (regardless of age or number), pregnant women, and 
people seeking custody of children under 18. Only providers of housing 
that meets the specific definition of housing for older persons may 
refuse to rent to families with children. Children with elevated blood 
lead levels and persons with Multiple Chemical Sensitivity (MCS) may 
fall under the definition of persons with disabilities. Among the 
actions prohibited under the Fair Housing Act are any action which 
differentiates on a prohibited basis for any of the following: Refusal 
to rent or sell housing; refusal to negotiate for housing; making a 
dwelling unavailable; denying a dwelling; providing different housing 
services or facilities; falsely stating that housing is not available 
for inspection, sale, or rental; refusing to make a mortgage loan; 
imposing different terms or conditions on a loan; setting different 
terms, conditions, or privileges for sale or rental of a dwelling; 
segregating a portion of the population into special buildings or 
areas; maintaining different lease conditions; and advertising or 
making any statement that indicates a limitation or preference based on 
any prohibited basis of the Fair Housing Act.
    Based on this law, it is illegal for owners of housing to 
discriminate against families with children, or EBL children, even if 
the unit is known to have lead-based paint hazards. The prohibitions of 
the Fair Housing Act would further make it inadvisable to ask questions 
about EBL status, pregnancy, or intentions to become pregnant. 
Restrictive covenants against children, including EBL children, are 
also illegal. Therefore, no renter or buyer may be asked to sign a 
statement that a child, or EBL child, is not expected to reside in the 
dwelling. Owners of rental housing may eliminate lead-based paint 
hazards in a percentage of units and hold those units available for 
families with children and affirmatively market them to appropriate 
families. An owner may also tell families of the danger of moving into 
a unit which has not been treated and recommend an alternative 
comparable unit. In no case may an owner refuse to allow a family to 
occupy the unit, however, because of the presence of a child or require 
that a family move because lead is found. Laws against discrimination 
will be enforced by HUD.
    Title II of the Americans With Disabilities Act (ADA) establishes a 
clear and comprehensive prohibition against discrimination on the basis 
of disability in State and local government services. Section 504 of 
the Rehabilitation Act of 1973 provides for nondiscrimination against 
persons with disabilities in Federally-assisted housing. Both laws 
define a person with a disability as any person who has a physical or 
mental impairment that substantially limits one or more major life 
activities, has a record of an impairment, or is regarded by others as 
having such an impairment. Under both laws, EBL children and persons 
with MCS may fall under the definition of persons with disabilities. 
Among the actions prohibited under Title II of the ADA and Section 504 
are those which discriminate, on the basis of disabilities, in 
Federally-assisted programs, services, and activities. Such actions 
include a refusal to (1) allow participation in a program, service, or 
activity; (2) provide programs, services and activities in an 
integrated setting, unless separate or different measures are necessary 
to ensure equal opportunity; (3) eliminate unnecessary eligibility 
standards or rules that deny an equal opportunity to enjoy a program, 
service or activity unless ``necessary'' for the provisions of the 
program, service or activity; (4) make reasonable modifications in 
policies, practices, and procedures that deny equal access, unless a 
fundamental alteration in the program would result; (5) make reasonable 
accommodations, unless an undue burden or fundamental alteration would 
result, e.g., furnish auxiliary aids and services when necessary to 
ensure effective

[[Page 50159]]

communication (e.g., interpreters, or accessible formats, such as 
braille, large print, or audio cassette) and/or provide notice to and 
relocate residents with MCS prior to removing lead-based paint hazards 
with harmful toxic chemicals; and (6) operate programs so that, when 
viewed in their entirety, they are readily accessible to, and usable 
by, individuals with disabilities. A covered housing provider must not 
impose special charges to pay for measures necessary to ensure 
nondiscriminatory treatments, such as relocation expenses when 
necessary to remove lead-based paint hazards, or making modifications 
to provide accessibility. Finally, it is unlawful under these laws for 
a covered housing provider to make inquiries into the nature and 
severity of a person's disability, although that information may be 
volunteered when a reasonable accommodation is requested.
    8. Qualification Requirements. The proposed rule required that most 
lead-based paint inspections, risk assessments and abatements be 
conducted by individuals or firms that are certified in accordance with 
national EPA requirements for lead-based paint activities developed 
pursuant to sections 402 and 404 of the Toxic Substances Control Act 
(TSCA). EPA published a final rule on August 29, 1996 that takes full 
effect on August 29, 1999. After that time, all lead-based paint 
inspections, risk assessments, and abatements nationwide will have to 
be conducted in accordance with the EPA work practices standards at 40 
CFR 745.227 or State or tribal standards that have been authorized by 
EPA under procedures set forth at 40 CFR part 745, subpart Q. 
Recognizing that there might be temporary limitations on the supply of 
certified personnel, HUD proposed to provide for the possibility of 
temporary qualifications.
    The proposed rule included two apparent exceptions to this general 
certification requirement. Public and Indian housing agencies (``HAs'') 
conducting dust and soil testing for public and Indian housing were not 
required to be certified in accordance with the EPA requirements. The 
Department pointed out that HAs were required to complete lead-based 
paint inspections by December 6, 1994, and that many HAs have already 
taken the initiative to conduct risk assessments in housing projects. 
Further, HUD did not extend the certification requirement to dust 
testing conducted by HAs for the Section 8 tenant-based rental 
assistance program. The Department, however, did require that a risk 
assessment conducted in response to an identified environmental 
intervention blood lead level child be conducted by a certified risk 
assessor.
    Certification requirements in the proposed rule were somewhat 
different for interim controls than for abatement. Recognizing that the 
EPA regulations do not cover interim controls, HUD proposed that all 
workers performing interim controls be trained in accordance with the 
basic Occupational Safety and Health Administration (OSHA) hazard 
communication standard at 29 CFR 1926.59 and supervised by a certified 
abatement supervisor.
    Comments on the qualifications requirements dealt with five issues: 
(1) Whether housing agency personnel had to be certified to perform 
dust and soil testing; (2) the availability of qualified personnel and 
firms, and temporary qualifications in case of an inadequate supply of 
certified personnel; (3) qualification requirements for interim 
controls; (4) the independence of the clearance examiner; and (5) the 
authority of a trained technician to perform clearance examinations.
    EPA objected to the exemption of public and Indian housing 
authorities from certification requirements related to dust and soil 
testing. EPA did not accept HUD's rationale for suggesting that 
noncertified personnel could perform lead-based-paint-related functions 
for public and Indian housing agencies, other than under emergency 
circumstances. On the other hand, another commenter said he was 
``pleased'' that dust testing would be permitted in that program by 
non-licensed Housing Quality Standards (HQS) inspectors trained in 
lead-hazard evaluation. The commenter recommended that ``non-licensed, 
but trained'' rehabilitation inspectors similarly be allowed to 
accomplish clearance testing in the funded rehabilitation programs. A 
public interest commenter remarked that ``HUD should begin the process 
of educating these workers at once, so that a qualified work force is 
available when the requirements go into effect.''
    A local funded agency indicated that its State law would not allow 
Section 8 housing inspectors to perform inspections requiring dust 
wipes, and the agency went on to say that licensure for inspectors 
costs $250, renewable every two years, and that risk assessment 
training ran to $300 per person. Costs to housing authorities, and to 
landlords, for importing licensed personnel to perform inspections and 
assessments were regarded as prohibitive by the commenter.
    The Department has decided to require in the final rule that dust 
and soil testing in public housing be conducted by personnel certified 
in accordance with an EPA-authorized State or tribal program or EPA 
regulations, a provision that is also in accordance with many State 
laws. Also, dust testing in housing assisted through tenant-based 
rental assistance will not be required at the evaluation stage, so the 
qualification issue for that function is no longer relevant; but 
clearance of the dwelling unit (or, in some cases, only the worksite) 
will be required if paint stabilization, interim controls or abatement 
is required. See the discussion below of the authority of trained 
technicians to perform clearance examinations.
    There was much concern among commenters about the availability of a 
qualified (and affordable) work force of persons certified (or 
otherwise adequately trained) to perform the necessary work called for 
in the rule. Rural housing suppliers claimed such trained people would 
have to be imported from far away--and at premium rates. There were 
also calls for reciprocity for State-approved training programs until 
the EPA-approved programs are implemented.
    HUD expects that most States will have EPA authorized certification 
programs by the effective date of this rule. Those that do not will be 
covered by the EPA certification program directly. After August 29, 
1999, inspections, risk assessments and abatements must be done in 
accordance with the standards of EPA or an authorized State or tribal 
program. While this fact does not in itself eliminate the possibility 
that there will be shortages in the supply of certified personnel for 
inspections, risk assessments and abatements in some parts of the 
country, it increases the likelihood that the certification mechanisms 
will be in place in most of the nation when this rule becomes 
effective. At the time of this writing, 37 States have already enacted 
lead-based paint hazard control laws. In the final rule, the Department 
has made one change to the qualifications requirements that may result 
in increased availability of persons qualified to perform clearances. 
See the discussion below of the authority of technicians to perform 
clearance examinations.
    The Department intends to monitor the availability of qualified 
personnel. One source of information is likely to be the ``Lead 
Listing,'' a nationwide listing of inspectors and risk assessors 
developed by the National Lead Assessment and Abatement Council (NLAC) 
with HUD assistance. The

[[Page 50160]]

``Lead Listing'' can be accessed by calling 1-888-LEADLIST (this is a 
toll-free number) or can be found on the Internet at 
www.leadlisting.org. HUD notes the constructive suggestion by one 
commenter that such monitoring should be done in cooperation with the 
States, as is being done with the development and maintenance of the 
Lead Listing. HUD would also expect to coordinate with EPA in the 
development of such information and in determining whether any further 
Federal response is needed.
    One national organization questioned the requirement that workers 
performing ``interim control treatments'' be supervised by a certified 
abatement supervisor. Arguing that the definition of ``interim 
controls'' was too broad, the commenter recommended breaking the 
definition down so that ``painting, maintenance and similar routine 
tasks'' could be performed without a certified supervisor. Such a 
change, the commenter said, would be in accord with Congress' intent 
that certification requirements not be imposed on interim control 
workers, and the change would decrease routine property maintenance 
costs. A similar complaint was directed at the requirement that the 
appropriate worksite preparation be determined by a certified risk 
assessor, abatement supervisor or planner/designer. The commenter 
feared that the rule could be construed as requiring professional 
worksite design for ``mere paint repair work and for such basic interim 
control tasks as rehanging of doors. . .'' and asked that the rule be 
clarified to eliminate the worksite preparation requirement for interim 
control work.
    Noting that the Task Force had recommended a one-day training 
course for maintenance supervisors, one commenter advocated HUD/EPA 
cooperation in developing a short course geared for maintenance workers 
that is inexpensive, requires one day or less to complete, and is 
frequently offered. Other commenters endorsed the short training course 
idea. The idea was a popular one, not only among cost-conscious funded 
agencies, but with public interest organizations as well.
    A national environmental group disagreed with the emphasis on 
limiting the occasions for use of expert personnel. All hazard control 
activities, including paint repairs, should be conducted by trained 
personnel, the organization declared. A landlord who has permitted 
paint to become deteriorated to the point that it presents a lead 
hazard is ``unlikely to have the skills or inclination to perform a 
paint repair in a manner that does not increase exposure,'' the group 
said.
    HUD agrees that persons performing interim controls should be 
prepared to protect themselves and the occupants from exposure to lead, 
should know how to protect interior and exterior environments from 
contamination and how to clean up the worksite, and should understand 
the importance of an independent clearance examination. In the final 
rule, HUD is requiring that persons performing interim controls, 
including paint stabilization, be trained in lead hazards in accordance 
with OSHA regulations at 29 CFR 1926.59 and either be supervised by a 
certified abatement supervisor (the requirement of the proposed rule) 
or successfully complete one of the following training courses: (1) An 
accredited abatement supervisor course; (2) an accredited lead-based 
paint worker course; (3) the Lead-Based Paint Maintenance Training 
Program, developed by the National Environmental Training Association 
for EPA and HUD; (4) the Remodeler's and Renovator's Lead-Based Paint 
Training Program, prepared by HUD and the National Association of the 
Remodeling Industry (NARI); or (5) another course approved for this 
purpose by HUD after consultation with EPA. HUD intends that any person 
performing hands-on, interim controls work on the worksite in 
compliance with the final rule must have satisfied one of the optional 
requirements. With regard to the OSHA training requirements, OSHA 
regulations at 29 CFR 1926.62 require that workers exposed to airborne 
lead below the OSHA action level of 30 g/cu.m. be trained 
under the hazard communication construction standard, which is at 29 
CFR 1926.59. If airborne lead is at or above the action level, OSHA 
requires a more complete training program. Workers performing interim 
controls of lead-based paint hazards are not expected to be exposed to 
airborne lead above 30 g/cu.m. Therefore the final rule states 
that the required training must be in accordance with 29 CFR 1926.59.
    A national housing organization questioned the language barring a 
clearance examiner from being ``affiliated with, paid, employed or 
otherwise compensated by the entity performing the hazard reduction and 
cleanup.'' The provision assumes, the commenter said, that the hazard 
reduction work has been performed by an independent contractor. In the 
case of paint stabilization and interim controls, this assumption will 
often be incorrect. Where only paint stabilization and simple interim 
controls are required, it was argued, the rule should permit owners and 
their employees to perform the work themselves. The ``independence'' 
provision would make this impossible. The commenter recommended, first, 
eliminating the clearance testing requirement for hazard reduction work 
involving only ``basic interim controls.'' A second solution would be 
to remove from the quoted provision the words ``paid'' and ``or 
otherwise compensated'', so that clearance testing by employees and 
affiliates of a contractor would be prohibited, but the owner could 
retain an independent, certified risk assessor to perform the clearance 
testing work.
    HUD agrees that a property owner or manager should be able to 
employ both hazard reduction and clearance personnel. The final rule 
requires that clearance examinations and hazard reduction activities be 
conducted by entities that are independent of each other unless the 
owner or designated party uses qualified in-house employees to conduct 
clearance. The final rule, however, does not permit the same individual 
employee to conduct both hazard reduction and clearance, due to the 
clear conflict of interest this would pose.
    As mentioned, HUD has made a change in the final rule that may 
increase the availability of persons qualified to perform clearance 
examinations, and thus may reduce the cost. The proposed rule required 
that clearances be performed by either a certified risk assessor or a 
certified lead-based paint inspector. One group of commenters urged 
that a technician with less training than a risk assessor or inspector 
be authorized to perform clearances in situations where interim 
controls of lead-based paint hazards or ongoing lead-based paint 
maintenance has been conducted. These commenters argued that the skills 
needed for the clearance function are modest compared to those required 
for lead-based paint inspections or risk assessments and, further, that 
the speed and affordability of clearance is of critical importance to 
the practical workability of the system of requirements to be set forth 
in the rule.
    In the conference report on the VA-HUD-Independent Agencies 
Appropriations Act for FY 1999, the Congress urged EPA ``to develop a 
relevant one-day sampling technician training course and to encourage 
the recognition of this discipline.'' As of this writing, it is HUD's 
understanding that EPA plans to develop such a course and that an 
important purpose of the course will be to train people to perform 
clearance examinations. Therefore, anticipating that trained clearance 
technicians may be available, HUD is

[[Page 50161]]

providing in the final rule two ways they could perform clearances 
following interim controls or maintenance: first, as a technician who 
is uncertified or unlicensed and whose work must be approved in writing 
by a certified risk assessor or lead-based paint inspector; or, second, 
as a technician who is certified or licensed to perform clearance 
examinations without the approval of a risk assessor or inspector. 
Uncertified or unlicensed clearance technicians must have successfully 
completed a training course on clearance examinations (or similar 
title) that is developed or accepted by EPA or by a State or tribal 
program authorized by EPA pursuant to 40 CFR part 745, subpart Q (the 
EPA regulations implementing TSCA section 404). The course must be 
given by a training provider accredited by a State, Indian tribe or the 
EPA for training in lead-based paint inspection or risk assessment. HUD 
assumes that certified or licensed clearance technicians would also be 
required to complete such training. Certification or licensing of 
clearance technicians must be by a State or Indian tribe or EPA.
    With regard to the training course taken by an unlicensed or 
uncertified clearance technician, there are several possible 
arrangements that are acceptable to HUD under this rule. The course can 
be developed by EPA, or it can be developed by a State or Indian tribe 
with a program authorized by EPA pursuant to TSCA section 404. A State 
or Indian tribe may adopt or accept a course prepared by another EPA 
authorized State or tribe. While the training provider from whom the 
course is taken must be accredited by EPA or an EPA-authorized State or 
tribal program, it is not necessary from HUD's point of view that the 
technician be trained within the State or Indian nation where the 
clearance is being performed or by a training provider accredited by 
that State or tribe. The ultimate responsibility for quality control 
rests with the certified lead-based paint inspector or risk assessor 
who approves the work of the technician and signs the clearance report.
    Under this policy, an unlicensed or uncertified but properly 
trained clearance technician could perform a clearance examination on 
site, prepare the report, and send the report (by e-mail, fax, or other 
method) to a certified risk assessor or certified lead-based paint 
inspector, who may be located in another area. The risk assessor or 
inspector could review and sign the report and forward it to the 
client, taking responsibility for the quality of the clearance 
examination and report. The Department assumes that the risk assessor 
or lead-based paint inspector would require the technician to work as 
an apprentice until the inspector or assessor is satisfied that the 
technician's work is of satisfactory quality, but HUD leaves that 
process and decision to the risk assessor or inspector. In the rule, 
HUD places no restrictions on the scope or scale of clearance 
examinations that could be performed in this manner.
    HUD is setting a limitation, however, on the authority of a 
certified or licensed technician who is taking full responsibility for 
the clearance examination without written approval of a risk assessor 
or lead-based paint inspector. In this case, the authority extends, 
under the HUD rule, only to clearances of single family units or 
individual units and associated common areas in a multi-unit property. 
The authority does not extend to clearance examinations of multifamily 
properties, or parts thereof, in which the clearance examiner engages 
in random sampling of dwelling units and common areas. In the opinion 
of the Department, it is unlikely that a one-day course will be 
adequate to teach all the techniques, procedures and judgments required 
to conduct random sampling of dwelling units and common areas in large 
multifamily clearance examinations. Under the HUD final rule, however, 
clearance technicians may perform multifamily clearances involving 
random sampling with the written approval of a certified risk assessor 
or lead-based paint inspector. Furthermore, certified clearance 
technicians may, without written approval of an inspector or risk 
assessor, conduct clearance examinations of any number of individual 
dwelling units and associated common areas in multifamily properties, 
provided results from the units and areas in which clearance 
examinations are conducted are not used to represent units and areas 
for which no examination or testing has been conducted.
    Under this policy on technicians, people can prepare themselves to 
perform clearances with less investment in training and equipment than 
is required to become a risk assessor or lead-based paint inspector. 
HUD is hopeful, therefore, that the policy will contribute to an 
increased availability of persons authorized to perform clearances and 
a reduction in the cost of clearances. The policy retains the reliance 
on a certification or licensing process. Certification by a State or 
other entity provides a way to take action against fraudulent or 
otherwise unprofessional clearance examiners.
    HUD recognizes that performance of clearance examinations by a 
certified or uncertified technician may not be permissible under some 
State or tribal regulations, even with the written approval of a risk 
assessor or lead-based paint inspector. Where that is the case, the 
State or tribal regulation would apply. HUD also recognizes that EPA 
may, in the future, establish certification procedures for clearance 
technicians (or a similar discipline) and, at that time, may make it 
illegal nationwide for uncertified technicians to perform the on-site 
work of a clearance examination. However, HUD thinks it will be 
efficient to have trained technicians, certified or not, working with 
higher level certified personnel and encourages other regulatory 
entities to permit it.
    9. Paint Stabilization vs. Paint Repair. The proposed rule 
established a procedure called ``paint repair,'' which was a repainting 
of a deteriorated paint surface using safe work practices to minimize 
the generation of dust, protect occupants and the environment, and 
leave the site clean. The procedure was widely used in the rule; it was 
required in the subparts or sections applicable to single family 
mortgage insurance, disposition of HUD-owned single family property 
(without sufficient appropriations), multifamily insured property, 
disposition of HUD-owned and mortgagee-in-possession property (without 
sufficient appropriations), residential property receiving an average 
of less than $5,000 per unit in Federal rehabilitation assistance, CPD 
non-rehabilitation, and tenant-based rental assistance.
    Many commenters questioned this procedure. The most common position 
was a caution against leaving anything in the rule that implied that 
``mere overpainting'' of surfaces, without addressing the substrate, 
could ever be considered an appropriate course of action. A typical 
comment was the following: ``HUD's final regulations should require 
that whenever deteriorated paint is repaired, the cause of the 
deterioration must be corrected and the substrate stabilized.'' Another 
commenter argued that paint repair, by itself, was ``inconsistent with 
the HUD Guidelines.''
    HUD agrees that it can be ineffective to try to put paint on a 
damaged substrate, such as crumbling plaster. Old lead-based paint on 
such a surface could shortly become deteriorated again after 
repainting. On the other hand, HUD is aware that substrate 
stabilization requires case-by-case judgment in the field as to when 
substrate repair is necessary and what extent and method of repair is

[[Page 50162]]

appropriate. There is reason to be concerned that cautious 
administrators may sometimes insist on repairs that are overly 
expensive or that others will not correct the underlying problem.
    After careful consideration, the Department has eliminated ``paint 
repair'' throughout the final rule and instead is requiring ``paint 
stabilization,'' which calls for the repair of any physical defect in 
the substrate of a painted surface or component that is causing 
deterioration of the surface or component. It should be noted that the 
purpose of this requirement is not complete renovation but merely to 
try to assure that the integrity of the repainting will survive for a 
reasonable period of time. Also, if a substrate is being damaged 
because of a water leak, repair of the leak would be necessary in any 
case to meet housing or building codes. In situations in which a costly 
repair may be necessary to stabilize a damaged substrate, designated 
parties should always determine through paint testing whether or not 
the surface has lead-based paint. Frequently the paint will not be 
leaded at the Federal standard of 1.0 mg/sq.cm., so paint stabilization 
will not be required under this rule. If the deteriorated paint is 
lead-based paint, the designated party may consider alternative methods 
for controlling the hazard, such as enclosure of the surface.

E. Subparts

    1. Subpart A--Disclosure of Known Lead-Based Paint Hazards Upon 
Sale or Lease of Residential Property. This subpart contains the 
requirements for disclosure of known lead-based paint and/or lead-based 
paint hazards in the sale or lease of target housing. This joint HUD/
EPA regulation was promulgated as required by section 1018 of Title X 
(42 U.S.C. 4852d), and was originally published at 24 CFR part 35, 
subpart H. Subpart H has been transferred unchanged to this subpart A, 
so the regulations implementing sections 1012 and 1013 of Title X can 
be published in consecutive subparts B, C, D, F through M, and R.
    2. Subpart B--General Lead-Based Paint Requirements and Definitions 
For All Programs. This subpart sets out general requirements for 
federally owned residential property and housing receiving Federal 
assistance.
    a. Definitions. In the proposed rule, HUD used the definitions, 
where possible, that were included in section 1004 of Title X (42 
U.S.C. 4851b). In cases where the statute either failed to define 
terms, or where the definition was inadequate for the purpose of a 
regulation, the Department drew definitions from the HUD Guidelines, 
existing HUD or EPA regulations, and from definitions compiled and set 
forth by the American Society for Testing and Materials (ASTM), West 
Conshohocken, PA 19428-2959, in a document entitled ``Standard 
Terminology Relating to Abatement of Hazards from Lead-Based Paint in 
Buildings and Related Structures'' (ASTM Standard E 1605-94).
    In most cases public comments on definitions concerned the scope of 
the definition rather than the meaning, and the commenters wanted the 
scope to be either expanded or limited. In response to comments, the 
definition of residential property was revised in the final rule to 
more precisely define its scope to ``a dwelling unit, common areas, 
building exterior surfaces, and any surrounding land, including 
outbuildings, fences, and play equipment affixed to the land belonging 
to an owner and available for use by residents but not including land 
used for agricultural, commercial, industrial, or other non-residential 
purposes, and not including paint on the pavement of parking lots, 
garages, or roadways'' rather than the proposed rule language of ``a 
dwelling unit, common areas and any surrounding land belonging to an 
owner and accessible to occupants.'' Paint striping on parking lots, 
garages, and roadways will not be covered by this rule. Common area was 
expanded in scope to mean ``a portion of a residential property that is 
available for use by occupants of more than one dwelling unit'' rather 
than ``generally accessible to occupants of all dwelling units''. 
Throughout the final rule, HUD has avoided using the term 
``accessible'' if its meaning might be confused with that in 
regulations implementing the Americans With Disabilities Act. Hazard 
reduction was expanded to include standard treatments. Paint testing 
was added, replacing the proposed-rule's limited paint inspection for 
reasons explained below in the discussion of options in Section 
III.E.2.c.(4) of this preamble.
    The publication of the EPA regulation at 40 CFR part 745, subparts 
L and Q, significantly affected the definitions section as it did the 
remainder of this regulation. The definitions of several technical 
terms have been deleted from the final rule, since they were associated 
with the evaluation and hazard reduction activities now covered by the 
EPA regulation.
    In the definition of abatement, the statement that ``permanent 
means at least 20 years effective life'' was relocated to a separate 
definition of ``permanent.'' This was done to conform the definition of 
abatement more closely to that in Title X. Also the terms ``lead-
contaminated dust'' and ``lead-contaminated soil'' were changed to 
``dust-lead hazard'' and ``soil-lead hazard'' respectively to conform 
with terminology being used by EPA in their proposed regulation 
implementing TSCA section 403, which was published on June 3, 1998 (63 
FR 30301-55). The latter change of terminology has been made throughout 
this final rule; the definitions of lead-contaminated dust and lead-
contaminated soil have been replaced with definitions of dust-lead 
hazard and soil-lead hazard respectively, and the same substitution of 
terms has been made in the definition of lead-based paint hazard. In 
the proposed section 403 rule, EPA has adopted the position that 
``lead-contaminated dust'' and ``lead-contaminated soil'' are general 
terms referring to dust and soil with varying levels of lead 
concentration but not necessarily to levels that are considered 
hazardous. In the definition of ``soil-lead hazard'' in this final 
rule, HUD is including a de minimis area of bare soil outside of play 
areas that is not considered a hazard. To be considered a soil-lead 
hazard according to this definition, spots or areas of bare soil 
outside of play areas must total more than 9 square feet per 
residential property and have a lead concentration of an average of 
equal to or exceeding 2000 micrograms per gram.
    The term accessible (chewable) surface has been replaced with 
chewable surface. This was done for two reasons: (1) It avoids 
confusion with the use of the word ``accessible'' in regulations and 
guidance implementing the Americans With Disabilities Act (ADA), which 
is an important law affecting residential real estate; and (2) it 
substitutes an easily understood term, ``chewable,'' for a somewhat 
ambiguous term, ``accessible,'' that might imply ``reachable'' as well 
as ``chewable.'' The substitution of ``chewable'' for ``accessible'' 
was also made in the definition of ``lead-based paint hazard.'' In 
response to many requests for further clarity as to what constitutes a 
chewable surface, HUD has added to the definition of ``chewable 
surface'' a statement that, ``Hard metal substrates and other materials 
that cannot be dented by the bite of a young child are not considered 
chewable.'' In most homes, the only chewable surfaces are likely to be 
protruding, interior wooden window sills.
    A new term, designated party, has been added to simplify and reduce 
the length of the rule. It means ``a Federal agency, grantee, 
subrecipient,

[[Page 50163]]

participating jurisdiction, housing agency, CILP recipient, tribe, 
tribally designated housing entity (TDHE), sponsor, or property owner 
responsible for complying with applicable requirements.'' The 
definition of the term dwelling unit has been changed to conform to the 
Title X definition of ``residential dwelling.'' The substantive meaning 
does not change. As in the proposed rule, HUD prefers to use ``dwelling 
unit'' instead of ``residential dwelling'' because the former term is 
more commonly used and understood and is more distinct from a related 
term used in the rule, ``residential property.'' As explained in 
Section III.D.6 of this preamble above, in the discussion of policy on 
responding to children with elevated blood lead levels, the defined 
term elevated blood lead level (EBL) has been changed to environmental 
intervention blood lead level, and the definition has been changed 
slightly to conform to CDC guidance. The term emergency repair has been 
removed from the definitions section, because it is only used once in 
the rule, in the section later in subpart B setting forth the exception 
for emergency actions; and its meaning there is clear.
    The definition of evaluation has been changed. Title X defines this 
important term as meaning a risk assessment, inspection, or combination 
of the two. The proposed rule added ``visual evaluation'' and made the 
determination of the presence of deteriorated paint one of the purposes 
of evaluation as well as the determination of the presence of lead-
based paint hazards and lead-based paint. In the final rule, HUD has 
removed ``visual evaluation'' from the definition of ``evaluation,'' 
has removed the related purpose of identifying deteriorated paint, and 
has added ``lead hazard screen'' and ``paint testing'' as evaluation 
methods. ``Visual evaluation'' was removed because it is quite 
different from the activities mentioned in the statutory definition of 
``evaluation.'' It does not involve any testing of paint, dust or soil 
for lead concentration, nor does it determine the presence or absence 
of lead-based paint hazards or lead-based paint. Therefore it does not 
produce ``evaluation'' results that, in the opinion of the Department, 
have to be reported to occupants. For additional clarity, HUD has 
changed the term visual evaluation to visual assessment. A ``lead 
hazard screen'' and ``paint testing,'' however, do involve testing and 
produce reportable results. Lead hazard screen means a limited risk 
assessment that involves paint testing, dust testing and soil testing. 
If a property passes a screen using the criteria in subpart R, it is 
not necessary to conduct a full risk assessment. This term was not 
defined or used in the proposed rule, but HUD now believes that the 
option to conduct such a screen should be available, because it is 
potentially less costly than and often as effective as a full risk 
assessment, especially in housing built after 1959 that is in good 
condition. The term paint testing replaces the proposed-rule term 
limited paint inspection in response to a comment from EPA that it 
would be helpful to differentiate more clearly between a full 
``inspection,'' as specified in the EPA rule implementing TSCA section 
402, and a more limited procedure to determine the presence of lead-
based paint only on deteriorated paint surfaces or surfaces to be 
disturbed by rehabilitation.
    Title X exempts housing for the elderly and persons with 
disabilities unless a child of less than 6 years of age resides or is 
expected to reside in such housing. Believing that expected to reside 
requires interpretation, the Department is introducing in this final 
rule a definition stating that ``expected to reside'' means there is 
actual knowledge that a child will reside and that if a resident woman 
is known to be pregnant there is actual knowledge that a child will 
reside in the dwelling unit. (As mentioned, it is not advisable to 
inquire as to pregnancy status in most real estate transactions. See 
Section III.D.7 of this preamble, above, on fair housing requirements.)
    Firm commitment, a term used only in subpart G, Multifamily 
Mortgage Insurance, is defined for purposes of clarity to mean a valid 
commitment issued by HUD or the Federal Housing Commissioner setting 
forth the terms and conditions upon which a mortgage will be insured or 
guaranteed. In this rule, grantee is a term used only in subparts J, 
Rehabilitation, and K, Acquisition, Leasing, Support Services or 
Operation. It is defined to mean any State or local government, Indian 
tribe, IHBG recipient, or insular area that has been designated by HUD 
to administer Federal housing assistance under a program covered by 
subparts J and K, except the HOME program or the Flexible Subsidy-
Capital Improvement Loan Program (CILP). The defined term participating 
jurisdiction is used in the HOME program, and CILP recipient is the 
defined term used to mean an owner of a multifamily property which is 
undergoing rehabilitation funded by the CILP program. The definition of 
hard costs of rehabilitation has been changed, in response to comments 
requesting greater clarity, to add the following statement: ``Hard 
costs do not include administrative costs (e.g., overhead for 
administering a rehabilitation program, processing fees, etc.).''
    The definition of HEPA vacuum has been made more precise. The 
proposed rule definition was ``a vacuum with an attached high-
efficiency particulate air (HEPA) filter capable of removing particles 
of 0.3 microns or larger from air at 99.97 percent efficiency.'' The 
final definition requires that a HEPA filter be integral to the vacuum 
cleaner and gives an actual-performance, rather than potential-
performance, definition of HEPA filter. Both definitions use 
performance measures of filter collection efficiency, with values 
common in the hazardous dust standard setting, e.g., EPA in asbestos 
rules (40 CFR 763.83, 763.121), OSHA in a lead rule (29 CFR 
1926.62(f)(3)), and DOE in a HEPA filter specification (DOE-STD-3020-
97). Current technology for assessing personal respirator filter 
performance is used by NIOSH in its respirator rule (42 CFR 84.181), by 
OSHA in citing the NIOSH rule (63 FR 1297, January 8, 1998), and by DOE 
in the specification cited above.
    The technological precision reflected in the regulations just cited 
is not seen in the HEPA vacuum industry, however, so the rule can not 
specify the procedure for testing conformance. Performance and 
operational criteria of the manufacturer(s) of the filter and the 
vacuum unit as a whole are to be used for filter efficiency and 
particle size criteria. HUD is promoting research and development of 
standards on collection efficiency measurement applicable to HEPA 
vacuums. For example, it supports research at the University of 
Cincinnati (Cincinnati, OH 45267-0056) on vacuum cleaner dust 
penetration. HUD staff participates on the American Society for Testing 
and Materials' (West Conshohocken, PA 19428-2959) Task Force F11.23.01 
on vacuum cleaner system filtration efficiency working on a vacuum dust 
penetration measurement standard. HUD is aware of the American Society 
of Mechanical Engineers' (New York, NY 10017-2392) Air and Gas Cleaning 
Group work on protocols to assess HEPA filter application performance. 
DOE cites the testing procedures of ASME Code AG-1, Section FC, HEPA 
Filters. Because the standards above are not yet directly applicable to 
fully assessing HEPA vacuums, HUD will monitor and support research and 
standards development, and revise its definition as needed. HUD 
welcomes data on research and measurement criteria for HEPA vacuums and 
HEPA filters.
    The proposed-rule definition of HUD-owned property has been changed 
to

[[Page 50164]]

conform to the definition of federally owned property that is in Title 
X. The definition in the final rule is ``residential property owned or 
managed by HUD, or for which HUD is a trustee or conservator.'' The 
Department acknowledges, however, that although this definition 
conforms word for word to the Title X definition, it does not represent 
common usage. For practical and programmatic purposes, HUD considers 
property it owns to be only that to which it has title; it 
distinguishes between owned and managed property. However, this 
distinction does not affect the application of the rule. The rule 
covers both HUD-owned and HUD-managed property. Subpart I of the rule 
applies to multifamily property that is HUD-owned or for which HUD is 
``mortgagee-in-possession.'' A property for which HUD is mortgagee-in-
possession is one for which title has not passed to HUD but which is 
being managed by HUD prior to foreclosure.
    The definition of Indian tribe (tribe) has been changed to conform 
to the Native American Housing Assistance and Self Determination Act of 
1996 (Pub. L. 104-330). The proposed rule term ``paint inspection'' has 
been changed to lead-based paint inspection in the final rule to avoid 
confusion with inspections of paint that are conducted for purposes 
other than determining the presence of lead-based paint. The definition 
of project-based assistance is changed for purposes of clarity to 
indicate that the term applies to rental assistance and that it does 
not include Federal rehabilitation assistance or assistance to public 
housing developments. In the proposed rule, the definition of risk 
assessment was identical to that in Title X. In the final rule, the 
specificity of this definition has been reduced to minimize regulatory 
rigidity and to avoid potential conflict with EPA regulatory 
definitions and work practices standards.
    Finally, the definition of lead-based paint has been edited 
somewhat. Although no substantive change has been made, one 
modification is worthy of note. The definition in the proposed rule, 
after the phrase ``equal to or exceeding 1.0 milligram per square 
centimeter or 0.5 percent by weight or 5,000 parts per million,'' 
included the phrase ``or another level that may be established by the 
Secretary.'' The latter phrase has been removed from the definition in 
the final rule to avoid possible confusion that might result from the 
absence of such a phrase in other recent regulations promulgated 
pursuant to Title X. Its inclusion in the proposed rule was based on 
the statutory provision found in section 302(c) of the Lead-Based Paint 
Poisoning Prevention Act, which states that ``the Secretary (of HUD) 
shall periodically review and reduce the level below 1.0 milligram per 
centimeter squared or 0.5 percent by weight to the extent that reliable 
technology makes feasible the detection of a lower level and medical 
evidence supports the imposition of a lower level.'' While HUD has no 
plans to propose a lower level, the statutory responsibility remains 
whether it is mentioned in the rule or not.
    b. Exemptions. A detailed discussion of the exemptions provided in 
subpart B is found in Section III.A.5 of this preamble, above.
    c. Options. In addition to exemptions, the final rule provides 
several options that HUD believes will provide owners and other parties 
with flexibility and thus greater efficiency in carrying out evaluation 
and hazard reduction activities.
    (1) Standard treatments. Where interim controls are required, the 
designated party has the option to presume that lead-based paint or 
lead-based paint hazards or both are present throughout the property, 
omit the risk assessment or lead-based paint inspection or both, and 
conduct standard treatments in accordance with requirements set forth 
in subpart R of part 35 in lieu of interim controls. Standard 
treatments are: (a) Stabilization of all deteriorated paint, interior 
and exterior; (b) the provision of smooth and cleanable horizontal hard 
surfaces; (c) the correction of dust-generating conditions (i.e., 
conditions causing rubbing, binding, or crushing of surfaces known or 
presumed to be coated with lead-based paint); and (d) treatment of bare 
soil to control known or presumed soil-lead hazards. Safe work 
practices and clearance are required. Individuals performing standard 
treatments must be trained in how to control lead-based paint hazards. 
The training requirement is identical to that for interim controls. 
This option, which was not provided in the proposed rule, derives from 
a recommendation by the Task Force on Lead-Based Paint Hazard Reduction 
and Financing. The Task Force recommended standard treatments as an 
option to the risk assessment/interim control approach because standard 
treatments ``offer the advantage of devoting resources directly to 
hazard control--and their cost may be minimal for units in good 
condition.'' Also, the Task Force noted that standard treatments can be 
carried out by ``in-house maintenance staff who have sufficient 
knowledge of lead-based paint hazards.'' On the other hand, because no 
risk assessment is done, standard treatments may be implemented in some 
units that have no lead-based paint hazards, and resources may be 
expended unnecessarily. HUD is including the standard treatments option 
in the final rule in response to public comments that certified risk 
assessors may be in short supply in some parts of the nation, that the 
cost of risk assessments may be excessive, and because the decision to 
test is best left to the discretion of the designated party.
    (2) Presumption in the case of abatement. Where abatement is 
required, the designated party may presume that lead-based paint or 
lead-based paint hazards or both are present throughout the property, 
omit the evaluation, and conduct abatement on all painted surfaces. 
This option, however, is not available in public housing, because a 
lead-based paint inspection has been a statutory requirement for all 
target housing that is public housing since 1994.
    (3) Lead hazard screen. Where a risk assessment is required by this 
rule, the designated party may choose to first conduct a lead hazard 
screen to determine whether a full risk assessment is necessary. The 
lead hazard screen is a limited risk assessment activity that involves 
dust sampling and soil sampling, and may include paint testing on 
deteriorated paint surfaces (if present). The screen must be conducted 
in accordance with State or tribal work practices standards under an 
EPA-authorized program or in accordance with EPA standards at 40 CFR 
part 745, subpart L. Because EPA regulations do not include specific 
standards for dust lead in lead hazard screens, HUD, in this final 
rule, is setting such standards at approximately one-half those of a 
full risk assessment (see Section III.E.15.a and b of this preamble, 
below). The standards for soil are the same for a lead hazard screen as 
for a risk assessment. If State or tribal standards for a lead hazard 
screen are more stringent than those in this rule, the State or tribal 
standards prevail. If they are less stringent, the standards of this 
rule apply. The standard for lead-based paint is the same for the 
screen as for a risk assessment or lead-based paint inspection. If a 
dust sample is found to be positive, i.e. have a level of lead equal to 
or greater than the dust-lead standards for the lead hazard screen, or 
there is lead-based paint on a deteriorated paint surface, a full risk 
assessment must be performed. If the lead hazard screen is negative, 
the risk assessment is not required. The lead

[[Page 50165]]

hazard screen option was not provided in the proposed rule because the 
cost differential between a full risk assessment and a screen was 
perceived to be small (essentially the cost of soil testing and a 
somewhat more elaborate report) and because HUD felt that a certified 
risk assessor would be empowered by EPA and/or State or tribal 
regulations to use a screen anyway. HUD is including explicit mention 
of the screen in the final rule to assure that all parties will be 
aware that the option is available to try to achieve cost savings, 
which are most likely in post-1959 properties in good condition.
    (4) Paint testing. Under the proposed rule the requirements of 
certain subparts of the rule would not apply for a specific 
deteriorated paint surface to be disturbed if a ``limited paint 
inspection'' indicated the absence of lead-based paint on that surface. 
EPA objected to the proposed rule's definition of ``limited paint 
inspection,'' noting that EPA work practices standards for inspections 
(40 CFR 745.227) do not include or envision a ``limited'' paint 
inspection or any other inspection activity not including a 
``comprehensive inventory of all of the lead-painted surfaces in a 
residential dwelling.'' Accordingly, a ``limited'' paint inspection 
would be a violation of EPA work practice standards. If a similar 
procedure is retained, EPA said, the use of the word ``inspection'' in 
the definition should be dropped, and HUD should identify the 
circumstances under which this ``limited'' activity would be conducted, 
set out procedures and requirements for conducting it, and state the 
qualifications required for individuals who would conduct the activity. 
Another comment from a legal services organization recommended 
elimination from the regulation of the ``limited paint inspection'' 
option.
    In the final rule, the term ``limited paint inspection'' has been 
replaced with the term ``paint testing.'' Where paint stabilization or 
interim controls of a deteriorated paint surface is required by this 
rule, paint testing of non-intact paint surfaces may be conducted to 
determine the presence of lead-based paint instead of conducting a 
complete lead-based paint inspection or presuming the presence of lead-
based paint. Paint testing may also be employed to determine if intact 
paint on a surface to be disturbed during rehabilitation contains lead-
based paint. If the paint testing indicates the absence of lead-based 
paint, paint stabilization, interim controls or abatement of that 
surface is not required. Paint testing must be performed by a certified 
lead-based paint inspector or risk assessor.
    d. Notice of Evaluation and Hazard Reduction Activities. Title X 
requires the provision of notice to occupants describing the nature and 
scope of any risk assessment, lead-based paint inspection, or hazard 
reduction activities undertaken. In general, the Department believes 
that detailed matters of notice, format and distribution are best 
determined by the property owner or other recipient of Federal housing 
assistance, under the general framework provided in this rule. In the 
final rule as well as the proposed rule, the Department has interpreted 
this provision to require the following: (1) Within 15 calendar days of 
receiving a risk assessment, lead-based paint inspection, or paint 
testing report, a written notice must be provided to occupants 
containing a summary of the nature, scope and results of the evaluation 
and a contact for more information or access to the actual reports; and 
(2) within 15 calendar days of completing hazard reduction activities, 
a notice must be provided to occupants of actual hazard reduction 
activities conducted. The notice must contain a summary of the nature, 
scope and results of the hazard reduction activities, a contact for 
more information, and information on any identified remaining lead-
based paint on a surface-by-surface basis. This notice shall be 
updated, based on any reevaluation of the dwelling unit or if 
additional lead-based paint hazard reduction work is conducted. The 
notices must be posted in centrally located common areas or distributed 
to each occupied dwelling unit, must be of a size and type that are 
easily read by occupants, and must be made available in a format 
accessible to persons with disabilities, to the extent practicable. The 
proposed rule required that, if possible, the notice must be provided 
in the occupant's primary language. The final rule, in response to 
comments that some apartment projects may have more than a dozen 
primary languages represented, deleted the ``if possible'' phrase and 
added the option to provide the notice in the language of the 
occupant's contract or lease.
    The statute does not specifically require that separate notices be 
provided to occupants after an evaluation has been conducted and again 
after hazard reduction activities have been undertaken. In the 
Department's view, however, withholding information of the results of 
an evaluation until after hazard reduction activities have been 
performed poses a potential risk to occupants. The sooner occupants are 
provided with this information, the better they can protect their 
children and themselves.
    The Department requested comment on the content, format and 
distribution of the notices. One commenter suggested that the notice be 
provided both when evaluation has taken place, and then again before 
hazard reduction activities are undertaken. HUD has not adopted this 
suggestion, because it believes it should not regulate tenant-landlord 
relations this closely. This comment was made to insure that occupants 
can prepare their units for hazard reduction activities. Actually, all 
hazard reduction activities require occupant protection by the owner 
(or contractor), who would coordinate these actions with the occupant 
even if no separate notice is provided.
    Some commenters recommended that the notice be given to each 
occupant. HUD continues to believe that it is reasonable to expect that 
occupants can read the notice if it is posted in central locations. In 
the final rule, this decision is left to the discretion of the owner or 
other designated party, except that the notice must be distributed to 
the dwelling unit of a head of a tenant household if the owner knows 
that the head of household is a person with a disability that would 
make a posted notice inaccessible to that person.
    One commenter asked for more time to provide occupants with the 
notice of evaluation results. The commenter felt that 15 days is not 
enough time for management to digest the evaluation and prepare the 
documentation needed to explain the results to residents. In response, 
HUD has added to the final rule a strong recommendation, but not a 
requirement, that paint inspectors and risk assessors provide summary 
statements of inspections and risk assessments suitable for posting or 
distribution. This provision is located in Sec. 35.1320, in subpart R. 
For further discussion and sample formats, see Section III.E.15.c, of 
this preamble below, and appendices B through E of the rule.
    One commenter noted that the proposed rule did not include notice 
requirements for HUD-owned properties. In the final rule, HUD has 
included notice requirements for HUD-owned properties that are similar 
to those for other housing programs, even though such a requirement is 
not called for by statute.
    e. Lead Hazard Information Pamphlet. Title X requires that the lead 
hazard information pamphlet developed by EPA, CPSC and HUD pursuant to 
TSCA section 406(a) be provided to purchasers

[[Page 50166]]

and tenants of housing affected by section 1012 of the statute. 
Provision of the pamphlet is not required for housing affected only by 
section 1013 of Title X. In response to comments, the Department has 
made three types of changes to the pamphlet-provision requirement that 
was in the proposed rule. The first change is largely editorial and is 
intended to increase policy consistency across programs and to reduce 
the length of the rule. HUD has provided a statement of the general 
requirement in subpart B, Sec. 35.130, and referenced that section in 
each of the program-specific subparts where pamphlet provision is 
required. Section 35.130 states that the designated party shall provide 
the pamphlet to each occupied dwelling unit. Acknowledgment of receipt 
is not required, but it is recommended. The program-specific subparts 
of the rule state more explicitly who shall provide the pamphlet--e.g., 
the public housing agency, the owner, the sponsor, the grantee, or the 
participating jurisdiction.
    Second, HUD has made substantive changes to further minimize 
duplicative requirements for the provision of the pamphlet. Section 
1012 is one of three different sections of Title X that call for 
provision of the pamphlet. The other two are section 1018 (which 
requires provision of the pamphlet and disclosure of known lead-based 
paint hazards prior to sale or lease), and TSCA section 406(b) (which 
requires persons performing renovation for compensation to provide the 
pamphlet before beginning the renovation). The proposed rule recognized 
potential overlap with the HUD-EPA rule implementing section 1018 (the 
disclosure rule) but did not discuss EPA's then-proposed rule 
implementing section 406(b) (the renovation rule).
    For most rental housing, HUD's proposed rule required that the 
pamphlet be provided only if the tenant had taken residence before the 
effective date of the disclosure rule (which was either September or 
December 1996, depending on the number of housing units owned by the 
landlord). This policy did not address the case of a tenant who took 
residence before the effective date of the disclosure rule but received 
the pamphlet at the time of renewal or revision of the lease. The 
proposed-rule policy also did not address the case of a landlord who, 
acting as a renovator's designated representative, provided the 
pamphlet to a tenant before renovation in compliance with the 
renovation rule. Therefore, to allow landlords the flexibility to 
minimize duplication of pamphlet provision, the final rule, in 
Sec. 35.130, states simply that it is not necessary to provide the 
pamphlet if it can be demonstrated that it has already been provided in 
accordance with the disclosure rule or the section 406(b) renovation 
rule. Prior provision of the pamphlet is best demonstrated by retaining 
an acknowledgement by the occupant of receipt of the pamphlet. Such 
acknowledgment is required by the disclosure rule and, with some 
exceptions, by the renovation rule.
    In the proposed rule, the two subparts pertaining, respectively, to 
rehabilitation assistance and to CPD non-rehabilitation programs 
required provision of the pamphlet to the tenant, owner occupant or 
purchaser regardless of whether the pamphlet had been provided under 
the disclosure rule. In the final rule, this has been changed to 
conform with the general policy in Sec. 35.130. HUD expects that most 
local and State rehabilitation programs will be administered so that 
provision of the pamphlet by the renovator in compliance with the 
renovation rule will also meet the requirements of this final rule.
    Third, some commenters requested that EPA-approved State 
equivalents to the pamphlet be specifically permitted. In the interest 
of streamlining and simplicity, the final rule includes such a 
provision.
    f. Use of Paint Containing Lead. The final rule continues the 
prohibition against use of new paint containing more than 0.06 percent 
by weight of lead in federally owned or assisted housing. This 
provision has been in HUD regulations since the late 1970's and is 
based on the 1977 regulation promulgated by the Consumer Product Safety 
Commission (16 CFR Part 1303).
    If a State or local jurisdiction banned the residential use of 
paint containing lead before 1978, the rule allows the Secretary to 
apply a date earlier than 1978 to activities covered by this rule in 
that jurisdiction.
    g. Prohibited Methods of Paint Removal. The final rule includes the 
same prohibited practices as in the proposed rule (open flame burning, 
machine sanding without HEPA exhaust control, abrasive blasting without 
HEPA local exhaust control, heat guns operating above 1100 degrees 
Fahrenheit, dry scraping or sanding except in certain situations), plus 
one addition: paint stripping using a hazardous volatile substance in a 
poorly ventilated space. OSHA says that adults exposed to methylene 
chloride ``are at increased risk of developing cancer, adverse effects 
on the heart, central nervous system and liver, and skin or eye 
irritation. Exposure may occur through inhalation, by absorption 
through the skin, or through contact with the skin.''(62 FR 1493, 
January 10, 1997).
    The Consumer Product Safety Commission/EPA consumer notice, What 
You Should Know About Using Paint Strippers (CPSC Document 4423, EPA 
document EPA 747-F-95-002), recommends to persons who ``use paint 
strippers frequently, (that) it is particularly important that 
you...Never use any paint stripper in a poorly ventilated area. If work 
must be done indoors under low ventilation conditions, consider having 
the work done professionally instead of attempting it yourself.'' This 
is of particular importance in lead-based paint removal work larger 
than the de minimis level (such as 2 sq. ft. per room). CPSC and EPA 
recommend that persons who strip paint ``cross-ventilate (the worksite) 
by opening all doors and windows (and m)ake sure there is fresh air 
movement throughout the room.'' This practice deviates from the 
worksite protection for larger lead-based paint stripping projects, 
which typically involves protecting the work area and occupants from 
dispersal of lead debris and dust by sealing off ventilation systems 
and/or erecting barriers between the work area and the rest of the 
residence to reduce ventilation (see the HUD Guidelines, chapter 8). 
The CPSC/EPA notice also recommends precautions for firesafety, eye 
protection, skin protection, and waste disposal for paint strippers.
    Some paint strippers are hazardous, and are addressed as such by 
regulatory agencies. HUD has considered the type of work in identifying 
the applicable definition to consider. The definition of ``hazardous 
substance'' used by the CPSC (see 16 CFR 1500.3), based on the Federal 
Hazardous Substances Act (15 U.S.C. 1261-74), applies to paint 
stripping work that does not involve employment, such as paint 
stripping by the owner of HUD-assisted housing who performs the work 
personally. The definition of ``hazardous chemical'' used by the 
Occupational Safety and Health Administration, and based on the 
Occupational Safety and Health Act (29 U.S.C. 655(a)), applies to paint 
stripping that does involve employment. OSHA's definition for the 
general industry at 29 CFR 1910.1200 currently applies to building 
maintenance, custodial, or construction work, because OSHA's hazard 
communication standard for the construction industry, at 29 CFR 
1926.59, is identical to that for general industry.
    Employers of paint removal workers are expected to know that OSHA

