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Screening and Eviction for Drug Abuse and Other Criminal Activity

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 [Federal Register: May 24, 2001 (Volume 66, Number 101)]
[Rules and Regulations]
[Page 28775-28806]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24my01-18]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 5, 200, 247, 880, 882, 884, 891, 960, 966, and 982
[Docket No. FR-4495-F-02]
RIN 2501-AC63
 
Screening and Eviction for Drug Abuse and Other Criminal Activity

AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.

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SUMMARY: This final rule amends the regulations for the public housing 
and Section 8 assisted housing programs, and for other HUD assisted 
housing programs, such as the Section 221(d)(3) below market interest 
rate (BMIR) program, Section 202 program for the elderly, and Section 
811 program for persons with disabilities, and Section 236 interest 
reduction program. All of these programs were affected by 1998 
amendments to the statute authorizing the public housing and Section 8 
programs. These amendments give Public Housing Agencies (PHAs) and 
assisted housing owners the tools for adopting and implementing fair, 
effective, and comprehensive policies for screening out programs 
applicants who engage in illegal drug use or other criminal activity 
and for evicting or terminating assistance of persons who engage in 
such activity.

DATES: Effective Date: June 25, 2001.

FOR FURTHER INFORMATION CONTACT: For tenant-based Section 8 and public 
housing--Patricia Arnaudo, Senior Program Manager, Office of Public and 
Assisted Housing Delivery, Department of Housing and Urban Development, 
451 Seventh Street, SW., Room 4224, Washington DC, 20410; telephone 
(202) 708-0744 or the Public and Indian Housing Resource Center at 1-
800-955-2232. Ms. Arnaudo also may be reached via the Internet at 
Patricia_S._Arnaudo@hud.gov.
    For the Section 8 project-based programs--Willie Spearmon, 
Director, Office of Housing Assistance and Grants Management, Office of 
Housing, Department of Housing and Urban Development, Room 4220, 451 
Seventh Street, SW., Washington, DC 20410; telephone (202) 708-3000. 
Mr. Spearmon also may be reached via the Internet at 
Willie_Spearmon&hud.gov.
    Only the Public and Indian Housing Resource Center number is toll-
free. Persons with hearing or speech impairments may access the above 
telephone numbers via TTY by calling the toll-free Federal Information 
Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    HUD published a proposed rule to implement the applicant screening 
and tenant eviction procedures to make HUD-assisted housing safer 
places to live on July 23, 1999 (64 FR 40262), which superseded earlier 
proposed rules for the Section 8 and public housing programs covering 
this subject. Crime prevention in federally assisted housing will be 
advanced by the authority to screen out those who engage in illegal 
drug use or other criminal activity, and both prevention and 
enforcement will be advanced by the authority to evict and terminate 
assistance for persons who participate in criminal activity.
    The changes proposed in that rule derived from several sources. 
(See the chart published in the July 23, 1999, proposed rule at 64 FR 
40264-40265 for more detail.) Section 9 of the Housing Opportunity 
Program Extension Act (Pub. L. 104-120, 110 Stat. 834-846, approved 
March 28, 1996)(``the Extension Act'') amended sections 6 and 16 of the 
United Stated Housing Act of 1937 (42 U.S.C. 1437a, et seq.) (``the 
1937 Act''). Sections 428, 506, 545, and 575-579 of the HUD 
Appropriation Act for Fiscal Year 1999 (Pub. L. 105-276, approved Oct. 
21, 1998) amended sections 3, 6, 8, and 16 of the 1937 Act and created 
other statutory authority concerning crime and security provisions in 
most federally assisted housing (42 U.S.C. 13661-13664). Title V of the 
HUD Appropriation Act for Fiscal Year 1999 (Pub. L. 105-276, approved 
October 21, 1998) was designated the Quality Housing and Work 
Responsibility Act of 1998 and is referenced in this rule as ``the 
QHWRA'' or ``the 1998 Act.'' Section 903 of the Personal Responsibility 
and Work Opportunity Act of 1996 (Pub. L. 104-193, approved August 22, 
1996, 110 Stat. 2105, 2348) amended sections 6(l) and 8(d)(1) of the 
1937 Act concerning terminating tenancy for fleeing to avoid 
prosecution, custody or confinement after commission of a felony, or 
for violation of probation or parole.
    Although owners and PHAs have been free to deny admission to 
applicants for assisted housing on the basis of criminal activity, 
these new statutory provisions mandate denial of admission for 
specified criminal activity. In implementing the new mandatory 
provisions, HUD does not impair existing authority of owners and PHAs 
to deny admission for criminal activity other than that specified in 
this rule or which has taken place at times other than those specified. 
In addition, although this rule provides a mechanism for obtaining 
access to criminal records, HUD recognizes that many PHAs and owners 
may now use other means of obtaining criminal records and may continue 
to use these other means of obtaining that information. The portion of 
this rule that addresses access to criminal records, subpart J of part 
5, does not affect those other means. However, HUD cautions PHAs and 
owners to handle any information obtained about criminal records in 
accordance with applicable State and Federal privacy laws and with the 
provisions of the consent forms signed by applicants.
    The preamble to the July 23, 1999, proposed rule provided 
additional information about the proposed implementation of the 
Extension Act and the 1998 Act.

II. Significant Differences Between This Final Rule and the 
Proposed Rule

    This final rule takes into consideration the public comments 
received on the proposed rule and attempts to simplify the rule where 
possible. The more significant changes made to the July 23, 1999 
proposed rule by this final rule are described below.
    1. Revised and reorganized regulatory text. HUD has revised and 
reorganized the majority of the proposed regulatory text. These changes 
are not substantive, but are designed to streamline the contents of the 
proposed rule and make the new requirements easier to understand. For 
example, the final rule uses a more reader-friendly question and answer 
format. The more significant of these clarifying and organizational 
changes are described in greater detail in this section.
    2. Cross-reference to generally applicable definitions 
(Sec. 5.100). The final rule eliminates unnecessary redundancy by 
relocating the definitions of commonly used terms to subpart A of 24 
CFR part 5 (see Sec. 5.100 of this final rule). The program regulations 
using the defined terms have been revised to simply cross-reference to 
24 CFR part 5, rather than repeating the generally applicable 
definitions.
    3. Authority to screen applicants and evict tenants (24 CFR part 5, 
subpart I). This final rule reorganizes and clarifies the provisions of 
the proposed rule concerning the authority of housing providers to 
screen and evict tenants. Some of the 1998 Act provisions require 
certain actions, while other provisions authorize various actions. In 
the proposed rule, this distinction was not always entirely clear. HUD 
has made several revisions to proposed 24 CFR part 5, subpart I to 
clarify these

[[Page 28777]]

differences. For example, the final rule adds a new Sec. 5.851, which 
discusses these distinctions.
    The final rule also locates the specifically authorized actions in 
separate sections from the mandatory actions. This reorganization 
reveals the statutory distinction between treatment of illegal drug use 
and other drug-related criminal activity. Current illegal use of a drug 
is the subject of a mandatory prohibition on admission. Past eviction 
for drug-related criminal activity and conviction for methamphetamine 
production are also the subject of statutory prohibitions on admission. 
Certain other drug-related criminal activity is required by statute to 
be included in the lease as a basis for eviction in the Section 8 and 
public housing programs, and this policy has been applied to other 
federally assisted housing programs as well.
    4. Prohibition on admission of sex offenders (Sec. 5.856). Because 
the prohibition against admitting persons subject to a lifetime 
registration requirement under a State sex offender registration 
program is mandatory, but not captured under the heading of the other 
subjects of mandatory screening, that provision is now contained in its 
own section of part 5 (see new Sec. 5.856). Similarly, the sex offender 
provision is positioned in the other program regulations to emphasize 
the mandatory nature of this provision as a screening element.
    5. Reorganization of 24 CFR part 5, subpart J. Subpart J of the 
final rule is reorganized slightly, to place all of the applicability 
and purpose discussions in one section (the new Sec. 5.901), and all 
the definitions in one section (the new Sec. 5.902). The remaining two 
sections on general criminal offender records and sexual offender 
registration are renumbered, as a result.
    6. Opportunities to dispute criminal record information 
(Sec. 5.903(f)). This final rule adds a new Sec. 5.903(f), which 
requires the PHA to provide the subject of an accessed criminal record 
and the applicant or tenant a copy of the record and an opportunity to 
dispute the accuracy and relevance of the information. This opportunity 
must be provided before the denial of admission, eviction, or lease 
enforcement action on the basis of such information.
    7. Penalties for improper release of information (Sec. 5.903(h)). 
This final rule adds a new Sec. 5.903(h), which describes the possible 
criminal penalties and civil liability for unauthorized disclosure of 
criminal records and information.
    8. Lease and termination of tenancy under the Section 8 Moderate 
Rehabilitation Program (Sec. 882.511). This final rule amends 24 CFR 
part 882 (entitled ``Section 8 Moderate Rehabilitation Program'') to 
clarify drug-related lease requirements under the program regulations. 
Specifically, the final rule adds a new Sec. 882.511(a)(2), which 
requires the lease to provide that certain drug-related criminal 
activity is grounds for termination of the tenancy. In addition, the 
lease must provide that the owner may terminate the tenancy when the 
owner determines that a pattern of illegal drug use interferes with the 
health, safety, or right to peaceful enjoyment of the premises by other 
residents.
    9. Removal of duplicative provision (Sec. 882.514(g)). The final 
rule removes one paragraph from the Section 8 Moderate Rehabilitation 
regulation dealing with family obligations (Sec. 882.514(g)), since its 
coverage of denial of admission and termination of tenancy is now 
covered in Secs. 882.518(c) and (d).
    10. Admission and occupancy changes (24 CFR part 960). On March 29, 
2000 (65 FR 16692), HUD published a final rule implementing the changes 
to the admissions and occupancy requirements for the public housing and 
Section 8 assisted housing programs made by the QHWRA. Among other 
amendments, the Admissions and Occupancy final rule made several 
changes to 24 CFR part 960. The part 960 regulations had earlier been 
proposed to be amended by the July 23, 1999 proposed rule on screening 
and eviction for drug abuse and other criminal activity. Accordingly, 
this final rule updates or revises the proposed revisions to part 960 
to reflect publication of the final rule on admissions and occupancy.
    11. Reference to PHAS screening and eviction procedures (24 CFR 
parts 960 and 966). The final rule revises the regulations governing 
public housing admissions and occupancy (24 CFR part 960) and lease and 
grievance requirements (24 CFR part 966) to reference criminal 
screening and eviction procedures under the Public Housing Assessment 
System (PHAS). Under the PHAS, PHAs that have adopted policies, 
implemented procedures and can document that they successfully screen 
out and deny admission to certain applicants with unfavorable criminal 
histories receive points (see 24 CFR 902.43(a)(5)).
    12. Post office notification requirements (Sec. 966.4(l)(5)). To 
correct the proposed rule's inadvertent removal of a provision from the 
public housing eviction provisions, the final rule restores the current 
rule's requirement in Sec. 966.4(l)(5) that a PHA notify the local post 
office when the PHA evicts an individual or family for criminal 
activity. This provision implements a statutory requirement (42 U.S.C. 
1437d(n)) that is intended to prevent the return to the development of 
the evicted person to obtain mail.
    13. Termination of tenancy under Housing Choice Voucher program (24 
CFR part 982). The rule for the Section 8 tenant-based certificate and 
voucher programs on termination of tenancy for drug-related criminal 
activity is based on section 8(d)(1)(B)(iii) and section 8(o)(7)(D) of 
the 1937 Act (42 U.S.C. 1437f(d)(1)(B)(iii) and 1437f(o)(7)(D)), as 
well as on section 577 of the 1998 Act. The final rule changes the 
proposed revision of Sec. 982.310(c) to remove two non-exclusive 
examples of when the owner may terminate tenancy for drug-related 
criminal activity.
    14. Screening and Eviction by Responsible Entity. Public commenters 
had expressed concern that in all programs the responsible entity be 
encouraged to consider all the circumstances of the family before 
taking action based on proscribed activity by one member of the 
household. Public commenters had objected to the provision of the 
proposed rule that purported to mandate a period of ineligibility for 
prior eviction for drug-related criminal activity that was longer than 
three years. Public commenters had expressed the view that the 
consideration of rehabilitation was not prominent enough in the rule. 
All of these elements, plus specific requirements, and adherence to the 
entity's standards and policies, are included in the provisions 
regarding discretion. (This provision is discussed at greater length in 
response to the public comments.)
    15. Clarification of eviction for drug use by guests and other 
persons. Various sections of the proposed rule allow PHAs the option of 
evicting the tenant when a ``covered person'' engages in improper 
activity ``on or off'' the premises (in the case of public housing) and 
``on or near'' the premises (in the case of Section 8 programs). The 
concept of ``covered person'' is an umbrella term including (in 
addition to the tenant) guests, members of the tenant's household, and 
``other persons under the tenant's control.'' HUD has defined ``guest'' 
in this context to mean anyone staying in the unit with the permission 
of the tenant or another household member with the authority to give 
such permission. In order to distinguish the concept of ``other 
person'' from ``guest,'' HUD is defining ``other person under the 
tenant's control'' to mean a short-term invitee

[[Page 28778]]

who is not ``staying'' in the unit. The rule specifies that such a 
person is only under the tenant's control during the period of the 
invitation, and the person is on the premises because of that 
invitation. Hence, in Secs. 5.858, 882.511, 882.518(c)(1), 
966.4(f)(12), 966.4(l)(5), and 982.310(c), the final rule replaces the 
proposed term ``covered person'' with more specific language to clarify 
this distinction.
    16. More precise cross-references. Sections 247.3, 880.607, and 
884.216, describing when landlords in the assisted housing programs 
governed by those sections may terminate tenancy for criminal activity 
or alcohol abuse, provide cross-references to part 5, subparts I and J 
generally. The final rule cross-references directly to the most 
applicable sections of part 5 to avoid any potential for confusion.

III. Responses to Public Comments

    The public comment period on the proposed rule closed on September 
21, 1999. During this period, HUD received 29 public comments. The 
commenters were comprised of 17 public housing agencies (PHAs) and 
their representatives, including four State Housing Finance Agencies 
and their representatives, three legal aid organizations, three 
managers of Section 8 housing, four resident groups, one Federal 
government agency, and one legal organization representing PHAs. The 
following discussion of comments (and HUD's responses to the comments) 
is organized according to the regulatory section to which the comment 
applies, in sequential order. The corresponding sections for particular 
programs are also listed in the headings.

A. General Comments Not Regarding a Particular Regulatory Section

    Comment. Residents of an assisted development that had been for 
elderly persons only but had added other residents recently expressed 
their general support for the rule, hoping that the rule will help rid 
their development of problem tenants engaged in drug-related activity. 
An owner of a Single Room Occupancy project who participates in HUD's 
Shelter Plus Care program praised the rule for giving the owner the 
ability to reject and evict tenants who engage in illegal activities 
specifically related to drug and alcohol use, noting that the rule will 
improve the quality of life for its 195 residents. This owner also 
praised the new authority for a PHA to check criminal records, as a way 
to restrict tenancy to suitable applicants.
    Response. With the new statutory authority owners and PHAs should 
have the tools to deny or terminate assistance to families whose 
criminal actions interfere with the safety and security of the other 
residents.
    Comment. A legal organization representing PHA interests commended 
the Department for an excellent overall effort in its regulatory 
implementation of the 1998 Act. The organization commented that HUD had 
shown a commendable reluctance to further complicate an already complex 
statutory scheme with regulations that are more detailed than 
necessary.
    Response. In that vein, HUD declines to elaborate upon some of the 
statutory terms that commenters have urged HUD to define. In some 
cases, the terms may already have been the subject of judicial 
clarification. HUD is attempting to limit its role to amplifying the 
statute only where necessary.

B. Definitions--Sec. 5.100

    Comment. HUD's adoption of a revised definition of ``violent 
criminal activity'' was praised by a legal aid organization, but the 
organization recommended the ``nontrivial bodily injury or property 
damage'' be changed to ``serious bodily injury or property damage.'' An 
organization providing legal support to PHAs and their counsel also 
expressed support of this revised definition, particularly with respect 
to its inclusion of threatening behaviors.
    Response. HUD has adopted this change. On further consideration of 
the issue, HUD has decided that the word ``serious'' is a more common 
legal term and therefore preferable. HUD intends no change in meaning.

