[Federal Register Volume 60, Number 17 (Thursday, January 26, 1995)]
[Rules and Regulations]
[Pages 5280-5286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1932]
[[Page 5279]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
_______________________________________________________________________
24 CFR Part 261
Federally Assisted Low Income Housing Drug Elimination Program; Final
Rule
Federal Register / Vol. 60, No. 17 / Thursday, January 26, 1995 /
Rules and Regulations
[[Page 5280]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
24 CFR Part 261
[Docket No. R-95-1741; FR-3467-F-02]
RIN 2502-AG07
Federally Assisted Low Income Housing Drug Elimination Program
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule implements the Assisted Housing Drug
Elimination Program, as authorized by the National Affordable Housing
Act and the Housing and Community Development Act of 1992. This program
authorizes HUD to make drug elimination grants to owners of federally
assisted low-income housing, while previously these grants were only
available for public housing agencies and Indian housing authorities.
HUD will award these grants for use in eliminating drug-related crime
and the problems associated with it.
EFFECTIVE DATE: February 27, 1995.
FOR FURTHER INFORMATION CONTACT: Lessley Wiles, Office of Multifamily
Housing Management, Operations Division, Room 6176, Department of
Housing and Urban Development, 451 Seventh Street, SW, Washington, DC
20410; telephone (202) 708-2654, or (202) 708-3938 (TDD for speech- or
hearing-impaired). (These are not toll free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act Statement
The information collection requirements contained in this rule have
been approved by the Office of Management and Budget, under section
3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520),
and assigned OMB control number 2502-0476.
I. Background
On August 9, 1994 (59 FR 40764), HUD published a proposed rule that
would implement the Assisted Housing Drug Elimination Program, as
authorized by section 581 of the National Affordable Housing Act (42
U.S.C. 11901-11909) (NAHA), and as amended by section 161 of the
Housing and Community Development Act of 1992 (Pub. L. 102-550,
approved October 18, 1992) (HCDA 1992). The preamble to the proposed
rule contains a detailed explanation of the ways in which NAHA amended
the Public Housing Drug Elimination Program, including the addition of
authorization to make grants to private, for-profit and nonprofit
owners of federally assisted low-income housing for use in eliminating
drug-related crime. Section 581 of NAHA also permits HUD to establish
other criteria, in addition to those applicable to the Public Housing
Drug Elimination Program, for the evaluation of funding applications
submitted by owners of federally assisted low-income housing.
HUD solicited public comments on the proposed rule. By the
expiration of the public comment period on October 11, 1994, HUD
received six comments. HUD carefully considered all the public comments
received, and has decided to make no changes from the proposed rule.
The following section of the preamble presents a summary of the
comments received and HUD's responses to those comments.
II. Public Comment on Proposed Rule
1. Two commenters suggested changes in the selection criteria
(Sec. 261.15(a)). One commenter suggested that HUD should specifically
target the elderly and disabled as priority populations due to their
special vulnerability. This commenter would change Sec. 261.15(a)(1) of
the rule to include the vulnerability of the populations at risk due to
the drug-related crimes, as well as the extent of the substance abuse
in the applicant's development.
Another commenter suggested that the order of the criteria should
be changed to reflect different priorities. This commenter suggested
that the first criterion should be the capability of the applicant to
carry out the plan, rather than the extent of the drug-related crime
problem in the applicant's development. The commenter explained that
this would be more effective; while ``there (are) no shortage of
serious (drug-related crime) problems, * * * there are too few able
organizations with effective plans to make the best use of the meager
resources available to combat drugs.'' According to this commenter, the
second criterion should be the quality of the plan, the third criterion
should be the extent of local participation and involvement, and the
fourth criterion should be the extent of the drug-related crime
problem.
HUD Response: In the preamble to the proposed rule, HUD
specifically invited comments on additional criteria for selecting
grant recipients. Section 581 of NAHA requires, however, that
additional criteria shall be designed only to reflect--(1) relevant
differences between the financial resources and other characteristics
of public housing authorities and owners of federally assisted low-
income housing, or (2) relevant differences between the problem of
drug-related crime in public housing and the problem of drug-related
crime in federally assisted low-income housing. The suggestions by the
commenters, while having merit, do not reflect these differences as
outlined in the statute.
With regard to the priority of the criteria, section 5125(b) of the
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11904(b)), which is the
authorizing statute for this drug elimination program, specifies the
primary selection criteria for grants under this drug elimination
program. This rule reflects the criteria in the statute in the order
stated.
2. One commenter objected to the fact that alcohol abuse programs
will not be eligible for funding under this drug elimination program,
due to the specific exclusion of alcohol from the definition of
controlled substance in Sec. 261.5. This commenter asserted that
``alcohol is increasingly the prime reason for abuse and other domestic
problems encountered in housing developments,'' and that a drug
elimination program cannot be effective unless it addresses the problem
of alcohol abuse.