[[Page 50167]]

recently reduced its permissible exposure limit for methylene chloride 
in air from 500 to 25 parts per million (29 CFR 1910.1052 for general 
industry, and the identical 29 CFR 1926.1152 for construction, 62 FR 
1492-1619, January 10, 1997). Methylene chloride can not be detected by 
odor at the permissible exposure limit, and organic vapor cartridge 
negative pressure respirators are generally ineffective for personal 
protection against it. Alternative paint strippers may be safer but 
have their own safety and/or health concerns, as indicated in the CPSC/
EPA notice, so caution in the selection and use of any paint stripper 
is prudent. Paint stripping in a poorly ventilated space using a 
volatile substance that is hazardous should be done in accordance with 
CPSC regulations (16 CFR 1500.3), and/or OSHA's hazard communications 
standards (29 CFR 1010.1200 or 29 CFR 1926.59, which are currently 
identical), and with any substance-specific standards applicable to the 
work.
    h. Compliance With Other State, Tribal, and Local Laws. In response 
to comments urging deference to State, tribal and local laws and 
regulations, HUD has added a provision to the final rule that makes it 
clear that HUD may modify or waive requirements of subparts B, C, D, F 
through M, and R, if the Department determines that a State, tribal, or 
local law provides a comparable level of protection and that such a 
modification or waiver will promote efficiency.
    The final rule also indicates that this regulation is not intended 
to relieve program participants from compliance with State, tribal or 
local law.
    i. Minimum Requirements. The final rule retains the policy included 
in the proposed rule that the requirements of subparts B, C, D, F 
through M, and R, are intended to be minimum requirements. Nothing in 
this rulemaking is intended to preclude designated parties from 
conducting a more protective method than the one required. Thus, for 
example, if the requirement is interim controls, a designated party may 
choose to use an abatement method instead.
    Similarly, where more than one requirement covers a condition or 
activity, the most protective shall apply.
    j. Waivers. Also retained from the proposed rule is the authority 
of the Secretary of HUD to waive any provision of this rulemaking, 
subject to statutory limitations. This conforms to, and cites, 
Sec. 5.110, the general waiver section for HUD programs under title 24.
    k. Prior Evaluation or Hazard Reduction. Some commenters requested 
clarification as to the validity under HUD's rule of lead-based paint 
activities conducted prior to the effective date of the rule. In the 
final rule, conditions under which a prior evaluation or hazard 
reduction meets the requirements of the rule have been specified.
    Section 1013 of Title X gives the Secretary authority to waive the 
lead-based paint inspection and risk assessment requirement for 
federally owned housing built between 1960 and 1978 if a federally 
funded risk assessment by a certified contractor shows an absence of 
lead-based paint hazards. The Department believes case-by-case waivers 
to be inefficient and inappropriate and therefore has developed a 
broader policy on prior activities that covers all properties for which 
an acceptable risk assessment, lead-based paint inspection, abatement, 
or clearance has been performed. The Department believes that the 
conditions set forth in this section provide the necessary quality 
control measures for prior lead-based paint activities while avoiding 
unnecessary duplication.
    A lead-based paint inspection or a risk assessment conducted at a 
residential property or dwelling unit prior to the property or unit 
becoming subject to the requirements of subparts C, D, F through M, and 
R, need not be repeated if it was conducted in the following manner or 
under the following circumstances:
    (1) If the lead-based paint inspection or risk assessment was 
conducted prior to August 30, 1999 (the effective date of the EPA 
regulations at 40 CFR 745.227), results of the evaluation may be used 
if it was conducted in accordance with 40 CFR 745.227 or by an 
individual or firm otherwise certified under a State or Indian tribal 
lead-based paint inspector or risk assessor certification program, 
except that the risk assessment must be no more than 12 months old to 
be considered current; and furthermore a lead-based paint inspection of 
public or Indian housing meets the requirements of this rule if it was 
accepted by the housing agency in fulfillment of the lead-based paint 
inspection requirement of the public and Indian housing program prior 
to the effective date of this rule.
    (2) If the inspection or risk assessment was conducted after August 
29, 1999, the results of the evaluation may be used if it was conducted 
in accordance with 40 CFR part 745, subparts L and/or Q, except that 
the risk assessment must have been completed no more than 12 months 
prior to the date of reference.
    The provisions in subpart B regarding prior risk assessments do not 
apply in cases where a risk assessment is required in response to the 
identification of a child under 6 years of age with an environmental 
intervention blood lead level. In such cases the risk assessment must 
be conducted in the child's dwelling unit shortly after the child's 
blood was last sampled.
    Interim controls conducted prior to a property or unit becoming 
subject to the requirements of subparts B, C, D, F through M, and R, 
need not be repeated if such controls were conducted in accordance with 
a risk assessment that meets the requirements of this rule; however, 
ongoing lead-based paint maintenance and reevaluation must be conducted 
as required by this final rule.
    Abatements conducted before August 30, 1999 and before the property 
or unit becomes subject to the requirements of subparts B, C, D, F 
through M, and R, need not be repeated if conducted by an abatement 
supervisor approved by a State or Indian tribe to perform abatement of 
lead-based paint or lead-based paint hazards. It is not necessary that 
the State or tribal approval program had EPA authorization. Abatements 
conducted after August 29, 1999, must have been conducted by a lead-
based paint abatement supervisor certified by a State or Indian tribe 
with an EPA-authorized lead-based paint certification program or by EPA 
in accordance with 40 CFR 745.226. State law may impose different 
requirements. A lead-based paint abatement project meets the 
requirements of this rule if it was accepted by the housing agency in 
fulfillment of the abatement requirement of the public or Indian 
Housing program prior to the effective date of this rule.
    With regard to the policy on prior lead-based paint inspections in 
public and Indian housing, it should be explained that in the late 
1980's, pursuant to a statutory requirement, HUD began requiring public 
and Indian housing agencies to conduct lead-based paint inspections in 
all pre-1978 family developments. All inspections had to be completed 
by December 1994. Abatement of any lead-based paint was required at the 
time of modernization. HUD estimates that by 1998, virtually all of the 
pre-1978 family developments have been inspected, representing 
approximately 900,000 dwelling units. Also, HUD estimates that housing 
agencies have completely abated lead-based paint in over 200,000 units. 
The Department does not think it would be acceptable now to require 
that all lead-based paint inspections be redone. However, the rule does 
recommend that housing agencies conduct quality

[[Page 50168]]

assurance testing for all inspections that might be questionable.
    l. Enforcement. Every commenter who addressed the question of 
enforcement of the rule remarked that penalties for noncompliance 
needed to be spelled out in the rule. The Lead-Based Paint Poisoning 
Prevention Act does not provide any independent enforcement provisions. 
Remedies will vary based on which program's requirements have been 
violated. For example, a designated party that is not in compliance 
with this rule may be considered in default of the regulatory agreement 
or housing assistance payments contract with the Department, may be 
debarred from receiving assistance from the Department or denied future 
participation in HUD programs, may be forced to surrender grant funds 
or may be otherwise subject to civil money penalties or other 
sanctions. Recipients of assistance under the Community Development 
Block Grant program will find enforcement provisions at 24 CFR 570.910, 
570.911 and 570.913; those for other programs are found in other parts 
and sections of the CFR. HUD does not think it necessary to restate 
each program's sanctions in this lead-based paint rule but has included 
a general provision under Sec. 35.160 that states the consequences of 
noncompliance with this regulation. HUD intends to vigorously enforce 
all requirements of this regulation.
    m. Records. HUD has retained a record keeping requirement in this 
final rule for designated parties conducting lead-based paint 
activities. The Department strongly recommends that designated parties 
keep for the life of the property a copy of each notice to occupants of 
the results of evaluation and hazard reduction (including clearance) 
and each report from a certified individual or firm performing lead-
based paint inspections, risk assessments, abatement, or clearance. 
Such notices and reports document compliance in case of a legal or 
administrative question; and evaluation and hazard reduction reports 
provide information on where lead-based paint may remain on the 
property so it can be managed safely, or, if such reports document that 
there is no lead-based paint remaining on the property, they can be 
used to support exemption from the requirements of this rule and the 
disclosure rule. At a minimum, the Department requires that such 
documentation be retained for three years. Records applicable to a 
portion of a residential property for which ongoing maintenance and/or 
reevaluation activities are required shall be kept until at least three 
years after such activities are no longer required. This policy is 
designed to provide a basis for helping ensure that Federal funds have 
been expended properly.
    3. Subpart C--Disposition of Residential Property Owned by a 
Federal Agency Other than HUD. This subpart establishes minimum lead-
based paint requirements for residential property built before 1978 
that is owned and to be sold by a Federal agency other than HUD and is 
consequently subject to the requirements of section 1013 of Title X. 
The subpart basically restates the requirements set out in section 1013 
of Title X, with minimal elaboration. The Department believes that the 
details of how another Federal agency should carry out the requirements 
of section 1013 are best determined by the affected agency.
    The proposed rule required that for residential property built 
before 1960, the Federal agency shall conduct a lead-based paint 
inspection and a risk assessment, and shall abate all lead-based paint 
hazards. In the case of a purchaser who is not to be an owner occupant, 
the agency could make abatement a condition of sale with sufficient 
funds escrowed. For properties built after 1959 and before 1978, the 
proposed rule required that the agency conduct a risk assessment and a 
lead-based paint inspection. Under the disclosure rule implementing 
section 1018 of Title X, the agency would be required to provide the 
results of the risk assessment and inspection to the purchaser.
    The Department of the Navy commented that the requirement that both 
a risk assessment and a lead-based paint inspection be conducted 
appeared to exceed the statutory requirement. Section 1013 calls for 
``the inspection and abatement of lead-based paint hazards'' in pre-
1960 housing and ``an inspection for lead-based paint and lead-based 
paint hazards'' in housing built between 1960 and 1978. HUD is calling 
for both an inspection and a risk assessment because the statutorily 
defined term ``inspection'' refers to a procedure that identifies the 
location of lead-based paint, if any, on a property but does not 
identify the location of ``lead-based paint hazards,'' as that term is 
defined in the statute. Identification of lead-based paint hazards is 
the function of a risk assessment. Thus, because lead-based paint 
hazards must be identified to comply with section 1013, a risk 
assessment must be conducted as well as an inspection. HUD expects that 
the two evaluation procedures will be performed concurrently.
    The Air Force, Army and the General Services Administration (GSA) 
all asked for greater flexibility to permit negotiation with 
transferees regarding hazard control requirements ``built into the 
contract of sale.'' These agencies argued that, while the proposed rule 
allowed abatement to be made a condition of sale, it required the 
escrow of sufficient funds, and it may not be feasible for a bidder on 
large blocks of units to escrow large sums for long periods of time. It 
was pointed out that purchasers do not always know at the time of 
transfer what the reuse of a property, or a part thereof, will be. It 
was recommended that other conditions be permitted to be attached to 
the sale--for example, certification and indemnification requirements 
not requiring escrow deposits, and deed restrictions. GSA also 
complained that limiting an agency's authority to make abatement a 
condition of sale to when the purchaser is not an owner occupant could 
cause unnecessary complications in the bidding process. Bidders 
intending not to be owner occupants might discount their bids to 
account for the cost of the evaluation, while those intending to be 
owner occupants would not.
    HUD believes that allowing the Federal agency a choice of 
conducting the abatement itself or making it a condition of sale 
facilitates efficiency and timeliness in the disposition process. The 
Department finds the agencies' comments about making abatement a 
condition of sale in pre-1960 properties to be reasonable and has 
changed the relevant provision to allow that ``where abatement of lead-
based paint hazards is not completed before the closing of the sale, 
the Federal agency shall be responsible for assuring that the abatement 
is carried out by the purchaser before occupancy of the property as 
target housing'' (emphasis added) and in accordance with the 
requirements of either a State or tribal program authorized by EPA 
under subpart Q of 40 CFR part 745 or EPA's requirements at subpart L 
of 40 CFR part 745. This revised wording is intended to provide 
agencies more choice, while retaining their responsibility to assure 
compliance with the statute; and it eliminates the potential for 
confusion and complications in the bidding process by removing the 
provision that confined the authority to make abatement a condition of 
sale only to those sales in which the purchasers will not be owner 
occupants of the property. Further, it should be noted that it is HUD's 
interpretation that abatement

[[Page 50169]]

will not be required if the reuse is not to be target housing.
    With regard to disposal of military property, HUD recognizes that 
there are several statutory, regulatory and policy requirements 
pertaining to the cleanup, disposal and reuse of BRAC (base realignment 
and closure) properties and that agencies of the Department of Defense 
are using provisions in contracts for sale and deeds to assure that 
lead-based paint hazards in target housing built before 1960 will be 
abated prior to occupancy. Typical of such contract or deed provisions 
is the following: ``Purchaser agrees that purchaser will be responsible 
for the abatement of any lead-based paint hazards (as defined in Title 
X and implementing regulations) by a certified contractor in accordance 
with Title X and implementing regulations before the use and occupancy 
of such improvements as a residential dwelling (as defined in Title 
X).'' To document compliance with such a provision, HUD recommends that 
Federal agencies include as a contractual condition the requirement 
that the purchaser send a copy of the certified abatement report, 
including clearance, to the agency.
    The Department of the Army recommended that the rule be changed to 
allow the lead-based paint inspection and risk assessment, as well as 
the abatement, to be conducted following the sale of the property. HUD 
is of the opinion that evaluation must be conducted by the Government 
before the sale for two reasons: (1) Unless the evaluation is done 
prior to bidding, bidders will be unable to estimate the cost of 
abatement in pre-1960 properties and to consider that amount in 
calculating their bids; and (2) for properties built after 1959 and 
before 1978, the statute explicitly states that ``the results of such 
inspections shall be made available to prospective purchasers.''
    One advocacy organization argued that the regulations should do 
away with the artificial distinction they create between HUD-owned 
property and housing owned by some other Federal agency stating that 
``the Federal government must provide consistent leadership in ensuring 
that all housing it sells or * * * disposes of is free of lead 
hazards.'' HUD's rationale for distinguishing between HUD Programs and 
those of other Federal agencies is discussed under Section III.D.5 of 
this preamble, above.
    As mentioned above, in Section III.A.3 of this preamble, the 
statute states that the requirements of section 1013 do not apply ``in 
the absence of appropriations sufficient to cover the costs.'' 
Therefore this final rule provides in subpart B, at Sec. 35.115, that 
each Federal agency other than HUD must determine whether 
appropriations are sufficient.
    With regard to a sale of housing owned by Federal agencies other 
than HUD and in which more than one Federal agency is party to the 
sale, HUD leaves to the agencies involved the responsibility to 
determine which Federal agency is responsible for compliance with this 
subpart.
    4. Subpart D--Project-Based Assistance Provided by a Federal Agency 
Other Than HUD. This subpart sets out minimum requirements, consistent 
with section 1012, for Federal agencies other than HUD that have 
housing programs and provide more than $5,000 of project-based 
assistance. The subpart basically restates the minimum requirements set 
out in section 1012. Few comments were received on this subpart of the 
proposed rule and therefore, the requirements remain largely unchanged.
    HUD has modified the proposed-rule requirements for notification of 
occupants about the results of evaluation and hazard reduction. In the 
final rule, the notification requirements that apply to this subpart 
are basically the same as those that apply to HUD-assisted housing 
instead of the more general proposed version. The Department believes 
that this change will result in more uniform and complete notification 
practices among all federally owned and assisted housing, consistent 
with government-wide regulatory streamlining.
    In response to a question from the Department of Agriculture 
regarding how the ``more than $5,000'' figure is to be applied, HUD is 
indicating in the final rule that the requirements apply to housing 
that receives annually more than $5,000 per project.
    5. Subpart E reserved. This subpart is reserved for possible future 
rulemaking on lead-based paint poisoning prevention requirements in 
single family housing covered by an application for HUD mortgage 
insurance or guarantee. Existing requirements at 24 CFR part 200, 
subpart O, as revised by this final rule, shall continue to apply to 
housing covered by an application for single family mortgage insurance.
    6. Subpart F--HUD-Owned Single Family Property. This subpart sets 
out the requirements for HUD-owned single family property. In the 
proposed rule, two subparts addressed HUD-owned single family property; 
one subpart set out the requirements when sufficient appropriations 
were available, and another set out the requirements for such property 
in the absence of sufficient appropriations. In the case of sufficient 
appropriations, the requirements were identical to those of section 
1013 of Title X: for housing built before 1960, a risk assessment and 
lead-based paint inspection followed by abatement of lead-based paint 
hazards; for housing built between 1960 and 1978, a risk assessment and 
lead-based paint inspection, followed by disclosure as required under 
the disclosure law. In the case of insufficient appropriations, the 
requirements were a visual-assessment for deteriorated paint followed 
by paint repair and cleanup. The Department has removed the 
appropriations distinction, and set forth a single policy under subpart 
F, as explained in Section III.A.3 of this preamble, above.
    A childhood lead poisoning prevention advocacy group argued for 
stronger protection in both the single-family and multifamily subparts, 
asserting that HUD and other Federal agencies selling residential 
properties have a ``particular responsibility'' to ensure that sold 
properties contain no lead-based paint hazards. The commenter declared, 
``HUD has complete discretion and ample existing authority to require 
the evaluation and control of lead hazards before the sale of federally 
owned housing.'' An environmental organization joined in all these 
points, and remarked that ``one of the most obvious opportunities for 
lead hazard control is during turnover, such as that accompanying 
change of ownership. HUD can, and should, be a leader in assuring that 
hazards are corrected at the time of sale * * *'' The groups called for 
revisions to include the requirement of a risk assessment and hazard 
identification and control for any older structure.
    In the final rule, the requirements for HUD-owned single family 
properties being purchased with a mortgage insured by HUD are: a visual 
assessment to identify deteriorated paint, paint stabilization, and 
unit-wide clearance. HUD has added the clearance requirement to provide 
assurance that the work is done properly and that no hazards remain 
after paint stabilization. Clearance is required only if paint 
stabilization is conducted. The Department has the option to test 
deteriorated paint and to confine paint stabilization only to those 
surfaces with deteriorated lead-based paint. No requirements are 
established for properties being purchased without a HUD-insured 
mortgage, except for the requirements of the disclosure rule. Many of 
the properties purchased

[[Page 50170]]

without HUD-insured mortgages are in need of major rehabilitation. The 
cost of paint stabilization and cleanup would be substantial relative 
to the value of the property, and there is a high likelihood that 
subsequent rehabilitation would negate the effectiveness of the cleanup 
in removing dust-lead hazards. HUD will acquaint purchasers of the 
risks of generating lead-based paint hazards during rehabilitation; 
this will occur during the notification and disclosure required by 
subpart A of 24 CFR part 35. Approximately one-half of all HUD-owned 
single family properties are purchased with HUD-insured mortgages.
    This subpart does not require specific action regarding an 
environmental intervention blood lead level child. Less than 1 percent 
of single family properties are occupied when HUD acquires ownership, 
and, in most cases, HUD-owned single family property is vacant within 
three months of the transfer of ownership to HUD. Further, HUD-owned 
single family properties are generally sold within six months after 
acquisition. Because of the limited occupancy and relatively short HUD 
involvement with these properties, the Department finds it 
impracticable to impose environmental intervention blood lead level 
requirements.
    7. Subpart G-Multifamily Mortgage Insurance. This subpart sets out 
the requirements for the Department's multifamily mortgage insurance 
programs. As in the proposed rule, applications for mortgage insurance 
in connection with a refinancing transaction are excluded from coverage 
if an appraisal is not required under the applicable procedures 
established by HUD. This exemption, which affects applications under 
section 223(a)(7) of the National Housing Act, is sensible because the 
properties are already under mortgage insurance, the mortgage amount is 
not being changed, there is no equity-take out, and the processing is 
very streamlined, often involving no on-site inspection by HUD.
    The proposed rule required visual assessment for deteriorated 
paint, paint repair and cleanup for these programs. One commenter said 
that the HUD regulation will serve as ``a model standard of care for 
the private mortgage insurance industry'' and asked that HUD require 
the implementation of essential maintenance practices, risk assessments 
and lead hazard controls in all pre-1960 multifamily insured 
properties, and essential maintenance practices and risk assessments in 
all other federally insured properties. HUD agrees that rental housing 
must receive greater protection from lead-based paint hazards than 
owner-occupied housing because tenants have less ability than owners to 
make the repairs necessary to reduce hazards. The Department has 
revised, therefore, the procedures of the proposed rule to ensure, to 
the extent HUD considers practicable, that pre-1960 units are free of 
lead-based paint hazards and that the risk of lead exposure is 
minimized in housing built after 1959.
    A major housing industry organization pointed out that it would not 
be practicable to implement the proposed-rule requirement that 
deteriorated paint in a multifamily property be repaired ``before the 
issuance of a firm commitment,'' because it would compel a mortgagor to 
expend sums on paint repair ``based on chance and speculation.'' Other 
factors could prevent issuance of the commitment, or market conditions 
might prevent closing on the commitment's terms. It was suggested that 
HUD escrow 125-150% of the estimated cost of the repair work, and 
permit the paint to be repaired within 90 days after closing, using a 
repair escrow. The Department has addressed this comment by providing 
for a repair escrow in the final rule.
    In the final rule, a multifamily insured property constructed 
before 1960 must have a risk assessment before the issuance of a firm 
commitment, and interim controls of identified lead-based paint hazards 
must be completed before firm commitment or made a condition of the 
sale and insurance agreement with sufficient funds escrowed. Also, 
there must be notices to occupants regarding the results of the 
evaluation and hazard reduction. The sponsor must also agree to 
incorporate ongoing lead-based paint maintenance into regular building 
operations. Ongoing maintenance activities in this final rule are 
comprised of many of the same elements as the essential maintenance 
practices recommended by the Task Force. The Department is not 
requiring reevaluation in housing covered by this subpart, because 
there is no continuing Federal subsidy. For a multifamily insured 
property constructed after 1959 and before 1978, no evaluation or 
hazard reduction is required in the final rule; but for these 
properties, the sponsor must agree to incorporate ongoing lead-based 
paint maintenance practices into regular building operations. Due to 
the limited relationship between the purchaser and the Federal 
government, HUD deemed it impracticable to include in this subpart 
requirements for responding to a child with an environmental 
intervention blood lead level. In cases where multifamily mortgage 
insurance is combined with another HUD program (e.g., project-based 
assistance), the environmental intervention blood lead level 
requirements for that program would apply.
    A new section has been added to this subpart of the final rule to 
clarify Departmental mortgage insurance policy on lead-based paint in 
buildings being converted from nonresidential use to multifamily 
residential use (conversions) and in multifamily residential properties 
undergoing major rehabilitation. Major rehabilitation is defined as 
rehabilitation that is estimated to cost more than 50 percent of the 
estimated replacement cost after rehabilitation. The requirement for 
both types of property is that all lead-based paint be abated and that 
the abatement methods be, to the extent practicable, paint removal or 
component replacement. Enclosure or encapsulation may be used if paint 
removal or component replacement are not practicable, as for example if 
they would damage substrate material considered architecturally 
significant. If the building is an historic property, interim controls 
can be used at the request of the State Historic Preservation Office 
(as explained in Section III.E.2.b of this preamble, above).
    HUD considers conversions and major rehabilitations a special case 
because they usually involve major renovation of the interior, 
including new partitioning, new heating, ventilating, mechanical and 
electrical systems, plus new windows and doors. Also, conversions are, 
in effect, newly built housing. Such major construction activity 
provides an opportunity to remove lead-based paint and thus assure that 
such properties will be free of any possibility that lead-based paint 
hazards will be generated in the future as a result of the disturbance 
of paint during building operations, maintenance or future renovations. 
The incremental cost of abatement of all lead-based paint relative to 
the total conversion or rehabilitation cost will, in most cases, be 
modest, and, once done, the properties will be free of lead-based paint 
requirements, except to monitor any encapsulation or enclosure 
treatments or to engage in ongoing lead-based paint maintenance if 
interim controls are used in an historic property.
    8. Subpart H-Project-Based Rental Assistance. This subpart sets out 
the requirements for the Department's project-based rental assistance 
programs. The Indian Housing Block Grant Program has been added as a 
covered program under this subpart.

[[Page 50171]]

    The legislative history of Title X indicates that it was the intent 
of Congress that the requirements of a risk assessment and interim 
controls would apply to housing receiving project-based assistance. 
Therefore these procedures are required in the final rule, as they were 
in the proposed rule. The final rule also requires ongoing maintenance 
and reevaluation to assure that the housing remains lead safe, which is 
similar to the monitoring requirement in the proposed rule, and it has 
additional requirements to respond to a case of a child with an 
environmental intervention blood lead level, as did the proposed rule.
    There is ample evidence, however, in the statute and in legislative 
history that Congress felt that evaluation and hazard reduction 
requirements should be reasonably related to the level of Federal 
financial assistance. Therefore, as in the proposed rule, the 
requirements of a risk assessment and interim controls apply only to 
multifamily properties receiving more than $5,000 per dwelling unit 
annually in project-based rental assistance, calculated as an average 
of per assisted unit. For all other properties receiving project-based 
rental assistance under a HUD program, the initial evaluation and 
hazard reduction requirements are: A visual assessment to identify 
deteriorated paint, stabilization of deteriorated paint, and clearance 
(if paint stabilization is required). This less stringent requirement 
applies to multifamily properties receiving an average of up to and 
including $5,000 per assisted dwelling unit annually in project-based 
rental assistance and all single family properties receiving Section 8 
Moderate Rehabilitation or Project-Based Certificate assistance or 
project-based rental assistance from another HUD program. The 
stringency of the requirement is less for these properties because the 
amount of financial assistance is less and because the Department 
wanted to relieve owners of single family rental property with limited 
financial resources from the more extensive lead-based paint 
requirements that apply to owners of large multifamily projects with a 
high level of rental assistance. On average, the costs per dwelling 
unit of evaluation and hazard reduction are significantly higher for 
single family than for multifamily housing.
    A commenter believed that the rule's definition of ``project-based 
assistance'' could be read to include assistance delivered by local 
governments using HUD's Community Planning and Development (CPD) 
program funds. It is the Department's expectation and intent that most 
housing-related programs using CPD program funds will be covered by 
subparts J (rehabilitation), K (acquisition, leasing, support services, 
and operation), and M (tenant-based rental assistance). However, a CPD-
funded program may be covered by subpart H if it is providing rental 
assistance that is tied to a particular property through contract or 
agreement.
    The Department has decided that the term ``project-based'' should 
be given its traditional meaning of housing assistance payment programs 
where the funding is tied to the residential property and not to the 
tenant. Further, the requirement for risk assessment only makes sense 
when it is applied to traditionally ``project-based'' housing 
assistance payment programs, where HUD maintains an ongoing 
relationship with the owner and is able to require a phase-in of risk 
assessment requirements.
    Section 1012 of Title X (at 42 U.S.C. 4822(a)(1)(B)) sets out a 
schedule in which risk assessments and interim controls must be 
performed, i.e., all pre-1960 dwelling units before January 1, 1996; 25 
percent of 1960-1978 dwelling units by January 1, 1998; not less than 
50 percent of 1960-1978 dwelling units by January 1, 2000; and the 
remainder by January 1, 2002. The Department is not issuing a final 
lead-based paint rule in time to meet the January 1, 1996 deadline. 
Therefore, the Department has delayed the start of the risk assessment 
schedule but is establishing an expedited phase-in schedule that is 
somewhat simpler than that in the statute: September 17, 2001, for 
properties constructed before 1960, and September 15, 2003, for 
properties constructed after 1959 and before 1978.
    This risk assessment phase-in schedule applies only to multifamily 
properties receiving more than $5,000 per unit annually in project-
based rental assistance. The schedule for all other properties covered 
by subpart H is based on the schedule of initial or periodic 
inspections.
    The revised schedule for risk assessments is based on the comments 
received on the proposed rule's risk assessment schedule, and it also 
takes into account the delay in meeting the deadlines established by 
the Congress. It is HUD's view that the revised schedule still provides 
adequate time for education and training in order to implement the new 
technical standards, requirements and procedures. The proposed rule 
provision that allows the Secretary to develop an alternative schedule, 
if necessary, remains in this subpart. The provision was included to 
provide the Department with flexibility in working with HUD clients 
whose housing assistance payment contracts are due to expire close to 
the required date for completing risk assessments--an issue raised by 
commenters.
    The final rule does not include the proposed rule's requirement 
that an owner develop a hazard reduction plan. The hazard reduction 
plan, a concept suggested by the Task Force, was intended to provide 
the owner with flexibility to design his or her own schedule for 
completing interim controls. However, it was perceived by commenters 
and by the Department to be a paperwork requirement that could be a 
burden for owners and an unsolvable administrative problem for the 
Department. HUD has established, therefore, the following schedule for 
interim controls: Dwelling units occupied by families with children 
under 6 years of age and common areas servicing those units shall have 
interim controls completed no later than 90 days after the completion 
of the risk assessment for those units. Dwelling units not occupied by 
families with children under 6 years of age, common areas servicing 
those units, shall have interim controls completed within 12 months of 
the completion of the risk assessment for those units. If the owner 
chooses to conduct standard treatments rather than a risk assessment 
and interim controls (see ``Options'' above), standard treatments for 
units occupied by children of less than 6 years of age must be 
completed no later than 90 days after the final date for completion of 
a risk assessment, and for other units no later than 12 months 
following the final date for completion of a risk assessment. 
Completion of standard treatments as well as interim controls includes 
clearance testing.
    These policies regarding interim controls and the standard 
treatment option must be complied with only by owners of properties 
receiving more than $5,000 per unit annually in project-based rental 
assistance. Other properties must complete paint stabilization and 
clearance, if needed, within 30 days of receiving notification of the 
results of the visual assessment.
    HUD assumed in drafting the proposed rule that multifamily 
properties receiving more than $5,000 per unit annually in project-
based rental assistance would be subject to the same lead-based paint 
requirements that currently apply until they are required to comply 
with this new regulation. Commenters pointed out that more clarity and 
precision is needed on requirements during the phase-in period. 
Therefore the Department is adding to this subpart a paragraph on 
transitional requirements that will be

[[Page 50172]]

effective on September 15, 2000. Until the phase-in date that is 
applicable to a property, or until the owner conducts a risk 
assessment, whichever is first, the owner must practice ongoing lead-
based paint maintenance. This consists mainly of three activities: (1) 
Visually assessing, at least once a year, the condition of painted 
surfaces to identify deteriorated paint; (2) stabilizing any 
deteriorated paint; and (3) using safe work practices when performing 
any maintenance or renovation that disturbs paint that may be lead-
based paint.
    As explained in Section III.D.6 of this preamble, above, 
environmental intervention blood lead level requirements that apply to 
this subpart have been revised.
    9. Subpart I-HUD-Owned and Mortgagee-in-Possession Multifamily 
Property. In the proposed rule, two subparts addressed the disposition 
of HUD-owned multifamily property; one subpart set out the requirements 
that would apply when sufficient appropriations were available to 
comply with the statutory requirements of section 1013, and another set 
out the requirements in the absence of sufficient appropriations. The 
section 1013 requirements are: for pre-1960 properties, an inspection 
and risk assessment followed by abatement of lead-based paint hazards, 
and, for properties built after 1959 and before 1978, an inspection and 
risk assessment followed by disclosure. In the absence of sufficient 
appropriations, the proposed rule called for a visual evaluation to 
identify deteriorated paint followed by repair of deteriorated paint 
and cleanup of the worksite. Additional requirements were included in 
the case of a child with an environmental intervention blood lead 
level, and monitoring of paint conditions was required for properties 
retained in the HUD-owned inventory for more than one year. No 
distinction was made for the period of construction, e.g., before or 
after 1960.
    In the final rule, the Department has removed the appropriations 
distinction, and set forth a single policy under this subpart, as 
discussed under Section III.A.3 of this preamble, above. The 
Department's intent in setting lead-based paint policy for HUD-owned 
and mortgagee-in-possession multifamily property in this final rule is 
to make the requirements similar to those for multifamily properties 
receiving more than $5,000 per unit annually in project-based rental 
assistance while recognizing the intent of Congress as expressed in 
section 1013 of Title X. HUD finds no reason to require of itself a 
less stringent standard than it requires of private owners of assisted 
multifamily housing. The Department must conduct a lead-based paint 
inspection and risk assessment before publicly advertising the property 
for sale, followed by interim controls of all identified lead-based 
paint hazards. A lead-based paint inspection is required as well as a 
risk assessment so information on the location of lead-based paint can 
be given to the purchaser pursuant to the disclosure rule at subpart A 
of 24 CFR part 35, who can then use it to assure that lead-based paint 
hazards are not generated inadvertently during future maintenance or 
renovation work. For dwelling units occupied by families with children 
of less than 6 years of age and common areas servicing such units, 
interim controls shall be completed no later than 90 days after the 
completion of the risk assessment; while dwelling units not occupied by 
families with children younger than 6 and associated common areas must 
have interim controls and clearance completed no later than 12 months 
after the risk assessment. If a unit becomes newly occupied by a family 
with a child of less than 6 years of age or such a child moves into a 
unit, interim controls must be completed within 90 days after said 
move-in if they have not already been completed. The schedule for 
completion of standard treatments is also the same as for multifamily 
housing receiving more than $5,000 per unit annually in project-based 
rental assistance. The Department must provide a notice to occupants if 
evaluation or hazard reduction is undertaken.
    If conveyance of the title by the Department at a sale of a HUD-
owned property or a foreclosure sale caused by the Secretary when HUD 
is mortgagee-in-possession occurs before the required schedule for 
completion of interim controls or standard treatments, the Department 
must complete the hazard reduction before conveyance or foreclosure 
sale, or the Department shall be responsible for assuring that interim 
controls are carried out by the purchaser according to the following 
schedule: (1) In units occupied by families with children of less than 
6 years of age and common areas servicing such units, no less than 90 
days after the date of closing of the sale or 90 days after a family 
with a child less than 6 moves in; and (2) in all other units and 
associated common areas, no later than 180 days after the closing of 
the sale. The schedule for completion of hazard reduction by the 
purchaser is keyed to the closing date, because it is only at that time 
that the purchaser can begin to make firm arrangements to conduct the 
treatments; but the duration of time from the closing date is somewhat 
less than that which HUD must meet in relation to the risk assessment 
date because of concern that the risk assessment may go out of date. 
Similar to requirements for multifamily properties receiving project-
based assistance, ongoing maintenance and reevaluation are required 
under this subpart if the Department retains ownership of the property 
for more than 1 year.
    This subpart requires specific actions in response to a child with 
an environmental intervention blood lead level; the requirements are 
similar to those for housing receiving project-based rental assistance.
    10. Subpart J-Rehabilitation. This subpart sets out the 
requirements for the Department's programs which provide assistance for 
housing rehabilitation. The majority of this assistance is provided 
through programs administered by the Office of Community Planning and 
Development (CPD), principally the Community Development Block Grant 
program and the HOME program. Other rehabilitation assistance is 
provided under the Flexible Subsidy-Capital Improvement Loan Program 
(CILP) and the Mark-to-Market Program for multifamily property. 
Rehabilitation assistance may also be provided under the Indian 
Community Development Block Grant Program and the Indian Housing Block 
Grant Program. This subpart does not apply to the following HUD 
programs that may have rehabilitation activities: Mortgage insurance 
programs, the Section 8 Moderate Rehabilitation program, and the public 
housing modernization programs. Those programs are covered by other 
subparts.
    The requirements of Title X pertaining to federally assisted 
residential rehabilitation are quite specific. The statute sought to 
take advantage of the rehabilitation event as a cost-effective 
opportunity to sharply reduce lead-based paint hazards in the assisted 
stock. Many types of rehabilitation, such as window replacement or 
installation of new walls or doors, often reduce lead-based paint 
hazards. Section 1012 requires at a minimum: (1) Inspection for the 
presence of lead-based paint prior to federally-funded renovation or 
rehabilitation that is likely to disturb painted surfaces; (2) interim 
controls of lead-based paint hazards in housing receiving less than 
$25,000 per unit in Federal rehabilitation assistance; and (3) 
abatement of lead-based paint hazards

[[Page 50173]]

in housing receiving more than $25,000 per unit.
    Among those commenters on the proposed rule who directed their 
remarks towards specific HUD programs, the rehabilitation programs drew 
by far the most attention, largely because compliance was perceived as 
complex and costly. Some commenters felt that the rule would reduce the 
impact that rehabilitation assistance funds can have on the community 
and would make smaller communities determine that rehabilitation 
projects are ``not worth it.'' Pointing out that some local 
rehabilitation assistance is provided in the form of a loan, local 
agencies feared that they would have difficulty getting homeowners to 
borrow the additional funds needed to comply with the lead-based paint 
hazard reduction requirements. As a long time proponent and funder of 
housing rehabilitation, the Department understands and shares these 
concerns and has attempted to provide local agencies with ways to 
incorporate as efficiently as possible the statutory requirements of 
Title X into their rehabilitation programs.
    At the outset, it should be noted that rehabilitation that does not 
disturb a painted surface is exempt from this rule. Thus, for example, 
roof repairs or heating system improvements are likely to be exempt 
unless such activities disturb painted surfaces.
    In both the proposed rule and the final rule, HUD has interpreted 
the statutory requirement of a lead-based paint inspection to apply 
only to surfaces to be disturbed by rehabilitation. In the proposed 
rule this procedure was called a ``limited paint inspection.'' In 
response to concerns of EPA regarding possible confusion if the word 
``inspection'' is used differently than in EPA regulations, HUD is 
using the term ``paint testing'' instead (see Section III.E.2.c. of 
this preamble, above). Furthermore, HUD provides the option of either 
conducting paint testing of the painted surfaces to be disturbed or 
replaced during rehabilitation or presuming that all such painted 
surfaces are coated with lead-based paint. Paint testing is not 
necessary if a complete lead-based paint inspection has been conducted 
of the property.
    In the final rule as well as in the proposed rule, the Department 
has added a category of housing receiving up to and including $5,000 
per unit in Federal rehabilitation assistance to allow a lower level of 
lead-based paint treatment for rehabilitation of modest expenditure. 
HUD's intent in setting requirements for housing in this category of 
assistance is to allow low level rehabilitation to occur without 
incurring the full expense of the statutory lead-based paint 
requirements but at the same time to minimize the possibility of 
exposure to lead-based paint hazards as a result of the assisted 
rehabilitation work. This has been referred to as a ``do-no-harm'' 
policy. The impact of this policy is significant. HUD estimates that 
the average amount of rehabilitation assistance per unit from the 
Community Development Block Grant program is between $5,000 and $6,000. 
The proposed rule would have required visual assessment to identify 
deteriorated paint on surfaces to be disturbed by rehabilitation, 
repair of such deteriorated paint surfaces, and cleanup of the 
worksite. The final rule requires paint testing of surfaces to be 
disturbed or presumption of lead-based paint, and, if the paint is 
found or presumed to be lead-based paint, the following are required: 
safe work practices (as specified in subpart R of the final rule) 
during rehabilitation, repair of any paint disturbed during 
rehabilitation, and clearance of the worksite. The main differences 
between the proposed and final rules are (1) the more explicit emphasis 
on safe work practices during rehabilitation as the way to avoid 
causing exposure to lead-based paint hazards, and (2) the clearance 
requirement, which assures that no lead-based paint hazards are left at 
the worksite. The worksite consists of only those rooms or areas where 
the rehabilitation is conducted. Safe work practices include the 
following: Not using prohibited practices of paint removal, occupant 
protection and worksite preparation, and specialized cleaning. These 
practices were included in the requirements of the proposed rule for 
paint repair. HUD estimates that the average cost per unit of complying 
with today's rule for housing receiving no more than $5,000 in Federal 
rehabilitation assistance will be approximately $150 for single family 
and $115 for multifamily units.
    For housing receiving more than $5,000 and up to and including 
$25,000 in Federal rehabilitation assistance, the final rule makes one 
significant change to the requirements in the proposed rule (which 
derive directly from the statute), and that is the standard treatment 
option. This option allows the use of standard treatments (as suggested 
by the Task Force; see Section III.D.3 of this preamble, above) instead 
of conducting a risk assessment and interim controls. If standard 
treatments are used, no evaluation is required. Standard treatments 
include stabilization of deteriorated paint, the provision of smooth 
and cleanable horizontal surfaces, the correction of conditions causing 
rubbing, binding or crushing of painted surfaces, and the treatment of 
bare soil--all using safe work practices and followed by clearance. 
When conducted as a part of rehabilitation, standard treatments must 
include stabilization of paint disturbed as a result of the 
rehabilitation work, and clearance must be conducted after completion 
of rehabilitation, as is the case if interim controls are conducted. 
Standard treatments may be an appropriate option in housing in which 
experience indicates there is a high likelihood of extensive lead-based 
paint hazards. In such housing the risk assessment would just confirm 
what is expected. Standard treatments may also be appropriate in 
housing that is otherwise in good condition but is undergoing 
rehabilitation in one or more confined areas, in which case the extent 
of deteriorated paint, surfaces that are not smooth and cleanable, and 
dust-generating conditions might be minor. Another potential advantage 
of standard treatments is that they are a known and limited group of 
activities that crews can be trained to perform efficiently. A possible 
disadvantage is that such treatments may be performed unnecessarily on 
surfaces without lead-based paint, because no testing is conducted.
    In Title X, the statutory requirement for hazard reduction in 
properties receiving more than $25,000 per unit in Federal 
rehabilitation assistance is ``abatement of lead-based paint hazards in 
the course of substantial rehabilitation projects.'' In the proposed 
rule, the statutory phrase ``in the course of * * * rehabilitation'' 
was interpreted to mean that lead-based paint hazards on surfaces to be 
disturbed by rehabilitation were to be abated (i.e. permanently 
eliminated), while hazard reduction (which includes less costly, but 
more temporary, interim controls as a minimum) could be conducted on 
lead-based paint hazards on other surfaces. This interpretation was 
questioned by those who thought the Congress meant that all lead-based 
paint hazards should be abated in these major rehabilitation projects, 
regardless of whether the surface was or was not being disturbed by the 
rehabilitation. Supporters of the proposed-rule interpretation claimed 
that the cost of abating lead-based paint hazards on the exterior of 
old houses with wood siding would be exorbitant. In the final rule, the 
Department has revised the proposed-rule requirement to require 
abatement of all lead-based hazards

[[Page 50174]]

identified by paint testing and/or a risk assessment and any lead-based 
paint hazards created as a result of the rehabilitation work, except 
that interim controls are acceptable on exterior surfaces that are not 
disturbed by rehabilitation.
    HUD believes that the exemptions and options in this rule provide 
designated parties with enough flexibility to achieve the statutory 
objectives with maximum efficiency. For instance, in very old housing 
with a high likelihood of extensive lead-based paint and undergoing 
Federally assisted rehabilitation of between $5,000 and $25,000 per 
unit, the grantee, participating jurisdiction or CILP recipient may 
find it most efficient to forego the evaluation, presume the presence 
of lead-based paint and lead-based paint hazards, and conduct standard 
treatments using trained and efficient crews. Conversely, if the 
presence of lead-based paint or lead-based paint hazards is 
questionable, a grantee, participating jurisdiction or CILP recipient 
may choose to test the paint and conduct a risk assessment to determine 
whether it is necessary to treat all, some or any of the paint as lead-
based paint.
    Beyond the broad objections regarding the cost impact of the rule, 
commenters had many questions and concerns. A frequent complaint among 
commenters was their inability to determine, from the proposed rule, 
``exactly what rehabilitation is, what are rehab soft costs, and 
exactly what activities are to be used to determine the various types 
of costs.'' In the final rule, HUD has adopted the policy that the 
determination of the category of assistance (up to and including 
$5,000, more than $5,000 and up to and including $25,000, or more than 
$25,000) will be based on the hard costs of ordinary rehabilitation, 
not including the additional costs of complying with this rule. The 
Department has made efforts to clarify the definition of hard and soft 
rehabilitation costs through the use of examples.
    A commenter also questioned the Department's decision not to 
include additional provisions for dwellings occupied by children with 
environmental intervention blood lead levels under rehabilitation-
related rules. In general, the requirements for units receiving 
rehabilitation assistance of more than $5,000 (risk assessment and 
either interim controls or abatement of lead-based paint hazards) are 
similar to or more stringent than the activities that would be required 
in the case of an environmental intervention blood lead level child. 
Also, rehabilitation assistance is usually provided at one point in 
time, so there is often no continuing financial involvement of HUD with 
the property. However, in the case of a multifamily property receiving 
Federal rehabilitation assistance under the HOME program or the 
Flexible-Subsidy-CILP program, the grantee, participating jurisdiction 
or CILP recipient must require the property owner to incorporate 
ongoing lead-based paint maintenance activities into regular building 
operations. Ongoing lead-based paint maintenance practices are designed 
to ensure that new lead-based paint hazards do not occur in the 
property.
    A commenter representing developers noted that ``subrecipient'' was 
defined to exclude an owner or developer receiving rehabilitation 
assistance. ``Thus the responsibility of performing subrecipient duties 
must fall on the local government grantee.* * *'' The commenter urged 
that the final rule permit duties to be delegated to the owner or 
developer, with only monitoring and oversight functions necessarily 
remaining with local government grantees. Although many of the 
requirements under this subpart refer to the grantee or participating 
jurisdiction, as is the case with many CPD programs, it is the 
Department's intent that the grantee or participating jurisdiction may 
require virtually all of these functions to be performed by a 
subrecipient or other designated party. The exclusion of an owner or 
developer, however, from the definition is retained in the final rule 
to permit at least some degree of independent oversight of the use of 
public funds.
    Another funded agency commenter said that the rule's requirements 
would ``cripple'' the agency's ancillary programs. The commenter stated 
that the agency provides funds to an organization that implements an 
emergency rehabilitation program for county residents. This program, 
the commenter argued, is staffed by volunteers, and will not be able to 
comply with the extensive lead-based paint requirements. The Department 
has attempted to respond to this concern by tailoring the requirements 
to the amount of Federal assistance. While even the minimum 
requirements of the $5,000-or-less category may require workers to 
undergo a modest amount of training, such training may be necessary to 
protect children who may live in the unit, and it should not be 
inefficient where such workers are volunteers who work on multiple 
projects.
    In the final rule, the Department has established separate 
requirements for insular areas operating rehabilitation programs under 
the HOME and Community Development Block Grant (CDBG) programs. Insular 
areas include the U.S. Virgin Islands, Guam, Northern Mariana Islands, 
and American Samoa. The requirements for insular areas are less 
stringent than the regular requirements for properties receiving more 
than $5,000 per dwelling unit in Federal rehabilitation assistance. 
There is no difference in requirements for properties receiving up to 
$5,000 per unit in rehabilitation assistance. The rationale for the 
lesser requirements is that insular areas do not currently have the 
capacity to comply with more stringent requirements applicable to other 
CDBG grantees and HOME participating jurisdictions, nor is it likely 
that capacity can be developed in the foreseeable future. The remote 
location of the insular areas, their small populations and the limited 
volume of HOME- and CDBG-funded housing activity makes the development 
of a competitive lead ``industry'' (i.e., certified lead inspectors, 
risk assessors and contractors) unlikely.
    For properties receiving more than $5,000 per unit in 
rehabilitation assistance, the final rule requires, in insular areas, 
stabilization of all deteriorated paint and paint being disturbed by 
rehabilitation instead of the normal requirements of a risk assessment 
and interim controls or abatement of lead-based paint hazards. (As is 
always the case, stabilization is not required of paint found by a 
certified lead-based paint inspector not to be lead-based paint.) Safe 
work practices must be used, including occupant protection, worksite 
preparation and clearance. HUD believes that clearance is very 
important and that, if laboratory analysis of dust samples is not 
available on an island, it can be obtained at reasonable cost through 
air mail of samples and electronic response by the laboratory, as is 
often the practice elsewhere in the United States.
    These separate requirements for rehabilitation assistance of more 
than $5,000 per unit in insular areas are protective of children and 
other occupants. They are the same as those in the final rule for units 
receiving tenant-based rental assistance (subpart M), assistance for 
acquisition, leasing, support services or operation (subpart K), and 
HUD-owned single family properties at disposition (subpart F). However, 
when undertaking Federally-funded rehabilitation, the Department 
encourages insular areas to use, to the maximum extent feasible and in 
consultation with their respective Field Office, the more rigorous and 
thorough

[[Page 50175]]

methods and procedures required of other grantees and participating 
jurisdictions in subpart J.
    Finally, subpart J requires that all occupants shall be provided 
with the lead hazard information pamphlet by the grantee, participating 
jurisdiction or CILP recipient (or their representative). In all cases 
where evaluation or hazard reduction or both are undertaken, each 
grantee, participating jurisdiction or CILP recipient shall post or 
distribute a notice to occupants of the results of the evaluation. The 
grantee, participating jurisdiction or CILP recipient shall also post 
or distribute a notice of the results of the hazard reduction 
activities.
    11. Subpart K--Acquisition, Leasing, Support Services, or 
Operation. This subpart sets out the requirements for certain CPD 
programs and the Indian Community Development Block Grant program and 
the Indian Housing Block Grant program when such programs are providing 
Federal funding for acquisition, leasing, operating or support services 
for a residential property. In the proposed rule, this subpart was 
entitled ``Community Planning and Development (CPD) Non-Rehabilitation 
Programs.'' The title has been changed because of the addition of 
Indian programs to the coverage of the subpart and because the new 
title is more descriptive than the term, ``non-rehabilitation,'' used 
in the proposed rule. The main CPD programs that fund activities 
covered by this subpart are the HOME program, the Community Development 
Block Grant program, the Supportive Housing program, the Emergency 
Shelter Grant program, and Housing Opportunities for Persons with AIDS 
(HOPWA). Persons with AIDS are considered persons with disabilities, so 
assisted housing for them is exempt from the rule except when there is 
a child of less than 6 years of age who resides or is expected to 
reside in the dwelling unit.
    Examples of the types of housing assistance to which subpart K 
applies are acquisition or leasing of a homeless facility, downpayment 
assistance, mortgage and utility payments for persons with AIDS (if a 
child under 6 resides), and payment of security deposits. Other 
examples are payment of the day-to-day operating expenses of housing 
for the homeless and assistance for various support services that are 
provided on site at a residential facility, such as child care, 
employment assistance, outpatient health care including drug treatment 
or counseling, case management, nutritional counseling, security 
arrangements, and assistance in getting permanent housing.
    For properties built between 1950 and 1978, the lead-based paint 
requirements for these activities in the proposed rule were visual 
assessment, paint repair and cleanup. For properties built before 1950, 
the requirements were visual assessment, dust testing for the presence 
of dust-lead hazards, paint repair, cleanup of the dwelling unit if the 
dust testing finds dust-lead hazards, or cleanup only of the paint-
repair worksite if the dust testing does not find dust-lead hazards. In 
certain instances, ongoing monitoring of paint conditions was required. 
For all activities, provision of the pamphlet developed by EPA under 
TSCA section 406 was required.
    Some commenters expressed concern regarding the adverse impact that 
these requirements would have on small-grant acquisition assistance 
programs. The Department believes that families receiving such 
assistance should be able to move into lead-safe housing. HUD has a 
statutory responsibility under the Lead-Based Paint Poisoning 
Prevention Act to establish procedures that achieve that objective to 
the extent practicable.
    In the final rule, as in the proposed rule, HUD has set 
requirements for this subpart that are the same in most aspects as 
those for tenant-based rental assistance, which is covered by subpart 
M. The basic strategy set forth in the final rule consists of a visual 
assessment to identify deteriorated paint, stabilization of 
deteriorated paint, clearance of the dwelling unit, and, where there is 
a continuing and active financial relationship with the property, 
ongoing lead-based paint maintenance. This procedure is the minimum 
needed to assure that the housing is lead-safe. Many of the households 
inhabiting residential properties assisted through programs covered by 
subpart K include young children. Many of the assisted households are 
homeless. A basic level of protection against exposure to lead-based 
paint hazards is essential.
    In the final rule, HUD has changed the proposed rule's requirement 
of paint repair to paint stabilization, as it has throughout the final 
rule. This is explained above in Section III.D.9 of this preamble. 
Also, the dust testing requirement in pre-1950 housing has been 
eliminated, and in its place the Department has required clearance of 
the dwelling unit, as it has for all other HUD-assisted and HUD-owned 
housing. Clearance is required, however, only if paint stabilization is 
required. Also, the final rule eliminates the proposed rule's 
distinction between pre-1950 and post-1949 housing. In the interest of 
regulatory streamlining, a single set of requirements applies to all 
pre-1978 housing. As in the proposed rule, the grantee or participating 
jurisdiction must provide the lead hazard information pamphlet to all 
occupants except those who have received the pamphlet under the 
disclosure rule. Also, each grantee or participating jurisdiction must 
provide a notice to occupants describing the results of the clearance 
examination. The notice requirement does not apply to the visual 
assessment but does apply to clearance results after paint 
stabilization, because the clearance report provides known information 
about the presence or absence of lead-based paint hazards. Finally, the 
final rule requires that ongoing maintenance of painted surfaces and 
safe work practices be incorporated into regular building operations, 
where appropriate under HUD-administered programs.
    The Department has given the grantee or participating jurisdiction 
the discretion to determine whether the cost of paint stabilization and 
clearance is to be borne by the owner/developer, the grantee or a 
combination of the owner/developer and the grantee, based on program 
requirements and local program design. This helps to ensure maximum 
flexibility for local authorities and is consistent with HUD's 
reinvention initiative. Because the relationship between the HUD 
grantee or participating jurisdiction and the property owner or 
developer is often a one-time event, HUD deemed it impracticable to 
include special requirements in the case of a child with an 
environmental intervention blood lead level.
    12. Subpart L--Public Housing Programs. This subpart sets forth 
requirements for eliminating lead-based paint hazards in public 
housing. The proposed rule included Indian housing under this subpart, 
but, as explained above in Section III.A.8 of this preamble, Indian 
housing programs are now covered under other subparts of this rule. 
Section 1012 of Title X does not specifically add new requirements to 
public housing. The Senate Committee Report states that Congress did 
not intend the changes to the Lead-Based Paint Poisoning Prevention Act 
introduced by Title X to pose a barrier to ongoing efforts by public 
and Indian housing agencies to conduct risk assessments, lead-based 
paint inspections and abatement activities. According to the Report, 
``the changes made by Title X to the public housing provision of the 
LPPPA are intended merely to conform the terminology of Title X's 
definition of terms'' (Senate Report 102-332, page 118). Nevertheless, 
in order to consolidate all