C. Prohibiting Admission of Drug Criminals--Secs. 5.854, 960.204, 
982.553

    Comment. Sections 5.854 and 960.204 (Secs. 5.853, 960.203 at the 
proposed rule stage), and 982.553(a) of the proposed rule provide that 
the responsible entity must adopt standards that prohibit admission of 
applicants:
     If the entity determines that a household member is 
engaged in or has engaged in drug-related criminal behavior; or
     If the entity determines it has reasonable cause to 
believe that illegal drug use by a household member may threaten 
peaceful enjoyment by other residents.
    Comments asserted that most of the provisions concerning whether a 
family is eligible for admission or continued occupancy use a phrase 
placing the responsibility on the owner or PHA determination of a 
condition, not on the objective existence of the condition. 
Representatives of housing owners and residents asked what is meant by 
reasonable cause for an owner to believe that a condition exists (e.g., 
that there is illegal use of a drug by a household member that is a 
threat to others, as described in Sec. 5.854(a)(2)). They noted a 
contrast with other provisions that seem to be based on the existence 
of the condition, such as whether a household member ``has been evicted 
from federally assisted housing for drug-related criminal activity.'' 
(Sec. 5.853 proposed; Sec. 5.854 final) They recommended that the rule 
should either (1) make the objective existence of the condition rather 
than a PHA or owner determination the critical factor resulting in 
ineligibility or termination of assistance; or (2) state the process 
and standards to be used by the PHA or owner in making its 
determination.
    Response. Section 576 of the 1998 Act refers to the PHA or owner's 
determination with respect to drug use, criminal activity, or a pattern 
of activity that would have potential negative impact on other 
residents. In these provisions, the Congress and the Department 
recognize that the entities that are responsible for direct 
administration of the assisted housing programs should have latitude 
for practical and reasonable day-to-day judgments whether household 
members have committed criminal activity or other activity that is 
grounds for denial or termination of assistance. Thus, the final rule 
simply reflects the statutory language. HUD notes, however, that 
nothing in the language of the rule on the question of owner 
determinations would change any ability to challenge in court the 
responsible entity's action or change any applicable court standard of 
review of such action.
    Comment. A legal aid organization criticized HUD's implementation 
of restrictions against persons who have engaged in illegal drug use in 
Sec. 5.854 (Sec. 5.853 of the proposed rule). The commenter argued 
that, based on section 576(b) of the 1998 Act, the rule should permit 
such persons to be excluded only if there is a link with a threat to 
health, safety or peaceful enjoyment of others.
    Response. HUD disagrees that this link must be present in every 
case related to illegal drug use or drug-related criminal activity. 
Section 576(b)(1)(A) of the 1998 Act provides independent authority to 
bar admission of persons currently engaged in illegal drug use, without 
reference to any effect on health, safety, or right to peaceful 
enjoyment of the premises. Although section 576(b) links a pattern of 
illegal drug use to interference with the rights of others, the 
language of section 576(c) gives broad authority to owners to

[[Page 28779]]

screen out applicants involved in drug-related activity--which includes 
illegal drug use, as well as commercial drug crime--without any 
necessary finding of current interference with the rights of others.
    The language of section 576(c) mentions the anticipated effect on 
others in connection with an owner's choice to prohibit admission of 
persons involved in forms of criminal activity other than drug-related 
criminal activity or violent criminal activity--to designate serious 
forms of criminal activity in addition to drug crime or violent crime. 
While section 576(c) confirms that an owner may deny admission to 
criminal offenders, the law also specifies that this new statutory 
authority is ``in addition to any other authority to screen applicants. 
* * * '' Section 8 of the 1937 Act already provided that ``the 
selection of tenants shall be the function of the owner.'' (See 42 
U.S.C. 1437f(d)(1)(A).) In public housing also, there is nothing that 
requires the PHA to admit certain families or precludes the PHA from 
screening for potential of disruptive behavior. For many years, the 
public housing regulations in part 960 have, in fact, required the PHA 
to screen out families likely to engage in such behavior.
    Following the structure of section 576 of the 1998 Act, Sec. 5.854 
implements the mandatory screening provisions of paragraphs (a) and (b) 
of the statute, and Sec. 5.855 implements the permissive screening 
provisions of paragraph (c) of the statute. Section 576(c) permits 
exclusion without a showing of current interference with others.
    Comment. Based on section 576(c) of the 1998 Act, the rule should 
require exclusion for past drug-related criminal activity in Sec. 5.854 
(Sec. 5.853 of the proposed rule) to be limited to activity during a 
``reasonable time preceding the date when the applicant household would 
otherwise be selected for admission'' (or past criminal activity in 
Sec. 5.854(a).)
    Response. HUD agrees with the commenter about when the reasonable 
period should apply and has added this language to Sec. 5.855(a) 
(Sec. 5.854 of the proposed rule), which deals with the owner's 
authority to prohibit admission for violent criminal activity or other 
criminal activity that threatens the peaceful enjoyment of other 
residents. In each case, HUD has made corresponding changes in 
comparable provisions of Secs. 960.203 (concerning standards for PHA 
tenant selection criteria) and 982.553 (concerning admission to the 
Section 8 voucher program).
    Comment. A legal aid organization recommended that HUD specify what 
a reasonable time period is, for consistency nationwide. A distinction 
should be made between an appropriate period for drug-related or 
violent criminal activity and other disqualifying criminal activity, 
with ``no more than three years'' applying to drug-related and violent 
criminal activity, and a shorter period for other criminal activity. A 
PHA that expressed an opinion on the subject recommended that the time 
period be left to the determination of the owner (or PHA).
    Response. HUD believes it would be too rigid for it to define a 
reasonable time period in a manner that covers every circumstance 
nationally. The reasonable time period is still left up to the owner 
(or PHA) to determine in its admission policies. Owners and PHAs may 
want to adopt standards that differentiate what is a reasonable period 
for different categories of criminal activity. While HUD considers that 
five years may be a reasonable period for serious offenses, depending 
on the offense, some PHAs or owners may not agree. The owners and PHAs 
should make these decisions in the best interests of their communities.
    Comment. Legal aid organizations and a mental health organization 
objected to the provision of proposed Sec. 5.853(c) (final 
Sec. 5.854(a)) that permits an owner to establish a reasonable period 
during which a person previously evicted from a federally assisted 
project for drug-related criminal activity may be denied admission to 
assisted housing. They argued that the statute sets this period at 
three years, giving the owner authority to override the requirement to 
deny admission if there is evidence of rehabilitation. They pointed out 
that the rule would permit exclusion of a person on this basis for 
longer than three years without any evidence that the applicant would 
interfere with the health, safety, or enjoyment of other tenants, in 
violation of the statute.
    Response. Section 576(a) of the 1998 Act provides that an applicant 
``shall not be eligible'' for admission to federally assisted housing 
``during the three-year period beginning on the date of [eviction from 
such housing by reason of drug-related criminal activity].'' However, 
the statutory language does not in any way limit the authority of the 
responsible entity to screen out applicants in any other circumstance--
whether for criminal activity or for any other reason. There is nothing 
in the statute that requires an owner or PHA to admit an applicant who 
has previously been evicted from federally assisted housing for drug-
related criminal activity at any point in time.
    Since the intent of the statute was to strengthen protections 
against admitting persons whose presence in assisted housing might be 
deleterious, HUD does not interpret this new provision as a constraint 
on the screening authority that owners and PHAs already had. Therefore, 
the statute permits owners and PHAs to establish a reasonable period, 
which may vary depending on the type of drug-related criminal activity 
involved.
    The final rule distinguishes the mandatory ineligibility provision 
applicable during a three-year period from the owner's authority to 
establish a reasonable period longer than three years to prohibit 
admission of such applicants. The first, mandatory, prohibition on 
admission is found in Sec. 5.854(a). The second, discretionary, 
extension of the period of the prohibition is referenced in 
Sec. 5.852(d)).
    Comment. The exceptions permitting eligibility for a previously 
evicted applicant are stated in proposed Sec. 5.853(a). The elaboration 
on the statutory language ``the circumstances leading to the eviction 
no longer exist'' provided in the rule are when ``the criminal 
household member has died or is imprisoned.'' One commenter urged HUD 
to add a third example: When that household member ``is no longer in 
the household.''
    Response. HUD declines to add this example (Sec. 5.853 of the 
proposed rule is Sec. 5.854 at the final rule stage). Temporary absence 
from the household is not a sufficient basis for granting an exception. 
PHAs and owners can make determinations of circumstances that they are 
certain satisfy the statutory language.
    Comment. A PHA objected to Sec. 5.853(b) of the proposed rule 
concerning submission of evidence related to drug-related criminal 
activity, because the section appeared to require the submission of 
evidence by every applicant, regardless of the absence of any 
allegations of drug-related criminal activity by any household members 
at any time. Other commenters expressed concern about abuse of the 
authority to seek such evidence unless the evidence were sought from 
every applicant.
    Response. Proposed 24 CFR 5.853(b) was intended to implement the 
provision of section 576(c) of the 1998 Act that provides the authority 
to prohibit admission. The rule provides that the owner may choose to 
consider the application of an applicant to whom the owner has 
previously denied admission if the owner has sufficient evidence that 
no member of the

[[Page 28780]]

household is engaged in criminal activity. In such a case, a family 
must supply information or documentation required by HUD or the 
responsible entity to make an admission decision. This provision, and 
the statute on which it is based, do not preclude the owner from asking 
for criminal background information in connection with the initial 
application. (See Sec. 5.903(b) of this final rule with respect to 
obtaining consent from every applicant family for release of criminal 
records.)
    Comment. An organization representing owners of assisted housing in 
the State of Minnesota, wrote to point out conflicts between the 
actions to prohibit admission of persons who have been engaged in drug 
use and State law that prohibits discrimination on the basis of past 
drug use. Does this rule preempt State law with respect to this 
protection?
    Response. HUD declines to speculate here about the applicability of 
this rule to particular local situations. If there is a concern about a 
specific potential conflict between the HUD rule and a State or local 
law, the applicable HUD field office should be contacted.
    Comment. One commenter criticized the statement in the preamble of 
the proposed rule that the 1998 Act amendments to the 1996 Extension 
Act provisions on ineligibility of illegal drug users and alcohol 
abusers confirm that a PHA or owner may deny admission or terminate 
assistance for the whole household that includes a person involved in 
the proscribed activity. In essence, since rehabilitation of the 
household member with the offending substance abuse problem is the only 
way to cure the household's ineligibility, the preamble to the proposed 
rule stated that the whole household is held responsible for that 
member's rehabilitation. The commenter said that the statute did not 
authorize such action.
    Response. Both the denial of admission and termination of 
assistance provisions of the 1998 Act contain provisions that give PHAs 
the discretion to hold an entire household responsible for the actions 
of members. Section 576(b) of the 1998 Act (42 U.S.C. 13661(b)) 
provides that a household must be denied admission if the household has 
``a member'' with respect to whom the PHA or owner determines that it 
has reasonable cause to believe is involved in illegal drug use or 
alcohol abuse that is a threat to others. The statute provides that 
rehabilitation of the member can render the household eligible for 
admission. Similarly, section 577 of the 1998 Act (42 U.S.C. 13662(a)) 
allows a PHA or owner to terminate the tenancy or assistance for any 
household with a member who is determined to be illegally using drugs 
or whose illegal drug use or alcohol abuse is determined to be a threat 
to others.
    Comment. A legal aid organization stated that section 576(c)(2) of 
the 1998 Act (42 U.S.C. 13661(c)(2)) gave HUD the responsibility for 
specifying ``by regulation'' what would constitute sufficient evidence 
to ensure that a member of the family who had engaged in criminal 
activity has not engaged in such activity for a reasonable period. A 
PHA recommended that the standard should be the absence of an arrest 
for drug-related crimes within a time specified by the owner or PHA.
    Response. HUD agrees that the rule should include more guidance 
concerning the evidence obtained after the owner's initial denial of 
admission because of criminal activity by a household member. The final 
rule addresses this issue in Sec. 5.855(c), which states that an owner 
would have ``sufficient evidence'' if the individual submitted a 
certification that she or he is not currently engaged in and has not 
engaged in such criminal activity during the reasonable period, 
supported by evidence from such sources as a probation officer, a 
landlord, neighbors, social service agency workers and criminal 
records, which the owner verified. The applicant will need to supply 
information that will permit the owner to contact these sources of 
information, and the owner will need to verify supporting evidence. 
Comparable changes have been made to the sections on both drug-related 
and other crimes in parts 960 and 982.

D. Prohibiting Admission of Other Criminals--Secs. 855, 5.856, 960.204, 
982.553

    Comment. Two representatives of owners point out that Sec. 5.854 of 
the proposed rule (Sec. 5.855 of the final rule) merely permits owners 
to prohibit admission of applicants who are engaged in violent criminal 
activity, while Sec. 5.853 of the proposed rule (Sec. 5.854 of the 
final rule) requires owners to prohibit admission of applicants they 
have ``reasonable cause'' to believe are currently involved in drug-
related criminal activity or alcohol abuse. They recommended that HUD 
require denial of admission in both cases.
    Response. The statutory language on which these two sections are 
based makes that distinction. Compare section 576(c) with section 
576(b)(1)(B) (42 U.S.C. 13661(c) with 13661(b)(1)(B)).
    Comment. An organization representing owners suggested that the 
rule may not permit denial of admission because of theft or fraud, or 
any other crime that does not fit the definitions of threatening 
criminal activity.
    Response. The rule does not overrule an owner's authority to screen 
tenants for crimes or behavior not described in the rule. Section 576 
of the 1998 Act recognized existing screening authority of PHAs and 
owners with its lead in phrase: ``in addition to any other authority to 
screen applicants, * * *.'' [emphasis added]
The final rule covers this 
subject in a new Sec. 5.851. In addition, the final rule separates 
mandatory actions from permissive actions, both of which reside in the 
context of existing authority.
    Comment. The requirement of Sec. 5.854(c) of the proposed rule to 
check whether any member of a household is the subject of a lifetime 
registration requirement under a State sex offender registration 
program constitutes a significant burden. The search should be limited 
to consultation with appropriate officials of the state in which the 
PHA (or owner) is located and to any state in which the applicant is 
known to have resided.
    Response. HUD agrees that the search can be limited to these 
states. The final rule reflects this policy--in the new Sec. 5.856 and 
in Sec. 5.905(a).

E. Prohibiting Admission of Alcohol Abusers--Secs. 5.857, 960.204, 
982.553

    Comment. A legal aid organization argued that alcohol abusers must 
be found to be a threat to others, and that the rule should focus on 
behavior rather than status. The organization commented that this 
provision should cross-reference the applicability of consideration of 
rehabilitation.
    Response. Section 5.857 of the final rule includes the link between 
admissions standards and the alcohol abuser's impact on others, as the 
proposed rule did. The rule concerning consideration of rehabilitation 
is found in another paragraph of the same section in the case of public 
housing (proposed Sec. 960.203; final Sec. 960.205) and the voucher 
program (Sec. 982.553), and in a nearby section in the case of other 
project-based programs (proposed Sec. 5.855; final Sec. 5.862), so no 
cross-reference is necessary.

F. Termination of Assistance for Drug-Related Criminal Activity--
Secs. 5.858, 966.4(f)(12)(i) & (l)(5)(i), and 982.310(c)

    Comment. A legal aid organization criticized regulatory language 
that would allow a project owner to terminate an assisted tenancy 
because a tenant ``has engaged in'' drug-related criminal activity. The 
comment stated

[[Page 28781]]

that section 577(a) of the 1998 Act only supports eviction for past 
drug-related criminal activity when there is a pattern of illegal drug 
use that interferes with the ``health, safety, and peaceful enjoyment'' 
of others. The commenter recommended that the rule follow the statute 
more closely and that the rule add a reference to consideration of 
rehabilitation.
    Response. Section 577 of the 1998 Act requires the owner to use 
lease provisions that allow the owner to terminate tenancy if a 
household member ``is illegally using'' a controlled substance, or if 
the owner determines that drug use or abuse interferes with peaceful 
enjoyment by other residents. However, section 577 of the 1998 Act does 
not supplant or supersede statutory and regulatory authority that 
authorize the owner to terminate tenancy for drug-related criminal 
activity (e.g., for present or past drug dealing during the term of the 
tenancy), or that require the owner to use a lease that allows the 
owner to terminate the tenancy for such drug crime. The 1998 Act was 
enacted to promote ``safety and security in public and assisted 
housing'' by supplementing and strengthening existing statutory tools 
for fighting criminal activity by assisting housing residents (see 
subtitle F of the 1998 Act, which includes section 577).
    For Section 8 programs, section 8(d) mandates that program leases 
``shall provide'' that ``any drug-related criminal activity'' on or 
near the premises by a covered person during the term of the lease is 
grounds for termination of tenancy (42 U.S.C. 1437f(d)(1)(B)(iii)). The 
additional ``safety and security'' requirements enacted in the 1998 law 
must be implemented in tandem with the existing termination 
requirements in section 8 of the 1937 Act, so that owners have 
authority to evict drug dealers as well as drug users, and the 
authority to evict for past drug-related criminal activity during the 
term of tenancy, as well as for continuing or recent drug-related 
criminal activity. Existing HUD program regulations for the various 
assisted housing programs already provide authority for an assisted 
project owner to terminate tenancy for drug-related and other forms of 
criminal activity (see 24 CFR part 247, 24 CFR 880.607). Such 
provisions are included in the HUD model lease for Section 8, Section 
236, and Section 221(d)(3) below-market interest rate projects. The new 
termination of tenancy requirements under this rule (Secs. 5.856 and 
5.857 of the proposed rule; Secs. 5.858 through 5.861 of the final 
rule) are consistent with termination of tenancy requirements in the 
existing program regulations.
    For public housing, the 1937 Act (section 6(l)(6)), 42 U.S.C. 
1437d(l)(6)) requires that a PHA use leases that ``provide that any 
criminal activity that threatens the health, safety, or right to 
peaceful enjoyment of the premises by other tenants or any drug-related 
criminal activity on or off such premises, engaged in by a [covered 
person]
shall be cause for termination of tenancy.'' Thus, the illegal 
drug use criterion of section 577 of the 1998 Act adds little regarding 
eviction of illegal drug users for the public housing program, but adds 
a provision on alcohol abuse. None of the statutes explicitly addresses 
the timing of the offending activity. The final rule does not include 
the phrase ``during the term of the lease'' that would have been added 
by the proposed rule, since that phrase is unnecessary. Activity 
occurring only prior to the time the leaseholder signed the lease, or 
the household member or guest joined the household or became a guest, 
would not be a basis for termination of tenancy. The provision on 
consideration of rehabilitation is not included in the eviction 
provision itself but is included in the regulatory provisions that 
address generally the authority of a responsible entity in making 
admission and termination decisions (see Secs. 5.852, 960.203, 966.4, 
982.310, and 982.552).
    Comment. A PHA challenged the use of term ``on or near such 
premises'' with respect to the location of the drug-related criminal 
activity that is grounds for eviction (in proposed Sec. 5.856) 
(eviction from assisted projects) and Secs. 982.310(c)(1)(i) and 
(c)(2)(i)(C)) (eviction from housing of families assisted Section 8 
tenant-based programs). A PHA noted that the phrase was changed to ``on 
or off such premises'' by a 1996 statute.
    Response. Sections 6(k) and 6(l)(6) of the 1937 Act now use the 
term ``on or off such premises'' with respect to drug-related or 
violent criminal activity in stating conditions for which leases must 
require termination of tenancy, and in distinguishing which types of 
termination of tenancy can be the subject of an expedited grievance 
procedure, respectively, in the public housing program. However, 
sections 8(d)(1)(B)(iii) and 8(o)(7)(D)of the 1937 Act, concerning 
leases used in the Section 8 programs, still use the term ``on or near 
such premises'' with respect to drug-related criminal activity that is 
cause for termination of tenancy. Section 576(c) of the 1998 Act, 
referenced in section 6(l)(7) of the 1937 Act, provides for denial of 
admission on the basis of drug-related or violent criminal activity, 
without mention of its location.
    In the final rule, the provisions applicable only to public housing 
(part 966) use the term ``on or off.'' References to ``on or near'' are 
found in all the provisions concerning termination of tenancy 
applicable to Federal Housing Administration subsidized housing and 
assisted housing for the elderly, as well as to the Section 8 program 
(part 5, subpart I, and part 982).
    Comment. One commenter pointed out that Sec. 966.51(a)(2)(i)(B), 
which implements the expedited public housing grievance procedure 
provision of the statute, should reflect the statutory change 
authorizing eviction for drug-related criminal activity ``on or off'' 
public housing premises.
    Response. HUD has made this change.
    Comment. Two representatives of public housing tenants objected to 
the provision of Sec. 966.4(f)(12)(i) that permits eviction from public 
housing based on criminal activity off the premises by a guest of the 
household unrelated in time to the visit to the premises and unrelated 
to its effect on residents of the premises or the vicinity. One of them 
stated that the Section 8 rule is more reasonable in that the Section 8 
rule only permits such eviction if the guest's criminal activity took 
place on or near the premises. This commenter suggested that the 
provision requires a demonstration that the resident had control over 
the guest's actions and that the actions constituted a serious 
violation of the resident's lease. Another commenter suggested that the 
criminal activity serving as the basis for termination be required to 
take place on the premises.
    Response. HUD is not persuaded by these arguments to change the 
``on or off the premises'' language of rule, because the ``on or off 
the premises'' language in the statute pertaining to public housing, 42 
U.S.C. 1437d(l)(6), potentially applies to guests and ``other persons 
under the tenant's control,'' and is not qualified by whether the 
resident knew about or literally ``controlled'' the guest's unlawful 
actions. Rather, the question is one of legal control; by ``control,'' 
the statute means control in the sense that the tenant has permitted 
access to the premises. See HUD's 1991 rule on public housing lease and 
grievance procedures, 56 FR 51560, 51562 (``the question * * * is 
whether the person in question was in the premises with the consent of 
a household member at the time of the criminal activity * * *.'') See 
also, for example, Housing Authority of New

