[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Notices]
[Pages 66729-66737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28095]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-7006-N-15]


60-Day Notice of Proposed Information Collection: Comment 
Request: Agency Information Collection Activities: Public Housing 
Annual Contributions Contract for Capital and Operating Grant Funds

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

ACTION: Notice.

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SUMMARY: HUD is seeking approval from the Office of Management and 
Budget (OMB) for the information and collection described below. The 
public housing program provides Operating Funds and Capital Funds to 
low rent projects owned and operated by public housing agencies (PHAs), 
subject to the terms and conditions contained in the Annual 
Contributions Contract (ACC) grant agreement. These program 
requirements govern how projects are funded and operated by PHAs. HUD 
has made changes and updates to its grant agreement, the Annual 
Contributions Contract (ACC) (the ``New ACC''), based on current 
applicable statutes and regulations. This notice is to provide PHAs 
with notice of the changes and the opportunity to comment on such 
changes. In accordance with the Paperwork Reduction Act, HUD is 
requesting comment from all interested parties on the proposed 
collection of information. The purpose of this notice is to allow for 
60 days of public comment.

DATES: Comments Due Date: February 25, 2019.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposal. All comments must refer to the proposal by name and OMB 
Control Number. 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 20410-0500.
    2. Electronic Submission of Comments. Interested persons may also 
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 website 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 methods specified above. Again, all 
submissions must refer to the docket number and title of the notice.

    No Facsimiled Comments. Facsimiled (faxed) comments are not 
acceptable.
    Public Inspection of Public Comments. Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov. In addition, 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 Federal Relay Service at 800-877-8339 
(this is a toll-free number).

FOR FURTHER INFORMATION CONTACT: Arlette Mussington, Office of Policy, 
Programs and Legislative Initiatives, PIH, Department of Housing and 
Urban Development, 451 7th Street SW, Room 3178, Washington, DC 20410; 
telephone 202-402-4109, (this is not a toll-free number). Persons with 
hearing or speech impairments may access this number via TTY by calling 
the Federal Information Relay Service at (800) 877-8339. Copies of 
available documents submitted to OMB may be obtained from Ms. 
Mussington.

SUPPLEMENTARY INFORMATION: This notice informs the public that the 
Department is re-submitting the proposed information collection to OMB 
for review, under the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35, as amended). HUD is seeking approval from OMB for the 
information collection described in Section A.

A. Overview of Information Collection

    Title of Information Collection: Public Housing Annual 
Contributions Contract for Capital and Operating Grant Funds.\1\
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    \1\ The previous title was ``Public Housing Annual Contribution 
Contract and Inventory Removal Application''.
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    OMB Approval Number: 2577-0075.
    Type of Request: Revision of a currently approved collection.
    Form Number: HUD-52840A; HUD-53012A; HUD-53012 B.
    Description of the need for the information and proposed use: The 
ACC establishes the basic terms and conditions for the PHA's public 
housing programs and requires the PHA to manage and operate its public 
housing properties in accordance with the United States Housing Act of 
1937 (42 U.S.C. 1437 et seq.) (1937 Act) and all applicable HUD 
requirements. The ACC governs the award and use of two distinct public 
housing grant funds. The Capital Fund Program (CFP) provides financial 
assistance in the form of grants

[[Page 66730]]

to PHAs to carry out eligible capital and management activities 
authorized by Section 9(d)(1) of the 1937 Act. The Operating Fund 
Program provides financial assistance in the form of grants to PHAs for 
the operation and maintenance of public housing authorized by Section 
9(e)(1) of the 1937 Act. Section 6 of the 1937 Act, 24 CFR 5.403, 24 
CFR 905.100 (Capital Fund), and 24 CFR 990.115 (Operating Fund) 
authorizes the Secretary of HUD to make annual contributions for 
federal financial assistance in the form of grants to PHAs to achieve 
and maintain the low income character of public housing projects. The 
Secretary is required to embody the provisions for such annual grant 
contributions in a grant agreement (i.e., the ACC). Additional 
applicable regulations include: 24 CFR part 907 for Substantial Default 
by a PHA; 2 CFR part 200 for Uniform Administrative Requirements, Cost 
Principles and Audit Requirements for Federal Awards, and 24 CFR part 5 
for General HUD Program Requirements.
    The amendment of this notice of proposed information collection 
provides PHAs with sufficient notice of the changes to the New ACC, 
which was revised in order to align the agreement with existing 
statutes and regulations. It combines Part A and B of the 1995 ACC and 
the Mixed Finance Amendment to the 1995 ACC to streamline the grant 
agreement. The New ACC also removes Section 10, Operating Budget and 
Section 11, Pooling of Funds formerly in the 1995 version of ACC, 
because these provisions are no longer included in 24 CFR part 990 and 
thus no longer apply. Section 22, Performance of Conditions Precedent 
to the Validity, which discussed implementation of the 1995 version of 
the ACC, is also deleted. Additionally, the New ACC includes additional 
definitions that were not in the 1995 ACC but are already in existing 
regulations required by the 1937 Act and makes changes to definitions 
of ``Operating Costs'' and ``Operating Receipts'' to be consistent with 
24 CFR part 905 subpart F, 24 CFR 990.110 and 990.115, 2 CFR 200.80 and 
2 CFR 200.307. Finally, the New ACC incorporates a definition for 
``Annual Contributions Contract'' consistent with the terms and 
conditions under which the public housing grant program has been 
administered by HUD, and consistent with existing regulations at 2 CFR 
200.51, 24 CFR 905.100(b), and 905.300(b), 905.306, 905.322, which 
refer to the programs as grants. This definition applies to both the 
Capital Fund and Operating Fund.
    Respondents: Public housing agencies.