[[Page 50176]]

of the lead-based paint requirements for HUD in a single place, the 
Department is including subpart L for public housing in this 
rulemaking. This subpart implements the requirements set out in 42 
U.S.C. 4822(d)(1)(3) prior to Title X; where necessary, however, the 
Department has modified these requirements in order to be consistent 
with the intent of Title X. Such modifications are noted below.
    The Lead-Based Paint Poisoning Prevention Act requires PHAs to 
complete lead-based paint inspections of all pre-1978 family 
developments by December 6, 1994. This statutory requirement has 
existed since 1987. HUD has data indicating that most developments have 
been inspected, as mandated by Congress. Those that have not must be 
inspected no later than the effective date of this final rule, which is 
September 15, 2000. Where a PHA has not complied with the statutory 
requirement to complete lead-based paint inspections of pre-1978 family 
units, the PHA is eligible only for Emergency Modernization or work 
needed to complete the inspections as described in 24 CFR 968.210. The 
Lead-Based Paint Poisoning Prevention Act also has required for many 
years that PHAs abate all lead-based paint found in the inspections. 
This is a continuing activity conducted at the time of modernization.
    The Department's primary concern in developing this rule is with 
the safety of occupants of housing developments that have lead-based 
paint but have not yet been abated. In such cases, modernization (and 
hence abatement) may be years or decades away, and nothing is required 
in the interim to control lead-based paint hazards. In the proposed 
rule, HUD set forth the following additional requirements for these 
developments with the goal of assuring that they are lead-safe: visual 
assessment for deteriorated paint, matching the visual assessment with 
the lead-based paint inspection to identify the locations of 
deteriorated lead-based paint, dust and soil testing to determine the 
presence of dust-lead hazards or soil-lead hazards, and interim 
controls of lead-based hazards found.
    A principal concern of commenters was the financial burden, the 
asserted ``unfunded requirement,'' the rule would place on public 
housing agencies. Based on these financial hardships, a group 
representing public housing agency interests recommended eliminating 
the rule's new requirements (dust and soil testing and interim 
controls) as they pertained to public and Indian housing. Acknowledging 
the need for addressing the issue of lead in the environment, one 
commenter asserted that most local housing agencies already had made a 
good faith effort to comply with the requirement to complete lead-based 
paint inspections by the end of 1994.
    A more specific issue addressed by some commenters was the 
acceptance by the proposed rule of dust and soil testing by non-
certified personnel. Some commenters objected to this because it 
appeared to violate the requirements of EPA's regulations implementing 
TSCA sections 402 and 404. Others urged HUD to establish a major 
training activity to assure that public housing maintenance staff would 
be able to conduct such sampling properly and interpret the results 
accurately.
    In the final rule, HUD is requiring that, instead of soil and dust 
testing by non-certified personnel, risk assessments must be conducted 
by certified risk assessors in developments with lead-based paint that 
has not yet been abated. The Department has concluded after careful 
consideration that it would be wasteful and ineffective to allow PHAs 
to skirt the EPA certification requirements for dust and soil testing. 
For further discussion of this issue, see Section III.D.8 of this 
preamble, above.
    Another question has to do with the reliability of the lead-based 
paint inspections that have already been conducted. In a study of prior 
inspections in public housing, HUD has found that approximately 13 
percent of the inspections were of questionable accuracy. In the 
proposed rule HUD, therefore, encouraged PHAs to engage in quality 
control activities to determine whether a lead-based paint inspection 
is reliable. The final rule continues this policy. HUD's Office of 
Public and Indian Housing issued a detailed Notice in 1995 (PIH 95-
8(HA)) explaining how quality control can be implemented for lead-based 
paint inspections that have already occurred.
    The final rule also continues the proposed rule requirement that 
occupants be informed of the results of all evaluation and hazard 
reduction activities, and it continues the additional requirements that 
are triggered if a child with an environmental intervention blood lead 
level is identified in a public housing development. The basic 
requirement is that a risk assessment and interim controls be completed 
in the dwelling unit quickly. A more detailed explanation of the 
requirements for response to a child with an environmental intervention 
blood lead level is provided above in Section III.D.6 of this preamble.
    Under this subpart the Department has included references to the 
liability insurance provisions found in the pubic housing program 
requirements. Also, the rule describes the circumstance under which a 
PHA may use financial assistance received under the modernization 
program for the evaluation and reduction of lead-based paint hazards, 
and references sections of the public housing regulations for 
additional information on eligible costs.
    13. Subpart M--Tenant-Based Rental Assistance. This subpart sets 
out lead-based paint requirements for the Department's tenant-based 
rental assistance programs, including those operated under the HOME, 
Housing Opportunities for Persons With AIDS (HOPWA), Shelter Plus Care, 
and Indian Housing Block Grant programs as well as Section 8. Because 
there are different types of local organizations that administer 
tenant-based rental assistance under HUD programs, this subpart uses 
the general term ``designated party'' to refer to housing agencies, 
grantees, participating jurisdictions or Indian Housing Block Grant 
recipients. Unlike other subparts, this subpart applies only to housing 
occupied by families with children of less than 6 years of age.
    The lead-based paint requirements for tenant-based rental 
assistance in the proposed rule were virtually the same as those 
proposed for the subpart now titled Acquisition, Leasing, Support 
Services, or Operation (formerly CPD Non-Rehabilitation). For 
properties built between 1950 and 1978, visual assessment, paint repair 
and cleanup; for properties built before 1950, visual evaluation, dust 
testing for the presence of dust-lead hazards, paint repair, cleanup of 
the dwelling unit if the dust testing finds dust-lead hazards, or 
cleanup only of the paint repair worksite if the dust testing does not 
find dust-lead hazards.
    Comments ranged from declarations that it was illegal under the 
statute to apply the rule to tenant-based programs to assertions that 
stringent lead-control standards must be applied, especially in the 
case of the tenant-based programs. Commenters opposed to the 
requirements argued that there exists a ``statutory, program-wide 
exemption for housing receiving tenant-based Section 8 assistance.'' 
One commenter asserted that only landlords agreeing to accept 
assistance under a section 1011 grant (i.e., the HUD Lead-Based Paint 
Hazard Control Grant program) are required to adhere to requirements 
associated with lead-based paint testing and control. HUD disagrees. 
The Department's response to the question of the legality

[[Page 50177]]

of imposing lead-based paint requirements on tenant-based rental 
assistance programs is discussed above, under Section III.A.2. of this 
preamble.
    Many commenters discussed the fair housing implications of the rule 
because of its focus on families with young children. Some commenters 
advocated simply relocating a family to another unit upon discovery of 
a lead hazard (leaving the unit available for other families without 
small children). Others advocated making special funding available in 
pilot programs for particular localities, to finance any necessary 
control or abatement activities, or providing tax or other special 
incentives to owners faced with unexpected repair costs arising out of 
the discovery of a lead hazard. Still other commenters advocated 
coverage for all tenant-based units without regard to family makeup.
    The Department believes limiting the requirements of subpart M to 
dwelling units in which a family with a child less than age 6 resides 
is a reasonable policy because of the unique ability of designated 
parties to identify changes in the composition of an assisted family 
through the income certification process. In addition, the designated 
parties are able to monitor the property owner's compliance with lead-
based paint requirements through initial and periodic dwelling unit 
inspections. These two safeguards will help to ensure that a designated 
party will know whether a child of less than 6 years of age resides in 
a dwelling unit. An owner who refuses to rent a dwelling unit to a 
family with a child under the age of 6 may be in violation of the 
provisions of the Fair Housing Act prohibiting discrimination on the 
basis of familial status. The same possibility applies to a designated 
party that requires that a family with a young child make an 
involuntary relocation. (See the discussion of the requirements of 
anti-discrimination statutes in Section III.D.7 of this preamble 
above.)
    Comments included repeated expressions of fear that the cost of 
compliance with this subpart would result in a ``shortfall'' of housing 
available to families with tenant-based rental assistance, and 
assertions that new contractual duties were being imposed on owners 
that were not a part of the owners' existing agreements with the 
designated party. Landlords will be discouraged from participating, 
commenters claimed, and the rule will drive up their operating costs, 
without any certainty of additional compensation. Both rural housing 
authorities and agencies in the largest cities worried about tight 
rental markets and the inability of participating families to locate 
lead-safe units.
    Taking the more protective point of view, other commenters noted 
that the rule's requirements for tenant-based programs were less 
demanding than those set out for project-based programs and advocated 
applying the stricter standards uniformly. Some commenters urged that 
HUD impose the same protection that the Task Force on Lead-Based Paint 
Hazard Reduction and Financing recommended for all private units. A 
health department believed that because housing assistance programs 
were shifting toward tenant-based assistance, ``the most stringent of 
requirements probably should be on this (type) of housing.''
    In considering how to respond to these comments, HUD took into 
account the recommendations of the Task Force. In their report, the 
Task Force recognized most of the concerns expressed by commenters on 
the proposed rule, not the least of which was the fear that expensive 
standards could reduce participation in the program by private 
landlords. It is noteworthy that the Task Force concluded that lead-
based paint requirements for tenant-based assistance programs should be 
similar to the standards recommended by the Task Force for rental 
housing in general.
    Under current regulations, HUD requires that designated parties 
administering tenant-based rental assistance programs visually inspect 
pre-1978 dwelling units that are to be occupied by children under the 
age of 6 to identify defective paint, and that owners correct any 
defective paint surfaces and clean up the worksite carefully. Except 
for the explicit cleanup requirement, which was issued in 1995, these 
requirements have been part of the Housing Quality Standards (HQS) for 
over ten years.
    In the final rule, as in the proposed rule, HUD is retaining the 
requirement of a visual assessment to identify deteriorated paint to be 
performed usually by a housing quality inspector at initial and 
periodic inspections. (There is no effective difference between the 
meaning of ``defective paint,'' the term used in the current 
regulations, and ``deteriorated paint,'' which is the term used in 
Title X.) Also, the final rule retains the proposed rule requirement 
that such inspectors be trained to perform the activities required of 
them by this rule. The Department is developing a training course that 
will enable such inspectors to meet this requirement. The purpose of 
the course is to assure that persons performing the visual assessment 
understand why they are doing it, what they should look for, and why 
deteriorated paint should be stabilized. The course was pilot tested in 
1998 and will be available well before the effective date of this final 
rule.
    The basic concept of treating defective paint is being retained, 
but the final rule modifies the details of the standard applying to 
that requirement. First, as explained above in Section III.D.4 of this 
preamble, the minimum area of defective paint that must be treated has 
been changed. The minimum that was promulgated in the Housing Quality 
Standards in 1995, and was included in the proposed rule, is being 
withdrawn at the request of many housing agencies, health departments 
and other commenters who found it complicated, difficult to administer, 
and contrary to the purpose of the regulations. As was the case before 
1995, all deteriorated paint must be treated.
    Second, the painted surfaces that are subject to the rule have 
changed.
    Current requirements apply to all interior surfaces within the 
dwelling unit, the entrance and hallway serving the unit in a multi-
unit building, and exterior surfaces up to five feet from the floor or 
ground that are readily accessible to children under 6 years of age, 
but excluding outbuildings. The proposed rule was the same as the 
current regulations, except for the addition of playground equipment 
and fences surrounding an exterior play area. The final rule sets no 
limits to the surfaces covered by the requirement, saying only that the 
designated party shall conduct a visual assessment of ``all painted 
surfaces.'' It is HUD's intent that such surfaces shall include all 
surfaces within the dwelling unit, all surfaces on the exterior of the 
structure regardless of height from the ground, and all common areas 
servicing the dwelling unit. The definition of ``common area'' in the 
rule includes all areas on the property available for use by occupants 
of more than one unit, including outbuildings such as garages.
    Third, in the final rule the details regarding the method of 
treatment are somewhat different than those in current regulations and 
in the proposed rule. Current regulations require removal of defective 
paint (using specified acceptable methods) and covering surfaces ``with 
durable materials with joints and edges sealed and caulked as needed to 
prevent escape of dust.'' The proposed rule called for ``paint 
repair'', which was repainting with proper surface preparation using 
safe practices and including occupant protection and cleanup. The final 
rule requires ``paint stabilization,'' which is the same as

[[Page 50178]]

paint repair except that it includes the additional requirement that 
any physical defect in the substrate that is causing deterioration be 
repaired. Such defects include dry-rot, rust, moisture, crumbling 
plaster, and missing siding or other components that are not securely 
fastened. As discussed above in Section III.D.9 of this preamble, HUD 
is uniformly requiring paint stabilization across this final rule, 
because otherwise the treatment of the deteriorated paint will be 
ineffective.
    The fourth change to the standard for treating deteriorated paint 
is the requirement in the final rule that there be clearance of the 
dwelling unit if paint stabilization is conducted. As explained above, 
this is also a uniform requirement across this rule whenever hazard 
reduction is conducted. It does not exist in current regulations nor 
was it required for tenant-based rental assistance programs in the 
proposed rule. HUD believes unit-wide clearance is an essential factor 
in establishing that a dwelling unit is lead safe, and therefore is 
requiring that clearance tests be conducted by certified risk assessors 
or certified lead-based paint inspectors. The final rule eliminates the 
dust testing requirement for pre-1950 housing that was in the proposed 
rule and the distinction between pre-1950 and post-1949 housing. In the 
interest of regulatory streamlining, a single set of requirements 
applies to all pre-1978 housing.
    All occupants shall be provided the lead hazard information 
pamphlet by the owner, except that a pamphlet does not have to be 
provided if it has already been provided by the owner or other 
designated party pursuant to the disclosure rule. Also, the owner must 
provide a notice to occupants describing the results of the clearance 
examination. Finally, the final rule requires that ongoing maintenance 
of painted surfaces and safe work practices be incorporated into 
regular building operations, where appropriate under HUD-administered 
programs.
    HUD estimates in the Economic Analysis for this rule that the 
average cost of the new requirements imposed by this subpart will be 
approximately $250 per unit in single family units and $100 per unit in 
multifamily units during the first year after the effective date. In 
subsequent years, costs will doubtless be less. Net benefits are 
clearly positive. For single family units, the estimated average net 
benefit (benefits minus costs) is $850 per unit using a discount rate 
of three percent for increased lifetime earnings and $125 per unit 
using a seven percent rate. For multifamily units, the comparable net 
benefits are $840 and $150. For further information on costs and 
benefits of the rule, see Section VI. of this preamble, below.
    Another subject of public comment was the policy on responding to 
the existence of an environmental intervention blood lead level child 
in the home of a family receiving tenant-based rental assistance. Some 
commenters felt that the proposed policy of requiring a risk assessment 
and interim controls would reduce participation in the program by 
property owners. HUD believes that compliance with the basic policy of 
paint stabilization and unit clearance, combined with ongoing 
maintenance is so inexpensive and will so reduce the likelihood of 
environmental intervention blood lead level cases in these dwellings 
that landlords will not leave the program. To ensure that the 
designated party is aware of environmental intervention blood lead 
level cases in assisted families, the final rule clarifies the 
requirements of the proposed rule for exchanging information between 
public health departments and designated parties and matching 
environmental intervention blood lead level addresses with those of 
assisted families. (See further discussion in Section III.D.6 of this 
preamble, above.) Also, for purposes of clarity, the rule states that 
if a dwelling unit does not comply with the requirements of this rule, 
the unit does not meet Housing Quality Standards (HQS). If a family is 
occupying a unit that is out of compliance, the designated party may 
offer the family the right to move to another unit. If the family 
refuses to move, the designated party may curtail assistance.
    14. Subparts N-Q reserved.
    15. Subpart R--Methods and Standards for Lead--Based Paint Hazard 
Evaluation and Reduction Activities. This subpart replaces part 37 of 
the proposed rule. It is shorter than the proposed part 37 because it 
references methods and standards established by EPA-authorized State or 
tribal programs or by EPA itself for risk assessment, lead-based paint 
inspection and abatement. Revised, streamlined sections are provided on 
interim controls (including paint stabilization), occupant protection 
and worksite preparation, and ongoing lead-based paint maintenance and 
reevaluation (called ``monitoring'' in the proposed rule). New sections 
are provided on standard treatments and safe work practices, concepts 
recommended by the Task Force (see Section I.D.2 of this preamble, 
above).
    a. Standards. Although HUD defers to a large extent to methods and 
standards set by States, Indian tribes or EPA for lead-based paint 
inspections, risk assessments, lead-hazard screens and abatements, the 
Department is requiring that Federal standards for lead-based paint, 
dust-lead hazards and soil-lead hazards be used when conducting 
evaluations and hazard reductions in housing covered by this final rule 
unless a State, tribal or local government requirement is more 
protective.
    As explained above in Section III.D.4 of this preamble, above, the 
standard for deteriorated paint in the proposed rule contained de 
minimis areas that are not included in the final rule. The definition 
of lead-based paint, however, is the same. HUD is including interim 
standards for dust-lead hazards and soil-lead hazards pending effective 
EPA standards pursuant to TSCA section 403. The interim standard for 
soil-lead hazards, and the concentration for abating bare soil, are 
unchanged from the proposed rule; but the interim dust-lead standards 
have changed. The proposed dust-lead standard for risk assessments and 
reevaluations was 100 g/sq.ft (micrograms per square foot) for 
interior floors (both hard and carpeted) and 500 g/sq.ft for 
interior window sills; there was no proposed standard for window 
troughs (sometimes called window wells); the standards for clearance 
were the same as for risk assessments; and there was no standard for 
lead hazard screens, which were not recognized in the proposed rule. In 
the final rule, the interim dust-lead standard for risk assessments and 
reevaluations is 40 g/sq.ft for interior floors (both hard and 
carpeted) and 250 g/sq.ft for interior window sills. Risk 
assessments and reevaluations do not have a standard for window 
troughs. Standards for clearance and lead hazard screens are also 
provided. Exterior floors, such as unenclosed porches, and patios, do 
not have a standard; the floor standard applies to enclosed porches. A 
complete discussion of dust-lead standards is provided below in Section 
III.E.15.b of this preamble, ``Adequacy of Dust-Lead Standards.''
    One commenter questioned the advisability of HUD specifying a dust 
standard in the proposed rule for carpets, arguing that there is no 
consensus about how to test for dust hazards in carpets or what level 
of lead is dangerous. HUD agrees with the commenter that research on 
this question is needed, and it initiated such studies in 1997. It is 
known, however, that carpeting can be a dust reservoir with significant 
amounts of lead (Battelle 1997). The Department believes that it would 
be wrong to do nothing to protect children in this situation. The

[[Page 50179]]

effect of failing to provide a standard for carpeted floors would mean 
that the children who happen to be living in homes that are covered by 
the rule and have wall-to-wall carpeting would remain unprotected from 
floor dust-lead hazards, and the children living with area rugs would 
be only partially protected. Preliminary data from the HUD Evaluation 
of the Lead-Based Paint Hazard Control Grant program indicate that 
about 25-30 percent of the bedrooms and living rooms in the study had 
carpeting, with the percentage much higher in certain areas.
    HUD acknowledges that the proposed EPA rule implementing TSCA 
section 403 did not include a dust-lead standard for carpets because 
EPA felt that currently available data are insufficient for 
establishing a health-based standard and because it is not clear what 
hazard reduction methods are effective. EPA acknowledged that ``the 
lack of a standard for carpeted floors is a significant limitation'' 
and requested comment on the impact of not having a standard and on 
information that would be helpful in setting such a standard.
    As explained below under ``Adequacy of Dust-Lead Standards,'' a 
study by the University of Rochester (Lanphear 1996) shows a 
significant correlation between dust lead in carpets and children's 
blood lead. Furthermore, HUD provides in subpart R of the rule a method 
for dust-lead hazard control in carpets or rugs. This method relies on 
thorough vacuuming and is based on the HUD Guidelines and on recent 
data from the Evaluation of the HUD Lead-Based Paint Hazard Control 
Grant program. The feasibility of removing dust lead from carpets to 
achieve the interim standard is discussed below in Section III.E.15.b. 
of this preamble. Therefore, HUD is including in the final rule an 
interim standard for dust lead in carpeting using a wipe sampling 
method, pending the issuance by EPA of a health-based standard pursuant 
to TSCA section 433.
    The HUD interim standard for clearance in the final rule is the 
same as for risk assessments on floors and interior window sills, but a 
clearance standard of 800 g/sq.ft is added for window troughs. 
The Department's intent in setting a clearance standard for window 
troughs is to encourage their cleaning. It is not unusual for window 
troughs to have very high loadings of lead in dust, perhaps because 
they are perceived as an exterior surface and are rarely cleaned, and 
perhaps because lead-based paint on window friction surfaces 
contributes to the dust lead loading in the trough. In the evaluation 
of HUD's Lead-Based Paint Hazard Control Grant Program, the median pre-
intervention dust-lead loading on troughs for occupied dwelling units 
was over 11,500 g/sq.ft, and 10 percent of the units had 
loadings over 100,000 g/sq.ft. Comments were both for and 
against sampling troughs. A large city housing agency agreed with the 
policy on troughs in the proposed rule. A State agency disagreed, 
pointing out that, in the Rochester study of the relationship between 
dust lead and childhood blood lead, dust lead in troughs correlated 
well with blood lead.
    In the final rule HUD has included an option to conduct a lead 
hazard screen, and, as in the HUD Guidelines, the dust-lead standard is 
set at approximately one-half the risk assessment standard: 25 
g/sq.ft. for floors and 125 g/sq.ft. for interior 
window sills. The floor standard for the lead hazard screen was set at 
25 g/sq.ft. instead of 20, reflecting practical laboratory 
detection limits.
    Several commenters addressed aspects of the proposed rule's 
treatment of soil-lead standards or soil treatments. EPA questioned 
HUD's interpretation of the soil-lead levels in EPA's guidance on lead 
in soil (60 FR 47248, September 11, 1995). In its guidance, EPA 
recommended that when lead levels in bare soil exceed 400 ppm at 
``areas expected or intended to be used by children,'' interim controls 
be undertaken to change use patterns and/or create barriers between 
children and contaminated soil. ``Where bare soil-lead levels are found 
to be 2,000 ppm or more, interim controls should be implemented even if 
the area is not frequented by children.'' At 5,000 ppm or more, EPA 
recommended abatement of bare soil. In the proposed rule, HUD applied 
the 400 ppm standard to bare soil ``in play areas;'' the 2,000 ppm 
standard was applied to bare soil in ``other areas.'' EPA called this 
interpretation incorrect, indicating that permitting 2000 ppm levels 
anywhere near areas occupied by children ``may present an unreasonable 
risk.'' The Agency recommended that the 400 ppm standard apply to the 
entire yard. HUD believes that its interpretation of the guidance is 
reasonable and also that it reflects the guidance on this matter given 
in the HUD Guidelines, which is referenced in the EPA regulation. In 
the final rule, HUD has retained, therefore, the same interpretation as 
in the proposed rule. The standard for soil-lead hazards addresses bare 
soil in play areas frequented by children under 6 years of age. HUD 
intends that these play areas include those intended for these 
children's routine use, as demonstrated by such evidence as the 
presence of play equipment or similar attractions, collections of toys 
or other children's possessions, or observations of children's play 
patterns.
    EPA questioned the basis for the proposed rule standard of no more 
than 200 g/g for material used to cover soil-lead hazards. 
While conclusive scientific data on which to base the standard are not 
available, HUD believes that a standard is needed and that making it 
one-half of the level considered to be a soil-lead hazard in children's 
play areas is reasonable.
    Throughout the rule, units of measurement are provided in metric 
forms as well as corresponding conventional unit values, in accordance 
with the Metric Conversion Act of 1975, as amended by Public Law 100-
418, at 15 U.S.C. 205b; and Executive Order 12770, ``Metric Usage in 
Federal Government Programs'' (56 FR 35801, July 25, 1991). Persons 
covered by the rule should consistently apply the units they use 
routinely in their work. For example, lead-based paint professionals 
who use conventional units (such as feet) in their work should use the 
risk assessment standards of micrograms per square foot (g/ft 
\2\); professionals who use metric units (such as meters) in their work 
should use the fully metric standards of micrograms per square meter 
(g/m \2\).
    HUD is aware of efforts by voluntary consensus standards bodies to 
develop private-sector standards in the lead-based paint hazard 
evaluation, management and control areas, and on related subjects. HUD 
has been supportive of, and participated in, some of these efforts. For 
example, over a dozen standards of the American Society for Testing and 
Materials (ASTM, West Conshohocken, PA 19428-2392) are cited in the HUD 
Guidelines. The Guidelines, in turn, are cited by subpart R itself and 
in the EPA rule on lead hazard control work practices (40 CFR 
745.227(a)(3)), which is cited by subpart R. ASTM and other committees 
are continuing to develop standards in the lead-based paint hazard 
field (such as occupant notices with more detail). The Department will 
review these standards, when issued, for their applicability to and 
practicality for the programs covered by this rule.
    b. Adequacy of Dust-Lead Standards. One commenter stated that the 
permissible levels of lead in dust referenced in the proposed rule 
would not be sufficiently protective of children and cited several 
recent scientific studies as evidence. Other commenters stated that HUD 
failed to require clearance testing in all programs to determine if 
housing units undergoing lead hazard reduction activities were

[[Page 50180]]

safe to reoccupy. The proposed rule contained standards for lead in 
dust of 100 g/ft2 on floors and 500 g/
ft2 on window sills for both risk assessment and clearance 
purposes. The proposed rule eliminated an earlier standard of 800 
g/ft2 for window troughs. In preparing the final 
rule, HUD considered the health benefits and feasibility of lead dust 
standards for both clearance and risk assessment purposes.
    (1) Health Benefits. Clark and coworkers reported a study of 23 
homes in Cincinnati where the floor dust-lead level required to prevent 
95% of the children from exceeding a blood lead level of 10 g/
dL was found to be almost an order of magnitude lower than the existing 
standard of 100 g/ft \2\ (Clark 1996). In a study of 205 
children in Rochester, NY, Lanphear et al. found that approximately 20% 
of children exposed to a floor dust-lead level of 40 g/ft \2\ 
had blood lead levels greater than 10 g/dL (Lanphear 1996).
    Earlier studies have demonstrated the importance of establishing 
adequate dust-lead standards. From data collected in 1990, Ashengrau 
reported an increase in blood lead level of 6.5 g/dL (p=0.05) 
in children who had baseline blood lead levels below 20 g/dL 
and whose houses were treated for lead-based paint hazards using a 
floor clearance standard of 200 g/ft2 (Ashengrau 
1997). These houses were also treated mainly through extensive dry 
scraping, which under this rule is now a prohibited method of paint 
removal in federally-assisted or federally-owned housing.
    In a study conducted between 1987 and 1990 where clearance testing 
may not have been conducted at all and where children had baseline 
blood lead levels less than 20 g/dL, only 35% of the children 
had lower blood lead levels following hazard control work. The mean 
blood lead level increased significantly from 16.8 g/dL to 
19.3 g/dL (p<0.05) (Swindell 1990).
    These studies demonstrate that without clearance testing and 
without adequate dust-lead standards, children's blood lead levels may 
worsen as a result of lead-based paint hazard control work in housing. 
Therefore, HUD has provided for clearance testing when lead hazard 
control work is done in housing covered by this rule.
    Although each of the studies cited above have limitations, it is 
clear that the weight of the scientific evidence suggests that children 
may not be adequately protected under the dust-lead standards in HUD's 
proposed rule. As a result of such studies, HUD has progressively 
lowered its dust-lead standard over the years. In 1990, HUD used a 
floor dust-lead standard of 200 g/ft2 in its 
Interim Guidelines, based primarily on a standard adopted by the State 
of Maryland and research conducted at Johns Hopkins University (Farfel 
1990).
    At that time, the Centers for Disease Control and Prevention (CDC) 
had established a blood lead level of concern of 25 g/dL. In 
1991, CDC adopted a new multi-tier blood lead level response system. 
That system indicated that blood lead levels of 10-14 g/dL in 
many children in a community should trigger community-wide childhood 
lead poisoning prevention activities. A blood lead level of 15-19 
g/dL that persists in an individual child should result in an 
environmental investigation and intervention. Higher blood lead levels 
require more intensive medical evaluation and pharmacologic treatment. 
Because CDC lowered the blood lead level of concern, it is logical that 
dust-lead standards would also need to be reduced. Consequently, HUD 
reduced its floor dust-lead standard to 100 g/ft2 
in its 1994 draft Guidelines, which was released in final form in 1995. 
EPA adopted the same guidance dust-lead level in 1994 and published it 
the next year (60 FR 47248, September 11, 1995).
    Dust-lead standards in this rule will be used in risk assessments 
to determine whether hazard reduction should be conducted and in 
clearance examinations to determine whether dust in housing units, 
common areas and/or work sites has been properly cleaned and removed 
after hazard reduction activities. The goal of these activities is to 
protect children from exposure to lead at or above the CDC level of 
concern, 10 g/dL. As explained below, HUD has considered both 
cost and feasibility in setting the interim standards.
    To better understand the existing science, HUD conducted a study 
pooling the data from virtually all available epidemiological studies 
that examined the relationship between dust-lead and blood-lead levels, 
taking into account differences across the studies (Lanphear et al. 
1998). After combining data sets from each study, a cohort of 1,861 
children aged 6 to 36 months was created. This age group has been found 
to have the clearest relationship between dust lead and blood lead. The 
pooled analysis excluded children who had been individually selected 
for study on the basis of high blood lead, due to the bias this could 
introduce. Environmental lead measurements and other variables (season, 
presence of industrial sources of exposure, year of study, race, sex, 
socioeconomic status and measurement error) were standardized across 
all studies.
    The pooled analysis of epidemiological studies estimated the 
expected prevalence rate of blood lead levels greater than or equal to 
10 and 15 g/dL in young children using a number of different 
candidate dust-lead standards and holding all other environmental 
variables and other covariates at their national averages. Table 1 
shows the results of this analysis.

       Table 1.--Floor Dust Lead and Children's Blood Lead Levels
------------------------------------------------------------------------
                                        Percentage of     Percentage of
                                        children with     children with
                                         blood lead        blood lead
Floor dust-lead loading  (g/  levels greater    levels greater
                ft2)                  than or Equal to  than or equal to
                                      10 g/dL  15 g/dL
                                       (95% confidence   (95% confidence
                                         intervals)        intervals)
------------------------------------------------------------------------
1...................................     1.0 (0.3-3.8)     0.1 (0.0-0.6)
5...................................    4.4 (1.7-11.0)     0.7 (0.4-2.6)
10..................................    7.4 (3.1-16.5)     1.4 (0.4-4.6)
20..................................         12 (5-24)     2.7 (0.9-7.8)
25..................................         14 (6-27)         3.2 (1-9)
40..................................         18 (9-33)        4.7 (2-13)
70..................................        24 (12-42)        7.2 (3-18)

[[Page 50181]]

 
100.................................        28 (14-48)        9.3 (4-23)
------------------------------------------------------------------------

    The pooled analysis indicates that, using the old standard (i.e., 
100 g/sq.ft. on floors), 28 percent of young children may have 
a blood lead level greater than or equal to 10 g/dL, and 
nearly 10 percent may have a blood lead level equal to or greater than 
15 g/dL. Using a floor dust-lead standard of 40 g/
sq.ft., 18 percent of young children may have a blood level of 10 
g/dL or greater, and less than 5 percent will be a 15 
g/dL or greater. To achieve a prevalence of only 5 percent of 
young children with blood levels at 10 g/dL or greater, the 
analysis indicates that dust-lead loadings on floors would have to be 
at 5 g/sq.ft.
    For reasons of feasibility, HUD is setting an interim dust-lead 
standard for floors of 40 g/sq.ft. The feasibility issues are 
discussed in the following paragraphs. It is noteworthy that, based on 
Table 1, a standard of 40 g/sq.ft. is expected to protect more 
than 95 percent of young children against exposure to lead in blood 
equal to or greater than 15 g/dL, which is the level 
recommended by CDC at which environmental intervention should be 
conducted. This is also the environmental intervention blood lead level 
used in this rule, as explained above in Section III.D.6 of this 
preamble.
    With regard to carpeted floors, Lanphear et al. found a significant 
correlation between dust lead in carpets (using wipe sampling) and 
children's blood lead levels (Lanphear 1996). Furthermore, the study 
showed that about 19.8 percent of children would have blood lead levels 
at or above 10 g/dL with carpeted floors at 40 g/
sq.ft., a percentage that is not significantly different from the 18 
percent found with hard-floor dust lead at 40 g/sq.ft. 
Therefore HUD is setting an interim dust lead standard for carpeted 
floors that is the same as that for hard floors.
    (2) Feasibility. There are two issues that affect the feasibility 
and cost of any given dust-lead standard: (1) The ability of cleaning 
techniques to meet a given level of cleanliness and the percentage of 
houses that can be expected to pass and maintain a given dust-lead 
standard; and (2) the ability to measure dust-lead levels in the range 
of interest using readily available analytical techniques (and the 
increased cost of using more sensitive detection methods if needed).
    The largest study of residential lead hazard control conducted to 
date is HUD's on-going evaluation of its first 14 grantees under the 
Lead-Based Paint Hazard Control Grant program. These grantees are State 
and local governments receiving grants to address lead-based paint 
hazards in low-income, privately owned dwelling units. Almost 3,000 
dwelling units are enrolled in this evaluation. Using modern hazard 
control techniques, this study provides important insights into the 
degree of cleanliness that is feasible using current measurement, 
cleaning and hazard reduction technologies. The final report will not 
be issued until after the year 2000 due to on-going evaluation of the 
dwellings and the children who live in them.
    Interim results show that, on average, initial floor dust-lead 
levels are below 20 g/ft2 (National Center 1998). 
Furthermore, the data show that dust-lead levels on floors do not 
reaccumulate continuously, as assumed in the Economic Analysis for the 
proposed rule, which was prepared before these reaccumulation data were 
available. The new data show that median dust-lead levels on floors 
continue to drop for at least the first year following the hazard 
control work, from 19 g/ft2 to 14 g/
ft2 twelve months later. The average dwelling unit 
undergoing lead hazard control had a median floor dust-lead level of 17 
g/ft2 immediately following hazard control work. 
That level declined to 14 g/ft\2\ six months later and 
remained at the same level one year following the work. Therefore, it 
is feasible to reach and maintain a floor dust-lead standard of 40 
g/ft2.
    The pooled epidemiological analysis also shows that a floor dust-
lead standard of 5 g/ft2 would be required to 
ensure that 95 percent of children do not have a blood lead level 
greater than or equal to 10 g/dL. However, modern hazard 
reduction techniques do not appear to be capable of reaching a floor 
dust-lead level of 5 g/ft2 routinely, since the 
median level following hazard control work is three to four times 
greater (see also the discussion below about detection limits).
    Importantly, many of the units treated under the HUD lead hazard 
control grant program are high-risk houses and often initially contain 
children with seriously elevated blood lead levels. In more typical 
dwelling units, it is likely that even lower dust-lead levels can be 
achieved. Indeed, HUD's 1990 National Survey of Lead-Based Paint 
Hazards in Private Housing found that the average dust-lead loading on 
floors (converted to wipe sampling) was estimated to be only 5 
g/ft2. This survey did not include houses where 
lead hazard reduction had occurred.
    The HUD Evaluation Study data show that 17.4 percent of these high 
risk houses have floor dust-lead levels above 100 g/
ft2 (the existing standard). A dust-lead standard of 40 
g/ft2 would increase the percentage of ``high 
risk'' houses above the standard to about 26 percent. This is fairly 
consistent with the blood lead levels found in this population, because 
28.9% of the children enrolled had environmental intervention blood 
lead levels.
    More typical houses that are served by other HUD programs are 
likely to have a far lower percentage failing the reduced dust-lead 
interim standard, because these programs do not target housing with 
lead-poisoned children. For example, data from HUD's National Survey 
show that the percentage of all U.S. housing exceeding a floor dust-
lead level of 100 g/ft2 is 7.6 percent in ``dry'' 
rooms (i.e., rooms without plumbing fixtures). The percentage exceeding 
a floor dust-lead level of 40 g/ft2 is 10.2 percent 
in dry rooms. In short, the lower floor dust-lead interim standard of 
40 g/ft2 will increase the percentage of houses 
requiring hazard control by a modest 2.6 percent.
    With regard to carpeted floors, preliminary data from the HUD 
Evaluation indicate that only 15 percent of carpeted entry areas and 8 
percent of

[[Page 50182]]

other carpeted rooms had dust-lead loadings equal to or greater than 40 
g/sq.ft. based on wipe sampling. The Evaluation data also 
indicate that grantees were able to reduce dust-lead loadings in 
carpets, but the data are limited by the fact that grantees were 
working with a clearance standard of 100 g/sq.ft. instead of 
40 g/sq.ft.
    (3) Detection Limits. Detection limits of dust wipe analysis also 
have an effect on the feasibility of lower dust-lead standards. A 
standard cannot be set at a level that cannot be measured reliably. 
Many analytical laboratories currently report method detection limits 
of 25 g/wipe. For floors, this means a method detection limit 
of 25 g/ft2, since a one square foot area is 
typically sampled. A method detection limit at least 4 times lower than 
the regulatory standard is desirable to ensure reliable results.
    For all laboratories in the HUD Evaluation Study, the average 
method detection limit is currently 11 g/wipe. Therefore, HUD 
believes that laboratories will be able to report detection limits of 
10 g/wipe without having to resort to more sensitive and more 
expensive types of analytical procedures. In short, no increase in 
analytical cost is expected in order to achieve a detection limit of 10 
g/wipe, which is one-fourth the new floor dust-lead standard 
of 40 g/ft2. This will ensure that reliable 
measures of dust-lead loading can be made.
    A floor dust-lead standard of 5 g/ft2 is well 
below method detection limits reported by most laboratories and is 
therefore not feasible to implement.
    (4) Window Dust Standards. For interior window sills and window 
troughs, epidemiological data are less available than for floors, 
because only a few studies have collected samples from these areas. For 
interior window sills, the final rule establishes a dust-lead standard 
of 250 g/ft2, which is based on a study in 
Rochester, NY (Lanphear 1996). This standard also should protect 
virtually all children from developing an environmental intervention 
blood lead level. In the high risk houses enrolled in the HUD 
Evaluation Study, 47.5 percent of the units had baseline window sill 
dust lead levels below 250 g/ft2, which is close to 
the percentage of children who had blood lead levels below 10 
g/dL in the evaluation (54.3 percent). At clearance following 
lead hazard control work, the median dust-lead level on window sills 
was 44 g/ft2 at the time of clearance, 83 
g/ft2 six months later, and 88 g/
ft2 12 months later. For more typical houses, the HUD 
National Survey found that the percentage of interior window sills 
failing a new dust-lead standard of 250 g/ft2 would 
increase by a modest 5.4 percent (compared to the current standard of 
500 g/ft2).
    In short, the window sill standard is both feasible and health-
based. It is feasible because dust-lead levels at the new interim 
standard can be reached and maintained and because the increase in the 
percentage of houses failing the new standard is small. It is health-
based because the percentage of houses failing the standard is about 
the same as the percentage of children with blood lead levels greater 
than 10 g/dL in the HUD Evaluation Study.
    In the proposed rule, HUD did not include the window trough 
standard of 800 g/ft2 it had established in the HUD 
Guidelines and the 1990 Interim Guidelines. However, several commenters 
indicated that a window trough standard should be retained for 
clearance purposes, as a way of ensuring that window troughs are 
cleaned and/or treated during hazard reduction work. The HUD Evaluation 
Study shows that median dust-lead levels in window troughs immediately 
following hazard reduction work is 72 g/ft2, 
indicating that it is feasible to implement a window trough clearance 
standard of 800 g/ft2.
    On the other hand, development of a feasible window trough risk 
assessment standard is more problematic, because nearly all pre-1978 
dwellings have very high window trough dust-lead levels. For example, 
data from HUD's Evaluation Study indicate that the median window trough 
dust-lead level for occupied dwelling units prior to hazard control 
work is more than 11,500 g/ft2. Because HUD 
believes it is important to have a reliable way to determine whether or 
not window troughs were cleaned during hazard reduction work, and 
because window trough lead dust does appear to contribute to children's 
exposure, HUD has reestablished a window trough clearance standard of 
800 g/ft2 in the final rule. Because most dwelling 
units have window trough levels above 800 g/ft2, 
HUD believes it is not feasible to establish a window trough dust-lead 
standard for risk assessment and reevaluation purposes at this time. 
Therefore, the window trough dust standard of 800 g/
ft2 is used for clearance purposes only. To meet this 
clearance requirement, window troughs should be cleaned as a routine 
part of all lead hazard control work.
    (5) Lead Hazard Screen Standards. The lead hazard screen levels for 
floor and interior window sill dust lead in this rule are 25 
g/ft2 and 125 g/ft2, 
respectively. These are about half of the standards used for risk 
assessment purposes. This ensures that the screen will be sufficiently 
sensitive to uncover those houses that should have a full risk 
assessment.
    Lead hazard screens are a form of risk assessment applied to 
housing in good condition where lead-based paint hazards are unlikely 
to be present. The protocol for a lead hazard screen referenced in the 
HUD Guidelines involves (among other things) collection of two 
composite dust samples: one from floors and a second from window 
troughs. Each composite sample consists of 4 individual samples 
collected from a like surface. If a level found in the screen is more 
than one half of the applicable risk assessment dust-lead standard, 
then a full risk assessment is to be conducted to determine if lead-
based paint hazards are actually present.
    In this final regulation, HUD has modified slightly the lead hazard 
screen protocol of the HUD Guidelines regarding dust. In the final 
rule, interior window sills are sampled instead of window troughs for 
three reasons: (1) Interior window sills are easier to wipe-sample than 
troughs; (2) dust-lead loadings on troughs may reflect exterior sources 
not related to the residential structure itself; and (3) dust-wipe 
loadings on sills and troughs are highly correlated (the correlation 
coefficient of the logarithms of the loadings is 0.60, which is higher 
than that for any other pairs of paint- or dust-lead measurements 
(Lanphear 1995)). EPA made a similar judgment in deciding not to 
propose a window trough dust-lead hazard standard in the proposed 
regulations pursuant to TSCA section 403 (63 FR 30335-6, June 3, 1998). 
Future research or technological advances may result in different 
recommendations, which the Department will review.
    Similarly, HUD is noting that single-wipe samples may be used 
instead of composite samples as part of the lead hazard screen. When 
two or more single-wipe samples are used for a single building 
component type (such as two or more interior widow sills), the dust 
loadings for that component type are averaged to give the equivalent 
composite sample result. Users may wish to take single-wipe samples, 
rather than composite samples, as part of lead hazard screens for 
several reasons: the cost of laboratory analyses is low enough for many 
users that they may perceive little economic benefit to analyzing 
composite samples instead of single-wipe samples, and the EPA's 
National Lead Laboratory Accreditation Program (NLLAP) does not, at the 
time of issuance of this rule, have a formal

[[Page 50183]]

quality assurance program for composite dust samples. EPA is working on 
this latter issue, and will advise NLLAP participants and others if and 
when such a program becomes available. Potential users of composite 
dust wipe analyses may contact the National Lead Information Center 
Clearinghouse toll-free at 1-800-424-LEAD for information on this 
subject.
    If less than 125 g/ft2 (half of 250 g/
ft2) of lead dust is detected on the composite interior 
window sill sample, and the composite floor sample shows that less than 
25 g/ft2 is present, the screen shows that lead-
based paint hazards are not present. In this case, a full risk 
assessment is not needed. Conversely, if a lead hazard screen shows 
that dust-lead is present at a level equal to or greater than 125 
g/ft2 on interior window sills or equal to or 
greater than 25 g/ft2 on floors, a lead-based paint 
hazard may be present and a full risk assessment should be conducted to 
confirm or reject the results of the screen.
    HUD has also modified slightly the lead hazard screen protocol of 
the HUD Guidelines regarding soil. In the final rule, soil is to be 
sampled and analyzed, and the analyses evaluated, using the same 
protocol as for a risk assessment. With analytical costs having dropped 
since the publication of the HUD Guidelines, the cost of performing 
soil analyses as part of lead hazard screens for single family housing 
in good condition undergoing rehabilitation above $5,000 per unit (the 
cases where the lead hazard screens are likely to be used) has become 
insignificant; the additional time associated with the samples, for 
lead professionals already at the site, is also insignificant.
    To summarize, the final rule establishes the dust-lead standards in 
Table 2. The dust-lead standards in this rule are interim standards 
until EPA promulgates and makes effective dust-lead hazard standards 
under TSCA section 403. When the TSCA 403 rule is effective, HUD will 
issue any technical amendments that are needed to make clear what 
standards are applicable to this rule at that time.

                                      Table 2.--Interim Dust-Lead Standards
----------------------------------------------------------------------------------------------------------------
                                                                           Surface
                                            --------------------------------------------------------------------
                                                                Interior
             Evaluation method               Floors (g/ft2)      (g/     Window troughs  (g/ft2)
                                                                  ft2)
----------------------------------------------------------------------------------------------------------------
Risk Assessment Screen.....................              25             125  Not Applicable.
Risk Assessment............................              40             250  Not Applicable.
Reevaluation...............................              40             250  Not Applicable.
Clearance..................................              40             250  800.
----------------------------------------------------------------------------------------------------------------
Note: ``Floors'' includes carpeted and uncarpeted interior floors.

    c. Summary Notice Formats. Subparts D, and F through M of the final 
rule require that occupants be notified of the results of evaluations 
and hazard reduction activities (including clearance examinations). 
Also, if lead-based paint or lead-based paint hazards are presumed to 
exist, notification must be made. The major elements of these notices 
are described in Subpart B.
    Subpart B places responsibility for any required occupant 
notification on the designated party. HUD recognizes that many 
designated parties may not have the expertise from staff or consultants 
to extract the pertinent information from the inspection, risk 
assessment or clearance reports to prepare the notices. As a result, 
the Department, in subpart R, makes a strong recommendation that the 
lead-based paint professional who prepares such a report provide the 
designated party with the summary notice of the results suitable for 
posting or distribution to occupants.
    Sample (i.e., non-mandatory) notice formats that can be used are 
provided in Appendix A for a lead-based paint inspection, Appendix B 
for a risk assessment, Appendix C for presumption of the presence of 
lead-based paint or lead-based paint hazards, and Appendix D for 
completion of hazard reduction activities (including clearance). These 
formats include the information described in Subpart B and are based 
on: (1) The sample formats developed by HUD and EPA for the disclosure 
rule (see 61 FR 9074-5, March 6, 1998, in the preamble to the final 
rules implementing section 1018 of Title X, 24 CFR 35.80-98 and 40 CFR 
745.100-119); and (2) formats developed by the California Department of 
Health Services (Emeryville, CA 94608-1939) for notices of abatement of 
lead hazards (DHS form 8551) and lead hazard evaluation (DHS form 
8552).
    Requirements for reports of evaluation or abatement clearance used 
to develop the corresponding notices to occupants are found in EPA's 
TSCA section 402/404 rule (40 CFR 745.227) and are cited by subpart R. 
Requirements for reports on hazard reduction activities other than 
abatement are in subpart R itself. Guidance on preparing these reports 
is found in the HUD Guidelines, chapters 5 (risk assessment), 7 
(inspection), and 15 (clearance). There are currently no detailed 
standards for preparing these reports, and HUD-funded research on lead-
based paint inspection reports has found considerable variability in 
them, in both format and measures of completeness and accuracy (HUD 
1998). ASTM committee work developing detailed voluntary consensus 
standard protocols for report preparation is beginning; HUD will 
evaluate any standards, when issued, for their applicability to, and 
practicality for, the programs covered by this rule.
    d. Interim Controls. The section on interim controls in the final 
rule is similar to that of the proposed rule. As mentioned above in 
Section III.D.8 of this preamble, the proposed rule required that 
workers performing interim controls be supervised by a certified 
abatement supervisor, and this was met with criticism by several 
commenters. In response to these comments, in the final rule HUD is 
following the Task Force recommendation that such workers be trained in 
the basic requirements of safe lead-based paint hazard reduction, and 
several choices of acceptable training courses are mentioned. All such 
training is designed to meet OSHA requirements; several choices meet 
EPA requirements as well.
    Another significant modification of the proposed-rule section on 
interim controls is the addition of explicit factors that must be 
present for interim controls to be required under this rule for 
friction, impact and chewable surfaces. HUD developed these factors in 
response to comments that greater specificity is needed to prevent 
unnecessary, ineffective and wasteful hazard reduction actions. 
Friction

[[Page 50184]]

surfaces are required to be treated only if: (1) Dust-lead levels on 
the nearest horizontal surface (i.e., the surface on which the dust 
settles that is nearest to the friction surface) are greater than the 
risk assessment dust-lead standards; (2) there is evidence that the 
surface is subject to abrasion; and (3) lead-based paint is known or 
presumed to be present on the surface. Impact surfaces are required to 
be treated only if: (1) Paint on the surface is damaged; (2) the 
damaged paint is caused by impact from a related building component 
(such as a door knob that knocks into a wall, or a door that knocks 
against its door frame); and (3) lead-based paint is known or presumed 
to be present on the surface. HUD intends that impact as a result of 
misuse by occupants is not necessarily an acceptable basis for 
requiring treatment. Chewable surfaces are required to be treated only 
if: (1) There is evidence that a child of less than 6 years of age has 
chewed on the surface; and (2) lead-based paint is known or presumed to 
be present on the surface.
    As in the proposed rule, interim control methods, when required, 
must be selected from among those identified as acceptable in a current 
risk assessment report. (As noted in subpart B, abatement is also 
acceptable when interim controls are required.) When interim controls 
are required and no risk assessment has been done or no risk assessment 
that has been done is current, a new risk assessment must be conducted 
(except when only paint stabilization of deteriorated paint is 
required, because the response has been specified in the rule). 
Techniques for repairing physical defects in a substrate before 
performing paint stabilization are discussed in the HUD Guidelines, 
chapter 11.
    The proposed rule required a minimum two-stage cleaning process for 
the control of dust-lead hazards on hard surfaces: first HEPA 
vacuuming, then wet cleaning. Also, HEPA vacuuming was required for 
surfaces covered by carpeting or rugs. One commenter noted that recent 
research has indicated that a variety of cleaning methods may achieve 
clearance levels, and that one of the critical variables affecting the 
difficulty of cleaning is the condition of the surface. To avoid 
rigidity, HUD has modified the dust-lead hazard control requirements in 
the interim controls section of subpart R of the final rule in three 
ways. First, the two-stage process is no longer required; second, if 
hard surfaces are rough and pitted, they must be made smooth and 
cleanable; and third, rather than requiring HEPA vacuuming, HUD is 
requiring the use of a ``HEPA vacuum or other method of equivalent 
efficacy.'' One of the main reasons for revision of required cleaning 
methods is that the final rule requires clearance after all hazard 
reduction activities, whereas the proposed rule omitted the clearance 
requirement for some housing programs. In the context of this rule, the 
goal of cleaning should be to achieve clearance, not to comply with 
prescriptive regulations on how to clean. Making surfaces smooth and 
cleanable is an important objective, because it makes it possible for 
occupants to maintain their dwellings safe from dust-lead hazards in 
the future. Revision of the HEPA filter requirement will facilitate the 
application of advances in technology resulting from ongoing research 
on cleaning lead-contaminated surfaces. Information on the status of 
this field of technology is provided in Section III.E.2.a of this 
preamble, in the discussion of HEPA vacuums.
    A commenter recommended that clearance not be required after 
``basic interim controls,'' because many interim controls are like 
routine maintenance activities that will be performed frequently by in-
house staff. In the final rule, the Department has retained the 
clearance requirement for initial interim controls, because clearance 
is the only method of determining whether a dwelling unit is free of 
lead-based paint hazards. HUD, however, is not requiring clearance 
after ongoing lead-based paint maintenance activities that are 
conducted after interim controls and that do not disturb painted 
surfaces of a total area greater than 20 square feet on exterior 
surfaces, 2 square feet in any one interior room or space, or 10 
percent of the total surface area on an interior or exterior component 
with a small surface area such as window sills, baseboards and other 
trim.
    e. Standard Treatments. As explained above in Section III.E.2.c of 
this preamble, standard treatments, when used, must include: (1) 
Stabilization of all deteriorated paint, interior and exterior; (2) the 
provision of smooth and cleanable horizontal hard surfaces; (3) the 
correction of dust-generating conditions (i.e., conditions causing 
rubbing, binding, or crushing of surfaces known or presumed to be 
coated with lead-based paint); and (4) treatment of bare soil to 
control known or presumed soil-lead hazards. Safe work practices and 
clearance are required. Individuals performing standard treatments must 
be trained in how to control lead-based paint hazards. The training 
requirement is identical to that for interim controls.
    f. Clearance. Methods and standards for clearance in this rule 
refer to the EPA requirements for clearance after abatement at 40 CFR 
745.227(e) but also specify the dust-lead loading levels to be used for 
clearance. To pass clearance, dust-lead levels, using wipe sampling, 
must be less than 40 g/ft2 for interior floors, 250 
g/ft2 for interior window sills, and 800 
g/ft2 for window troughs. The rule also specifies 
the content of clearance reports that must be prepared for clearances 
after hazard reduction activities other than abatement. For clearance 
of the worksite only, which is required in subpart J after 
rehabilitation receiving no more than $5,000 per unit and also in some 
ongoing maintenance activities, dust samples must be taken from the 
floor and windows (if available) that represent the area within the 
dust containment area of the worksite. Worksite clearance is not 
required if the rehabilitation or maintenance does not disturb painted 
surfaces totaling more than the safe work practices de minimis levels 
(see Section III.D.4 of this preamble, above). For a discussion of 
qualification requirements for persons performing clearance, see 
Section III.D.8 of this preamble, above.
    While subpart R allows recleaning immediately after a clearance 
failure, owners, designated parties and contractors are urged to 
consider the cause of the failure, and to address the cause, if 
identified, before recleaning the affected area.
    A commenter recommended that property owners (or other designated 
parties) be allowed to retain a certified inspector or risk assessor to 
perform the clearance examinations. In the final rule, HUD has allowed 
this, provided the clearance examiner is independent from any 
contractor used to perform the hazard reduction work. The property 
owners (or other designated parties) may, however, use in-house 
employees for both hazard reduction and clearance examination, provided 
that the same employee does not do hazard reduction and clearance.
    After clearance, a report is to be prepared that documents the 
hazard reduction or maintenance activity as well as the results of the 
clearance examination. It is the responsibility of the designated party 
to ensure that this report is prepared, signed, and kept for at least 
three years. For an abatement activity, the report is an abatement 
report as described in EPA regulations at 40 CFR 745.227(e)(10). The 
abatement report includes the results of the clearance examination as 
well as a detailed written description of the abatement, and its 
preparation is the responsibility of the abatement supervisor. For 
another hazard reduction activity requiring a clearance

[[Page 50185]]

report (including interim controls, paint stabilization, standard 
treatments, lead-based paint maintenance, or rehabilitation), the EPA 
rule does not apply; so the final rule provides an outline of the 
required report that parallels the EPA abatement report outline. 
However, the designated party must make sure: (1) That a report 
describing the hazard reduction activity is prepared; and (2) that the 
clearance examiner provides a signed clearance report with the 
information required by the rule.
    Designated parties should also bear in mind that HUD has 
requirements in subparts D, and F through M for occupant notification 
following hazard reduction activities. The major elements of this 
notice are described in Subpart B. A sample (i.e., non-mandatory) 
format that can be used for notification of the completion of hazard 
reduction activities, including clearance, is provided in Appendix D 
(see discussion, above, in Section III.E.15.c of this preamble).
    g. Occupant Protection and Worksite Preparation. Requirements for 
occupant protection and worksite preparation in this final rule are 
similar to those in the proposed rule, which were based largely on the 
HUD Guidelines.
    Many hazard reduction activities can be completed in one work 
shift. As a result, the Department has streamlined the requirements for 
occupant relocation for work that will be completed within one period 
of 8 daytime hours. For work lasting longer, the rule provides for 
either occupant relocation or, for work lasting up to five days, 
occupancy of parts of the dwelling unit outside the worksite. The five-
day de minimis criterion is used in chapter 8 of the HUD Guidelines; 
the regulation closely parallels, but streamlines the guidance in 
tables 8.1, 8.2, and 8.3 of the Guidelines.
    At rooms where hazard reduction activities are conducted when 
occupants are present; or buildings from which occupants have been 
relocated, a warning sign shall be posted at each entry. For exterior 
hazard reduction activities, the sign placement is based on the HUD 
Guidelines, chapter 8, but the rule is somewhat more flexible, in that 
the position of the sign for exterior work is not specified beyond the 
performance requirement of its being easily read at 20 feet (6 meters) 
from the edge of the worksite. The wording of the sign is that of the 
four-line warning sign in the OSHA lead in construction standard (29 
CFR 1926.62(m)), ``WARNING / LEAD WORK AREA / POISON / NO SMOKING OR 
EATING.'' The OSHA wording is used by HUD for interagency regulatory 
consistency. Based on the approach used in subpart B for occupant 
notification, the warning sign is to be provided in the occupants' 
primary language or in the language of the occupants' lease or 
contract.
    h. Safe Work Practices. A section on safe work practices has been 
added to this final rule to specify the practices to be observed during 
paint stabilization, ongoing lead-based paint maintenance, and 
rehabilitation receiving no more than $5,000 per unit in Federal 
rehabilitation assistance. Safe work practices include occupant 
protection and worksite preparation, specialized cleanup, and the 
prohibition of certain methods of paint removal (see Section III.E.2.g 
of this preamble, above). Safe work practices are not required if the 
total area of paint surfaces being disturbed is no more than the de 
minimis exemption levels of 20 square feet on exterior surfaces, or 2 
square feet in any one interior room or space, or 10 percent of the 
total surface area on an interior or exterior component with a small 
surface area (such as window sills, baseboards, and other trim).
    i. Ongoing Lead-Based Paint Maintenance and Reevaluation. The 
proposed monitoring of housing after interim controls was the subject 
of several comments. Commenters expressed doubts about the efficacy of 
the proposed monitoring requirements, regarded them as expensive to 
maintain and enforce, and questioned the ability of designated parties 
to assure, into the future, that monitoring responsibilities assigned 
to owners would be carried out. Monitoring, as proposed, consisted of a 
visual survey by the owner at least annually, repair of any 
deteriorated paint, and a professional reevaluation by a risk assessor 
for the presence of lead-based paint on a schedule based on the hazards 
found and the action taken.
    In the final rule, the monitoring requirement has been changed in 
several ways. The term, ``monitoring,'' is no longer used in the rule; 
the visual assessment by the owner is now part of the ongoing 
maintenance requirement, which has been patterned after the ``essential 
maintenance practices'' recommended by the Task Force; and the 
reevaluation schedule has been simplified so that all reevaluations are 
on the same schedule. The new schedule calls for reevaluation at 
intervals of two years, plus or minus 60 days. If two consecutive 
reevaluations at two-year intervals find no lead-based paint hazards, 
no further reevaluation is required. Similarly, if the initial risk 
assessment found no lead-based paint hazards, no reevaluation is 
required.
    Ongoing lead-based paint maintenance is required in specified 
situations in subparts F through M. This can involve such activities as 
visual assessment, stabilizing deteriorated paint, standard treatments, 
interim controls, repair of failed lead-based paint hazard controls, 
and notifications of evaluation and hazard reduction activities. 
(Sample formats and language requirements for notices are discussed 
above in Sections III.E.15.c and g of this preamble, respectively.)
    Reevaluation is required for housing receiving project-based 
assistance greater than $5,000 per unit per year and for public 
housing. The strategy for selecting portions of residential properties 
to reevaluate considers two factors: How many dwelling units and common 
areas are present, and at how many worksites hazard reduction 
activities were performed previously. The selection and reevaluation 
procedures for dwelling units and common areas are the same as for risk 
assessment, as provided in subpart R, and as detailed in the HUD 
Guidelines, chapter 5. Similar dwelling units are grouped, and the 
number to be reevaluated in each such group is determined from tables 
in the Guidelines.
    For a targeted sample of units with the highest likelihood for 
finding lead-based paint hazards, there is a table in chapter 5; for a 
random sample of units, chapter 5 refers users to a table in chapter 7. 
Separately, the number of worksites of previous hazard reduction 
activities to be reevaluated is determined using the same procedure as 
for selecting the number of units. Specifically, worksites are grouped 
on the basis of similarities of their original lead-based paint hazards 
(e.g., similarities in the type of location, original condition and, as 
applicable, building component type, of the lead-based paint hazards), 
and types of hazard reduction activities performed on them. The number 
of such similar worksites to be reevaluated is determined using the 
tables in chapters 5 or 7, and worksites are selected. Reevaluations 
are not to be duplicated in locations selected by both processes (that 
is, selecting units and common areas, and selecting worksites).
    When a risk assessor performing a reevaluation finds deteriorated 
paint or deteriorated or failed interim controls, encapsulations or 
enclosures, the designated party shall respond, selecting from among 
the acceptable options for controlling the hazard identified in the 
risk assessor's report of the reevaluation. When the risk assessor 
reports newly-identified lead-based

[[Page 50186]]

paint hazards, the designated party shall treat each dust-lead hazard 
by cleaning or hazard reduction measures, and each soil-lead hazard by 
hazard reduction measures.

