[Federal Register Volume 78, Number 105 (Friday, May 31, 2013)]
[Proposed Rules]
[Pages 32595-32608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12604]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 15

[Docket No. FR-5624-P-01]
RIN 2501-AD57


Revision of Freedom of Information Act Regulation

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend HUD's regulations implementing 
the Freedom of Information Act (FOIA). HUD is proposing these 
amendments to update and streamline HUD's current FOIA regulation. This 
proposed rule would update HUD's regulations to reflect statutory 
changes to FOIA, current HUD organizational structure, and current HUD 
policies and practices with respect to FOIA. Finally, the rule would 
use current cost figures in calculating and charging fees.

DATES: Comment Due Date: July 30, 2013.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410-0500. All submissions must refer 
to the above docket number and title. There are two methods for 
submitting public comments.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0001.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note:  To receive consideration as public comments, comments 
must be submitted through one of the two methods specified above. 
Again, all submissions must refer to the docket number and title of 
the rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number via TTY by calling the toll-free Federal Relay 
Service at 1-800-877-8339. Copies of all comments submitted are 
available for inspection and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Dolores W. Cole, Director, FOIA and 
Executive Correspondence, Executive Secretariat Division, Office of the 
Chief Human Capital Officer, Department of Housing and Urban 
Development, 451 7th Street SW., Room 10139, Washington, DC 20410-0500, 
telephone number 202-402-2671 (this is not a toll-free number). 
Hearing- or speech-impaired individuals may access this number via TTY 
by calling the toll-free Federal Relay Service at telephone number 1-
800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

    HUD's regulations at 24 CFR part 15 contain the policies and 
procedures governing public access to HUD records under FOIA (5 U.S.C. 
552). Subject to certain statutory exceptions, FOIA gives persons the 
right to request and receive a wide range of information from any 
federal agency. FOIA has been amended several times since its enactment 
in 1966. In 2007, significant amendments to FOIA were made by the 
Openness Promotes Effectiveness in Our National Government Act of 2007 
(OPEN Government Act) (Pub. L. 110-175, approved December 31, 2007). 
The OPEN Government Act made several amendments to procedural issues 
affecting FOIA administration, including the protection of fee status 
for news media, time limits for agencies to act upon FOIA requests, the 
availability of agency records maintained by a private entity, the 
establishment of a FOIA Public Liaison and FOIA Requester Service 
Center, and the requirement to describe the exemptions authorizing the 
redaction of material provided under FOIA.
    In addition to these statutory changes, several policy directives 
have recently been issued that affect HUD's FOIA program. These policy 
directives include Presidential Memoranda dated January 21, 2009, 
entitled ``Freedom of Information Act'' (74 FR 4683, January 26, 2009) 
and ``Transparency and Openness'' (74 FR 4685, January 26, 2009), which 
encourage federal agencies to apply a presumption of disclosure in FOIA 
decision making. As required by the Presidential Memoranda, on March 
19, 2009, Attorney General Eric Holder issued comprehensive new FOIA 
guidelines (see http://www.justice.gov/ag/foia-memo-march2009.pdf). The 
Attorney General's guidance further advises that agencies should 
release information to the fullest extent of the law, including 
information that may be legally withheld, provided there is no 
foreseeable harm to an interest protected by an exemption or the 
disclosure is not prohibited by law. In addition, the Attorney 
General's FOIA guidelines emphasized that agencies must have effective 
systems in place for responding to FOIA requests.
    Consistent with this law and guidance, HUD undertook a 
comprehensive review of its FOIA regulation. As part of this review, 
HUD looked to the proposed FOIA regulation published by the Department 
of Justice (DOJ) on March 21, 2011 (76 FR 15236). DOJ intended for 
these revised regulations to serve as a model for all agencies to 
similarly use in updating their own FOIA regulations (see http://www.judiciary.senate.gov/pdf/11-3-15%20Pustay%20Testimony.pdf). As a 
result of this review, HUD proposes to revise its FOIA regulation, 
modeled on DOJ's proposed regulation, to incorporate changes enacted by 
the OPEN Government Act of 2007, reflect developments in the case law, 
and include current cost figures for calculating and charging fees. 
Additionally, this proposed rule would reorganize HUD's current FOIA 
regulation and eliminate outdated regulatory provisions. Further, the 
proposed rule would incorporate changes to the language and structure 
of the regulation. Titled section headings would eliminate the 
question-and-answer format, as well as the form of address ``you.'' 
These proposed changes are intended to enhance the administration and 
operation of HUD's FOIA program by increasing the transparency and 
clarity of the regulation.

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II. Amendments Proposed by This Rule

    The following is a section-by-section overview of the amendments 
proposed by this rule.

Sec.  15.1 General Provisions

    This section would be revised to clarify that the Federal Housing 
Administration (FHA) and the Government National Mortgage Association 
(Ginnie Mae) are components of HUD and covered by part 15. This section 
would also be revised to emphasize that consistent with the January 21, 
2009, Presidential Memoranda, HUD may make information routinely 
provided to the public as part of a regular Department activity 
available without following this subpart.

Sec.  15.2 Definitions

    This section would be revised by adding a definition for ``agency 
records'' to mean any documentary material that is either created or 
obtained by HUD in the transaction of agency business and which is 
under agency control at the time of the FOIA request, but not records 
that are not already in existence. HUD is proposing this definition to 
provide clarity to its FOIA regulation. This section would also update 
and clarify terms already in the current regulation. Definitions 
pertaining to fees would be relocated to proposed Sec.  15.106.
    HUD is also proposing to restructure this section to clarify that 
the terms ``Appropriate Associate General Counsel,'' ``Appropriate 
Regional Counsel,'' and ``Authorized Approving Official'' apply only to 
subparts C and D of part 15, which address the production or disclosure 
of any material or the provision of testimony in legal proceedings. HUD 
is proposing these changes to provide the public with a clearer 
understanding of the administration and operations of the Department's 
FOIA program.

Sec.  15.101 Proactive Disclosures of Department Records

    The President's January 21, 2009, memorandum entitled ``Freedom of 
Information Act'' directs federal agencies to take affirmative steps to 
make information public, that they should not wait for specific 
requests from the public, and that they should use modern technology to 
inform the public. Consistent with this direction, Sec.  15.101 
describes the ways in which HUD makes information regarding HUD and its 
programs more readily available to the public. This section would 
emphasize HUD's preference for online requests and information access. 
Specifically, Sec.  15.101 lists certain fundamental information that 
HUD makes available without request, including final opinions and 
orders, regulatory authority and statements of policy and 
interpretation for each HUD program office. Recognizing that the public 
is interested in information regarding the activities of HUD, Sec.  
15.101 would also inform the public that HUD makes frequently requested 
information available through its electronic FOIA Reading Room. The 
information includes, but is not limited to, HUD's highest-scoring 
funding grant applications, HUD handbooks, the list of FHA approved 
lenders, and a list of homes for sale, as well as information regarding 
applying for public and Section 8 housing, public housing contact 
information, and HUD's FOIA logs.

Sec.  15.102 Requirements for Making Requests for Records

    Currently codified Sec.  15.103, which provides guidance regarding 
obtaining HUD records, would be revised and redesignated as Sec.  
15.102. The proposed revisions would provide more detail on the 
itemized requirements for submitting a FOIA request. One revision in 
Sec.  15.102 would require requesters to agree to pay for costs that 
exceed $25 for records search, review, and duplication. HUD is 
proposing this provision to allow the agency to avoid spending time and 
resources processing FOIA requests that will not be completed due to 
the requester's refusal to pay the assessed fees. The revision would 
also add language that encourages requesters seeking a fee waiver or 
fee reduction to include such request with their request for 
information and to describe how the disclosure of the requested 
information is likely to contribute significantly to public 
understanding of the operations or activities of the government and is 
not primarily in the commercial interest of the requester. Finally, the 
revision would clarify that requests for HUD records, whether located 
in HUD Headquarters or HUD field offices, may be submitted by mail, 
email, facsimile, or the electronic request form located on HUD's FOIA 
Web site at http://www.hud.gov. HUD is proposing these changes to 
improve efficiency.

Sec.  15.103 Timing of Responses to Requests

    Currently codified Sec.  15.104, which outlines the time periods 
for HUD to respond to FOIA requests, would be revised and redesignated 
as Sec.  15.103. Paragraphs (a) and (b) of Sec.  15.103 would 
incorporate changes enacted by section 6 of the OPEN Government Act, 
which amends the time limits for complying with FOIA requests and 
establishes when an agency may toll the statutory time period. First, 
Sec.  15.103(a) incorporates the provision which provides that the 20-
day period for responding to a FOIA request for information begins on 
the date on which the request is first received by the appropriate 
agency component designated to receive the request, but not in any 
event later than 10 days after the request is received by any agency 
component designated to receive FOIA requests. Second, consistent with 
the OPEN Government Act, Sec.  15.103(b) would provide that HUD may 
make one request to the requester for additional information and toll 
the statutory time period while waiting for receipt of the additional 
information requested from the requester. This paragraph would also 
permit HUD to toll the time period to clarify with the requester issues 
regarding fee assessments. There is no limit given for the number of 
times that HUD may go back to a requester to clarify issues regarding 
fee assessments, which may need to be done in stages as the records are 
being located and processed. In both situations, HUD's receipt of the 
requester's response to its request for additional information or the 
resolution of the fee issue would end the tolling period.
    Section 15.103(c), which addresses when HUD may extend the time 
periods for processing a FOIA request, restates and clarifies current 
Sec.  15.104(c). While Sec.  15.103(c) continues to provide that HUD 
may extend the time period for processing a request in unusual 
circumstances, HUD is revising the provision for clarity, emphasizing 
examples of what may constitute unusual circumstances.
    Finally, consistent with 5 U.S.C. 552(a)(6)(B)(iv), Sec.  15.103(d) 
would provide that HUD may aggregate certain requests submitted by the 
same requester or by a group of requesters acting in concert. 
Accordingly, HUD proposes to aggregate multiple requests when HUD 
determines that certain requests are from the same requester or from a 
group of requesters acting in concert and the requests involve clearly 
related matters. This change would allow HUD to more effectively 
respond to multiple requests for information that are clearly related.