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                                                       Total
                  ACC provision                      responses      Total hours    Cost per hour  Total cost ($)
----------------------------------------------------------------------------------------------------------------
1. Execute new ACC via HUD form 53012-A and B...              42             205          $24.34          $4,990
2. Terminate or amend ACC.......................              78             390           24.34           9,493
3. Request HUD approval of non-dwelling leases               114             735           24.34          17,890
 or agreements..................................
4. HUD approval for easement uses...............              48            3524           24.34           8,567
5. Submit General Depository Agreement (GDA) via             265             651           24.34          15,845
 form HUD 51999.................................
6. Request to terminate GDA.....................             107             202           24.34           4,917
7. ACC revisions to change year end dates.......              23             257           24.34           6,255
8. ACC to consolidate PHAS......................              18             217           24.34           5,282
9. ACC revision to transfer programs............              43             391           24.34           9,517
10. Request review of Conflict of interest......             102             951           24.34          23,147
11. Request pooling of insurance................               5              97           24.34           2,361
12. Request for new Declaration of Trust (DOT)               142            1249           24.34          30,400
 via form HUD 52190-A and B.....................
13. Request DOT amendment or termination........             221            2031           24.34          49,435
14. Amend ACC for Capital Fund Finance via form               73             788           24.34          19,180
 HUD 52840-A....................................
15. Amend ACC for Mixed Finance Supplementary                 94            1981              50          99,050
 Legal Document.................................
16. Amend ACC for Capital Grant.................            2820          11,070           24.34         269,443
17. Amend ACC for Emergency Capital Fund Grant..              38             100           24.34           2,434
18. Amend ACC Capital Fund for Safety and                     75              96           24.34           2,337
 Security.......................................
19. Amend ACC to Recapture Capital Fund Grant...             123             643           24.34          15,650
20. Amend ACC for Energy Performance Contract...              38             192           24.34           4,673
21. Amend ACC for Community Facilities Grants...              13              28           24.34             682
22. Demo Disposition Approvals and Removing                  162            1746           24.34          42,498
 Units form ACC-HUD Form 52860..................
23. Chicago Special Applications Center Approval             851           6,010           33.06         225,072
 for Inventory Removal Applications.............
24. Supplementary Document: Unique Legal                      60            1440              50          72,000
 Document used by HQ Staff Mixed-Finance
 Amendment to the ACC...........................
                                                 ---------------------------------------------------------------
    Totals......................................           6,765          34,944  ..............         927,423
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B. Solicitation of Public Comment

    This notice is soliciting comments from members of the public and 
affected parties concerning the collection of information described in 
Section A on the following:
    (1) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    (2) The accuracy of the agency's estimate of the burden of the 
proposed collection of information;
    (3) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (4) Ways to minimize the burden of the collection of information on 
those who are to respond; including through the use of appropriate 
automated collection techniques or other forms of information 
technology, e.g., permitting electronic submission of responses.
    HUD encourages interested parties to submit comment in response.
    Affected Public Who Will Be Asked or Required to Respond: The 
primary respondents are Public Housing Agencies.

[[Page 66731]]

C. Authority

    Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. 
Chapter 35.

    Date: December 19, 2018.
Dominique Blom,
 General Deputy Assistant Secretary for Public and Indian Housing.

Annual Contributions Contract HUD-53012 (ACC)

U.S. Department of Housing and Urban Development Office of Public and 
Indian Housing

OMB Approval No. 2577-0075 (exp. 01/31/2021)

The information collection requirements contained in this document 
have been approved by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and 
assigned OMB control number 2577-0075. There is no personal 
information contained in this application. Information on activities 
and expenditures of grant funds is public information and is 
generally available for disclosure. Recipients are responsible for 
ensuring confidentiality when disclosure is not required. In 
accordance with the Paperwork Reduction Act, HUD may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless the collection displays a currently valid OMB 
control number.

1. Definitions

    Act--The United Stated Housing Act of 1937 (42 U.S.C. 1437, et 
al.), as amended.
    Annual Contributions Contract (ACC)--This agreement between HUD and 
the HA which establishes the basic terms and conditions for the HA's 
public housing grant program.
    Consolidated Annual Contributions Contract (consolidated ACC or 
CACC)--HUD's annual Grant Funding Exhibits to the ACC, which together 
with the ACC, constitute the annual grant agreement for the HA's public 
housing program.
    Cooperation Agreement--Agreement(s) prescribed by HUD for execution 
by the HA and the local governing body relative to the cooperation of 
the local governing body in the development and operation of the 
Project(s) and the obligation of the HA for payments in lieu of taxes 
(PILOT).
    Fiscal Year--The HA fiscal year.
    Grant Funding Exhibit--Exhibits to the ACC, in a form prescribed by 
HUD, reflecting HUD's estimate of Operating Fund and Capital Fund grant 
funding or other public housing grant funding for which the HA is 
eligible.
    Housing Agency (HA)--The entity that meets the statutory definition 
set forth under the Act, and which is subject to the CACC.
    HUD--The U.S. Department of Housing and Urban Development.
    Mixed-Finance--Development or modernization of public housing units 
where the public housing units are owned in whole or in party by an 
entity other than a PHA (i.e., Owner-Entity).
    Operating Costs (Operating Expenditures or Operating Expenses)--
Costs incurred by the HA for the necessary administration, operation 
and maintenance of a public housing Project; and which may be charged 
against Operating Receipts in accordance with the CACC and HUD 
requirements. Except as allowed by HUD, such costs do not include: any 
costs, expenses, expenditures, or charges incurred as part of the 
development or modernization of a public housing Project.
    Operating Receipts--All rents, revenues, income, and receipts 
accruing from, out of, generated by, or in connection with the 
ownership or operation of public housing, including grant funds 
received pursuant to HUD Requirements and is not limited to income from 
fees for services performed, the use or rental of real or personal 
property acquired with grant funds, the sale of commodities or items 
fabricated under the grant, license fees and royalties on patents and 
copyrights, and principal and interest on loans made with grant funds. 
Operating Receipts shall not include any funds received for the 
development or modernization of a Project; annual contributions pledged 
for payment of bonds or notes; proceeds from the disposition of real 
property; or rebates, credits, discounts and interest.
    Interest on the Operating Receipts (including the investment of 
Operating Receipts) constitutes Operating Receipts.
    Operating Reserve--The cumulative amount by which Operating 
Receipts have exceeded Operating Costs.
    Owner Entity--An entity, including the HA, that owns public housing 
units in a mixed finance project.
    Project (Public Housing Project)--Low-income housing, developed, 
acquired, or assisted by HUD under the Act, and the improvement of such 
housing, and necessary appurtenances thereto. The term includes all 
real and personal property, tangible and intangible, that is acquired 
or held by a HA in connection with a Project covered under the CACC. 
The term does not include housing under section 8 of the Act.
    Program (Public Housing program)--The HA's public housing grant 
program.
    Program Receipts--Program Receipts shall mean Operating Receipts 
and any other funds received by the HA for the development, 
modernization, sale or transfer of Public Housing Projects. Subject to 
HUD Requirements, as defined in Paragraph 3, interest on the Program 
Receipts (including the investment of program receipts) constitutes 
Program Receipts. Program Receipts shall only be used to pay for public 
housing program expenditures, unless otherwise allowed by HUD 
Requirements.
    Public Housing--The term shall include Public Housing Projects, as 
well as all other real and personal property, tangible and intangible, 
which is acquired, or held by, the HA in connection with its public 
housing program covered under a CACC.
    Replacement Reserve Account--An account established by the HA, as 
approved by HUD, that may be used to fund any of the eligible capital 
activities outlined in the HA's Capital Fund 5 Year Action Plan as 
approved by HUD.