HUD Response: HUD cannot include alcohol in the definition of
controlled substance in Sec. 261.5 because this definition is
statutorily prescribed. Section 5126(1) of the Anti-Drug Abuse Act of
1988 (42 U.S.C. 11905(1)) incorporates the definition of controlled
substance as provided in section 102 of the Controlled Substances Act
(21 U.S.C. 802). This definition specifically excludes alcohol.
Therefore, alcohol abuse programs are not eligible for funding under
this drug elimination program.
3. One commenter stated that HUD should not encourage voluntary
tenant patrols as an eligible activity (Sec. 261.10(b)(5)), because
they pose an unacceptable risk of harm to residents where drug-related
crime is at very serious levels. This commenter explained that while
tenant patrols may be appropriate in areas with mild crime problems,
these areas are less likely to receive grant awards under this program.
HUD Response: HUD does not encourage the use of tenant patrols. The
inclusion of tenant patrols as an eligible activity, however, is
statutorily prescribed in section 5124(5) of the Anti-Drug Abuse Act of
1988 (42 U.S.C. 11903(5)). [[Page 5281]]
4. One commenter proposed that, in keeping with HUD's comprehensive
approach to solving drug-related crime problems, HUD should include the
provision of new community space as an eligible activity in
Sec. 261.10(b) of the rule. This commenter suggested that to be
eligible for funding, the applicant would have to meet the following
conditions: (1) Absence of space on-site; (2) Absence of alternative
space off-site; (3) HUD concurs to either the creation of new space or
taking a unit off-line for this purpose; (4) The space must be provided
in turn-key condition within three months of the first drawdown of
funds; and (5) The applicant must specify a social program, whether
existing or fundable through the grant, to accompany the request for
new space. This commenter noted that previous grants have been used to
refurbish existing community space.
HUD Response: Given the costs of construction and the limited
amount of funds available under this drug elimination program, HUD is
not encouraging the construction of new buildings. Rental or leasing of
space near the property, where activities such as classes and
counseling sessions can take place, would be a preferred option.
However, HUD has permitted the retrofitting of existing available space
as an eligible physical improvement, provided no units are taken off-
line. HUD also permitted the siting of a surplussed mobile classroom to
provide the needed space, since this involved minimal cost.
5. One commenter raised two concerns about the selection process
for the drug elimination grant proposals. First, the commenter asserted
that proposals are not judged on the basis of need, but on the quantity
of information provided by the applicant. Specifically, this commenter
asserted that applications from areas of high drug-related crime have
lost points for ``lack of crime statistics.'' The commenter stated that
the lack of such data should not be a hindrance in determining
eligibility for a grant, and that other support documentation should be
considered if such data is not available.
Second, this commenter expressed concern about unintentional
geographic bias in awarding grants under drug elimination programs. The
commenter suggested that the panel reviewing the grant applications
should consist of individuals from geographically diverse areas in
order to avoid this bias.
HUD Response: In response to the first concern, there have been
allegations in the past that HUD awarded drug grants to public housing
projects with no evidence of drug-related criminal activity. Therefore,
obtaining specific statistics on the extent of this activity is
necessary to assure that the problems to be addressed by this program
do, in fact, exist.
In response to the second concern about geographical bias, local
HUD offices will review and score applications for the Federal fiscal
year (FY) 1995 drug elimination grants. The funding, based on scores
received, will take place at geographically disbursed sites. This
should reduce the possibility of bias in project funding selections.
6. Two commenters expressed concern with the way the rule would
apply to an applicant seeking funding for a multi-year project. One
commenter encouraged HUD to streamline the application process for
applicants seeking funds for a continuing program activity. The rule
provides that applicants for grants to continue current program
activities may apply on the same basis as other applicants
(Sec. 261.10(b)(7)). This commenter remarked that this process is
burdensome, and that ``HUD offices will effectively be discouraged from
awarding continuation funds.'' In the alternative, this commenter
suggested that HUD make funding for subsequent years conditional upon:
(1) the property's first year score being sufficient to earn an award
in the following year; and (2) confirmation from the HUD drug grant
coordinator that the property is in compliance with the requirements of
previously received grant funds.
The other commenter suggested changing the grant term provisions in
Sec. 261.26(b) to allow for initial one-year terms, with second- and
third-year extensions. This would allow the grantee to undertake
``ambitious plans without the additional concern of searching for
additional funding'' early in the program. This commenter further
argued that a longer term would encourage outside funding, since the
potential funder would have more of a performance record on which to
base its determination.