[[Page 28782]]

Orleans v. Green, 657 So.2d 552, 553 (La.Ct.App.), writ denied, 661 
So.2d 1355 (La.1995), cert. denied, 517 U.S. 1169, 116 S.Ct. 1571, 134 
L.Ed.2d 670 (1996). HUD has revised the definition of ``guest'' and 
added a definition of ``other person under the tenant's control'' to 
the general definitions section of 24 CFR part 5. HUD has also revised 
24 CFR 966.4(f)(12) and 966.4(l)(5)(i)(B) to clarify how the concept of 
``control'' relates to tenant liability for the behavior of guests and 
others.
    In order to provide guidance as to the scope of the tenant's legal 
control and hence potential responsibility, the rule has been revised 
to provide that a ``guest'' is a person temporarily staying in the unit 
with the consent either of the tenant or of a household member with 
express or implied authority to consent on behalf of the tenant. The 
definition of ``guest'' also has been revised to clarify that the 
activity of a guest is actionable under this provision only if the 
activity takes place while the person is a guest; only in that case can 
the tenant's legal control extend to actions that occur off public 
housing premises.
    In contrast, if a person (with the tenant's consent) visits public 
housing premises for only a short period of time and is not ``staying'' 
in the tenant's unit, the tenant's legal control necessarily would be 
limited by the brevity of the visit and would not extend to activity 
off public housing premises. Because the rule's definition of ``guest'' 
now includes only persons ``staying'' in the unit with consent, the 
rule uses the phrase ``other person under the tenant's control'' to 
denote this latter category of non-guest invitee, over whom the 
tenant's legal control necessarily applies only during the period of 
invitation onto public housing premises. HUD has made similar changes 
in the relevant sections dealing with Section 8 assistance to make 
those provisions consistent with public housing.
    HUD has also clarified that a commercial visitor such as a delivery 
person only visiting the premises for the purpose of making a delivery 
and having no other contact with the unit or relationship with the 
tenant ordinarily would not be a person under the tenant's control, and 
hence the tenant would not be liable for any improper activity by the 
delivery person. HUD has added to the definition of ``other person 
under the tenant's control'' a sentence clarifying the exclusion from 
the definition of persons on the premises for brief, infrequent visits 
for legitimate commercial purposes. Of course, if it could be shown 
that if such a commercial visitor were engaging in prohibited activity 
and the tenant knew about it or was somehow involved in it, there would 
be no such exclusion.
    Some courts have disagreed with HUD's concept of legal control and 
have read into 42 U.S.C. 1437d(6)(l) a requirement that the tenant have 
some degree of knowledge or ability to control the unlawful behavior. 
See, for example, Rucker v. Davis, 237 F.3d 1113 (9th Cir., 2001) (en 
banc).
    If individual PHAs are subject to binding court decisions, of 
course they should follow them even though HUD's interpretation may 
differ. Quite apart from these decisions, PHAs may conclude in 
particular instances that no useful purpose would be served by 
terminating a tenancy on the basis of a crime committed by a guest or 
other person with whom the leaseholder only had a minimal connection. 
The fact that statutorily required lease provisions would allow PHAs to 
terminate tenancy under certain circumstances does not mean that PHAs 
are required to do so in each case where the lease would allow it.
    Comment. A PHA requested that in the Section 8 tenant-based 
assistance program HUD not restrict an owner's right to terminate 
tenancy for violent criminal activity that occurs only ``on or near the 
premises.'' The owner should not have to wait until the criminal 
activity comes ``home'' before removing such a tenant.
    Response. Section 8 authorizes eviction for violent criminal 
activity ``on or near the premises,'' or alternatively for any criminal 
activity that threatens other residents of the development or the 
peaceful enjoyment of their homes of residents in the vicinity (42 
U.S.C. 1437f(d)(1)(B)(iii) and 1437f(o)(7)(D)). The final rule reflects 
these distinctions. (See Sec. 982.310.)

G. Evicting Other Criminals--Secs. 5.859, 966.4(l)(5), 982.310(c)(2), 
and 982.553(b)(2)

    Comment. A legal services organization recommended restoring 
language of Sec. 966.4(l)(5), preserving for PHAs (and adding for 
courts) ``discretion to consider all of the circumstances of the case, 
including the seriousness of the offense, the extent of participation 
by family members, and the effects that the eviction would have on 
family members not involved in the proscribed activity.'' The commenter 
cited support for this position in a Congressional committee report on 
the 1990 amendment to the statutory foundation for this provision. That 
report suggested that eviction would be inappropriate if the tenant had 
no knowledge of the criminal activities of guests or had taken 
reasonable steps to prevent the activity. (S. Rep. No. 316, 101st 
Congress, 2d Sess. 179, reprinted in 1990 U.S. Code Cong. & Admin. News 
5763, 5941.) The commenter urged changes to the rules for Section 8 
project-based and tenant-based assistance, as well, to encourage courts 
to consider all circumstances and exercise discretion in a humane 
manner when evicting a tenant for another person's criminal activity.
    Response. As discussed in more detail elsewhere in the preamble, 
the final rule allows the necessary flexibility for PHAs with respect 
to public housing and owners with respect to project-based assistance 
and tenant-based assistance. This is consistent with the cited 
committee report language, which in any event has not been reflected in 
any statute. The committee report language for both the House and 
Senate versions of the QHWRA emphasizes efforts to make assisted 
housing safer for residents, which is consistent with the final rule.
    The statute does not authorize courts to exercise this same type of 
discretion. Courts determine whether a violation of the lease has 
occurred and whether the lease provides that such a violation is 
grounds for eviction of the persons whom the PHA seeks to evict. In the 
latter regard, HUD recognizes that some courts, such as the Ninth 
Circuit in Rucker v. Davis, prompted by their differing view of 
Congressional intent, have read into the lease provision mandated by 
Section 6(l)(6) a requirement that a PHA, in certain circumstances, 
demonstrate particularized fault or other lack of ``innocence'' on the 
part of a leaseholder when a PHA seeks to terminate a lease based on a 
crime committed by someone other than the leaseholder. Obviously, PHAs 
must abide by any such binding court decisions in their jurisdictions, 
even though HUD has a differing view. However, it is important to 
recognize that even in those jurisdictions, a court's function under 
HUD's regulations is to determine whether an eviction meets the 
requirements of the lease and of Section 6(l)(6) as they have been 
interpreted in that jurisdiction, and not whether a PHA has considered 
additional social and situational factors that HUD's regulations 
authorize, but do not require, a PHA to consider in making its decision 
whether or not to pursue eviction of any family or individual whom, 
under the lease, the PHA has the legal right to evict (see, for 
example, Sec. 966.4(f)(5)(vii)(B).) See Minneapolis Public Housing 
Authority v. Lor, 591 N.W.2d 700 (Minn. 1999).

[[Page 28783]]

    Comment. Another commenter took a different view of such discretion 
conferred on PHAs with respect to termination of tenancy. A legal 
organization representing PHA interests, stated that when PHAs are 
given discretion to do something they are not required to do it. 
Certainly, courts should not exercise the discretion for them. To avoid 
this possibility, this commenter recommended adding language to the 
effect that (a) the existence of discretion on the part of PHAs does 
not obligate them to exercise the discretion in any particular case; 
and (b) the discretion in the regulation is not intended to confer the 
discretion to consider circumstances other than proof of lease 
violation on any court or party other than the PHA. The commenter 
argued that such a position is consistent with the policy of giving 
PHAs the maximum flexibility possible in the operation of assisted 
housing, ensuring safe and livable environments.
    Response. HUD agrees that conferring discretion on PHAs to take 
action does not require them to take action, and that HUD's conferral 
of discretion on PHAs in deciding whether to terminate tenancy in each 
case does not constitute a conferral of discretion on local courts to 
consider factors other than those appropriate under the lease. Of 
course, by the same logic, it should also be noted that, insofar as 
PHAs possess discretion to determine for themselves when to initiate 
eviction proceedings, they are neither required by law nor encouraged 
by HUD to terminate leaseholds in every circumstance in which the lease 
would give the PHA grounds to do so. However, the rule does not need to 
add the language suggested by the commenter as these points are already 
inherent in the regulatory language.
    Comment. One PHA recommended that, in the Housing Choice Voucher 
Program, the rule authorizing an owner to terminate the tenancy of any 
tenant who engages in violent criminal activity on or near the premises 
(Sec. 982.310(c)(2)) should be revised to cover commission of a felony 
or serious misdemeanor, regardless of where it was committed. This PHA 
also recommended a change in the provision that prohibits participants 
from engaging in drug-related or violent criminal activity, or other 
criminal activity or alcohol abuse that threatens the health, safety, 
or peaceful enjoyment of the premises (Sec. 982.551(l) and (m). The 
commenter urged HUD to revise this provision so that the criminal 
activity that is actionable does not require force and does not have to 
be committed in the vicinity of the development. Provisions authorizing 
PHAs to terminate assistance to participants (Secs. 982.552 and 
982.553) should also be revised, according to this commenter, to permit 
termination of assistance of participants who commit a felony or 
misdemeanor, regardless of where it is committed. This recommendation 
is based on the need for public support for assisted housing programs.
    Response. In the voucher program, an owner's termination of tenancy 
must be based on a serious or repeated violation of the lease, 
violation of law that imposes obligations on the tenant in connection 
with occupancy, or other good cause (Sec. 982.310). The existing rule 
describes certain types of criminal activity that violate federal law 
with respect to the obligations of tenants. This rule amends the 
existing regulations to reflect the requirements of the statutes it is 
implementing with respect to criminal activity and tenant obligations 
as they relate to an owner's right to terminate tenancy. This rule also 
reflects these provisions with respect to a PHA's rights and 
obligations to terminate assistance with respect to criminal activity.
    The statutes being implemented in this rulemaking specifically 
require owners to adopt leases that authorize eviction for illegal drug 
use (or for a pattern of illegal drug use that would interfere with 
other residents' rights) without regard to location, but they do not 
broaden the type of criminal activity or remove the proximity condition 
with respect to other drug-related or violent criminal activity as the 
commenter urges HUD to do in the rule. Nonetheless, the rule permits an 
owner to specify in the lease grounds for eviction other than those 
specifically mandated by these statutes to be included in the lease or 
to evict for ``other good cause.'' An owner who used a standard lease 
that provided that commission of any felony or serious misdemeanor by a 
household member is grounds for termination would have grounds to evict 
a tenant for serious lease violation for such criminal behavior, in 
accordance with Sec. 982.310, if that lease provision were consistent 
with State and local law and were applied equally to voucher holders 
and other tenants. (See section 8(o)(7)(B) (42 U.S.C. 1437f(o)(7)(B).) 
``Other good cause'' is subject to interpretation by local courts, but 
may well encompass some categories of activity and location that the 
commenter seeks to cover.
    Comment. One commenter stated that there is statutory authority for 
termination of tenancy for criminal activity other than drug-related 
criminal activity if the criminal activity is a threat to others in the 
Section 8 existing housing program. While that authority is reflected 
in Sec. 5.857 of the proposed rule, applicable to termination of 
tenancy in the project-based assistance program, there is no comparable 
provision pertaining to tenant-based assistance.
    Response. Section 982.310(c)(2) of the proposed rule reflects this 
authority. Since the statute speaks in terms of termination of tenancy, 
not termination of assistance, the language is not repeated in the 
section on termination of assistance in the tenant-based assistance 
program, Sec. 982.553.
    Comment. One PHA expressed disappointment that the public housing 
rule provision on termination of tenancy does not go farther, to 
terminate for violent criminal activity on or off the premises and for 
criminal or other activity by a covered person that threatens other 
residents, PHA employees, or residents in the immediate vicinity. The 
PHA stated that the provisions of the ``Public Housing Management 
Reform Act of 1997'' require that these form the basis for termination 
of tenancy in the public housing program.
    Response. The referenced proposed legislation was not enacted. This 
final rule implements the legislation that was enacted. The 1937 Act 
already provided for termination if a member of the household, guest or 
other person under the tenant's control engaged in criminal activity 
that threatens residents or in any drug-related criminal activity on or 
off the premises.
    Paragraphs (1)(2)(iii) and (1)(5) of Sec. 966.4 of the proposed 
rule addressed the issue of what activity forms the basis for 
termination of tenancy--the first in terms of what constitutes ``other 
good cause'', and the other in terms of criminal activity or alcohol 
abuse that is actionable, based on the recent statutory revisions. 
Notable differences between the two provisions are that:
    (1) Paragraph (1)(2) used the term ``member of the household'', 
whereas paragraph (1)(5) used the broader term ``covered person,'' 
which is defined in Sec. 966.2;
    (2) Paragraph (1)(2) addressed other criminal activity if the 
activity is a threat to others, whereas paragraph (1)(5) addressed only 
criminal activity; and
    (3) Paragraph (1)(2) was silent about where the activity takes 
place, whereas paragraph (1)(5) specified that drug-related criminal 
activity is actionable regardless of whether it is committed on or off 
the premises.
    The final rule consolidates these provisions in paragraph (1)(5). 
The

[[Page 28784]]

consolidated provision deals only with criminal activity. The final 
rule retains the reference to ``covered person,'' with the difference 
that, in the case of drug-related criminal activity, in order to 
clarify the reasonable extent of the tenant's legal ``control,'' the 
rule, as discussed above, differentiates between ``other person under 
the tenant's control'' and tenants themselves, guests and other 
household members. The final rule maintains the provision that 
specifies the location of criminal activity only with respect to drug-
related criminal activity, consistent with the statute for public 
housing. (Authority for Section 8 project-based assistance is similar 
to that for public housing on this issue, while the authority for 
tenant-based assistance (section 8(o)(7)(D)) puts violent criminal 
activity in the same category as drug-related for purposes of the 
location where it takes place--``on or near the premises''.) It is 
clear, however, that if violent criminal activity threatens the 
residents of the housing, that activity would be actionable under the 
rule, even without the location being specified.
    Comment. Section 5.857(a) of the proposed rule requires that 
criminal activity that threatens the health, safety, or peaceful 
enjoyment of their residences by persons residing in the ``immediate 
vicinity of the premises'' is cause for termination of tenancy (based 
on the authority of sections 8(d)(1)(B)(iii) and 8(o)(7)(D)). For the 
public housing program, the proposed rule seemed to cover action that 
is a threat to persons residing in the ``immediate vicinity'' in 
Sec. 966.4(l)(2) but did not in Sec. 966.4(l)(5). That difference was 
resolved in favor of covering such impact. Two representatives of 
owners asked for guidance on the meaning of the phrase ``immediate 
vicinity of the premises.'' Litigation impeded their implementation of 
``on or near the premises'' language formerly found in the 1937 Act. A 
PHA asked whether ``near the premises'' in proposed Sec. 5.856 and ``in 
the immediate vicinity of the premises'' in proposed Sec. 5.857 had 
different meanings, and whether either of them meant farther away than 
the ``1000 feet'' away that their current leases provide. A tenant 
organization also asks for clarification of what specific distance is 
meant.
    Response. The terms used in proposed Secs. 5.856 and 5.857 (final 
Secs. 5.858 and 5.859) are both derived directly from the statute. The 
courts will interpret these terms as part of endorsing or repudiating 
actions taken by PHAs under their standards.
    Comment. Proposed Secs. 5.857(b) and 982.553(b)(2)(ii) (see also, 
Secs. 966.4(l)(5)(ii)(B)) require that the lease must provide that the 
owner may terminate the tenancy if a member of the household is fleeing 
prosecution or confinement for a felony or is violating parole. A PHA 
pointed out that although the rule requires the lease to contain this 
provision, the rule states that PHAs and owners ``may'' terminate 
tenancy on this basis. The PHA objects to requiring this as a lease 
provision if the PHA or owner has no intention of enforcing it. An 
owner representative points out that a court is unlikely to enforce 
such a provision by evicting an entire family because one person fits 
one of these categories. The commenter states that it is more likely 
that the court would simply evict the offender if the other household 
members have not caused a disturbance and are current in the rent.
    Response. The rule provisions follow the statutory requirements. 
This final rule does make one adjustment: where the proposed rule 
applied the fugitive felon provision to ``a member of the household,'' 
in fact, Section 6(l)(9) of the 1937 Act, as added by section 903 of 
the Personal Responsibility and Work Opportunity Reconciliation Act of 
1996, Pub. L. 104-193, 110 Stat 2105, requires PHAs to use leases that 
provide that the fact that a ``tenant'' is fleeing to avoid 
prosecution, custody or confinement for a felony, or is violating a 
condition of probation or parole, is a basis for termination of 
tenancy. Similarly, section 8(d)(1)(B)(v) of the 1937 Act requires HAP 
contracts between PHAs and Section 8 owners to require the owners to 
use leases that include the fugitive felon provisions in respect to 
``tenants'' as a basis for termination of tenancy. Section 8(o)(7) of 
that Act requires the HAP contract between a PHA and owner 
participating in the Section 8 voucher program to contain terms 
generally applicable to the owner's other tenants and include any 
addenda required by the Secretary. This provision is included in an 
addendum required by the Secretary for the voucher program. Hence, the 
final rule applies the fugitive felon provisions to ``tenants.'' Of 
course, a PHA can include additional lease provisions that do not 
violate 42 U.S.C. 1437d(l)(2) or any express statutory provision. 
Hence, PHAs may include, so long as they do not violate any applicable 
laws, reasonable lease provisions that could, for example, require the 
tenants to exclude fugitive felons or parole violators from the 
household, and make failure to do so a basis for breach of the lease. 
Of course, PHAs may also consider other circumstances per section 
982.552(c)(2).
    While some PHAs and owners may choose not to take action against 
tenants who are fleeing felons or parole violators, the statute 
requires that PHAs and owners use leases that afford that option. The 
statutes and these implementing regulations also leave to PHAs and 
owners sufficient discretion to use their authority in a way that 
serves the best interests of the development and the community.
    It should be noted that proposed Secs. 5.857(b) is Sec. 5.859(b) in 
this final rule. Also, the Section 8 fugitive felon provision, proposed 
982.553(b)(2)(ii), is located at Sec. 982.310(c)(2)(ii) of the final 
rule.