2. Mission of HUD and HA

    a. HUD shall administer its Public Housing Program for the 
provision of decent, safe, and sanitary housing to eligible families in 
accordance with the CACC and all applicable HUD Requirements. HUD shall 
provide maximum responsibility and flexibility to HAs in making 
administrative decisions within all applicable statutes, executive 
orders, regulations and this ACC. HUD shall provide annual 
contributions, in the form of grants, to the HA in accordance with all 
applicable statutes, executive orders, regulations, and the CACC.
    b. The HA shall use Program Receipts to provide decent, safe, and 
sanitary housing for eligible families in compliance with the Act and 
all HUD requirements. HA shall at all times develop and operate Public 
Housing Projects in a manner that promotes serviceability, economy, 
efficiency, and stability of the Projects, and the economic and social 
well-being of the tenants.
    c. Except as otherwise provide by law, the HA shall develop, 
modernize and operate all Projects covered by the CACC, in accordance 
with HUD Requirements. The HA shall also ensure compliance with such 
requirements by any Owner Entity, contractor or subcontractor engaged 
in the development or operation of a Project covered under the CACC.

3. HUD Requirements

    Except as otherwise provided by law, the HA must comply with the 
following ``HUD Requirements,'' including all

[[Page 66732]]

such requirements as amended from time to time:
    a. The Act;
    b. Regulations at Title 2 of the Code of Federal Regulations, and 
regulations issued by HUD at Title 24 of the Code of Federal 
Regulations);
    c. Other Federal statutes (including appropriations acts), 
executive orders and regulatory requirements; and
    d. HUD-issued notices, and HUD-required forms, or agreements.

4. Cooperation Agreement(s)

    During the development and operation of the Project(s), the HA 
shall perform and comply with all applicable provisions of a 
Cooperation Agreement in the form prescribed by HUD, including the 
making of PILOT provided therein (or such lesser amount as may be 
prescribed by State law or agreed to by the local governing body); and 
shall at all times preserve and enforce its rights thereunder, and 
shall not terminate or amend the Cooperation Agreement(s) without the 
prior written approval of HUD.

5. Declaration of Restrictive Covenants

    a. Record of Obligation. Upon the acquisition, development, or 
assistance of any real property with funds covered by the CACC, the HA 
shall execute and file for record against the Project and/or the 
owner's leasehold interest an instrument (which shall be in the form of 
a declaration of trust, declaration of restrictive covenant, or such 
other document as approved or prescribed by HUD), confirming and 
further evidencing, but not limited to, (1) the obligation of the HA 
not to convey or encumber the Project except as expressly authorized in 
the CACC, (2) the obligation of the HA to develop, maintain and operate 
such Project in compliance with the CACC and HUD Requirements.
    1. Such instrument and all amendments shall be duly recorded or 
filed for record to give public notice of their contents and to protect 
the rights and interests of HUD.
    2. The HA shall promptly furnish HUD with appropriate evidence of 
such recording or filing. From time to time, as additional real 
property is acquired, assisted, or disposed of (or removed from the 
public housing program) by the HA in connection with its Public Housing 
Program, the HA shall promptly amend such instrument to incorporate all 
such real property and shall record the instrument, as amended. The 
declaration shall provide further that it may not be modified, amended 
or released without the prior written approval of HUD. The HA shall 
promptly furnish HUD with appropriate evidence of such recording or 
filing.
    b. Mixed-Financed Projects. The HA shall require the Owner Entity 
to execute and file for record against the Project, prior to the 
recordation of any other encumbrance, a declaration in the form 
approved by HUD.
    1. The declaration shall confirm and evidence the Owner Entity's 
obligation during the term of CACC covering the Project units and 
throughout such further period when such approval may be required by 
law as then in effect, to develop, maintain and operate the Project 
units in compliance with the HUD Requirements. Such declaration and all 
amendments shall be duly recorded or filed for record to give public 
notice of their contents and to protect the rights and interests of 
HUD.
    2. The declaration shall provide further that it may not be 
modified, amended or released without the prior written approval of 
HUD. The HA shall promptly furnish HUD with appropriate evidence of 
such recording or filing.