HUD Response: HUD's Office of Housing has no assurance that it will
receive funds for more than one year. Consequently, the program can
only permit funding for one year. In addition, due to the limitation on
the amount of funds available in any given year, HUD's goal is to
spread the funds as far as possible and give all eligible applicants a
fair chance of receiving funding. Therefore, each grant application
must stand alone, without any assumption of additional funding, as both
commenters suggested.
7. One commenter argued that the maximum grant amount would have to
be increased. This commenter remarked that while security personnel are
eligible for funding under this drug elimination program, the only
effective approach would be to hire off-duty police. According to the
commenter, an off-duty police patrol would cost approximately $200,000
per year (two patrol officers at $15 per hour; two 8-hour shifts per
weekday, three 8-hour shifts on weekends), which may exceed the maximum
grant amount.
HUD Response: HUD does not encourage hiring off-duty police;
rather, it hopes to find other solutions to drug-related criminal
problems that are more cost-effective. As mentioned above, the limited
amount of money available forces HUD and the applicants to seek maximum
benefit from limited funds.
III. Other Matters
Environmental Impact
At the time of the development of the proposed rule, a Finding of
No Significant Impact with respect to the environment was made in
accordance with HUD's regulations at 24 CFR part 50, which implement
section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332). The Finding of No Significant Impact remains applicable
to this final rule and is available for public inspection between 7:30
a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk,
Room 10276, Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The rule
provides grants to eliminate drug-related crime in federally assisted
low-income housing. Although small entities in the form of owners of
federally assisted low-income housing could participate in the program,
the rule is not intended to and would not have a significant economic
impact on them.
Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule has the
potential for a positive, although indirect, impact on family
formation, maintenance, and general well-being. [[Page 5282]] The rule
implements a program that encourages owners of federally assisted low-
income housing to develop a plan for addressing the problem of drug-
related crime, and makes available grants to carry out this plan. As
such, the program is intended to improve the quality of life of
federally assisted low-income housing residents, including families, by
reducing the incidence of drug-related crime. Accordingly, since any
impact on the family from the rule will be positive, no further review
is considered necessary.
Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule will not have substantial direct effects on
States or their political subdivisions, or the relationship between the
Federal government and the States, or on the distribution of power and
responsibilities among the various levels of government. As a result,
the rule is not subject to review under the Order. The program helps
combat serious drug-related crime problems in federally assisted low-
income housing. The rule generally tracks the statute and involves
little implementing discretion.
Regulatory Agenda
The rule was listed as Item No. 1765 in HUD's Semiannual Agenda of
Regulations published on November 14, 1994 (59 FR 57632, 57634) in
accordance with Executive Order 12866 and the Regulatory Flexibility
Act.
Catalog of Federal Domestic Assistance
The program number for this Assisted Housing Drug Elimination
Program is 14.854.
List of Subjects in 24 CFR Part 261
Drug abuse, Drug traffic control, Grant programs--housing and
community development, Grant programs--low and moderate income housing,
Reporting and recordkeeping requirements.
Accordingly, part 261, consisting of Secs. 261.1 through 261.29, is
added to 24 CFR chapter II, as follows:
PART 261--ASSISTED HOUSING DRUG ELIMINATION PROGRAM
Subpart A--General
Sec.
261.1 Purpose and scope.
261.5 Definitions.
Subpart B--Use of Grant Funds
261.10 Applicants and activities.
Subpart C--Application and Selection
261.15 Application selection and requirements.
261.18 Resident comments on grant application.
Subpart D--Grant Administration
261.26 Grant administration.
261.28 Grantee reports.
261.29 Other federal requirements.
Authority: 42 U.S.C. 3535(d) and 11901 et seq.
Subpart A--General
Sec. 261.1 Purpose and scope.
The purposes of the Assisted Housing Drug Elimination Program are
to:
(a) Eliminate drug-related crime and the problems associated with
it in and around the premises of federally assisted low-income housing;
(b) Encourage owners of federally assisted low-income housing to
develop a plan that includes initiatives that can be sustained over a
period of several years for addressing drug-related crime and the
problems associated with it in and around the premises of assisted
housing proposed for funding under this part; and
(c) Make available federal grants to help owners of federally
assisted low-income housing carry out their plans.
Sec. 261.5 Definitions.
Act means The United States Housing Act of 1937 (42 U.S.C. 1437 et
seq.).
Chief executive officer of a State or a unit of general local
government means the elected official, or the legally designated
official, who has the primary responsibility for the conduct of that
entity's governmental affairs. Examples of the ``chief executive
officer'' of a unit of general local government are: The elected mayor
of a municipality; the elected county executive of a county; the
chairperson of a county commission or board in a county that has no
elected county executive; or the official designated pursuant to law by
the governing body of the unit of general local government. The chief
executive officer of an Indian tribe is the tribal governing official.