IV. Deletions of Current Regulations

    Most of the regulatory changes in parts of title 24 other than part 
35 consist, as noted in Section III.A.7 of this preamble, above, of 
replacing explicit descriptions of lead-based paint requirements with 
references to part 35. Retaining mention of lead-based paint in each 
HUD program's part of title 24 maintains the visibility of the lead-
based paint requirements, and promotes compliance with requirements 
under Title X and the Lead-Based Paint Poisoning Prevention Act. 
Consolidating references in affected program parts will help program 
managers, property owners and other users recognize that they can apply 
the same procedures to the same situations, even if they arise under 
different HUD programs. The consolidation also shortens these other 
parts of title 24.
    To aid users, the relevant program-oriented subpart of part 35 is 
identified in the other parts of title 24, as is subpart A, the 
Disclosure Rule. Each program-oriented subpart in part 35 describes and 
cites applicable requirements elsewhere in that part.
    References to Title X are added to the existing references to the 
Lead-Based Poisoning Prevention Act, as bases for the regulations in 
part 35. The terminology of Title X regarding evaluation and hazard 
reduction replaces previous wording regarding inspection and abatement, 
respectively, which were used in accordance with the earlier LPPPA.
    For public housing, the regulations on liability insurance coverage 
found at Sec. 965.215 fit better in their original location than they 
would in part 35, and their substantive text remains in place. The 
section has been modified, as described above for other sections, to 
reflect Title X terminology and requirements.

V. Additional Public Comment

    As noted earlier in this preamble, the rule will not take effect 
for a period of one year. If in the review of this rule, there are 
questions, concerns or other comments, HUD welcomes these questions, 
concerns and comments. It is HUD's intention that the rule achieve the 
objectives of the statute in the least burdensome manner. If there are 
any serious inconsistencies or deficiencies in the rule, HUD will make 
every effort to correct these before the rule takes effect. Comments 
should be submitted to the Office of Lead Hazard Control, Department of 
Housing and Urban Development, 451 Seventh Street, SW, Room P-3206, 
Washington, DC 20410-0500.

VI. Regulatory Assessment

A. Economic Analysis

    An Economic Analysis (EA) has been prepared that examines the costs 
and benefits of this final rule. This document fulfills the 
requirements of Executive Order 12866, which requires HUD to prepare an 
EA for all significant rulemakings. A discussion of public comments on 
the EA of the proposed rule is provided below in Section VI.A.6 of this 
preamble.
    1. Summary and Methodology of Cost-Benefit Analysis. HUD estimates 
the costs associated with this rule to be $253.2 million for the first 
year, and the benefits to be $1,143.3 million using a three percent 
discount rate for increased lifetime earnings and $324.2 million using 
a seven percent discount rate (see discussion of discount rates below). 
The analysis in the EA reflects costs and benefits associated with the 
first year of hazard evaluation and reduction activities in housing 
units affected under the final rule. The estimated annual number of 
HUD-assisted and HUD-owned units affected reflect an annual flow of 
units under HUD programs (e.g., insurance and rehabilitation programs), 
except in the case of project-based assistance and public housing, for 
which the affected units are divided by the number of years allowed 
under the final rule for completion of required activities. The costs 
and benefits for each year's activities include the present value of 
future costs and benefits associated with first year hazard reduction 
activities. For example, the costs associated with first year 
activities include the present value of future reevaluation costs. 
Similarly, the benefits of first year activities include the present 
value of lifetime earnings benefits for children living in or visiting 
the affected unit during the first year, and for children living in or 
visiting that unit during the second and subsequent years after hazard 
reduction activities.
    After the first year, the number of units for which initial hazard 
evaluation and reduction must be done will decline significantly 
because some large housing assistance programs, such as public housing 
and project-based assistance, have a relatively stable stock and do not 
experience a large annual inflow of new units. In these programs, 
owners will need only to engage in ongoing maintenance and reevaluation 
after initial hazard evaluation and reduction is completed. There is a 
two-year phase-in of requirements in the public housing program and a 
four-year phase-in for housing with project-based assistance of more 
than $5,000 per unit per year. HUD estimates that the total number of 
dwelling units newly covered by the rule will be approximately 
1,289,000 in the first year, 513,000 in the second year, 341,000 in 
years three and four, and 314,000 per year after the fourth year. The 
estimated present value of costs associated with the first five years 
of the rule is $564.2 million. Using a seven percent discount rate for 
increased lifetime earnings, HUD estimates the present value of total 
benefits associated with the first five years to be $715.6 million, 
with net benefits for the same period at $151.4 million. Using a three 
percent discount rate, total benefits over five years are $2.65 
billion, and net benefits are $2.08 billion.
    The primary monetized benefit of childhood lead poisoning 
prevention is increased lifetime earnings associated with the higher 
cognitive abilities of persons not lead poisoned as children. The 
present value of lifetime earnings benefits is particularly sensitive 
to discount rate assumptions in the analysis, because these benefits 
reflect lifetime earnings many decades into the future. The EA presents 
estimated benefits using two different discount rates for lifetime 
earnings--three percent and seven percent. For all other benefit and 
cost estimates, the EA uses only a seven percent rate. The analysis 
assumes that preventing a one g/dL increase in a one-year old 
child's blood lead level saves $2,367 in lifetime earnings discounted 
at three percent, and $544 at seven percent.
    While the Office of Management and Budget (OMB) specifies seven 
percent as the appropriate discount rate for most regulatory analyses, 
a special social rate of time preference is appropriate when conducting 
intergenerational analysis. HUD believes that an intergenerational 
discount rate is applicable to the final rule because the costs will be 
borne by adult taxpayers, and lifetime earnings benefits will be 
realized by the children and grandchildren of these adult taxpayers. 
The analysis of this issue by the Environmental Protection Agency, in 
the 1996 EA for the regulations implementing sections 402(a) and 404 of 
the Toxic Substances Control Act, concluded that a three percent 
discount rate best reflects the social rate of time preference for 
annualized, non-capital costs and benefits.
    An intermediate approach, not quantified in the EA, could have used

[[Page 50187]]

a real discount rate based on the long-term borrowing costs of the 
Federal government. The seven percent rate used in most regulatory 
analyses is intended to reflect OMB's estimate of the opportunity cost 
of capital, based on the average real rates of return on private 
investments. This rate is appropriate for most regulatory analyses 
because most regulations impose costs on the private sector. The final 
rule, however, imposes costs on federally assisted housing. Most of 
these costs will be funded directly or indirectly by Federal 
expenditures. If these expenditures increase the national debt, then 
the real cost of that debt to future generations will compound at the 
real long-term Federal rate. The Internal Revenue Service's Applicable 
Federal Rate (AFR) measures the nominal cost of government borrowing 
over obligations with different maturities. The long-term AFR adjusted 
for the implicit price deflator results in real AFRs of approximately 
four to five percent over recent years. Therefore, benefits could be 
discounted at this real AFR rate (i.e., 4 to 5 percent).
    By presenting results using both three and seven percent, HUD is 
providing the broadest view of costs and benefits. Additional 
information on the methodology and results of the cost-benefit analysis 
is provided below.
    The methodology used in this analysis to estimate annual costs and 
benefits for the final rule is based on the following simple formulas:

Regulatory Costs = (dwelling unit cost)  x  (unit cost frequency)  x  
(number of affected units); and
Regulatory Benefits = (dwelling unit benefit)  x  (unit benefit 
frequency)  x  (number of affected units).

    The unit cost estimates reflect the average costs associated with 
specific hazard evaluation and reduction activities in a single housing 
unit.
    The unit benefit estimates are the benefits achieved by conducting 
hazard reduction activities in a single housing unit. Unit cost 
frequencies reflect the extent of required hazard evaluation activities 
under the final rule, and the occurrence frequencies of different lead-
based paint hazards that trigger hazard reduction requirements. Unit 
benefit frequencies are also determined by the occurrence frequencies 
of lead-based paint hazards, because benefits are realized by hazard 
reduction activities. Frequencies are estimated by three periods of 
construction: Pre-1940, 1940-1959, and 1960-1977. The affected units, 
for regulatory costs and benefits, are federally assisted and federally 
owned units affected by the final rule.
    2. Regulatory Costs. The cost estimates used in the EA reflect the 
estimated average cost per unit for LBP hazard evaluation and reduction 
activities in single and multifamily units affected by the final rule. 
In the case of rehabilitation programs, the regulatory cost estimates 
for paint stabilization and LBP hazard abatement activities reflect 
only the incremental costs of the final rule. For example, the unit 
cost of stabilizing paint that would not otherwise have been repaired 
is significantly greater than the incremental cost of safe work 
practices and cleanup to reduce lead-based paint hazards in the course 
of scheduled repainting. The full cost of lead-based paint hazard 
abatement includes a variety of activities that are also associated 
with housing rehabilitation activities. Therefore, housing 
rehabilitation programs affected by the final rule incur only 
incremental costs for paint stabilization and abatement.
    Under non-rehabilitation programs, the full costs of paint 
stabilization are recognized as regulatory costs, but these costs are 
substantially offset by the market value of housing-related benefits 
for paint stabilization. The EA assumes that the full market value of 
paint stabilization is realized whenever paint stabilization is 
required under the final rule. Therefore, the incremental costs of 
paint stabilization (e.g., safe work practices) are the only costs of 
these activities that are not offset by market value benefits.
    Although the final rule only requires hazard abatement in 
rehabilitation units receiving more than $25,000 of Federal assistance, 
the EA anticipates that some units subject to interim control 
requirements will find it economical to treat friction impact surfaces 
in part by replacing old windows with new energy efficient (low-e) 
windows. In such cases, the EA recognizes the market value of new 
windows based on the present value of estimated fuel savings 
(discounted at seven percent). It is possible, however, that the market 
value estimates for painting and window replacement may overstate the 
market benefits of the final rule. For example, the market value of 
paint stabilization required for HUD-owned housing may not be fully 
recovered when these repainted units are sold by HUD. Therefore, the 
cost-benefit analysis for non-rehabilitation programs explicitly 
separates the estimated market value benefits of the final rule from 
the monetized health benefits of LBP hazard reduction to facilitate 
recalculations of net benefits under alternative market value 
assumptions. The EA details the basis for unit cost estimates and 
associated market values and explains the available data on occurrence 
frequencies and the number of housing units affected by the final rule.
    3. Monetized Benefits. Although many benefits of lead-based paint 
hazard reduction cannot be quantified or monetized, the EA does provide 
monetized estimates of the benefits of preventing children from 
developing elevated blood lead levels (EBLs). Such benefits include 
avoiding the costs of special education and medical treatment for EBL 
children, as well as increasing lifetime earnings associated with 
higher IQs for children with lower blood lead levels. The monetized 
benefit of increased lifetime earnings due to lower blood lead levels 
accounts for 99 percent of all monetized health benefits of the rule.
    The benefits quantified in this analysis reflect the benefits of 
preventing EBLs in children rather than the benefits of lowering the 
blood lead levels of children already affected by lead poisoning. As 
shown in the analysis, the benefits associated with avoiding childhood 
lead poisoning substantially exceed the benefits of reducing hazards 
for children already affected by lead poisoning. The EA details the 
basis for the health benefit estimates.
    4. Monetized Net Benefits. The analysis of net benefits in the EA 
reflects costs and benefits associated with the first year of hazard 
evaluation and reduction activities under the final rule. These costs 
and benefits, however, include the present value of future costs and 
benefits associated with first year hazard reduction activities.
    Tables 3a and 3b present net benefits or costs by housing program 
at three percent and seven percent discount rates respectively for 
increased lifetime earnings. All programs have a net benefit at three 
percent. The following programs have a net cost at seven percent: HUD-
owned single family and multifamily housing, housing with project-based 
assistance, single family housing receiving rehabilitation assistance 
of more than $5,000 per unit, and housing receiving assistance for 
acquisition, leasing, support services or operation. The specificity of 
statutory requirements limits the Department's ability to devise 
policies with net benefits for these programs at a seven percent 
discount rate.
    Table 3c presents a summary of the costs, benefits, and net 
benefits of the first year activities under the final rule, using a 
three percent and seven percent discount rate for lifetime earnings. 
The total cost of first year hazard evaluation and reduction activities 
is $253.2

[[Page 50188]]

million. The total benefit of first year activities is $1.14 billion 
using a three percent discount rate, and $324 million using a seven 
percent discount rate. Net benefits of first year activities are 
therefore either $890 million or $71 million, depending on the discount 
rate used. The EA details the costs and benefits of the final rule by 
subpart of the rule and by period of construction.
    The individual rows of Table 3c detail the components of hazard 
evaluation and reduction costs and monetized hazard reduction benefits. 
Although the components of hazard reduction costs and monetized 
benefits are often identified by the same brief descriptors (e.g., 
paint stabilization, soil cover, dust cleanup) the cost components are 
not directly comparable to the benefit components. For example, dust-
cleanup costs reflect only the costs of cleanup. Cleanup benefits, 
however, reflect the assumption that low dust-lead levels have a 
benefit duration of five years with paint stabilization and ten years 
with lead-based paint hazard abatement.
    The duration of dust removal benefits reflects the anticipated 
benefits over five or ten years to a new population of young children, 
associated with births and unit turnover. This estimated duration of 
benefits could not be realized without the hazard reduction activities 
of paint stabilization or abatement, friction/impact work, and soil 
cover, to the extent required by the rule. The monetized benefits in 
the table for paint stabilization and abatement reflect only the health 
benefits of avoided paint chip ingestion. The cost of paint 
stabilization includes the incremental cost for rehabilitation 
programs, and the full cost for non-rehab programs. Paint stabilization 
market value benefits reflect the estimated market value for non-
rehabilitation programs. Subtracting paint stabilization market value 
benefits from paint stabilization costs yields the incremental cost of 
all paint stabilization required under the rule.

                       Table 3a.--Net Benefit (Cost) by Program for First Year Activities
                               [Three percent discount rate for lifetime earnings]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Total for
                Subparts                      Pre-1940          1940-1959         1960-1977          subpart
----------------------------------------------------------------------------------------------------------------
Single Family Insured Housing (E).......                $0               $0                $0                 $0
HUD-Owned Single Family Housing (F).....           804,349         (104,790)         (267,451)           432,108
Multifamily Insured Housing (G).........         3,712,523        2,981,836                 0          6,694,360
Multifamily Housing With Project-Based           7,858,982        6,284,595         4,395,518         18,539,094
 Assistance > 5K (Hm1)..................
Multifamily Housing With Project-Based          22,150,600        7,055,126         4,798,460         34,004,186
 Assistance > 5K (Hm2)..................
Single Family Housing With Project-Based         5,359,054        1,570,456           848,160          7,777,670
 Assistance (Hs)........................
HUD-Owned and Mortgagee-in-Possession              221,666          551,460           316,903          1,090,029
 Multifamily Housing (I)................
Single Family Rehab <5K (J1s)...........        26,705,720       19,813,315         3,103,588         49,622,624
Single Family Rehab 5K-25K (J2s)........        40,365,551       29,115,276         4,186,525         73,667,352
Single Family Rehab 25K (J3s)...........         3,192,504        8,466,423           421,773         12,080,700
Multifamily Rehab <5K (J1m).............         3,103,001        2,488,518           491,894          6,083,413
Multifamily Rehab 5K-25K (J2m)..........        12,303,357        9,541,269         3,316,929         25,161,554
Multifamily Rehab >25K (J3m)............         8,536,151        6,932,896         1,504,944         16,973,991
Single Family Acquisition, Leasing,                318,545          124,334            20,862            463,741
 Operating, and Support (Ks)............
Multifamily Acquisition, Leasing,                  608,761          146,925            47,221            802,907
 Operating, and Support (Km)............
Multifamily Public Housing (Lm).........        58,623,013      188,764,843        34,665,629        282,053,485
Single Family Public Housing (Ls).......        13,930,634       44,625,006         7,001,718         65,557,359
Single Family Tenant-Based Rental               68,354,171       31,214,436        15,578,130        115,146,737
 Assistance (Ms)........................
Multifamily Tenant-Based Rental                102,509,490       46,573,257        24,862,934        173,945,681
 Assistance (Mm)........................
                                         -----------------------------------------------------------------------
    Total Net Benefit...................       378,658,072      406,145,182       105,293,738        890,096,991
----------------------------------------------------------------------------------------------------------------


                        Table 3b.Net Benefit (Cost) by Program for First Year Activities
                               [Seven percent discount rate for lifetime earnings]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Total for
                Subparts                      Pre-1940          1940-1959         1960-1977          Subpart
----------------------------------------------------------------------------------------------------------------
Single Family Insured Housing (E).......               $0                $0                $0                $0
HUD-Owned Single Family Housing (F).....       (1,927,841)         (689,268)         (539,603)       (3,156,712)
Multifamily Insured Housing (G).........          246,690           176,627                 0           423,317
Multifamily Housing With Project-Based            391,267           240,304        (3,053,108)       (2,421,537)
 Assistance > 5K (Hm1)..................
Multifamily Housing With Project-Based         (2,093,138)       (2,104,432)       (5,644,938)       (9,842,508)
 Assistance < 5K (Hm2)..................
Single Family Housing With Project-Based       (1,667,495)       (1,102,037)       (3,184,370)       (5,953,901)
 Assistance (Hs)........................
HUD-Owned and Mortgagee-in-Possession             (15,690)          (40,308)         (368,895)         (424,892)
 Multifamily Housing (I)................
Single Family Rehab <5K (J1s)...........        3,659,065         2,291,784        (2,361,222)        3,589,628
Single Family Rehab 5K-25K (J2s)........          332,951          (564,095)       (4,419,314)       (4,650,458)
Single Family Rehab >25K (J3s)..........         (202,701)         (259,968)         (467,775)         (930,445)
Multifamily Rehab <5K (J1m).............          506,967           370,441          (153,853)          723,554
Multifamily Rehab 5K-25K (J2m)..........        1,820,172         1,315,448           (76,463)        3,059,158
Multifamily Rehab >25K (J3m)............        1,191,958           963,529           (42,968)        2,112,520
Single Family Acquisition, Leasing,               (99,117)          (87,249)          (78,325)         (264,691)
 Operating, and Support (Ks)............
Multifamily Acquisition, Leasing,                 (57,525)          (43,825)          (55,551)         (156,902)
 Operating, and Support (Km)............
Multifamily Public Housing (Lm).........        8,942,287        27,902,848        (1,523,858)       35,321,277
Single Family Public Housing (Ls).......        1,380,411         4,213,020        (2,151,524)        3,441,908
Single Family Tenant-Based Rental              11,717,061         4,619,772         1,484,946        17,821,779
 Assistance (Ms)........................
Multifamily Tenant-Based Rental                19,667,574         7,933,157         4,751,523        32,352,254
 Assistance (Mm)........................
                                         -----------------------------------------------------------------------

[[Page 50189]]

 
    Total Net Benefit...................       43,792,895        45,135,748       (17,885,295)       71,043,348
----------------------------------------------------------------------------------------------------------------


 Table 3c.--Cost-Benefit Summary for First Year Activities Using a Three
     Percent and a Seven Percent Discount Rate for Lifetime Earnings
                              [$ millions]
------------------------------------------------------------------------
                                                     Three       Seven
                                                    percent     percent
------------------------------------------------------------------------
Hazard Evaluation Costs.........................      $ 99.5      $ 99.5
Hazard Reduction Costs:
  Paint Stabilization...........................        75.7        75.7
  Window Replacement............................         4.6         4.6
  Friction/Impact Work..........................         8.5         8.5
  Soil Cover....................................         2.3         2.3
  Paint Hazard Abatement........................         2.0         2.0
  Dust Cleanup..................................        60.5        60.5
                                                 -----------------------
    Total First Year Costs......................       253.2       253.2
                                                 =======================
Monetized Benefits:
  Paint Stabilization...........................        71.2        20.3
  Paint Hazard Abatement........................         1.1         0.3
  Soil Cover....................................        88.0        20.2
  Dust Cleanup..................................       908.6       209.0
  Paint Stabilization Market Value..............        70.2        70.2
  Window Replacement............................         4.2         4.2
                                                 -----------------------
    Total First Year Benefits...................     1,143.3       324.2
                                                 =======================
    Total First Year Net Benefits...............       890.1        71.0
------------------------------------------------------------------------

    5. Data Sources. The following data sources are referenced 
extensively in the EA:
     The HUD national survey of lead-based paint in housing, 
conducted in 1989 and 1990.
     ``Comprehensive and Workable Plan for the Abatement of 
Lead-Based Paint in Privately Owned Housing: a Report to Congress,'' 
prepared by HUD, December 7, 1990.
     ``TSCA Title IV, Sections 402(a) and 404: Target Housing 
and Child-Occupied Facilities Final Rule Regulatory Impact Analysis,'' 
prepared by Abt Associates for EPA, August 1996.
     The Evaluation of the HUD Lead-Based Paint Hazard Control 
Grant program--interim data collected through March 1998.
     National Academy of Sciences, National Research Council 
Committee on Measuring Lead in Critical Populations, ``Measuring Lead 
Exposure in Infants, Children, and Other Sensitive Populations,'' 
October 1993.
     Third National Health and Nutrition Examination Survey, as 
reported in ``Blood Lead Levels in the U.S. Population'' and ``The 
Decline in Blood Lead Levels in the United States,'' Journal of the 
American Medical Association, July 27, 1994; and ``Update Blood Lead 
Levels--United States, 1991-1994,'' MMWR, February 21, 1997; and 
additional detail obtained from NHANES III data on CD-ROM.
    6. Public Comments. An industry group criticized the EA for the 
proposed rule on several grounds. The group stated that population 
blood lead levels may have declined further since the NHANES III Phase 
1 data were released. For the final rule, HUD has used the most current 
data available, which is the NHANES III, Phase 2 data covering the 
years 1992-1994.
    The group also suggested that HUD's conclusion that declining dust 
lead levels will reduce blood lead levels in children is not 
supportable because it is based on a single study. In fact, there are 
at least 18 epidemiological studies which have estimated the blood 
lead/dust lead relationship; HUD has not relied on a single study in 
developing the final EA, but has conducted an extensive pooled analysis 
of virtually all available epidemiological data (Lanphear 1998).
    The group stated that HUD's EA relied on a 1991 CDC finding that 10 
g/dL represents a threshold level, below which there are no 
adverse effects, and that therefore the EA should not have calculated 
benefits below 10 g/dL. This is an incorrect interpretation of 
CDC's position. In fact, the 1991 CDC guidance document indicated that 
there was evidence of adverse health effects below 10 g/dL. 
Neither HUD nor CDC have stated that 10 g/dL is a 
``threshold.'' The conclusion that it is reasonable to assume cognitive 
benefits to reducing childhood blood lead levels, including below 10 
g/dL, has been approved by EPA, the EPA external peer review 
process, CDC, the HHS internal peer review process and the National 
Academy of Sciences. It is clear that HUD's analysis is consistent with 
the consensus of the scientific community.
    The group also stated that the EA cited the correlation between 
blood lead and low IQ, but erred in suggesting that correlation could 
be used to establish causality and that the available scientific 
studies failed to control for a variety of confounding variables. HUD 
agrees that correlation alone cannot establish causality. The idea that 
lead exposure causes a reduction in IQ is supported by not only 
correlation, but also by time precedence, biological plausibility, 
dose-effect relationship, and animal studies. When taken together, HUD 
believes that all these factors establish conclusively that lead 
exposure does in fact cause reductions in IQ. Time precedence has been 
established by those studies that measure blood lead level at birth, 
showing that the cause exists before the consequence. Biological 
plausibility has been established by the studies showing anatomical, 
physiological, and biochemical changes in the brain due to lead 
exposure. Dose-response has also been clearly established in the 
literature. Finally, all modern lead studies have in fact controlled 
for confounding variables, such as socio-economic status, parent's 
education and race.
    The group also suggested that the lead studies upon which the EA 
relied used imprecise or incomplete methods of measuring IQ. However, 
if IQ was in fact measured inappropriately, one would expect to see the 
studies equally distributed between those showing no effect and those 
that did. In fact, virtually all of the studies on lead show the same 
IQ effect. While the size of the effect and degree of statistical 
significance may vary from one study to another, the basic conclusion 
remains the same: increased lead exposure is related to reduced IQ.
    Another industry group suggested that HUD's EA for the proposed 
rule had overestimated the benefits, because children living in HUD-
assisted housing will grow up to earn less than the average income, and 
thus the calculated loss in lifetime earnings was too great.

[[Page 50190]]

First, HUD does not believe it is appropriate to declare that the value 
of damage to children in one socioeconomic group is less than the value 
of damage to children in another socioeconomic group. Furthermore, 
there is evidence that earnings may have in fact been underestimated, 
because per capita productivity has increased in recent years, which 
often results in increased wages. HUD used data covering the past 20 
years to estimate growth in real wages, which has been low. If in fact 
the country returns to the growth rate over the past century, HUD's EA 
would underestimate the size of the lost lifetime earnings. HUD has 
used an updated estimate of the size of the lost lifetime earnings 
benefit (Salkever 1995) in the EA for this final rule to respond to 
this criticism. Salkever updated the analysis of labor force 
participation and other pathways by which lead can reduce expected 
future earnings. Finally, HUD's EA assumed that there would be no 
benefit to reducing lead exposure in adults, even though a number of 
studies have demonstrated that lead can increase blood pressure and 
cause a decline in both kidney function and cognition in adults. In 
short, HUD's EA is likely to underestimate the total benefit involved, 
not overestimate it.
    An industry group suggested that HUD should use the lower 
confidence bound of the scientific studies, which would reduce the 
benefits of the proposed rule. HUD agrees that this would reduce the 
benefits, but notes that if it chose to use the upper bound as a health 
protective measure, the benefit would increase. On balance, HUD 
believes that measures of central tendency appear to be best when faced 
with the need to make public policy in the face of scientific 
uncertainty, which is always present to some extent. HUD encourages 
public comment on the EA and the final rule and will make revisions to 
both documents as new evidence comes to light.

B. Paperwork Reduction Act Statement

    The information collection requirements contained in this final 
rule have been approved by the Office of Management and Budget (OMB) in 
accordance with the requirements of the Paperwork Reduction Act of 1995 
(44 U.S.C. 2501-3520), and have been assigned OMB control number 2539-
0009. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection displays a valid control number.

C. Regulatory Flexibility Act--Final Regulatory Flexibility Analysis

    When the proposed rule was published on June 7 1996, HUD certified 
that the proposed regulatory requirements would not have a significant 
economic impact on a substantial number of small entities. On October 
9, 1998 (63 FR 54422), HUD published a Notice in the Federal Register 
containing additional information about its determination that the 
proposed rule would not have a significant impact on a substantial 
number of small entities. HUD has concluded, upon further 
consideration, that its certification that the rule will not have a 
significant economic impact on a substantial number of small entities 
could reasonably be questioned. Although the Department continues to 
believe that the certification was reasonable and justified, the degree 
of uncertainty as to what constitutes a ``significant'' impact and a 
``substantial'' number of small entities in the housing industry has 
led to the decision not to make such a certification at this time. HUD 
is seeking to comply fully with the intent of the Regulatory 
Flexibility Act and is publishing this Final Regulatory Flexibility 
Analysis to describe the likely impact. This analysis expands on the 
analysis published on October 9, 1998 and summarizes and responds to 
public comments. HUD requests written public comment on this analysis 
of the impact of the rule on small entities. The final rule does not 
take effect until one year after publication, so there is time for the 
Department to arrange for responses to economic impacts that it 
believes would significantly diminish the effectiveness of its housing 
assistance programs in providing affordable housing to families of low 
and moderate income.
    Comments on this notice must be received on or before November 1, 
1999. Interested persons are invited to submit comments to the Rules 
Docket Clerk, Office of General Counsel, room 10276, Department of 
Housing and Urban Development, 451 7th Street, SW., Washington, DC 
20410-0500. Comments should refer to the above docket number and title. 
A copy of each comment submitted will be available for public 
inspection and copying between 7:30 a.m. and 5:30 p.m. weekdays at the 
above address. Facsimile (FAX) comments are not acceptable. For further 
information, contact: Steve Weitz, Office of Lead Hazard Control, 
Department of Housing and Urban Development, 451 7th Street, SW., 
Washington, DC 20410-0500. Telephone: (202) 755-1785, ext. 106 (this is 
not a toll-free number). E-Mail: [email protected]. Hearing 
or speech-impaired persons may access the above telephone number via 
TTY by calling the toll-free Federal Information Relay Service at 1-
800-877-8339.
    1. Need For and Objectives of the Final Rule. The Lead-Based Paint 
Poisoning Prevention Act of 1971, as amended, directs the U.S. 
Department of Housing and Urban Development (HUD) to establish 
procedures to eliminate to the extent practicable lead-based paint 
hazards in federally associated housing. HUD issued implementing 
regulations in 1976 and made Department-wide revisions in 1986, 1987, 
and 1988. In 1992, Congress passed the Residential Lead-Based Paint 
Hazard Reduction Act, which was Title X of the Housing and Community 
Development Act of 1992 (Title X). Sections 1012 and 1013 of Title X 
amend the Lead-Based Paint Poisoning Prevention Act to require specific 
new procedures for lead-based paint notification, evaluation, and 
hazard reduction activities in housing receiving Federal assistance 
(section 1012) and federally owned housing at the time of sale (section 
1013).
    In enacting Title X, the Congress found that low-level lead 
poisoning is widespread among American children, with minority and low-
income communities disproportionately affected. The Congress also found 
that, at low levels, lead poisoning in children causes IQ deficiencies, 
reading and learning disabilities, impaired hearing, reduced attention 
span, hyperactivity, and behavior problems. In addition the Congress 
found that the health and development of children living in as many as 
3.8 million homes is endangered by chipping or peeling lead paint or 
excessive amounts of lead-contaminated dust in their homes.
    Among the stated purposes of Title X are to implement, on a 
priority basis, a broad program to evaluate and reduce lead-based paint 
hazards in the Nation's housing stock; to ensure that the existence of 
lead-based paint hazards is taken into account in the development of 
Government housing policies and in the sale, rental, and renovation of 
homes and apartments; and to reduce the threat of childhood lead 
poisoning in housing owned, assisted, or transferred by the Federal 
Government.
    The final rule sets forth new requirements for lead-based paint 
hazard notification, evaluation, and reduction for federally owned 
residential property and housing receiving Federal assistance. The rule 
takes into consideration the substantial advancement of lead-based 
paint remediation technologies and the

[[Page 50191]]

improved understanding of the causes of childhood lead poisoning by the 
scientific and medical communities. Perhaps the most important results 
of research on this subject during the last 10-12 years have been: (1) 
The finding that lead in house dust is the most common pathway of 
childhood lead exposure; and (2) the measurement of the statistical 
relationship between levels of lead in house dust and lead in the blood 
of young children. The final rule updates the existing HUD regulations 
to reflect this knowledge, giving importance to procedures that 
identify and remove dust-lead hazards as well as chipping, peeling or 
flaking lead-based paint.
    The rule also offers a consolidated, uniform approach to addressing 
lead-based paint hazards. Currently, each individual HUD program has a 
separate set of lead-based paint requirements incorporated into its 
program regulations. The final regulation consolidates the HUD lead-
based paint regulations and groups requirements by type of housing 
assistance, rather than by individual program. For example, the rule 
contains subparts that address multifamily mortgage insurance; project-
based assistance; rehabilitation assistance; assistance for 
acquisition, leasing, support services and operation; public housing; 
and tenant-based assistance. Moreover, the final rule uses a clear and 
consistent set of terms to specify notification, evaluation, and hazard 
reduction requirements. Organizing the requirements by the type of 
housing assistance and using new terminology will avoid subjecting 
properties receiving assistance from more than one program to 
inconsistent or redundant HUD lead-based paint requirements. These 
changes will also ease the burden on HUD clients in locating and 
understanding the applicable requirements and help ensure that lead 
hazards are identified and safely reduced.
    2. Public Comments. The Notice published in the Federal Register on 
October 9, 1998 outlined the impact of the proposed rule on small 
entities. Eight comments were received. Following is a summary of the 
significant issues raised by the comments and a description of the 
Department's assessment of and response to such issues.
    a. Information Not Adequate. Two commenters requested additional 
information. One commenter said they were unable to assess the impact 
of the proposed regulations with the information provided in the 
published Notice and requested that the Department extend the comment 
period on the Notice until supporting materials are available for 
public review. Another requested that HUD prepare a more detailed 
analysis and submit it for comment before publishing a final rule.
    In response, HUD is providing more detailed information in this 
analysis and welcomes further comment. However, HUD is not delaying 
further the publication of this important regulation, which is expected 
to significantly reduce lead poisoning among children living in 
Federally owned housing that is sold and in housing that receives 
Federal assistance.
    b. Capital vs. Operating Costs. One commenter stated that the 
analysis was ``confusing,'' because it compared the cost of lead-based 
paint hazard reduction to current rent revenue. According to this 
commenter, lead-based paint activities are major capital improvement 
costs that would be financed from reserves or through a loan.
    HUD agrees that some property managers may budget the required work 
out of reserves, some may have to finance it through a loan, while 
others will be able to handle it as an operating expense. Regardless of 
how the work is budgeted and financed, HUD believes that comparison to 
annual rent revenues is a reasonable method of gaining a general 
understanding of the significance of the costs. However, Section 3 of 
this Notice includes additional financial statistics for HUD-insured 
multifamily housing with project-based rental assistance; these 
statistics are net annual cash flow per unit before income taxes, total 
reserves per unit, and backlog of physical needs per unit.
    c. Costs Will Be Higher Than HUD Assumes. Three commenters thought 
HUD underestimated the cost of complying with the requirements. All of 
these commenters were concerned primarily with rehabilitation programs. 
One commenter stated that the cost would be between $2,000 and $4,000 
per unit, while the others claimed that rehabilitation costs are 35-50 
percent more when lead-based paint is involved.
    While it is possible that the costs in some jurisdictions may 
exceed those estimated for this analysis, HUD believes it has estimated 
the national average costs of the requirements in the rule as 
accurately as possible, given available data. It is important to 
remember that average costs may be much lower than costs one may have 
heard reported for heavily contaminated housing. Even in older housing, 
some structures have a great deal of lead-based paint while others have 
only a small amount, and the condition of the paint varies as well. 
Also, the anecdotal costs reported in some jurisdictions may not be for 
the same activities as those required in this rule. Furthermore, the 
costs used in the analysis for rehabilitation are incremental costs. 
For example, if it is estimated that rehabilitation will replace 
windows for other reasons, that cost is not charged to lead-based paint 
hazard reduction. Finally, HUD believes that the cost of lead-based 
paint hazard evaluation and reduction will decline as program managers 
learn how to administer the requirements efficiently and as staff and 
contractors become experienced in the work.
    HUD has estimated unit costs for lead-based paint hazard evaluation 
and reduction based on interviews with contractors and data from the 
ongoing Evaluation of HUD's Lead-Based Paint Hazard Control Grant 
Program (National Center 1998). It has estimated the frequencies of 
hazard occurrence based on both the Evaluation and the 1990 National 
Survey of Lead-Based Paint in Housing (EPA 1995). Also, it used 
American Housing Survey data to estimate the frequency with which 
rehabilitation involves activities like repainting or window 
replacement that overlap the requirements of lead-based paint hazard 
reduction. These estimates are explained in the HUD EA for the final 
rule (HUD 1999).
    d. There Will Be a Significant Impact. Many commenters stated or 
implied that HUD was incorrect in its determination that the rule will 
not have a significant economic impact on a substantial number of small 
entities. While the Department has chosen not to make such a 
determination for this final rule, it continues to think that the cost 
of compliance, and therefore the impact, will not be as significant as 
many commenters believe.
    As explained below, in section 4 of this Analysis, HUD has written 
provisions into the rule, consistent with Title X, designed to 
alleviate the impact of the lead-based paint evaluation and reduction 
requirements on entities receiving limited Federal assistance. For 
example, for most housing affected by this regulation, all that is 
required is stabilization of deteriorated paint, if any is present, 
followed by cleanup and clearance.
    In multifamily housing, HUD estimates that compliance with this 
requirement costs only about $100 per unit more than routine 
repainting, and less if only a small amount of deteriorated paint is 
present. This requirement pertains to housing that receives tenant-
based rental assistance and is occupied by children of less than

[[Page 50192]]

six years of age, and it applies to housing receiving project-based 
rental assistance averaging less than $5,000 per unit per year (which 
includes most housing that is affected by this rule and is receiving 
project-based assistance). The requirements are greater for multifamily 
housing receiving project-based assistance of more than $5,000 per unit 
per year; but that is a relatively small percentage of the assisted 
stock that was built before 1978, and most of it is professionally 
managed, in relatively good physical and financial condition, and not 
expected to have a high prevalence of lead-based paint hazards. For 
housing receiving Federal rehabilitation assistance of $5,000 per unit 
or less (which is almost one-half of the housing receiving such 
assistance), the rule requires only that the rehabilitation be done in 
a lead-safe manner so that it causes no contamination.
    For these reasons and because there currently exist lead-based 
paint regulations for virtually all HUD programs prescribing notice, 
evaluation and treatment procedures, HUD continues to believe that the 
economic impact of the rule will be much less than many of the 
commenters believe.
    e. Owners Whose Entire Portfolio Is Affected May Be Impacted 
Especially Hard. One organization stated that ``small property owners 
whose portfolio may only contain target properties and will have to 
bear this additional expense throughout their portfolio, may well be 
forced out of business by such extreme financial requirements.''
    HUD agrees that the impact on an owner may depend to some extent on 
the percentage of his or her portfolio that is affected by the rule. 
However, many if not most housing owned by small entities will be only 
partially affected by the rule. A dwelling unit is not covered if it 
was built after 1977, or designated exclusively for the elderly or 
persons with disabilities (unless a child of less than 6 years of age 
resides or is expected to reside), or is a zero bedroom dwelling (e.g., 
efficiency, studio, or single-room occupancy unit), or is found to be 
free of lead-based paint, or all lead-based paint has been removed. 
Many residential properties, especially those built after 1960, have 
little or no lead-based paint hazards. If a unit has no deteriorated 
paint or no lead-based paint hazards (depending on the housing 
program), no hazard reduction is required. Thus, owners can minimize 
the cost effect of the rule through good maintenance of paint surfaces 
and careful cleanup at turnover. In the case of units with tenant-based 
assistance, the rule applies only to units occupied by families with 
children of less than six years of age. Many properties with project-
based assistance have only part of their units under housing assistance 
payments contracts. For all of these reasons, the total annual rental 
revenue for affected small entities may substantially exceed the total 
annual rental revenue associated with just those units subject to the 
rule.
    3. Impact on Small Entities. a. Number of Small Entities Affected 
by the Rule. For this analysis, HUD defines a small entity as one with 
less than $5 million in total revenues per year. This standard is based 
on the report, ``Small Business Administration Standard Industrial Code 
(SIC) Size Standards,'' dated January 1998.
    Table 4 provides, for each program group, an estimate of the number 
of small entities that will be affected by the first effective year of 
the rule. Although some additional housing units and ownership entities 
will become subject to the rule after the first effective year, 
focusing on the first year facilitates analysis of impact on an annual 
basis. Estimates are given for the same program groups used in the EA 
for the rule, and the number of housing units for each program is taken 
from the EA. For all program groups, it is estimated that approximately 
203,000 small entities will be affected in the first year of the rule. 
Of these, about 122,000, or 60 percent, are owners of single-family 
housing being rehabilitated with HUD rehabilitation assistance.
    The vast majority of these owners are expected to be individuals 
who are rehabilitating their own residences. They are not businesses, 
organizations or units of local government, which are the entities of 
concern under the Regulatory Flexibility Act. Nevertheless data are 
provided for these owners for completeness of analysis. Of the 
remaining 81,000 small entities, the great majority will be owners of 
rental housing; and, of those, about 56,000 will be owners of housing 
with tenant-based rental assistance, 17,000 will be owners of housing 
with project-based rental assistance, 1,500 will own multifamily 
housing receiving rehabilitation assistance, and about 1,400 will be 
local public housing authorities. HUD believes that the great majority 
of local public housing authorities are not covered by the Regulatory 
Flexibility Act, because they are not agencies of local governments 
with populations of less than 50,000. Nevertheless, public housing data 
are included in this analysis for completeness.
    (1) Housing With Multifamily Mortgage Insurance and/or Project-
Based Rental Assistance. The first and second rows of Table 4 pertain 
to multifamily housing that has HUD mortgage insurance but not HUD 
subsidies. For this program group, the rule will apply only to 
properties built before 1978 that are covered by a new application for 
mortgage insurance. These properties tend to be relatively large, with 
an average of 160 units per property. Twenty-one percent of the 
properties have more than 200 units (Abt Associates 1999). Average 
annual total revenues for unassisted HUD-insured multifamily properties 
are assumed for purposes of this analysis to be $8,000 per unit. (This 
assumption is based on Abt Associates 1999, Exhibit 3-1, which reports 
a mean average annual total revenue for all unassisted insured 
properties of $7,978.) To earn $5 million per year in total revenues, a 
property with per unit annual revenue of $8,000 would have to have 625 
housing units. Few projects are of this size. However, it is well known 
that many of these projects are part of multiproperty portfolios. Of 
all rental housing in properties with 50 or more units, 25 percent of 
the properties and 50 percent of the units are owned by limited 
partnerships, general partnerships, real estate corporations or other 
corporations, or joint ventures (HUD 1996). Therefore it is assumed for 
this analysis that 25 percent of the unassisted multifamily properties 
with HUD mortgage insurance are owned by large entities and 75 percent 
are owned by small entities. It is also assumed that none of the 
properties owned by small entities are part of a multiproperty 
portfolio. This assumption may overstate the number of small entities 
somewhat. Based on this analysis, it is estimated that each year 70 
applicants for unassisted multifamily mortgage insurance will be small 
entities.