Sec.  15.104 Procedures for Processing FOIA Requests

    Currently codified Sec.  15.105, which discusses how HUD will 
respond to FOIA requests, would be revised, and redesignated as Sec.  
15.104, for clarity and to increase transparency in HUD's

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processing of FOIA requests. Section 15.104(a) would provide that 
unless a request is deemed ``expedited'' as set forth in proposed Sec.  
15.104(c), HUD generally responds to FOIA requests in order of receipt. 
Responding to requests in the order of receipt is not new, being that 
it currently is codified in Sec.  15.105(a). HUD proposes revising this 
section, however, for clarity and to increase transparency in HUD's 
processing of FOIA requests.
    Section 15.104(b) is new and implements section 7(a) of the OPEN 
Government Act, which requires agencies to assign a tracking number for 
each request and provide requesters with information regarding the 
status of their request.
    Section 15.104(c) would clarify HUD's use of expedited processing, 
consistent with 5 U.S.C. 552(a)(6)(E), which requires agencies to 
promulgate regulations that provide for the expedited processing of 
requests if the requester demonstrates a compelling need, or in other 
cases as determined by the agency. Section 15.104(c) would restructure 
for clarity currently codified Sec.  15.105(b), which specifies the 
circumstances that constitute a compelling need. Specifically, Sec.  
15.104(c) would provide that HUD may expedite processing of a request 
if it determines that the request is: (1) One that involves 
circumstances in which the lack of expedited treatment could reasonably 
be expected to pose an imminent threat to the life or physical safety 
of an individual, (2) a circumstance in which an urgent need of a 
person primarily engaged in disseminating information exists to inform 
the public about an actual or alleged federal government activity, or 
(3) one where there exists risk of loss of substantial due process 
rights. Section 15.104(c)(3) would provide that requests for expedited 
processing contain a detailed explanation of the basis for such 
request, which is certified as true and correct to the best of the 
requester's knowledge and belief. HUD is proposing these changes to 
allow it to more effectively respond to requests for expedited 
processing.
    Finally, Sec.  15.104(d) would restate and revise current Sec.  
15.105(a) to provide that HUD may use two or more processing tracks by 
distinguishing between simple and more complex requests based on the 
amount of time and work needed to process the request. Section 
15.104(d)(2) would clarify that HUD may provide requesters on a slower 
track an opportunity to limit the scope of their request in order to 
qualify for faster processing consistent with Sec.  15.104(c).

Sec.  15.105 Responses to Requests

    Currently codified Sec.  15.106 would be revised and redesignated 
as Sec.  15.105. HUD is proposing revisions to describe in greater 
detail the process by which HUD responds to FOIA requests. Section 
15.105(a) would update HUD's FOIA regulation to reflect current HUD 
organizational structure. Section 15.105(a) would also provide that an 
acknowledgement letter be sent to each requester, confirming receipt of 
the request by the appropriate HUD office and providing an assigned 
tracking number, as proposed by Sec.  15.104(b). Consistent with 
current Sec.  15.104(c), Sec.  15.105(b) would provide that, if the 
FOIA request seeks agency records in HUD's possession that originated 
with or are of primary interest to another agency, HUD may either 
respond to the request after consultation or coordination with the 
other agency or refer the request to the other agency for processing. 
Finally, Sec.  15.105(d) would substantially expand current Sec.  
15.106(b) by identifying who is authorized to deny a FOIA request on 
behalf of HUD, describing the process by which the requester is given 
notification of the denial, and providing examples of determinations 
that constitute a denial of a FOIA request. Section 15.105(d) would 
also provide that denials of FOIA requests, in whole or in part, not 
only must be made in writing and include the name and title or position 
of the denying employee or officer, a statement of the reasons for the 
denial, and a statement of appeal rights, but must also include an 
estimate of the volume of records denied, when appropriate, and an 
indication of the exemption under which any deletions have been made, 
unless doing so would harm an interest protected by the exemption. HUD 
is making these changes to implement section 12 of the OPEN Government 
Act and to eliminate the confusion experienced by requesters whose FOIA 
requests are denied in whole or in part. Section 12 requires agencies 
to indicate the exemption under which a deletion is made directly on 
the released portion of the record unless doing so would harm an 
interest protected by the exemption.

Sec.  15.106 Fees

    Section 15.106 would provide the general basis by which HUD will 
assess fees, and would partially incorporate provisions of current 
Sec.  15.110. Significantly, Sec.  15.106(a) would provide that HUD 
will collect applicable fees prior to sending copies of requested 
information to the requester. Section 15.106(a) also would provide that 
payment be in the form of a check or money order made payable to the 
United States Treasury.
    Section 15.106(b) is new and would define various terms and 
activities applicable to HUD's processing of FOIA requests. HUD's 
definition of ``commercial use'' would parallel the description of 
``commercial user requester'' in current Sec.  15.110(b)(1). Should HUD 
determine that the requested information is to be used for commercial 
purposes, HUD would provide the requester with a reasonable opportunity 
to clarify the use to which the requester seeks to put the information. 
``Direct costs'' would be defined to mean those expenses that HUD 
actually incurs in searching for and duplicating and, in the case of 
commercial use requests, reviewing records to respond to a FOIA 
request. HUD would explicitly include as direct costs the salary of the 
employee performing the work and the cost of operating computers and 
other electronic equipment. The definition of ``duplication'' would be 
moved to Sec.  15.106(b) and would indicate that HUD will honor the 
requester's specified preference of form or format of disclosure if the 
record is readily reproducible, with reasonable efforts, in the 
requested form or format. Similarly, the definition of ``educational 
institution'' would be moved to Sec.  15.106(b) and revised by adding 
that, to be in this category, a requester must show that the request is 
authorized by, and is made under the auspices of, a qualifying 
institution and that the records are not sought for a commercial use 
but are sought to further scholarly research. Records requested for the 
intention of fulfilling credit requirements are not considered to be 
sought for a scholarly purpose. ``Noncommercial scientific 
institution'' would be defined parallel to the description of 
``noncommercial scientific institution requester'' in current Sec.  
15.110(b)(3), and be revised by adding that, to be in this category, a 
requester should show that the request is authorized by, and is made 
under the auspices of, a qualifying institution and that the records 
are not sought for a commercial use but are sought to further 
scientific research. Finally, ``representative of the news media'' 
would be defined in a manner that tracks the definition provided in 
section 3 of the OPEN Government Act.
    Section 15.106(c) would establish the manner in which HUD would 
charge fees for its records search, review, duplication, and 
certification, and would charge for other services provided in response 
to a FOIA request.

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These changes are consistent with DOJ guidance and the practice of 
other federal agencies. For document search and review, HUD proposes to 
charge $13 per quarter hour for professional staff and $6 per quarter 
hour for staff personnel involved in the search for and review of 
documents, and to roundup to the next quarter hour for professional and 
clerical search and review services that exceed a quarter-hour. Once 
the records search and review are complete, HUD would assess 
duplication costs at $0.18 per page for each paper record copied. This 
amount would not be increased from that provided for under current 
Sec.  15.110(c). Duplication costs for media copies would be the actual 
cost of the media. Section 15.106(b) would define ``direct costs'' to 
include expenses that HUD actually incurs in searching for records 
responsive to a FOIA request and would include the cost of operating 
computers and electronic equipment. Consequently, HUD proposes to 
charge the direct costs of any programming services required to conduct 
a search, including the cost associated with the creation of a new 
program to locate the requested records. Under proposed Sec.  
15.106(c), application of these fees to the category of requester would 
not change from that currently provided under Sec.  15.110(c).
    Section 15.106(d) would provide restrictions on HUD's charging of 
fees, and is similar to Sec.  15.110 in that it provides that no search 
or review fee will be charged for requests submitted by educational 
institutions, noncommercial scientific institutions, or representatives 
of the news media. If HUD fails to comply with the applicable time 
limits in which to respond to a request, and no unusual or exceptional 
circumstance exists, this section would provide that HUD may not charge 
search fees or, in the instances of requests from educational 
institutions, noncommercial scientific institutions, and 
representatives of the media, duplication fees. Identical to current 
Sec.  15.110(g), proposed Sec.  15.106(d) would provide that HUD will 
not charge a fee if the total cost to respond to the request does not 
exceed $25.
    Section 15.106(e) would provide that HUD will notify the requester 
when it estimates or determines that the fees for a FOIA request will 
exceed $25. Under this proposal, HUD will not perform further work on 
the request until the FOIA requester either makes a written, firm 
commitment to pay the anticipated additional costs or pays these 
additional costs. The failure of the requester to provide a firm 
commitment to pay the anticipated fee, within the time period specified 
by HUD, will result in the request being closed. HUD is proposing this 
provision to avoid spending time and resources processing FOIA requests 
that will not be completed due to the requester's refusal to pay the 
assessed fees.
    Section 15.106(f) would reserve to HUD the right to provide special 
services, such as certifying the records, to a requester at the direct 
cost of such services. Proposed Sec.  15.106(g) would incorporate the 
substance of current Sec.  15.110(j), but would provide that interest 
is charged on unpaid fees, pursuant to the Debt Collection Act of 1982, 
as amended (5 U.S.C. 5514; 31 U.S.C. 3701 et seq.), beginning on the 
31st day after the billing date. Section 15.106(h) would incorporate, 
without substantial alteration, current Sec.  15.110(e) by stating that 
HUD may aggregate FOIA requests for purposes of assessing fees when the 
FOIA requests are related in purpose and HUD reasonably believes that 
the FOIA requests were submitted separately to avoid or reduce 
applicable fees. HUD proposes, however, to add that aggregation of 
requests for fee purposes will be conducted independent of aggregation 
of requests for purposes of establishing the time to respond under 
Sec.  15.103(d).
    Section 15.106(i) would describe when and how HUD may request 
advance payment before processing a FOIA request. Specifically, HUD 
would require advance payment when it determines that a total fee to be 
charged exceeds $250. Consistent with current Sec.  15.110(i), it would 
also provide that when a requester has previously failed to pay a 
properly charged FOIA fee to HUD within 30 days of the date of billing, 
HUD may require the requester to pay the full amount due, plus any 
applicable interest, and to make an advance payment of the full amount 
of any anticipated fee before HUD begins to process a new request or 
continues to process a pending request from that requester. Section 
15.106(j) is new and would add a provision that advises requesters that 
the fee schedule does not apply to records for which a fee is 
specifically established by statute. HUD proposes notifying requesters 
when records responsive to their requests are subject to a statutorily 
based fee schedule.
    Finally, Sec.  15.106(k) would update current Sec.  15.110(h) by 
providing additional detail as to what factors HUD considers to 
determine whether a waiver or reduction of fees is warranted. Section 
15.106(k)(1) establishes two requirements that must be met for HUD to 
consider a reduction or waiver of fees, specifically: (1) the 
disclosure of the information is in the public interest because it is 
likely to contribute significantly to public understanding of the 
operations or activities of the government, and (2) the disclosure of 
the information is not primarily in the commercial interest of the 
requester. Paragraphs (k)(2) and (k)(3) of Sec.  15.106 would list the 
factors that HUD will consider to determine whether the disclosure is 
in the public interest and is primarily in the commercial interest of 
the requester. Section 15.106(k)(4) would clarify that if a fee waiver 
requirement is met for only a portion of a FOIA request, HUD may waive 
or reduce fees only for that portion of the request. Section 
15.106(k)(5) would require a requester seeking a fee waiver or 
reduction to submit evidence demonstrating that the FOIA request meets 
the criteria set forth in this section. HUD, in deciding to grant 
waivers or reductions of fees, may also consider the cost effectiveness 
of its investment of administrative resources. These amendments would 
update the waiver processes to be consistent with the current law and 
government practice, as well as the Office of Management and Budget 
(OMB) Fee Guidelines, and to clarify them for the public.