Controlled substance means a drug or other substance or immediate
precursor included in schedule I, II, III, IV, or V of section 102 of
the Controlled Substances Act (21 U.S.C. 802). The term does not
include distilled spirits, wine, malt beverages, or tobacco as those
terms are defined in Subtitle E of the Internal Revenue Code of 1954.
Drug intervention means a process to identify assisted housing
resident drug users and assist them in modifying their behavior and/or
refer them to drug treatment to eliminate drug abuse.
Drug prevention means a process to provide goods and services
designed to alter factors, including activities, environmental
influences, risks, and expectations, that lead to drug abuse.
Drug-related crime means the illegal manufacture, sale,
distribution, use, or possession with intent to manufacture, sell,
distribute, or use, a controlled substance.
Drug treatment means a program for the residents of an applicant's
development that strives to end drug abuse and to eliminate its
negative effects through rehabilitation and relapse prevention.
Federally assisted low-income housing (includes the term ``assisted
housing'' as used in this rule) means housing assisted under:
(1) Section 221(d)(3), section 221(d)(4) or 236 of the National
Housing Act (12 U.S.C. 1701 et seq.) (Note: However, section 221(d)(4)
and section 221(d)(3) market rate projects without project-based
assistance contracts are not considered federally assisted low-income
housing. Therefore, section 221(d)(4) and section 221(d)(3) market rate
projects with tenant-based assistance contracts are not considered
federally assisted low-income housing and are not eligible for
funding.);
(2) Section 101 of the Housing and Urban Development Act of 1965
(12 U.S.C. 1701s); or
(3) Section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f note) (not including tenant-based assistance).
Governmental jurisdiction means the unit of general local
government, State, or area of operation of an Indian tribe in which the
housing development administered by the applicant is located.
HUD or Department means the United States Department of Housing and
Urban Development.
In and around means within, or adjacent to, the physical boundaries
of a housing development.
Local law enforcement agency means a police department, sheriff's
office, or other entity of the governmental jurisdiction that has law
enforcement responsibilities for the community at large, including the
housing developments owned by the applicant.
Problems associated with drug-related crime means the negative
physical, social, educational and economic impact of drug-related crime
on assisted housing residents, and the deterioration of the assisted
housing environment because of drug-related crime. [[Page 5283]]
Resident Organization (RO) means an incorporated or unincorporated
nonprofit organization or association that meets each of the following
requirements:
(1) It must be representative of the residents it purports to
represent;
(2) It may represent residents in more than one housing
development, but it must fairly represent residents from each
development that it represents;
(3) It must adopt written procedures providing for the election of
specific officers on a regular basis (but at least once every three
years); and
(4) It must have a democratically elected governing board. The
voting membership of the board must consist of residents of the
development or developments that the resident organization represents.
Single State Agency means an agency responsible for licensing and
monitoring State or tribal drug abuse programs.
State means any of the several States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, or any agency or instrumentality of a
State exclusive of local governments. The term does not include any
public or Indian housing agency under the United States Housing Act of
1937.
Unit of general local government means any city, county, town,
municipality, township, parish, village, local public authority or
other general purpose political subdivision of a State.
Subpart B--Use of Grant Funds
Sec. 261.10 Applicants and activities.
Applicants and activities eligible for funding under the Assisted
Housing Drug Elimination Program are listed in this section. The
applicants and activities eligible under any particular funding round
may be limited in a Notice of Funding Availability (NOFA) published in
the Federal Register. Additional details concerning eligible and
ineligible applicants and activities will also be published in the
NOFAs for this program.
(a) Eligible applicants. The applicant must be the owner of a
federally assisted low-income housing project under:
(1) Section 221(d)(3), section 221(d)(4) or 236 of the National
Housing Act (Note: However, section 221(d)(4) and section 221(d)(3)
market rate projects without project-based assistance contracts are not
considered federally assisted low-income housing. Therefore, section
221(d)(4) and section 221(d)(3) market rate projects with tenant-based
assistance contracts are not considered federally assisted low-income
housing and are not eligible for funding.);
(2) Section 101 of the Housing and Urban Development Act of 1965;
or
(3) Section 8 of the United States Housing Act of 1937 (not
including tenant-based assistance).
(b) Eligible activities. An application for funding under this
program may be for one or more of the following eligible activities, as
further specified in program NOFAs:
(1) Employment of security personnel.
(2) Reimbursement of local law enforcement agencies for additional
security and protective services.
(3) Physical improvements to enhance security.
(4) Employment of one or more individuals:
(i) To investigate drug-related crime, and the problems associated
with it, on or about the real property comprising any federally
assisted low-income housing project; and
(ii) To provide evidence relating to such crime in any
administrative or judicial proceeding.
(5) The provision of training, communications equipment, and other
related equipment for use by voluntary tenant patrols acting in
cooperation with local law enforcement officials.