[[Page 50193]]



  Table 4.--Number of Small Entities Affected By The First Year of the HUD Lead-Based Paint Regulations, Final
                                                      Rule
----------------------------------------------------------------------------------------------------------------
                                                                                        Small owner
                                                                                        entities as   Number of
                 Program group                    Number of    Units per    Number of    percent of     small
                                                    units       property    properties   number of    ownership
                                                                                         properties    entities
----------------------------------------------------------------------------------------------------------------
Pre-1960 Housing w/Multifamily (MF) Mortgage           3,750          160           23           75           17
 Insurance.....................................
Post-1959 Housing w/ MF Mortgage Insurance.....       11,250          160           70           75           53
MF Housing w/ Project-Based Assistance, >$5K/         35,750          115          311           75          233
 Unit..........................................
MF Housing w/ Project-Based Assistance, <$5K/        408,690          115        3,554           85        3,021
 Unit..........................................
Single Family (SF) Housing w/ Project-Based          134,280            2       67,140           20       13,428
 Assistance....................................
MF Housing w/ Tenant-Based Assistance..........      207,050            7       29,579           99       29,283
SF Housing w/ Tenant-Based Assistance..........      134,500            1      134,500           20       26,900
Public Housing.................................      164,000          N/A        1,500           96        1,440
SF Housing w/ Rehab Assistance, <$5K/Unit......       66,836            1       66,836          100       66,836
MF Housing w/ Rehab Assistance, <$5K/Unit......        7,834           20          392           99          388
SF Housing w/ Rehab Assistance, $5K-$25K.......       48,998            1       48,998          100       48,998
MF Housing w/ Rehab Assistance, $5K-$25K.......       15,877           20          794           98          778
SF Housing w/ Rehab Assistance, >$25K..........        5,817            1        5,817          100        5,817
MF Housing w/ Rehab Assistance, >$25K..........        7,306           20          365           98          358
SF Housing w/ Acquisition, Leasing, etc.               5,093            1        5,093          100        5,093
 Assistance....................................
MF Housing w/ Acquisition, Leasing, etc.               6,103           20          305           99          302
 Assistance....................................
                                                ----------------------------------------------------------------
    Total......................................    1,263,134  ...........      365,277  ...........      202,945
----------------------------------------------------------------------------------------------------------------

    The third and fourth rows of Table 4 present estimates for 
multifamily housing with project-based rental assistance. These are 
somewhat smaller properties, with an average of 115 units per project; 
only 13 percent have more than 200 units (Abt Associates 1999). For 
this analysis it is assumed that average annual total revenues are 
$10,000 per unit for properties receiving an average of more than 
$5,000 in rental assistance per unit per year and $6,000 for those with 
less than $5,000. (The Abt Associates 1999 report estimates that mean 
annual total revenues were $5,868 in 1995 for all ``older assisted'' 
multifamily properties and $10,057 for ``newer assisted'' properties. 
Older assisted properties receive either mortgage interest subsidies 
(under section 236 or 221(d)(3) Below Market Interest Rate insurance 
programs) or rental assistance under the Section 8 Loan Management Set 
Aside, Rent Supplement, Rental Assistance Payment, Section 8 Property 
Disposition, or Preservation programs. Newer assisted properties 
receive rental assistance under one of the following Section 8 
programs: New Construction, Substantial Rehabilitation, or Moderate 
Rehabilitation. Older assisted properties had mean assistance payments 
of $2,576 per unit per year, with a median of $2,310. Newer assisted 
properties had mean assistance payments of $7,448, with a median of 
$7,106. Thus HUD assumes for purposes of this Regulatory Flexibility 
Analysis that virtually all of the housing receiving more than $5,000 
per unit per year in project-based assistance are in the newer assisted 
properties and that virtually all of the housing receiving less than 
$5,000 are in the older assisted category.) A project with $10,000 in 
annual revenue per unit would have to have 500 units to earn $5 million 
in total revenue. A project with $6,000 in annual revenue per unit 
would need 834 units. It is assumed that 75 per cent of the owners of 
properties receiving more than $5,000 per unit in assistance will be 
small entities--the same as for unassisted insured properties. However, 
recognizing the sharp difference in average revenues between properties 
receiving more than and less than $5,000 per unit per year, it is 
assumed that 85 percent of the less-than-$5,000 group will be small 
entities. Based on this analysis, it is estimated that 3,254 small 
entities will own multifamily properties with project-based assistance 
that will be affected by the rule in its first year. All of these 
should complete initial work in the first year, with only ongoing 
maintenance and some reevaluation required after that. In each of the 
second, third and fourth years, it is expected that 233 additional 
small entities will be affected.
    The fifth row in Table 4 presents estimates for all single family 
housing receiving project-based assistance. HUD assumes for the 
purposes of this analysis of ownership that there is an average of two 
units per property in this inventory. This assumption derives from 
American Housing Survey data which indicates that there are a large 
number of three-and four-unit properties with project-based assistance 
as well as single unit properties. (The HUD-FHA definition of ``single 
family property'' is one-to-four units.) It is further assumed that 
owners of single-family housing with project-based assistance own an 
average of five properties. This assumption recognizes that it requires 
a certain additional amount of managerial knowledge to participate in 
project-based assistance programs compared to owning an unassisted 
rental unit, and that such owners tend to try to maximize the benefits 
of such knowledge by owning several homes. HUD also assumes, however, 
that 100 percent of the owners of such housing are small entities. It 
is estimated that 13,428 small entities will own single family housing 
with project-based assistance that is affected by the first year of the 
rule. After that, only ongoing maintenance is required. No additional 
entities are expected to be affected in later years.
    (2) Tenant-Based Rental Assistance. Families assisted by tenant-
based rental assistance programs are living in housing that is similar 
in size and age to the nation's entire non-luxury rental housing stock. 
Therefore HUD assumes that the average number of units per multifamily 
property is 20, which is much smaller than the projects with mortgage 
insurance and project-based assistance. However, in the tenant-based 
assistance programs, HUD lead-based paint regulations apply only to 
housing occupied by children of less than 6 years of age. Therefore, 
based on occupancy data from a subsample of the American Housing 
Survey, it is assumed that 35 percent of the 20 units (or seven) are 
occupied by such children. Because

[[Page 50194]]

of the small average property size, HUD assumes that only one percent 
of the owners of multifamily housing assisted under tenant-based 
programs are large entities.
    For single-family housing with tenant-based assistance, it is 
assumed that an average of one unit per property will house families 
with children of less than six years of age, that owners will own an 
average of five properties, and that 100 percent of the properties are 
owned by small entities.
    Counting owners of both multifamily and single family housing, it 
is estimated that 56,183 small entities will own housing with tenant-
based assistance affected by the first year of the rule. In future 
years, because of housing turnover in these programs, it is expected 
that about 20,000 small entities will become newly affected each year.
    (3) Public Housing. HUD estimates that approximately 1,500 public 
housing agencies will be affected by the rule. Although HUD believes 
that the Regulatory Flexibility Act does not apply to the vast majority 
of public housing authorities, data are presented here for 
completeness. Many public housing agencies own both multifamily and 
single family units, so no attempt is made in Table 1 to distinguish 
between agencies owning one or the other. Although rents paid by 
tenants of public housing are relatively low, HUD estimates that 
subsidies boosted public housing agency revenues to an average of 
approximately $7,400 per unit per year in 1995. A public housing agency 
with average revenues per unit would have to have 676 units to have 
revenues of $5 million. Only about 2 percent of public housing agencies 
have that many units. However, many housing agencies have revenues from 
sources other than the public housing program, including the project-
based and tenant-based rental assistance programs. Therefore HUD 
assumes for this analysis that 4 percent of the public housing agencies 
are large entities and that 96 percent, or 1,440, are small entities.
    (4) Rehabilitation Assistance. There are at least three types of 
entities that will be affected by the lead-based paint requirements for 
housing receiving rehabilitation assistance. They are: (1) The State 
and local governmental agencies and tribal agencies that are the 
grantees and participating jurisdictions that receive funding from HUD; 
(2) nonprofit organizations that are subrecipients or funded directly 
by HUD and that operate housing development and rehabilitation 
programs; and (3) private owners of housing being rehabilitated. Of 
these three, the greatest concern of those commenting on the proposed 
rule was with the potential economic impact on private owners. 
Therefore this analysis focuses on that group.
    The number of small-owner entities participating in the 
rehabilitation programs is estimated to be large, because many local 
programs concentrate on the rehabilitation of single family, owner-
occupied homes. HUD assumes for purposes of this analysis that in any 
given year all single family units assisted by rehabilitation programs 
are individually owned, i.e., that the number of owners equals the 
number of units. While this may produce an overestimate of the actual 
number of owners, the error is expected to be small. For multifamily 
units, the same average number of 20 units per property is used as was 
used in the tenant-based assistance programs; and 98 to 99 percent of 
the owners are assumed to be small entities. In total, it is estimated 
that 125,028 small-owner entities will be affected by the 
rehabilitation assistance programs each year.
    (5) Acquisition, Leasing, Support Services, or Operation. 
Assumptions for the Acquisition, Leasing, Support Services or Operation 
group are the same as for Rehabilitation. The number of small entities 
affected is estimated to be 5,395.
    b. Economic Impact. This section examines, for each program group, 
the financial impact of the rule on small entities.
    (1) Housing With Multifamily Mortgage Insurance, Project-Based 
Rental Assistance, Tenant-Based Rental Assistance, or Public Housing. 
Table 5 provides a comparison of the incremental cost of compliance 
with total revenues for most of the rental housing programs affected by 
the rule. Table 6 provides the following additional financial 
statistics that are available from a study of the insured multifamily 
inventory: annual net cash flow, total reserves, and backlog of 
physical needs--all per unit (Abt Associates 1999, exhibits 2-2, 3-3, 
and 3-7). Annual net cash flow equals revenues less expenses before 
income taxes. Expenses include deposits to reserve accounts and debt 
service as well as operating expenses. Total reserves include 
replacement reserves and, for some properties, residual receipts 
accounts. The physical needs backlog is the estimated cost of repairs 
and replacements beyond ordinary maintenance required to restore a 
property to its original condition. The financial statistics in Table 6 
are available only for the multifamily HUD-insured stock that is 
unassisted or assisted with project-based subsidies; they are not 
available for housing receiving tenant-based assistance or for public 
housing.
    Two sets of compliance cost estimates are provided for each program 
group in Table 5. The first column is the mean incremental cost per 
unit for all properties. Incremental costs are new costs incurred in 
compliance with this rule over and above the costs of compliance with 
existing regulations. There is a great deal of variation around this 
mean that is associated with the age, size and condition of the 
housing. Many properties will have no cost at all. Therefore, the 
second column of Table 5 provides the estimated incremental cost per 
unit for ``high-cost properties.'' This is an approximation of the 
average cost that may be incurred by properties that have all the 
hazards for which the rule requires remediation for a given program. 
The frequency of such high-cost cases is not known but is expected to 
be between one and eight percent of all properties, depending on the 
program group. All compliance cost estimates are incremental, i.e., 
over and above the costs of current HUD lead-based paint regulations. 
The cost estimates are derived from the EA, which in turn is based on 
data collected from discussions with lead-based paint inspectors and 
hazard reduction contractors in 1995 and the evaluation of the HUD 
Lead-Based Paint Hazard Control Grant Program (data collected 1994-
1997). No cost estimates are shown for post-1959 unassisted housing 
with HUD multifamily mortgage insurance because the rule requires only 
that sponsors agree to conduct ongoing lead-based paint maintenance.
    Estimates of mean annual total revenues per unit are based on a 
1995 survey of HUD-insured multifamily rental housing (Abt Associates 
1999, exhibit 3-1) and estimates by HUD staff. As with Table 4, all 
estimates pertain to housing affected by the first year of the rule.
    In comparing compliance costs with revenue or with other financial 
data, it is important to remember that the compliance costs are not 
continuing annual costs. Rather they are one-time costs of hazard 
evaluation and control, after which the owner must simply maintain the 
paint surfaces and conduct maintenance and repair activities in a lead-
safe manner. For some program groups, owners will have to conduct at 
least two reevaluations in two-year intervals after the initial hazard 
reduction activity to assure that lead-based paint hazards have not 
reoccurred. Also, many owners have

[[Page 50195]]

properties that are not covered by the rule as well as those that are 
affected. The financial impact on such owners will be less than on 
those whose portfolios consist solely of pre-1978 HUD-associated 
housing.
    Table 5 indicates that, in the first effective year of the rule, 
the mean incremental cost of compliance is expected to vary from 1.0 to 
6.9 percent of total annual revenues for the insured multifamily stock 
and housing receiving project-based rental assistance. Public housing 
and unassisted insured multifamily housing built before 1960 have the 
highest average costs and the highest percentage of revenue, because of 
the stringency of the requirements and the age of the stock. High-cost 
properties have ratios of cost to revenue of 9.0 to 28 percent; but 
these percentages should be used only as rough indicators, because the 
universe of the revenue estimate (all properties) does not correspond 
to that of the high-cost properties.
    Table 6 provides additional financial statistics from the Abt 
Associates report on the multifamily insured stock. Data from the Abt 
study for unassisted properties are not included in this table, because 
they are not necessarily representative of properties that will apply 
for mortgage insurance when the rule becomes effective. For newer 
assisted properties (defined as properties receiving Section 8 New 
Construction, Substantial Rehabilitation, or Moderate Rehabilitation), 
the average (mean) cash flow was a substantial $1,105 per unit. This 
compares to lead-based paint regulatory compliance costs of $255 
(average for all properties) and $1,120 (high-cost properties) for 
housing with project-based assistance of more than $5,000 per unit. 
While reserves also appeared respectable for most of these newer 
assisted properties, the mean backlog of physical needs was $3,214 
compared to a median of $1,324, indicating that a few properties had 
very high backlog needs. Also, 13 percent of the newer assisted 
properties had negative cash flow, again indicating that some 
properties are in financial distress.
    For the older assisted properties, which correspond to housing with 
project-based assistance of less than $5,000 per unit, mean annual net 
cash flow per unit was $283, compared with compliance costs of $60-$82 
per unit (average for all properties) and $570-$870 (high-cost 
properties). The Abt study found that 33 percent of the older assisted 
properties had a negative cash flow and that another 42 percent had a 
cash flow of $0-$500 per unit. Further, the study found $3,929 in 
average (mean) backlog of physical needs per unit, with a median of 
$2,096, indicating that some properties have very high deferred needs. 
Thus it appears that a certain percentage of this older stock is in 
financial distress, even more than with the newer assisted properties.

 Table 5.--Incremental Cost of Compliance as a Percentage of Annual Revenue, by Program Group: Nonfederal Rental
                                 Housing Affected by the First Year of the Rule
   [Not including housing receiving assistance for rehabilitation or acquisition, leasing, support services or
                                operation. Cost and revenue data as of 1995-1996]
----------------------------------------------------------------------------------------------------------------
                                                                                          Average      Average
                                                   Average      Average      Average    incremental  incremental
                                                 incremental  incremental     annual     compliance   compliance
                                                  compliance   compliance     total      cost as a    cost as a
                 Program group                     cost per     cost per   revenue per   percent of   percent of
                                                  unit, all   unit, high-   unit, all     revenue,     revenue,
                                                  properties      cost      properties      all       high-cost
                                                               properties                properties   properties
----------------------------------------------------------------------------------------------------------------
Pre-1960 Housing w/Multifamily (MF) Mortgage            $414       $1,120       $8,000          5.2           14
 Insurance.....................................
Post-1959 Housing w/MF Mortgage Ins............            0            0        8,000            0            0
MF Housing w/Project-Based Assistance, >$5K/             255        1,120       10,000          2.6           11
 Unit..........................................
MF Housing w/Project-Based Assistance, <$5K/              60          570        6,000          1.0          9.5
 Unit..........................................
SF Housing w/Project-Based Assistance..........           82          870        6,500          1.3           13
MF Housing w/Tenant-Based Rental Assistance....           59          560        6,200          1.0          9.0
SF Housing w/Tenant-Based Rental Assistance....          103          870        6,200          1.7           14
MF Public Housing..............................          311        1,120        7,400          4.2           15
SF Public Housing..............................          511        2,095        7,400          6.9           28
----------------------------------------------------------------------------------------------------------------


   Table 6.--Financial Statistics for Multifamily Properties with Hud-
                         Insured Mortgages 1995
             [In 1995 dollars per 2-bedroom equivalent unit]
------------------------------------------------------------------------
                                       Newer assisted    Older assisted
                                         properties        properties
------------------------------------------------------------------------
Annual Net Cash Flow Per Unit:
    Mean............................            $1,105              $283
    Median..........................              $742              $162
Percentage of Properties With                      13%               33%
 Negative Cash Flow.................
Percentage of Properties With Cash                 22%               42%
 Flow of $0-$500....................
Total Reserves Per Unit:
    Mean............................            $1,924            $1,766
    Median..........................            $1,163            $1,240
Backlog of Physical Needs Per Unit:
    Mean............................            $3,214            $3,929
    Median..........................            $1,324            $2,096
------------------------------------------------------------------------


[[Page 50196]]

    It is apparent from these statistics that some properties will not 
be able to fund lead-based paint compliance out of current income. HUD 
estimates that no more than half of the housing with project-based 
assistance will be able to obtain an adjustment in assistance levels to 
finance the cost of the lead-based paint requirements. For projects 
that do not qualify for a rent adjustment and do not have sufficient 
income to cover the cost of compliance with the rule, HUD will work 
with owners to find funds from other sources. Depending on the 
property, this process may include the financial restructuring known as 
Mark to Market. Mark-to-Market processing will address lead-based paint 
requirements in the restructuring commitment. Other possible sources of 
funds include replacement reserves, grants, and Community Development 
Block Grant funds.
    (2) Housing Receiving Rehabilitation Assistance. For housing 
receiving rehabilitation assistance, Table 7 compares the cost of 
compliance to an assumed average total cost of rehabilitation. Assumed 
average total rehabilitation costs are $4,000 for projects receiving 
$5,000 or less in rehabilitation assistance, $15,000 for those 
receiving between $5,000 and $25,000 in assistance, and $30,000 for 
those receiving more than $25,000 in assistance. Average compliance 
costs vary from 1.1 to 4.2 percent of these total project costs. Costs 
for high-compliance-cost projects vary from 3.3 to 9.3 percent of total 
rehabilitation cost. Single family properties tend to have a higher 
cost impact than multifamily, because they are larger units on average 
and usually require more exterior work.
    Virtually all HUD rehabilitation assistance is administered by 
State, local and tribal agencies, and many, if not most, of these 
programs are operated as low-interest loans. If property owners are 
unable to finance loans for the incremental cost of lead hazard 
control, the administering agencies have the option to finance such 
costs with a grant out of program funds.

    Table 7.--Incremental Cost of Compliance as a Percentage of Average Rehabilitation Cost, by Program Group
                               Housing Receiving Federal Rehabilitation Assistance
                                           [Cost data as of 1995-1996]
----------------------------------------------------------------------------------------------------------------
                                                                                          Average      Average
                                                            Average                     incremental  incremental
                                               Average    incremental                    compliance   compliance
                                             incremental   compliance  Average cost of   cost as a    cost as a
               Program group                  compliance    cost per   rehabilitation,   percentage   percentage
                                               cost per   unit, high-   all properties   of average   of average
                                              unit, all       cost                      rehab cost,  rehab cost,
                                              properties   properties                       all       high-cost
                                                                                         properties   properties
----------------------------------------------------------------------------------------------------------------
Single Family (SF) Housing w/ Rehab                 $153         $170         $4,000            3.8          4.3
 Assistance, <$5K/Unit.....................
Multifamily (MF) Housing w/ Rehab                    113          130          4,000            2.8          3.3
 Assistance, <$5K/Unit.....................
SF Housing w/ Rehab Assistance, $5K-$25K...          627        1,275         15,000            4.2          8.5
MF Housing w/ Rehab Assistance, $5K-$25K...          265          720         15,000            1.8          4.8
SF Housing w/ Rehab Assistance, >$25K/Unit.          891        2,775         30,000            3.0          9.3
MF Housing w/ Rehab Assistance, >$25K/Unit.          342        1,140         30,000            1.1          3.8
----------------------------------------------------------------------------------------------------------------

    (3) Acquisition, Leasing, Support Services, and Operation. This 
program group does not appear on Table 5, because HUD has no aggregate 
financial information for the housing affected by this subpart of the 
rule. For single family properties, the average cost of compliance is 
estimated at $251 per unit for all properties; the high cost is $870. 
For multifamily properties, the average cost per unit is $122 for all 
properties and $460 for high-cost properties. These costs are similar 
to those of housing with tenant-based assistance, and the financial 
impact is likely to be similar also.
    4. Final Rule Requirements. The final rule establishes the 
following types of lead-based paint requirements: (1) Distribution of a 
lead hazard information pamphlet; (2) notice to occupants of evaluation 
and hazard reduction activities; (3) evaluation of lead-based paint 
hazards; (4) reduction of lead-based paint hazards; (5) ongoing 
monitoring and reevaluation; (6) response to a child with an elevated 
blood lead level; and (7) record keeping.
    a. Lead Hazard Information Pamphlet. The rule, in accordance with 
the statute, requires the distribution of the EPA pamphlet entitled, 
``Protect Your Family From Lead in Your Home'' to all existing tenants 
or owner-occupants who have not already received it in compliance with 
the lead-based paint disclosure rule (24 CFR part 35, subpart H) or the 
EPA rule implementing TSCA section 406(b) (40 CFR part 745, subpart E). 
Since the disclosure rule was effective in the Fall of 1996, HUD 
expects that most tenants will have already received the pamphlet when 
the rule becomes effective in year 2000 (see discussion of effective 
date below). Current HUD regulations require provision of information 
similar to that in the EPA pamphlet, so this is not a totally new 
requirement.
    b. Resident Notice. The rule, in accordance with Title X, requires 
that occupants of rental housing receiving Federal assistance be 
provided written notice of risk assessments, paint inspections, or 
hazard reduction activities required by this regulation and undertaken 
at the property. This is a new requirement in HUD regulations. The 
required notice following risk assessment or inspection provides 
information to occupants about the nature, scope, and results of the 
evaluation and a name and phone number to contact for more information 
or for access to the actual evaluation reports. Notices to tenants 
regarding hazard reduction activities must contain information about 
the treatments performed and the location of any remaining lead-based 
paint. HUD is providing a sample format for resident notices in the 
final rule.
    c. Evaluation. The rule establishes four types of evaluation 
procedures: (1) A lead-based paint inspection, which is a surface-by-
surface investigation to determine the presence of lead-based paint on 
painted surfaces of a dwelling, typically through the use of a portable 
X-ray fluorescence (XRF) analyzer; (2) paint testing, which is a 
limited form of lead-based paint inspection aimed at determining the 
lead content of deteriorated paint or paint to be

[[Page 50197]]

disturbed by rehabilitation; (3) a risk assessment, which is an on-site 
investigation to determine and report the existence, nature, severity, 
and location of lead-based paint hazards, which, in accordance with 
Title X, include dust-lead and soil-lead hazards as well as 
deteriorated lead-based paint, as well as lead-based paint on friction, 
impact and chewable surfaces; and (4) clearance, which is an 
examination conducted after hazard reduction, rehabilitation, or 
maintenance activities (a) to visually determine that deteriorated 
surfaces that are known or presumed to be lead-based paint have been 
controlled or abated and that visible dust, debris, paint chips, or 
other residue have been cleaned up; and (b) to collect samples of 
settled dust and test them for lead content to determine that no dust-
lead hazards remain. A risk assessment includes limited dust wipe 
sampling or other environmental sampling techniques, identification of 
hazard reduction options, and a report explaining the results of the 
investigation. In some housing programs, the rule calls for a visual 
assessment instead of a lead-based paint inspection or risk assessment. 
A visual assessment does not require environmental sampling but 
requires the visual examination of interior and exterior painted 
surfaces for signs of deterioration. The rule requires different types 
of evaluation for different types of housing assistance programs and 
different ages of housing. The differences in the requirements largely 
reflect the extent of Federal involvement in the property or the 
availability of funding.
    Existing HUD lead-based paint regulations require a visual 
inspection for defective paint surfaces and, in some cases, testing of 
and abatement of any lead-based paint on chewable paint surfaces. These 
methods are similar in kind to the visual assessment and paint testing 
requirements under the proposed rule.
    d. Hazard Reduction Activities. Three types of hazard reduction 
activities are required in the rule: (1) Abatement, which is a set of 
measures designed to permanently eliminate lead-based paint or lead-
based paint hazards through removal, permanent enclosure or 
encapsulation, replacement of components, or removal or covering of 
lead-contaminated soil; (2) interim controls, which are designed to 
reduce temporarily human exposure to lead-based paint hazards through 
repairs, maintenance, painting, temporary containment, specialized 
cleaning, and ongoing monitoring; and (3) paint stabilization, which is 
the removal of deteriorated paint, repair of any physical defect in the 
substrate that may be causing paint deterioration, and repainting. 
Specialized cleanup and clearance are required after all these 
activities.
    As with the requirements for evaluation, the final rule requires 
different types of hazard reduction activities for different types of 
housing assistance programs and different periods of construction. In 
the case of public housing, abatement of lead-based paint and lead-
based paint hazards is required during the course of modernization 
under the current regulation. Under the final rule, the public housing 
requirements would remain essentially the same, with the additional 
requirement of interim controls to reduce identified lead-based hazards 
before scheduled abatement can occur.
    e. Ongoing Lead-Based Paint Maintenance and Reevaluation. If 
temporary hazard reduction measures are used and there is a continuing 
financial relationship between HUD and the residential property, the 
final rule requires that owners conduct an annual check to identify any 
new deteriorated paint and to ensure that prior hazard reduction 
treatments are still intact. If there is new deteriorated paint, it is 
to be repaired; if old treatments are failing, they are to be fixed. 
For some housing programs, the rule requires that a certified risk 
assessor conduct a reevaluation of the property at specified intervals 
to identify any reaccumulation of lead-contaminated dust and any 
failure of prior hazard reductions.
    f. Response To a Child With an Elevated Blood Lead Level. In some 
HUD programs, existing regulations use the presence of a child under 
age seven with an elevated blood lead level (EBL) as a trigger to 
initiate testing for and abatement of lead-based paint on chewable 
surfaces. The final rule changes the cutoff age from seven to six, to 
conform to guidance from the Centers for Disease Control and Prevention 
(CDC). The rule also changes the response requirement to a risk 
assessment and interim controls of any identified lead-based paint 
hazards, and changes the definition of an elevated blood lead level for 
the purposes of this rule from equal to or exceeding 25 micrograms per 
deciliter (g/dL) to 20 g/dL for a single venous test 
or of 15-19 g/dL in two tests taken at least 3 months apart. 
This definitional change was made in consultation with CDC to conform 
to their existing medical guidelines.
    g. Record Keeping. Grantees, owners, public housing authorities, 
and other designated parties are responsible for keeping a copy of each 
notice, evaluation, clearance or hazard reduction report for at least 
three years. If ongoing lead-based paint maintenance and/or 
reevaluation is required, such records must be kept and made available 
for HUD review until at least three years after such ongoing activities 
are no longer required.
    5. Description of Alternatives and Minimization of Economic Impact. 
The specificity of the statute left HUD with no alternative to issuing 
an implementing regulation. However, in developing the final rule, HUD 
considered several alternative policies related to minimizing the 
burden of the rule on grantees, property owners and other parties 
responsible for complying with its requirements. Other alternatives 
were suggested by commenters on the proposed rule. In many cases, the 
public comments on the proposed rule articulated the issues discussed 
within the Department and at meetings with interested parties.
    a. Effective Date. One consideration pertained to the effective 
date of the rule. On the one hand, an early effective date (such as 30 
or 60 days after publication) seemed appropriate because the health of 
young children was at stake and the rule was delayed relative to the 
statutory schedule. On the other hand, HUD was aware that property 
owners, State and local agencies and other responsible parties needed 
time to prepare for compliance. The Department has concluded that such 
preparation is essential for safe, effective compliance and therefore 
is setting the effective date as one year after publication.
    Commenters also urged HUD to make it clear that projects for which 
financing had been committed prior to the effective date should not 
have to be redesigned or refinanced in midstream. In response, HUD is 
including in the rule provisions that clarify exactly when projects in 
the pipeline are affected by the new requirements.
    In addition to the phase-in period of one year, the final rule, in 
accordance with the statute, provides a more extended phase-in period 
for multifamily housing receiving project-based assistance of more than 
$5,000 per unit per year and was constructed after 1959. For some 
housing, this phase-in could last for 4 years after publication of the 
final rule.
    b. Stringency of Requirements in Relation to Amount of Federal 
Assistance and Nature of Program. The Department recognizes that the 
statute and the legislative history indicates a desire on the part of 
Congress to make

[[Page 50198]]

the stringency of requirements reasonable in relation to the amount of 
Federal assistance, the type and size of property, and the nature of 
the program. HUD considered various ways to achieve this goal and 
concluded with three important policies: (1) Multifamily properties 
receiving no more than $5,000 per unit per year in project-based 
assistance and all single family properties receiving project-based 
assistance have less stringent requirements than multifamily properties 
receiving more than $5,000 in project-based assistance; (2) housing 
receiving no more than $5,000 per unit in Federal rehabilitation 
assistance have much less stringent requirements than those receiving 
more than $5,000; and (3) the requirements for housing occupied by 
families with tenant-based rental assistance apply only to units 
occupied by families with children of less than 6 years of age. By 
applying the rule narrowly to tenant-based rental assistance programs, 
HUD has mitigated some of the cost and burden on small businesses, 
while still realizing significant benefits by targeting units that 
house families with young children.
    c. De Minimis Area of Deteriorated Paint. In the proposed rule, in 
an attempt to make the requirements of the rule as cost-effective as 
possible, the Department proposed a certain area of deteriorated paint 
that had to be present before treatment was required under the rule. 
This ``de minimis'' was drawn from the HUD Guidelines, where it was 
established as a way to focus resources on the highest priority hazards 
while maintaining effectiveness in hazard reduction. The de minimis 
areas were as follows: More than 10 square feet on an exterior wall; 
more than two square feet on a component with a large surface area 
other than an exterior wall (such as interior walls, ceilings, floors 
and doors); or more than 10 percent of the total surface area on an 
interior or exterior component with a small surface area including, but 
not limited to window sills, baseboards, and trim. Comments on this 
proposal were mixed. Some commenters found it difficult to understand 
and put in practice, indicating that people would spend too much time 
measuring the exact areas of deteriorated paint instead of focusing on 
making housing lead safe. Others welcomed the proposal as a reasonable 
way to target hazard reduction resources. In preparing the final rule, 
HUD has removed the de minimis provision with regard to deteriorated 
paint, after concluding that experience in the tenant-based assistance 
programs (where the de minimis provision was made effective in 1995) 
indicates that it is a cause of confusion.
    d. Qualifications. Another subject of concern to HUD and to 
commenters on the proposed rule was the qualifications of individuals 
performing the hazard evaluation and reduction activities required by 
the rule. The proposed rule allowed dust and soil testing by persons 
employed by local housing agencies that are trained but not certified. 
Two commenters felt that it would be a mistake to allow uncertified 
individuals to take dust and soil tests, indicating that this appeared 
to be an avoidance of the certification law established by EPA 
regulations. EPA agreed with this point of view. HUD concluded that, 
because of the importance of dust and soil testing to the effectiveness 
of the regulation, there must be an established set of qualifications 
for those doing such testing. At this time, the only such program is 
that administered by EPA under authority of sections 402 and 404 of the 
Toxic Substances Control Act. Therefore HUD requires in the final rule 
that all dust and soil testing, as well as lead-based paint 
inspections, risk assessments, clearances and abatements, be performed 
or approved by people certified in accordance with EPA regulations or a 
State or tribal program authorized by EPA. To increase the availability 
of persons qualified to perform clearance examinations, HUD allows 
certified clearance technicians to perform clearances; and HUD also 
allows uncertified but trained technicians to perform clearances, 
provided the clearance report is signed by a certified lead-based paint 
inspector or risk assessor.
    The proposed rule also required workers performing interim controls 
to be supervised by a person who is certified under EPA procedures as 
an abatement supervisor. Some commenters felt that it was unnecessary 
to require that interim controls workers be supervised by a certified 
abatement supervisor, suggesting that such workers could simply be 
trained in safe work practices. HUD agrees and requires in the final 
rule that workers performing lead-based paint maintenance and interim 
controls, including paint stabilization, only be trained in safe work 
practices. A series of optional acceptable training programs is listed.
    e. Options to Provide Greater Flexibility. Several commenters on 
the proposed rule urged that HUD allow greater flexibility in ways to 
meet the goals of the rule. In particular, it was suggested that 
options be provided, such as the standard treatments recommended by the 
Task Force on Lead-Based Hazard Reduction and Financing as an option to 
conducting a risk assessment and interim controls. Such options would 
allow owners to select the procedure that is most cost-effective for 
them to achieve the goal of lead-based paint hazard control. The 
standard treatments option has been incorporated into today's final 
rule.
    In the proposed rule, HUD included a provision requiring owners of 
multifamily housing with project-based rental assistance to prepare a 
lead hazard reduction plan. The hazard reduction plan was a suggestion 
of the Task Force on Lead-Based Paint Hazard Reduction and Financing. 
Its purpose was to give owners flexibility in prioritizing hazard 
reduction work. Several commenters, however, noted that it would be a 
paperwork ``nightmare,'' not only for the owners but for HUD as well. 
Therefore the final rule requires simply that the hazard reduction work 
be completed within 90 days after completion of the risk assessment 
report in units occupied by children of less than six years of age and 
within 12 months in all other units. HUD believes this change provides 
flexibility without unnecessary paperwork.
    HUD recognizes that some States, tribes, or local governments may 
have established procedures for lead-based paint evaluation and hazard 
reduction that may be somewhat different than but as protective as 
those in this rule. Therefore the rule provides that HUD may waive or 
modify certain requirements if the Department determines that such 
local provisions are as protective as those of the HUD rule.
    f. Avoidance of Duplication. The final rule was written with 
careful consideration of existing regulations developed by other 
Federal agencies, States, Indian tribes and localities. To minimize 
duplication and avoid confusion, HUD has explicitly stated that this 
rulemaking does not preclude States, Indian tribes or localities from 
conducting a more protective procedure than the minimum requirements 
set out in the proposed rule. Similarly, if more than one requirement 
covers a condition or activity, the most protective method shall apply. 
HUD has worked and continues to work closely with the EPA and CDC to 
ensure that regulations from two or more Federal agencies are 
consistent and not duplicative. Wherever possible, HUD has referenced 
relevant requirements established by EPA.

[[Page 50199]]

VII. Findings and Certifications

A. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. This final rule does not impose any 
Federal mandates on any State, local, or tribal governments or the 
private sector within the meaning of Unfunded Mandates Reform Act of 
1995.

B. Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations at 24 CFR part 50, 
which implement section 102(2)(C) of the National Environmental Policy 
Act of 1969 (42 U.S.C. 4223). The Finding of No Significant Impact is 
available for public inspection between the hours of 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.

C. Executive Order 12866, Regulatory Planning and Review

    This rule was reviewed by the Office of Management and Budget (OMB) 
under Executive Order 12866 on Regulatory Planning and Review, issued 
by the President on September 30, 1993. OMB determined that this rule 
is an economically significant regulatory action, as defined in section 
3(f)(1) of the Order. As described in section VI of this preamble, an 
Economic Analysis (EA) has been prepared that examines the economic 
costs and benefits of the final rule. The EA is available for 
inspection and copying in the office of the Departments' Rules Docket 
Clerk, Room 10276, 451 Seventh Street, SW, Washington, DC 20410. Any 
changes made to the final rule subsequent to its submission to OMB are 
identified in the docket file, which is also available for public 
inspection in the office of the Rules Docket Clerk.

D. 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 federalism implications concerning the division of local, 
State, and Federal responsibilities. The purpose of this rule is to 
ensure that housing receiving Federal assistance and federally owned 
housing that is to be sold does not pose lead-based paint hazards to 
young children. It implements Title X of the Housing and Community 
Development Act of 1992. No programmatic or policy change will result 
from this rule that will affect the relationship between the Federal 
government and State and local governments.

E. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    This rule will not pose an environmental health risk or safety risk 
for children.

F. Congressional Review of Major Final Rules

    This final rule is a ``major rule'' as defined in the Congressional 
Review Act (5 U.S.C. Chapter 8).

VIII. References

    1. Abt Associates 1999. Abt Associates, Inc., Status of HUD-
Insured (or Held) Multifamily Rental Housing in 1995, Final Report. 
Prepared for U.S. Department of Housing and Urban Development, 
Office of Policy Development and Research, May 1999.
    2. Ashengrau 1997. Aschengrau A, Beiser A, Bellinger D, 
Copenhafer D, Weitzman M. Residential lead-based paint hazard 
remediation and soil-lead abatement among children with mildly 
elevated blood lead levels, American Journal of Public Health 
87:1698-1702, 1997.
    3. ATSDR 1988. Agency for Toxic Substances and Disease Registry, 
Public Health Service, U.S. Department of Health and Human Services. 
The Nature and Extent of Lead Poisoning in Children in the United 
States: A Report to Congress. Atlanta, GA, 1988.
    4. Battelle 1997. Summary and Assessment of Published 
Information on Determining Lead Exposures and Mitigating Lead 
Hazards Associated With Dust and Soil in Residential Carpets, 
Furniture and Forced Air Ducts. Prepared for U.S. Environmental 
Protection Agency, December 1997 (EPA 747-S-97-001).
    5. CDC 1990. Centers for Disease Control, Public Health Service, 
U.S. Department of Health and Human Services. Strategic Plan for the 
Elimination of Childhood Lead Poisoning. November 1990.
    6. CDC 1997a. Centers for Disease Control and Prevention. 
Update: Blood Lead Levels--United States, 1991-1994, Morbidity and 
Mortality Weekly Report 46: 141-146. 1997.
    7. CDC 1997b. Centers for Disease Control and Prevention. 
Screening Young Children for Lead Poisoning: Guidance for State and 
Local Public Health Officials. Atlanta, 1997.
    8. Clark 1996. Clark S, Bornschein RL, Pan W, Menrath W, Roda S, 
Grote J. The relationship between surface dust-lead loadings on 
carpets and the blood lead of young children, Environmental 
Geochemistry and Health (18) 143-146, 1996.
    9. EPA 1995. U.S. Environmental Protection Agency, Office of 
Pollution Prevention and Toxics, Report on the National Survey of 
Lead-Based Paint in Housing, April 1995 (EPA 747-R95-005).
    10. Farfel 1990. Farfel MR, Chisolm JJ Jr. Health and 
environmental outcomes of traditional and modified practices for 
abatement of residential lead-based paint, American Journal of 
Public Health 80:1240-1245.
    11. HUD 1996. U.S. Department of Housing and Urban Development 
and Bureau of the Census, Department of Commerce, Property Owners 
and Managers Survey, 1996.
    12. HUD 1997. Moving Toward a Lead-Safe America: A Report to the 
Congress of the United States. U.S. Department of Housing and Urban 
Development, Office of Lead hazard Control. February 1997.
    13. HUD 1998. U.S. Department of Housing and Urban Development, 
Office of Lead Hazard Control. Field Evaluation of Lead-Based Paint 
Inspections. Washington, 1998.
    14. HUD 1999. Regulatory Impact Analysis of the Final Rule on 
Lead-Based Paint: Requirements for Notification, Evaluation and 
Reduction of Lead-Based Paint Hazards in Federally Owned Residential 
Property and Housing Receiving Federal Assistance. Prepared by ICF, 
Inc. for U.S. Department of Housing and Urban Development, Office of 
Lead Hazard Control, 1999.
    15. Lanphear 1996. Lanphear BP, Weitzman M, Winter NL, Tanner M, 
Yakir B, Eberly S, Emond M, Matte TD. Lead-contaminated house dust 
and urban children's blood lead levels. American Journal of Public 
Health, 86:1416-1421, 1996.
    16. Lanphear 1998. Lanphear BP, Matte TD, Rogers J, Clickner R, 
Dietz B, Bornschein RL, Succop P, Mahaffey KR, Dixon S, Galke W, 
Rabinowitz M, Farfel M, Rohde C, Schwartz J, Ashley P, Jacobs DE. 
The contribution of lead-contaminated house dust and residential 
soil to children's blood lead levels, Environmental Research; 
79(1):51-68. October 1998.
    17. National Academy of Sciences 1993. Measuring Lead Exposure 
in Infants, Children and Other Sensitive Populations. Committee on 
Measuring Lead in Critical Populations, Board on Environmental 
Studies and Toxicology, Commission on Life Sciences, National 
Academy of Sciences, 1993.
    18. National Center 1998. Evaluation of the HUD Lead-Based Paint 
Hazard Control Grant Program: Fifth Interim Report. Prepared for HUD 
by the National Center for Lead-Safe Housing and the University of 
Cincinnati Department of Environmental Health, March 1998.
    19. Salkever 1995. Salkever DS. Updated Estimates of Earnings 
Benefits From Reduced Exposure of Children to Environmental Lead. 
Environmental Research, 70, 1995.
    20. Swindell 1994. Swindell SL, Charney E, Brown MJ, Delaney J. 
Home abatement and blood lead changes in Children with Class III 
lead poisoning, Clinical Pediatrics, 536-541, September 1994.

List of Subjects

24 CFR Part 35

    Grant programs--housing and community development, Lead poisoning, 
Mortgage insurance, Rent subsidies, Reporting and recordkeeping 
requirements.

[[Page 50200]]

24 CFR Part 91

    Aged, Grant programs--housing and community development, Homeless, 
Individuals with disabilities, Low and moderate income housing, 
Reporting and recordkeeping requirements.

24 CFR Part 92

    Administrative practice and procedure, Grant programs--housing and 
community development, Grant programs--Indians, Indians, Low and 
moderate income housing, Manufactured homes, Rent subsidies, Reporting 
and recordkeeping requirements.

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs--housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

24 CFR Part 203

    Hawaiian Natives, Home improvement, Indians--lands, Loan programs--
housing and community development, Mortgage insurance, Reporting and 
recordkeeping requirements, Solar energy.

24 CFR Part 206

    Aged, Condominiums, Loan programs--housing and community 
development, Mortgage insurance, Reporting and recordkeeping 
requirements.

24 CFR Part 280

    Community development, Grant programs--housing and community 
development, Loan programs--housing and community development, Low and 
moderate income housing, Nonprofit organizations, Reporting and 
recordkeeping requirements.

24 CFR Part 291

    Community facilities, Conflict of interests, Homeless, Lead 
poisoning, Low and moderate income housing, Mortgages, Reporting and 
recordkeeping requirements, Surplus government property.

24 CFR Part 511

    Administrative practice and procedure, Grant programs--housing and 
community development, Lead poisoning, Low and moderate income housing, 
Reporting and recordkeeping requirements, Technical assistance.

24 CFR Part 570

    Administrative practice and procedure, American Samoa, Community 
development block grants, Grant programs--education, Grant programs--
housing and community development, Guam, Indians, Lead poisoning, Loan 
programs--housing and community development, Low and moderate income 
housing, New communities, Northern Mariana Islands, Pacific Islands 
Trust Territory, Pockets of poverty, Puerto Rico, Reporting and 
recordkeeping requirements, Small cities, Student aid, Virgin Islands.

24 CFR Part 572

    Condominiums, Cooperatives, Fair housing, Government property, 
Grant programs--housing and community development, Low and moderate 
income housing, Nonprofit organizations, Reporting and recordkeeping 
requirements.

24 CFR Part 573

    Condominiums, Fair housing, Government property, Grant programs--
housing and community development, Low and moderate income housing, 
Nonprofit organizations, Reporting and recordkeeping requirements.

24 CFR Part 574

    AIDS, Community facilities, Disabled, Emergency shelter, Grant 
programs--health programs, Grant programs--housing and community 
development, Grant programs--social programs, Homeless, Housing, Low 
and moderate income housing, Nonprofit organizations, Rent subsidies, 
Reporting and recordkeeping requirements, Technical assistance.

24 CFR Part 576

    Community facilities, Emergency shelter grants, Grant programs--
housing and community development, Grant programs--social programs, 
Homeless, Reporting and recordkeeping requirements.

24 CFR Part 582

    Homeless, Rent subsidies, Reporting and recordkeeping requirements, 
Supportive housing programs--housing and community development, 
Supportive services.

24 CFR Part 583

    Homeless, Rent subsidies, Reporting and recordkeeping requirements, 
Supportive housing programs--housing and community development, 
Supportive services.

24 CFR Part 585

    Grant programs--housing and community development, Homeless, Low 
and very low-income families, Reporting and recordkeeping requirements.

24 CFR Part 761

    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 881

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

24 CFR Part 882

    Grant programs--housing and community development, Homeless, Lead 
poisoning, Manufactured homes, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 883

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

24 CFR Part 886

    Grant programs--housing and community development, Lead poisoning, 
Rent subsidies, Reporting and recordkeeping requirements.

24 CFR Part 891

    Aged, Capital advance programs, Civil rights, Grant programs--
housing and community development, Individuals with disabilities, Loan 
programs--housing and community development, Low- and moderate-income 
housing, Mental health programs, Rent subsidies, Reporting and 
recordkeeping requirements.

24 CFR Part 901

    Administrative practice and procedure, Public housing, Reporting 
and recordkeeping requirements.

24 CFR Part 906

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

24 CFR Part 941

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

[[Page 50201]]

24 CFR Part 965

    Energy conservation, Government procurement, Grant programs--
housing and community development, Lead poisoning, Loan programs--
housing and community development, Public housing, Reporting and 
recordkeeping requirements, Utilities.

24 CFR Part 968

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

24 CFR Part 970

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

24 CFR Part 982

    Grant programs--housing and community development, Housing, Rent 
subsidies, Reporting and recordkeeping requirements.

24 CFR Part 983

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

24 CFR Part 1000

    Aged, Community development block grants, Grant programs--housing 
and community development, Grant programs--Indians, Indians, 
Individuals with disabilities, Low and moderate income housing, Public 
housing, Reporting and recordkeeping requirements.

24 CFR Part 1003

    Alaska, Community development block grants, Grant programs--housing 
and community development, Indians, Reporting and recordkeeping 
requirements.

24 CFR Part 1005

    Indians, Reporting and recordkeeping requirements.

    For the reasons discussed in the preamble, HUD is amending title 24 
of the Code of Federal Regulations as follows:

PART 35--LEAD-BASED PAINT POISONING PREVENTION IN CERTAIN 
RESIDENTIAL STRUCTURES

    1. The authority citation for 24 CFR part 35 is revised to read as 
follows:

    Authority: 42 U.S.C. 3535(d), 4821, and 4851.

    2. Remove Subpart A and redesignate subpart H, consisting of 
Secs. 35.80 through 35.98, as subpart A, consisting of Secs. 35.1 
through 35.19. The table of contents to redesignated subpart A is 
revised to read as follows:

Subpart A--Disclosure of Known Lead-Based Paint Hazards Upon Sale or 
Lease of Residential Property

Sec.
35.1  Purpose.
35.3  Scope and applicability.
35.5  Effective dates.
35.7  Definitions.
35.9  Disclosure requirements for sellers and lessors.
35.11  Opportunity to conduct an evaluation.
35.13  Certification and acknowledgement of disclosure.
35.15  Agent responsibilities.
35.17  Enforcement.
35.19  Impact on State and local requirements.

    3. Revise subparts B through G and add subparts H through R to read 
as follows:

Subpart B--General Lead-Based Paint Requirements and Definitions for 
All Programs

35.100  Purpose and applicability.
35.105  Effective dates.
35.106  Information collection requirements.
35.110  Definitions.
35.115  Exemptions.
35.120  Options.
35.125  Notice of evaluation and hazard reduction activities.
35.130  Lead hazard information pamphlet.
35.135  Use of paint containing lead.
35.140  Prohibited methods of paint removal.
35.145  Compliance with Federal laws and authorities.
35.150  Compliance with other State, tribal, and local laws.
35.155  Minimum requirements.
35.160  Waivers.
35.165  Prior evaluation or hazard reduction.
35.170  Noncompliance with the requirements of subparts B through R.
35.175  Records

Subpart C--Disposition of Residential Property Owned by a Federal 
Agency Other Than HUD

35.200  Purpose and applicability.
35.205  Definitions and other general requirements.
35.210  Disposition of residential property constructed before 1960.
35.215  Disposition of residential property constructed after 1959 
and before 1978.

Subpart D--Project-Based Assistance Provided by a Federal Agency Other 
Than HUD

35.300  Purpose and applicability.
35.305  Definitions and other general requirements.
35.310  Notices and pamphlet.
35.315  Risk assessments.
35.320  Hazard reduction.
35.325  Child with an environmental intervention blood lead level.

Subpart E [Reserved]

Subpart F--HUD-Owned Single Family Property

35.500  Purpose and applicability.
35.505  Definitions and other general requirements.
35.510  Required procedures.

Subpart G--Multifamily Mortgage Insurance

35.600  Purpose and applicability.
35.605  Definitions and other general requirements.
35.610  Exemption.
35.615  Notices and pamphlet.
35.620  Multifamily insured property constructed before 1960.
35.625  Multifamily Insured Property constructed after 1959 and 
before 1978.
35.630  Conversions and Major Rehabilitations

Subpart H--Project-Based Rental Assistance

35.700  Purpose and applicability.
35.705  Definitions and other general requirements.
35.710  Notices and pamphlet.
35.715  Multifamily properties receiving more than $5,000 per unit.
35.720  Multifamily properties receiving up to $5,000 per unit, and 
single-family properties.
35.725  Section 8 rent adjustments.
35.730  Child with an environmental intervention blood lead level.

Subpart I--HUD-Owned and Mortgagee-in-Possession Multifamily Property.

35.800  Purpose and applicability.
35.805  Definitions and other general requirements.
35.810  Notices and pamphlet.
35.815  Evaluation.
35.820  Interim controls.
35.825  Ongoing lead-based paint maintenance and reevaluation.
35.830  Child with an environmental intervention blood lead level.

Subpart J--Rehabilitation

35.900  Purpose and applicability.
35.905  Definitions and other general requirements.
35.910  Notices and pamphlet.
35.915  Calculating rehabilitation costs, except for the CILP 
program.
35.920  Calculating rehabilitation costs for the Flexible-Subsidy--
CILP Program.
35.925  Examples of determining applicable requirements.
35.930  Evaluation and hazard reduction requirements.
35.935  Ongoing lead-based paint maintenance activities.
35.940  Special requirements for insular areas.

Subpart K--Acquisition, Leasing, Support Services, or Operation.

35.1000  Purpose and applicability.
35.1005  Definitions and other general requirements.
35.1010  Notices and pamphlet.
35.1015  Visual assessment, paint stabilization, and maintenance.

[[Page 50202]]

35.1020  Funding for evaluation and hazard reduction.

Subpart L--Public Housing Programs

35.1100  Purpose and applicability.
35.1105  Definitions and other general requirements.
35.1110  Notices and pamphlet.
35.1115  Evaluation.
35.1120  Hazard reduction.
35.1125  Evaluation and hazard reduction before acquisition and 
development.
35.1130  Child with an environmental intervention blood lead level.
35.1135  Eligible costs.
35.1140  Insurance coverage

Subpart M--Tenant-Based Rental Assistance

35.1200  Purpose and applicability.
35.1205  Definitions and other general requirements.
35.1210  Notices and pamphlet.
35.1215  Activities at initial and periodic inspections.
35.1220  Ongoing lead-based paint maintenance activities
35.1225  Child with an environmental intervention blood lead level.

Subparts N-Q [Reserved]

Subpart R--Methods and Standards for Lead-Based Paint Hazard Evaluation 
and Hazard Reduction Activities.

35.1300  Purpose and applicability
35.1305  Definitions and other general requirements.
35.1310  References.
35.1315  Collection and laboratory analysis of samples.
35.1320  Lead-based paint inspections and risk assessments.
35.1325  Abatement.
35.1330  Interim controls.
35.1335  Standard treatments.
35.1340  Clearance.
35.1345  Occupant protection and worksite preparation
35.1350  Safe work practices.
35.1355  Ongoing lead-based paint maintenance and reevaluation 
activities.

Subpart B--General Lead-Based Paint Requirements and Definitions 
for All Programs.


Sec. 35.100  Purpose and applicability.

    (a) Purpose. The requirements of subparts B through R of this part 
are promulgated to implement the Lead-Based Paint Poisoning Prevention 
Act, as amended (42 U.S.C. 4821 et seq.), and the Residential Lead-
Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851 et seq.).
    (b) Applicability.--(1) This subpart. This subpart applies to all 
target housing that is federally owned and target housing receiving 
Federal assistance to which subparts C, D, F through M, and R of this 
part apply, except where indicated.
    (2) Other subparts.--(i) General. Subparts C, D, and F through M of 
this part each set forth requirements for a specific type of Federal 
housing activity or assistance, such as multifamily mortgage insurance, 
project-based rental assistance, rehabilitation, or tenant-based rental 
assistance. Subpart R of this part provides standards and methods for 
activities required in subparts B, C, D, and F through M of this part.
    (ii) Application to programs. Most HUD housing programs are covered 
by only one subpart of this part, but some programs can be used for 
more than one type of assistance and therefore are covered by more than 
one subpart of this part. A current list of programs covered by each 
subpart of this part is available on the internet at www.hud.gov, or by 
mail from the National Lead Information Center at 1-800-424-LEAD. 
Examples of flexible programs that can provide more than one type of 
assistance are the HOME Investment Partnerships program, the Community 
Development Block Grant program, and the Indian Housing Block Grant 
Program. Grantees, participating jurisdictions, Indian tribes and other 
entities administering such flexible programs must decide which subpart 
applies to the type of assistance being provided to a particular 
dwelling unit or residential property.
    (iii) Application to dwelling units. In some cases, more than one 
type of assistance may be provided to the same dwelling unit. In such 
cases, the subpart or section with the most protective initial hazard 
reduction requirements applies. Paragraph (c) of this section provides 
a table that lists the subparts and sections of this part in order from 
the most protective to the least protective. (This list is based only 
on the requirements for initial hazard reduction. The summary of 
requirements on this list is not a complete list of requirements. It is 
necessary to refer to the applicable subparts and sections to determine 
all applicable requirements.)
    (iv) Example. A multifamily building has 100 dwelling units and was 
built in 1965. The property is financed with HUD multifamily mortgage 
insurance. This building is covered by subpart G of this part (see 
Sec. 35.625--Multifamily mortgage insurance for properties constructed 
after 1959), which is at protectiveness level 5 in the table set forth 
in paragraph (c) of this section. In the same building, however, 50 of 
the 100 dwelling units are receiving project-based assistance, and the 
average annual assistance per assisted unit is $5,500. Those 50 units, 
and common areas servicing those units, are covered by the requirements 
of subpart H of this part (see Sec. 35.715--Project-based assistance 
for multifamily properties receiving more than $5,000 per unit), which 
are at protectiveness level 3. Therefore, because level 3 is a higher 
level of protectiveness than level 5, the units receiving project-based 
assistance, and common areas servicing those units, must comply at 
level 3, while the rest of the building can be operated at level 5. The 
owner may choose to operate the entire building at level 3 for 
simplicity.
    (c) Table One. The following table lists the subparts and sections 
of this part applying to HUD programs in order from most protective to 
least protective hazard reduction requirements. The summary of hazard 
reduction requirements in this table is not complete. Readers must 
refer to relevant subpart for complete requirements.

----------------------------------------------------------------------------------------------------------------
                                                                                           Hazard reduction
      Level of protection              Subpart, section, and type of assistance              requirements
----------------------------------------------------------------------------------------------------------------
1..............................  Subpart L, Public housing. Subpart G, Sec.  35.630,  Full abatement of lead-
                                  Multifamily mortgage insurance for conversions and   based paint.
                                  major rehabilitations.
2..............................  Subpart J, Sec.  35.930(d), Properties receiving     Abatement of lead-based
                                  more than $25,000 per unit in rehabilitation         paint hazards.
                                  assistance.
3..............................  Subpart G, Sec.  35.620, Multifamily mortgage        Interim controls.
                                  insurance for properties constructed before 1960,
                                  other than conversions and major rehabilitations.
                                  Subpart H, Sec.  35.715, Project-based assistance
                                  for multifamily properties receiving more than
                                  $5,000 per unit. Subpart I, HUD-owned multifamily
                                  property. Subpart J, Sec.  35.930(c), Properties
                                  receiving more than $5,000 and up to $25,000 per
                                  unit in rehabilitation assistance.
4..............................  Subpart F, HUD-owned single family properties.       Paint stabilization.
                                  Subpart H, Sec.  35.720, Project-based rental
                                  assistance for multifamily properties receiving up
                                  to $5,000 per unit and single family properties.
                                  Subpart K, Acquisition, leasing, support services,
                                  or operation. Subpart M, Tenant-based rental
                                  assistance.

[[Page 50203]]

 
5..............................  Subpart G, Sec.  35.625, Multifamily mortgage        Ongoing lead-based paint
                                  insurance for properties constructed after 1959.     maintenance.
6..............................  Subpart J, Sec.  35.930(b), Properties receiving up  Safe work practices during
                                  to and including $5,000 in rehabilitation            rehabilitation.
                                  assistance.
----------------------------------------------------------------------------------------------------------------

Sec. 35.105  Effective dates.

    The effective date for subparts B through R of this part is 
September 15, 2000, except that the effective date for prohibited 
methods of paint removal, described in Sec. 35.140, is November 15, 
1999. Subparts F through M of this part provide further information on 
the application of the effective date to specific programs. Before 
September 15, 2000, a designated party has the option of following the 
procedures in subparts B through R of this part, or complying with 
current HUD lead-based paint regulations.


Sec. 35.106  Information collection requirements.

    The information collection requirements contained in this part have 
been approved by the Office of Management and Budget (OMB) in 
accordance with the requirements of the Paperwork Reduction Act of 1995 
(44 U.S.C. 2501-3520), and have been assigned OMB control number 2539-
0009. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection displays a valid control number.


Sec. 35.110  Definitions.