Sec.  15.107 Documents Generally Protected From Disclosure

    Section 15.107 incorporates and revises current Sec.  15.3 by 
describing the nine FOIA exemptions that protect various records from 
disclosure (5 U.S.C. 552(b)). For clarity and enhanced transparency, 
this section would describe how HUD generally applies each exemption. 
Specifically, HUD seldom relies on Exemption 1 (classified documents). 
Exemption 2 (internal agency rules and practices) protects records 
relating to internal personnel rules and practices. With regard to 
Exemption 3 (information prohibited from disclosure by another 
statute), this section would cite the statutory provisions that 
prohibit the disclosure of competitive proposals submitted prior to 
contract award and covered selection information that might provide a 
grant applicant an unfair competitive advantage. HUD proposes to 
address Exemption 4 (commercial or financial information) in Sec.  
15.108.
    Interagency and intra-agency communications are protected from 
disclosure under Exemption 5. With regard to Exemption 6 (personal 
privacy), HUD generally will not disclose the names, addresses, 
telephone numbers, and email addresses of persons residing in public or 
assisted housing or of borrowers in FHA-insured

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single family mortgage transactions. Exemption 7 (law enforcement 
records) protects the disclosure of the names of individuals who have 
filed fair housing complaints, as well as the names of confidential 
informants. It also protects techniques and procedures for law 
enforcement investigations, or guidelines for law enforcement 
investigations if such disclosure could reasonably be expected to risk 
circumvention of the law. With regard to Exemption 8 (supervision of 
financial institutions), HUD proposes to provide that it is considered 
an ``agency responsible for the regulation and supervision of financial 
institutions'' for purposes of monitoring fair housing compliance. 
Finally, for comprehensiveness, HUD includes a citation to Exemption 9 
(wells).

Sec.  15.108 Business Information

    Section 15.108 would significantly revise current Sec.  15.108, and 
describe in detail the procedures HUD will follow when responding to 
FOIA requests for agency records containing business information. 
Current Sec.  15.108(a) provides only that HUD may not disclose 
business information that it considers confidential or which contains 
financial information, except as provided by the section. Proposed 
Sec.  15.108(a) restates this provision, but adds a specific reference 
to Executive Order 12600, ``Predisclosure notification procedures for 
confidential commercial information'' (52 FR 23781, June 25, 1987), as 
the basis for notifying submitters of confidential commercial 
information when HUD has received a request for such information. The 
section would emphasize that HUD relies extensively upon information 
provided by the affected submitter in determining whether the 
information is confidential and subject to notice provisions. Section 
15.108(a) would also explicitly state HUD's expectation that if sued 
under FOIA for nondisclosure of confidential business information, the 
affected business will cooperate to the fullest extent possible in 
defending that decision.
    Section 15.108(b) would place an affirmative duty on submitters to 
use good faith efforts to designate, at the time of submission, 
business information they consider to be protected from disclosure 
under Exemption 4 (5 U.S.C. 552(b)(4)). This section also protects 
business information from disclosure for 10 years after the date of the 
submission, unless the submitter justifies a longer designation period.
    As provided by current Sec.  15.108(c), proposed Sec.  15.108(c) 
provides that HUD will, unless exempted by Sec.  15.108(g), notify the 
submitter if HUD receives a request for agency records containing 
information that the submitter has designated as business information.
    Section 15.108(d) clarifies when such notice is required and 
incorporates language currently codified in Sec.  15.108(c). Section 
15.108(e) provides that if HUD notifies a submitter that the agency may 
be required to disclose information the submitter has designated as 
``business information,'' HUD would allow the submitter a reasonable 
time to object to the proposed disclosure. Consistent with Sec.  
15.108(a), submitters who object to the disclosure of information would 
be requested to demonstrate why the information should be protected as 
a trade secret or commercial or financial information. Conclusory 
statements generally would not provide a basis for HUD to protect the 
information as confidential. HUD proposes to provide that a submitter's 
failure to respond to HUD's notice within the specified time period 
will be treated as the submitter not objecting to disclosure of the 
information.
    Section 15.108(f) would provide that HUD will consider the 
objections of the submitter and, unless exempted by Sec.  15.108(g), 
notify the submitter in writing of HUD's final decision to disclose the 
information. Section 15.108(g) would describe the instances when HUD is 
not required to give the submitter notice that the agency may be 
required to disclose information that the submitter has designated as 
``business information.'' These exceptions generally are identical to 
those currently codified at paragraphs (c)(2), (c)(3), and (c)(4) of 
Sec.  15.108, and include: (1) Where HUD determines that the 
information should not be disclosed; (2) where the information has been 
made publicly available; or (3) where the disclosure is required by law 
(other than FOIA) or regulation. Finally, consistent with Sec.  
15.108(a), Sec.  15.108(h) proposes that HUD will notify the submitter 
should FOIA lawsuits be filed by requesters. Section 15.108(i) would 
provide for corresponding notice to requesters.

Sec.  15.109 Mortgage Sales

    Section 15.109 makes minor, nonsignificant changes to current Sec.  
15.109. For example, HUD would revise the title of the section to 
clarify that the provisions set forth in this section apply to mortgage 
sales (Form HUD-92410, Statement of Profit and Loss). Substantially, 
proposed Sec.  15.109 is identical to Sec.  15.109 as currently 
codified. The minor changes would clarify the section and facilitate 
readability.

Sec.  15.110 Appeals

    Section 15.110 renumbers and revises currently codified Sec.  
15.111 and describes the appeals process to a FOIA request 
determination. To streamline HUD's FOIA process and streamline the 
appeals procedure for the public, Sec.  15.110 would consolidate the 
process for all appeals regardless of whether the subject of the appeal 
is a denial of information, an adverse fee determination, or a denial 
of a request for expedited processing. In addition, Sec.  15.110 would 
incorporate those provisions currently codified Sec.  15.112(a), which 
establishes the length of time by which HUD will respond to requests 
for appeal.
    Section 15.110(a) would provide that appeals should include the 
assigned tracking number proposed by Sec.  15.104(b). It would also 
provide that appeals be marked ``Freedom of Information Act Appeal'' to 
facilitate HUD's response. Similar to currently codified Sec.  15.111, 
it would provide that appeals be postmarked within 30 calendar days of 
the date of HUD's determination and that transmittal of an appeal by 
means other than the United States Postal Service be received by close 
of business on the 30th day after the date of HUD's determination.
    Section 15.110(b) would maintain the length of time by which HUD 
will respond to appeals, specifically 10 working days after the date of 
receipt for appeal of a denial of expedited processing and 20 working 
days after the date of receipt for all other appeals, unless unusual 
circumstances require that HUD extends the time for an additional 10 
working days.
    Section 15.110(c) would provide a consolidated list of information 
that should be included in an appeal, regardless of type. Generally, 
appeals should include a copy of the original request, a copy of the 
adverse determination, a statement of facts and legal arguments 
supporting the appeal, and any additional information the appellant 
wishes to include.
    Finally, Sec.  15.110(d) is new and provides that requesters should 
exhaust all administrative remedies before seeking judicial review of 
HUD's adverse determinations.

Sec.  15.111 HUD Response to Appeals

    Section 15.111 provides the process by with HUD will respond to 
appeals. Significantly, Sec.  15.111(a) provides that the appellate 
official will conduct a de novo review of the entire record and 
applicable law when making a decision.

[[Page 32600]]

This section would provide that HUD's decision on the appeal would be 
considered the final action of HUD. Paragraphs (b), (c), and (d) of 
Sec.  15.111 list the options available to the appellate official with 
regard to the appeal of denial of records, appeal of fee 
determinations, and appeal of denial of expedited processing, 
respectively. The options listed are those currently codified in Sec.  
15.112(b), but redrafted for clarity.