6. Disposition and Encumbrances

    a. Covenant Against Disposition and Encumbrances. The HA shall not 
demolish or dispose of any Project, or portion thereof, other than in 
accordance with the terms of the CACC and applicable HUD Requirements. 
The HA shall not encumber any Project, or portion thereof, without the 
prior written approval of HUD. The HA shall not pledge any assets of 
any Project covered by the CACC as collateral for any loan or other 
obligation, without the prior written approval of HUD. However, prior 
written approval by HUD is not required for the HA to enter into 
dwelling leases with eligible families for dwelling units in the 
Projects covered by the CACC, and such other normal uses associated 
with the operation of the Project(s).
    b. Mixed-Finance Projects. Without the prior written approval of 
HUD, no transfer, conveyance, or assignment shall be made: (i) Of any 
interest of a managing member, general partner, or controlling 
shareholder (any such interest being referred to as a ``Controlling 
Interest'') of the Owner Entity; (ii) of a Controlling Interest in any 
entity which has a Controlling Interest in the Owner Entity; or, (iii) 
prior to the payment in full of all equity contributions described in 
the approved evidentiary documents, any other interest in the Owner 
Entity, or in any partner or member thereof.
    1. Notwithstanding the foregoing, HUD consent is not required where 
a business organization that has a limited interest (non-controlling 
and non-managing) in the Owner Entity transfers a non-controlling and 
non-managing interest in the business organization, provided that: (i) 
The Owner Entity provides HUD with written notice of such transfer; 
(ii) the transfer of such interest does not result in an entity 
obtaining a Controlling Interest or managing interest following the 
transfer; and, (iii) the Owner Entity certifies to HUD that the new 
owner of the limited interest remains obligated to fund its equity 
contribution in accordance with the terms of the HUD-approved 
organizational documents of the Owner Entity.
    2. HUD will not unreasonably withhold, delay, or condition a 
request by the Owner Entity for HUD's consent to an internal 
reorganization of the corporate or partnership structure of the Owner 
Entity or any of the partners, members or stockholders of the Owner 
Entity.
    3. Notwithstanding the foregoing, the prior approval of HUD and the 
HA will not be required for the exercise by any investor partner of the 
Owner Entity (``Investor'') of its right pursuant to the Amended and 
Restated Limited Partnership Agreement of the Owner Entity 
(``Partnership Agreement'') to remove the general partner of the Owner 
Entity and appoint the Investor or its Affiliate (i.e., any entity 
which directly or indirectly controls, or is controlled by, or is under 
common control with, the specified entity) as an interim general 
partner of the Owner Entity so long as the Investor gives prompt 
written notice to HUD of such removal and appointment (``Removal 
Notice''); provided that HUD and the HA consent will be required for 
the appointment of such interim general partner to extend beyond a 
ninety (90) day period and for the appointment of any entity (including 
the Investor of an affiliate thereof) as the permanent replacement 
general partner. Such 90-day period will commence on the date of the 
Removal Notice (``Interim Replacement Period''). With the prior written 
approval of HUD and the HA, the Interim Replacement Period may be 
extended for an additional 90 days to allow the substitute general 
partner of the Owner Entity to find a replacement general partner 
acceptable to HUD and all other parties, provided that prior to the 
expiration of such additional 90-day period, the substitute general 
partner demonstrates that the Investor is continuing to fund (or has 
already funded) capital as required under the Partnership Agreement and 
that the Project continues to be operated in a manner consistent with 
HUD Requirements.

[[Page 66733]]

    4. The consent of HUD and the HA will not be required for (i) any 
exercise by the Investor of its right to require the repurchase of its 
limited partnership interests as against the General Partner, any 
guarantor, and/or any affiliate thereof (``Repurchaser'') pursuant to 
the Partnership Agreement, provided that the Investor provides prompt 
written notice to HUD and the HA at the time of its exercise of such 
right, and further provided that any resale of the limited partnership 
interests by the Repurchaser will be subject to the approval of HUD and 
the HA, such approval not to be unreasonably withheld, delayed or 
conditioned, or (ii) the exercise by the HA (or any approved Affiliate 
thereof) of its rights to acquire interests or the Property pursuant to 
the Right of First Refusal and Purchase Option Agreement of 
approximately even date herewith.