    Abatement means any set of measures designed to permanently 
eliminate lead-based paint or lead-based paint hazards (see definition 
of ``permanent''). Abatement includes:
    (1) The removal of lead-based paint and dust-lead hazards, the 
permanent enclosure or encapsulation of lead-based paint, the 
replacement of components or fixtures painted with lead-based paint, 
and the removal or permanent covering of soil-lead hazards; and
    (2) All preparation, cleanup, disposal, and post abatement 
clearance testing activities associated with such measures.
    Act means the Lead-Based Paint Poisoning Prevention Act, as 
amended, 42 U.S.C. 4822 et seq.
    Bare soil means soil or sand not covered by grass, sod, other live 
ground covers, wood chips, gravel, artificial turf, or similar 
covering.
    Certified means licensed or certified to perform such activities as 
risk assessment, lead-based paint inspection, or abatement supervision, 
either by a State or Indian tribe with a lead-based paint certification 
program authorized by the Environmental Protection Agency (EPA), or by 
the EPA, in accordance with 40 CFR part 745, subparts L or Q.
    Chewable surface means an interior or exterior surface painted with 
lead-based paint that a young child can mouth or chew. A chewable 
surface is the same as an ``accessible surface'' as defined in 42 
U.S.C. 4851b(2)). Hard metal substrates and other materials that cannot 
be dented by the bite of a young child are not considered chewable.
    Clearance examination means an activity conducted following lead-
based paint hazard reduction activities to determine that the hazard 
reduction activities are complete and that no soil-lead hazards or 
settled dust-lead hazards, as defined in this part, exist in the 
dwelling unit or worksite. The clearance process includes a visual 
assessment and collection and analysis of environmental samples. Dust-
lead standards for clearance are found at Sec. 35.1320.
    CILP recipient means an owner of a multifamily property which is 
undergoing rehabilitation funded by the Flexible Subsidy-Capital 
Improvement Loan Program (CILP).
    Common area means a portion of a residential property that is 
available for use by occupants of more than one dwelling unit. Such an 
area may include, but is not limited to, hallways, stairways, laundry 
and recreational rooms, playgrounds, community centers, on-site day 
care facilities, garages and boundary fences.
    Component means an architectural element of a dwelling unit or 
common area identified by type and location, such as a bedroom wall, an 
exterior window sill, a baseboard in a living room, a kitchen floor, an 
interior window sill in a bathroom, a porch floor, stair treads in a 
common stairwell, or an exterior wall.
    Composite sample means a collection of more than one sample of the 
same medium (e.g., dust, soil or paint) from the same type of surface 
(e.g., floor, interior window sill, or window trough), such that 
multiple samples can be analyzed as a single sample.
    Containment means the physical measures taken to ensure that dust 
and debris created or released during lead-based paint hazard reduction 
are not spread, blown or tracked from inside to outside of the 
worksite.
    Designated party means a Federal agency, grantee, subrecipient, 
participating jurisdiction, housing agency, CILP recipient, Indian 
tribe, tribally designated housing entity (TDHE), sponsor or property 
owner responsible for complying with applicable requirements.
    Deteriorated paint means any interior or exterior paint or other 
coating that is peeling, chipping, chalking or cracking, or any paint 
or coating located on an interior or exterior surface or fixture that 
is otherwise damaged or separated from the substrate.
    Dry sanding means sanding without moisture and includes both hand 
and machine sanding.
    Dust-lead hazard means surface dust that contains a dust-lead 
loading (area concentration of lead) at or exceeding the levels 
promulgated by the EPA pursuant to section 403 of the Toxic Substances 
Control Act or, if such levels are not in effect, the standards in 
Sec. 35.1320.
    Dwelling unit means a:
    (1) Single-family dwelling, including attached structures such as 
porches and stoops; or
    (2) Housing unit in a structure that contains more than 1 separate 
housing unit, and in which each such unit is used or occupied, or 
intended to be used or occupied, in whole or in part, as the home or 
separate living quarters of 1 or more persons.
    Encapsulation means the application of a covering or coating that 
acts as a barrier between the lead-based paint and the environment and 
that relies for its durability on adhesion between the encapsulant and 
the painted surface, and on the integrity of the existing bonds between 
paint layers and between the paint and the substrate. Encapsulation may 
be used as a method of abatement if it is designed and performed so as 
to be permanent (see definition of ``permanent'').
    Enclosure means the use of rigid, durable construction materials 
that are mechanically fastened to the substrate in order to act as a 
barrier between lead-based paint and the environment. Enclosure may be 
used as a method of

[[Page 50204]]

abatement if it is designed to be permanent (see definition of 
``permanent'').
    Environmental intervention blood lead level means a confirmed 
concentration of lead in whole blood equal to or greater than 20 
g/dL (micrograms of lead per deciliter) for a single test or 
15-19 g/dL in two tests taken at least 3 months apart.
    Evaluation means a risk assessment, a lead hazard screen, a lead-
based paint inspection, paint testing, or a combination of these to 
determine the presence of lead-based paint hazards or lead-based paint.
    Expected to reside means there is actual knowledge that a child 
will reside in a dwelling unit reserved for the elderly or designated 
exclusively for persons with disabilities. If a resident woman is known 
to be pregnant, there is actual knowledge that a child will reside in 
the dwelling unit.
    Federal agency means the United States or any executive department, 
independent establishment, administrative agency and instrumentality of 
the United States, including a corporation in which all or a 
substantial amount of the stock is beneficially owned by the United 
States or by any of these entities. The term ``Federal agency'' 
includes, but is not limited to, Rural Housing Service (formerly Rural 
Housing and Community Development Service that was formerly Farmer's 
Home Administration), Resolution Trust Corporation, General Services 
Administration, Department of Defense, Department of Veterans Affairs, 
Department of the Interior, and Department of Transportation.
    Federally owned property means residential property owned or 
managed by a Federal agency, or for which a Federal agency is a trustee 
or conservator.
    Firm commitment means a valid commitment issued by HUD or the 
Federal Housing Commissioner setting forth the terms and conditions 
upon which a mortgage will be insured or guaranteed.
    Friction surface means an interior or exterior surface that is 
subject to abrasion or friction, including, but not limited to, certain 
window, floor, and stair surfaces.
    g means gram, mg means milligram (thousandth of a gram), and 
g means microgram (millionth of a gram).
    Grantee means any State or local government, Indian tribe, IHBG 
recipient, insular area or nonprofit organization that has been 
designated by HUD to administer Federal housing assistance under a 
program covered by subparts J and K of this part, except the HOME 
program or the Flexible Subsidy-Capital Improvement Loan Program 
(CILP).
    Hard costs of rehabilitation means:
    (1) Costs to correct substandard conditions or to meet applicable 
local rehabilitation standards;
    (2) Costs to make essential improvements, including energy-related 
repairs, and those necessary to permit use by persons with 
disabilities; and costs to repair or replace major housing systems in 
danger of failure; and
    (3) Costs of non-essential improvements, including additions and 
alterations to an existing structure; but
    (4) Hard costs do not include administrative costs (e.g., overhead 
for administering a rehabilitation program, processing fees, etc.).
    Hazard reduction means measures designed to reduce or eliminate 
human exposure to lead-based paint hazards through methods including 
interim controls or abatement or a combination of the two.
    HEPA vacuum means a vacuum cleaner device with an included high-
efficiency particulate air (HEPA) filter through which the contaminated 
air flows, operated in accordance with the instructions of its 
manufacturer. A HEPA filter is one that captures at least 99.97 percent 
of airborne particles of at least 0.3 micrometers in diameter.
    Housing for the elderly means retirement communities or similar 
types of housing reserved for households composed of one or more 
persons 62 years of age or more, or other age if recognized as elderly 
by a specific Federal housing assistance program.
    Housing receiving Federal assistance means housing which is covered 
by an application for HUD mortgage insurance, receives housing 
assistance payments under a program administered by HUD, or otherwise 
receives more than $5,000 in project-based assistance under a Federal 
housing program administered by an agency other than HUD.
    HUD means the United States Department of Housing and Urban 
Development.
    HUD-owned property means residential property owned or managed by 
HUD, or for which HUD is a trustee or conservator.
    Impact surface means an interior or exterior surface that is 
subject to damage by repeated sudden force, such as certain parts of 
door frames.
    Indian Housing Block Grant (IHBG) recipient means a tribe or a 
tribally designated housing entity (TDHE) receiving IHBG funds.
    Indian tribe means a tribe as defined in the Native American 
Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 
et seq.)
    Inspection (See Lead-based paint inspection).
    Insular areas means Guam, the Northern Mariana Islands, the United 
States Virgin Islands and American Samoa.
    Interim controls means a set of measures designed to reduce 
temporarily human exposure or likely exposure to lead-based paint 
hazards. Interim controls include, but are not limited to, repairs, 
painting, temporary containment, specialized cleaning, clearance, 
ongoing lead-based paint maintenance activities, and the establishment 
and operation of management and resident education programs.
    Interior window sill means the portion of the horizontal window 
ledge that protrudes into the interior of the room, adjacent to the 
window sash when the window is closed. The interior window sill is 
sometimes referred to as the window stool.
    Lead-based paint means paint or other surface coatings that contain 
lead equal to or exceeding 1.0 milligram per square centimeter or 0.5 
percent by weight or 5,000 parts per million (ppm) by weight.
    Lead-based paint hazard means any condition that causes exposure to 
lead from dust-lead hazards, soil-lead hazards, or lead-based paint 
that is deteriorated or present in chewable surfaces, friction 
surfaces, or impact surfaces, and that would result in adverse human 
health effects.
    Lead-based paint inspection means a surface-by-surface 
investigation to determine the presence of lead-based paint and the 
provision of a report explaining the results of the investigation.
    Lead hazard screen means a limited risk assessment activity that 
involves paint testing and dust sampling and analysis as described in 
40 CFR 745.227(c) and soil sampling and analysis as described in 40 CFR 
745.227(d).
    Mortgagee means a lender of a mortgage loan.
    Mortgagor means a borrower of a mortgage loan.
    Multifamily property means a residential property containing five 
or more dwelling units.
    Occupant means a person who inhabits a dwelling unit.
    Owner means a person, firm, corporation, nonprofit organization, 
partnership, government, guardian, conservator, receiver, trustee, 
executor,

[[Page 50205]]

or other judicial officer, or other entity which, alone or with others, 
owns, holds, or controls the freehold or leasehold title or part of the 
title to property, with or without actually possessing it. The 
definition includes a vendee who possesses the title, but does not 
include a mortgagee or an owner of a reversionary interest under a 
ground rent lease.
    Paint stabilization means repairing any physical defect in the 
substrate of a painted surface that is causing paint deterioration, 
removing loose paint and other material from the surface to be treated, 
and applying a new protective coating or paint.
    Paint testing means the process of determining, by a certified 
lead-based paint inspector or risk assessor, the presence or the 
absence of lead-based paint on deteriorated paint surfaces or painted 
surfaces to be disturbed or replaced.
    Paint removal means a method of abatement that permanently 
eliminates lead-based paint from surfaces.
    Painted surface to be disturbed means a paint surface that is to be 
scraped, sanded, cut, penetrated or otherwise affected by 
rehabilitation work in a manner that could potentially create a lead-
based paint hazard by generating dust, fumes, or paint chips.
    Participating jurisdiction means any State or local government that 
has been designated by HUD to administer a HOME program grant.
    Permanent means an expected design life of at least 20 years.
    Play area means an area of frequent soil contact by children of 
less than 6 years of age, as indicated by the presence of play 
equipment (e.g. sandboxes, swing sets, sliding boards, etc.) or toys or 
other children's possessions, observations of play patterns, or 
information provided by parents, residents or property owners.
    Project-based rental assistance means Federal rental assistance 
that is tied to a residential property with a specific location and 
remains with that particular location throughout the term of the 
assistance.
    Public health department means a State, tribal, county or municipal 
public health department or the Indian Health Service.
    Public housing development means a residential property assisted 
under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.), 
but not including housing assisted under section 8 of the 1937 Act.
    Reevaluation means a visual assessment of painted surfaces and 
limited dust and soil sampling conducted periodically following lead-
based paint hazard reduction where lead-based paint is still present.
    Rehabilitation means the improvement of an existing structure 
through alterations, incidental additions or enhancements. 
Rehabilitation includes repairs necessary to correct the results of 
deferred maintenance, the replacement of principal fixtures and 
components, improvements to increase the efficient use of energy, and 
installation of security devices.
    Replacement means a strategy of abatement that entails the removal 
of building components that have surfaces coated with lead-based paint 
and the installation of new components free of lead-based paint.
    Residential property means a dwelling unit, common areas, building 
exterior surfaces, and any surrounding land, including outbuildings, 
fences and play equipment affixed to the land, belonging to an owner 
and available for use by residents, but not including land used for 
agricultural, commercial, industrial or other non-residential purposes, 
and not including paint on the pavement of parking lots, garages, or 
roadways.
    Risk assessment means:
    (1) An on-site investigation to determine the existence, nature, 
severity, and location of lead-based paint hazards; and
    (2) The provision of a report by the individual or firm conducting 
the risk assessment explaining the results of the investigation and 
options for reducing lead-based paint hazards.
    Single family property means a residential property containing one 
through four dwelling units.
    Single room occupancy (SRO) housing means housing consisting of 
zero-bedroom dwelling units that may contain food preparation or 
sanitary facilities or both (see Zero-bedroom dwelling).
    Soil-lead hazard means bare soil on residential property that 
contains lead equal to or exceeding levels promulgated by the U.S. 
Environmental Protection Agency pursuant to section 403 of the Toxic 
Substances Control Act or, if such levels are not in effect, the 
following levels: 400 g/g in play areas; and 2000 g/g 
in other areas with bare soil that total more than 9 square feet (0.8 
square meters) per residential property.
    Sponsor means mortgagor (borrower).
    Subrecipient means any nonprofit organization selected by the 
grantee or participating jurisdiction to administer all or a portion of 
the Federal rehabilitation assistance or other non-rehabilitation 
assistance, or any such organization selected by a subrecipient of the 
grantee or participating jurisdiction. An owner or developer receiving 
Federal rehabilitation assistance or other assistance for a residential 
property is not considered a subrecipient for the purposes of carrying 
out that project.
    Standard treatments means a series of hazard reduction measures 
designed to reduce all lead-based paint hazards in a dwelling unit 
without the benefit of a risk assessment or other evaluation.
    Substrate means the material directly beneath the painted surface 
out of which the components are constructed, including wood, drywall, 
plaster, concrete, brick or metal.
    Target housing means any housing constructed prior to 1978, except 
housing for the elderly or persons with disabilities (unless a child of 
less than 6 years of age resides or is expected to reside in such 
housing for the elderly or persons with disabilities) or any zero-
bedroom dwelling. In the case of jurisdictions which banned the sale or 
use of lead-based paint prior to 1978, HUD may designate an earlier 
date.
    Tenant means the individual named as the lessee in a lease, rental 
agreement or occupancy agreement for a dwelling unit.
    Visual assessment means looking for, as applicable:
    (1) Deteriorated paint;
    (2) Visible surface dust, debris and residue as part of a risk 
assessment or clearance examination; or
    (3) The completion or failure of a hazard reduction measure.
    Wet sanding or wet scraping means a process of removing loose paint 
in which the painted surface to be sanded or scraped is kept wet to 
minimize the dispersal of paint chips and airborne dust.
    Window trough means the area between the interior window sill 
(stool) and the storm window frame. If there is no storm window, the 
window trough is the area that receives both the upper and lower window 
sashes when they are both lowered.
    Worksite means an interior or exterior area where lead-based paint 
hazard reduction activity takes place. There may be more than one 
worksite in a dwelling unit or at a residential property.
    Zero-bedroom dwelling means any residential dwelling in which the 
living areas are not separated from the sleeping area. The term 
includes efficiencies, studio apartments, dormitory or single room 
occupancy housing, military barracks, and rentals of individual rooms 
in residential dwellings (see Single room occupancy (SRO)).

[[Page 50206]]

Sec. 35.115  Exemptions.

    (a) Subparts B through R of this part do not apply to the 
following:
    (1) A residential property for which construction was completed on 
or after January 1, 1978, or, in the case of jurisdictions which banned 
the sale or residential use of lead-containing paint prior to 1978, an 
earlier date as HUD may designate (see Sec. 35.160).
    (2) A zero-bedroom dwelling unit, including a single room occupancy 
(SRO) dwelling unit.
    (3) Housing for the elderly, or a residential property designated 
exclusively for persons with disabilities; except this exemption shall 
not apply if a child less than age 6 resides or is expected to reside 
in the dwelling unit (see definitions of ``housing for the elderly'' 
and ``expected to reside'' in Sec. 35.110).
    (4) Residential property found not to have lead-based paint by a 
lead-based paint inspection conducted in accordance with 
Sec. 35.1320(a) (for more information regarding inspection procedures 
consult the 1997 edition of Chapter 7 of the HUD Guidelines). Results 
of additional test(s) by a certified lead-based paint inspector may be 
used to confirm or refute a prior finding.
    (5) Residential property in which all lead-based paint has been 
identified, removed, and clearance has been achieved in accordance with 
40 CFR 745.227(b)(e) before September 15, 2000, or in accordance with 
Secs. 35.1320, 35.1325 and 35.1340 on or after September 15, 2000. This 
exemption does not apply to residential property where enclosure or 
encapsulation has been used as a method of abatement.
    (6) An unoccupied dwelling unit or residential property that is to 
be demolished, provided the dwelling unit or property will remain 
unoccupied until demolition.
    (7) A property or part of a property that is not used and will not 
be used for human residential habitation, except that spaces such as 
entryways, hallways, corridors, passageways or stairways serving both 
residential and nonresidential uses in a mixed-use property shall not 
be exempt.
    (8) Any rehabilitation that does not disturb a painted surface.
    (9) For emergency actions immediately necessary to safeguard 
against imminent danger to human life, health or safety, or to protect 
property from further structural damage (such as when a property has 
been damaged by a natural disaster, fire, or structural collapse), 
occupants shall be protected from exposure to lead in dust and debris 
generated by such emergency actions to the extent practicable, and the 
requirements of subparts B through R of this part shall not apply. This 
exemption applies only to repairs necessary to respond to the 
emergency. The requirements of subparts B through R of this part shall 
apply to any work undertaken subsequent to, or above and beyond, such 
emergency actions.
    (10) If a Federal law enforcement agency has seized a residential 
property and owns the property for less than 270 days, Secs. 35.210 and 
35.215 shall not apply to the property.
    (11) The requirements of subpart K of this part do not apply if the 
assistance being provided is emergency rental assistance or foreclosure 
prevention assistance, provided that this exemption shall expire for a 
dwelling unit no later than 100 days after the initial payment or 
assistance.
    (12) Performance of an evaluation or lead-based paint hazard 
reduction or lead-based paint abatement on an exterior painted surface 
as required under this part may be delayed for a reasonable time during 
a period when weather conditions are unsuitable for conventional 
construction activities.
    (13) Where abatement of lead-based paint hazards or lead-based 
paint is required by this part and the property is listed or has been 
determined to be eligible for listing in the National Register of 
Historic Places or contributing to a National Register Historic 
District, the designated party may, if requested by the State Historic 
Preservation Office, conduct interim controls in accordance with 
Sec. 35.1330 instead of abatement. If interim controls are conducted, 
ongoing lead-based paint maintenance and reevaluation shall be 
conducted as required by the applicable subpart of this part in 
accordance with Sec. 35.1355.
    (b) For the purposes of subpart C of this part, each Federal agency 
other than HUD will determine whether appropriations are sufficient to 
implement this rule. If appropriations are not sufficient, subpart C of 
this part shall not apply to that Federal agency. If appropriations are 
sufficient, subpart C of this part shall apply.


Sec. 35.120  Options.

    (a) Standard treatments. Where interim controls are required by 
this part, the designated party has the option to presume that lead-
based paint or lead-based paint hazards or both are present throughout 
the residential property. In such a case, evaluation is not required. 
Standard treatments shall then be conducted in accordance with 
Sec. 35.1335 on all applicable surfaces, including soil. Standard 
treatments are completed only when clearance is achieved in accordance 
with Sec. 35.1340.
    (b) Abatement. Where abatement is required by this part, the 
designated party may presume that lead-based paint or lead-based paint 
hazards or both are present throughout the residential property. In 
such a case, evaluation is not required. Abatement shall then be 
conducted on all applicable surfaces, including soil, in accordance 
with Sec. 35.1325, and completed when clearance is achieved in 
accordance with Sec. 35.1340. This option is not available in public 
housing, where inspection is required.
    (c) Lead hazard screen. Where a risk assessment is required, the 
designated party may choose first to conduct a lead hazard screen in 
accordance with Sec. 35.1320(b). If the results of the lead hazard 
screen indicate the need for a full risk assessment (e.g., if the 
environmental measurements exceed levels established for lead hazard 
screens in Sec. 35.1320(b)(2)), a complete risk assessment shall be 
conducted. Environmental samples collected for the lead hazard screen 
may be used in the risk assessment. If the results of the lead hazard 
screen do not indicate the need for a follow-up risk assessment, a risk 
assessment is not required.
    (d) Paint testing. Where paint stabilization or interim controls of 
deteriorated paint surfaces are required by this rule, the designated 
party has the option to conduct paint testing of all surfaces with non-
intact paint. If paint testing indicates the absence of lead-based 
paint on a specific surface, paint stabilization or interim controls 
are not required on that surface.


Sec. 35.125  Notice of evaluation and hazard reduction activities.

    The following activities shall be conducted if notice is required 
by subparts D and F through M of this part.
    (a) Notice of evaluation or presumption. When evaluation is 
undertaken and lead-based paint or lead-based paint hazards are found 
to be present, or if a presumption is made that lead-based paint or 
lead-based paint hazards are present in accordance with the options 
described in Sec. 35.120, the designated party shall provide a notice 
to occupants within 15 calendar days of the date when the designated 
party receives the report or makes the presumption.
    (1) The notice of the evaluation shall include:
    (i) A summary of the nature, scope and results of the evaluation;
    (ii) A contact name, address and telephone number for more 
information,

[[Page 50207]]

and to obtain access to the actual evaluation report; and
    (iii) The date of the notice.
    (2) The notice of presumption shall include:
    (i) The nature and scope of the presumption;
    (ii) A contact name, address and telephone number for more 
information; and
    (iii) The date of the notice.
    (b) Notice of hazard reduction activity. When hazard reduction 
activities are undertaken, each designated party shall:
    (1) Provide a notice to occupants no more than 15 calendar days 
after the hazard reduction activities have been completed. Notice of 
hazard reduction shall include, but not be limited to:
    (i) A summary of the nature, scope and results (including 
clearance), of the hazard reduction activities.
    (ii) A contact name, address and telephone number for more 
information; and
    (iii) Available information on the location of any remaining lead-
based paint in the rooms, spaces or areas where hazard reduction 
activities were conducted, on a surface-by-surface basis;
    (2) Update the notice, based on reevaluation of the residential 
property and as any additional hazard reduction work is conducted.
    (c) Availability of notices of evaluation, presumption, and hazard 
reduction activities. (1) The notices of evaluation, presumption, and 
hazard reduction shall be of a size and type that is easily read by 
occupants.
    (2) To the extent practicable, each notice shall be made available, 
upon request, in a format accessible to persons with disabilities 
(e.g., Braille, large type, computer disk, audio tape).
    (3) Each notice shall be provided in the occupants' primary 
language or in the language of the occupants' contract or lease.
    (4) The designated party shall provide each notice to the occupants 
by:
    (i) Posting and maintaining it in centrally located common areas 
and distributing it to any dwelling unit if necessary because the head 
of household is a person with a known disability; or
    (ii) Distributing it to each occupied dwelling unit affected by the 
evaluation, presumption, or hazard reduction activity or serviced by 
common areas in which an evaluation, presumption or hazard reduction 
has taken place.


Sec. 35.130  Lead hazard information pamphlet.

    If provision of a lead hazard information pamphlet is required in 
subparts D and F through M of this part, the designated party shall 
provide to each occupied dwelling unit to which subparts D and F 
through M of this part apply, the lead hazard information pamphlet 
developed by EPA, HUD and the Consumer Product Safety Commission 
pursuant to section 406 of the Toxic Substances Control Act (15 U.S.C. 
2686), or an EPA-approved alternative; except that the designated party 
need not provide a lead hazard information pamphlet if the designated 
party can demonstrate that the pamphlet has already been provided in 
accordance with the lead-based paint notification and disclosure 
requirements at Sec. 35.88(a)(1), or 40 CFR 745.107(a)(1) or in 
accordance with the requirements for hazard education before renovation 
at 40 CFR part 745, subpart E.


Sec. 35.135  Use of paint containing lead.

    (a) New use prohibition. The use of paint containing more than 0.06 
percent dry weight of lead on any interior or exterior surface in 
federally owned housing or housing receiving Federal assistance is 
prohibited. As appropriate, each Federal agency shall include the 
prohibition in contracts, grants, cooperative agreements, insurance 
agreements, guaranty agreements, trust agreements, or other similar 
documents.
    (b) Pre-1978 prohibition. In the case of a jurisdiction which 
banned the sale or residential use of lead-containing paint before 
1978, HUD may designate an earlier date for certain provisions of 
subparts D and F through M of this part.


Sec. 35.140  Prohibited methods of paint removal.

    The following methods shall not be used to remove paint that is, or 
may be, lead-based paint:
    (a) Open flame burning or torching.
    (b) Machine sanding or grinding without a high-efficiency 
particulate air (HEPA) local exhaust control.
    (c) Abrasive blasting or sandblasting without HEPA local exhaust 
control.
    (d) Heat guns operating above 1100 degrees Fahrenheit or charring 
the paint.
    (e) Dry sanding or dry scraping, except dry scraping in conjunction 
with heat guns or within 1.0 ft. (0.30 m.) of electrical outlets, or 
when treating defective paint spots totaling no more than 2 sq. ft. 
(0.2 sq. m.) in any one interior room or space, or totaling no more 
than 20 sq. ft. (2.0 sq. m.) on exterior surfaces.
    (f) Paint stripping in a poorly ventilated space using a volatile 
stripper that is a hazardous substance in accordance with regulations 
of the Consumer Product Safety Commission at 16 CFR 1500.3, and/or a 
hazardous chemical in accordance with the Occupational Safety and 
Health Administration regulations at 29 CFR 1910.1200 or 1926.59, as 
applicable to the work.


Sec. 35.145  Compliance with Federal laws and authorities.

    All lead-based paint activities, including waste disposal, 
performed under this part shall be performed in accordance with 
applicable Federal laws and authorities. For example, such activities 
are subject to the applicable environmental review requirements of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the 
Toxic Substances Control Act, Title IV (15 U.S.C. 2860 et seq.), and 
other environmental laws and authorities (see, e.g., laws and 
authorities listed in Sec. 50.4 of this title).


Sec. 35.150  Compliance with other State, tribal, and local laws.

    (a) HUD responsibility. If HUD determines that a State, tribal or 
local law, ordinance, code or regulation provides for evaluation or 
hazard reduction in a manner that provides a comparable level of 
protection from the hazards of lead-based paint poisoning to that 
provided by the requirements of subparts B, C, D, F through M and R of 
this part and that adherence to the requirements of subparts B, C, D, F 
through M, and R of this part, would be duplicative or otherwise cause 
inefficiencies, HUD may modify or waive some or all of the requirements 
of the subparts in a manner that will promote efficiency while ensuring 
a comparable level of protection.
    (b) Participant responsibility. Nothing in this part is intended to 
relieve any participant in a program covered by this subpart of any 
responsibility for compliance with State, tribal or local laws, 
ordinances, codes or regulations governing evaluation and hazard 
reduction. If a State, tribal or local law, ordinance, code or 
regulation defines lead-based paint differently than the Federal 
definition, the more protective definition (i.e., the lower level) 
shall be followed in that State, tribal or local jurisdiction.


Sec. 35.155  Minimum requirements.

    (a) Nothing in subparts B, C, D, F through M, and R of this part is 
intended to preclude a designated party or occupant from conducting 
additional evaluation or hazard reduction measures beyond the minimum 
requirements established for each program in this regulation. For 
example, if the applicable subpart requires visual

[[Page 50208]]

assessment, the designated party may choose to perform a risk 
assessment in accordance with Sec. 35.1320. Similarly, if the 
applicable subpart requires interim controls, a designated party or 
occupant may choose to implement abatement in accordance with 
Sec. 35.1325.
    (b) To the extent that assistance from any of the programs covered 
by subparts B, C, D, and F through M of this part is used in 
conjunction with other HUD program assistance, the most protective 
requirements prevail.


Sec. 35.160  Waivers.

    In accordance with Sec. 5.110 of this title, on a case-by-case 
basis and upon determination of good cause, HUD may, subject to 
statutory limitations, waive any provision of subparts B, C, D, F 
through M, and R of this part.


Sec. 35.165  Prior evaluation or hazard reduction.

    If an evaluation or hazard reduction was conducted at a residential 
property or dwelling unit before the property or dwelling unit became 
subject to the requirements of subparts B, C, D, F through M, and R of 
this part, such an evaluation, hazard reduction or abatement meets the 
requirements of subparts B, C, D, F through M, and R of this part and 
need not be repeated under the following conditions:
    (a) Lead-based paint inspection. (1) A lead-based paint inspection 
conducted before August 30, 1999, meets the requirements of this rule 
if:
    (i) At the time of the inspection the lead-based paint inspector 
was approved by a State or Indian tribe to perform lead-based paint 
inspections. It is not necessary that the State or tribal approval 
program had EPA authorization at the time of the inspection.
    (ii) Notwithstanding paragraph (a)(1)(i) of this section, the 
inspection was conducted and accepted as valid by a housing agency in 
fulfillment of the lead-based paint inspection requirement of the 
public and Indian housing program.
    (2) A lead-based paint inspection conducted after August 29, 1999 
must have been conducted by a certified lead-based paint inspector.
    (b) Risk assessment. (1) A risk assessment must be no more than 12 
months old to be considered current.
    (2) A risk assessment conducted before August 30, 1999 meets the 
requirements of this part if at the time of the risk assessment the 
risk assessor was approved by a State or Indian tribe to perform risk 
assessments. It is not necessary that the State or tribal approval 
program had EPA authorization at the time of the risk assessment.
    (3) A risk assessment conducted after August 29, 1999 must have 
been conducted by a certified risk assessor.
    (4) Paragraph (b) of this section does not apply in a case where a 
risk assessment is required in response to the identification of a 
child with an environmental intervention blood lead level. In such a 
case, the requirements in the applicable subpart for responding to a 
child with an environmental intervention blood lead level shall apply.
    (c) Interim controls. If a residential property is under a program 
of interim controls and ongoing lead-based paint maintenance and 
reevaluation activities established pursuant to a risk assessment 
conducted in accordance with paragraph (b) of this section, the interim 
controls that have been conducted meet the requirements of this part if 
clearance was achieved after such controls were implemented. In such a 
case, the program of interim controls and ongoing activities shall be 
continued in accordance with the requirements of this part.
    (d) Abatement. (1) An abatement conducted before August 30, 1999 
meets the requirements of this part if:
    (i) At the time of the abatement the abatement supervisor was 
approved by a State or Indian tribe to perform lead-based paint 
abatement. It is not necessary that the State or tribal approval 
program had EPA authorization at the time of the abatement.
    (ii) Notwithstanding paragraph (d)(1)(i) of this section, it was 
conducted and accepted by a housing agency in fulfillment of the lead-
based paint abatement requirement of the public housing program or by 
an Indian housing authority (as formerly defined under the U.S. Housing 
Act of 1937) in fulfillment of the lead-based paint requirement of the 
Indian housing program formerly funded under the U.S. Housing Act of 
1937.
    (2) An abatement conducted after August 29, 1999 must have been 
conducted under the supervision of a certified lead-based paint 
abatement supervisor.


Sec. 35.170  Noncompliance with the requirements of subparts B through 
R of this part.

    (a) Monitoring and enforcement. A designated party who fails to 
comply with any requirement of subparts B, C, D, F through M, and R of 
this part shall be subject to the sanctions available under the 
relevant Federal housing assistance or ownership program and may be 
subject to other penalties authorized by law.
    (b) A property owner who informs a potential purchaser or occupant 
of lead-based paint or possible lead-based paint hazards in a 
residential property or dwelling unit, in accordance with subpart A of 
this part, is not relieved of the requirements to evaluate and reduce 
lead-based paint hazards in accordance with subparts B through R of 
this part as applicable.


Sec. 35.175  Records.

    The designated party, as specified in subparts C, D, and F through 
M of this part, shall keep a copy of each notice, evaluation, and 
clearance or abatement report required by subparts C, D, and F through 
M of this part for at least three years. Those records applicable to a 
portion of a residential property for which ongoing lead-based paint 
maintenance and/or reevaluation activities are required shall be kept 
and made available for the Department's review, until at least three 
years after such activities are no longer required.

Subpart C--Disposition of Residential Property Owned by a Federal 
Agency Other Than HUD


Sec. 35.200  Purpose and applicability.

    The purpose of this subpart C is to establish procedures to 
eliminate as far as practicable lead-based paint hazards prior to the 
sale of a residential property that is owned by a Federal agency other 
than HUD. The requirements of this subpart apply to any residential 
property offered for sale on or after September 15, 2000.


Sec. 35.205  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.210  Disposition of residential property constructed before 
1960.

    (a) Evaluation. The Federal agency shall conduct a risk assessment 
and a lead-based paint inspection in accordance with 40 CFR 745.227 
before the closing of the sale.
    (b) Abatement of lead-based paint hazards. The risk assessment used 
for the identification of hazards to be abated shall have been 
performed no more than 12 months before the beginning of the abatement. 
The Federal agency shall abate all identified lead-based paint hazards 
in accordance with 40 CFR 745.227. Abatement is completed when 
clearance is achieved in accordance with 40 CFR 745.227. Where 
abatement of lead-based paint hazards is not completed before the

[[Page 50209]]

closing of the sale, the Federal agency shall be responsible for 
assuring that abatement is carried out by the purchaser before 
occupancy of the property as target housing and in accordance with 40 
CFR 745.227.


Sec. 35.215  Disposition of residential property constructed after 1959 
and before 1978.

    The Federal agency shall conduct a risk assessment and a lead-based 
paint inspection in accordance with 40 CFR 745.227. Evaluation shall be 
completed before closing of the sale according to a schedule determined 
by the Federal agency. The results of the risk assessment and lead-
based paint inspection shall be made available to prospective 
purchasers as required in subpart A of this part.

Subpart D--Project-Based Assistance Provided by a Federal Agency 
Other Than HUD


Sec. 35.300  Purpose and applicability.

    The purpose of this subpart D is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a 
residential property that receives more than $5,000 annually per 
project in project-based assistance on or after September 15, 2000, 
under a program administered by a Federal agency other than HUD.


Sec. 35.305  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.310  Notices and pamphlet.

    (a) Notice. A notice of evaluation or hazard reduction shall be 
provided to the occupants in accordance with Sec. 35.125.
    (b) Lead hazard information pamphlet. The owner shall provide the 
lead hazard information pamphlet in accordance with Sec. 35.130.


Sec. 35.315  Risk assessment.

    Each owner shall complete a risk assessment in accordance with 40 
CFR 745.227(d). Each risk assessment shall be completed in accordance 
with the schedule established by the Federal agency.


Sec. 35.320  Hazard reduction.

    Each owner shall conduct interim controls consistent with the 
findings of the risk assessment report. Hazard reduction shall be 
conducted in accordance with subpart R of this part.


Sec. 35.325  Child with an environmental intervention blood lead level.

    If a child less than 6 years of age living in a federally assisted 
dwelling unit has an environmental intervention blood lead level, the 
owner shall immediately conduct a risk assessment in accordance with 40 
CFR 745.227(d). Interim controls of identified lead-based paint hazards 
shall be conducted in accordance with Sec. 35.1330. Interim controls 
are complete when clearance is achieved in accordance with 
Sec. 35.1340. The Federal agency shall establish a timetable for 
completing risk assessments and hazard reduction when an environmental 
intervention blood lead level child is identified.

Subpart E [Reserved]

Subpart F--HUD-Owned Single Family Property


Sec. 35.500  Purpose and applicability.

    The purpose of this subpart F is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in HUD-owned 
single family properties that have been built before 1978 and are sold 
with mortgages insured under a program administered by HUD. The 
requirements of this subpart apply to any such residential properties 
offered for sale on or after September 15, 2000.


Sec. 35.505  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.510  Required procedures.

    (a) The following activities shall be conducted for all properties 
to which this subpart is applicable:
    (1) A visual assessment of all painted surfaces in order to 
identify deteriorated paint;
    (2) Paint stabilization of all deteriorated paint in accordance 
with Sec. 35.1330(a) and (b); and
    (3) Clearance in accordance with Sec. 35.1340.
    (b) Occupancy shall not be permitted until all required paint 
stabilization is complete and clearance is achieved.
    (c) If paint stabilization and clearance are not completed before 
the closing of the sale, the Department shall assure that paint 
stabilization and clearance are carried out pursuant to subpart R of 
this part by the purchaser before occupancy.

Subpart G--Multifamily Mortgage Insurance


Sec. 35.600  Purpose and applicability.

    The purpose of this subpart G is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a 
multifamily residential property for which HUD is the owner of the 
mortgage or the owner receives mortgage insurance, under a program 
administered by HUD.


Sec. 35.605  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.610  Exemption.

    An application for insurance in connection with a refinancing 
transaction where an appraisal is not required under the applicable 
procedures established by HUD is excluded from the coverage of this 
subpart.


Sec. 35.615  Notices and pamphlet.

    (a) Notice. If evaluation or hazard reduction is undertaken, the 
sponsor shall provide a notice to occupants in accordance with 
Sec. 35.125.
    (b) Lead hazard information pamphlet. The sponsor shall provide the 
lead hazard information pamphlet in accordance with Sec. 35.130.


Sec. 35.620  Multifamily insured property constructed before 1960.

    Except as provided in Sec. 35.630, the following requirements apply 
to multifamily insured property constructed before 1960:
    (a) Risk assessment. Before the issuance of a firm commitment the 
sponsor shall conduct a risk assessment in accordance with 
Sec. 35.1320(b).
    (b) Interim controls. (1) The sponsor shall conduct interim 
controls in accordance with Sec. 35.1330 to treat the lead-based paint 
hazards identified in the risk assessment. Interim controls are 
considered completed when clearance is achieved in accordance with 
Sec. 35.1340.
    (2) The sponsor shall complete interim controls before the issuance 
of the firm commitment or interim controls may be made a condition of 
the Federal Housing Administration (FHA) firm commitment, with 
sufficient repair or rehabilitation funds escrowed at initial 
endorsement of the FHA insured loan.
    (c) Ongoing lead-based paint maintenance activities. Before the 
issuance of the firm commitment, the sponsor shall agree to incorporate 
ongoing lead-based paint maintenance into regular building operations 
and maintenance activities in accordance with Sec. 35.1355(a).


Sec. 35.625  Multifamily insured property constructed after 1959 and 
before 1978.

    Except as provided in Sec. 35.630, before the issuance of the firm 
commitment,

[[Page 50210]]

the sponsor shall agree to incorporate ongoing lead-based paint 
maintenance practices into regular building operations, in accordance 
with Sec. 35.1355(a).


Sec. 35.630  Conversions and major rehabilitations.

    The procedures and requirements of this section apply when a 
nonresidential property constructed before 1978 is to be converted to 
residential use, or a residential property constructed before 1978 is 
to undergo rehabilitation that is estimated to cost more than 50 
percent of the estimated replacement cost after rehabilitation.
    (a) Lead-based paint inspection. Before issuance of a firm FHA 
commitment, the sponsor shall conduct a lead-based paint inspection in 
accordance with Sec. 35.1320(a).
    (b) Abatement. Prior to occupancy, the sponsor shall conduct 
abatement of all lead-based paint on the property in accordance with 
Sec. 35.1325. Whenever practicable, abatement shall be achieved through 
the methods of paint removal or component replacement. If paint removal 
or component replacement are not practicable, that is if such methods 
would damage substrate material considered architecturally significant, 
permanent encapsulation or enclosure may be used as methods of 
abatement. Abatement is considered complete when clearance is achieved 
in accordance with Sec. 35.1340. If encapsulation or enclosure is used, 
the sponsor shall incorporate ongoing lead-based paint maintenance into 
regular building operations maintenance activities in accordance with 
Sec. 35.1355.
    (c) Historic properties. Section 35.115(a)(13) applies to this 
section.

Subpart H--Project-Based Rental Assistance


Sec. 35.700  Purpose and applicability.

    (a) This subpart H establishes procedures to eliminate as far as 
practicable lead-based paint hazards in residential properties 
receiving project-based assistance under a HUD program. The 
requirements of this subpart apply only to the assisted dwelling units 
in a covered property and any common areas servicing those dwelling 
units. This subpart does not apply to housing receiving rehabilitation 
assistance or to public housing, which are covered by subparts J and M 
of this part, respectively.
    (b) For the purposes of competitively awarded grants under the 
Housing Opportunities for Persons with AIDS Program (HOPWA), the 
Supportive Housing Program (42 U.S.C. 11381-11389) and the Shelter Plus 
Care Program project-based rental assistance and sponsor-based rental 
assistance components (42 U.S.C. 11402-11407), the requirements of this 
subpart shall apply to grants awarded pursuant to Notices of Funding 
Availability published on or after October 1, 1999. For the purposes of 
formula grants awarded under the Housing Opportunities for Persons with 
AIDS Program (HOPWA) (42 U.S.C. 12901 et seq.), the requirements of 
this subpart shall apply to activities for which program funds are 
first obligated on or after September 15, 2000.


Sec. 35.705  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.710  Notices and pamphlet.

    (a) Notice. If evaluation or hazard reduction is undertaken, each 
owner shall provide a notice to occupants in accordance with 
Sec. 35.125.
    (b) Lead hazard information pamphlet. The owner shall provide the 
lead hazard information pamphlet in accordance with Sec. 35.130.


Sec. 35.715  Multifamily properties receiving more than $5,000 per 
unit.

    The requirements of this section shall apply to a multifamily 
residential property that is receiving an average of more than $5,000 
per assisted dwelling unit annually in project-based assistance.
    (a) Risk assessment. Each owner shall complete a risk assessment in 
accordance with Sec. 35.1320(b). A risk assessment is considered 
complete when the owner receives the risk assessment report. Until the 
owner conducts a risk assessment as required by this section, the 
requirements of paragraph (d) of this section shall apply. After the 
risk assessment has been conducted the requirements of paragraphs (b) 
and (c) of this section shall apply. Each risk assessment shall be 
completed no later than the following schedule or a schedule otherwise 
determined by HUD:
    (1) Risk assessments shall be completed on or before September 17, 
2001, in a multifamily residential property constructed before 1960.
    (2) Risk assessments shall be completed on or before September 15, 
2003, in a multifamily residential property constructed after 1959 and 
before 1978.
    (b) Interim controls. Each owner shall conduct interim controls in 
accordance with Sec. 35.1330 to treat the lead-based paint hazards 
identified in the risk assessment. Interim controls are considered 
completed when clearance is achieved in accordance with Sec. 35.1340. 
Interim controls shall be completed no later than the following 
schedule:
    (1) In units occupied by families with children of less than 6 
years of age and in common areas servicing those units, interim 
controls shall be completed no later than 90 days after the completion 
of the risk assessment. In units in which a child of less than 6 years 
of age moves in after the completion of the risk assessment, interim 
controls shall be completed no later than 90 days after the move-in.
    (2) In all other dwelling units, common areas, and the remaining 
portions of the residential property, interim controls shall be 
completed no later than 12 months after completion of the risk 
assessment for those units.
    (c) Ongoing lead-based paint maintenance and reevaluation 
activities. Effective immediately after completion of the risk 
assessment required in Sec. 35.715(a), the owner shall incorporate 
ongoing lead-based paint maintenance and reevaluation into the regular 
building operations in accordance with Sec. 35.1355, unless all lead-
based paint has been removed. If the reevaluation identifies new lead-
based paint hazards, the owner shall conduct interim controls in 
accordance with Sec. 35.1330.
    (d) Transitional requirements--(1) Effective date. The requirements 
of this paragraph shall apply effective September 15, 2000, and 
continuing until the applicable date specified in Sec. 35.715(a) (1) or 
(2) or until the owner conducts a risk assessment, whichever is first.
    (2) Definitions and other general requirements that apply to this 
paragraph are found in subpart B of this part.
    (3) Ongoing lead-based paint maintenance. The owner shall 
incorporate ongoing lead-based paint maintenance activities into 
regular building operations, in accordance with Sec. 35.1355(a), except 
that clearance is not required.
    (4) Child with an environmental intervention blood lead level. If a 
child of less than 6 years of age living in a dwelling unit covered by 
this paragraph has an environmental intervention blood lead level, the 
owner shall comply with the requirements of Sec. 35.730.

[[Page 50211]]

Sec. 35.720  Multifamily properties receiving up to $5,000 per unit, 
and single family properties.

    Effective September 15, 2000, the requirements of this section 
shall apply to a multifamily residential property that is receiving an 
average of up to and including $5,000 per assisted dwelling unit 
annually in project-based assistance and to a single family residential 
property that is receiving project-based assistance through the Section 
8 Moderate Rehabilitation program, the Project-Based Certificate 
program, or any other HUD program providing project-based assistance.
    (a) Activities at initial and periodic inspection.--(1) Visual 
assessment. During the initial and periodic inspections, an inspector 
trained in visual assessment for deteriorated paint surfaces in 
accordance with procedures established by HUD shall conduct a visual 
assessment of all painted surfaces in order to identify any 
deteriorated paint.
    (2) Paint stabilization. The owner shall stabilize each 
deteriorated paint surface in accordance with Sec. 35.1330(a) and 
Sec. 35.1330(b) before occupancy of a vacant dwelling unit or, where a 
unit is occupied, within 30 days of notification of the results of the 
visual assessment. Paint stabilization is considered complete when 
clearance is achieved in accordance with Sec. 35.1340.
    (3) Notice. The owner shall provide a notice to occupants in 
accordance with Secs. 35.125(b) (1) and (c) describing the results of 
the clearance examination.
    (b) Ongoing lead-based paint maintenance activities. The owner 
shall incorporate ongoing lead-based paint maintenance activities into 
regular building operations in accordance with Sec. 35.1355(a), unless 
all lead-based paint has been removed.
    (c) Child with an environmental intervention blood lead level. If a 
child of less than 6 years of age living in a dwelling unit covered by 
this section has an environmental intervention blood lead level, the 
owner shall comply with the requirements of Sec. 35.730.


Sec. 35.725  Section 8 Rent adjustments.

    HUD may, subject to the availability of appropriations for Section 
8 contract amendments, on a project by project basis for projects 
receiving Section 8 project-based assistance, provide adjustments to 
the maximum monthly rents to cover the costs of evaluation for and 
reduction of lead-based paint hazards, as defined in section 1004 of 
the Residential Lead-Based Paint Hazard Reduction Act of 1992.


Sec. 35.730  Child with an environmental intervention blood lead level.

    (a) Risk assessment. Within 15 days after being notified by a 
public health department or other medical health care provider that a 
child of less than 6 years of age living in a dwelling unit to which 
this subpart applies has been identified as having an environmental 
intervention blood lead level, the owner shall complete a risk 
assessment of the dwelling unit in which the child lived at the time 
the blood was last sampled and of common areas servicing the dwelling 
unit. The risk assessment shall be conducted in accordance with 
35.1320(b) and is considered complete when the owner receives the risk 
assessment report. The requirements of this paragraph apply regardless 
of whether the child is or is not still living in the unit when the 
owner receives the notification of the environmental intervention blood 
lead level. The requirements of this paragraph (a) shall not apply if 
the owner conducted a risk assessment of the unit and common areas 
servicing the unit between the date the child's blood was last sampled 
and the date when the owner received the notification of the 
environmental intervention blood lead level. If a public health 
department has already conducted an evaluation of the dwelling unit, 
the requirements of this paragraph shall not apply.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living in a dwelling unit covered by this subpart may have an 
environmental intervention blood lead level, the owner shall 
immediately verify the information with the public health department or 
other medical health care provider. If that department or provider 
verifies that the child has an environmental intervention blood lead 
level, such verification shall constitute notification, and the owner 
shall take the action required in paragraphs (a) and (c) of this 
section.
    (c) Hazard reduction. Within 30 days after receiving the report of 
the risk assessment conducted pursuant to paragraph (a) of this section 
or the evaluation from the public health department, the owner shall 
complete the reduction of identified lead-based paint hazards in 
accordance with Sec. 35.1325 or Sec. 35.1330. Hazard reduction is 
considered complete when clearance is achieved in accordance with 
Sec. 35.1340 and the clearance report states that all lead-based paint 
hazards identified in the risk assessment have been treated with 
interim controls or abatement or the public health department certifies 
that the lead-based paint hazard reduction is complete. The 
requirements of this paragraph do not apply if the owner, between the 
date the child's blood was last sampled and the date the owner received 
the notification of the environmental intervention blood lead level, 
already conducted a risk assessment of the unit and common areas 
servicing the unit and completed reduction of identified lead-based 
paint hazards.
    (d) Notice. If evaluation or hazard reduction is undertaken, each 
owner shall provide a notice to occupants in accordance with 
Sec. 35.125.
    (e) Reporting requirement. The owner shall report the name and 
address of a child identified as having an environmental intervention 
blood lead level to the public health department within 5 working days 
of being so notified by any other medical health care professional.

Subpart I--HUD-Owned and Mortgagee-in-Possession Multifamily 
Property


Sec. 35.800  Purpose and applicability.

    The purpose of this subpart I is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a HUD-owned 
multifamily residential property or a multifamily residential property 
for which HUD is identified as mortgagee-in-possession. The 
requirements of this subpart apply to any such property that is offered 
for sale or held or managed on or after September 15, 2000.


Sec. 35.805  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.810  Notices and pamphlet.

    (a) Notices. When evaluation or hazard reduction is undertaken, the 
Department shall provide a notice to occupants in accordance with 
Sec. 35.125.
    (b) Lead hazard information pamphlet. HUD shall provide the lead 
hazard information pamphlet in accordance with Sec. 35.130.


Sec. 35.815  Evaluation.

    HUD shall conduct a risk assessment and a lead-based paint 
inspection in accordance with Sec. 35.1320(a) and (b). For properties 
to which this subpart applies on September 15, 2000, the lead-based 
paint inspection and risk assessment shall be conducted no later than 
December 15, 2000, or before publicly advertising the property for 
sale, whichever is sooner. For properties to which this subpart becomes

[[Page 50212]]

applicable after September 15, 2000, the lead-based paint inspection 
and risk assessment shall be conducted no later than 90 days after this 
subpart becomes applicable or before publicly advertising the property 
for sale, whichever is sooner.


Sec. 35.820  Interim controls.

    HUD shall conduct interim controls in accordance with Sec. 35.1330 
to treat the lead-based paint hazards identified in the evaluation 
conducted in accordance with Sec. 35.815. Interim controls are 
considered completed when clearance is achieved in accordance with 
Sec. 35.1340. Interim controls of all lead-based paint hazards shall be 
completed no later than the following schedule:
    (a) In units occupied by families with children of less than 6 
years of age and in common areas servicing those units, interim 
controls shall be completed no later than 90 days after the completion 
of the risk assessment. In units in which a child of less than 6 years 
of age moves in after the completion of the risk assessment, interim 
controls shall be completed no later than 90 days after the move-in.
    (b) In all other dwelling units, common areas, and the remaining 
portions of the residential property, interim controls shall be 
completed no later than 12 months after completion of the risk 
assessment for those units.
    (c) If conveyance of the title by HUD at a sale of a HUD-owned 
property or a foreclosure sale caused by HUD when HUD is mortgagee-in-
possession occurs before the schedule in paragraphs (a) and (b) of this 
section, HUD shall complete interim controls before conveyance or 
foreclosure, or HUD shall be responsible for assuring that interim 
controls are carried out by the purchaser. If interim controls are made 
a condition of sale, such controls shall be completed according to the 
following schedule:
    (1) In units occupied by families with children of less than 6 
years of age and in common areas servicing those units, interim 
controls shall be completed no later than 90 days after the date of the 
closing of the sale. In units in which a child of less than 6 years of 
age moves in after the closing of the sale, interim controls shall be 
completed no later than 90 days after the move-in.
    (2) In all other dwelling units, in common areas servicing those 
units, and in the remaining portions of the residential property, 
interim controls shall be completed no later than 180 days after the 
closing of the sale.


Sec. 35.825  Ongoing lead-based paint maintenance and reevaluation.

    HUD shall incorporate ongoing lead-based paint maintenance and 
reevaluation, in accordance with Sec. 35.1355, into regular building 
operations if HUD retains ownership of the residential property for 
more than 12 months.


Sec. 35.830  Child with an environmental intervention blood lead level.

    (a) Risk assessment. Within 15 days after being notified by a 
public health department or other medical health care provider that a 
child of less than 6 years of age living in a multifamily dwelling unit 
owned by HUD (or where HUD is mortgagee-in-possession) has been 
identified as having an environmental intervention blood lead level, 
HUD shall complete a risk assessment of the dwelling unit in which the 
child lived at the time the blood was last sampled and of common areas 
servicing the dwelling unit. The risk assessment shall be conducted in 
accordance with Sec. 35.1320(b) and is considered complete when HUD 
receives the risk assessment report. The requirements of this paragraph 
apply regardless of whether the child is or is not still living in the 
unit when HUD receives the notification of the environmental 
intervention blood lead level. The requirements of this paragraph do 
not apply if HUD conducted a risk assessment of the unit and common 
areas servicing the unit between the date the child's blood was last 
sampled and the date when HUD received the notification of the 
environmental intervention blood lead level. If a public health 
department has already conducted an evaluation of the dwelling unit, 
the requirements of this paragraph shall not apply.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living in a multifamily dwelling unit owned by HUD (or where HUD is 
mortgagee-in-possession) may have an environmental intervention blood 
lead level, HUD shall immediately verify the information with the 
public health department or other medical health care provider. If that 
department or provider verifies that the child has an environmental 
intervention blood lead level, such verification shall constitute 
notification, and HUD shall take the action required in paragraphs (a) 
and (c) of this section.
    (c) Hazard reduction. Within 30 days after receiving the report of 
the risk assessment conducted pursuant to paragraph (a) of this section 
or the evaluation from the public health department, HUD shall complete 
the reduction of lead-based paint hazards identified in the risk 
assessment in accordance with Sec. 35.1325 or Sec. 35.1330. Hazard 
reduction is considered complete when clearance is achieved in 
accordance with Sec. 35.1340 and the clearance report states that all 
lead-based paint hazards identified in the risk assessment have been 
treated with interim controls or abatement or the public health 
department certifies that the lead-based paint hazard reduction is 
complete. The requirements of this paragraph do not apply if HUD, 
between the date the child's blood was last sampled and the date HUD 
received the notification of the environmental intervention blood lead 
level, conducted a risk assessment of the unit and common areas 
servicing the unit and completed reduction of identified lead-based 
paint hazards.
    (d) Reporting requirement. HUD shall report the name and address of 
a child identified as having an environmental intervention blood lead 
level to the public health department within 5 working days of being so 
notified by any other health professional.
    (e) Closing. If the closing of a sale is scheduled during the 
period when HUD is responding to a case of a child with an 
environmental intervention blood lead level, HUD may arrange for the 
completion of the procedures required by Sec. 35.830(a)-(d) by the 
purchaser within a reasonable period of time.
    (f) Extensions. The Assistant Secretary for Housing-Federal Housing 
Commissioner or designee may consider and approve a request for an 
extension of deadlines established by this section for a lead-based 
paint inspection, risk assessment, hazard reduction, and reporting. 
Such a request may be considered, however, only during the first six 
months during which HUD is owner or mortgagee-in-possession of a 
multifamily property.