IV. Findings and Certifications

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if the 
regulation is necessary, to select the regulatory approach that 
maximizes net benefits. Because this rule would incorporate changes 
enacted by the OPEN Government Act of 2007 and otherwise would update 
and streamline HUD's current FOIA regulation, this rule was determined 
to not be a significant regulatory action under section 3(f) of 
Executive Order 12866, Regulatory Planning and Review, and therefore 
was not reviewed by OMB.

Environmental Impact

    This rule is categorically excluded from environmental review under 
the National Environmental Policy Act (42 U.S.C. 4321). The revision of 
the FOIA-related provisions of 24 CFR part 15 falls within the 
exclusion provided by 24 CFR 50.19(c)(1), in that it does not direct, 
provide for assistance or loan and mortgage insurance for, or otherwise 
govern or regulate, real property acquisition, disposition, leasing, 
rehabilitation, alteration, demolition, or new construction, or 
establish, revise, or provide for standards for construction or 
construction materials, manufactured housing, or occupancy.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This proposed rule would establish the process by which HUD would 
respond to requests for information under FOIA. Costs assessed by HUD 
for search, review, and duplication required to process the information 
requested by a requester are limited by FOIA to direct costs and are 
not economically significant. As a result, the proposed rule would not 
have a significant economic impact on a substantial number of small 
entities.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This proposed rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive Order.

Unfunded Mandates

    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 on the private sector. This proposed rule would not 
impose any federal mandates on any state, local, or tribal governments, 
or on the private sector, within the meaning of the Unfunded Mandates 
Reform Act of 1995.

List of Subjects in 24 CFR Part 15

    Classified information, Courts, Freedom of information, Government 
employees, Reporting and recordkeeping requirements.

    For the reasons stated in the preamble, HUD proposes to amend 24 
CFR part 15 as follows:

PART 15--PUBLIC ACCESS TO HUD RECORDS UNDER THE FREEDOM OF 
INFORMATION ACT AND TESTIMONY AND PRODUCTION OF INFORMATION BY HUD 
EMPLOYEES

0
1. The authority citation for 24 CFR part 15 is revised to read as 
follows:

    Authority:  42 U.S.C. 3535(d).
    Subparts A and B also issued under 5 U.S.C. 552.
    Section 15.107 also issued under E.O. 12958, 60 FR 19825, 3 CFR 
Comp., p333.
    Subparts C and D also issued under 5 U.S.C. 301.

0
2. Revise subpart A to read as follows:
Subpart A--General Provisions
Sec.
15.1 General provisions.
15.2 Definitions.


Sec.  15.1  General provisions.

    (a) Scope. Requests for material from HUD will be processed as set 
forth in this part. The Federal Housing Administration and the 
Government National Mortgage Association are components of HUD and are 
also covered by this part.
    (b) Subpart B. Subpart B of this part contains the rules that HUD 
follows in processing requests for records under the Freedom of 
Information Act (FOIA) (5 U.S.C. 552). These rules should be read 
together with the FOIA, which provides additional information about 
access to records maintained by HUD. Information routinely provided to 
the public as part of a regular Department activity may be provided to 
the public without following this subpart.
    (c) Subpart C. Subpart C of this part describes the procedures to 
be followed and standards to be applied in processing demands for the 
production of material or provision of testimony in legal proceedings 
among private litigants.
    (d) Subpart D. Subpart D of this part describes the procedures to 
be followed and standards to be applied in processing demands for the 
production of material or provision of testimony in legal proceedings 
in which the United States is a party.
    (e) Inspector General. Subparts B and C of this part do not apply 
to the Office of the Inspector General. The procedures that apply to 
the Office of the Inspector General are described in parts 2002 and 
2004 of this title.


Sec.  15.2  Definitions.

    (a) The following definitions apply to this part.
    Agency records means any documentary material that is either 
created or obtained by an agency in the transaction of agency business 
and is under agency control. ``Agency record'' does not include records 
that are not already in existence and that would have to be created 
specifically to meet a request.
    Business information means commercial or financial information 
provided to HUD by a submitter that arguably is protected from 
disclosure under Exemption 4 (42 U.S.C. 552(b)(4)) of FOIA.
    FOIA means the Freedom of Information Act (5 U.S.C. 552).
    HUD means the Department of Housing and Urban Development.
    Review means the examination of a record located in response to a 
request in order to determine whether any portion of it is exempt from 
disclosure. Review time includes processing any record for disclosure 
(for example,

[[Page 32601]]

doing all that is necessary to redact it and prepare it for 
disclosure). Review costs are recoverable even if a record ultimately 
is not disclosed. Review time includes time spent considering any 
formal objection to disclosure, made by a business submitter under 
Sec.  15.108, but does not include time spent resolving general legal 
or policy issues regarding the application of exemptions.
    Search means the process of looking for and retrieving records or 
information responsive to a request. It includes page-by-page or line-
by-line identification of information within records and also includes 
reasonable efforts to locate and retrieve information from records 
maintained in electronic form or format.
    Secretary means the Secretary of Housing and Urban Development.
    Submitter means any person or entity that provides business 
information, directly or indirectly, to HUD. The term includes, but is 
not limited to, corporations, State governments, and foreign 
governments.
    (b) The following definitions apply to subparts C and D of this 
part.
    Appropriate Associate General Counsel means the Associate General 
Counsel for Litigation or the Associate General Counsel for HUD 
Headquarters employees in those programs for which the Associate 
provides legal advice.
    Appropriate Regional Counsel means the Regional Counsel for the 
Regional Office having delegated authority over the project or activity 
with respect to which the information is sought. For assistance in 
identifying the Appropriate Regional Counsel, see appendix A to this 
part.
    Authorized Approving Official means the Secretary, General Counsel, 
Appropriate Associate General Counsel, or Appropriate Regional Counsel.
    Demand means a subpoena, order, or other demand of a court or other 
authority that is issued in a legal proceeding and any accompanying 
submissions.
    Employee of the Department means a current or former officer or 
employee of the United States appointed by or subject to the 
supervision of the Secretary, but does not include an officer or 
employee covered by part 2004 of this title.
    Good cause means necessary to prevent a miscarriage of justice or 
to promote a significant interest of the Department.
    Legal proceeding includes any proceeding before a court of law or 
other authority; i.e., an administrative board or commission, a hearing 
officer, an arbitrator or other body conducting a quasi-judicial or 
legislative proceeding.
    Legal proceeding among private litigants means any legal proceeding 
in which the United States is not a party.
    Legal proceeding in which the United States is a party means any 
legal proceeding including as a named party the United States, the 
Department of Housing and Urban Development, any other federal 
executive or administrative agency or department, or any official 
thereof in his official capacity.

    Material means either documents or information contained in, or 
relating to contents of, the files of the Department or documents or 
information acquired by any person while such person was an employee of 
the Department as a part of the performance of his or her official 
duties or because of his or her official status.
    Production means to produce material by any means other than 
through the provision of oral testimony.
    Testimony means any oral or written statements made in litigation 
under oath or penalty of perjury.
    United States means the Federal Government of the United States 
(including the Department), the Secretary, and any employees of the 
Department in their official capacities.

0
3. Revise subpart B to read as follows:
Subpart B--Procedures for Disclosure of Records Under the FOIA
Sec.
15.101 Proactive disclosures of department records.
15.102 Requirements for making requests for records.
15.103 Timing of responses to requests.
15.104 Procedures for processing FOIA requests.
15.105 Responses to requests.
15.106 Fees.
15.107 Documents generally protected from disclosure.
15.108 Business information.
15.109 Mortgage sales.
15.110 Appeals.
15.111 HUD response to appeals.


Sec.  15.101  Proactive disclosures of department records.

    (a) In General. Records that are required to be made available for 
public inspection and copying are accessible on the Department's Web 
site at http://www.hud.gov. Published agency records, whether or not 
they are available for purchase, are made available for examination. 
Each HUD office (Headquarters and field) has a FOIA Public Liaison that 
can assist individuals in locating records. A list of the Department's 
FOIA Public Liaisons is available at http://www.hud.gov.
    (b) Electronic FOIA reading room. As required by 5 U.S.C. 
552(a)(2), HUD makes available records created on or after November 1, 
1996, through its electronic FOIA Reading Room, located on HUD's FOIA 
Web site at http://www.hud.gov. These records include:
    (1) Final opinions and orders.
    (2) Public access to high value, machine readable datasets via 
Data.gov.
    (3) Statements of policy and interpretation, including:
    (i) HUD's Client and Information Policy System (HUDCLIPS);
    (ii) Housing policy;
    (iii) Public and Indian Housing policy and regulations;
    (iv) Public and Indian Housing policy and guidance (PHA Plans); and
    (v) Community Planning and Development policy and guidance.
    (4) Administrative staff manuals.
    (5) HUD's online library.
    (6) Fair housing information.
    (c) Frequently requested materials. HUD also makes available 
frequently requested materials on its FOIA Web site at http://www.hud.gov. These frequently requested materials include information 
related to:
    (1) Highest-scoring funding grant applications.
    (2) Purchase charge cardholders.
    (3) FHA refunds.
    (4) FHA-approved lenders.
    (5) Homes for sale.
    (6) How to buy a HUD home.
    (7) How to apply for public housing and Section 8 housing.
    (8) Housing for the elderly.
    (9) Housing for individuals with disabilities.
    (10) HUD contracting home page.
    (11) FHA mortgage insurance programs.
    (12) HUD handbooks.
    (13) HUD programs.
    (14) HUD telephone directory.
    (15) HUD homes listings.
    (16) HUD's organization.
    (17) Multifamily housing data.
    (18) Public housing authority contact information.
    (19) Weekly listing of multifamily properties for sale.
    (20) Catalog of Federal Domestic Assistance (CFDA) materials.
    (21) Grants.
    (22) FOIA request logs.


Sec.  15.102  Requirements for making requests for records.