7. Insurance Requirements

    a. Except as otherwise provided by HUD, and in accordance with the 
CACC and HUD regulations and requirements, the HA shall procure 
adequate insurance to protect the HA from financial loss resulting from 
various hazards.
    b. Mandatory Insurance Coverage. The following types of insurance 
coverage are required:
    1. Commercial Property. Each policy must be written with a blanket 
limit, on a replacement cost basis, and with an agreed value clause 
eliminating any coinsurance provision.
    2. Commercial General Liability.
    3. Workers Compensation and Employers Liability.
    4. Owned and Non-Owned Automobile Liability.
    5. Theft, Disappearance, and Destruction, only if the amount of 
cash and checks on hand at any one time exceeds the amount prescribed 
by HUD.
    6. Employee Dishonesty.
    7. Boiler and Machinery if steam boilers have been installed.
    8. Flood Insurance for property located in a flood plain, as 
determined in the Federal Government's National Flood Insurance 
Program.
    9. Lead-Based Paint Liability for HAs undergoing lead-based paint 
testing and abatement.
    10. Fidelity Bond Coverage. The HA must carry adequate fidelity 
bond coverage, as required by HUD, of its officers, agents, or 
employees handling cash or authorized to sign checks.
    c. Optional Insurance Coverage. The following types of insurance 
coverage are recommended and should be purchased when the HA has 
exposure to these covered risks:
    1. Boiler and Machinery (equipment breakdown).
    2. Directors and Officers or Public Officials Liability.
    3. Law Enforcement Liability when the Commercial General Liability 
insurer has excluded coverage.
    d. Authorized Insurance Companies. Insurance must be purchased from 
an insurance company or other entity that is licensed or duly 
authorized to write insurance in the State where the HA is located.
    e. Certificates of Insurance. At each renewal, the HA shall 
promptly have certificates of insurance submitted by the insurers to 
HUD describing the types of coverage, limits of insurance, policy 
numbers, and inception and expiration dates.
    f. Waivers and Self-Insurance Funds. Requests for waivers of this 
section not to purchase any form of required insurance, or to establish 
a self-insurance fund in lieu of purchasing insurance, must be 
submitted in writing to HUD for approval and include specific 
justification and risk analysis.
    g. Restoration. Unless the HA has received prior written approval 
of HUD to the contrary, the HA shall, to the extent that insurance 
proceeds permit, promptly restore, reconstruct, and/or repair any 
damaged or destroyed property of a Project, in accordance with all HUD 
Requirements.
    h. Mixed Finance Projects. The HA, to the extent that insurance 
proceeds or condemnation award proceeds (``Proceeds'') permit, shall 
promptly cause the restoration, reconstruction, and/or repair 
(``Restoration'') of any damaged or destroyed property of the Project. 
The Owner Entity, to the extent Proceeds and other funds (if any are 
made available by the Owner Entity or the HA) permit, and to the extent 
Restoration is feasible, shall promptly cause the Restoration of ay 
damaged or destroyed property of the Project. Each mortgagee must 
permit Restoration if feasible (rather than require application of 
Proceeds to reduction of debt). If Restoration is not feasible, then 
the following requirements, which shall be incorporated into the 
Regulatory and Operating Agreement (or other such agreement) between 
the HA and the Owner Entity (and ground lease, if applicable), and with 
which all mortgage documents encumbering the Project shall be 
consistent, shall apply:
    1. Partial loss. In the event that less than all of the dwelling 
units in the Project are damaged, destroyed or lost as a result of 
casualty or condemnation, the following provisions shall apply:
    (A) If the Proceeds are less than, or equal to, the sum of the 
existing outstanding mortgage debt secured by the Project, excluding 
any such debt held by the HA to secure a loan of Capital Funds, other 
public housing development funds, or Program Receipts for the Project 
(``Existing Mortgages''), and such Proceeds are applied to reduction of 
Existing Mortgages, the number of Project units in the Project shall 
remain the number required immediately prior to the occurrence of the 
casualty or condemnation.
    (B) If the Proceeds are less than, or equal to, the sum of the 
Existing Mortgages but, at the election of the holders of the Existing 
Mortgages, are distributed among the holders thereof and the HA, by 
application first to reduction of the Existing Mortgages in an 
aggregate amount not to exceed the proportion of the Proceeds equal to 
the ratio of non-Project units to all dwelling units in the Project, 
and then by payment to the HA of the balance of the Proceeds; then the 
percentage of units in the Project (and the percentage of bedrooms 
contained therein) which shall be Project units shall remain the same 
as required immediately prior to the casualty or condemnation.
    (C) If the Proceeds are more than sufficient to pay off the 
Existing Mortgages, Proceeds in excess of the aggregate amount of the 
Existing Mortgages shall be applied in the following order of priority:
    (i). To reduce any outstanding indebtedness to the HA for a loan of 
Capital Funds, other public housing development funds, or Program 
Receipts;
    (ii). To reimburse the HA for any Capital Funds, HOPE VI Grant 
Funds or other public housing funds disbursed to the Owner Entity for 
development of the Project other than by loan;
    (iii). To the HA an amount equal to the total ``cost of 
construction'' attributable to the Project units, less the sum of (A) 
and (B) above; and
    (iv). To the Owner Entity.
    (D) Following application of Proceeds in accordance with this 
subparagraph the percentage of dwelling units in the Project which 
shall be Project units (and the percentage of bedrooms contained 
therein) shall remain the same as required immediately prior to the 
casualty or condemnation; provided, however, that to the extent that 
the payment to the HA pursuant to clauses (A), (B), and (C) shall be 
less than the ``cost of construction'' attributable to the Project 
units, the number of remaining Project units shall be increased by a 
number of units (rounded down) equal to (1) the amount by which such 
payments to the HA shall be less than the cost of construction, divided 
by (2)

[[Page 66734]]

the quotient of (x) cost of construction, divided by (y) the number of 
Project units immediately prior to the occurrence of the casualty or 
condemnation.
    2. Total loss. In the event that all of the units in the Project 
are damaged, destroyed or lost as a result of casualty or condemnation, 
the following provisions shall apply:
    (A) The Proceeds shall be used to reduce the amount of the 
outstanding indebtedness of any mortgage(s) secured by the Project, 
including any mortgage(s) held by the HA, based on the priority 
recorded order of such mortgage(s);
    (B) If the Proceeds are more than sufficient to pay off the amount 
of the outstanding indebtedness of all mortgage(s) secured by the 
Project, including any mortgage(s) held by the HA, then the amount of 
the Proceeds in excess of such indebtedness shall be applied in the 
following order of priority:
    (i). To reduce any outstanding indebtedness to the HA for an 
unsecured loan of Capital Funds, or other HUD Development Funds or 
Program Receipts;
    (ii). To reimburse the HA for any Capital Funds, other public 
housing funds or Program Receipts disbursed to the Owner Entity for 
development of the Project other than by loan;
    (iii). To the HA an amount equal to the total ``cost of 
construction'' attributable to the Project units, less the sum of (a) 
and (b) above, and
    (iv). To the Owner Entity.
    For the purposes of this subsection, the term ``cost of 
construction'' shall mean the total cost of developing the Project, 
less land acquisition costs, if any, and non-capitalized soft costs.

8. Employer Requirements

    The HA shall comply with all State and Federal laws applicable to 
employee benefit plans and other conditions of employment.

9. Accounts, Records, and Government Access

    a. The HA shall maintain complete and accurate books of account for 
the Projects of the HA in such a manner as to permit the preparation of 
statements and reports in accordance with HUD Requirements, and to 
permit timely and effective audit.
    b. The HA shall furnish HUD such financial and program data, 
reports, records, statements, and documents at such times, in such 
form, and accompanied by such supporting data as required by HUD. The 
HA is required to submit information to, or access HUD's system of 
records (SOR). HUD's SOR are subject to the Privacy Act, the Freedom of 
Information Act, and other such applicable law. The HA shall not 
release, without prior HUD approval, any information contained in such 
records.
    c. The United States Government, including HUD and the Comptroller 
General, and its duly authorized representatives, shall have full and 
free access to all HA offices and facilities, and to all books, 
documents, and records of the HA relevant to the administration of the 
Projects under this CACC, including the right to audit and make copies.
    d. The HA shall engage and pay an independent public accountant to 
conduct audits that are required by HUD Requirements. The cost of 
audits required by HUD Requirements may be charged against Program 
Receipts.
    e. The foregoing (a)-(d) shall apply to any records and/or any 
facilities operated or maintained by an agent or independent contractor 
for the HA that assists in fulfilling any obligation under this CACC. 
Any such agent or independent contractor that denies or unduly limits 
HUD or its duly authorized representatives from reviewing records or 
denies or unduly limits HUD or its duly authorized representative entry 
to an office or facility, or prevents access to any office or facility, 
is a denial by the HA.