H. Evidence of Criminal Activity--Secs. 5.861, 966.4(l)(5), and 
982.553(c)

    Comment. A legal aid organization and a mental health organization 
challenged this section because the section does not specifically 
reference a threat posed by the criminal activity to other residents. 
(Other similar sections cited by the commenter were 
Secs. 882.518(b)(3), 960.203(d), 966.4(l)(5)(iii), and 982.553(c).)
    Response. The intent of proposed Sec. 5.858 was not to provide an 
independent basis for denial of admission or termination of tenancy but 
to add a provision applicable to all the other sections. HUD has 
clarified that by adding to that section (Sec. 5.861 of the final rule) 
after the words ``by a family member'' the phrase ``in accordance with 
the provisions of this subpart,'' and comparable language to 
Sec. 966.4(l)(5). In fact, Secs. 882.518(b)(3), 960.203(d), and 
982.553(c) already contain such references.
    Comment. Several commenters noted that Sec. 982.553(c) uses the 
term ``household member'' as opposed to ``covered person''; stated that 
the same problem is found in Sec. 982.310(c)(1)(B) and (c)(3); and 
questioned where there is any significance to that difference in 
terminology.
    Response. The statutory restrictions on admission pertain to 
members of the household, while most (but not all) provisions relating 
to termination of tenancy refer to actions by the broader category of 
``covered person'' (which includes tenants, guests, and ``other persons 
under the tenant's control''). (As examples of eviction provisions that 
apply to categories more narrow than ``covered person,'' see Sec. 577 
of QHWRA, 42 U.S.C. 13662 (household members) and 42 U.S.C. 1437d(l)(9) 
(tenants).) The sections in the final rule that apply only to 
termination of tenancy use the term ``covered person,'' except that, in 
some

[[Page 28785]]

cases where the proposed rule referred to ``covered person,'' the final 
rule differentiates between tenants, household members and guests and 
``other persons'' in order to clarify potential tenant responsibility 
for the off-premises actions of others.
    Comment. A problem was stated by representatives of owners, PHAs, 
and tenants: what type of evidence and what standard of evidence should 
be used to determine that a person has engaged in criminal activity. 
The proposed rule just stated that the owner or PHA need not rely on an 
arrest or conviction. Some commenters observed that, in the absence of 
a conviction, courts have been skeptical of owners seeking to evict a 
tenant for criminal activity, and owners are generally not prepared to 
provide their own witnesses to prove such an offense. Proposed 
solutions included (1) stating only that a conviction is unnecessary; 
(2) restoring the language of the current Sec. 982.553(c), which 
authorizes a PHA to terminate assistance when a preponderance of the 
evidence indicates that a family member has engaged in drug-related or 
violent criminal activity; and (3) stating who bears the burden of 
proof and the procedures to be followed. The legal aid organization 
recommending the second solution said that it interprets this language 
to mean that the allegation is more likely so than not so. The 
organization recommends this standard to avoid arbitrary determinations 
by owners or PHAs.
    Response. In the final rule, HUD has adopted the first recommended 
approach with respect to most programs. Section 5.861 specifies that 
with respect to eviction for criminal activity, neither an arrest nor a 
conviction is necessary, and the responsible entity need not satisfy 
the standard of proof used for a criminal conviction. This provision is 
replicated elsewhere for public housing (Secs. 960.203(d) and 
966.4(l)(5)(iii)). For termination of assistance, however, in the 
Section 8 tenant-based and moderate rehabilitation programs, the final 
rule retains the reference to preponderance of evidence, since there is 
no expectation of a court proceeding with respect to this termination 
of a benefit, and HUD wants to assure that the action is not taken 
lightly. (See Secs. 882.518(d), 982.310(c), and 982.553(c).)

I. Terminating Assistance to Alcohol Abusers--Secs. 5.860, 966.4(l)(5), 
982.310(c), and 982.553(b)

    Comment. A legal services organization criticized these sections 
for appearing to require abstinence from alcohol to be considered 
rehabilitated from alcohol abuse that would threaten others. The 
language of Sec. 982.553(e) of the proposed rule, for example, refers 
to a ``household member who is no longer engaging in such abuse'' and 
successful completion of ``a supervised drug or alcohol rehabilitation 
program.''
    Response. These provisions (the language of Sec. 982.553(e) is 
found in Sec. 982.552(c)(2)(iii) of the final rule) relate only to 
cessation of alcohol ``abuse'' sufficient to constitute a threat, and 
to the PHA's option to consider the successful completion of a 
treatment program. The commenter reads content into the rule that is 
not there. Therefore, HUD declines to change the rule in response to 
this comment.
    Comment. An owner's representative noted that, although the owner's 
lease must provide for termination of tenancy for alcohol abuse that 
threatens the health or safety of other residents, the action to 
terminate such a tenancy is a voluntary one by the owner. This 
decreases the potential conflict between human rights protection for 
alcohol abusers and this rule.
    Response. HUD agrees with this comment. No change in the language 
of the rule is needed.

J. Drug Use and Alcohol Abuse: Consideration of Circumstances--
Secs. 5.852, 966.4(l)(5), 982.553(e)

    Comment. A resident organization objected to the fact that an owner 
is not required to consider whether the household member involved has 
completed or is participating in a rehabilitation program. Another 
organization recommended that the rule make more explicit that a PHA is 
not required to consider rehabilitation.
    Response. The statute clearly states that the PHA or owner may 
consider whether the person is rehabilitated. The rule reflects this 
statutory language in Sec. 5.852 of the final rule.
    Comment. A legal services organization criticized the organization 
of the treatment of rehabilitation as a consideration in admission and 
termination decisions. This commenter recommended creating a stand-
alone section on rehabilitation that is then cross-referenced in all of 
the admission and termination-related sections.
    Response. In subpart I of part 5, proposed Sec. 5.860 addressed the 
issue of rehabilitation, and the final rule continues to address this 
matter in Sec. 5.852. Each of the specific program regulations contains 
a comparable provision. Of course, where rehabilitation is an element 
that would render an applicant not ineligible under the law--with 
respect to a tenant previously evicted for drug-related criminal 
activity--the applicable rule provision mentions this element. 
Additional language to cross-reference these rehabilitation provisions 
is unnecessary.
    Comment. Proposed Sec. 5.860(a) includes three ways of 
demonstrating rehabilitation: (1) current participation in a supervised 
program; (2) successful completion of a supervised program; or (3) 
otherwise having been rehabilitated successfully. A legal aid 
organization and a mental health organization pointed out in paragraph 
(b) of this section does not include the third prong in the discussion 
of the types of evidence that may be submitted by a household member 
and argues that such persons (who may have succeeded with Alcoholics 
Anonymous) should not be excluded for lack of proof of participation in 
a supervised program. (See the comparable provisions in parts 882, 960, 
and 966.)
    Response. HUD has revised the rule in response to this comment (See 
section 5.852(c) of the final rule).
    Comment. One legal aid organization criticized the provision that 
requires evidence to be provided of participation in rehabilitation 
program, claiming that the requirement inherently conflicts with the 
privacy of rehabilitation records and the lack of any obligation on the 
part of rehabilitation facilities to provide information to PHAs or 
owners.
    Response. The statute contemplates consideration by the PHA or 
owner of such evidence. (see 42 U.S.C. 13661(b)(2).) In order to be 
able to consider the evidence, the regulation provides that the PHA or 
owner may require the applicant or tenant to provide it. In addition, 
the household could provide the evidence voluntarily to bolster its 
application for admission or its response to a proposal to terminate 
tenancy.
    Comment. Two organizations representing tenants objected to 
provisions, such as proposed Sec. 5.860(b)(1), that permit an owner or 
PHA to require the exclusion from the household of a person who engaged 
in or is culpable for the drug use or alcohol abuse. They contended 
that such authority could be used against individuals who have been in 
recovery for a long period of time and present no threat to other 
tenants or the premises. They argued that such treatment would 
constitute a violation of their rights under the Fair Housing Act and 
the Americans with Disabilities Act.
    Response. This provision has no effect unless the owner or PHA has 
the right under the regulations to deny admission or to terminate 
tenancy on the basis of

[[Page 28786]]

the offending activity. The regulation follows the statute.
    Comment. Another commenter suggested that HUD revise the rule's 
provision for conditional admission or continued assistance to provide 
that after the eligibility determination is made, the household be 
allowed to decide whether to revise its composition to eliminate a 
member whose conduct prevents admission or continued occupancy for the 
entire household.
    Response. Owners and PHAs may permit withdrawal of a problematic 
family member from the applicant's household once a negative decision 
has been made, but there is no statutory basis to require them to do 
so. The final rule addresses this matter in Sec. 5.852.
    Comment. A legal organization representing PHA interests and a 
representative of public housing and Section 8 tenants advocated 
extending the discretion of PHAs to exclude a household member to avoid 
evicting innocent family members more broadly than provided in the 
proposed rule. For example, Sec. 966.4(1)(5)(vi)(B) of the proposed 
rule would give PHAs the discretion to impose as a condition of 
continued assistance to family members the exclusion of the household 
member engaged in alcohol and drug abuse but does not cover criminal 
activity generally.
    Response. In fact, one section currently mentions the authority to 
exclude culpable family members with respect to any action or failure 
to act on the part of the family--Sec. 982.552(c)(2)(ii), as amended on 
October 21, 1999 (64 FR 56915). On further reflection, HUD has decided 
that the responsible entity's authority to exclude culpable family 
members should be stated explicitly, and this authority should apply to 
any basis for termination. As discussed above, HUD has created a 
section in 24 CFR part 5 to address this issue, Sec. 5.852, and HUD has 
revised sections that previously just applied to drug and alcohol abuse 
to deal more broadly with a responsible entity's authority in this 
area. HUD has revised Sec. 982.552(c) to reflect a PHA's authority 
generally in screening and eviction.

K. Access to Criminal and Drug Treatment Records and Information--
Secs. 5.903, 5.905, 960.204, 960.205 and 982.553

    Comment. A legal organization representing PHA interests suggested 
that information about a person being subject to a lifetime sex 
offender registration requirement might be obtained in more than one 
way. The organization requested that the rule require denial of 
admission to an applicant if law enforcement authorities inform the 
owner or PHA that a member of the household is subject to such a 
requirement, making the public document check or PHA criminal history 
background check unnecessary in such a circumstance.
    Response. The method a responsible entity uses to assure that it is 
not admitting a person ineligible on this basis is up to the 
responsible entity, based on its assessment of good business practice. 
The primary regulatory provision on sex offender registration 
verification is Sec. 5.905, which applies only to obtaining records 
under section 578 of the 1998 Act (42 U.S.C. 13663). (See also 
Secs. 960.204(a)(4) and 982.553(a)(2)(ii).) A responsible entity may 
verify such information in another manner, such as obtaining 
information lawfully from law enforcement agencies or other sources, or 
directly accessing a listing of persons subject to a lifetime 
registration requirement under a State sex offender registration 
program.
    Comment. A PHA asked what agencies maintain information about 
persons who are subject to a lifetime sex offender registration 
requirement. The PHA stated that its local law enforcement agencies do 
not keep this information.
    Response. Many states have passed legislation that authorizes the 
establishment of automated data bases that provide information on all 
registered sex offenders. (For example, the Texas Department of Public 
Safety maintains a web site at www.sexoffenders.com with this 
information, in compliance with State law.) In states where an 
automated system is not yet in operation, a responsible entity may need 
to perform another form of criminal history check. In such States, a 
computerized inquiry may generate a message that suggests contacting 
the Governor's office or District Attorney to obtain information on 
registered sex offenders.
    Comment. A PHA organization objected to the provisions of 
Sec. 5.902(d) and (e) of the proposed rule, which provide for PHAs to 
obtain records for owners and to apply owners' admissions standards, 
and the underlying statutory provisions. The organization stated that 
PHAs are not in the business of interpreting leases and owners' 
application criteria and that this function is not consistent with the 
responsibility or mission of public housing.
    Response. The statute (42 U.S.C. 1437d(q)(1)(B) requires these 
procedures, which are found in Sec. 5.903 of the final rule.
    Comment. A legal organization representing PHA interests suggested 
that Sec. 5.902(f) of the proposed rule be modified to provide that a 
PHA could condition the performance of criminal records checks and 
applying the owner's admissions standards on obtaining a reasonable 
agreement with the owner holding the PHA harmless from costs associated 
with third-party claims and litigation arising out of the performance 
of these services. The organization recommended that the rule 
specifically hold PHAs harmless from legal actions directed at the 
owner because of the owner's admission policies, action or inaction, 
and regarding the owner's use of criminal conviction records, should 
the PHA be required to disclose them in accordance with 
Sec. 5.902(f)(8) of the proposed rule.
    Response. Congress has made performance of these criminal records 
checks for owners part of the responsibilities of PHAs. (See 42 U.S.C. 
1437d(q)(1)(B).) They must, therefore, perform them in accordance with 
legal requirements, including the requirements not to act negligently 
and to adhere to confidentiality provisions of the statute. However, 
HUD agrees that PHAs should not be required to absorb costs incurred as 
the result of being brought into litigation arising from a challenge to 
the validity of an owner's admission standards.
    The final rule makes two changes in response to this comment. 
Paragraph (d)(4) of Sec. 5.903 provides that the reasonable costs 
incurred by a PHA for which the PHA is entitled to reimbursement 
includes not only any fees charged to the PHA by the law enforcement 
agency but also the PHA's own related staff and administrative costs. 
The administrative costs would include a portion of insurance costs to 
cover any potential liability for performing functions for owners and 
litigation costs that are solely attributable to the owner's policies. 
With respect to release of criminal records to the owner, 
Sec. 5.903(e)(2) of the final rule provides protection for a PHA 
requested to release records in connection with an eviction. The new 
paragraph provides that the PHA may rely on an owner's certification 
that the criminal record is necessary to proceed with a judicial 
eviction to evict the tenant based on criminal activity of the 
identified household member as demonstrated by the criminal conviction 
record.
    Comment. An owner's representative suggested that HUD require 
current residents to sign consent release forms

[[Page 28787]]

for criminal background checks at the annual reexaminations. Otherwise, 
problem tenants may refuse to sign a consent form.
    Response. The occasion for residents to sign a consent form for 
verifications related to their occupancy of assisted housing is not 
currently prescribed by regulation. HUD declines to change that policy 
in this rulemaking, but is exploring a possible change in this policy 
in the future.
    Comment. One PHA reported that the FBI has refused to give the PHA 
the identification number that is necessary to access the background 
records because the PHA does not administer a public housing program, 
in addition to its Section 8 housing assistance programs.
    Response. Section 575(c) of the QHWRA expanded the applicability of 
criminal background check authority from ``public housing'' to 
``covered housing assistance,'' which includes tenant-based and 
project-based assistance under Section 8. That section also required 
that a PHA receiving information on behalf of an owner keep the 
information it receives confidential, in accordance with regulations to 
be prescribed by HUD. Therefore, the FBI is awaiting publication of 
this final rule before providing access to criminal records to PHAs 
that do not administer a public housing program.
    Comment. A PHA and a representative of housing owners reported that 
private apartment owners routinely obtain criminal conviction records, 
as well as numerous other types of confidential records, directly or 
through firms that provide screening services. They questioned the need 
to give PHAs responsibility to obtain such records and apply the 
owner's criteria to screen applicants. One suggested this only be done 
where an owner certifies and documents that it is unable to access 
criminal conviction records directly or through a readily available 
service. The other recommended that the rule authorize owners to obtain 
the records directly and require them to establish a system of records 
management that would adequately safeguard them.
    Response. The final rule is not changed with respect to this 
request. The statute does not require that access through PHAs be a 
last resort. This rule does not prevent owners from obtaining records 
in another way, as stated in Sec. 5.903 of the final rule.
    Comment. A PHA indicated that the rule provisions authorizing PHAs 
to charge owners a fee for obtaining criminal records relevant to the 
owner's admission or occupancy standards ignore the difficulty of 
establishing what is a reasonable fee. How will disputes be resolved? 
Other PHAs indicated that they do not have the staff to perform the 
criminal records (or sex offender registration) check function, and 
charging a fee could not provide sufficient compensation for them to 
hire additional staff. They also objected to expecting a PHA to review 
owners' policies and make decisions regarding admission for the owners, 
saying it would be an undue burden and would subject the PHA to 
potential liability.
    Response. The statute requires PHAs to perform the function. They 
may, however, pass along the costs attributable to performing this 
function to the owner. See discussion above responding to concerns 
about liability. HUD trusts that owners and PHAs will be able to reach 
agreement on reasonable fees to reimburse PHAs for their costs.
    Comment. Two State housing finance agencies and an organization 
representing State housing agencies questioned whether the statute and 
regulation requiring a PHA to obtain criminal records on behalf of an 
owner apply to their operation of Section 8 New Construction and 
Substantial Rehabilitation projects. Although they agreed that criminal 
records are required to be provided by PHAs administering ``covered 
housing assistance,'' which does include such projects, they stated 
that the term used with respect to owner requests for assistance is 
``project-based assistance under Section 8,'' which is defined in 
section 8(f)(6) not to include new construction and substantial 
rehabilitation projects. They argued that project owners should be 
responsible for performing this function.
    Response. The legislative history indicates a clear intent to cover 
new construction and substantial rehabilitation projects under the 
provision requiring PHA performance of this function. (See H.R. 2, 
105th Cong., 2d Sess. Sec. 641, and especially Sec. 645; S. 462, 105th 
Cong., 2d Sess. Secs. 301 and 305 (1998).)
    Comment. One of these State housing finance agencies took the 
approach that none of the provisions of Subpart J, concerning criminal 
background checks, should be applicable to State housing finance 
agencies. The agency argued that it entered the program as a financier 
of projects, using that skill to get the projects built, and criminal 
background checks were not required at that time. The State agency's 
skills are not related to the skills necessary for this function, and 
owners can get this kind of information in other ways. ``Addition of 
this responsibility is a unilateral expansion of a PHA's 
responsibilities, not only with respect to the projects whose HAP 
contracts the PHA administers, but also with respect to any assisted 
housing that exists within the PHA's jurisdiction, whether or not there 
is a contractual relationship between the PHA and the owner.''
    Response. The rule is not changed, because the statute applies this 
provision to all PHAs, including State housing finance agencies that 
are administering programs covered under 24 CFR 5.100.
    Comment. Section 5.902(e)(1)(i) of the proposed rule permits use of 
criminal conviction records for applicant screening for all the covered 
programs. However, Sec. 5.902(e)(1)(ii) of the proposed rule explicitly 
excludes the Section 8 tenant-based assistance program from using the 
records for lease enforcement and eviction. This poses a problem in 
persuading owners to participate in the program, according to two 
representatives of owners.
    Response. This distinction is based on the statute. Section 
6(q)(1)(B) of the 1937 Act is limited to obtaining information for 
owners of project-based Section 8 projects.
    Comment. A legal aid organization pointed out that Sec. 966.4(l)(5) 
of the proposed rule provides that public housing leases must provide 
that if a ``PHA seeks to terminate the tenancy for criminal activity as 
shown by a criminal record, the PHA must provide the tenant with a copy 
of the criminal record before a PHA grievance hearing or court trial 
concerning the termination of tenancy or eviction, and the tenant must 
be given an opportunity to dispute the accuracy and relevance of that 
record in the grievance hearing or court trial.'' Section 982.553(d) 
contains a similar provision with respect to the Section 8 tenant-based 
assistance program. However, Sec. 5.902 of the proposed rule does not 
provide an applicant or tenant of a Section 8 project-based project the 
right to see and dispute the accuracy and relevance of a criminal 
conviction, as required by the statute (section 6(q)(2) of the 1937 
Act). Tenants of project-based assistance should have this opportunity 
to dispute a record to be used in case of denial of admission, lease 
enforcement and/or eviction. The PHA that obtains the records should be 
the entity that provides the right to dispute the accuracy or relevance 
of the record.
    Response. Section 5.903(g) of the proposed rule (Sec. 5.903(f) of 
the final rule) provides for the PHA to offer such an opportunity with 
respect to sex offender registration information. A