    (a) In general. Any request for HUD records must be in writing and 
submitted to the FOIA Public Liaison in the HUD field office where the 
records are located or to the Office of the Executive Secretariat in 
HUD Headquarters if the request is for records located in HUD 
Headquarters.
    (b) HUD field office records. Requests for records located in a HUD 
field office may be submitted to the public liaison

[[Page 32602]]

at the field office by mail (including courier or delivery service), 
email, or facsimile.
    (c) HUD headquarters records. Requests for records located in HUD 
Headquarters may be submitted via an electronic request form on HUD's 
FOIA Web site at http://www.hud.gov. Requests can also be submitted to 
the Office of the Executive Secretariat in HUD headquarters in person 
or by mail (including courier or delivery service), email, or 
facsimile.
    (d) Form of requests. FOIA requests should:
    (1) Be in writing and clearly identifiable as a FOIA request. To 
facilitate identification, the requester should place the phrase ``FOIA 
Request'' on the front of the envelope or on the cover sheet or other 
transmittal document used when submitting the request in person or by 
mail, email, facsimile, or electronic request form;
    (2) Include, whenever possible, detailed and specific information 
about each record sought, such as the date, title or name, author, 
recipient, and subject matter of the record. The more specific the FOIA 
request for records, the more likely HUD officials will be able to 
locate the records requested. Requests for categories of information 
should be for specific and well-defined categories. Insufficient 
descriptions may lead HUD officials to contact the requester to seek 
additional information for their record search;
    (3) Indicate the form or format in which the requester would like 
the record made available, if the requester has a preference;
    (4) Specify the fee amount the requester is willing to pay. In 
general, HUD provides records at no cost up to $25. Requesters are 
required to agree to pay for any costs that exceed $25. Requesters may 
also request a dollar amount above which HUD should consult with them 
before they agree to pay the fee. If a requester seeks a fee waiver or 
reduction, the requester should include this request with the FOIA 
disclosure request, and should describe, consistent with Sec.  
15.106(k), how the disclosure of the requested information is likely to 
contribute significantly to public understanding of the operations or 
activities of the government and is not primarily in the commercial 
interest of the requester;
    (5) Indicate the fee category that the requester believes applies 
to each of his or her requests. Fee categories are defined in Sec.  
15.2 and Sec.  15.106(b);
    (6) Include verifying information of the requester's identity, if 
the requester requests agency records pertaining to the requester, a 
minor, or an individual who is legally incompetent, pursuant to the 
Privacy Act of 1974, as amended, 5 U.S.C. 552a. Information about what 
constitutes acceptable verifying information can be found in HUD's 
Privacy Act regulations in 24 CFR part 16;
    (7) Contain signed authorization from the other person, if the 
requester makes a request on another person's behalf for information 
about that person. If necessary, HUD will inform the requester of the 
authorization needed from the other person and give the requester an 
opportunity to provide authorization. Requests for information about 
another person should be accompanied by either written, notarized 
authorization or proof that the individual is deceased (for example, a 
copy of a death certificate or obituary), or that request will be 
deemed insufficient; and
    (8) Contain a detailed explanation of the basis for the request, if 
the requester makes a request for expedited processing as provided by 
Sec.  15.104(d). The requester should also include a statement 
certifying the truth of the circumstances alleged or other evidence, 
acceptable to HUD, of the requester's compelling need.


Sec.  15.103  Timing of responses to requests.

    (a) In general. HUD will generally respond to a FOIA request within 
20 working days, depending on the size of the request. The 20-day 
period will begin on the day the request is first received by the 
appropriate component of HUD, but in any event not later than 10 
working days after the request is first received by any component of 
HUD designated to receive FOIA requests.
    (b) Tolling the 20-day time period. Under the OPEN Government Act 
of 2007, HUD may toll the 20-day period:
    (1) One time to make one reasonable request for additional 
information from the requester; or
    (2) As many times as necessary to clarify fee assessment issues 
with the requester. The agency's receipt of the requester's response to 
the agency's request for information or resolution of all fee 
assessment issues ends the tolling period.
    (c) Extension of time periods for processing a request. In unusual 
circumstances, as defined in this paragraph, HUD may extend the time 
period for processing a FOIA request. If processing a request would 
require more than 10 working days beyond the general time limit 
established in paragraph (a) of this section, HUD will offer the 
requester an opportunity to limit the scope of the request so that HUD 
may process it within the extra 10-day working period or arrange an 
alternative time period within which the FOIA request will be 
processed. For purposes of this section, unusual circumstances include:
    (1) The need to search for and collect records not located in the 
office processing the request;
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records; or
    (3) The need to consult with another government agency or two or 
more HUD components having a substantial interest in the determination 
of the FOIA request.
    (d) Aggregating multiple requests. HUD may aggregate multiple 
requests in cases where unusual circumstances exist and HUD determines 
that:
    (1) Certain requests from the same requester or from a group of 
requesters acting in concert actually constitute a single request; and
    (2) The requests involve clearly related matters.


Aggregation of requests for this purpose will be conducted independent 
of aggregation of requests for fee purposes under Sec.  15.106(h).


Sec.  15.104  Procedures for processing FOIA requests.

    (a) In general. HUD will ordinarily respond to FOIA requests 
according to their order of receipt.
    (b) Tracking number. FOIA requests will be logged in as received 
and assigned a tracking number. A requester should use the tracking 
number to identify his or her request when contacting the FOIA Office 
for any reason.
    (c) Expedited processing. (1) Requests and appeals will be taken 
out of order and given expedited treatment whenever it is determined 
that they involve:
    (i) Circumstances in which the lack of expedited treatment could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual;
    (ii) An urgency to inform the public about an actual or alleged 
Federal Government activity, if made by a person primarily engaged in 
disseminating information; or
    (iii) The loss of substantial due process rights.
    (2) A request for expedited processing may be made at the time of 
the initial request for records or at any later time. For a prompt 
determination, a request for expedited processing should be received by 
the proper office designated to receive FOIA requests as provided in 
Sec.  15.102.

[[Page 32603]]

    (3) A requester that seeks expedited processing should submit a 
statement, certified to be true and correct to the best of that 
person's knowledge and belief, explaining in detail the basis for 
requesting expedited processing. For example, a requester who makes a 
request under paragraph (c)(1)(ii) of this section, if not a full-time 
member of the news media, should establish that he or she is a person 
whose main professional activity or occupation is information 
dissemination, though it need not be his or her sole occupation. A 
requester making a request under paragraph (c)(1)(ii) of this section 
also should establish a particular urgency to inform the public about 
the government activity involved in the request, beyond the public's 
right to know about government activity generally. The formality of 
certification may be waived as a matter of administrative discretion.
    (4) HUD will make a determination whether to grant or deny a 
request for expedited processing within 10 calendar days of receipt by 
the appropriate component of HUD as provided in Sec.  15.102 and notify 
the requester of HUD's determination. FOIA requests accepted for 
expedited processing will be processed as soon as practicable and on a 
priority basis.
    (d) Multitrack processing. (1) For requests that do not qualify for 
expedited processing, HUD may use two or more processing tracks by 
distinguishing between simple and more complex FOIA requests based on 
one or more of the following: The time and work necessary to process 
the FOIA request, the volume of agency records responsive to the FOIA 
request, and whether the FOIA request qualifies for expedited 
processing as described in paragraph (c)(2) of this section.
    (2) When HUD uses multitrack processing, it may provide requesters 
in its slower track(s) an opportunity to limit the scope of their 
requests in order to qualify for faster processing within the specified 
limits of HUD's faster track(s). When HUD chooses to provide this 
option, HUD will contact the requester either by telephone, letter, or 
email, whichever is more efficient in each case.


Sec.  15.105  Responses to requests.

    (a) Acknowledgements of requests. The FOIA Office of the Office of 
the Executive Secretariat in HUD Headquarters and the FOIA Public 
Liaison in each HUD field office will ordinarily send an 
acknowledgement letter to the requester that will confirm receipt of 
the request by the appropriate HUD office and provide an assigned 
tracking number as provided by Sec.  15.104(b) for further reference.
    (b) Consultations, coordination, and referrals. When HUD receives a 
request for a record in its possession, it shall determine whether 
another agency of the Federal Government is better able to determine 
whether the record is exempt from disclosure under the FOIA or whether 
it should be disclosed as a matter of administrative discretion. If HUD 
determines that it is best able to determine whether the record is 
exempt from disclosure, then it shall do so. If HUD determines that it 
is not best able to make that determination, then it shall either:
    (1) Respond to the request regarding that record, after consulting 
with the agency best able to determine whether to disclose it and with 
any other agency that has a substantial interest in it; or
    (2) Refer the responsibility for responding to the request 
regarding that record to the agency that originated the record, but 
only if that agency is subject to the FOIA. Ordinarily, the agency with 
which the record originated will be presumed to be best able to 
determine whether to disclose it.
    (c) Fee estimates. HUD will notify the requester if HUD's estimate 
of the fee is more than the requester has agreed to pay. Consistent 
with Sec.  15.106(e), the requester shall have 15 working days to 
either agree to pay the higher fee or to reformulate the request so 
that it can be processed at an amount that is agreeable to the 
requester.
    (d) Forms of response. (1) Granting requests in whole or in part. 
Once HUD makes a determination to grant a request in whole or in part, 
it will notify the requester in writing. HUD will make a record 
available in the form or format requested, if the record is readily 
reproducible in that format. HUD will inform the requester in the 
notice of any fee charged under Sec.  15.106 and disclose records to 
the requester promptly upon payment of any applicable fee. Records 
disclosed in part will be marked or annotated to show the amount of 
information deleted and the exemption(s) under which each deletion is 
made, unless doing so would harm an interest protected by an applicable 
FOIA exemption. The location of the information deleted and the 
exemption(s) under which the deletion is made will be indicated 
directly on the record itself, if technically feasible.
    (2) Adverse determination of requests. If a determination is made 
to deny a request in any respect, HUD shall notify the requester of 
that determination in writing. Adverse determinations, or denials of 
requests, include: a determination to withhold any requested record, in 
whole or in part; a determination that a requested record does not 
exist, cannot be located, or has not been retained; a determination 
that a record is not readily reproducible in the form or format sought 
by the requester; a determination that what has been requested is not a 
record subject to the FOIA; a determination on any disputed fee matter, 
including a denial of a request for a fee waiver or reduction; and a 
denial of a request for expedited treatment. The denial letter shall be 
signed by the Executive Secretariat or a designee of the Executive 
Secretariat in HUD Headquarters or the FOIA Public Liaison for the HUD 
field office where the adverse determination was made, and shall 
include:
    (i) The name and title or position of the person responsible for 
the denial;
    (ii) A brief statement of the reason(s) for the denial, including 
any FOIA exemption applied by HUD in denying the request;
    (iii) An estimate of the volume of records or information withheld, 
when appropriate, in number of pages or in some other reasonable form 
of estimation. This estimate does not need to be provided if the volume 
is otherwise indicated through deletions on records disclosed in part, 
or if providing an estimate would harm an interest protected by an 
applicable exemption; and
    (iv) A statement that the denial may be appealed as provided by 
Sec.  15.110 and a description of the requirements for appeal.