10. Grant Funding

    a. HUD shall make annual contributions in the form of grant funding 
in the amounts provided for the Public Housing Program as stated in the 
Grant Funding Exhibits.
    b. Grant funding is subject to each year's annual appropriations 
act. Appropriations may be reduced by HUD as directed by the Congress 
in an appropriations act. Grant funding may be reduced by an offset of 
a HA's funding, pursuant to a formula prescribed by Congress in an 
appropriations act. Grant funding may also be reduced or offset 
pursuant to a formula devised by HUD if Congress has invested HUD with 
the discretion to devise and implement a funding formula in the 
appropriations act. Grant funding may also be terminated, recaptured, 
withheld, suspended, reduced or such other actions taken in accordance 
with HUD Requirements.
    c. Grant funding is calculated by applying applicable regulations 
in Title 24 of the Code of Federal Regulations unless Congress provides 
otherwise. HUD will provide grant funding to the HA in accordance with 
HUD Requirements, unless modified by an appropriations act. The 
appropriations act, not the Title 24 of the Code of Federal 
Regulations, will always take precedence in formulating each year's 
grant funding. Each year's funding amounts and related information will 
be provided to the HA. Any change in funding or requirements to a Grant 
Funding Exhibit will be provided in a written notice to the HA.
    d. The HUD notice of a revised Grant Funding Exhibit(s) constitutes 
an amendment of the CACC.

11. Depository

    a. The HA shall deposit and invest Program Receipts and investment 
securities received by or held for the account of the HA in connection 
with the development, operation and improvement of the Projects under a 
CACC with HUD in accordance with the terms of the General Depository 
Agreement(s) and all investment requirements provided in HUD and 
Treasury Notices and Regulations. The General Depository Agreement 
shall be in the form prescribed by HUD and must be executed by the HA 
and the depository. Immediately upon the execution of any General 
Depository Agreement, the HA shall furnish to HUD such executed or 
conformed copies thereof as HUD may require. A General Depository 
Agreement shall not be terminated except after 30 days' notice to HUD.
    b. The HA shall maintain records that identify the source and 
application of funds in such a manner as to allow HUD to determine that 
all funds are and have been expended in accordance with HUD 
Requirements. The HA may only use Program Receipts for: (1) The payment 
of the costs of development and operation of the Projects under the 
CACC with HUD; (2) the purchase of investment securities as approved by 
HUD; and (3) such other purposes as may be specifically approved by 
HUD. Except as approved by HUD, and consistent with HUD Requirements, 
grant funds are not fungible.

12. Termination of a Project

    If any Project covered by this ACC is terminated, all related 
Program Receipts shall, in accordance with the terms of this CACC and 
HUD Requirements, become part of another Project administered by the 
HA. If no Public Housing Project(s) exists, the remaining personal and 
real property, and Program Receipts, shall be distributed (including 
the possible remittance to HUD) as directed by HUD, consistent with HUD 
Requirements.

[[Page 66735]]