(6) Drug-abuse prevention, intervention and treatment programs to
reduce the use of drugs.
(7) Continuation of current program activities. Current or previous
Assisted Housing Drug Elimination Program grant recipients who are
eligible under Sec. 261.10(a) of this subpart may apply, on the same
basis as other applicants, for grants to continue their grant
activities or implement other program activities. The Department will
evaluate an applicant's performance under any previous Drug Elimination
Program grants within the past five years. Subject to evaluation and
review are the applicant's financial and program performance; reporting
and special condition compliance; accomplishment of stated goals and
objectives under the previous grant; and program adjustments made in
response to previous ineffective performance. If the evaluation
discloses a pattern under past grants of ineffective performances with
no corrective measures attempted, it will result in a deduction of
points from the current application. Since this is a competitive
program, HUD does not guarantee continued funding of any previously
funded Drug Elimination Program grant.
Subpart C--Application and Selection
Sec. 261.15 Application selection and requirements.
(a) Selection criteria. HUD will review each application that it
determines meets the requirements of this part and assign points in
accordance with the selection criteria. The number of points that an
application receives will depend on the extent to which the application
is responsive to the information requested in Notices of Funding
Availability (NOFAs) published for this program. Each application
submitted for a grant under this part will be evaluated on the basis of
the following selection criteria:
(1) First criterion: The extent of the drug-related crime problem
in the applicant's development or developments proposed for assistance.
(2) Second criterion: The quality of the plan to address the crime
problem in the developments proposed for assistance, including the
extent to which the plan includes initiatives that can be sustained
over a period of several years.
(3) Third criterion: The capability of the applicant to carry out
the plan.
(4) Fourth criterion: The extent to which tenants, the local
government and the local community support and participate in the
design and implementation of the activities proposed to be funded under
the application.
(b) Plan requirement. Each application must include a plan for
addressing the problem of drug-related crime and the problems
associated with drug-related crime on the premises of the housing for
which the application is being submitted. For applications that cover
more than one housing development, the plan does not have to address
each development separately if the same activities will apply to each
development. Only where program activities will differ from one
development to another must the plan address each development
separately.
(c) Notice of Funding Availability. HUD will publish Notices of
Funding Availability (NOFAs) in the Federal Register, as appropriate,
to inform the public of the availability of grant amounts under this
part. NOFAs will provide specific guidance with respect to the grant
process, including the deadlines for the submission of grant
applications; the limits (if any) on maximum grant amounts; the
eligible applicants and activities; the information that must be
submitted to permit HUD to score each of the selection criteria; the
maximum number of points to be awarded for each [[Page 5284]] selection
criterion; the contents of the plan for addressing the problem of drug-
related crime that must be included with the application; the listing
of any certifications and assurances that must be submitted with the
application; and the process for ranking and selecting applicants.
NOFAs will also include any additional information, factors, and
requirements that the Department has determined to be necessary and
appropriate to provide for the implementation and administration of the
program under this part.
(Approved by the Office of Management and Budget under control
number 2502-0476.)
(d) Environmental review. Grants under this part are categorically
excluded from review under the National Environmental Policy Act of
1969 (NEPA)(42 U.S.C. 4321), in accordance with 24 CFR 50.20(p).
However, prior to an award of grant funds under this part, HUD will
perform an environmental review to the extent required by HUD's
environmental regulations at 24 CFR part 50, including the applicable
related authorities at 24 CFR 50.4.
Sec. 261.18 Resident comments on grant application.
The applicant must provide the residents of developments proposed
for funding under this part, as well as any resident organizations that
represent those residents, with a reasonable opportunity to comment on
its application for funding under this program. The applicant must give
these comments careful consideration in developing its plan and
application as well as in the implementation of funded programs. Copies
of all written comments submitted must be maintained by the grantee for
three years.
Subpart D--Grant Administration
Sec. 261.26 Grant administration.
(a) General. Each grantee is responsible for ensuring that grant
funds are administered in accordance with the requirements of this
part, any Notice of Funding Availability (NOFA) issued for this
program, 24 CFR part 85, applicable laws and regulations, applicable
OMB circulars, HUD fiscal and audit controls, grant agreements, grant
special conditions, the grantee's approved budget (SF-424A), budget
narrative, plan, and activity timetable.
(b) Grant term extensions.--(1) Grant term. Terms of the grant
agreement may not exceed 12 months, unless an extension is approved by
the local HUD Office. The maximum extension allowable for any grant is
6 months. Any funds not expended at the end of the grant term shall be
remitted to HUD.
(2) Extension. Grantees may be granted an extension of the grant
term in response to a written request for an extension stating the need
for the extension and indicating the additional time required.
(3) Receipt. The request must be received by the local HUD Office
before the termination of the grant, and requires approval by the local
HUD Office with jurisdiction over the grantee.