[[Page 28788]]

similar paragraph has been added to the general criminal records 
section and to Sec. 966.4(l)(5).
    Comment. A PHA stated that Sec. 966.4(l)(5)(iv) of the proposed 
rule is inconsistent with Sec. 966.51(a)(2), which permits a PHA to 
omit a grievance hearing and proceed directly with court action where 
there is a termination of tenancy or eviction that involves threat to 
the health, safety, or right to peaceful enjoyment of the premises by 
other tenants or employees of the PHA or any drug-related criminal 
activity.
    Response. Under Sec. 966.51(a)(2), the opportunity to dispute the 
accuracy and relevance of the record required by Sec. 966.4(l)(5) may 
be provided at the eviction proceeding rather than at a grievance 
hearing, if the direct eviction proceeding is authorized.
    Comment. A legal aid organization stated that the rule does not 
give tenants a chance to dispute the criminal record and its relevancy 
before the adverse action is taken, i.e., before the eviction action is 
filed in court. The organization bases the right of tenants to have 
this opportunity on section 6(q)(2) of the 1937 Act, which requires 
that before an adverse action is taken with respect to assistance under 
the assisted housing programs on the basis of a criminal record, the 
PHA must provide the tenant or applicant a copy of the record an 
opportunity to dispute the accuracy and relevance of the record. The 
organization recommends changing the rule language allowing the 
challenge ``in the grievance hearing or court trial'' to allowing this 
challenge ``before the grievance hearing or commencement of court 
proceedings.''
    Response. Allowing the record to be disputed in the grievance 
hearing or the trial, rather than before such events, protects tenants 
and applicants sufficiently from ``adverse action'' and comports with 
due process. The actual adverse action does not occur until the 
completion of the proceeding. HUD declines to add an unnecessary layer 
of administrative proceedings.
    Comment. A legal aid organization also recommended that the rule 
include a statement that the rule does not preempt any state law that 
provides stronger protections for the subject of criminal record 
inquiries, such as where the opportunity to dispute is stronger.
    Response. Congress did not address the issue of preemption, and HUD 
declines to generalize.
    Comment. A legal services organization and a mental health 
organization objected to the language of Sec. 960.204(c)(3) of the 
proposed rule requiring a drug abuse treatment facility to provide 
information at the request of a PHA. They stated that the law governing 
release of such information, the Public Health Service Act (42 U.S.C. 
290dd-2) and implementing regulations (42 CFR part 2), authorizes but 
does not require the release of information if the patient has signed 
an appropriate consent form. They urged HUD to remove this paragraph. A 
legal organization representing PHAs took the other side of the 
argument. This organization stated that drug treatment facilities 
should be required to provide the information requested by PHAs as long 
as the request is made consistent with the Public Health Service Act. 
Such information is necessary to successful implementation of the 
provisions of the 1998 Act.
    Response. The 1998 Act does not require release of the information. 
The Act states that the facility will not be liable for damages for 
releasing information if done consistent with the Public Health Service 
Act. The final rule (in Sec. 960.205, which now addresses this matter) 
removes the subject paragraph, relying instead on the paragraph that 
emphasizes the lack of liability for proper release.
    Comment. Section 960.204(c) of the proposed rule should reference 
the Public Health Service Act, 42 U.S.C. 290dd-2 and the HHS 
implementing regulations, 42 CFR part 2, to make sure that PHAs are 
aware of all the relevant law, according to a legal aid organization. 
HUD should provide a model form to be used for consent to access 
treatment facility records.
    Response. The proposed rule did reference the statute in 
Sec. 960.204(d)(3). The final rule adds the requested statutory and 
regulatory reference to Sec. 960.205(c)(1).
    Comment. To conform to section 6(t) of the 1937 Act, there are two 
points at which the rule must assure nondiscrimination, a legal aid 
organization insists. First, Sec. 960.204(c) must be revised to clarify 
that the treatment facility consent form may only be requested of an 
applicant if all applicants are asked to sign such a form. Second, the 
PHA must make inquiry only about every applicant or about every 
applicant that satisfies the statutory criteria related for special 
interest. This commenter urged HUD to use the carefully crafted 
language of the statute on this point.
    Response. The final rule (in Sec. 960.205(c)) clarifies that a PHA 
may require an applicant to sign a consent form for obtaining 
information from a drug abuse treatment facility only if all applicants 
are required to provide such consent.
    Comment. Section 960.204(d) of the proposed rule recognizes the 
authority of a treatment facility to charge the PHA a fee for providing 
information. A legal aid organization suggests that the rule clarify 
that there is no statutory basis for the PHA to pass these fees on to 
the applicant or resident.
    Response. The statute is silent with respect to this issue. 
However, historically the costs for obtaining and verifying necessary 
information to admit applicants and make subsequent determinations 
about their income and rent have been considered an expense of doing 
business for the PHA or owner, covered through the administrative fee 
or operating subsidy (see Secs. 5.903(d)(4) and 982.553(d)(3)), since 
the purpose of the programs is to serve low income families. Therefore, 
consistent with current HUD policy, the rule (Sec. 960.205(d)(5)) 
prohibits PHAs and owners from passing on the cost of obtaining drug 
abuse treatment facility records to applicants or residents.
    Comment. The question of a PHA's liability for its policy on using 
a consent form for applicants to inquire about them at drug abuse 
treatment facilities is not addressed in the rule, one PHA stated. 
Proposed Sec. 960.204(e) describes the two possible policies that are 
permitted. Another paragraph should be added to declare that a PHA will 
not be liable for damages based on which policy the PHA adopts.
    Response. Section 960.205(d)(4) of the final rule is clear that the 
PHA is not liable if the PHA does not request or receive information of 
this sort.

L. Management of Records--5.903(g), and 960.205(f)

    Comment. PHAs and the FBI commented on management of the records. 
(Proposed Sec. 960.204(f)(1)(iii)(B) provides that a drug abuse 
treatment facility record be destroyed after the statute of limitations 
for a civil action has expired--presumably without a suit having been 
filed. Sections 5.902(g) and 5.903(f) of the proposed rule provide more 
generally that criminal records must be destroyed once the purpose for 
which the record was requested has been accomplished.) PHAs objected to 
keeping the record of criminal conviction separate from the applicant 
or tenant file and to the requirement that the record be destroyed once 
it is no longer needed. Their concern is that they would not have ready 
access to the record to defend a denial of admission to a program.
    Response. To assure the confidentiality of criminal records, the 
final rule (Sec. 5.903(g)) adopts the approach used with respect to 
drug

[[Page 28789]]

abuse treatment facility records for criminal records. The records must 
be destroyed when the purpose(s) for which the record was requested has 
been accomplished and the time has expired for a challenge to the 
action being taken without the institution of a court action, or final 
disposition of any such litigation has been concluded. We note that a 
PHA might use application and consent forms that apply to all of its 
housing programs. In that case, the PHA might retain a record until it 
had acted on the application with respect to all of its programs before 
concluding that all of the purposes for which the record was sought 
have been accomplished. This authority in no way prevents a PHA from 
disposing of the record after using it with respect to the first 
program on which the PHA makes a determination and obtaining more 
recent records before making a subsequent determination for another 
program with respect to the same applicant.
    Comment. Proposed Sec. 960.204(f) addresses when treatment facility 
information must be destroyed. A legal aid organization stated that the 
statute's provision that an applicant's consent expires 5 days after 
the PHA's decision to approve or deny the application, means that the 
rule should provide for destruction of the record containing such 
information 5 days after the decision to approve the application. The 
record should not be allowed to be kept until 5 days after admission to 
a unit, since placement on a waiting list might take place 
substantially before admission to a unit.
    Response. The rule does not delay destruction of the record until 
actual admission. Section 960.205(c)(2) of the final rule provides that 
the consent form expires automatically after the PHA makes the final 
decision to either approve or deny the admission of such person. 
However, Sec. 960.205(f) provides that, if the person is denied 
admission, the record is to be destroyed in a timely manner after the 
statute of limitations for a civil action challenging the denial has 
expired. This provision tracks the statute and is necessary to assure 
that the PHA has the necessary records to respond to possible 
litigation. The final rule expands on this provision so that, if a 
court challenge is filed, the rule permits preservation of the record 
until final disposition of the action.
    Comment. On the other side of the issue, the FBI wanted the actual 
criminal record to be sealed. The FBI stated that although the 
applicant or tenant's record would have to refer to the existence of a 
criminal record concerning a household member, the actual record should 
not be maintained in a manner to allow access for unofficial purposes.
    Response. In view of the penalties for unauthorized disclosure 
provided by section 6(q)(1) of the 1937 Act--misdemeanor conviction, 
$5,000 fine, and liability for damages and attorney fees and costs--the 
agencies have agreed that it is unnecessary to provide that the record 
be sealed.
    Comment. A PHA objected to the requirement of proposed 
Sec. 960.204(c)(2) that requires that the consent form used to obtain 
information from a drug treatment facility expire automatically after 
the PHA has made a final decision to approve or disapprove an 
application for admission. A single consent form is routinely used for 
many agencies, which is often updated annually.
    Response. The statute specifies this limitation (found in 
Sec. 960.205(c)(2) of the final rule). PHAs can alter the consent forms 
they use to address the statutory requirement.
    Comment. A legal aid organization recommended that the penalties 
for violation of confidentiality obligations be stated clearly in any 
section dealing with access to criminal records. The organization also 
recommended that PHAs be instructed in the use of NCIC records, 
especially the fact that any incident for which there is no final 
disposition must be treated as if the subject is innocent.
    Response. The final rule includes reference to the penalties for 
violation of confidentiality obligations, as well as referencing that 
some sources (such as the NCIC) may specify how their records are to be 
used. (See revised Sec. 5.903 of the final rule.)
    Comment. In connection with use of a criminal conviction record in 
judicial eviction proceedings, the FBI wanted the PHA (and not the 
owner) to retain the records if the PHA took responsibility for 
initiating the proceedings. If the information must be provided to 
owners, the FBI recommended establishing a penalty for misuse of the 
information similar to that provided for misuse by officers, employees, 
and authorized representatives of a PHA. And the consent form used by 
owners should reflect the possible use of criminal records in an 
eviction action.
    Response. The statute provides that ``any person'' who knowingly 
and willfully discloses criminal records information obtained under the 
authority of section 575 of the 1998 Act to an individual not 
authorized by law to receive it is subject to conviction of a 
misdemeanor and a fine of up to $5,000. The statute gives examples of 
who is covered by the term ``any person'' that relate to PHA agents--
not project owners, but the words do not limit the term's meaning to 
PHA agents. The final rule includes project owners in the examples of 
entities who may be subject to a criminal penalty. The statute does not 
appear to authorize civil liability against any entity other than a 
PHA, so the rule reflects that conclusion. The rule is silent about the 
content of the owner's consent form.
    Comment. Section 960.203(e) of the proposed rule provides that 
before denying admission to the public housing program on the basis of 
a criminal record, the PHA must provide the ``household'' with a copy 
of the record. Section 982.553(d) has a comparable provision, using the 
term ``family'' instead of ``household.'' The FBI commented that 
dissemination of criminal records is limited to those with 
authorization (such as the PHA) and the person who is the ``subject'' 
of the record, not to other persons in the household.
    Response. The final rule reflects HUD's statutory requirement to 
provide information to the applicant or tenant to permit the applicant 
or tenant to dispute the accuracy or relevance of the record. (See 
Secs. 5.903, 5.905, 960.205, 966.4, and 982.553, implementing 42 U.S.C. 
1437d(q) and 13663(d).)
    Comment. If a PHA currently obtains criminal conviction records, 
i.e., without the authority of the new rule, and obtains drug abuse 
treatment program records without this new authority, is the PHA free 
of the restrictions on records management imposed by the new rule? 
Although Sec. 5.903(f)(2) of the proposed rule, concerning sex offender 
registration, and Sec. 960.204(f), concerning drug abuse treatment 
program information, refer to information received under the authority 
of their provisions, Sec. 5.902 of the proposed rule, concerning 
criminal conviction records, is not so limited. The final rule should 
emphasize that current information collection practices dealing with 
all of these subjects may continue unaffected by the new rule.
    Response. The rule does not affect other means used by PHAs to 
verify suitability for admission. However, HUD cautions PHAs and owners 
to handle any information obtained from other records in accordance 
with applicable State and Federal privacy laws and with the provisions 
of the consent forms signed by applicants.
    Comment. A legal services organization urged HUD to emphasize, in 
the rule or preamble, that a PHA or owner cannot avoid the records 
safeguards of this rule by requiring the

[[Page 28790]]

applicant to obtain the information for them. PHAs and owners should be 
directed not to rely on criminal conviction records obtained from 
credit reports.
    Response. The final rule clarifies that records received directly 
from the family are subject to the limitations of this subpart. Since 
PHAs and owners may determine that a household member has engaged in 
criminal activity without relying on a conviction, HUD is not 
prohibiting them from consulting evidence from sources other that those 
provided under proposed 24 CFR part 5, subpart I.

M. Miscellaneous

    Comment. One criticism of the rule's organization was that any 
provision that might involve access to criminal records or lifetime sex 
offender registries should include a cross-reference to the sections 
stating the requirements for gaining access, and the associated 
protections.
    Response. The final rule adds these cross-references to 24 CFR part 
5, subpart J. (See Secs. 882.518(b)(3), 960.204, 966.4(l)(5), 
982.310(c)(3), and 982.553(d).)
    Comment. A legal services organization criticized the revision of 
Sec. 966.4(l)(2)(i) of the proposed rule on the basis that HUD's 
revision eliminates the distinction between serious lease violations 
and minor lease violations. The organization stated that this section, 
as revised, categorizes as serious ``any violation of a household 
obligation under Sec. 966.4(f).'' This commenter recommended that the 
paragraph be revised to state that a serious lease violation ``includes 
a serious violation of any material term of the lease or a serious 
violation of any household obligation described in paragraph (f) of 
this section.''
    Response. The final rule follows the organization of this section 
made by another recently published final rule that addresses admission 
and occupancy issues (65 FR 16730-16731, March 29, 2000). That rule 
restored the language concerning serious lease violations that this 
commenter favored. This final rule now only adds the provisions needed 
in this section to implement the provisions of the 1998 Act.
    Comment. A representative of PHA interests suggested that the rule 
authorize termination of tenancy in two additional cases: (1) where the 
PHA attempted to obtain criminal background information before 
admitting an applicant but only discovers after admission the facts 
that should have disqualified the tenant because of a criminal 
conviction; and (2) where the tenant is found to have made one or more 
material false statements or omissions or otherwise committed fraud in 
connection with any application for assistance or recertification. The 
commenter stated that this would afford PHAs a method of avoiding tort 
exposure that might result from the continued presence of potentially 
dangerous individuals.
    Response. In the final rule, these two examples have replaced the 
examples relating to criminal activity stated as ``other good cause'' 
in the proposed rule. (Criminal activity is already specifically listed 
as a grounds for termination under paragraphs (l)(2)(ii), referring to 
paragraph (l)(5) of Sec. 966.4.)
    Comment. A representative of assisted tenants recommended that HUD 
endorse the practice of using an informal fact finding committee before 
terminating any tenancy. The committee, to be composed of tenants and 
staff, could interview residents and neighbors and investigate 
allegations of criminal or drug-related incidents, making findings of 
fact on which a decision to proceed with termination would be based. 
Another residents' representative recommended that the final rule 
require all PHAs to establish a panel of residents and PHA staff to set 
policy and oversee implementation of the PHA's grievance procedure.
    Response. Owners of project-based assistance developments are 
encouraged to employ administrative actions to resolve potential 
eviction cases before resorting to court action. The rule does not 
prescribe particular procedures. PHA grievance procedure operation is 
unchanged in this rule.
    Comment. A PHA was disappointed that the rule does not address how 
to handle domestic violence, which is often related to drug and alcohol 
abuse, and for which eviction is often a remedy that would penalize the 
victim. The PHA recommended that HUD require tenants who are victims or 
perpetrators of domestic violence to counseling within 72 hours of the 
occurrence. Only after such counseling is ineffective would eviction 
proceedings be initiated.
    Response. If a responsible entity has grounds to evict a family 
because of domestic violence (for violent criminal activity), then the 
entity has the authority to take various actions short of eviction. 
Those may include the counseling suggested by the commenter or 
permitting continued occupancy on condition that the household member 
who has committed the domestic violence is removed from the lease and 
vacates the unit.