Subpart J--Rehabilitation


Sec. 35.900  Purpose and applicability.

    (a) Purpose and applicability. (1) The purpose of this subpart J is 
to establish procedures to eliminate as far as practicable lead-based 
paint hazards in a residential property that receives Federal 
rehabilitation assistance under a program administered by HUD. 
Rehabilitation assistance does not include project-based rental 
assistance, rehabilitation mortgage insurance or assistance to public 
housing.
    (2) The requirements of this subpart shall not apply to HOME funds 
which are committed to a specific project in accordance with Sec. 92.2 
of this title before September 15, 2000. Such

[[Page 50213]]

projects shall be subject to the requirements of Sec. 92.355 of this 
title that were in effect at the time of project commitment or the 
requirements of this subpart.
    (3) For the purposes of the Indian Housing Block Grant program and 
the CDBG Entitlement program, the requirements of this subpart shall 
apply to all residential rehabilitation activities (except those 
otherwise exempted) for which funds are first obligated on or after 
September 15, 2000. For the purposes of the State, HUD-Administered 
Small Cities, and Insular Areas CDBG programs, the requirements of this 
subpart shall apply to all covered activities (except those otherwise 
exempted) for which grant funding is awarded to the unit of local 
government by the State or HUD, as applicable, on or after September 
15, 2000. For the purposes of the Emergency Shelter Grant Program (42 
U.S.C. 11371-11378) and the formula grants awarded under the Housing 
Opportunities for Persons with AIDS Program (HOPWA) (42 U.S.C. 12901 
et. seq.), the requirements of this subpart shall apply to activities 
for which program funds are first obligated on or after September 15, 
2000.
    (4) For the purposes of competitively awarded grants under the 
HOPWA Program and the Supportive Housing Program (42 U.S.C. 11481-
11389), the requirements of this subpart shall apply to grants awarded 
under Notices of Funding Availability published on or after September 
15, 2000.
    (5) For the purposes of the Indian CDBG program (Sec. 1003.607 of 
this title), the requirements of this subpart shall not apply to funds 
whose notice of funding availability is announced or funding letter is 
sent before September 15, 2000. Such project grantees shall be subject 
to the regulations in effect at the time of announcement or funding 
letter.
    (b) The grantee or participating jurisdiction may assign to a 
subrecipient or other entity the responsibilities set forth in this 
subpart.


Sec. 35.905  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.910  Notices and pamphlet.

    (a) Notices. In cases where evaluation or hazard reduction or both 
are undertaken as part of federally funded rehabilitation, the grantee, 
participating jurisdiction, or CILP recipient, shall provide a notice 
to occupants in accordance with Sec. 35.125.
    (b) Lead hazard information pamphlet. The grantee, participating 
jurisdiction, or CILP recipient, shall provide the lead hazard 
information pamphlet in accordance with Sec. 35.130.


Sec. 35.915  Calculating rehabilitation costs, except for the CILP 
Program.

    (a) Applicability. This section applies to recipients of Federal 
rehabilitation assistance, except for CILP recipients, for which 
Sec. 35.920 applies.
    (b) Rehabilitation assistance. (1) Lead-based paint requirements 
for rehabilitation fall into three categories which depend on the 
amount of rehabilitation assistance provided. The three categories are:
    (i) Assistance of up to and including $5,000 per unit;
    (ii) Assistance of more than $5,000 per unit up to and including 
$25,000 per unit; and
    (iii) Assistance of more than $25,000 per unit.
    (2) For purposes of implementing Secs. 35.930-35.935, the amount of 
rehabilitation assistance is the average per unit amount of Federal 
funds for the hard costs of rehabilitation, excluding lead-based paint 
hazard evaluation and hazard reduction activities. Costs of site 
preparation, occupant protection, relocation, interim controls, 
abatement, clearance and waste handling attributable to lead-based 
paint hazard reduction are not to be included in the hard costs of 
rehabilitation.
    (c) Calculating rehabilitation assistance. For a residential 
property that includes both federally assisted and non-assisted units, 
the rehabilitation costs of non-assisted units are not included in the 
calculation.
    (1) The average cost of rehabilitation for the assisted units is 
calculated as follows:

Per Unit Rehabilitation $ = (a/c) + (b/d)
Where:
a= Federal Rehabilitation Assistance for all assisted units
b= Federal Rehabilitation Assistance for common areas and exterior 
painted surfaces
c= Number of federally assisted units
d= Total number of units

    (2) Eight out of 10 dwelling units in a residential property 
receive Federal rehabilitation assistance. The total amount of Federal 
rehabilitation assistance for the dwelling units is $90,000, and the 
total amount of Federal rehabilitation assistance for the common areas 
and exterior surfaces is $10,000. Based on the formula above, the 
average per unit amount of Federal rehabilitation assistance is 
$12,250. This is illustrated as follows: $12,250 = ($90,000/8) + 
($10,000/10).


Sec. 35.920  Calculating rehabilitation costs for the Flexible Subsidy-
CILP program.

    All dwelling units and common areas in a residential property are 
considered to be assisted under the CILP program. The cost of 
rehabilitation is calculated as follows:

    Per Unit Rehab $ = Federal Rehab Assistance / Total Number of 
Units.


Sec. 35.925  Examples of determining applicable requirements.

    The following examples illustrate how to determine whether the 
requirements of Secs. 35.930(b), (c), or (d) apply to a dwelling unit 
receiving Federal rehabilitation assistance (dollar amounts are on a 
per unit basis):
    (a) If the total amount of Federal assistance for a dwelling is 
$2,000, and the hard costs of rehabilitation are $10,000, the lead-
based paint requirements would be those described in Sec. 35.930(b), 
because Federal rehabilitation assistance is up to and including 
$5,000.
    (b) If the total amount of Federal assistance for a dwelling unit 
is $6,000, and the hard costs of rehabilitation are $2,000, the lead-
based paint requirements would be those described in Sec. 35.930(b). 
Although the total amount of Federal dollars is more than $5,000, only 
the $2,000 of that total can be applied to rehabilitation. Therefore, 
the Federal rehabilitation assistance is $2,000 which is not more than 
$5,000.
    (c) If the total amount of Federal assistance for a unit is $6,000, 
and the hard costs of rehabilitation are $6,000, the lead-based paint 
requirements are those described in Sec. 35.930(c), because the amount 
of Federal rehabilitation assistance is more than $5,000 but not more 
than $25,000.


Sec. 35.930  Evaluation and hazard reduction requirements.

    (a) Paint testing. The grantee, participating jurisdiction, or CILP 
recipient shall either perform paint testing on the painted surfaces to 
be disturbed or replaced during rehabilitation activities, or presume 
that all these painted surfaces are coated with lead-based paint.
    (b) Residential property receiving an average of up to and 
including $5,000 per unit in Federal rehabilitation assistance. Each 
grantee, participating jurisdiction, or CILP recipient shall:
    (1) Conduct paint testing or presume the presence of lead-based 
paint, in accordance with paragraph (a) of this section. If paint 
testing indicates that the painted surfaces are not coated with lead-
based paint, safe work practices and clearance are not required.

[[Page 50214]]

    (2) Implement safe work practices during rehabilitation work in 
accordance with Sec. 35.1350 and repair any paint that is disturbed.
    (3) After completion of any rehabilitation disturbing painted 
surfaces, perform a clearance examination of the worksite(s) in 
accordance with Sec. 35.1340. Clearance is not required if 
rehabilitation did not disturb painted surfaces of a total area more 
than that set forth in Sec. 35.1350(b).
    (c) Residential property receiving an average of more than $5,000 
and up to and including $25,000 per unit in Federal rehabilitation 
assistance. Each grantee, participating jurisdiction, or CILP recipient 
shall:
    (1) Conduct paint testing or presume the presence of lead-based 
paint, in accordance with paragraph (a) of this section.
    (2) Perform a risk assessment in the dwelling units receiving 
Federal assistance, in common areas servicing those units, and exterior 
painted surfaces, in accordance with Sec. 35.1320(b), before 
rehabilitation begins.
    (3) Perform interim controls in accordance with Sec. 35.1330 of all 
lead-based paint hazards identified pursuant to paragraphs (c)(1) and 
(c)(2) of this section and any lead-based paint hazards created as a 
result of the rehabilitation work.
    (d) Residential property receiving an average of more than $25,000 
per unit in Federal rehabilitation assistance. Each grantee, 
participating jurisdiction, or CILP recipient shall:
    (1) Conduct paint testing or presume the presence of lead-based 
paint in accordance with paragraph (a) of this section.
    (2) Perform a risk assessment in the dwelling units receiving 
Federal assistance and in associated common areas and exterior painted 
surfaces in accordance with Sec. 35.1320(b) before rehabilitation 
begins.
    (3) Abate all lead-based paint hazards identified by the paint 
testing or risk assessment conducted pursuant to paragraphs (d)(1) and 
(d)(2) of this section, and any lead-based paint hazards created as a 
result of the rehabilitation work, in accordance with Sec. 35.1325, 
except that interim controls are acceptable on exterior surfaces that 
are not disturbed by rehabilitation.


Sec. 35.935  Ongoing lead-based paint maintenance activities.

    In the case of a rental property receiving Federal rehabilitation 
assistance under the HOME program or the Flexible Subsidy-CILP program, 
the grantee, participating jurisdiction or CILP recipient shall require 
the property owner to incorporate ongoing lead-based paint maintenance 
activities into regular building operations, in accordance with 
Sec. 35.1355(a).


Sec. 35.940  Special requirements for insular areas.

    If a dwelling unit receiving Federal assistance under a program 
covered by this subpart is located in an insular area, the requirements 
of this section shall apply and the requirements of Sec. 35.930 shall 
not apply. All other sections of this subpart J shall apply. The 
insular area shall conduct the following activities for the dwelling 
unit, common areas servicing the dwelling unit, and the exterior 
surfaces of the building in which the dwelling unit is located:
    (a) Residential property receiving an average of up to and 
including $5,000 per unit in Federal rehabilitation assistance. (1) 
Implement safe work practices during rehabilitation work in accordance 
with Sec. 35.1350 and repair any paint that is disturbed by 
rehabilitation.
    (2) After completion of any rehabilitation disturbing painted 
surfaces, perform a clearance examination of the worksite(s) in 
accordance with Sec. 35.1340. Clearance shall be achieved before 
residents are allowed to occupy the worksite(s). Clearance is not 
required if rehabilitation did not disturb painted surfaces of a total 
area more than that set forth in Sec. 35.1350(b).
    (b) Residential property receiving an average of more than $5,000 
per unit in Federal rehabilitation assistance. (1) Before beginning 
rehabilitation, perform a visual assessment of all painted surfaces in 
order to identify deteriorated paint.
    (2) Perform paint stabilization of each deteriorated paint surface 
and each painted surface being disturbed by rehabilitation, in 
accordance with Secs. 35.1330(a) and (b).
    (3) After completion of all paint stabilization, perform a 
clearance examination of the affected dwelling units and common areas 
in accordance with Sec. 35.1340. Clearance shall be achieved before 
residents are allowed to occupy rooms or spaces in which paint 
stabilization has been performed.

Subpart K--Acquisition, Leasing, Support Services, or Operation.


Sec. 35.1000  Purpose and applicability.

    (a) The purpose of this subpart K is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in a 
residential property that receives Federal assistance under certain HUD 
programs for acquisition, leasing, support services, or operation. 
Acquisition, leasing, support services, and operation do not include 
mortgage insurance, sale of federally-owned housing, project-based or 
tenant-based rental assistance, rehabilitation assistance, or 
assistance to public housing. For requirements pertaining to those 
activities or types of assistance, see the applicable subpart of this 
part.
    (b) The grantee or participating jurisdiction may assign to a 
subrecipient or other entity the responsibilities set forth in this 
subpart.
    (c)(1) The requirements of this subpart shall not apply to HOME 
funds which are committed to a specific project in accordance with 
Sec. 92.2 of this title before September 15, 2000. Such projects shall 
be subject to the requirements of Sec. 92.355 of this title that were 
in effect at the time of project commitment, or the requirements of 
this subpart.
    (2) For the purposes of the CDBG Entitlement program and the Indian 
Housing Block Grant program, the requirements of this subpart shall 
apply to all residential rehabilitation activities (except those 
otherwise exempted) for which funds are first obligated on or after 
September 15, 2000. For the purposes of the State, HUD-Administered 
Small Cities, and Insular Areas CDBG programs, the requirements of this 
subpart shall apply to all covered activities (except those otherwise 
exempted) for which grant funding is awarded to the unit of local 
government by the State or HUD, as applicable, on or after September 
15, 2000. For the purposes of the Emergency Shelter Grant Program (42 
U.S.C. 11371-11378) and the formula grants awarded under the Housing 
Opportunities for Persons with AIDS Program (HOPWA) (42 U.S.C. 12901 
et. seq.), the requirements of this subpart shall apply to activities 
for which program funds are first obligated on or after September 15, 
2000.
    (3) For the purposes of competitively awarded grants under the 
HOPWA Program and the Supportive Housing Program (42 U.S.C. 11481-
11389), the requirements of this subpart shall apply to grants awarded 
under Notices of Funding Availability published on or after September 
15, 2000.
    (4) For the purposes of the Indian CDBG program (Sec. 1003.607 of 
this title), the requirements of this subpart shall not apply to funds 
whose notice of funding availability is announced or funding letter is 
sent before September 15, 2000. Such project grantees shall be subject 
to the regulations in effect at the time of announcement or funding 
letter.

[[Page 50215]]

Sec. 35.1005  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.1010  Notices and pamphlet

    (a) Notice. In cases where evaluation or hazard reduction, 
including paint stabilization, is undertaken, each grantee or 
participating jurisdiction shall provide a notice to residents in 
accordance with Sec. 35.125. A visual assessment is not considered an 
evaluation for purposes of this part.
    (b) Lead hazard information pamphlet. The grantee or participating 
jurisdiction shall provide the lead hazard information pamphlet in 
accordance with Sec. 35.130.


Sec. 35.1015  Visual assessment, paint stabilization, and maintenance.

    If a dwelling unit receives Federal assistance under a program 
covered by this subpart, each grantee or participating jurisdiction 
shall conduct the following activities for the dwelling unit, common 
areas servicing the dwelling unit, and the exterior surfaces of the 
building in which the dwelling unit is located:
    (a) A visual assessment of all painted surfaces in order to 
identify deteriorated paint;
    (b) Paint stabilization of each deteriorated paint surface, and 
clearance, in accordance with Secs. 35.1330(a) and (b), before 
occupancy of a vacant dwelling unit or, where a unit is occupied, 
immediately after receipt of Federal assistance; and
    (c) The grantee or participating jurisdiction shall incorporate 
ongoing lead-based paint maintenance activities into regular building 
operations, in accordance with Sec. 35.1355(a).
    (d) The grantee or participating jurisdiction shall provide a 
notice to occupants in accordance with Secs. 35.125(b)(1) and (c), 
describing the results of the clearance examination.


Sec. 35.1020  Funding for evaluation and hazard reduction.

    The grantee or participating jurisdiction shall determine whether 
the cost of evaluation and hazard reduction is to be borne by the 
owner/developer, the grantee or a combination of the owner/developer 
and the grantee, based on program requirements and local program 
design.

Subpart L--Public Housing Programs


Sec. 35.1100  Purpose and applicability.

    The purpose of this subpart L is to establish procedures to 
eliminate as far as practicable lead-based paint hazards in residential 
property assisted under the U.S. Housing Act of 1937 (42 U.S.C. 1437 et 
seq.) but not including housing assisted under section 8 of the 1937 
Act.


Sec. 35.1105  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.1110  Notices and pamphlet.

    (a) Notice. In cases where evaluation or hazard reduction is 
undertaken, each public housing agency (PHA) shall provide a notice to 
residents in accordance with Sec. 35.125.
    (b) Lead hazard information pamphlet. The PHA shall provide the 
lead hazard information pamphlet in accordance with Sec. 35.130.


Sec. 35.1115  Evaluation.

    (a) A lead-based paint inspection shall be conducted in all public 
housing unless a lead-based paint inspection that meets the conditions 
of Sec. 35.165(a) has already been completed. If a lead-based paint 
inspection was conducted by a lead-based paint inspector who was not 
certified, the PHA shall review the quality of the inspection, in 
accordance with quality control procedures established by HUD, to 
determine whether the lead-based paint inspection has been properly 
performed and the results are reliable. Lead-based paint inspections of 
all housing to which this subpart applies shall be completed no later 
than September 15, 2000. Revisions or augmentations of prior 
inspections found to be of insufficient quality shall be completed no 
later than September 17, 2001.
    (b) If a lead-based paint inspection has found the presence of 
lead-based paint, or if no lead-based paint inspection has been 
conducted, the PHA shall conduct a risk assessment according to the 
following schedule, unless a risk assessment that meets the conditions 
of Sec. 35.165(b) has already been completed:
    (1) Risk assessments shall be completed on or before March 15, 
2001, in a multifamily residential property constructed before 1960.
    (2) Risk assessments shall be completed on or before March 15, 
2002, in a multifamily residential property constructed after 1959 and 
before 1978.
    (c) A PHA that advertises a construction contract (including 
architecture/engineering contracts) for bid or award or plans to start 
force account work shall not execute such contract until a lead-based 
paint inspection and, if required, a risk assessment, has taken place 
and any necessary abatement is included in the modernization budget, 
except for contracts solely for emergency work in accordance with 
Sec. 35.115(a)(9).
    (d) The five-year funding request plan for CIAP and CGP shall be 
amended to include the schedule and funding for lead-based paint 
activities.


Sec. 35.1120  Hazard reduction.

    (a) Each PHA shall, in accordance with Sec. 35.1325, abate all 
lead-based paint and lead-based paint hazards identified in the 
evaluations conducted pursuant to Sec. 35.1115. The PHA shall abate 
lead-based paint and lead-based paint hazards in accordance with 
Sec. 35.1325 during the course of physical improvements conducted under 
the modernization.
    (b) In all housing where abatement of all lead-based paint and 
lead-based paint hazards required in paragraph (a) of this section has 
not yet occurred, each PHA shall conduct interim controls, in 
accordance with Sec. 35.1330, of the lead-based paint hazards 
identified in the most recent risk assessment.
    (1) Interim controls of dwelling units in which any child who is 
less than 6 years of age resides and common areas servicing those 
dwelling units shall be completed within 90 days of the evaluation 
under Sec. 35.1330. If a unit becomes newly occupied by a family with a 
child of less than 6 years of age or such child moves into a unit, 
interim controls shall be completed within 90 days after the new 
occupancy or move-in if they have not already been completed.
    (2) Interim controls in dwelling units not occupied by families 
with one or more children of less than 6 years of age, common areas 
servicing those units, and the remaining portions of the residential 
property shall be completed no later than 12 months after completion of 
the evaluation conducted under Sec. 35.1115.
    (c) The PHA shall incorporate ongoing lead-based paint maintenance 
and reevaluation activities into regular building operations in 
accordance with Sec. 35.1355. In accordance with Sec. 35.115(a) (6) and 
(7), this requirement does not apply to a development or part thereof 
if it is to be demolished or disposed of in accordance with disposition 
requirements in part 970 of this title, provided the dwelling unit will 
remain unoccupied until demolition, or if it is not used and will not 
be used for human habitation.

[[Page 50216]]

Sec. 35.1125  Evaluation and hazard reduction before acquisition and 
development.

    (a) For each residential property constructed before 1978 and 
proposed to be acquired for a family project (whether or not it will 
need rehabilitation) a lead-based paint inspection and risk assessment 
for lead-based paint hazards shall be conducted in accordance with 
Sec. 35.1320.
    (b) If lead-based paint is found in a residential property to be 
acquired, the cost of evaluation and abatement shall be considered when 
making the cost comparison to justify new construction, as well as when 
meeting maximum total development cost limitations.
    (c) If lead-based paint is found, compliance with this subpart is 
required, and abatement of lead-based paint and lead-based paint 
hazards shall be completed in accordance with Sec. 35.1325 before 
occupancy.


Sec. 35.1130   Child with an environmental intervention blood lead 
level.

    (a) Risk assessment. Within 15 days after being notified by a 
public health department or other medical health care provider that a 
child of less than 6 years of age living in a public housing 
development has been identified as having an environmental intervention 
blood lead level, the PHA shall complete a risk assessment of the 
dwelling unit in which the child lived at the time the blood was last 
sampled and of common areas servicing the dwelling unit, the provisions 
of Sec. 35.1115(b) notwithstanding. The risk assessment shall be 
conducted in accordance with Sec. 35.1320(b) and is considered complete 
when the PHA receives the risk assessment report. The requirements of 
this paragraph apply regardless of whether the child is or is not still 
living in the unit when the PHA receives the notification of the 
environmental intervention blood lead level. The requirements of this 
paragraph shall not apply if the PHA conducted a risk assessment of the 
unit and common areas servicing the unit between the date the child's 
blood was last sampled and the date when the PHA received the 
notification of the environmental intervention blood lead level. If the 
public health department has already conducted an evaluation of the 
dwelling unit, the requirements of this paragraph shall not apply.
    (b) Verification. After receiving information from a person who is 
not a medical health care provider that a child of less than 6 years of 
age living in a public housing development may have an environmental 
intervention blood lead level, the PHA shall immediately verify the 
information with the public health department or other medical health 
care provider. If that department or provider verifies that the child 
has an environmental intervention blood lead level, such verification 
shall constitute notification, and the housing agency shall take the 
action required in paragraphs (a) and (c) of this section.
    (c) Hazard reduction. Within 30 days after receiving the report of 
the risk assessment conducted pursuant to paragraph (a) of this section 
or the evaluation from the public health department, the PHA shall 
complete the reduction of lead-based paint hazards identified in the 
risk assessment in accordance with Sec. 35.1325 or Sec. 35.1330. Hazard 
reduction is considered complete when clearance is achieved in 
accordance with Sec. 35.1340 and the clearance report states that all 
lead-based paint hazards identified in the risk assessment have been 
treated with interim controls or abatement or the local or State health 
department certifies that lead-based paint hazard reduction is 
complete. The requirements of this paragraph do not apply if the PHA, 
between the date the child's blood was last sampled and the date the 
owner received the notification of the environmental intervention blood 
lead level, already conducted a risk assessment of the unit and common 
areas servicing the unit and completed reduction of identified lead-
based paint hazards.
    (d) Notice of evaluation and hazard reduction. The PHA shall notify 
building residents of any evaluation or hazard reduction activities in 
accordance with Sec. 35.125.
    (e) Reporting requirement. The PHA shall report the name and 
address of a child identified as having an environmental intervention 
blood lead level to the public health department within 5 working days 
of being so notified by any other medical health care professional. The 
PHA shall also report each known case of a child with an environmental 
intervention blood lead level to the HUD field office.
    (f) Other units in building. If the risk assessment conducted 
pursuant to paragraph (a) of this section identifies lead-based paint 
hazards and previous evaluations of the building conducted pursuant to 
Sec. 35.1320 did not identify lead-based paint or lead-based paint 
hazards, the PHA shall conduct a risk assessment of other units of the 
building in accordance with Sec. 35.1320(b) and shall conduct interim 
controls of identified hazards in accordance with the schedule provided 
in Sec. 35.1120(c).


Sec. 35.1135  Eligible costs.

    A PHA may use financial assistance received under the modernization 
program (CIAP or CGP) for the notice, evaluation and reduction of lead-
based paint hazards in accordance with Sec. 968.112 of this title. 
Eligible costs include:
    (a) Evaluation and insurance costs. Evaluation and hazard reduction 
activities, and costs for insurance coverage associated with these 
activities.
    (b) Planning costs. Planning costs are costs that are incurred 
before HUD approval of the CGP or CIAP application and that are related 
to developing the CIAP application or carrying out eligible 
modernization planning, such as planning for abatement, detailed design 
work, preparation of solicitations, and evaluation. Planning costs may 
be funded as a single work item. Planning costs shall not exceed 5 
percent of the CIAP funds available to a HUD Field Office in a 
particular fiscal year.
    (c) Architectural/engineering and consultant fees. Eligible costs 
include fees for planning, identification of needs, detailed design 
work, preparation of construction and bid documents and other required 
documents, evaluation, planning and design for abatement, and 
inspection of work in progress.
    (d) Environmental intervention blood lead level response costs. The 
PHA may use its operating reserves and, when necessary, may request 
reimbursement from the current fiscal year CIAP funds, or request the 
reprogramming of previously approved CIAP funds to cover the costs of 
evaluation and hazard reduction.


Sec. 35.1140  Insurance coverage.

    For the requirements concerning the obligation of a PHA to obtain 
reasonable insurance coverage with respect to the hazards associated 
with evaluation and hazard reduction activities, see Sec. 965.215 of 
this title.

Subpart M--Tenant-Based Rental Assistance


Sec. 35.1200  Purpose and applicability.

    (a) Purpose. The purpose of this subpart M is to establish 
procedures to eliminate as far as practicable lead-based paint hazards 
in housing occupied by families receiving tenant-based rental 
assistance. Such assistance includes tenant-based rental assistance 
under the Section 8 certificate program, the Section 8 voucher program, 
the HOME program, the Shelter Plus Care program, the Housing 
Opportunities for Persons With AIDS (HOPWA) program,

[[Page 50217]]

and the Indian Housing Block Grant program. Tenant-based rental 
assistance means rental assistance that is not attached to the 
structure.
    (b) Applicability. (1) This subpart applies only to dwelling units 
occupied or to be occupied by families or households that have one or 
more children of less than 6 years of age, common areas servicing such 
dwelling units, and exterior painted surfaces associated with such 
dwelling units or common areas. Common areas servicing a dwelling unit 
include those areas through which residents pass to gain access to the 
unit and other areas frequented by resident children of less than 6 
years of age, including on-site play areas and child care facilities.
    (2) For the purposes of the Section 8 tenant-based certificate 
program and the Section 8 voucher program:
    (i) The requirements of this subpart are applicable where an 
initial or periodic inspection occurs on or after September 15, 200; 
and
    (ii) The PHA shall be the designated party.
    (3) For the purposes of formula grants awarded under the Housing 
Opportunities for Persons with AIDS Program (HOPWA) (42 U.S.C. 12901 et 
seq.):
    (i) The requirements of this subpart shall apply to activities for 
which program funds are first obligated on or after September 15, 2000; 
and
    (ii) The grantee shall be the designated party.
    (4) For the purposes of competitively awarded grants under the 
HOPWA Program and the Shelter Plus Care program (42 U.S.C. 11402-11407) 
tenant-based rental assistance component:
    (i) The requirements of this subpart shall apply to grants awarded 
pursuant to Notices of Funding Availability published on or after 
October 1, 1999; and
    (ii) The grantee shall be the designated party.
    (5) For the purposes of the HOME program:
    (i) The requirements of this subpart shall not apply to funds which 
are committed in accordance with Sec. 92.2 of this title before 
September 15, 2000; and
    (ii) The participating jurisdiction shall be the designated party.
    (6) For the purposes of the Indian Housing Block Grant program:
    (i) The requirements of this subpart shall apply to activities for 
which funds are first obligated on or after September 15, 2000; and
    (ii) The IHBG recipient shall be the designated party.
    (7) The housing agency, grantee, participating jurisdiction, or 
IHBG recipient may assign to a subrecipient or other entity the 
responsibilities of the designated party in this subpart.


Sec. 35.1205  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.1210  Notices and pamphlet.

    (a) Notice. In cases where evaluation or paint stabilization is 
undertaken, the owner shall provide a notice to residents in accordance 
with Sec. 35.125. A visual assessment is not an evaluation.
    (b) Lead hazard information pamphlet. The owner shall provide the 
lead hazard information pamphlet in accordance with Sec. 35.130.


Sec. 35.1215  Activities at initial and periodic inspection.

    (a) (1) During the initial and periodic inspections, an inspector 
acting on behalf of the designated party and trained in visual 
assessment for deteriorated paint surfaces in accordance with 
procedures established by HUD shall conduct a visual assessment of all 
painted surfaces in order to identify any deteriorated paint.
    (2) For tenant-based rental assistance provided under the HOME 
program, visual assessment shall be conducted as part of the initial 
and periodic inspections required under Sec. 92.209(i) of this title.
    (b) The owner shall stabilize each deteriorated paint surface in 
accordance with Sec. 35.1330(a) and (b) before commencement of assisted 
occupancy. If assisted occupancy has commenced prior to a periodic 
inspection, such paint stabilization must be completed within 30 days 
of notification of the owner of the results of the visual assessment. 
Paint stabilization is considered complete when clearance is achieved 
in accordance with Sec. 35.1340.
    (c) The owner shall provide a notice to occupants in accordance 
with Sec. 35.125(b)(1) and (c) describing the results of the clearance 
examination.


Sec. 35.1220  Ongoing lead-based paint maintenance activities.

    The owner shall incorporate ongoing lead-based paint maintenance 
activities into regular building operations in accordance with 
Sec. 35.1355(a).


Sec. 35.1225  Child with an environmental intervention blood lead 
level.

    (a) Within 15 days after being notified by a public health 
department or other medical health care provider that a child of less 
than 6 years of age living in an assisted dwelling unit has been 
identified as having an environmental intervention blood lead level, 
the designated party shall complete a risk assessment of the dwelling 
unit in which the child lived at the time the blood was last sampled 
and of the common areas servicing the dwelling unit. The risk 
assessment shall be conducted in accordance with Sec. 35.1320(b). When 
the risk assessment is complete, the designated party shall immediately 
provide the report of the risk assessment to the owner of the dwelling 
unit. If the child identified as having an environmental intervention 
blood lead level is no longer living in the unit when the designated 
party receives notification from the public health department or other 
medical health care provider, but another household receiving tenant-
based rental assistance is living in the unit or is planning to live 
there, the requirements of this section apply just as they do if the 
child still lives in the unit. If a public health department has 
already conducted an evaluation of the dwelling unit, or the designated 
party conducted a risk assessment of the unit and common areas 
servicing the unit between the date the child's blood was last sampled 
and the date when the designated party received the notification of the 
environmental intervention blood lead level, the requirements of this 
paragraph shall not apply.
    (b) Verification. After receiving information from a source other 
than a public health department or other medical health care provider 
that a child of less than 6 years of age living in an assisted dwelling 
unit may have an environmental intervention blood lead level, the 
designated party shall immediately verify the information with a public 
health department or other medical health care provider. If that 
department or provider verifies that the child has an environmental 
intervention blood lead level, such verification shall constitute 
notification to the designated party as provided in paragraph (a) of 
this section, and the designated party shall take the action required 
in paragraphs (a) and (c) of this section.
    (c) Hazard reduction. Within 30 days after receiving the risk 
assessment report from the designated party or the evaluation from the 
public health department, the owner shall complete the reduction of 
identified lead-based paint hazards in accordance with Sec. 35.1325 or 
Sec. 35.1330. Hazard reduction is considered complete when clearance is 
achieved in accordance with Sec. 35.1340 and the clearance report 
states that all lead-based paint hazards identified in the risk 
assessment have been treated with interim controls or

[[Page 50218]]

abatement or when the public health department certifies that the lead-
based paint hazard reduction is complete. If the owner does not 
complete the hazard reduction required by this section, the dwelling 
unit is in violation of Housing Quality Standards (HQS).
    (d) Notice of evaluation and hazard reduction. The owner shall 
notify building residents of any evaluation or hazard reduction 
activities in accordance with Sec. 35.125.
    (e) Reporting requirement. The designated party shall report the 
name and address of a child identified as having an environmental 
intervention blood lead level to the public health department within 5 
working days of being so notified by any other medical health care 
professional.
    (f) Data collection and record keeping responsibilities. At least 
quarterly, the designated party shall attempt to obtain from the public 
health department(s) with area(s) of jurisdiction similar to that of 
the designated party the names and/or addresses of children of less 
than 6 years of age with an identified environmental intervention blood 
lead level. At least quarterly, the designated party shall also report 
an updated list of the addresses of units receiving assistance under a 
tenant-based rental assistance program to the same public health 
department(s), except that the report(s) to the public health 
department(s) is not required if the health department states that it 
does not wish to receive such report. If it obtains names and addresses 
of environmental intervention blood lead level children from the public 
health department(s), the designated party shall match information on 
cases of environmental intervention blood lead levels with the names 
and addresses of families receiving tenant-based rental assistance, 
unless the public health department performs such a matching procedure. 
If a match occurs, the designated party shall carry out the 
requirements of this section.

Subparts N-Q--[Reserved]

Subpart R--Methods and Standards for Lead-Paint Hazard Evaluation 
and Hazard Reduction Activities


Sec. 35.1300  Purpose and applicability.

    The purpose of this subpart R is to provide standards and methods 
for evaluation and hazard reduction activities required in subparts B, 
C, D, and F through M of this part.


Sec. 35.1305  Definitions and other general requirements.

    Definitions and other general requirements that apply to this 
subpart are found in subpart B of this part.


Sec. 35.1310  References.

    Further guidance information regarding evaluation and hazard 
reduction activities described in this subpart is found in the 
following:
    (a) The HUD Guidelines for the Evaluation and Control of Lead-Based 
Paint Hazards in Housing (Guidelines);
    (b) The EPA Guidance on Residential Lead-Based Paint, Lead-
Contaminated Dust, and Lead Contaminated Soil;
    (c) Guidance, methods or protocols issued by States and Indian 
tribes that have been authorized by EPA under 40 CFR 745.324 to 
administer and enforce lead-based paint programs.


Sec. 35.1315  Collection and laboratory analysis of samples.

    All paint chip, dust, or soil samples shall be collected and 
analyzed in accordance with standards established either by a State or 
Indian tribe under a program authorized by EPA in accordance with 40 
CFR part 745, subpart Q, or by the EPA in accordance with 40 CFR 
745.227, and as further provided in this subpart.


Sec. 35.1320  Lead-based paint inspections and risk assessments.

    (a) Lead-based paint inspections. Lead-based paint inspections 
shall be performed in accordance with methods and standards established 
either by a State or Indian tribe under a program authorized by EPA, or 
by EPA at 40 CFR 745.227(b), except that the definition of lead-based 
paint shall not include a loading (area concentration) or mass 
concentration greater than that in the definition at Sec. 35.110 of 
this part.
    (b) Risk assessments. (1) Risk assessments shall be performed in 
accordance with methods and standards established either by a State or 
Indian tribe under a program authorized by EPA, or by EPA at 40 CFR 
745.227(d), and paragraph (b)(2) of this section.
    (2) Risk assessors shall use levels defining dust-lead hazards and 
soil-lead hazards that are no greater than those promulgated by EPA 
pursuant to section 403 of the Toxic Substances Control Act (15 U.S.C. 
2683), or, if such levels are not in effect, the following for dust or 
soil:
    (i) Dust. A dust-lead hazard shall be a dust-lead level equal to or 
greater than the applicable loading (area concentration), based on wipe 
samples, in the following table:

                                           Interim Dust Lead Standards
----------------------------------------------------------------------------------------------------------------
                                                 Surface
                                            ----------------    Interior
                                             Floors, g/ft \2\
             Evaluation method                 m>g/ft \2\      g/                (mg/m \2\)
                                               (mg/m \2\)     ft\2\  (mg/m
                                                                  \2\)
----------------------------------------------------------------------------------------------------------------
Lead Hazard Screen.........................       25 (0.27)       125 (1.4)  Not Applicable.
Risk Assessment............................       40 (0.43)       250 (2.7)  Not Applicable.
Reevaluation...............................       40 (0.43)       250 (2.7)  Not Applicable.
Clearance..................................       40 (0.43)       250 (2.7)  800 (8.6).
----------------------------------------------------------------------------------------------------------------
Note: ``Floors'' includes carpeted and uncarpeted interior floors.

    (ii) Soil. (A) A soil-lead hazard for play areas frequented by 
children under 6 years of age shall be bare soil with lead equal to or 
exceeding 400 micrograms per gram.
    (B) For other areas, soil-lead hazards shall be bare soil that 
totals more than 9 square feet (0.8 square meters) per property with 
lead equal to or exceeding 2,000 micrograms per gram.
    (3) Lead hazard screens shall be performed in accordance with the 
methods and standards established either by a State or Indian tribe 
under a program authorized by EPA, or by EPA at 40 CFR 745.227(c), and 
paragraph (b)(2) of this section. If the lead hazard screen indicates 
the need for a follow-up risk assessment (e.g., if dust-lead 
measurements exceed the levels established for lead hazard screens in 
this section), a risk assessment shall be conducted in accordance with 
paragraphs (b)(1) and (b)(2) of this section. Dust, soil, and paint 
samples collected for the lead hazard screen may

[[Page 50219]]

be used in the risk assessment. If the lead hazard screen does not 
indicate the need for a follow-up risk assessment, no further risk-
assessment is required.
    (c) It is strongly recommended, but not required, that lead-based 
paint inspectors and risk assessors provide a summary of the results 
suitable for posting or distribution to occupants in compliance with 
Sec. 35.125.


Sec. 35.1325  Abatement.

    Abatement shall be performed in accordance with methods and 
standards established either by a State or Indian tribe under a program 
authorized by EPA, or by EPA at 40 CFR 745.227(e), and shall be 
completed by achieving clearance in accordance with Sec. 35.1340. If 
encapsulation or enclosure is used as a method of abatement, ongoing 
lead-based paint maintenance activities shall be performed as required 
by the applicable subpart of this part in accordance with Sec. 35.1355. 
Abatement of an intact, factory-applied prime coating on metal surfaces 
is not required unless the surface is a friction surface.


Sec. 35.1330  Interim controls.

    Interim controls of lead-based paint hazards identified in a risk 
assessment shall be conducted in accordance with the provisions of this 
section. Interim control measures include paint stabilization of 
deteriorated paint, treatments for friction and impact surfaces where 
levels of lead dust are above the levels specified in Sec. 35.1320, 
dust control, and lead-contaminated soil control. As provided by 
Sec. 35.155, interim controls may be performed in combination with, or 
be replaced by, abatement methods.
    (a) General requirements. (1) Only those interim control methods 
identified as acceptable methods in a current risk assessment report 
shall be used to control identified hazards, except that, if only paint 
stabilization is required in accordance with subparts F, H, K or M of 
this part, it shall not be necessary to have conducted a risk 
assessment.
    (2) Occupants of dwelling units where interim controls are being 
performed shall be protected during the course of the work in 
accordance with Sec. 35.1345.
    (3) Clearance testing shall be performed at the conclusion of 
interim control activities in accordance with Sec. 35.1340.
    (4) A person performing interim controls must be trained in 
accordance with 29 CFR 1926.59 and either be supervised by an 
individual certified as a lead-based paint abatement supervisor or have 
successfully completed one of the following courses:
    (i) A lead-based paint abatement supervisor course accredited in 
accordance with 40 CFR 745.225;
    (ii) A lead-based paint abatement worker course accredited in 
accordance with 40 CFR 745.225;
    (iii) The Lead-Based Paint Maintenance Training Program, ``Work 
Smart, Work Wet, and Work Clean to Work Lead Safe,'' prepared by the 
National Environmental Training Association for EPA and HUD;
    (iv) ``The Remodeler's and Renovator's Lead-Based Paint Training 
Program,'' prepared by HUD and the National Association of the 
Remodeling Industry; or
    (v) Another course approved by HUD for this purpose after 
consultation with EPA.
    (b) Paint stabilization. (1) Interim control treatments used to 
stabilize deteriorated lead-based paint shall be performed in 
accordance with the requirements of this section. Interim control 
treatments of intact, factory applied prime coatings on metal surfaces 
are not required. Finish coatings on such surfaces shall be treated by 
interim controls if those coatings contain lead-based paint.
    (2) Any physical defect in the substrate of a painted surface or 
component that is causing deterioration of the surface or component 
shall be repaired before treating the surface or component. Examples of 
defective substrate conditions include dry-rot, rust, moisture-related 
defects, crumbling plaster, and missing siding or other components that 
are not securely fastened.
    (3) Before applying new paint, all loose paint and other loose 
material shall be removed from the surface to be treated. Acceptable 
methods for preparing the surface to be treated include wet scraping, 
wet sanding, and power sanding performed in conjunction with a HEPA 
filtered local exhaust attachment operated according to the 
manufacturer's instructions.
    (4) Dry sanding or dry scraping is permitted only in accordance 
with Sec. 35.140(e) (i.e., for electrical safety reasons or for 
specified minor amounts of work).
    (5) Paint stabilization shall include the application of a new 
protective coating or paint. The surface substrate shall be dry and 
protected from future moisture damage before applying a new protective 
coating or paint. All protective coatings and paints shall be applied 
in accordance with the manufacturer's recommendations.
    (6) Paint stabilization shall incorporate the use of safe work 
practices in accordance with Sec. 35.1350.
    (c) Friction and impact surfaces. (1) Friction surfaces are 
required to be treated only if:
    (i) Lead dust levels on the nearest horizontal surface underneath 
the friction surface (e.g., the window sill, window trough, or floor) 
are equal to or greater than the standards specified in 35.1320(b);
    (ii) There is evidence that the paint surface is subject to 
abrasion; and
    (iii) Lead-based paint is known or presumed to be present on the 
friction surface.
    (2) Impact surfaces are required to be treated only if:
    (i) Paint on an impact surface is damaged or otherwise 
deteriorated;
    (ii) The damaged paint is caused by impact from a related building 
component (such as a door knob that knocks into a wall, or a door that 
knocks against its door frame); and
    (iii) Lead-based paint is known or presumed to be present on the 
impact surface.
    (3) Examples of building components that may contain friction or 
impact surfaces include the following:
    (i) Window systems;
    (ii) Doors;
    (iii) Stair treads and risers;
    (iv) Baseboards;
    (v) Drawers and cabinets; and
    (vi) Porches, decks, interior floors, and any other painted 
surfaces that are abraded, rubbed, or impacted.
    (4) Interim control treatments for friction surfaces shall 
eliminate friction points or treat the friction surface so that paint 
is not subject to abrasion. Examples of acceptable treatments include 
rehanging and/or planing doors so that the door does not rub against 
the door frame, and installing window channel guides that reduce or 
eliminate abrasion of painted surfaces. Paint on stair treads and 
floors shall be protected with a durable cover or coating that will 
prevent abrasion of the painted surfaces. Examples of acceptable 
materials include carpeting, tile, and sheet flooring.
    (5) Interim control treatments for impact surfaces shall protect 
the paint from impact. Examples of acceptable treatments include 
treatments that eliminate impact with the paint surface, such as a door 
stop to prevent a door from striking a wall or baseboard.
    (6) Interim control for impact or friction surfaces does not 
include covering such a surface with a coating or other treatment, such 
as painting over the surface, that does not protect lead-based paint 
from impact or abrasion.

[[Page 50220]]

    (d) Chewable surfaces. (1) Chewable surfaces are required to be 
treated only if there is evidence that a child of less than 6 years of 
age has chewed on the painted surface, and lead-based paint is known or 
presumed to be present on the surface.
    (2) Interim control treatments for chewable surfaces shall make the 
lead-based paint inaccessible for chewing by children of less than 6 
years of age. Examples include enclosures or coatings that cannot be 
penetrated by the teeth of such children.
    (e) Dust-lead hazard control. (1) Interim control treatments used 
to control dust-lead hazards shall be performed in accordance with the 
requirements of this section. Additional information on dust removal is 
found in the HUD Guidelines, particularly Chapter 11 (see 
Sec. 35.1310).
    (2) Dust control shall involve a thorough cleaning of all 
horizontal surfaces, such as interior window sills, window troughs, 
floors, and stairs, but excluding ceilings. All horizontal surfaces, 
such as floors, stairs, window sills and window troughs, that are 
rough, pitted, or porous shall be covered with a smooth, cleanable 
covering or coating, such as metal coil stock, plastic, polyurethane, 
or linoleum.
    (3) Surfaces covered by a rug or carpeting shall be cleaned as 
follows:
    (i) The floor surface under a rug or carpeting shall be cleaned 
where feasible, including upon removal of the rug or carpeting, with a 
HEPA vacuum or other method of equivalent efficacy.
    (ii) An unattached rug or an attached carpet that is to be removed, 
and padding associated with such rug or carpet, located in an area of 
the dwelling unit with dust-lead hazards on the floor, shall be 
thoroughly vacuumed with a HEPA vacuum or other method of equivalent 
efficacy. Protective measures shall be used to prevent the spread of 
dust during removal of a rug, carpet or padding from the dwelling. For 
example, it shall be misted to reduce dust generation during removal. 
The item(s) being removed shall be wrapped or otherwise sealed before 
removal from the worksite.
    (iii) An attached carpet located in an area of the dwelling unit 
with dust-lead hazards on the floor shall be thoroughly vacuumed with a 
HEPA vacuum or other method of equivalent efficacy if it is not to be 
removed.
    (f) Soil-lead hazards. (1) Interim control treatments used to 
control soil-lead hazards shall be performed in accordance with this 
section.
    (2) Soil with a lead concentration equal to or greater than 5,000 
g/g of lead shall be abated in accordance with 40 CFR 
745.227(e).
    (3) Acceptable interim control methods for soil lead are 
impermanent surface coverings and land use controls.
    (i) Impermanent surface coverings may be used to treat lead-
contaminated soil if applied in accordance with the following 
requirements. Examples of acceptable impermanent coverings include 
gravel, bark, sod, and artificial turf.
    (A) Impermanent surface coverings selected shall be designed to 
withstand the reasonably-expected traffic. For example, if the area to 
be treated is heavily traveled, neither grass or sod shall be used.
    (B) When loose impermanent surface coverings such as bark or gravel 
are used, they shall be applied in a thickness not less than six inches 
deep.
    (C) The impermanent surface covering material shall not contain 
more than 200 g/g of lead.
    (D) Adequate controls to prevent erosion shall be used in 
conjunction with impermanent surface coverings.
    (ii) Land use controls may be used to reduce exposure to soil-lead 
hazards only if they effectively control access to areas with soil-lead 
hazards. Examples of land use controls include: fencing, warning signs, 
and landscaping.
    (A) Land use controls shall be implemented only if residents have 
reasonable alternatives to using the area to be controlled.
    (B) If land use controls are used for a soil area that is subject 
to erosion, measures shall be taken to contain the soil and control 
dispersion of lead.


Sec. 35.1335  Standard treatments.

    Standard treatments shall be conducted in accordance with this 
section.
    (a) Paint stabilization. All deteriorated paint on exterior and 
interior surfaces located on the residential property shall be 
stabilized in accordance with Sec. 35.1330(a)(b), or abated in 
accordance with Sec. 35.1325.
    (b) Smooth and cleanable horizontal surfaces. All horizontal 
surfaces, such as uncarpeted floors, stairs, interior window sills and 
window troughs, that are rough, pitted, or porous, shall be covered 
with a smooth, cleanable covering or coating, such as metal coil stock, 
plastic, polyurethane, or linoleum.
    (c) Correcting dust-generating conditions. Conditions causing 
friction or impact of painted surfaces shall be corrected in accordance 
with Sec. 35.1330(c)(4)-(6).
    (d) Bare residential soil. Bare soil shall be treated in accordance 
with the requirements of Sec. 35.1330, unless it is found not to be a 
soil-lead hazard in accordance with Sec. 35.1320(b).
    (e) Safe work practices. All standard treatments described in 
paragraphs (a) through (d) of this section shall incorporate the use of 
safe work practices in accordance with Sec. 35.1350.
    (f) Clearance. A clearance examination shall be performed in 
accordance with Sec. 35.1340 at the conclusion of any lead hazard 
reduction activities.
    (g) Qualifications. An individual performing standard treatments 
must meet the training and/or supervision requirements of 
Sec. 35.1330(a)(4).


Sec. 35.1340  Clearance.

    Clearance examinations required under subparts B, C, D, F through 
M, and R, of this part shall be performed in accordance with the 
provisions of this section.
    (a) Clearance following abatement. Clearance examinations performed 
following abatement of lead-based paint or lead-based paint hazards 
shall be performed in accordance with 40 CFR 745.227(e) and paragraphs 
(c)-(f) of this section. Such clearances shall be performed by a person 
certified to perform risk assessments or lead-based paint inspections.
    (b) Clearance following activities other than abatement. Clearance 
examinations performed following interim controls, paint stabilization, 
standard treatments, ongoing lead-based paint maintenance, or 
rehabilitation shall be performed in accordance with the requirements 
of this paragraph (b) and paragraphs (c)-(g) of this section.
    (1) Qualified personnel. Clearance examinations shall be performed 
by:
    (i) A certified risk assessor;
    (ii) A certified lead-based paint inspector;
    (iii) A person who has successfully completed a training course for 
clearance technicians (or a discipline of similar purpose and title) 
that is developed or accepted by EPA or a State or tribal program 
authorized by EPA pursuant to 40 CFR part 745, subpart Q, and that is 
given by a training provider accredited by EPA or a State or Indian 
tribe for training in lead-based paint inspection or risk assessment, 
provided a certified risk assessor or a certified lead-based paint 
inspector approves the work of the clearance technician and signs the 
report of the clearance examination; or
    (iv) A technician licensed or certified by EPA or a State or Indian 
tribe to perform clearance examinations without the approval of a 
certified risk assessor or certified lead-based paint inspector,

[[Page 50221]]

provided that a clearance examination by such a licensed or certified 
technician shall be performed only for a single-family property or 
individual dwelling units and associated common areas in a multi-unit 
property, and provided further that a clearance examination by a such a 
licensed or certified clearance technician shall not be performed using 
random sampling of dwelling units or common areas in multifamily 
properties, except that a clearance examination performed by such a 
licensed or certified clearance technician is acceptable for any 
residential property if the clearance examination is approved and the 
report signed by a certified risk assessor or a certified lead-based 
paint inspector.
    (2) Required activities. (i) Clearance examinations shall include a 
visual assessment, dust sampling, submission of samples for analysis 
for lead, interpretation of sampling results, and preparation of a 
report. Clearance examinations shall be performed in dwelling units, 
common areas and exterior areas in accordance with this section and the 
steps set forth at 40 CFR 745.227(e)(8). If clearance is being 
performed for more than 10 dwelling units of similar construction and 
maintenance, as in a multifamily property, random sampling for the 
purposes of clearance may be conducted in accordance with 40 CFR 
745.227(e)(9).
    (ii) The visual assessment shall be performed to determine if 
deteriorated paint surfaces and/or visible amounts of dust, debris, 
paint chips or other residue are still present. Both exterior and 
interior painted surfaces shall be examined for the presence of 
deteriorated paint. If deteriorated paint or visible dust, debris or 
residue are present in areas subject to dust sampling, they must be 
eliminated prior to the continuation of the clearance examination, 
except elimination of deteriorated paint is not required if it has been 
determined, through paint testing or a lead-based paint inspection, 
that the deteriorated paint is not lead-based paint. If exterior 
painted surfaces have been disturbed by the hazard reduction, 
maintenance or rehabilitation activity, the visual assessment shall 
include an assessment of the ground and any outdoor living areas close 
to the affected exterior painted surfaces. Visible dust or debris in 
living areas shall be cleaned up and visible paint chips on the ground 
shall be removed.
    (iii) Dust samples shall be wipe samples and shall be taken on 
floors and, where practicable, interior window sills and window 
troughs. Dust samples shall be collected and analyzed in accordance 
with Sec. 35.1315 of this part.
    (iv) Clearance reports shall be prepared in accordance with 
paragraph (c) of this section.
    (c) Clearance report. When clearance is required, the designated 
party shall ensure that a clearance report is prepared that provides 
documentation of the hazard reduction or maintenance activity as well 
as the clearance examination. When abatement is performed, the report 
shall be an abatement report in accordance with 40 CFR 745.227(e)(10). 
When another hazard reduction or maintenance activity requiring a 
clearance report is performed, the report shall include the following 
information:
    (1) The address of the residential property and, if only part of a 
multifamily property is affected, the specific dwelling units and 
common areas affected.
    (2) The following information on the clearance examination:
    (i) The date(s) of the clearance examination;
    (ii) The name, address, and signature of each person performing the 
clearance examination, including certification number;
    (iii) The results of the visual assessment for the presence of 
deteriorated paint and visible dust, debris, residue or paint chips;
    (iv) The results of the analysis of dust samples, in g/
sq.ft., by location of sample; and
    (v) The name and address of each laboratory that conducted the 
analysis of the dust samples, including the identification number for 
each such laboratory recognized by EPA under section 405(b) of the 
Toxic Substances Control Act (15 U.S.C. 2685(b)).
    (3) The following information on the hazard reduction or 
maintenance activity for which clearance was performed:
    (i) The start and completion dates of the hazard reduction or 
maintenance activity;
    (ii) The name and address of each firm or organization conducting 
the hazard reduction or maintenance activity and the name of each 
supervisor assigned;
    (iii) A detailed written description of the hazard reduction or 
maintenance activity, including the methods used, locations of exterior 
surfaces, interior rooms, common areas, and/or components where the 
hazard reduction activity occurred, and any suggested monitoring of 
encapsulants or enclosures; and
    (iv) If soil hazards were reduced, a detailed description of the 
location(s) of the hazard reduction activity and the method(s) used.
    (d) Standards. The clearance standards in Sec. 35.1320(b)(2) shall 
apply. If test results equal or exceed the standards, the dwelling 
unit, worksite, or common area represented by the sample fails the 
clearance examination.
    (e) Clearance failure. All surfaces represented by a failed 
clearance sample shall be recleaned or treated by hazard reduction, and 
retested, until the applicable clearance level in Sec. 35.1320(b)(2) is 
met.
    (f) Independence. Clearance examinations shall be performed by 
persons or entities independent of those performing hazard reduction or 
maintenance activities, unless the designated party uses qualified in-
house employees to conduct clearance. An in-house employee shall not 
conduct both a hazard reduction or maintenance activity and its 
clearance examination.
    (g) Worksite clearance. When clearance is of an interior worksite, 
not an entire dwelling unit or residential property, dust samples taken 
for paragraph (b) of this section shall be taken from the floor and 
window (if available) to represent the area within the dust containment 
area. Clearance is not required if maintenance or hazard reduction 
activities in the worksite do not disturb painted surfaces of a total 
area more than that set forth in Sec. 35.1350(d)


Sec. 35.1345  Occupant protection and worksite preparation.