(4) Term. The maximum extension allowable for any program period is
6 months. Requests for retroactive extension of program periods will
not be considered. Only one extension will be permitted. Extensions
will only be considered if the extension criteria of paragraph (b)(5)
of this section are met by the grantee at the time the request for the
extension of the deadline is submitted for approval.
(5) Extension criteria. The following criteria must be met by the
grantee when submitting a request to extend the expenditure deadline
for a program or set of programs.
(i) Financial status reports. There must be on file with the local
HUD Office current and acceptable Financial Status Reports, SF-269As.
(ii) Grant agreement special conditions. All grant agreement
special conditions must be satisfied except those conditions that must
be fulfilled in the remaining period of the grant. This also includes
the performance and resolution of audit findings in a timely manner.
(iii) Justification. A narrative justification must be submitted
with the program extension request. Complete details must be provided,
including the circumstances which require the proposed extension, and
explanation of the impact of denying the request.
(6) HUD action. The local HUD Office will attempt to take action on
an extension request within 15 working days after receipt of the
request.
(c) Duplication of funds. To prevent duplicate funding of any
activity, the grantee must establish controls to assure that an
activity or program that is funded by other HUD programs, or programs
of other Federal agencies, shall not also be funded by the Drug
Elimination Program. The grantee must establish an auditable system to
provide adequate accountability for funds that it has been awarded. The
grantee is responsible for ensuring that there is no duplication of
funds.
(d) Insurance. Each grantee is required to obtain adequate
insurance coverage to protect itself against any potential liability
arising out of the eligible activities under this part. In particular,
applicants are required to assess their potential liability arising out
of the employment or contracting of security personnel, law enforcement
personnel, investigators, and drug treatment providers, and the
establishment of voluntary tenant patrols; to evaluate the
qualifications and training of the individuals or firms undertaking
these functions; and to consider any limitations on liability under
State or local law. Grantees are required to obtain liability insurance
to protect the members of the voluntary tenant patrol against potential
liability as a result of the patrol's activities under
Sec. 261.10(b)(5). Voluntary tenant patrol liability insurance costs
are eligible program expenses. Subgrantees are required to obtain their
own liability insurance.
(e) Failure to implement program. If the grant plan, approved
budget and timetable, as described in the approved application, are not
operational within 60 days of the grant agreement date, the grantee
must report by letter to the local HUD Office the steps being taken to
initiate the plan and timetable, the reason for the delay, and the
expected starting date. Any timetable revisions which resulted from the
delay must be included. The local HUD Office will determine if the
delay is acceptable, approve/disapprove the revised plan and timetable,
and take any additional appropriate action.
(f) Sanctions. (1) HUD may impose sanctions if the grantee:
(i) Is not complying with the requirements of this part or of other
applicable Federal law;
(ii) Fails to make satisfactory progress toward its drug
elimination goals, as specified in its plan and as reflected in its
performance and financial status reports under Sec. 261.28;
(iii) Does not establish procedures that will minimize the time
elapsing between drawdowns and disbursements;
(iv) Does not adhere to grant agreement requirements or special
conditions;
(v) Proposes substantial plan changes to the extent that, if
originally submitted, would have resulted in the application not being
selected for funding;
(vi) Engages in the improper award or administration of grant
subcontracts;
(vii) Does not submit reports; or
(viii) Files a false certification.
(2) HUD may impose the following sanctions:
(i) Temporarily withhold cash payments pending correction of the
deficiency by the grantee or subgrantee; [[Page 5285]]
(ii) Disallow all or part of the cost of the activity or action not
in compliance;
(iii) Wholly or partly suspend or terminate the current award for
the grantee's or subgrantee's program;
(iv) Require that some or all of the grant amounts be remitted to
HUD;
(v) Condition a future grant and elect not to provide future grant
funds to the grantee until appropriate actions are taken to ensure
compliance;
(vi) Withhold further awards for the program; or
(vii) Take other remedies that may be legally available.
(Approved by the Office of Management and Budget under control
number 2502-0476).
Sec. 261.28 Grantee reports.
Grantees are responsible for managing the day-to-day operations of
grant and subgrant supported activities. Grantees must monitor grant
and subgrant supported activities to assure compliance with applicable
Federal requirements and that performance goals are being achieved.
Grantee monitoring must cover each program, function, or activity of
the grant.
(a) Final performance report--(1) Evaluation. Grantees are required
to provide the local HUD Office with a final cumulative performance
report that evaluates the grantee's overall performance against its
plan. This report shall include in summary form (but is not limited to)
the following: Any change or lack of change in crime statistics or
other indicators drawn from the applicant's plan assessment (such as
vandalism, etc.) and an explanation of any difference; successful
completion of any of the strategy components identified in the
applicant's plan; a discussion of any problems encountered in
implementing the plan and how they were addressed; an evaluation of
whether the rate of progress meets expectations; a discussion of the
grantee's efforts in encouraging resident participation; and a
description of any other programs that may have been initiated,
expanded or deleted as a result of the plan, with an identification of
the resources and the number of people involved in the programs and
their relation to the plan.