IV. Findings and Certifications

Paperwork Reduction Act

    The information collections contained in Secs. 5.853, 5.854, 5.855, 
5.903, 5.905, 882.517, 960.205a, and 982.553 have been approved by the 
Office of Management and Budget under the Paperwork Reduction Act of 
1995 (44 U.S.C. Chapter 35) and assigned OMB approval number 2577-0232. 
An agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless the collection displays 
a valid control number.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
was made in connection with publication of the proposed rule, in 
accordance with HUD regulations in 24 CFR part 50 that implement 
section 102(2)(C) of the National Environmental Policy Act of 1969 (42 
U.S.C. 4223). The Finding is 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 Regulations Division, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This final rule does not impose a Federal mandate 
that will result in the expenditure by State, local, or tribal 
governments in the aggregate, or by the private sector, of $100 million 
or more in any one year within the meaning of Unfunded Mandates Reform 
Act of 1995.

Executive Order 12866

    The Office of Management and Budget (OMB) reviewed this final rule 
under Executive Order 12866, Regulatory Planning and Review. OMB 
determined that this final rule is a ``significant regulatory action,'' 
as defined in section 3(f) of the Order (although not economically 
significant, as provided in section 3(f)(1) of the Order). Any changes 
made to the final rule subsequent to its submission to OMB are 
identified in the docket file, which is available for public inspection 
in the office of the Department's Rules Docket Clerk, Room 10276, 451 
Seventh Street, SW., Washington, DC 20410-0500.

[[Page 28791]]

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) (the RFA), has reviewed and approved this final rule and 
in so doing certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The reasons 
for HUD's determination were described in some detail in the preamble 
to the proposed rule, and they are applicable to this final rule, as 
well. No public comments addressed this issue, in response to the 
specific request for comment regarding any less burdensome alternatives 
to the proposed rule that would meet HUD's objectives as described in 
that rule.

Executive Order 13132, Federalism

    This final rule does not impose substantial direct compliance costs 
on State and local governments or preempt State law within the meaning 
of Executive Order 13132.

Catalog

    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by this interim rule are 14.120, 14.195, 14.850, 14.855 and 
14.857.

List of Subjects

24 CFR Part 5

    Administrative practices and procedures, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Individuals with disabilities, 
Loan programs--housing and community development, Low and moderate 
income housing, Mortgage insurance, Pets, Public housing, Rent 
subsidies, Reporting and recordkeeping requirements.

24 CFR Part 200

    Administrative practice and procedure, Aged, Civil rights, Grant 
programs--housing and community development, Loan programs--housing and 
community development, Reporting and recordkeeping requirements.

24 CFR Part 247

    Grant programs--housing and community development, Loan programs--
housing and community development, Low and moderate income housing, 
Rent subsidies.

24 CFR Part 880

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

24 CFR Part 882

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

24 CFR Part 884

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

24 CFR Part 891

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

24 CFR Part 960

    Aged, Grant program--housing and community development, Individuals 
with disabilities, Public housing.

24 CFR Part 966

    Grant programs--housing and community development, Public housing.

24 CFR Part 982

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

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

    1. The authority citation for part 5 continues to read as follows:

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.

    2. Amend Sec. 5.100 by adding the definitions of covered person, 
drug, drug-related criminal activity, federally assisted housing, 
guest, household, other person under the tenant's control, premises, 
and violent criminal activity in alphabetical order:

Sec. 5.100  Definitions.

    Covered person, for purposes of 24 CFR 5, subpart I, and parts 966 
and 982, means a tenant, any member of the tenant's household, a guest 
or another person under the tenant's control.
* * * * *
    Drug means a controlled substance as defined in section 102 of the 
Controlled Substances Act (21 U.S.C. 802).
    Drug-related criminal activity means the illegal manufacture, sale, 
distribution, or use of a drug, or the possession of a drug with intent 
to manufacture, sell, distribute or use the drug.
* * * * *
    Federally assisted housing (for purposes of subparts I and J of 
this part) means housing assisted under any of the following programs:
    (1) Public housing;
    (2) Housing receiving project-based or tenant-based assistance 
under Section 8 of the U.S. Housing Act of 1937 (42 U.S.C. 1437f);
    (3) Housing that is assisted under section 202 of the Housing Act 
of 1959, as amended by section 801 of the National Affordable Housing 
Act (12 U.S.C. 1701q);
    (4) Housing that is assisted under section 202 of the Housing Act 
of 1959, as such section existed before the enactment of the National 
Affordable Housing Act;
    (5) Housing that is assisted under section 811 of the National 
Affordable Housing Act (42 U.S.C. 8013);
    (6) Housing financed by a loan or mortgage insured under section 
221(d)(3) of the National Housing Act (12 U.S.C. 1715l(d)(3)) that 
bears interest at a rate determined under the proviso of section 
221(d)(5) of such Act (12 U.S.C. 1715l(d)(5));
    (7) Housing insured, assisted, or held by HUD or by a State or 
local agency under section 236 of the National Housing Act (12 U.S.C. 
1715z-1); or
    (8) Housing assisted by the Rural Development Administration under 
section 514 or section 515 of the Housing Act of 1949 (42 U.S.C. 1483, 
1484).
* * * * *
    Guest, only for purposes of 24 CFR part 5, subparts A and I, and 
parts 882, 960, 966, and 982, means a person temporarily staying in the 
unit with the consent of a tenant or other member of the household who 
has express or implied authority to so consent on behalf of the tenant. 
The requirements of parts 966 and 982 apply to a guest as so defined.
* * * * *
    Household, for purposes of 24 CFR part 5, subpart I, and parts, 
960, 966, 882, and 982, means the family and PHA-approved live-in aide.
* * * * *
    Other person under the tenant's control, for the purposes of the 
definition of covered person and for parts 5, 882, 966, and 982 means 
that the person, although not staying as a guest (as defined in this 
section) in the unit, is, or was at the time of the activity in 
question, on the premises (as premises is defined in this section)

[[Page 28792]]

because of an invitation from the tenant or other member of the 
household who has express or implied authority to so consent on behalf 
of the tenant. Absent evidence to the contrary, a person temporarily 
and infrequently on the premises solely for legitimate commercial 
purposes is not under the tenant's control.
    Premises, for purposes of 24 CFR part 5, subpart I, and parts 960 
and 966, means the building or complex or development in which the 
public or assisted housing dwelling unit is located, including common 
areas and grounds.
* * * * *
    Violent criminal activity means any criminal activity that has as 
one of its elements the use, attempted use, or threatened use of 
physical force substantial enough to cause, or be reasonably likely to 
cause, serious bodily injury or property damage.

    3. Amend part 5 by adding new subparts I and J, to read as follows:
Subpart I--Preventing Crime in Federally Assisted Housing--Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol 
Abuse

General

Sec.
5.850   Which subsidized housing is covered by this subpart?
5.851   What authority do I have to screen applicants and evict 
tenants?
5.852   What discretion do I have in screening and eviction actions?
5.853   Definitions.

Denying Admissions

5.854   When must I prohibit admission of individuals who have 
engaged in drug-related criminal activity?
5.855   When am I specifically authorized to prohibit admission of 
individuals who have engaged in criminal activity?
5.856   When must I prohibit admission of sex offenders?
5.857   When must I prohibit admission of alcohol abusers?

Terminating Tenancy

5.858   When authority do I have to evict drug criminals?
5.859   When am I specifically authorized to evict other criminals?
5.860   When am I specifically authorized to evict alcohol abusers?
5.861   What evidence of criminal activity must I have to evict?

Subpart I--Preventing Crime in Federally Assisted Housing--Denying 
Admission and Terminating Tenancy for Criminal Activity or Alcohol 
Abuse

General

Sec. 5.850  Which subsidized housing is covered by this subpart?

    (a) If you are the owner of federally assisted housing, your 
federally assisted housing is covered, except as provided in paragraph 
(b) or (c) of this section.
    (b) If you are operating public housing, this subpart does not 
apply, but similar provisions applicable to public housing units are 
found in parts 960 and 966 of this title. If you administer tenant-
based assistance under Section 8 or you are the owner of housing 
assisted with tenant-based assistance under Section 8, this subpart 
does not apply to you, but similar provisions that do apply are located 
in part 982 of this title.
    (c) If you own or administer housing assisted by the Rural Housing 
Administration under section 514 or section 515 of the Housing Act of 
1949, this subpart does not apply to you.

Sec. 5.851  What authority do I have to screen applicants and to evict 
tenants?

    (a) Screening applicants. You are authorized to screen applicants 
for the programs covered by this part. The provisions of this subpart 
implement statutory directives that either require or permit you to 
take action to deny admission to applicants under certain circumstances 
in accordance with established standards, as described in this subpart. 
The provisions of this subpart do not constrain your authority to 
screen out applicants who you determined are unsuitable under your 
standards for admission.
    (b) Terminating tenancy. You are authorized to terminate tenancy of 
tenants, in accordance with your leases and landlord-tenant law for the 
programs covered by this part. The provisions of this subpart implement 
statutory directives that either require or permit you to terminate 
tenancy under certain circumstances, as provided in 42 U.S.C. 1437f, 
1437n, and 13662, in accordance with established standards, as 
described in this subpart. You retain authority to terminate tenancy on 
any basis that is otherwise authorized.

Sec. 5.852  What discretion do I have in screening and eviction 
actions?

    (a) General. If the law and regulation permit you to take an action 
but do not require action to be taken, you may take or not take the 
action in accordance with your standards for admission and eviction. 
Consistent with the application of your admission and eviction 
standards, you may consider all of the circumstances relevant to a 
particular admission or eviction case, such as:
    (1) The seriousness of the offending action;
    (2) The effect on the community of denial or termination or the 
failure of the responsible entity to take such action;
    (3) The extent of participation by the leaseholder in the offending 
action;
    (4) The effect of denial of admission or termination of tenancy on 
household members not involved in the offending action;
    (5) The demand for assisted housing by families who will adhere to 
lease responsibilities;
    (6) The extent to which the leaseholder has shown personal 
responsibility and taken all reasonable steps to prevent or mitigate 
the offending action; and
    (7) The effect of the responsible entity's action on the integrity 
of the program.
    (b) Exclusion of culpable household member. You may require an 
applicant (or tenant) to exclude a household member in order to be 
admitted to the housing program (or continue to reside in the assisted 
unit), where that household member has participated in or been culpable 
for action or failure to act that warrants denial (or termination).
    (c) Consideration of rehabilitation. (1) In determining whether to 
deny admission or terminate tenancy for illegal use of drugs or alcohol 
abuse by a household member who is no longer engaged in such behavior, 
you may consider whether such household member is participating in or 
has successfully completed a supervised drug or alcohol rehabilitation 
program, or has otherwise been rehabilitated successfully (42 U.S.C. 
13661). For this purpose, you may require the applicant or tenant to 
submit evidence of the household member's current participation in, or 
successful completion of, a supervised drug or alcohol rehabilitation 
program or evidence of otherwise having been rehabilitated 
successfully.
    (2) If rehabilitation is not an element of the eligibility 
determination (see Sec. 5.854(a)(1) for the case where it must be 
considered), you may choose not to consider whether the person has been 
rehabilitated.
    (d) Length of period of mandatory prohibition on admission. If a 
statute requires that you prohibit admission of persons for a 
prescribed period of time after some disqualifying behavior or

[[Page 28793]]

event, you may apply that prohibition for a longer period of time.
    (e) Nondiscrimination limitation. Your admission and eviction 
actions must be consistent with fair housing and equal opportunity 
provisions of Sec. 5.105.

Sec. 5.853  Definitions.

    (a) Terms found elsewhere. The following terms are defined in 
subpart A of this part: 1937 Act, covered person, drug, drug-related 
criminal activity, federally assisted housing, guest, household, HUD, 
other person under the tenant's control, premises, public housing, 
public housing agency (PHA), Section 8, violent criminal activity.
    (b) Additional terms used in this part are as follows.
    Currently engaging in. With respect to behavior such as illegal use 
of a drug, other drug-related criminal activity, or other criminal 
activity, currently engaging in means that the individual has engaged 
in the behavior recently enough to justify a reasonable belief that the 
individual's behavior is current.
    Owner. The owner of federally assisted housing.
    Responsible entity. For the Section 8 project-based certificate or 
project-based voucher program (part 983 of this title) and the Section 
8 moderate rehabilitation program (part 882 of this title), responsible 
entity means the PHA administering the program under an Annual 
Contributions Contract with HUD. For all other federally assisted 
housing, the responsible entity means the owner of the housing.

Denying Admissions

Sec. 5.854  When must I prohibit admission of individuals who have 
engaged in drug-related criminal activity?

    (a) You must prohibit admission to your federally assisted housing 
of an applicant for three years from the date of eviction if any 
household member has been evicted from federally assisted housing for 
drug-related criminal activity. However, you may admit the household 
if:
    (1) The evicted household member who engaged in drug-related 
criminal activity has successfully completed an approved supervised 
drug rehabilitation program; or
    (2) The circumstances leading to the eviction no longer exist (for 
example, the criminal household member has died or is imprisoned).
    (b) You must establish standards that prohibit admission of a 
household to federally assisted housing if:
    (1) You determine that any household member is currently engaging 
in illegal use of a drug; or
    (2) You determine that you have reasonable cause to believe that a 
household member's illegal use or a pattern of illegal use of a drug 
may interfere with the health, safety, or right to peaceful enjoyment 
of the premises by other residents.

Sec. 5.855  When am I specifically authorized to prohibit admission of 
individuals who have engaged in criminal activity?

    (a) You may prohibit admission of a household to federally assisted 
housing under your standards if you determine that any household member 
is currently engaging in, or has engaged in during a reasonable time 
before the admission decision:
    (1) Drug-related criminal activity;
    (2) Violent criminal activity;
    (3) Other criminal activity that would threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents; or
    (4) Other criminal activity that would threaten the health or 
safety of the PHA or owner or any employee, contractor, subcontractor 
or agent of the PHA or owner who is involved in the housing operations.
    (b) You may establish a period before the admission decision during 
which an applicant must not have engaged in the activities specified in 
paragraph (a) of this section (reasonable time).
    (c) If you previously denied admission to an applicant because of a 
determination concerning a member of the household under paragraph (a) 
of this section, you may reconsider the applicant if you have 
sufficient evidence that the members of the household are not currently 
engaged in, and have not engaged in, such criminal activity during a 
reasonable period, determined by you, before the admission decision.
    (1) You would have sufficient evidence if the household member 
submitted a certification that she or he is not currently engaged in 
and has not engaged in such criminal activity during the specified 
period and provided supporting information from such sources as a 
probation officer, a landlord, neighbors, social service agency workers 
and criminal records, which you verified. (See subpart J of this part 
for one method of checking criminal records.)
    (2) For purposes of this section, a household member is currently 
engaged in the criminal activity if the person has engaged in the 
behavior recently enough to justify a reasonable belief that the 
behavior is current.

Sec. 5.856  When must I prohibit admission of sex offenders?

    You must establish standards that prohibit admission to federally 
assisted housing if any member of the household is subject to a 
lifetime registration requirement under a State sex offender 
registration program. In the screening of applicants, you must perform 
necessary criminal history background checks in the State where the 
housing is located and in other States where the household members are 
known to have resided. (See Sec. 5.905.)

Sec. 5.857  When must I prohibit admission of alcohol abusers?

    You must establish standards that prohibit admission to federally 
assisted housing if you determine you have reasonable cause to believe 
that a household member's abuse or pattern of abuse of alcohol 
interferes with the health, safety, or right to peaceful enjoyment of 
the premises by other residents.

Terminating Tenancy

Sec. 5.858  What authority do I have to evict drug criminals?

    The lease must provide that drug-related criminal activity engaged 
in on or near the premises by any tenant, household member, or guest, 
and any such activity engaged in on the premises by any other person 
under the tenant's control, is grounds for you to terminate tenancy. In 
addition, the lease must allow you to evict a family when you determine 
that a household member is illegally using a drug or when you determine 
that a pattern of illegal use of a drug interferes with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.

Sec. 5.859  When am I specifically authorized to evict other criminals?

    (a) Threat to other residents. The lease must provide that the 
owner may terminate tenancy for any of the following types of criminal 
activity by a covered person:
    (1) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of the premises by other residents 
(including property management staff residing on the premises); or
    (2) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of their residences by persons residing in 
the immediate vicinity of the premises.
    (b) Fugitive felon or parole violator. The lease must provide that 
you may terminate the tenancy during the term of the lease if a tenant 
is:

[[Page 28794]]

    (1) Fleeing to avoid prosecution, or custody or confinement after 
conviction, for a crime, or attempt to commit a crime, that is a felony 
under the laws of the place from which the individual flees, or that, 
in the case of the State of New Jersey, is a high misdemeanor; or
    (2) Violating a condition of probation or parole imposed under 
Federal or State law.

Sec. 5.860  When am I specifically authorized to evict alcohol abusers?

    The lease must provide that you may terminate the tenancy if you 
determine that a household member's abuse or pattern of abuse of 
alcohol threatens the health, safety, or right to peaceful enjoyment of 
the premises by other residents.

Sec. 5.861  What evidence of criminal activity must I have to evict?

    You may terminate tenancy and evict the tenant through judicial 
action for criminal activity by a covered person in accordance with 
this subpart if you determine that the covered person has engaged in 
the criminal activity, regardless of whether the covered person has 
been arrested or convicted for such activity and without satisfying a 
criminal conviction standard of proof of the activity.
Subpart J--Access to Criminal Records and Information
Sec.
5.901  To what criminal records and searches does this subpart 
apply?
5.902  Definitions.
5.903  What special authority is there to obtain access to criminal 
records?
5.905  What special authority is there to obtain access to sex 
offender registration information?