Sec.  15.106  Fees.

    (a) In general. HUD will charge for processing requests under the 
FOIA in accordance with paragraph (c) of this section, except where 
fees are limited under paragraph (d) of this section or where a waiver 
or reduction of fees is granted under paragraph (k) of this section. 
HUD shall collect all applicable fees before sending copies of 
requested records to a requester. In order to resolve any fee issues 
that arise under this section, HUD may contact a requester for 
additional information. Requesters shall pay fees by check or money 
order made payable to the United States Treasury.
    (b) Definitions. For purposes of this section:
    Commercial use means a request from or on behalf of a person who 
seeks information for a use or purpose that furthers his or her 
commercial, trade, or profit interests, which can include furthering 
those interests through litigation. HUD shall determine, whenever 
reasonably possible, the use

[[Page 32604]]

to which a requester will put the requested records. When it appears 
that the requester will put the records to a commercial use, either 
because of the nature of the request itself or because HUD has 
reasonable cause to doubt a requester's stated use, HUD shall provide 
the requester a reasonable opportunity to submit further clarification.
    Direct costs means those expenses that HUD actually incurs in 
searching for and duplicating and, in the case of commercial use 
requests, reviewing records to respond to a FOIA request. Direct costs 
include, for example, the salary of the employee performing the work 
and the cost of operating computers and other electronic equipment, 
such as for mainframe computer run time. Not included in direct costs 
are overhead expenses such as the costs of space and heating or 
lighting a facility.
    Duplication means the process of making a copy of a document 
necessary to respond to a FOIA request. Such copies can take the form 
of paper copy, audio visual materials, or machine readable 
documentation (e.g., diskette), among others. HUD shall honor a 
requester's specified preference of form or format of disclosure if the 
record is readily reproducible with reasonable efforts in the requested 
form or format by the office responding to the request.
    Educational institution. (1) Educational institution means:
    (i) A preschool;
    (ii) A public or private elementary or secondary school;
    (iii) An institution of graduate higher education;
    (iv) An institution of undergraduate higher education;
    (v) An institution of professional education; or
    (vi) An institution of vocational education, that primarily (or 
solely) operates a program or programs of scholarly research.
    (2) To be in this category, a requester should show that the 
request is authorized by, and is made under the auspices of, a 
qualifying institution and that the records are not sought for a 
commercial use but are sought to further scholarly research. Records 
requested for the intention of fulfilling credit requirements are not 
considered to be sought for a scholarly purpose.
    Noncommercial scientific institution means an institution that is 
not operated on a ``commercial'' basis, as defined in this section, and 
that is operated solely for the purpose of conducting scientific 
research the results of which are not intended to promote any 
particular product or industry. To be in this category, a requester 
should show that the request is authorized by, and is made under the 
auspices of, a qualifying institution and that the records are not 
sought for a commercial use but are sought to further scientific 
research.
    Other requester means any requester that does not fall within the 
categories of requesters described in this section.
    Representative of the news media, or news media requester, means 
any person actively gathering news for an entity that is organized and 
operated to publish or broadcast news to the public, uses its editorial 
skills to turn the raw materials into a distinct work, and distributes 
that work to an audience. The term news means information that is about 
current events or that would be of current interest to the public. 
Examples of news media entities include television or radio stations 
broadcasting to the public at large and publishers of periodicals that 
disseminate news and make their products available to the general 
public through a variety of means. For freelance journalists to be 
regarded as working for a news media entity, they should demonstrate a 
solid basis for expecting publication through a news media entity. A 
publication contract would be the clearest proof, but HUD will also 
look to the past publication record of a requester in making this 
determination. To be in this category a requester should not be seeking 
the requested records for a commercial use. However, a request for 
records supporting the news dissemination function of the requester 
shall not be considered to be for a commercial use.
    (c) Fees. In responding to FOIA requests, HUD will use the Fee 
Schedule set out in the following table, unless a waiver or reduction 
of fees has been granted under paragraph (k) of this section.

                                                FOIA FEE SCHEDULE
----------------------------------------------------------------------------------------------------------------
                                                                              News media,
                                                                              educational
                                                                            institution, or
            Activity                    Rate            Commercial use       noncommercial      Other requester
                                                          requester           scientific
                                                                              institution
                                                                               requester
----------------------------------------------------------------------------------------------------------------
(1) Professional search........  $13 per quarter     Applies............  Does not apply....  Applies. No charge
                                  hour.                                                        for first 2 hours
                                                                                               of cumulative
                                                                                               search time.
(2) Professional review........  $13 per quarter     Applies............  Does not apply....  Does not apply.
                                  hour.
(3) Clerical search............  $6 per quarter      Applies............  Does not apply....  Applies. No charge
                                  hour.                                                        for first 2 hours
                                                                                               of cumulative
                                                                                               search time.
(4) Clerical review............  $6 per quarter      Applies............  Does not apply....  Does not apply.
                                  hour.
(5) Programming services         Direct costs        Applies............  Does not apply....  Applies.
 required.                        associated with
                                  search.
(6) Duplication costs..........  $0.18 per page....  Applies............  Applies. No charge  Applies. No charge
                                                                           for first 100       for first 100
                                                                           pages.              pages.
(7) Duplication costs--tape, CD  Actual cost.......  Applies............  Applies...........  Applies.
 ROM or diskette.
----------------------------------------------------------------------------------------------------------------

     (1) Search. (i) Search fees will be charged for all requests other 
than requests made by educational institutions, noncommercial 
scientific institutions, or representatives of the news media, subject 
to the limitations of paragraph (d) of this section. HUD may charge for 
time spent searching even if HUD does not locate any responsive record 
or if HUD withholds the record(s) located as entirely exempt from 
disclosure.
    (ii) For each hour spent by personnel searching for requested 
records, including electronic searches that do not require new 
programming, the fees will be $13 per quarter hour for

[[Page 32605]]