    This section establishes procedures for protecting dwelling unit 
occupants and the environment from contamination from lead-contaminated 
or lead-containing materials during hazard reduction activities.
    (a) Occupant protection. (1) Occupants shall not be permitted to 
enter the worksite during hazard reduction activities (unless they are 
employed in the conduct of these activities at the worksite), until 
after hazard reduction work has been completed and clearance, if 
required, has been achieved.
    (2) Occupants shall be temporarily relocated before and during 
hazard reduction activities to a suitable, decent, safe, and similarly 
accessible dwelling unit that does not have lead-based paint hazards, 
except if:
    (i) Treatment will not disturb lead-based paint, dust-lead hazards 
or soil-lead hazards;
    (ii) Only the exterior of the dwelling unit is treated, and 
windows, doors, ventilation intakes and other openings in or near the 
worksite are sealed during hazard control work and cleaned

[[Page 50222]]

afterward, and entry free of dust-lead hazards, soil-lead hazards, and 
debris is provided;
    (iii) Treatment of the interior will be completed within one period 
of 8-daytime hours, the worksite is contained so as to prevent the 
release of leaded dust and debris into other areas, and treatment does 
not create other safety, health or environmental hazards (e.g., exposed 
live electrical wiring, release of toxic fumes, or on-site disposal of 
hazardous waste); or
    (iv) Treatment of the interior will be completed within 5 calendar 
days, the worksite is contained so as to prevent the release of leaded 
dust and debris into other areas, treatment does not create other 
safety, health or environmental hazards; and, at the end of work on 
each day, the worksite and the area within at least 10 feet (3 meters) 
of the containment area is cleaned to remove any visible dust or 
debris, and occupants have safe access to sleeping areas, and bathroom 
and kitchen facilities.
    (3) The dwelling unit and the worksite shall be secured against 
unauthorized entry, and occupants' belongings protected from 
contamination by dust-lead hazards and debris during hazard reduction 
activities. Occupants' belongings in the containment area shall be 
relocated to a safe and secure area outside the containment area, or 
covered with an impermeable covering with all seams and edges taped or 
otherwise sealed.
    (b) Worksite preparation. (1) The worksite shall be prepared to 
prevent the release of leaded dust, and contain lead-based paint chips 
and other debris from hazard reduction activities within the worksite 
until they can be safely removed. Practices that minimize the spread of 
leaded dust, paint chips, soil and debris shall be used during worksite 
preparation.
    (2) A warning sign shall be posted at each entry to a room where 
hazard reduction activities are conducted when occupants are present; 
or at each main and secondary entryway to a building from which 
occupants have been relocated; or, for an exterior hazard reduction 
activity, where it is easily read 20 feet (6 meters) from the edge of 
the hazard reduction activity worksite. Each warning sign shall be as 
described in 29 CFR 1926.62(m), except that it shall be posted 
irrespective of employees' lead exposure and, to the extent 
practicable, provided in the occupants' primary language.


Sec. 35.1350  Safe work practices.

    (a) Prohibited methods. Methods of paint removal listed in 
Sec. 35.140 shall not be used.
    (b) Occupant protection and worksite preparation. Occupants and 
their belongings shall be protected, and the worksite prepared, in 
accordance with Sec. 35.1345.
    (c) Specialized cleaning. After hazard reduction activities have 
been completed, the worksite shall be cleaned using cleaning methods, 
products, and devices that are successful in cleaning up dust-lead 
hazards, such as a HEPA vacuum or other method of equivalent efficacy, 
and lead-specific detergents or equivalent.
    (d) De minimis levels. Safe work practices are not required when 
maintenance or hazard reduction activities do not disturb painted 
surfaces that total more than:
    (1) 20 square feet (2 square meters) on exterior surfaces;
    (2) 2 square feet (0.2 square meters) in any one interior room or 
space; or
    (3) 10 percent of the total surface area on an interior or exterior 
type of component with a small surface area. Examples include window 
sills, baseboards, and trim.


Sec. 35.1355  Ongoing lead-based paint maintenance and reevaluation 
activities.

    (a) Maintenance. Maintenance activities shall be conducted in 
accordance with paragraphs (a)(2)-(6) of this section, except as 
provided in paragraph (a)(1) of this section.
    (1) Maintenance activities need not be conducted in accordance with 
this section if both of the following conditions are met, as 
applicable:
    (i) Either a lead-based paint inspection indicates that no lead-
based paint is present in the dwelling units, common areas, and on 
exterior surfaces, or a clearance report prepared in accordance with 
Sec. 35.1340(a) indicates that all lead-based paint has been removed; 
and
    (ii) If a risk assessment is required by the applicable subpart of 
this part, a current risk assessment indicates that no soil-lead 
hazards and no dust-lead hazards are present.
    (2) A visual assessment for deteriorated paint, bare soil, and the 
failure of any hazard reduction measures shall be performed at unit 
turnover and every twelve months.
    (3) (i) Deteriorated paint. All deteriorated paint on interior and 
exterior surfaces located on the residential property shall be 
stabilized in accordance with Sec. 35.1330(a)(b), except for any paint 
that an evaluation has found is not lead-based paint.
    (ii) Bare soil. All bare soil shall be treated with standard 
treatments in accordance with Sec. 35.1335(d) through (g), or interim 
controls in accordance with Sec. 35.1330(a) and (f); except for any 
bare soil that a current evaluation has found is not a soil-lead 
hazard.
    (4) Safe work practices, in accordance with sec. 35.1350, shall be 
used when performing any maintenance or renovation work that disturbs 
paint that may be lead-based paint.
    (5) Any encapsulation or enclosure of lead-based paint or lead-
based paint hazards which has failed to maintain its effectiveness 
shall be repaired, or abatement or interim controls shall be performed 
in accordance with Secs. 35.1325 or 35.1330, respectively.
    (6) Clearance testing of the worksite shall be performed at the 
conclusion of repair, abatement or interim controls in accordance with 
Sec. 35.1340.
    (7) Each dwelling unit shall be provided with written notice asking 
occupants to report deteriorated paint and, if applicable, failure of 
encapsulation or enclosure, along with the name, address and telephone 
number of the person whom occupants should contact. The language of the 
notice shall be in accordance with Sec. 35.125(c)(3). The designated 
party shall respond to such report and stabilize the deteriorated paint 
or repair the encapsulation or enclosure within 30 days.
    (b) Reevaluation. Reevaluation shall be conducted in accordance 
with this paragraph (b), and the designated party shall conduct interim 
controls of lead-based paint hazards found in the reevaluation.
    (1) Reevaluation shall be conducted if hazard reduction has been 
conducted to reduce lead-based paint hazards found in a risk assessment 
or if standard treatments have been conducted, except that reevaluation 
is not required if any of the following cases are met:
    (i) An initial risk assessment found no lead-based paint hazards;
    (ii) A lead-based paint inspection found no lead-based paint; or
    (iii) All lead-based paint was abated in accordance with 
Sec. 35.1325, provided that no failures of encapsulations or enclosures 
have been found during visual assessments conducted in accordance with 
Sec. 35.1355(a)(2) or during other observations by maintenance and 
repair workers in accordance with Sec. 35.1355(a)(5) since the 
encapsulations or inclosures were performed.
    (2) Reevaluation shall be conducted to identify:
    (i) Deteriorated paint surfaces with known or suspected lead-based 
paint;

[[Page 50223]]

    (ii) Deteriorated or failed interim controls of lead-based paint 
hazards or encapsulation or enclosure treatments;
    (iii) Dust-lead hazards; and
    (iv) Soil that is newly bare with lead levels equal to or above the 
standards in Sec. 35.1320(b)(2).
    (3) Each reevaluation shall be performed by a certified risk 
assessor.
    (4) Each reevaluation shall be conducted in accordance with the 
following schedule if a risk assessment or other evaluation has found 
deteriorated lead-based paint in the residential property, a soil-lead 
hazard, or a dust-lead hazard on a floor or interior window sill. 
(Window troughs are not sampled during reevaluation). The first 
reevaluation shall be conducted no later than two years from completion 
of hazard reduction. Subsequent reevaluation shall be conducted at 
intervals of two years, plus or minus 60 days. To be exempt from 
additional reevaluation, at least two consecutive reevaluations 
conducted at such two-year intervals must be conducted without finding 
lead-based paint hazards or a failure of an encapsulation or enclosure. 
If, however, a reevaluation finds lead-based paint hazards or a 
failure, at least two more consecutive reevaluations conducted at such 
two year intervals must be conducted without finding lead-based paint 
hazards or a failure.
    (5) Each reevaluation shall be performed as follows:
    (i) Dwelling units and common areas shall be selected and 
reevaluated in accordance with Sec. 35.1320(b).
    (ii) The worksites of previous hazard reduction activities that are 
similar on the basis of their original lead-based paint hazard and type 
of treatment shall be grouped. Worksites within such groups shall be 
selected and reevaluated in accordance with Sec. 35.1320(b).
    (6) Each reevaluation shall include reviewing available 
information, conducting selected visual assessment, recommending 
responses to hazard reduction omissions or failures, performing 
selected evaluation of paint, soil and dust, and recommending response 
to newly-found lead-based paint hazards.
    (i) Review of available information. The risk assessor shall review 
any available past evaluation, hazard reduction and clearance reports, 
and any other available information describing hazard reduction 
measures, ongoing maintenance activities, and relevant building 
operations.
    (ii) Visual assessment. The risk assessor shall:
    (A) Visually evaluate all lead-based paint hazard reduction 
treatments, any known or suspected lead-based paint, any deteriorated 
paint, and each exterior site, and shall identify any new areas of bare 
soil;
    (B) Determine acceptable options for controlling the hazard; and
    (C) Await the correction of any hazard reduction omission or 
failure and the reduction of any lead-based paint hazard before 
sampling any dust or soil the risk assessor determines may reasonably 
be associated with such hazard.
    (iii) Reaction to hazard reduction omission or failure. If any 
hazard reduction control has not been implemented or is failing (e.g., 
an encapsulant is peeling away from the wall, a paint-stabilized 
surface is no longer intact, or gravel covering an area of bare soil 
has worn away), or deteriorated lead-based paint is present, the risk 
assessor shall:
    (A) Determine acceptable options for controlling the hazard; and
    (B) Await the correction of any hazard reduction omission or 
failure and the reduction of any lead-based paint hazard before 
sampling any dust or soil the risk assessor determines may reasonably 
be associated with such hazard.
    (iv) Selected paint, soil and dust evaluation. (A) The risk 
assessor shall sample deteriorated paint surfaces identified during the 
visual assessment and have the samples analyzed, in accordance with 40 
CFR 745.227(b)(3)(4), but only if reliable information about lead 
content is unavailable.
    (B) The risk assessor shall evaluate new areas of bare soil 
identified during the visual assessment. Soil samples shall be 
collected and analyzed in accordance with 40 CFR 745.227(d)(8)-(11), 
but only if the soil lead levels have not been previously measured.
    (C) The risk assessor shall take selected dust samples and have 
them analyzed. Dust samples shall be collected and analyzed in 
accordance with Sec. 35.1320(b). At least two composite samples, one 
from floors and the other from interior window sills, shall be taken in 
each dwelling unit and common area selected. Each composite sample 
shall consist of four individual samples, each collected from a 
different room or area. If the dwelling unit contains both carpeted and 
uncarpeted living areas, separate floor samples are required from the 
carpeted and uncarpeted areas. Equivalent single-surface sampling may 
be used instead of composite sampling.
    (7) The risk assessor shall provide the designated party with a 
written report documenting the presence or absence of lead-based paint 
hazards, the current status of any hazard reduction and standard 
treatment measures used previously and any newly-conducted evaluation 
and hazard reduction activities. The report shall include the 
information in 40 CFR 745.227(d)(11), and shall:
    (i) Identify any lead-based paint hazards previously detected and 
discuss the effectiveness of any hazard reduction or standard treatment 
measures used, and list those for which no measures have been used.
    (ii) Describe any new hazards found and present the owner with 
acceptable control options and their accompanying reevaluation 
schedules.
    (iii) Identify when the next reevaluation, if any, must occur, in 
accordance with the requirements of paragraph (b)(4) of this section.
    (c) Response to the reevaluation. (1) Hazard reduction omission or 
failure found by a reevaluation. The designated party shall respond in 
accordance with paragraph (b)(6)(iii)(A) of this section to a report by 
the risk assessor of a hazard reduction control that has not been 
implemented or is failing, or that deteriorated lead-based paint is 
present.
    (2) Newly-identified lead-based paint hazard found by a 
reevaluation. The designated party shall treat each:
    (i) Dust-lead hazard or paint lead hazard by cleaning or hazard 
reduction measures, which are considered completed when clearance is 
achieved in accordance with Sec. 35.1340.
    (ii) Soil-lead hazard by hazard reduction measures, which are 
considered completed when clearance is achieved in accordance with 
Sec. 35.1340.

PART 91--CONSOLIDATED SUBMISSIONS FOR COMMUNITY PLANNING AND 
DEVELOPMENT PROGRAMS

    4. The authority citation for part 91 continues to read as follows:

    Authority: 42 U.S.C 3535(d), 3601-3619, 5301-5315, 11331-11388, 
12701-12711, 12741-12756, 12901-12912.

    5. Revise Sec. 91.2(b)(15) to read as follows:


Sec. 91.2  Applicability.

* * * * *
    (b) * * *
    (15) The ``Lead-Based Paint Hazard Reduction Program (see 42 U.S.C. 
4852(o));''
* * * * *
    6. In Sec. 91.5, revise the definition of ``Lead-based paint 
hazards'' to read as follows:


Sec. 91.5  Definitions.

* * * * *

[[Page 50224]]

    Lead-based paint hazards means lead-based paint hazards as defined 
in part 35, subpart B of this title.
* * * * *
    7. Revise Sec. 91.225(b)(7) to read as follows:


Sec. 91.225  Certifications.

* * * * *
    (b) * * *
    (7) Compliance with lead-based paint procedures. The jurisdiction 
must submit a certification that its activities concerning lead-based 
paint will comply with the requirements of part 35, subparts A, B, J, 
K, and R of this title.
* * * * *

PART 92--HOME INVESTMENT PARTNERSHIPS PROGRAM

    8. The authority citation for part 92 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 12701-12839.

    9. Revise Sec. 92.206(a)(2)(ii) to read as follows:


Sec. 92.206  Eligible project costs.

* * * * *
    (a) * * *
    (2) * * *
    (ii) To make essential improvements, including energy-related 
repairs or improvements, improvements necessary to permit use by 
persons with disabilities, and lead-based paint activities, as required 
by part 35 of this title.
* * * * *
    10. Revise Sec. 92.355 to read as follows:


Sec. 92.355  Lead-based paint.

    Housing assisted with HOME funds is subject to the Lead-Based Paint 
Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-
Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and 
implementing regulations at part 35, subparts A, B, J, K, M and R of 
this title.
    11. Revise Sec. 92.504(c)(3)(iv) to read as follows:


Sec. 92.504  Participating jurisdiction responsibilities; written 
agreements; on-site inspection.

* * * * *
    (c) * * *
    (3) * * *
    (iv) Property standards. The agreement must require the housing to 
meet the property standards in Sec. 92.251 and the lead-based paint 
requirements in part 35, subparts A, B, J, K, M and R of this title, 
upon project completion. The agreement must also require owners of 
rental housing assisted with HOME funds to maintain the housing 
compliance with Sec. 92.251 for the duration of the affordability 
period.
* * * * *
    12. Revise Sec. 92.508(a)(7)(vi) to read as follows:


Sec. 92.508  Recordkeeping.

* * * * *
    (a) * * *
    (7) * * *
    (vi) Records demonstrating compliance with the lead-based paint 
requirements of part 35, subparts A, B, J, K, M and R of this title.
* * * * *

PART 200--INTRODUCTION TO FHA PROGRAMS

    13. The authority citation for part 200 continues to read as 
follows:

    Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).

    14. Revise subpart O to read as follows:

Subpart O--Lead-Based Paint Poisoning Prevention

Sec.
200.800  Lead-based paint.
200.805  Definitions.
200.810  Single family insurance and coinsurance.

Subpart O--Lead-Based Paint Prevention


Sec. 200.800  Lead-based paint.

    The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, F, G, I, and R of this title, apply to activities under 
these programs, except for single family mortgage insurance and 
guarantee programs. Sections 200.805 and 200.810 apply to single family 
mortgage insurance and guarantee programs administered by HUD.


Sec. 200.805  Definitions.

    Applicable surface. All intact and nonintact interior and exterior 
painted surfaces of a residential structure.
    Defective paint surface. Paint on applicable surfaces that is 
cracking, scaling, chipping, peeling or loose.
    Lead-based paint surface. A paint surface, whether or not 
defective, identified as having a lead content greater than or equal to 
1 mg/cm\2\.


Sec. 200.810  Single family insurance and coinsurance.

    (a) General. (1) The requirements of this section apply to any one-
to four-family dwelling which was constructed before 1978 and is the 
subject of an application for mortgage insurance under section 203(b) 
or other sections of the National Housing Act relating to the insurance 
or coinsurance of mortgages on one-to-four-family dwellings. Such other 
sections include:
    (i) Section 244 (coinsurance);
    (ii) Section 213 (cooperative housing insurance);
    (iii) Section 220 (rehabilitation and neighborhood conservation 
housing insurance);
    (iv) Section 221 (housing for moderate income and displaced 
families);
    (v) Section 222 (mortgagor insurance for servicemen);
    (vi) Section 809 (armed services housing for civilian employees);
    (vii) Section 810 (armed services housing in impacted areas);
    (viii) Section 234 (mortgage insurance for condominiums);
    (ix) Section 235 (mortgage assistance payments for home ownership 
and project rehabilitation);
    (x) Section 237 (special mortgage insurance for low and moderate 
income families); and
    (xi) Section 240 (mortgage insurance on loans for purchase of fee 
simple title from lessors).
    (2) This section is also applicable to single family mortgage 
insurance on Indian reservations (12 U.S.C. 1715z-13) and loan 
guarantees for Indian housing (25 U.S.C. 4191).
    (3) Applications for insurance in connection with a refinancing 
transaction where an appraisal is not required under the applicable 
procedures established by the Commissioner are excluded from the 
coverage of this section. Any housing assisted under the programs set 
out in this section for which no new activity is applied for or 
required is not covered by this section.
    (b) Appraisal. The appraiser shall, when appraising a dwelling 
constructed prior to 1978, inspect the dwelling for defective paint 
surfaces.
    (c) Treatment of defective paint surfaces. For defective paint 
surfaces, treatment shall be provided to defective areas. Treatment of 
hazards shall consist of covering or removing defective paint surfaces. 
Covering may be accomplished by such means as adding a layer of 
wallboard to the wall surface. Depending on the wall condition, 
wallcoverings which are permanently attached may be used. Covering or 
replacing trim surfaces is also permitted. Paint removal may be 
accomplished by such methods as scraping, heat treatment (infra-red or 
coil type heat guns) or chemicals. Machine sanding and use of propane 
or

[[Page 50225]]

gasoline torches (open-flame methods) are not permitted. Washing and 
repainting without thorough removal or covering does not constitute 
adequate treatment. In the case of defective paint spots, scraping and 
repainting the defective area is considered adequate treatment. 
Treatment of a defective paint surface is not required if such a 
surface is found to not be a lead-based paint surface by a lead-based 
paint inspector certified pursuant to procedures of the U.S. 
Environmental Protection Agency at 40 CFR part 745.
    (d) Home equity conversion mortgage insurance. The requirements of 
this section, as modified by the following sentence, apply to a 
dwelling which is the subject of an application for mortgage insurance 
under section 255 of the National Housing Act (home equity conversion 
insurance) unless the mortgagor provides the certification described in 
Sec. 206.45(d) of this title. The defective paint surface may be 
treated after the mortgage is endorsed for insurance, provided that the 
defective paint surface is treated as expeditiously as possible in 
accordance with the repair work provisions contained in Sec. 206.47 of 
this title

PART 203--SINGLE FAMILY MORTGAGE INSURANCE

    15. The authority citation for part 203 continues to read as 
follows:

    Authority: 12 U.S.C. 1709, 1710, 1715b, and 1715u; 42 U.S.C. 
3535(d).

    16. In Sec. 203.673, revise paragraphs (a) and (c) to read as 
follows:


Sec. 203.673  Habitability.

    (a) For purposes of Sec. 203.670, a property is habitable if it 
meets the requirements of this section in its present condition, or 
will meet these requirements with the expenditure of not more than five 
percent of the fair market value of the property. The cost of hazard 
reduction or abatement of lead-based paint hazards in the property, as 
required by the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 
4821-4846), and the Residential Lead-Based Paint Hazard Reduction Act 
of 1992 (42 U.S.C. 4851-4856), and implementing regulations in part 35 
of this title, is excluded from these repair cost limitations.
* * * * *
    (c) If repairs, including lead-based paint hazard reduction or 
abatement, are to be made while the property is occupied, the occupant 
must hold the Secretary and the Department harmless against any 
personal injury or property damage that may occur during the process of 
making repairs. If temporary relocation of the occupant is necessary 
during repairs, no reimbursement for relocation expenses will be 
provided to the occupant.

PART 280--NEHEMIAH HOUSING OPPORTUNITY GRANTS PROGRAM

    17. The authority citation for part 280 continues to read as 
follows:

    Authority: 12 U.S.C. 1715l note; 42 U.S.C. 3535(d).

    18. Revise Sec. 280.25(e) to read as follows:


Sec. 280.25  Other Federal requirements.

* * * * *
    (e) Lead-based paint. The Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, K, and R, of this title apply to 
the program.
* * * * *

PART 291--DISPOSITION OF HUD-ACQUIRED SINGLE FAMILY PROPERTY

    19. The authority citation for part 291 continues to read as 
follows:

    Authority: 12 U.S.C. 1701 et seq.; 42 U.S.C. 1441, 1441a, and 
3535(d).

    20. Revise Sec. 291.100(g) to read as follows:


Sec. 291.100  General policy.

* * * * *
    (g) Lead-based paint poisoning prevention. Properties constructed 
before 1978 are subject to the requirements of the Lead-Based Paint 
Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-
Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and 
implementing regulations at part 35, subparts A, B, F, and R, of this 
title.
* * * * *
    21. Revise Sec. 291.430 to read as follows:


Sec. 291.430  Elimination of lead-based paint hazards.

    The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, F, and R of this title, apply activities covered by this 
subpart.

PART 511--RENTAL REHABILITATION GRANT PROGRAM

    22. The authority citation for 24 CFR part 511 continues to read as 
follows:

    Authority: 42 U.S.C. 1437o and 3535(d).

    23. Revise Sec. 511.10(f)(1)(ii) to read as follows:


Sec. 511.10  General requirements.

* * * * *
    (f) * * *
    (1) * * *
    (ii) Make essential improvements, as reasonably defined by the 
grantee or State recipient in its rehabilitation standards adopted 
under Sec. 511.10(e), including energy-related repairs, improvements 
necessary to permit the use of rehabilitated projects by handicapped 
persons, and activities of lead based paint hazards, as required by 
part 35 of this title;
* * * * *
    24. Revise Sec. 511.15 to read as follows:


Sec. 511.15  Lead-based paint.

    The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, J, K, and R of this title apply to activities under 
these programs.

PART 570--COMMUNITY DEVELOPMENT BLOCK GRANTS

    25. The authority citation for part 570 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 5300-5320.

    26. Revise Sec. 570.202(f) to read as follows:


Sec. 570.202  Eligible rehabilitation and preservation activities.

* * * * *
    (f) Lead-based paint activities. Lead-based paint activities as set 
forth in part 35 of this title.
    27. Revise Sec. 570.461 to read as follows:


Sec. 570.461  Post-preliminary approval requirements; lead-based paint.

    The recipient may receive preliminary approval prior to the 
accomplishment of lead-based paint activities conducted pursuant to 
part 35, subparts A, B, J, K, and R of this title, but no funds will be 
released until such actions are complete and evidence of compliance is 
submitted to HUD.
    28. Revise Sec. 570.487(c) to read as follows:


Sec. 570.487  Other applicable laws and related program requirements.

* * * * *
    (c) Lead-Based Paint Poisoning Prevention Act. States shall devise, 
adopt and carry out procedures with

[[Page 50226]]

respect to CDBG assistance that fulfill the objectives and requirements 
of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), 
the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 
U.S.C. 4851-4856), and implementing regulations at part 35, subparts A, 
B, J, K, and R of this title.
* * * * *
    29. Revise Sec. 570.608 to read as follows:


Sec. 570.608  Lead-based paint.

    The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, J, K, and R of this part apply to activities under this 
program.

PART 572--HOPE FOR HOMEOWNERSHIP OF SINGLE FAMILY HOMES PROGRAM 
(HOPE 3)

    30. The authority citation for part 572 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 12891.

    31. Revise Sec. 572.100(d)(1) to read as follows:


Sec. 572.100  Acquisition and rehabilitation of eligible properties; 
rehabilitation standards.

* * * * *
    (d) * * *
    (1) The recipient is responsible to assure that rehabilitation of 
eligible property meets local codes applicable to rehabilitation of 
work in the jurisdiction (but not less than the housing quality 
standards established under the Section 8 rental voucher program, 
described in Sec. 982.401 of this title). Rehabilitation must also 
include work necessary to meet applicable federal requirements, 
including lead-based paint requirements set forth at part 35, subparts 
A, B, J, K, and R of this title.
* * * * *
    32. Revise Sec. 572.215(e) to read as follows:


Sec. 572.215  Implementation grants-eligible activities.

* * * * *
    (e) Architectural and engineering work. Architectural and 
engineering work, and related professional services required to prepare 
architectural plans or drawings, write-ups, specifications or 
inspections, including lead-based paint evaluation.
* * * * *
    33. Revise Sec. 572.420(h) to read as follows:


Sec. 572.420  Miscellaneous requirements.

* * * * *
    (h) Lead-based paint activities. The Lead-Based Paint Poisoning 
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint 
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, J, K and R of this title apply 
to activities under these programs.

PART 573--LOAN GUARANTEE RECOVERY FUND

    34. The authority citation for part 573 continues to read as 
follows:

    Authority: Pub. L. 104-155, 110 Stat. 1392, 18 U.S.C. 241 note; 
42 U.S.C. 3535(d).

    35. Revise Sec. 573.9(c) to read as follows:


Sec. 573.9  Other requirements.

* * * * *
    (c) Lead-based paint. Housing assisted under this part is subject 
to the lead-based paint requirements described in part 35, subparts A, 
B, E, G, and R of this title.
* * * * *

PART 574--HOUSING OPPORTUNITIES FOR PEOPLE WITH AIDS

    36. The authority citation for part 574 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 12901-12912.

    37. Revise Sec. 574.635 to read as follows:


Sec. 574.635  Lead-based paint.

    The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, H, J, K, M, and R of this part apply to activities under 
this program.

PART 576--EMERGENCY SHELTER GRANTS PROGRAM: STEWART B. McKINNEY 
HOMELESS ASSISTANCE ACT

    38. The authority citation for part 576 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 11376.

    39. Revise Sec. 576.57(c) to read as follows:


Sec. 576.57  Other Federal Requirements.

* * * * *
    (c) The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, J, K, and R of this title apply to activities under this 
program.
* * * * *

PART 582--SHELTER PLUS CARE

    40. The authority citation for part 582 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 11403-11407b.

    41. Revise the first sentence of Sec. 582.305(a) to read as 
follows:


Sec. 582.305  Housing quality standards; rent reasonableness.

    (a) Housing quality standards. Housing assisted under this part 
must meet the applicable housing quality standards (HQS) under 
Sec. 982.401 of this title--except that Sec. 982.401(j) of this title 
does not apply and instead part 35, subparts A, B, K and R of this 
title apply--and, for SRO under Sec. 882.803(b) of this title. * * *
* * * * *

PART 583--SUPPORTIVE HOUSING PROGRAM

    42. The authority citation for part 583 continues to read as 
follows:

    Authority: 42 U.S.C. 11389 and 3535(d).

    43. Revise Sec. 583.330(d) to read as follows:


Sec. 583.330  Applicability of other Federal requirements.

* * * * *
    (d) Lead-based paint. The Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, J, K, and R of this title apply 
to activities under this program.
* * * * *

PART 585--YOUTHBUILD PROGRAM

    44. The authority citation for part 585 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 8011.

    45. Revise Sec. 585.305(d) to read as follows:


Sec. 585.305  Eligible activities.

* * * * *
    (d) Rehabilitation of housing and related facilities to be used for 
the purposes of providing homeownership, residential rental housing, or 
transitional housing for the homeless and low- and very low-income 
persons and families, including lead-based paint

[[Page 50227]]

activities; in accordance with part 35 of this title;
* * * * *
    46. Revise Sec. 585.502(h) to read as follows:


Sec. 585.502  Certifications.

* * * * *
    (h) Lead-based paint. A certification that the applicant will 
comply with the requirements of the Lead-Based Paint Poisoning 
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint 
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, J, K, and R of this title.
* * * * *

PART 761--DRUG ELIMINATION PROGRAMS

    47. The authority citation for part 761 continues to read as 
follows:

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

    48. Revise Sec. 761.40(c) to read as follows:


Sec. 761.40  Other Federal requirements.

* * * * *
    (c) Lead-based paint. The Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, H, and R of this title.
* * * * *

PART 881--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR 
SUBSTANTIAL REHABILITATION

    49. The authority citation for part 881 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), 12701, and 
13611-13619.

    50. Revise Sec. 881.207(e) to read as follows:


Sec. 881.207  Property standards.

* * * * *
    (e) The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, H, and R of this title; and
* * * * *

PART 882--SECTION 8 MODERATE REHABILITATION PROGRAMS

    51. The authority citation for part 882 continues to read as 
follows:

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

    52. Revise Sec. 882.404(d) to read as follows:


Sec. 882.404  Physical condition standards; physical inspection 
requirements.

* * * * *
    (d) Lead-based paint. The Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, H, and R of this title apply to 
the Section 8 moderate rehabilitation program.
    53. Revise Sec. 882.507(b)(2)(iv) to read as follows:


Sec. 882.507  Completion of rehabilitation.

* * * * *
    (b) * * *
    (2) * * *
    (iv) The unit(s) are in compliance with part 35, subparts A, B, H, 
and R of this title.
* * * * *
    54. Revise Sec. 882.514(d)(1)(vi) to read as follows:


Sec. 882.514  Family participation.

* * * * *
    (d) * * *
    (1) * * *
    (vi) The advisability and availability of blood lead level 
screening for children under 6 years of age and HUD's lead-based paint 
requirements in part 35, subparts A, B, H, and R of this title.
* * * * *
    55. Revise Sec. 882.803(b)(1) to read as follows:


Sec. 882.803  Project eligibility and other requirements.

* * * * *
    (b)(1) Physical condition standards. Section 882.404 applies to 
this program.
* * * * *

PART 883--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--STATE 
HOUSING AGENCIES

    56. The authority citation for part 883 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f, 3535(d), and 13611-
13619.

    57. Revise Sec. 883.310(b)(5) to read as follows:


Sec. 883.310  Property standards.

* * * * *
    (b) * * *
    (5) The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, H, and R of this title.
* * * * *

PART 886--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM--SPECIAL 
ALLOCATIONS

    58. The authority citation for part 886 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437f and 3535(d) and 13611-
13619.

    59. Revise Sec. 886.113(i) to read as follows:


Sec. 886.113  Physical condition standard; physical inspection 
requirements.

* * * * *
    (i) Lead based paint. The Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, H, and R of this title apply to 
activities under this program.
* * * * *
    60. Revise Sec. 886.307(i) to read as follows:


Sec. 886.307  Physical condition standards; physical inspection 
requirement.

* * * * *
    (i) Lead-based paint. The Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, H, and R of this title apply to 
activities under this program.
* * * * *
    61. Revise Sec. 886.333(b)(2)(iv) to read as follows:


Sec. 886.333  Completion of rehabilitation.

* * * * *
    (b) * * *
    (2) * * *
    (iv) The project was in compliance with applicable HUD lead-based 
paint regulations at part 35, subparts A, B, H, and R of this title.
* * * * *

PART 891--SECTION 8--SUPPORTIVE HOUSING FOR THE ELDERLY AND PERSONS 
WITH DISABILITIES

    62. The authority citation for part 891 continues to read as 
follows:

    Authority: 12 U.S.C. 1701q; 42 U.S.C. 1437f, 3535(d) and 8013.

    63. Revise Sec. 891.155(g) to read as follows:


Sec. 891.155  Other Federal requirements.

* * * * *
    (g) Lead-based paint. The requirements of the Lead-Based Paint

[[Page 50228]]

Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-
Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and 
implementing regulations at part 35, subparts A, B, H, and R of this 
title apply to these programs.
    64. Revise Sec. 891.325 to read as follows:


Sec. 891.325  Lead-based paint requirements.

    The requirements of the Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, H, and R of this title apply to 
the Section 811 program and to projects funded under Secs. 891.655 
through 891.790.

PART 901--PUBLIC HOUSING MANAGEMENT ASSESSMENT PROGRAM

    65. The authority citation for part 901 continues to read as 
follows:

    Authority: 42 U.S.C. 1437d(j); 42 U.S.C. 3535(d).

    66. In Sec. 901.5, revise the definition of ``HQS'' to read as 
follows:


Sec. 901.5  Definitions.

* * * * *
    HQS means Housing Quality Standards as set forth at Sec. 982.401 of 
this title, except that Sec. 982.401(j) of this title does not apply 
and instead part 35, subparts A, B, L, and R of this title apply.
* * * * *

PART 906--SECTION 5(h) HOMEOWNERSHIP PROGRAM

    67. The authority citation for part 906 continues to read as 
follows:

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

    68. Revise the first sentence of Sec. 906.6(b) to read as follows:


Sec. 906.6  Property that may be sold.

* * * * *
    (b) Physical condition of property. The property must meet local 
code requirements (or, if no local code exists, the housing quality 
standards established by HUD for the Section 8 Housing Assistance 
Payments Program for Existing Housing, under part 882 of this title) 
and the relevant requirements of the Lead-Based Paint Poisoning 
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint 
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations part 35, subparts A, B, L, and R of this title. * * *

PART 941--PUBLIC HOUSING DEVELOPMENT

    69. The authority citation for part 941 continues to read as 
follows:

    Authority: 42 U.S.C. 1437b, 1437c, 1437g and 3535(d).

    70. Revise Sec. 941.208(b) to read as follows:


Sec. 941.208  Other Federal requirements.

* * * * *
    (b) Lead-based paint. The relevant requirements of the Lead-Based 
Paint Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential 
Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), 
and implementing regulations at part 35, subparts A, B, L, and R of 
this title apply to the program.
    71. Revise the second sentence of Sec. 941.606(m) to read as 
follows:


Sec. 941.606  Proposal.

* * * * *
    (m) New construction. * * * This may be accomplished by the PHA's 
submission of a comparison of the cost of new construction in the 
neighborhood where the housing is proposed to be constructed and the 
cost of acquisition of existing housing (with or without 
rehabilitation) in the same neighborhood (including estimated costs of 
lead-based paint activities). * * *
* * * * *

PART 965--PHA-OWNED OR LEASED PROJECTS--GENERAL PROVISIONS

    72. The authority citation for part 965 continues to read as 
follows:

    Authority: 42 U.S.C. 1437, 1437a, 1437d, 1437g, and 3535(d). 
Subpart H is also issued under 42 U.S.C. 4821-4846.

    73. Amend Sec. 965.215 as follows:
    a. Revise paragraph (a);
    b. Revise the introductory text of paragraph (b); and
    c. Revise paragraphs (b)(1), (c), and (d).


Sec. 965.215  Lead-based paint liability insurance coverage.

    (a) General. The purpose of this section is to specify what HUD 
deems reasonable insurance coverage with respect to the hazards 
associated with lead-based paint activities that the PHA undertakes, in 
accordance with the PHA's ACC with HUD. The insurance coverage does not 
relieve the PHA of its responsibility for assuring that lead-based 
paint activities are conducted in a responsible manner.
    (b) Insurance coverage requirements. When the PHA undertakes lead-
based paint activities, it must assure that it has reasonable insurance 
coverage for itself for potential personal injury liability associated 
with those activities. If the work is being done by PHA employees, the 
PHA must obtain a liability insurance policy directly to protect the 
PHA. If the work is being done by a contractor, the PHA must obtain, 
from the insurer of the contractor performing this type of work in 
accordance with a contract, a certificate of insurance providing 
evidence of such insurance and naming the PHA as an additional insured; 
or obtain such insurance directly. Insurance must remain in effect 
during the entire period of lead-based paint activity and must comply 
with the following requirements:
    (1) Named insured. If purchased by the PHA, the policy shall name 
the PHA as insured. If purchased by an independent contractor, the 
policy shall name the contractor as insured and the PHA as an 
additional insured, in connection with performing work under the PHA's 
contract pertaining to lead-based paint activities. If the PHA has 
executed a contract with a Resident Management Corporation (RMC) to 
manage a building/project on behalf of the PHA, the RMC shall be an 
additional insured under the policy in connection with the PHA's 
contract related to lead-based paint activities. (The duties of the RMC 
are similar to those of a real estate management firm.)
* * * * *
    (c) Exception to requirements. Insurance already purchased by the 
PHA or contractor and enforced on the day this section is effective 
which provides coverage for lead-based paint activities shall be 
considered as meeting the requirements of this section until the 
expiration of the policy. This section is not applicable to architects, 
engineers or consultants who do not physically perform lead-based paint 
activities.
    (d) Insurance for the existence of lead-based paint hazards. A PHA 
may also purchase special liability insurance against the existence of 
lead-based paint hazards, although it is not a required coverage. A PHA 
may purchase this coverage if, in the opinion of the PHA, the policy 
meets the PHA's requirements, the premium is reasonable and the policy 
is obtained in accordance with applicable procurement standards. (See 
part 85 of this title and Sec. 965.205 of this title.) If this coverage 
is purchased, the premium must be paid from funds available under the 
Performance Funding System or from reserves.

[[Page 50229]]

    74. Revise subpart H, consisting of Sec. 965.701, to read as 
follows:

Subpart H--Lead-based Paint Poisoning Prevention


Sec. 965.701  Lead-based paint poisoning prevention.

    The requirements of the Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, L, and R of this title apply to 
this program.

PART 968--PUBLIC HOUSING MODERNIZATION

    75. The authority citation for part 968 continues to read as 
follows:

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

    76. Revise the first sentence of Sec. 968.102(c) to read as 
follows:


Sec. 968.102  Special requirements for Turnkey III developments.

* * * * *
    (c) Other. The homebuyer family must be in compliance with its 
financial obligations under its homebuyer agreement in order to be 
eligible for non-emergency physical improvements, with the exception of 
work necessary to meet statutory and regulatory requirements, (e.g., 
accessibility for persons with disabilities and lead-based paint 
activities) and the correction of development deficiencies. * * *
    77. Revise Sec. 968.110(k) to read as follows:


Sec. 968.110  Other program requirements.

* * * * *
    (k) Lead-based paint poisoning prevention. The PHA shall comply 
with the relevant requirements of the Lead-Based Paint Poisoning 
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint 
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, L, and R of this title.
* * * * *
    78. Revise Sec. 968.112(i) to read as follows:


Sec. 968.112  Eligible costs.

* * * * *
    (i) Lead-based paint costs. Eligible costs include lead-based paint 
activities, such as insurance coverage and cleanup and disposal, in 
accordance with part 35 of this title.
* * * * *
    79. In Sec. 968.205, revise the definition of the term ``Other 
modernization'' to read as follows:


Sec. 968.205  Definitions.

* * * * *
    Other Modernization (modernization other than emergency). A type of 
modernization program for a development that includes one or more 
physical work items, where HUD determines that the physical 
improvements are necessary and sufficient to extend substantially the 
useful life of the development, and/or one or more development specific 
or PHA-wide management work items (including planning costs), and/or 
lead-based paint activities.
* * * * *
    80. Revise Sec. 968.210(e)(2)(ii) to read as follows:


Sec. 968.210  Procedures for obtaining approval of a modernization 
program.

* * * * *
    (e) * * *
    (2) * * *
    (ii) Lead-based paint inspection compliance. Where a PHA has not 
complied with the statutory requirement to complete lead-based paint 
inspection of all pre-1978 family units, the PHA is eligible for 
processing only for Emergency Modernization or work needed to complete 
the lead-based paint inspection.
* * * * *
    81. Revise the first sentence of Sec. 968.315(e)(2)(i) to read as 
follows:


Sec. 968.315  Comprehensive Plan (including five-year action plan).

* * * * *
    (e) * * *
    (2) * * *
    (i) Requirements. The physical needs assessment identifies all of 
the work that a PHA would need to undertake to bring each of its 
developments up to the modernization and energy conservation standards, 
as required by the Act, to comply with the lead-based paint 
requirements in part 35, subparts A, B, L, and R of this title, and to 
comply with other program requirements under Sec. 968.110. * * *
* * * * *
    82. Revise Sec. 968.435(b) to read as follows:


Sec. 968.435  Other program requirements.

* * * * *
    (b) Certify that activities undertaken within vacant units will 
bring the affected units into compliance with the Housing Quality 
Standards, as set forth in Sec. 982.401 of this title, except that 
Sec. 982.401(j) of this title shall not apply; the applicable lead-
based paint requirements in part 35 subparts A, B, L and R, of this 
title shall apply.
* * * * *

PART 970--PUBLIC HOUSING PROGRAM--DEMOLITION OR DISPOSITION OF 
PUBLIC HOUSING PROJECTS

    83. The authority citation for part 970 continues to read as 
follows:

    Authority: 42 U.S.C. 1437p and 3535(d).

    84. Revise Sec. 970.13(d)(1)(i) to read as follows:


Sec. 970.13  Resident organization opportunity to purchase.

* * * * *
    (d) * * *
    (1) * * *
    (i) An identification of the development, or portion of the 
development, in the proposed demolition or disposition, including the 
development number and location, the number of units and bedroom 
configuration, the amount of space and use for non-dwelling space, the 
current physical condition (e.g., fire damaged, friable asbestos, lead-
based paint evaluation results), and occupancy status (e.g., percent 
occupancy).
* * * * *

PART 982--SECTION 8 TENANT-BASED ASSISTANCE: HOUSING CHOICE VOUCHER 
PROGRAM

    85. The authority citation for part 982 continues to read as 
follows:

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

    86. Revise Sec. 982.158(f)(5) to read as follows:


Sec. 982.158  Program accounts and records.

* * * * *
    (f) * * *
    (5) Lead-based paint records as required by part 35, subpart B of 
this title.
* * * * *


Sec. 982.301  [Amended]

    87. In Sec. 982.301, remove paragraph (b)(10) and redesignate 
paragraphs (b)(11) through (b)(16) as paragraphs (b)(10) through 
(b)(15), respectively.
    88. Revise Sec. 982.305(b)(3) to read as follows:


Sec. 982.305  PHA approval of assisted tenancy.

* * * * *
    (b) * * *
    (3) The lease is approvable and includes the lease addendum and the 
lead-based paint disclosure information as required in Sec. 35.92(b) of 
this title.
* * * * *
    89. Revise Sec. 982.401(j) to read as follows:

[[Page 50230]]

Sec. 982.401  Housing quality standards (HQS).

* * * * *
    (j) Lead-based paint performance requirement. The Lead-Based Paint 
Poisoning Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-
Based Paint Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and 
implementing regulations at part 35, subparts A, B, M, and R of this 
title apply to units assisted under this part.
* * * * *

PART 983--SECTION 8 PROJECT-BASED CERTIFICATE PROGRAM

    90. The authority citation for part 983 continues to read as 
follows:

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

    91. Revise Sec. 983.1(b)(2)(vii) to read as follows:


Sec. 983.1  Purpose and applicability.

* * * * *
    (b) * * *
    (2) * * *
    (vii) In subpart I of this part, Sec. 982.401(j), 
Sec. 982.402(a)(3), Sec. 982.402(c) and (d) (effect of family unit 
size--subsidy and size of unit); and Sec. 982.403 (termination of HAP 
contract when unit is too big or too small);
* * * * *
    92. Revise Sec. 983.5(c) to read as follows:


Sec. 983.5  Physical condition standards; physical inspection 
requirements.

* * * * *
    (c) The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4821-
4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 
(42 U.S.C. 4851-4856), and implementing regulations at part 35, 
subparts A, B, H, and R of this title apply to units assisted under 
this part.
    93. Revise Sec. 983.104(b)(2)(iv) to read as follows:


Sec. 983.104  New construction or rehabilitation completion.

* * * * *
    (b) * * *
    (2) * * *
    (iv) Units are in compliance with the lead-based paint requirements 
in part 35, subparts A, B, H, and R of this title; and
* * * * *
    94. In Sec. 983.203(d), revise the first sentence of the 
introductory paragraph to read as follows:


Sec. 983.203  Family participation.

* * * * *
    (d) Briefing of families. When a family is selected to occupy a 
project-based unit, the PHA must provide the family with information 
concerning the tenant rent and any applicable utility allowance and a 
copy of the lead hazard information pamphlet, as required by part 35, 
subpart A of this title. * * *
* * * * *

PART 1000--NATIVE AMERICAN HOUSING ACTIVITIES

    95. The authority citation for part 1000 continues to read as 
follows:

    Authority: 12 U.S.C. 1715z-13a and 3535(d).

    96. Revise Sec. 1000.40 to read as follows:


Sec. 1000.40  Do lead-based paint poisoning prevention requirements 
apply to affordable housing activities under NAHASDA?

    Yes, lead-based paint requirements apply to housing activities 
assisted under NAHASDA. The applicable requirements for NAHASDA are 
HUD's regulations at part 35, subparts A, B, E, G, H, K, M and R of 
this title, which implement the Lead-Based Paint Poisoning Prevention 
Act (42 U.S.C. 4822-4846) and the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856).

PART 1003--COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND 
ALASKAN NATIVE VILLAGES

    97. The authority citation for part 1003 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d) and 5301 et seq.

    98. Revise Sec. 1003.202(b)(7)(iv) to read as follows:


Sec. 1003.202  Eligible rehabilitation and preservation activities.

* * * * *
    (b) * * *
    (7) * * *
    (iv) Lead-based paint activities in part 35 of this title.
* * * * *
    99. Revise Sec. 1003.607 to read as follows:


Sec. 1003.607  Lead-based paint.

    The requirements of the Lead-Based Paint Poisoning Prevention Act 
(42 U.S.C. 4821-4846), the Residential Lead-Based Paint Hazard 
Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations part 35, subparts A, B, J, K, and R of this title apply to 
activities conducted under this program.

PART 1005--LOAN GUARANTEES FOR INDIAN HOUSING

    100. The authority citation for part 1005 continues to read as 
follows:

    Authority: 12 U.S.C. 1715z-13a and 3535(d).

    101. In Sec. 1005.111, redesignate the existing text as paragraph 
(a) and add paragraph (b) to read as follows:


Sec. 1005.111  What safety and quality standards apply?

* * * * *
    (b) The relevant requirements of the Lead-Based Paint Poisoning 
Prevention Act (42 U.S.C. 4821-4846), the Residential Lead-Based Paint 
Hazard Reduction Act of 1992 (42 U.S.C. 4851-4856), and implementing 
regulations at part 35, subparts A, B, H, J, K, M, and R of this title 
apply to this part.

    Dated: August 26, 1999.
Andrew Cuomo,
Secretary.

Appendix A--Sample Summary Inspection Notice Format

    Note: The following appendix will not appear in the Code of 
Federal Regulations

Summary Notice of Lead-Based Paint Inspection

Address/location of property or structure(s) this summary notice 
applies to:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

Lead-based paint inspection description:
  Date(s) of inspection:-----------------------------------------------

Summary of inspection results (check all that apply):
    (a) ____ No lead-based paint was found.
    (b) ____ Lead-based paint was found.
    (c) ____ A brief summary of the findings of the inspection is 
provided below (required if lead-based paint found).

Summary of where lead-based paint was found. List at least the 
housing unit numbers and common areas (for multifamily housing), and 
building components (including type of room or space, and the 
material underneath the paint):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

Contact person for more information about the inspection:
  Printed name:--------------------------------------------------------
  Organization:--------------------------------------------------------
  Street and city:-----------------------------------------------------

[[Page 50231]]

  State:____ ZIP:------------------------------------------------------
  Phone number: (____)-------------------------------------------------

Person who prepared this summary notice:
  Printed name:--------------------------------------------------------
  Signature:-----------------------------------------------------------
  Date:----------------------------------------------------------------
  Organization:--------------------------------------------------------
  Street and city:-----------------------------------------------------
  State:____ ZIP:____--------------------------------------------------
  Phone number: (____)-------------------------------------------------

Appendix B--Sample Summary Risk Assessment Notice Format

    Note: This following appendix will not appear in the Code of 
Federal Regulations

Summary Notice of Lead-Based Paint Risk Assessment

Address/location of property or structure(s) this summary notice 
applies to:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Lead-based paint risk assessment description:
  Date(s) of risk assessment:------------------------------------------

    Summary of risk assessment results (check all that apply):
    (a) ____ No lead-based paint hazards were found.
    (b) ____ Lead-based paint hazards were found.
    (c) ____ A brief summary of the findings of the risk assessment 
is provided below (required if any lead-based paint hazards were 
found).

Summary of types and locations of lead-based paint hazards. List at 
least the housing unit numbers and common areas (for multifamily 
housing), bare soil locations, dust-lead locations, and/or building 
components (including type of room or space, and the material 
underneath the paint), and types of lead-based paint hazards found:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

Contact person for more information about the risk assessment:
  Printed name:--------------------------------------------------------
----------------------------------------------------------------------
  Organization:--------------------------------------------------------
----------------------------------------------------------------------
  Street and city:-----------------------------------------------------
----------------------------------------------------------------------
  State: ____ ZIP: ____ Phone number: (____)---------------------------
----------------------------------------------------------------------
Person who prepared this summary notice:
  Printed name:--------------------------------------------------------
----------------------------------------------------------------------
  Signature:-----------------------------------------------------------
 Date:----------------------------------------------------------------
----------------------------------------------------------------------
  Organization:--------------------------------------------------------
----------------------------------------------------------------------
  Street and city:-----------------------------------------------------
----------------------------------------------------------------------
  State: ____ ZIP: ____ Phone number: (____)---------------------------
----------------------------------------------------------------------

Appendix C--Sample Summary Presumption Notice Format

    Note: The following appendix will not appear in the Code of 
Federal Regulations

Notice That Lead-Based Paint or Lead-Based Paint Hazards Are Presumed 
to be Present

Address/location of property or structure(s) this notice of 
presumption applies to:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Type of presumption (check all that apply):
    (a) ____ Lead-based paint is presumed to be present.
    (b) ____ Lead-based paint hazard(s) is(are) presumed to be 
present.
Summary of presumption. List at least the housing unit numbers and 
common areas (for multifamily housing), bare soil locations, dust-
lead locations, and/or building components (including type of room 
or space, and the material underneath the paint), and types of lead-
based paint hazards presumed to be present:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Contact person for more information about the presumption:
  Printed name:--------------------------------------------------------
----------------------------------------------------------------------
  Organization:--------------------------------------------------------
----------------------------------------------------------------------
  Street and city:-----------------------------------------------------
----------------------------------------------------------------------
  State: ____ ZIP: ____ Phone number: (____)---------------------------
----------------------------------------------------------------------
Person who prepared this notice of presumption:
  Printed name:--------------------------------------------------------
----------------------------------------------------------------------
  Signature:-----------------------------------------------------------
 Date:----------------------------------------------------------------
----------------------------------------------------------------------
  Organization:--------------------------------------------------------
----------------------------------------------------------------------
  Street and city:-----------------------------------------------------
----------------------------------------------------------------------
  State: ____ ZIP: ____ Phone number: (____)---------------------------
----------------------------------------------------------------------

Appendix D--Sample Hazard Reduction Completion Notice Format

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Summary Notice of Completion of Lead-Based Paint Hazard Reduction 
Activity

Address/location of property or structure(s) this summary notice 
applies to:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

Summary of the hazard reduction activity:
  Start and completion date(s):----------------------------------------

Activity locations and types. List at least the housing unit numbers 
and common areas (for multifamily housing), bare soil locations, 
dust-lead locations, and/or building components (including type of 
room or space, and the material underneath the paint), and types of 
hazard reduction activities performed at the locations listed:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

Date(s) of clearance testing and/or soil analyses: ____
Locations of building components with lead-based paint remaining in 
the rooms, spaces or areas where activities were conducted:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

Summary of results of clearance testing and soil analyses:
    (a) ____ No clearance testing was performed.
    (b) ____ Clearance testing showed clearance was achieved.
    (c) ____ Clearance testing showed clearance was not achieved.

Contact person for more information about the hazard reduction:
  Printed name:--------------------------------------------------------
  Organization:--------------------------------------------------------
  Street and city:-----------------------------------------------------
  State: ____ ZIP:-----------------------------------------------------
  Phone number: (____)-------------------------------------------------
Person who prepared this summary notice:
  Printed name:--------------------------------------------------------
  Signature:-----------------------------------------------------------
  Date:----------------------------------------------------------------
  Organization:--------------------------------------------------------
  Street and city:-----------------------------------------------------
  State: ____ ZIP:-----------------------------------------------------
  Phone number: (____)-------------------------------------------------

[FR Doc. 99-23016 Filed 9-14-99; 8:45 am]
BILLING CODE 4210-32-P