Subpart J

Access to Criminal Records and Information

Sec. 5.901  To what criminal records and searches does this subpart 
apply?

    (a) General criminal records searches. This subpart applies to 
criminal conviction background checks by PHAs that administer the 
Section 8 and public housing programs when they obtain criminal 
conviction records, under the authority of section 6(q) of the 1937 Act 
(42 U.S.C. 1437d(q)), from a law enforcement agency to prevent 
admission of criminals to public housing and Section 8 housing and to 
assist in lease enforcement and eviction.
    (b) Sex offender registration records searches. This subpart 
applies to PHAs that administer the Section 8 and public housing 
programs when they obtain sex offender registration information from 
State and local agencies, under the authority of 42 U.S.C. 13663, to 
prevent admission of dangerous sex offenders to federally assisted 
housing.
    (c) Excluded records searches. The provisions of this subpart do 
not apply to criminal conviction information or sex offender 
information searches by a PHA or others of information from law 
enforcement agencies or other sources other than as provided under this 
subpart.

Sec. 5.902  Definitions.

    (a) Terms found elsewhere. The following terms used in this subpart 
are defined in subpart A of this part: 1937 Act, drug, federally 
assisted housing, household, HUD, public housing, public housing agency 
(PHA), Section 8.
    (b) Additional terms used in this subpart are as follows:
    Adult. A person who is 18 years of age or older, or who has been 
convicted of a crime as an adult under any Federal, State, or tribal 
law.
    Covered housing. Public housing, project-based assistance under 
section 8 (including new construction and substantial rehabilitation 
projects), and tenant-based assistance under section 8.
    Law enforcement agency. The National Crime Information Center 
(NCIC), police departments and other law enforcement agencies that hold 
criminal conviction records.
    Owner. The owner of federally assisted housing.
    Responsible entity. For the public housing program, the Section 8 
tenant-based assistance program (part 982 of this title), the Section 8 
project-based certificate or project-based voucher program (part 983 of 
this title), and the Section 8 moderate rehabilitation program (part 
882 of this title), responsible entity means the PHA administering the 
program under an Annual Contributions Contract with HUD. For all other 
Section 8 programs, responsible entity means the Section 8 owner.

Sec. 5.903  What special authority is there to obtain access to 
criminal records?

    (a) Authority. If you are a PHA that administers the Section 8 
program and/or the public housing program, this section authorizes you 
to obtain criminal conviction records from a law enforcement agency, as 
defined in Sec. 5.902. You may use the criminal conviction records that 
you obtain from a law enforcement agency under the authority of this 
section to screen applicants for admission to covered housing programs 
and for lease enforcement or eviction of families residing in public 
housing or receiving Section 8 project-based assistance.
    (b) Consent for release of criminal conviction records. (1) In 
order to obtain access to records under this section, as a responsible 
entity you must require every applicant family to submit a consent form 
signed by each adult household member.
    (2) By execution of the consent form, an adult household member 
consents that:
    (i) Any law enforcement agency may release criminal conviction 
records concerning the household member to a PHA in accordance with 
this section;
    (ii) The PHA may receive the criminal conviction records from a law 
enforcement agency, and may use the records in accordance with this 
section.
    (c) Procedure for PHA. (1) When the law enforcement agency receives 
your request, the law enforcement agency must promptly release to you a 
certified copy of any criminal conviction records concerning the 
household member in the possession or control of the law enforcement 
agency. NCIC records must be provided in accordance with NCIC 
procedures.
    (2) The law enforcement agency may charge you a reasonable fee for 
releasing criminal conviction records.
    (d) Owner access to criminal records.--(1) General. (i) If an owner 
submits a request to the PHA for criminal records concerning an adult 
member of an applicant or resident household, in accordance with the 
provisions of paragraph (d) of this section, the PHA must request the 
criminal conviction records from the appropriate law enforcement agency 
or agencies, as determined by the PHA.
    (ii) If the PHA receives criminal conviction records requested by 
an owner, the PHA must determine whether criminal action by a household 
member, as shown by such criminal conviction records, may be a basis 
for applicant screening, lease enforcement or eviction, as applicable 
in accordance with HUD regulations and the owner criteria.
    (iii) The PHA must notify the owner whether the PHA has received 
criminal conviction records concerning the household member, and of its 
determination whether such criminal conviction records may be a basis 
for applicant screening, lease enforcement or eviction. However, except 
as provided in paragraph (e)(2)(ii) of this section, the PHA must not 
disclose the household member's criminal conviction record or the 
content of that record to the owner.
    (2) Screening. If you are an owner of covered housing, you may 
request that the PHA in the jurisdiction of the property obtain 
criminal conviction

[[Page 28795]]

records of an adult household member from a law enforcement agency on 
your behalf for the purpose of screening applicants.
    (i) Your request must include a copy of the consent form, signed by 
the household member.
    (ii) Your request must include your standards for prohibiting 
admission of drug criminals in accordance with Sec. 5.854, and for 
prohibiting admission of other criminals in accordance with Sec. 5.855.
    (3) Eviction or lease enforcement. If you are an owner of a unit 
with Section 8 project-based assistance, you may request that the PHA 
in the location of the project obtain criminal conviction records of a 
household member from an appropriate law enforcement agency on your 
behalf in connection with lease enforcement or eviction.
    (i) Your request must include a copy of the consent form, signed by 
the household member.
    (ii) If you intend to use the PHA determination regarding any such 
criminal conviction records in connection with eviction, your request 
must include your standards for evicting drug criminals in accordance 
with Sec. 5.857, and for evicting other criminals in accordance with 
Sec. 5.858.
    (iii) If you intend to use the PHA determination regarding any such 
criminal conviction records for lease enforcement other than eviction, 
your request must include your standards for lease enforcement because 
of criminal activity by members of a household.
    (4) Fees. If an owner requests a PHA to obtain criminal conviction 
records in accordance with this section, the PHA may charge the owner 
reasonable fees for making the request on behalf of the owner and for 
taking other actions for the owner. The PHA may require the owner to 
reimburse costs incurred by the PHA, including reimbursement of any 
fees charged to the PHA by the law enforcement agency, the PHA's own 
related staff and administrative costs. The owner may not pass along to 
the applicant or tenant the costs of a criminal records check.
    (e) Permitted use and disclosure of criminal conviction records 
received by PHA--(1) Use of records. Criminal conviction records 
received by a PHA from a law enforcement agency in accordance with this 
section may only be used for the following purposes:
    (i) Applicant screening. (A) PHA screening of applicants for 
admission to public housing (part 960 of this title);
    (B) PHA screening of applicants for admission to the Housing Choice 
Voucher Program (section 8 tenant-based assistance) (part 982 of this 
title);
    (C) PHA screening of applicants for admission to the Section 8 
moderate rehabilitation program (part 882 of this title); or the 
Section 8 project-based certificate or project-based voucher program 
(part 983 of this title); or
    (D) PHA screening concerning criminal conviction of applicants for 
admission to Section 8 project-based assistance, at the request of the 
owner. (For requirements governing use of criminal conviction records 
obtained by a PHA at the request of a Section 8 owner under this 
section, see paragraph (d) of this section.)
    (ii) Lease enforcement and eviction. (A) PHA enforcement of public 
housing leases and PHA eviction of public housing residents;
    (B) Enforcement of leases by a Section 8 project owner and eviction 
of residents by a Section 8 project owner. (However, criminal 
conviction records received by a PHA from a law enforcement agency 
under this section may not be used for lease enforcement or eviction of 
residents receiving Section 8 tenant-based assistance.)
    (2) PHA disclosure of records. (i) A PHA may disclose the criminal 
conviction records which the PHA receives from a law enforcement agency 
only as follows:
    (A) To officers or employees of the PHA, or to authorized 
representatives of the PHA who have a job-related need to have access 
to the information. For example, if the PHA is seeking to evict a 
public housing tenant on the basis of criminal activity as shown in 
criminal conviction records provided by a law enforcement agency, the 
records may be disclosed to PHA employees performing functions related 
to the eviction, or to a PHA hearing officer conducting an 
administrative grievance hearing concerning the proposed eviction.
    (B) To the owner for use in connection with judicial eviction 
proceedings by the owner to the extent necessary in connection with a 
judicial eviction proceeding. For example, criminal conviction records 
may be included in pleadings or other papers filed in an eviction 
action, may be disclosed to parties to the action or the court, and may 
be filed in court or offered as evidence.
    (ii) This disclosure may be made only if the following conditions 
are satisfied:
    (A) If the PHA has determined that criminal activity by the 
household member as shown by such records received from a law 
enforcement agency may be a basis for eviction from a Section 8 unit; 
and
    (B) If the owner certifies in writing that it will use the criminal 
conviction records only for the purpose and only to the extent 
necessary to seek eviction in a judicial proceeding of a Section 8 
tenant based on the criminal activity by the household member that is 
described in the criminal conviction records.
    (iii) The PHA may rely on an owner's certification that the 
criminal record is necessary to proceed with a judicial eviction to 
evict the tenant based on criminal activity of the identified household 
member, as shown in the criminal conviction record.
    (iv) Upon disclosure as necessary in connection with judicial 
eviction proceedings, the PHA is not responsible for controlling access 
to or knowledge of such records after such disclosure.
    (f) Opportunity to dispute. If a PHA obtains criminal record 
information from a State or local agency under this section showing 
that a household member has been convicted of a crime relevant to 
applicant screening, lease enforcement or eviction, the PHA must notify 
the household of the proposed action to be based on the information and 
must provide the subject of the record and the applicant or tenant a 
copy of such information, and an opportunity to dispute the accuracy 
and relevance of the information. This opportunity must be provided 
before a denial of admission, eviction or lease enforcement action on 
the basis of such information.
    (g) Records management. Consistent with the limitations on 
disclosure of records in paragraph (e) of this section, the PHA must 
establish and implement a system of records management that ensures 
that any criminal record received by the PHA from a law enforcement 
agency is:
    (1) Maintained confidentially;
    (2) Not misused or improperly disseminated; and
    (3) Destroyed, once the purpose(s) for which the record was 
requested has been accomplished, including expiration of the period for 
filing a challenge to the PHA action without institution of a challenge 
or final disposition of any such litigation.
    (h) Penalties for improper release of information.--(1) Criminal 
penalty. Conviction for a misdemeanor and imposition of a penalty of 
not more than $5,000 is the potential for:
    (i) Any person, including an officer, employee, or authorized 
representative of any PHA or of any project owner, who knowingly and 
willfully requests or obtains any information concerning an applicant 
for, or tenant of, covered housing assistance under the authority of 
this section under false pretenses; or
    (ii) Any person, including an officer, employee, or authorized 
representative of any PHA or a project owner, who

[[Page 28796]]

knowingly and willfully discloses any such information in any manner to 
any individual not entitled under any law to receive the information.
    (2) Civil liability. (i) A PHA may be held liable to any applicant 
for, or tenant of, covered housing assistance affected by either of the 
following:
    (A) A negligent or knowing disclosure of criminal records 
information obtained under the authority of this section about such 
person by an officer, employee, or authorized representative of the PHA 
if the disclosure is not authorized by this section; or
    (B) Any other negligent or knowing action that is inconsistent with 
this section.
    (ii) An applicant for, or tenant of, covered housing assistance may 
seek relief against a PHA in these circumstances by bringing a civil 
action for damages and such other relief as may be appropriate against 
the PHA responsible for such unauthorized action. The United States 
district court in which the affected applicant or tenant resides, in 
which the unauthorized action occurred, or in which the officer, 
employee, or representative alleged to be responsible resides, has 
jurisdiction. Appropriate relief may include reasonable attorney's fees 
and other litigation costs.

Sec. 5.905  What special authority is there to obtain access to sex 
offender registration information?

    (a) PHA obligation to obtain sex offender registration information. 
(1) A PHA that administers a Section 8 or public housing program under 
an Annual Contributions Contract with HUD must carry out background 
checks necessary to determine whether a member of a household applying 
for admission to any federally assisted housing program is subject to a 
lifetime sex offender registration requirement under a State sex 
offender registration program. This check must be carried out with 
respect to the State in which the housing is located and with respect 
to States where members of the applicant household are known to have 
resided.
    (2) If the PHA requests such information from any State or local 
agency responsible for the collection or maintenance of such 
information, the State or local agency must promptly provide the PHA 
such information in its possession or control.
    (3) The State or local agency may charge a reasonable fee for 
providing the information.
    (b) Owner's request for sex offender registration information.--(1) 
General. An owner of federally assisted housing that is located in the 
jurisdiction of a PHA that administers a Section 8 or public housing 
program under an Annual Contributions Contract with HUD may request 
that the PHA obtain information necessary to determine whether a 
household member is subject to a lifetime registration requirement 
under a State sex offender registration requirement.
    (2) Procedure. If the request is made in accordance with the 
provisions of paragraph (b) of this section:
    (i) The PHA must request the information from a State or local 
agency;
    (ii) The State or local agency must promptly provide the PHA such 
information in its possession or control;
    (iii) The PHA must determine whether such information may be a 
basis for applicant screening, lease enforcement or eviction, based on 
the criteria used by the owner as specified in the owner's request, and 
inform the owner of the determination.
    (iv) The PHA must notify the owner of its determination whether sex 
offender registration information received by the PHA under this 
section concerning a household member may be a basis for applicant 
screening, lease enforcement or eviction in accordance with HUD 
requirements and the criteria used by the owner.
    (3) Contents of request. As the owner, your request must specify 
whether you are asking the PHA to obtain the sex offender registration 
information concerning the household member for applicant screening, 
for lease enforcement, or for eviction and include the following 
information:
    (i) Addresses or other information about where members of the 
household are known to have lived.
    (ii) If you intend to use the PHA determination regarding any such 
sex offender registration information for applicant screening, your 
request must include your standards in accordance with Sec. 5.855(c) 
for prohibiting admission of persons subject to a lifetime sex offender 
registration requirement.
    (iii) If you intend to use the PHA determination regarding any such 
sex offender registration information for eviction, your request must 
include your standards for evicting persons subject to a lifetime 
registration requirement in accordance with Sec. 5.858.
    (iv) If you intend to use the PHA determination regarding any such 
sex offender registration information for lease enforcement other than 
eviction, your request must include your standards for lease 
enforcement because of criminal activity by members of a household.
    (4) PHA disclosure of records. The PHA must not disclose to the 
owner any sex offender registration information obtained by the PHA 
under this section.
    (5) Fees. If an owner asks a PHA to obtain sex offender 
registration information concerning a household member in accordance 
with this section, the PHA may charge the owner reasonable fees for 
making the request on behalf of the owner and for taking other actions 
for the owner. The PHA may require the owner to reimburse costs 
incurred by the PHA, including reimbursement of any fees charged to the 
PHA by a State or local agency for releasing the information, the PHA's 
own related staff and administrative costs. The owner may not pass 
along to the applicant or tenant the costs of a sex offender 
registration records check.
    (c) Records management. (1) The PHA must establish and implement a 
system of records management that ensures that any sex offender 
registration information record received by the PHA from a State or 
local agency under this section is:
    (i) Maintained confidentially;
    (ii) Not misused or improperly disseminated; and
    (iii) Destroyed, once the purpose for which the record was 
requested has been accomplished, including expiration of the period for 
filing a challenge to the PHA action without institution of a challenge 
or final disposition of any such litigation.
    (2) The records management requirements do not apply to information 
that is public information, or is obtained by a PHA other than under 
this section.
    (d) Opportunity to dispute. If a PHA obtains sex offender 
registration information from a State or local agency under paragraph 
(a) of this section showing that a household member is subject to a 
lifetime sex offender registration requirement, the PHA must notify the 
household of the proposed action to be based on the information and 
must provide the subject of the record, and the applicant or tenant, 
with a copy of such information, and an opportunity to dispute the 
accuracy and relevance of the information. This opportunity must be 
provided before a denial of admission, eviction or lease enforcement 
action on the basis of such information.

PART 200--INTRODUCTION TO FHA PROGRAMS

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

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

[[Page 28797]]

    5. Add a new Sec. 200.37 to read as follows:

Sec. 200.37  Preventing crime in federally assisted housing.

    See part 5, subparts I and J of this title, for provisions 
concerning preventing crime in federally assisted housing, including 
programs administered under section 236 and under sections 221(d)(3) 
and 221(d)(5) of the National Housing Act.

PART 247--EVICTIONS FROM SUBSIDIZED AND HUD-OWNED PROJECTS

    6. The authority citation for part 247 continues to read as 
follows:

    Authority: 12 U.S.C. 1701q, 1701s, 1715b, 1715l, and 1715z-1; 42 
U.S.C. 1437a, 1437c, 1437f, and 3535(d).

    7. In Sec. 247.2, revise the last sentence in the definition of 
``subsidized project'' to read as follows:

Sec. 247.2  Definitions.

* * * * *
    Subsidized project. * * * For purposes of this part, subsidized 
project also includes those units in a housing project that receive the 
benefit of:
    (1) Rental subsidy in the form of rent supplement payments under 
section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C. 
1701s); or
    (2) Housing assistance payments for project-based assistance under 
Section 8 of the 1937 Act (42 U.S.C. 1437f). However, this part is not 
applicable to Section 8 project-based assistance under parts 880, 881, 
883 and 884 of this title (except as specifically provided in those 
parts).

    8. In Sec. 247.3, revise paragraph (a)(3) to read as follows:

Sec. 247.3  Entitlement of tenants to occupancy.

    (a) * * *
    (3) Criminal activity by a covered person in accordance with 
sections 5.858 and 5.859, or alcohol abuse by a covered person in 
accordance with section 5.860. If necessary, criminal records can be 
obtained for lease enforcement purposes under section 5.903(d)(3).
* * * * *

PART 880--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM FOR NEW 
CONSTRUCTION

    9. The authority citation for part 880 continues to read as 
follows:

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

    10. In Sec. 880.607, revise paragraph (b)(1)(iii) to read as 
follows:

Sec. 880.607  Termination of tenancy and modification of lease.

* * * * *
    (b) * * *
    (1) * * *
    (iii) Criminal activity by a covered person in accordance with 
sections 5.858 and 5.859, or alcohol abuse by a covered person in 
accordance with section 5.860. If necessary, criminal records can be 
obtained for lease enforcement purposes under section 5.903(d)(3).
* * * * *

PART 882--SECTION 8 MODERATE REHABILITATION PROGRAMS

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

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

    12. In Sec. 882.102, amend paragraph (b) by removing the 
definitions of the terms drug-related criminal activity, drug-
trafficking, and violent criminal activity, and revise paragraph (a) to 
read as follows:

Sec. 882.102  Definitions.