professional personnel and $6 per quarter hour for clerical personnel.
    (iii) Requesters will be charged the direct costs associated with 
conducting any search that requires the creation of a new program to 
locate the requested records.
    (iv) For requests requiring the retrieval of records from any 
Federal Records Center, certain additional costs may be incurred in 
accordance with the Transactional Billing Rate schedule established by 
the National Archives and Records Administration.
    (2) Duplication. Duplication fees will be charged to all 
requesters, subject to the limitations of paragraph (d) of this 
section. For a paper photocopy of a record (no more than one copy of 
which need be supplied), the fee will be $0.18 per page. For copies in 
digital format, HUD will charge the direct costs, including operator 
time, of producing the copy. Where paper documents should be scanned in 
order to comply with a requester's preference to receive the records in 
an electronic format, the requester shall pay the direct costs 
associated with scanning those materials. For other forms of 
duplication, HUD will charge the direct costs.
    (3) Review. Review fees will be charged to requesters who make a 
commercial use request. Review fees will be charged only for the 
initial record review (the review done where HUD determines whether an 
exemption applies to a particular record or record portion, at the 
initial request level). No charge will be made for review at the 
administrative appeal level for an exemption already applied. However, 
records or portions of records withheld under an exemption that is 
subsequently determined not to apply may be reviewed again to determine 
whether any other exemption not previously considered applies. The cost 
of that review is chargeable where it is made necessary by such a 
change of circumstances. Fees for the review time will be $13 per 
quarter hour for professional personnel and $6 per quarter hour for 
clerical personnel.
    (d) Restrictions on charging fees. (1) No search fee will be 
charged for requests by educational institutions, noncommercial 
scientific institutions, or representatives of the news media. In 
addition, when HUD fails to comply with the applicable time limits in 
which to respond to a request and no unusual or exceptional 
circumstance, as those terms are defined by the FOIA, apply to the 
processing of the request, HUD will not charge search fees, or in the 
instances of requests from educational institutions, noncommercial 
scientific institutions, or representatives of the news media, as 
defined by paragraph (b) of this section, HUD will not charge 
duplication fees.
    (2) Search and review fees will be charged in quarter-hour 
increments. HUD will round up a quarter hour when professional and 
clerical search and review time exceeds a quarter-hour increment.
    (3) Except for requesters seeking records for a commercial use, HUD 
will provide without charge:
    (i) The first 100 pages of duplication (or the cost equivalent); 
and
    (ii) The first 2 hours of search (or the cost equivalent).
    (4) No fee will be charged whenever a total fee calculated under 
paragraph (c) of this section is less than HUD's cost to process the 
payment. Currently, whenever a total fee calculated is $25 or less, no 
fee will be charged.
    (e) Notice of anticipated fees in excess of $25. When HUD 
determines or estimates that the fees to be charged under this section 
will amount to more than $25, HUD shall notify the requester of the 
actual or estimated amount of the fees, unless the requester has 
indicated a willingness to pay fees as high as the amount anticipated. 
If only a portion of the fee can be readily, estimated HUD shall advise 
the requester that the estimated fee may be only a portion of the total 
fee. In cases in which a requester has been notified that actual or 
estimated fees amount to more than $25, the request will be held in 
abeyance for 15 working days. Further work shall not be done on that 
request until the requester has either made a firm commitment to pay 
the anticipated total fee or has made payment in advance if the total 
fee exceeds $250. Any such agreement should be memorialized by the 
requester in writing, should indicate a given dollar amount, and should 
be received by HUD within the time period specified by HUD in its 
notice to the requester. If the requester does not provide a firm 
commitment to pay the anticipated fee within the time period specified 
by HUD, the request will be closed. A notice under this paragraph will 
offer the requester an opportunity to discuss the matter of fees with 
HUD personnel in order to reformulate the request to meet the 
requester's needs at a lower cost. HUD is not required to accept 
payments in installments.
    (f) Charges for other services. Although not required to provide 
special services, if HUD chooses to do so as a matter of administrative 
discretion, HUD will charge the direct costs of providing these 
services. Examples of such services include certifying that records are 
true copies, providing multiple copies of the same document, or sending 
documents by means other than ordinary mail.
    (g) Charging interest. HUD may charge interest on any unpaid bill 
starting on the 31st day following the date of billing the requester. 
Interest charges will be assessed at the rate provided in 31 U.S.C. 
3717 and will accrue from the date of the billing until payment is 
received by HUD. HUD will follow the provisions of the Debt Collection 
Act of 1982 (Pub. L. 97-365, 96 Stat. 1749), as amended, and its 
administrative procedures, including the use of consumer reporting 
agencies, collection agencies, and offset.
    (h) Aggregating requests. If HUD reasonably believes that a 
requester or a group of requesters acting together is attempting to 
divide a request into a series of requests for the purpose of avoiding 
fees, HUD may aggregate those requests and charge accordingly. HUD may 
presume that multiple requests of this type made within a 30-day period 
have been made in order to avoid fees. Where requests are separated by 
a longer period, HUD will aggregate them only where there is a 
reasonable basis for determining that aggregation is warranted under 
all the circumstances involved. Multiple requests involving unrelated 
matters will not be aggregated. Aggregation of requests for fee 
purposes under this paragraph will be conducted independent of 
aggregation of requests under Sec.  15.103(d).
    (i) Advance payments. (1) For requests other than those described 
in paragraphs (i)(2) and (3) of this section, HUD will not require the 
requester to make an advance payment before work is begun or continued 
on a request. Payment owed for work already completed, such as 
prepayment before copies are sent to a requester, is not an advance 
payment.
    (2) If HUD determines or estimates that a total fee to be charged 
under this section will be more than $250, it may require the requester 
to make an advance payment of an amount up to the amount of the entire 
anticipated fee before beginning to process the request, except where 
it receives a satisfactory assurance of full payment from a requester 
who has a history of prompt payment.
    (3) If a requester has previously failed to pay a properly charged 
FOIA fee to HUD within 30 days of the date of billing, before HUD 
begins to process a new request or continues to process a pending 
request from that requester, HUD will require the requester to pay the 
full amount due, plus any applicable interest, and to make an advance

[[Page 32606]]

payment of the full amount of any anticipated fee. If HUD has a 
reasonable basis to believe that a requester has misrepresented his or 
her identity in order to avoid paying outstanding fees, it may require 
that the requester provide proof of identity.
    (4) When HUD requires advance payment, the request will be held in 
abeyance for 15 working days to allow the requester an opportunity to 
make payment in advance and/or modify the scope of the request. If the 
requester does not pay the advance payment or modify the scope of the 
request within the allotted time frame, the request will be closed.
    (j) Other statutes specifically providing for fees. The fee 
schedule in this section does not apply to fees charged under any 
statute that specifically requires an agency to set and collect fees 
for particular types of records. Where records responsive to requests 
are maintained for distribution by agencies operating such statutorily 
based fee schedule programs, HUD will inform requesters of the contact 
information for that source.
    (k) Requirements for waiver or reduction of fees. (1) Records 
responsive to a request will be furnished without charge or at a charge 
reduced below that established under paragraph (c) of this section if 
HUD determines, based on all available information, that the requester 
has demonstrated the following:
    (i) Disclosure of the requested information is in the public 
interest because it is likely to contribute significantly to public 
understanding of the operations or activities of the government; and
    (ii) Disclosure of the information is not primarily in the 
commercial interest of the requester.
    (2) To determine whether the first fee waiver requirement is met, 
HUD will consider the following factors:
    (i) The subject of the requested records should concern 
identifiable operations or activities of the Federal Government, with a 
connection that is direct and clear, not remote or attenuated.
    (ii) The disclosable portions of the requested records should be 
meaningfully informative about government operations or activities in 
order to ``likely to contribute'' to an increased public understanding 
of those operations or activities. The disclosure of information that 
already is in the public domain, in either a duplicative or a 
substantially identical form, would not be as likely to contribute to 
such increased understanding, where nothing new would be added to the 
public's understanding.
    (iii) The disclosure should contribute to the understanding of a 
reasonably broad audience of persons interested in the subject, as 
opposed to the individual understanding of the requester. A requester's 
expertise in the subject area and ability and intention to effectively 
convey information to the public shall be considered. It shall be 
presumed that a representative of the news media will satisfy this 
consideration.
    (iv) The public's understanding of the subject in question, as 
compared to the level of public understanding existing prior to the 
disclosure, should be enhanced by the disclosure to a significant 
extent. However, HUD will not make value judgments about whether 
information at issue is ``important'' enough to be made public.
    (3) To determine whether the second fee waiver requirement is met, 
HUD will consider the following factors:
    (i) HUD shall identify any commercial interest of the requester as 
defined in paragraph (b)(1) of this section, or of any person on whose 
behalf the requester may be acting, that would be furthered by the 
requested disclosure. Requesters shall be given an opportunity in the 
administrative process to provide explanatory information regarding 
this consideration.
    (ii) A fee waiver or reduction is justified where the public 
interest standard is satisfied and that public interest is greater than 
that of any identified commercial interest in disclosure. HUD 
ordinarily will presume that where a news media requester has satisfied 
the public interest standard, the public interest will be the interest 
primarily served by disclosure to that requester. Disclosure to data 
brokers or others who merely compile and market government information 
for direct economic return shall not be presumed to primarily serve the 
public interest.
    (4) Where only some of the records to be released satisfy the 
requirements for a waiver of fees, a waiver will be granted for those 
records.
    (5) Requests for the waiver or reduction of fees should address the 
factors listed in paragraphs (k)(2) and (k)(3) of this section, insofar 
as they apply to each request. In deciding to grant waivers or 
reductions of fees, HUD will exercise its discretion to consider the 
cost effectiveness of its investment of administrative resources.


Sec.  15.107  Documents generally protected from disclosure.

    FOIA contains nine exemptions (5 U.S.C. 552(b)) that protect 
various records from disclosure. With regard to certain types of 
records, HUD generally applies the exemptions as follows:
    (a) Classified documents. Exemption 1 (5 U.S.C. 552(b)(1)) protects 
classified national defense and foreign relations information. HUD 
seldom relies on this exception to withhold documents. However, where 
applicable, HUD will refer a request for records classified under 
Executive Order 12958 and the pertinent records to the originating 
agency for processing. HUD may refuse to confirm or deny the existence 
of the requested information if the originating agency determines that 
the fact of the existence of the information itself is classified.
    (b) Internal agency rules and practices. Exemption 2 (5 U.S.C. 
552(b)(2)) protects records relating to internal personnel rules and 
practices.
    (c) Information prohibited from disclosure by another statute. 
Exemption 3 (5 U.S.C. 552(b)(3)) protects information that is 
prohibited from disclosure by another federal law. HUD generally, will 
not disclose competitive proposals submitted prior to contract award 
that are not incorporated into the contract, unsuccessful contract 
proposals (see 41 U.S.C. 253(b)), or advance information on grant 
funding decisions, including information that would give a grant 
applicant an unfair competitive advantage (see 42 U.S.C. 3537a).
    (d) Commercial or financial information. Exemption 4 (5 U.S.C. 
552(b)(4)) protects trade secrets and commercial or financial 
information obtained from a person that is privileged and confidential. 
HUD will handle this type of information as provided by Sec.  15.108.
    (e) Certain interagency or intra-agency communications. Exemption 5 
(5 U.S.C. 552(b)(5)) protects interagency or intra-agency 
communications that are protected by legal privileges, such as the 
attorney-client privilege, attorney work-product privilege, or 
communications reflecting the agency's deliberative process.
    (f) Personal privacy. Exemption 6 (5 U.S.C. 552(b)(6)) protects 
information involving matters of personal privacy. This information may 
include personnel, medical, and similar files the disclosure of which 
would constitute a clearly unwarranted invasion of personal privacy. 
Names, addresses, telephone numbers, and email addresses of persons 
residing in public or assisted housing or of borrowers in FHA-insured 
single family mortgage transactions generally will not be disclosed.
    (g) Law enforcement records. Exemption 7 (5 U.S.C. 552(b)(7)) 
protects certain records or information

[[Page 32607]]

compiled for law enforcement purposes. This exemption protects records 
where the production could reasonably be expected to interfere with 
enforcement proceedings; for example, the names of individuals who have 
filed fair housing complaints. The protection of this exemption also 
encompasses, but is not limited to, information in law enforcement 
files that could reasonably be expected to constitute an unwarranted 
invasion of personal privacy; the names of confidential informants; and 
techniques and procedures for law enforcement investigations, or 
guidelines for law enforcement investigations if such disclosure could 
reasonably be expected to risk circumvention of the law.
    (h) Supervision of financial institutions. Exemption 8 (5 U.S.C. 
552(b)(8)) protects information relating to the supervision of 
financial institutions. For purposes of Exemption 8, HUD is considered 
an ``agency responsible for the regulation and supervision of financial 
institutions'' for purposes of monitoring fair housing compliance.
    (i) Wells. Exemption 9 (5 U.S.C. 552(b)(9)) protects geological 
information on wells.