13. Notices, Defaults, Remedies

    a. Notice. Any notice required or permitted to be given under this 
ACC or CACC shall be in writing, signed by a duly authorized official, 
and addressed, if to the HA, to the principal office of the HA, and if 
to HUD, to the HUD office with jurisdiction over the HA, unless 
otherwise directed by regulation or other HUD Requirements.
    b. Substantial Default. A substantial default is a serious and 
material violation of any one or more of the covenants contained in the 
CACC. Events of substantial default shall include, but shall not be 
limited to, any of the following occurrences: (1) Failure to maintain 
and operate the Project(s) under this ACC in a decent, safe, and 
sanitary manner; (2) the disposition or encumbrance of any Project or 
portion thereof without HUD approval; (3) failure of the HA to comply 
with any civil rights requirements applicable to the HA and the 
Project(s); (4) abandonment of any Project by the HA, or if the powers 
of the HA to operate the public housing program in accordance with the 
provisions of this ACC are curtailed or limited to an extent that will 
prevent the accomplishment of the objectives of this ACC; (5) failure 
to carry out modernization or development in a timely, efficient and 
effective manner; and (6) termination of tax exemption (either real or 
personal property) on behalf of a Project covered under the CACC.
    1. Delivery of a notice of substantial default shall be required 
before the exercise of any remedy permitted under this ACC. Such notice 
shall: (1) Identify the specific covenants, statutes, executive orders, 
or regulations alleged to have been violated; (2) identify the specific 
events, actions, failure to act, or conditions that constitute the 
alleged substantial default; and (3) provide a specific timeframe for 
the HA to cure the substantial default, taking into consideration the 
nature of the default.
    2. Except in cases involving clear and apparent fraud, serious 
criminal behavior, or emergency conditions that pose an imminent threat 
to life, health, or safety, the HA shall have the right to appeal any 
such notice received from the HUD office with jurisdiction over the HA. 
Such informal appeals shall be in writing and shall be submitted within 
ten (10) working days from the date of the HA's receipt of such notice. 
Appeals of the action of a HUD Office shall be made to the Assistant 
Secretary for Public and Indian Housing, or such other official as 
shall be a successor thereto.
    c. Remedies. Upon the occurrence of a substantial default, or the 
expiration of any applicable cure period provided by HUD, the HA shall: 
(1) Convey to HUD title to the Project(s) as demanded by HUD if, in the 
determination of HUD (which determination shall be final and 
conclusive), such conveyance of title is necessary to achieve the 
purposes of the Act; or (2) deliver possession and control of the 
Project(s) to HUD.
    d. Additional Remedies. Nothing contained in this ACC shall 
prohibit or limit HUD from the exercise of any other right or remedy 
existing under applicable law, or available at equity. HUD's exercise 
or non-exercise of any right or remedy under this ACC or CACC shall not 
be construed as a waiver of HUD's right to exercise that or any other 
right or remedy at any time.
    e. If HUD shall acquire title to, or possession of the Project(s), 
HUD shall re-convey or redeliver possession of the Project(s) to the 
HA, or to any entity recognized by HUD: (1) Upon a determination by HUD 
that the Substantial Default has been cured and that the Project(s) 
will thereafter be operated in accordance with the terms of the CACC; 
or (2) after the termination of HUD's obligation to make payments, 
unless there are any obligations or covenants of the HA to HUD that are 
then in default.
    f. Termination for cause. HUD may at any time by notice to the HA 
declare this ACC or the CACC terminated with respect to any Project if:
    1. The HA has made any fraudulent or willful misrepresentation of 
any material fact in any document or data submitted to HUD as a basis 
for the CACC or as an inducement to HUD to enter into the CACC; or
    2. A substantial default exists in connection with any of the 
Projects.
    g. Mixed Finance Projects. In addition to the above the following 
shall apply to Mixed-Finance Projects:
    1. Each of the following shall also constitute an event of 
substantial default under the CACC:
    (A) The drawdown of Capital Funds, development grant funds, or 
other public housing funds, as applicable, in amounts greater than 
authorized, or in amounts greater than allowed by HUD Requirements;
    (B) Breach of any approved performance schedule; or
    (C) Serious and material breach of any terms, covenants, 
agreements, provisions, or warranties of:
    (i). The HA which, in the opinion of HUD, adversely affects the 
performance obligations of the HA, the Owner Entity, or other 
participating parties, and
    (ii). The Owner Entity, partner, or other participating party, made 
in any agreement submitted to HUD as part of the evidentiary materials 
which, in the opinion of HUD, adversely affects the performance 
obligations of the HA, the Owner Entity, partner, or other 
participating parties.
    2. HUD shall permit an Owner Entity, partner, or lender to 
participate, and may in its discretion, permit any other participating 
party to participate, in any appeal from a notice of substantial 
default delivered by HUD to the HA pursuant to this ACC with respect to 
a Project.
    3. During the term of any agreement between the HA and Owner 
Entity, and so long as the Owner Entity shall not be in default of its 
obligations thereunder, HUD agrees that in the event of the substantial 
default by the HA under the CACC, HUD shall exercise any remedies or 
sanctions authorized under the CACC, including taking possession of the 
HA's interest in the Mixed Finance Project, in such manner as not to 
disturb the Owner Entity's rights under any such agreements.
    4. Any rights of the mortgagee under a Note and First Mortgage (if 
any), including the right to exercise all remedies specified therein, 
shall not be subordinate to any other obligations imposed upon the 
Project, except as such obligations (1) shall be reflected in the 
Declaration of Restrictive Covenants, as required by the CACC, or a 
memorandum of lease (if applicable), and/or any other recorded 
instrument which shall have been recorded prior to the lien of the 
First Mortgage, or (2) shall be the subject of a subordination 
agreement with such mortgagee.

14. HUD in Possession of Project(s)

    a. During any period in which HUD holds title to or possession of 
the Projects after a substantial default by the HA, HUD shall develop 
and/or operate such Project(s) as nearly as practicable in accordance 
with the provisions of the CACC.
    b. During any such period, HUD may, in the name and on behalf of 
the HA, or in its own name and on its own behalf (as HUD shall solely 
determine), exercise any and all rights of the HA under the CACC, and 
perform any and all obligations of the HA under the CACC. Nothing 
herein shall be deemed to make the action(s) or omission(s) of the HA 
attributable to HUD.

15. Conflict of Interest

    a. In addition to any other applicable conflict of interest 
requirements, including those provided herein, HAs must also maintain 
written standards of

[[Page 66736]]

conduct covering conflicts of interest and governing the performance of 
its Board Member, executives, and employees engaged in the 
administration and operation of Projects covered by the CACC. A 
conflict of interest would arise when the employee, officer, or agent, 
any member of his or her immediate family, his or her partner, or an 
organization which employs (or is about to employ any of the parties 
indicated herein), has a financial or other interest in an organization 
considered for a contract with the HA, an RMC, other resident 
organization of the HA; or otherwise does business with, a tenant 
organization or tenants of the HA. The HA must disclose in writing any 
potential) conflict of interest to HUD.
    b. The HA, its contractors and subcontractors shall not enter into, 
or be a party to, any contract, subcontract, or arrangement in 
connection with a Project under the CACC in which any of the following 
classes of people has an interest, direct or indirect, during his or 
her tenure or for one year thereafter:
    1. Any present or former member or officer of the governing body of 
the HA, or any member of such individual's immediate family. There 
shall be excepted from this prohibition any present or former tenant 
commissioner who does not serve on the governing body of a resident 
corporation, and who otherwise does not occupy a policymaking position 
with the resident corporation, the HA or a related business entity.
    2. Any employee of the HA who formulates policy or who influences 
decisions with respect to the Project(s), or any member of the 
employee's immediate family, or the employee's partner.
    3. Any public official, member of the local governing body, or 
State or local legislator, or any member of such individual's immediate 
family, who exercises functions or responsibilities with respect to the 
Project(s) or the HA.
    4. Any member of these classes of persons must disclose the 
member's interest or prospective interest to the HA.
    5. The requirements of this subsection may be waived by HUD for 
good cause, if the prohibited contract, subcontract or arrangement is 
otherwise permitted under State and local law. No person for whom a 
waiver is requested may exercise responsibilities or functions with 
respect to the contract, subcontract or arrangement to which the waiver 
pertains.
    6. The provisions of this subsection (b) shall not apply to the 
General Depository Agreement entered into with an institution regulated 
by a Federal agency, or to utility service for which the rates are 
fixed or controlled by a State or local agency.
    c. The HA shall not hire an employee in connection with a Project 
under this ACC if the prospective employee is an immediate family 
member of any person belonging to one of the following classes:
    1. Any present or former member or officer of the governing body of 
the HA. There shall be excepted from this prohibition any former tenant 
commissioner who does not serve on the governing body of a resident 
corporation, and who does not occupy a policymaking position with the 
HA.
    2. Any employee of the HA who formulates policy or who influences 
decisions with respect to the Project(s).
    3. Any public official, member of the local governing body, or 
State or local legislator, who exercises functions or responsibilities 
with respect to the Project(s) or the HA.
    d. The prohibition referred to in subsection (c) shall remain in 
effect throughout the class member's tenure and for one year 
thereafter.
    e. A class member shall disclose to the HA the member's familial 
relationship to any prospective employee.
    f. For purposes of this section, the term ``immediate family 
member'' means: the spouse, mother, father, mother-in-law, father-in-
law, brother, sister, brother-in-law, sister-in-law, daughter-in-law, 
son-in-law or child of a covered class member (whether related as a 
full blood relative or adoption, or as a ``half'' or ``step'' relative, 
e.g., a half-brother or stepchild).
    1. The officers, employees, and agents of the HA must neither 
solicit nor accept gratuities, favors, or anything of monetary value 
from residents residing in Projects or participating in programs 
covered by the CACC. However, HAs may set standards for situations in 
which the financial interest is not substantial or the gift is an 
unsolicited item of nominal value. The standards of conduct must 
provide for disciplinary actions to be applied for violations of such 
standards by officers, employees, or agents of the HA.
    2. If the HA has a parent, affiliate, or subsidiary organization 
that is not a state or local government, the HA must also maintain 
equivalent written standards of conduct covering organizational 
conflicts of interest. ``Organizational conflicts of interest'' means 
that because of relationships with a parent company, affiliate, or 
subsidiary organization, the HA is unable or appears to be unable to be 
impartial in conducting a procurement action involving a related 
organization; or in administering or operating a Project involving a 
related organization.
    g. Consistent with this section and HUD Requirements, the HA shall 
ensure that tenants served directly by the HA serve on the governing 
body of the HA.