(2) Reporting period. The final performance report shall cover the
period from the date of the grant agreement to the termination date of
the grant agreement. The report is due to the local HUD Office within
90 days after termination of the grant agreement.
(b) Semi-annual financial status reporting requirements--(1) Form.
The grantee shall provide a semi-annual financial status report. The
grantee shall use the SF-269A, Financial Status Report--Long Form, to
report the status of funds for nonconstruction programs. The grantee
shall use SF-269A, Block 12, ``Remarks,'' to report on the status of
programs, functions, or activities within the program.
(2) Reporting period. Semi-annual financial status reports (SF-
269A) covering the first 180 days of funded activities must be
submitted to the local HUD Office between 190 and 210 days after the
date of the grant agreement. If the SF-269A is not received on or
before the due date (210 days after the date of the grant agreement) by
the local HUD Office, grant funds will not be advanced until the
reports are received.
(c) Final financial status report (SF-269A)--(1) Cumulative
summary. The final report will be a cumulative summary of expenditures
to date and must indicate the exact balance of unexpended funds. The
grantee must remit all Drug Elimination Program funds (including any
unexpended funds) owed to HUD within 90 days after the termination of
the grant agreement.
(2) Reporting period. The final financial status report shall cover
the period from the date of the grant agreement to the termination date
of the grant agreement. The report is due to the local HUD Office
within 90 days after the termination of the grant agreement.
(d) Report submission. The grantee shall submit all required
reports to the local HUD Office.
(Approved by the Office of Management and Budget under control
number 2502-0476).
Sec. 261.29 Other federal requirements.
Use of grant funds requires compliance with the following
additional Federal requirements:
(a) Labor standards. (1) Where grant funds are used to undertake
physical improvements to increase security under Sec. 261.10(b)(3), the
following labor standards apply:
(i) The grantee and its contractors and subcontractors must pay the
following prevailing wage rates, and must comply with all related
rules, regulations and requirements:
(A) For laborers and mechanics employed in the program, the wage
rate determined by the Secretary of Labor pursuant to the Davis-Bacon
Act (40 U.S.C. 276a et seq.) to be prevailing in the locality with
respect to such trades;
(B) For laborers and mechanics employed in carrying out non-routine
maintenance in the program, the HUD-determined prevailing wage rate. As
used in this paragraph (a), non-routine maintenance means work items
that ordinarily would be performed on a regular basis in the course of
upkeep of a property, but have become substantial in scope because they
have been put off, and that involve expenditures that would otherwise
materially distort the level trend of maintenance expenses. Non-routine
maintenance may include replacement of equipment and materials rendered
unsatisfactory because of normal wear and tear by items of
substantially the same kind. Work that constitutes reconstruction, a
substantial improvement in the quality or kind of original equipment
and materials, or remodeling that alters the nature or type of housing
units is not non-routine maintenance.
(ii) The employment of laborers and mechanics is subject to the
provisions of the Contract Work Hours and Safety Standards Act (40
U.S.C. 327-333).
(2) The provisions of paragraph (a)(1) of this section shall not
apply to labor contributed under the following circumstances:
(i) Upon the request of any resident organization, HUD may, subject
to applicable collective bargaining agreements, permit residents to
volunteer a portion of their labor;
(ii) An individual may volunteer to perform services if:
(A) The individual does not receive compensation for the voluntary
services, or is paid expenses, reasonable benefits, or a nominal fee
for voluntary services; and
(B) Is not otherwise employed at any time in the work subject to
paragraph (a)(1)(i) (A) or (B) of this section.
(b) Nondiscrimination and equal opportunity. The following
nondiscrimination and equal opportunity requirements apply to this
program:
(1) The requirements of The Fair Housing Act (42 U.S.C. 3601-19)
and implementing regulations issued at 24 CFR part 100; Executive Order
11063 (Equal Opportunity in Housing) and implementing regulations at 24
CFR part 107; and Title VI of the Civil Rights Act of 1964 (42 U.S.C.
2000d-2000d-4) (Nondiscrimination in Federally Assisted Programs) and
implementing regulations issued at 24 CFR part 1;
(2) The prohibitions against discrimination on the basis of age
under the Age Discrimination Act of 1975 (42 U.S.C. 6101-07) and
implementing regulations at 24 CFR part 146, and the prohibitions
against discrimination against handicapped individuals under section
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) and implementing
regulations at 24 CFR part 8;
(3) The requirements of Executive Order 11246 (Equal Employment
Opportunity) and the regulations issued under the Order at 41 CFR
chapter 60; [[Page 5286]]
(4) The requirements of section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.C. 1701u) (Employment Opportunities for
Lower Income Persons in Connection with Assisted Projects); and
implementing regulations at 24 CFR part 135; and
(5) The requirements of Executive Orders 11625, 12432, and 12138.