Sec.  15.108  Business information.

    (a) In general. Business information obtained by HUD from a 
submitter will be disclosed under the FOIA only under this section. In 
making final confidentiality determinations under this section, HUD 
relies to a large extent upon the information furnished by the affected 
business to substantiate its claim of confidentiality. HUD may be 
unable to verify the accuracy of much of the information submitted by 
the affected business. HUD will comply with Executive Order 12600 and 
follow the procedure in this section by giving notice to the affected 
business and an opportunity for the business to present evidence of its 
confidentiality claim. If HUD is sued by a requester under the FOIA for 
nondisclosure of confidential business information, HUD expects the 
affected business to cooperate to the fullest extent possible in 
defending such decision.
    (b) Designation of business information. A submitter of business 
information will use good faith efforts to designate, by appropriate 
markings, either at the time of submission or at a reasonable time 
thereafter, any portions of its submission that it considers to be 
protected from disclosure under Exemption 4. These designations will 
expire 10 years after the date of the submission unless the submitter 
requests, and provides justification for, a longer designation period.
    (c) Notice to submitters. HUD will provide a submitter with prompt 
written notice of a FOIA request or administrative appeal that seeks 
business information, wherever required under paragraph (d) of this 
section, in order to give the submitter an opportunity to object to 
disclosure of any specified portion of that information under paragraph 
(e) of this section. The notice will either describe the business 
information requested or include copies of the requested records or 
portions of records containing the information. When notification of a 
voluminous number of submitters is required, notification may be made 
by posting or publishing the notice in a place reasonably likely to 
accomplish notification.
    (d) Where notice is required. Notice will be given to a submitter 
wherever:
    (1) The information has been designated in good faith by the 
submitter as information considered protected from disclosure under 
Exemption 4; or
    (2) HUD has reason to believe that the information may be protected 
from disclosure under Exemption 4.
    (e) Opportunity to object to disclosure. HUD will allow a submitter 
a reasonable time to respond to the notice described in paragraph (c) 
of this section and will specify that time period within the notice. If 
a submitter has any objection to disclosure, the submitter should 
submit a detailed written statement specifying the grounds for 
withholding any portion of the information under any exemption of FOIA 
and, in the case of Exemption 4, the submitter should show why the 
information is a trade secret or commercial or financial information 
that is privileged or confidential. HUD generally will not consider 
conclusory statements that particular information would be useful to 
competitors or would impair sales, or other similar statements, 
sufficient to justify confidential treatment. In the event that a 
submitter fails to respond to the notice within the time specified, the 
submitter will be considered to have no objection to the disclosure of 
the information. Information provided by the submitter that is not 
received until after the disclosure decision has been made will not be 
considered by HUD. Information provided by a submitter under this 
paragraph may itself be subject to disclosure under the FOIA.
    (f) Notice of intent to disclose. HUD will consider a submitter's 
objections and specific grounds for nondisclosure in deciding whether 
to disclose business information. Whenever HUD decides to disclose 
business information over the objection of a submitter, HUD will give 
the submitter written notice, which will include:
    (1) A statement of the reason(s) why each of the submitter's 
disclosure objections was not sustained;
    (2) A description of the business information to be disclosed; and
    (3) A specified disclosure date, which shall be a reasonable time 
subsequent to the notice.
    (g) Exceptions to notice requirements. The notice requirements of 
paragraphs (c) and (f) of this section will not apply if:
    (1) HUD determines that the information should not be disclosed;
    (2) The information lawfully has been published or has been 
officially made available to the public; or
    (3) Disclosure of the information is required by statute (other 
than the FOIA) or by a regulation issued in accordance with the 
requirements of Executive Order 12600.
    (h) Notice of FOIA lawsuit. Whenever a requester files a lawsuit 
seeking to compel the disclosure of business information, HUD will 
promptly notify the submitter.
    (i) Corresponding notice to requesters. Whenever HUD provides a 
submitter with notice and an opportunity to object to disclosure under 
paragraph (f) of this section, HUD will also notify the requester(s). 
Whenever a submitter files a lawsuit seeking to prevent the disclosure 
of business information, HUD shall notify the requester(s).


Sec.  15.109  Mortgage sales.

    (a) Disclosure of certain information in connection with mortgage 
sales. HUD will release information regarding a Mortgagor's statement 
of profit and loss only to eligible potential mortgage purchasers and 
only during the period specified by HUD for a mortgage sale.
    (b) Conditions for releasing information. HUD will release 
information regarding a Mortgagor's statement of profit and loss only 
if all of the following three conditions are met:
    (1) The information concerns a project that is subject to a HUD-
held mortgage that HUD is selling under the authority of Sections 
207(k) and (l) of the National Housing Act (12 U.S.C. 1713(k) and (l)) 
or Section 7(i)(3) of the Department of Housing and Urban Development 
Act (42 U.S.C. 3535(i)(3)).
    (2) The eligible potential purchasers have agreed to:
    (i) Keep the information confidential;
    (ii) Disclose the information only to potential investors in the 
mortgage and only for the period specified by HUD for

[[Page 32608]]

the mortgage sale and to notify those potential purchasers of their 
obligations under this section;
    (iii) Use the information only to evaluate the mortgage in 
connection with the mortgage sale; and
    (iv) Follow disclosure procedures for that sale that have been 
established by the Secretary of HUD.
    (3) The potential investors in the mortgage have agreed to keep the 
information confidential and to use the information only to evaluate 
the mortgage in connection with their investment decision.
    (c) Investor use of disclosed information. Potential investors in 
the mortgage shall not disclose the information to other entities 
unless the disclosure is:
    (1) Necessary for the investor's evaluation of the mortgage;
    (2) Made in accordance with disclosure procedures for the specific 
sale that have been established by HUD; and
    (3) Limited to the period specified by HUD for the mortgage sale.
    (d) Improper use of disclosed information. An eligible potential 
purchaser or a potential investor (who has received the information 
from a potential purchaser and has been notified by that entity of its 
obligations under paragraph (b) of this section) who discloses 
information in violation of this section may be subject to sanctions 
under 2 CFR part 2424.


Sec.  15.110  Appeals.

    (a) In general. A requester may appeal an adverse determination 
denying a request, in any respect, in writing to the address specified 
in HUD's notice responding to the FOIA request (see Sec.  15.105). The 
letter of appeal should clearly identify the determination that is 
being appealed and the assigned tracking number. The appeal letter and 
envelope should be marked ``Freedom of Information Act Appeal'' for the 
quickest possible handling. If mailed, the requester's letter of appeal 
must be postmarked within 30 calendar days of the date of HUD's letter 
of determination. If the letter of appeal is transmitted by means other 
than the United States Postal Service, it must be received in the 
appropriate office by the close of business on the 30th calendar day 
after the date of HUD's letter of determination.
    (b) Time frames. (1) Expedited processing. HUD will decide an 
appeal of a denial of a request to expedite processing of a FOIA 
request within 10 working days of receipt of the appeal.
    (2) All other appeals. HUD will make a determination on appeals 
within 20 working days of receipt unless unusual circumstances require 
HUD to extend the time for an additional 10 working days.
    (3) Exceptions. An appeal ordinarily will not be acted upon if the 
subject of the appeal is simultaneously being litigated in an 
applicable federal court.
    (c) Content of appeals. An appeal letter should include the 
following:
    (1) A copy of the original request;
    (2) A copy of the adverse determination;
    (3) A statement of facts and legal arguments supporting the appeal; 
and
    (4) Any additional information the appellant wishes to include.
    (d) When appeal is required. Before seeking a court review of HUD's 
adverse determination, a requester generally should have exhausted 
their administrative remedies.


Sec.  15.111  HUD response to appeals.

    (a) In general. (1) The appellate official will conduct a de novo 
review of the entire record and applicable law when making a decision.
    (2) The decision on the appeal will be made in writing and will be 
considered the final action of HUD.
    (i) A decision affirming an adverse determination, in whole or in 
part, will contain a statement of the reason(s) for the affirmation, 
including any FOIA exemption(s) applied, and will inform the appellant 
of the FOIA provisions for potential court review of the decision.
    (ii) If the adverse determination is modified on appeal, in whole 
or in part, a written decision will be sent to the appellant and the 
FOIA request will be reprocessed in accordance with the appeal 
decision.
    (b) Appeal of a denial of record request. Upon appeal of a denial 
of a record request, the appellate official will issue a decision that 
either:
    (1) Overturns the adverse determination, in whole or in part, and 
remands the request to the appropriate office. The requester will be 
notified of the rationale for the determination in writing. The 
original office will then reprocess the request in accordance with the 
appeal determination and respond directly to the requester; or
    (2) Affirms the adverse determination and declines to provide the 
requested records to the appellant.
    (c) Appeal of a fee determination. Upon appeal of a fee 
determination, the appellate official will issue a decision that 
either:
    (1) Waives the fee or charges the fee that the appellant requested;
    (2) Modifies the original fee charged and explains why the modified 
fee is appropriate; or
    (3) Advises the appellant that the original fee charged was 
appropriate and gives the reasons behind this determination.
    (d) Appeal of a denial of expedited processing. Upon appeal of a 
denial of an expedited processing request, the appellate official will 
issue a decision that either:
    (1) Overturns the adverse determination and grants the expedited 
processing request; or
    (2) Affirms the decision to deny expedited processing.

    Dated: May 1, 2013.
Shaun Donovan,
Secretary.
[FR Doc. 2013-12604 Filed 5-30-13; 8:45 am]
BILLING CODE 4210-67-P