16. Civil Rights and Employment Requirements

    a. The HA shall comply with all statutory, regulatory, and 
executive order requirements pertaining to civil rights, equal 
opportunity, and nondiscrimination, as those requirements now exist, or 
as they may be enacted, promulgated, or amended from time to time. 
These requirements currently include, but are not be limited to, 
compliance with the following authorities: Title VI of the Civil Rights 
Act of 1964 (42 U.S.C. 2000d; 24 CFR part 1); the Fair Housing Act (42 
U.S.C. 3601-3619; 24 CFR part 100); section 504 of the Rehabilitation 
Act of 1973 (29 U.S.C. 794; 24 CFR part 8); (the Age Discrimination Act 
of 1975 (42 U.S.C. 6101[not]6107; 24 CFR part 146); the Americans with 
Disabilities Act (Pub. L. 101-336, approved July 26, 1990; 28 CFR part 
35); Executive Order 11063 on Equal Opportunity in Housing (24 CFR part 
107); Executive Order 11246 on Equal Employment Opportunity, as amended 
by Executive Order 11375 (41 CFR part 60); and Executive Order 12892 on 
Affirmatively Furthering Fair Housing.
    b. In connection with the development or operation of any Project, 
the HA shall not discriminate against any employee or applicant for 
employment because of race, color, religion, sex, disability, age, or 
national origin. The HA shall take affirmative action to ensure that 
applicants are employed, and that employees are treated during 
employment, without regard to race, color, religion, sex, disability, 
age, or national origin. Such action shall include, but not be limited 
to, the following: employment, upgrading, demotion, or transfer; 
recruitment or recruitment advertising; layoff or termination; rates of 
pay or other forms of compensation; and selection for training, 
including apprenticeship. The HA shall insert the foregoing provision 
(modified only to show the particular contractual relationship) in all 
its contracts in connection with the development or operation of any 
Project, except contracts for standard commercial supplies or raw 
materials and contracts referred to in subsection (C) of this section, 
and shall require all contractors

[[Page 66737]]

to insert a similar provision in all subcontracts, except subcontracts 
for standard commercial supplies or raw materials. The HA shall post at 
the Projects, in conspicuous places available to employees and 
applicants for employment, notices to be provided by HUD setting forth 
the provisions of this nondiscriminatory clause.
    c. The HA shall incorporate the language required by Executive 
Order 11246, codified at 41 CFR 60-1.4(b) (or any successor provision), 
into any contract for construction work, or any modification thereof, 
which is paid for in whole or in part with funds obtained under this 
ACC. In addition, the HA agrees that it will be bound by the equal 
employment opportunity provisions set forth at 41 CFR 60-1.4(b) (or any 
successor provision) with respect to its own employment practices when 
it uses its own staff (force account) to carry out Federally assisted 
construction work.
    d. The HA shall, consistent with 12 U.S.C. 1701u, codified at 24 
CFR 135.1 (or any successor provision), provide economic opportunities 
for Section 3 residents and Section 3 business concerns. The HA may, 
consistent with applicable law and regulation, utilize work 
requirements when and where appropriate.

17. Members or Delegates to Congress

    No member of or delegate to the Congress of the United States of 
America or resident commissioner shall be admitted to any share or part 
of this ACC or to any benefits which may arise from it. (As used in 
this section, the term ``resident commissioner'' refers to an 
individual appointed to oversee a territory or possession of the United 
States of America, e.g., Guam.)

18. Rights of Third Parties

    Nothing in this ACC shall be construed as creating any right of any 
third party to enforce any provision of the ACC, the CACC, or to assert 
any claim against HUD or the HA.

19. Waiver or Amendment

    Any right or remedy that HUD may have under this ACC may be waived 
in writing by HUD without the execution of a new or supplemental 
agreement, or by mutual agreement of the parties to this ACC. This 
agreement may be amended in writing: Provided that, none of the 
provisions of this ACC may be modified or amended in a manner that 
impairs HUD's obligation to pay any annual contributions that have been 
pledged as security for any obligations of the HA.
[FR Doc. 2018-28095 Filed 12-26-18; 8:45 am]
 BILLING CODE 4210-67-P