Consistent with HUD's responsibilities under these Orders, recipients
must make efforts to encourage the use of minority and women's business
enterprises in connection with funded activities.
(c) Use of debarred, suspended, or ineligible contractors. Use of
grant funds under this program requires compliance with the provisions
of 24 CFR part 24 relating to the employment, engagement of services,
awarding of contracts, or funding of any contractors or subcontractors
during any period of debarment, suspension, or placement in
ineligibility status.
(d) Flood insurance. Grants will not be awarded for proposed
activities that involve acquisition, construction, reconstruction,
repair, or improvement of a building or mobile home located in an area
that has been identified by the Federal Emergency Management Agency
(FEMA) as having special flood hazards unless:
(1) The community in which the area is situated is participating in
the National Flood Insurance Program in accordance with 44 CFR parts
59-79; or
(2) Less than a year has passed since FEMA notification to the
community regarding such hazards; and
(3) Flood insurance on the structure is obtained in accordance with
section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4001).
(e) Lead-based paint. The provisions of section 302 of the Lead-
Based Paint Poisoning Prevention Act (42 U.S.C. 4821-4846) and
implementing regulations at 24 CFR part 965, subpart H (51 FR 27789-
27791, August 1, 1986) apply to activities under this program as set
out below. This section is promulgated pursuant to the authority
granted in 24 CFR 35.24(b)(4) and supersedes, with respect to all
housing to which it applies, the requirements (not including
definitions) prescribed by subpart C of 24 CFR part 35.
(1) Applicability. The provisions of this section shall apply to
all housing constructed or substantially rehabilitated before January
1, 1978, and for which assistance under this part is being used for
physical improvements to enhance security under Sec. 261.10(b)(3).
(2) Definitions. The term applicable surfaces means all intact and
nonintact interior and exterior painted surfaces of a residential
structure.
(3) Exceptions. The following activities are not covered by this
section:
(i) Installation of security devices;
(ii) Other similar types of single-purpose programs that do not
involve physical repairs or remodeling of applicable surfaces of
residential structures; or
(iii) Any non-single purpose rehabilitation that does not involve
applicable surfaces and that does not exceed $3,000 per unit.
(f) Conflicts of interest. No person, as described in paragraphs
(f)(1) and (2) of this section, may obtain a personal or financial
interest or benefit from an activity funded under this program, or have
an interest in any contract, subcontract, or agreement with respect
thereto, or the proceeds thereunder, either for him or herself or for
those with whom he or she has family or business ties, during his or
her tenure, or for one year thereafter:
(1) Who is an employee, agent, consultant, officer, or elected or
appointed official of the grantee that receives assistance under the
program and who exercises or has exercised any functions or
responsibilities with respect to assisted activities; or
(2) Who is in a position to participate in a decision making
process or gain inside information with regard to such activities.
(g) Drug Free Workplace Act of 1988. The requirements of the Drug-
Free Workplace Act of 1988 at 24 CFR part 24, subpart F apply to this
program.
(h) Anti-lobbying provisions under section 319. The use of funds
under this part is subject to the disclosure requirements and
prohibitions of section 319 of the Department of the Interior and
Related Agencies Appropriations Act for Fiscal Year 1990 (31 U.S.C.
1352), and implementing regulations at 24 CFR part 87. These
authorities prohibit recipients and subrecipients of Federal contracts,
grants, cooperative agreements, and loans from using appropriated funds
for lobbying the Executive or Legislative Branches of the Federal
Government in connection with a specific contract, grant, or loan. The
prohibition also covers the awarding of contracts, grants, cooperative
agreements, or loans unless the recipient has made an acceptable
certification regarding lobbying. Under 24 CFR part 87, applicants,
recipients, and subrecipients of assistance exceeding $100,000 must
certify that no Federal funds have been or will be spent on lobbying
activities in connection with the assistance. However, since grantees
sometimes may expect to receive additional grant funds through
reallocations, all potential grantees are required to submit the
certification, and to make the required disclosure if the grant amount
exceeds $100,000. The law provides substantial monetary penalties for
failure to file the required certification or disclosure.
(i) Intergovernmental review. The requirements of Executive Order
12372 and the regulations issued under the order at 24 CFR part 52, to
the extent provided by Federal Register notice in accordance with 24
CFR 52.3 apply to this program.
Dated: January 19, 1995.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 95-1932 Filed 1-25-95; 8:45 am]
BILLING CODE 4210-27-P