    (a) Terms found elsewhere. The following terms are defined in part 
5, subpart A of this title: 1937 Act, covered person, drug, drug-
related criminal activity, federally assisted housing, guest, 
household, HUD, MSA, other person under the tenant's control, public 
housing agency (PHA), Section 8, and violent criminal activity. 
* * * * *

    13. In Sec. 882.511, amend paragraph (a) by adding after the 
heading a paragraph designation (1), and by adding a new paragraph 
(a)(2).

Sec. 882.511  Lease and termination of tenancy.

    (a) * * *
    (2) The lease must provide that drug-related criminal activity 
engaged in on or near the premises by any tenant, household member, or 
guest, and any such activity engaged in on the premises by any other 
person under the tenant's control is grounds for the owner to terminate 
tenancy. In addition, the lease must provide that the owner may 
terminate the tenancy of a family when the owner determines that a 
household member is illegally using a drug or when the owner determines 
that a pattern of illegal use of a drug interferes with the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.
* * * * *

Sec. 882.514  [Amended]

    14. In Sec. 882.514, remove paragraph (a)(2) and redesignate 
paragraph (a)(3) as paragraph (a)(2), and remove paragraph (g).

    15. Add Sec. 882.518 to read as follows:

Sec. 882.518  Denial of admission and termination of assistance for 
criminals and alcohol abusers.

    (a) Requirement to deny admission.--(1) Prohibiting admission of 
drug criminals. (i) The PHA must prohibit admission to the program of 
an applicant for three years from the date of termination of tenancy if 
any household member's federally assisted housing tenancy has been 
terminated for drug-related criminal activity. However, the PHA may 
admit the household if the PHA determines:
    (A) The household member who engaged in drug-related criminal 
activity and whose tenancy was terminated has successfully completed an 
approved supervised drug rehabilitation program, or
    (B) The circumstances leading to the termination of tenancy no 
longer exist (for example, the criminal household member has died or is 
imprisoned).
    (ii) The PHA must establish standards that permanently prohibit 
admission to the program if any household member has ever been 
convicted of drug-related criminal activity for manufacture or 
production of methamphetamine on the premises of federally assisted 
housing.
    (iii) The PHA must establish standards that prohibit admission of a 
household to the program if the PHA determines that any household 
member is currently engaging in illegal use of a drug or that it has 
reasonable cause to believe that a household member's pattern of 
illegal use of a drug, as defined in Sec. 5.100 of this title, may 
threaten the health, safety, or right to peaceful enjoyment of the 
premises by other residents.
    (2) Prohibiting admission of sex offenders. The PHA must establish 
standards that prohibit admission to the program if any member of the 
household is subject to a lifetime registration requirement under a 
State sex offender registration program. In this screening of 
applicants, the PHA must perform criminal history background checks 
necessary to determine whether any household member is subject to a 
lifetime sex offender registration requirement in the State where the 
housing is located and in other States where household members are 
known to have resided.
    (b) Authority to deny admission.--(1) Prohibiting admission of 
other criminals. The PHA may prohibit admission of a household to the 
program under standards established by the PHA if the PHA determines 
that any

[[Page 28798]]

household member is currently engaged in or has engaged in during a 
reasonable time before the admission decision:
    (i) Drug-related criminal activity;
    (ii) Violent criminal activity;
    (iii) Other criminal activity which may threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents;
    (iv) Other criminal activity which may threaten the health or 
safety of the owner or any employee, contractor, subcontractor or agent 
of the owner who is involved in the owner's housing operations.
    (2) Reasonable time. The PHA may establish a period before the 
admission decision during which an applicant must not have engaged in 
the activities specified in paragraph (b)(1) of this section 
``reasonable time''.
    (3) Sufficient evidence. If the PHA has denied admission to an 
applicant because a member of the household engaged in criminal 
activity in accordance with paragraph (b)(1) of this section, the PHA 
may reconsider the applicant if the PHA has sufficient evidence that 
the members of the household are not currently engaged in, and have not 
engaged in criminal activity during a reasonable period, as determined 
by the PHA, before the admission decision.
    (i) The PHA would have ``sufficient evidence'' if the household 
member submitted a certification that she or he is not currently 
engaged in and has not engaged in such criminal activity during the 
specified period and provided supporting information from such sources 
as a probation officer, a landlord, neighbors, social service agency 
workers and criminal records, which the PHA verified.
    (ii) For purposes of this section, a household member is 
``currently engaged in'' criminal activity if the person has engaged in 
the behavior recently enough to justify a reasonable belief that the 
behavior is current.
    (4) Prohibiting admission of alcohol abusers. The PHA must 
establish standards that prohibit admission to the program if the PHA 
determines that it has reasonable cause to believe that a household 
member's abuse or pattern of abuse of alcohol may threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.
    (c) Terminating assistance.--(1) Terminating assistance for drug 
criminals. (i) The PHA may terminate assistance for drug-related 
criminal activity engaged in on or near the premises by any tenant, 
household member, or guest, and any such activity engaged in on the 
premises by any other person under the tenant's control. In addition, 
the PHA may terminate assistance if the PHA determines that a household 
member is illegally using a drug or when the PHA determines that a 
pattern of illegal use of a drug interferes with the health, safety, or 
right to peaceful enjoyment of the premises by other residents.
    (ii) The PHA must immediately terminate assistance for a family 
under the program if the PHA determines that any member of the 
household has ever been convicted of drug-related criminal activity for 
manufacture or production of methamphetamine on the premises of 
federally assisted housing.
    (2) Terminating assistance for other criminals. (i) The PHA must 
establish standards that allow the PHA to terminate assistance for a 
family if the PHA determines that any household member is engaged in 
criminal activity that threatens the health, safety, or right of 
peaceful enjoyment of the premises by other residents or by persons 
residing in the immediate vicinity of the premises.
    (ii) The PHA may terminate assistance for a family if the PHA 
determines that a member of the household is:
    (A) Fleeing to avoid prosecution, or custody or confinement after 
conviction, for a crime, or attempt to commit a crime, that is a felony 
under the laws of the place from which the individual flees, or that, 
in the case of the State of New Jersey, is a high misdemeanor; or
    (B) Violating a condition of probation or parole imposed under 
Federal or State law.
    (3) Evidence of criminal activity.
    (i) The PHA may terminate assistance for criminal activity in 
accordance with this section if the PHA determines, based on a 
preponderance of the evidence, that a covered person has engaged in the 
criminal activity, regardless of whether the covered person has been 
arrested or convicted for such activity.
    (ii) See part 5, subpart J, of this title for provisions concerning 
access to criminal records.
    (4) Terminating assistance for alcohol abusers. The PHA must 
establish standards that allow termination of assistance for a family 
if the PHA determines that a household member's abuse or pattern of 
abuse of alcohol threatens the health, safety, or right to peaceful 
enjoyment of the premises by other residents.

PART 884--SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW 
CONSTRUCTION SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING 
PROJECTS

    16. The authority citation for part 884 continues to read as 
follows:

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

    17. In Sec. 884.216, revise paragraph (b) to read as follows:

Sec. 884.216  Termination of tenancy.

* * * * *
    (b) Termination of tenancy for criminal activity by a covered 
person is subject to 24 CFR 5.858 and 5.859, and termination of tenancy 
for alcohol abuse by a covered person is subject to 24 CFR 5.860.

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

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

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


    19. Revise Sec. 891.430 to read as follows:

Sec. 891.430  Denial of admission, termination of tenancy, and 
modification of lease.

    (a) The provisions of part 5, subpart I, of this title apply to 
Section 202 and Section 811 capital advance projects.
    (b) The provisions of part 247 of this title apply to all decisions 
by an owner to terminate the tenancy or modify the lease of a household 
residing in a unit (or residential space in a group home).

    20. Revise Sec. 891.630 to read as follows:

Sec. 891.630  Denial of admission, termination of tenancy, and 
modification of lease.

    (a) The provisions of part 5, subpart I, of this title apply to 
Section 202 direct loan projects.
    (b) The provisions of part 247 of this title apply to all decisions 
by a Borrower to terminate the tenancy or modify the lease of a family 
residing in a unit.

    21. Revise Sec. 891.770 to read as follows:

Sec. 891.770  Denial of admission, termination of tenancy, and 
modification of lease.

    (a) The provisions of part 5, subpart I, of this title apply to 
Section 202 direct loan projects with Section 162 assistance for 
disabled families.
    (b) The provisions of part 247 of this title apply to all decisions 
by a Borrower to terminate the tenancy or modify the lease of a family 
residing in a unit (or residential space in a group home).

[[Page 28799]]

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

    22. The authority citation for part 960 continues to read as 
follows:

    Authority: 42 U.S.C. 1437a, 1437c, 1437d, 1437n, 1437z-3, and 
3535(d).

    23. In Sec. 960.102, paragraph (a)(1) is revised to read as 
follows:

Sec. 960.102  Definitions.

    (a) Definitions found elsewhere. (1) General definitions. The 
following terms are defined in part 5, subpart A of this title: 1937 
Act, drug, drug-related criminal activity, federally assisted housing, 
guest, household, HUD, MSA, premises, public housing, public housing 
agency (PHA), Section 8, violent criminal activity.
* * * * *

    24. Subpart B of part 960 is revised to read as follows:
  
Subpart B--Admission
960.200  Purpose.
960.201  Eligibility.
960.202  Tenant selection policies.
960.203  Standards for PHA tenant selection criteria.
960.204  Denial of admission for criminal activity or drug abuse by 
household members.
960.205  Drug use by applicants: obtaining information from drug 
treatment facility.
960.206  Waiting list: Local preferences in admission to public 
housing program.
960.208  Notification to applicants.

Sec. 960.200  Purpose.

    (a) This subpart states HUD eligibility and selection requirements 
for admission to public housing.
    (b) See also related HUD regulations in this title concerning these 
subjects:
    (1) 1937 Act definitions: part 5, subpart D;
    (2) Restrictions on assistance to noncitizens: part 5, subpart E;
    (3) Family income and family payment: part 5, subpart F;
    (4) Public housing agency plans: part 903;
    (5) Rent and reexamination: part 960, subpart C;
    (6) Mixed population developments: part 960, subpart D;
    (7) Occupancy by over-income families or police officers: part 960, 
subpart E.

Sec. 960.201  Eligibility.

    (a) Who is eligible? (1) Basic eligibility. An applicant must meet 
all eligibility requirements in order to receive housing assistance. At 
a minimum, the applicant must be a family, as defined in Sec. 5.403 of 
this title, and must be income-eligible, as described in this section. 
Such eligible applicants include single persons.
    (2) Low income limit. No family other than a low income family is 
eligible for admission to a PHA's public housing program.
    (b) Income used for eligibility and targeting. Family annual income 
(see Sec. 5.609) is used both for determination of income eligibility 
under paragraph (a) and for PHA income targeting under Sec. 960.202
    (c) Reporting. The PHA must comply with HUD-prescribed reporting 
requirements that will permit HUD to maintain the data, as determined 
by HUD, necessary to monitor compliance with income eligibility and 
targeting requirement.

Sec. 960.202  Tenant selection policies.

    (a) Selection policies, generally. (1) The PHA shall establish and 
adopt written policies for admission of tenants.
    (2) These policies shall provide for and include the following:
    (i) Targeting admissions to extremely low income families as 
provided in paragraph (b) of this section.
    (ii) Deconcentration of poverty and income-mixing in accordance 
with the PHA Plan regulations (see 24 CFR part 903).
    (iii) Precluding admission of applicants whose habits and practices 
reasonably may be expected to have a detrimental effect on the 
residents or the project environment;
    (iv) Objective and reasonable policies for selection by the PHA 
among otherwise eligible applicants, including requirements for 
applications and waiting lists (see 24 CFR 1.4), and for verification 
and documentation of information relevant to acceptance or rejection of 
an applicant, including documentation and verification of citizenship 
and eligible immigration status under 24 CFR part 5; and
    (v) Policies of participant transfer between units, developments, 
and programs. For example, a PHA could adopt a criterion for voluntary 
transfer that the tenant had met all obligations under the current 
program, including payment of charges to the PHA.
    (b) Targeting admissions to extremely low income families.
    (1) Targeting requirement. (i) Not less than 40 percent of the 
families admitted to a PHA's public housing program during the PHA 
fiscal year from the PHA waiting list shall be extremely low income 
families. This is called the ``basic targeting requirement.''
    (ii) To the extent provided in paragraph (b)(2) of this section, 
admission of extremely low income families to the PHA's Section 8 
voucher program during the same PHA fiscal year is credited against the 
basic targeting requirement.
    (iii) A PHA must comply with both the targeting requirement found 
in this part and the deconcentration requirements found in part 903 of 
this chapter.
    (2) Credit for admissions to PHA voucher program. (i) If admissions 
of extremely low income families to the PHA's voucher program during a 
PHA fiscal year exceeds the 75 percent minimum targeting requirement 
for the PHA's voucher program (see 24 CFR 982.201(b)(2)), such excess 
shall be credited (subject to the limitations in paragraph (b)(2)(ii) 
of this section) against the PHA's basic targeting requirement for the 
same fiscal year.
    (ii) The fiscal year credit for voucher program admissions that 
exceed the minimum voucher program targeting requirement shall not 
exceed the lower of:
    (A) Ten percent of public housing waiting list admissions during 
the PHA fiscal year;
    (B) Ten percent of waiting list admission to the PHA's Section 8 
tenant-based assistance program during the PHA fiscal year; or
    (C) The number of qualifying low income families who commence 
occupancy during the fiscal year of PHA public housing units located in 
census tracts with a poverty rate of 30 percent or more. For this 
purpose, qualifying low income family means a low income family other 
than an extremely low income family.
    (c) Adoption and availability of tenant selection policies. These 
selection policies shall:
    (1) Be duly adopted and implemented;
    (2) Be publicized by posting copies thereof in each office where 
applications are received and by furnishing copies to applicants or 
tenants upon request, free or at their expense, at the discretion of 
the PHA; and
    (3) Be consistent with the fair housing and equal opportunity 
provisions of Sec. 5.105 of this title; and
    (4) Be submitted to the HUD field office upon request from that 
office.

Sec. 960.203  Standards for PHA tenant selection criteria.

    (a) The tenant selection criteria to be established and information 
to be considered shall be reasonably related to individual attributes 
and behavior of an applicant and shall not be related to those which 
may be imputed to a particular group or category of persons

[[Page 28800]]

of which an applicant may be a member. The PHA may use local 
preferences, as provided in Sec. 960.206.
    (b) Under the Public Housing Assessment System (PHAS), PHAs that 
have adopted policies, implemented procedures and can document that 
they successfully screen out and deny admission to certain applicants 
with unfavorable criminal histories receive points. (See 24 CFR 
902.43(a)(5).) This policy takes into account the importance of 
screening to public housing communities and program integrity, and the 
demand for assisted housing by families who will adhere to lease 
responsibilities.
    (c) In selection of families for admission to its public housing 
program, or to occupy a public housing development or unit, the PHA is 
responsible for screening family behavior and suitability for tenancy. 
The PHA may consider all relevant information, which may include, but 
is not limited to:
    (1) An applicant's past performance in meeting financial 
obligations, especially rent;
    (2) A record of disturbance of neighbors, destruction of property, 
or living or housekeeping habits at prior residences which may 
adversely affect the health, safety or welfare of other tenants; and
    (3) A history of criminal activity involving crimes of physical 
violence to persons or property and other criminal acts which would 
adversely affect the health, safety or welfare of other tenants. (See 
Sec. 960.204.) With respect to criminal activity described in 
Sec. 960.204:
    (i) The PHA may require an applicant to exclude a household member 
in order to be admitted to the housing program where that household 
member has participated in or been culpable for actions described in 
Sec. 960.204 that warrants denial.
    (ii) The PHA may, where a statute requires that the PHA prohibit 
admission for a prescribed period of time after some disqualifying 
behavior or event, choose to continue that prohibition for a longer 
period of time.
    (d) In the event of the receipt of unfavorable information with 
respect to an applicant, consideration shall be given to the time, 
nature, and extent of the applicant's conduct (including the 
seriousness of the offense).
    (1) In a manner consistent with the PHA's policies, procedures and 
practices referenced in paragraph (b) of this section, consideration 
may be given to factors which might indicate a reasonable probability 
of favorable future conduct. For example:
    (i) Evidence of rehabilitation; and
    (ii) Evidence of the applicant family's participation in or 
willingness to participate in social service or other appropriate 
counseling service programs and the availability of such programs;
    (2) Consideration of rehabilitation. (i) In determining whether to 
deny admission for illegal drug use or a pattern of illegal drug use by 
a household member who is no longer engaging in such use, or for abuse 
or a pattern of abuse of alcohol by a household member who is no longer 
engaging in such abuse, the PHA may consider whether such household 
member is participating in or has successfully completed a supervised 
drug or alcohol rehabilitation program, or has otherwise been 
rehabilitated successfully (42 U.S.C. 13661). For this purpose, the PHA 
may require the applicant to submit evidence of the household member's 
current participation in, or successful completion of, a supervised 
drug or alcohol rehabilitation program or evidence of otherwise having 
been rehabilitated successfully.
    (ii) If rehabilitation is not an element of the eligibility 
determination (see Sec. 960.204(a)(1)), the PHA may choose not to 
consider whether the person has been rehabilitated.

Sec. 960.204  Denial of admission for criminal activity or drug abuse 
by household members.

    (a) Required denial of admission. (1) Persons evicted for drug-
related criminal activity. The PHA standards must prohibit admission of 
an applicant to the PHA's public housing program for three years from 
the date of the eviction if any household member has been evicted from 
federally assisted housing for drug-related criminal activity. However, 
the PHA may admit the household if the PHA determines:
    (i) The evicted household member who engaged in drug-related 
criminal activity has successfully completed a supervised drug 
rehabilitation program approved by the PHA; or
    (ii) The circumstances leading to the eviction no longer exist (for 
example, the criminal household member has died or is imprisoned).
    (2) Persons engaging in illegal use of a drug. The PHA must 
establish standards that prohibit admission of a household to the PHA's 
public housing program if:
    (i) The PHA determines that any household member is currently 
engaging in illegal use of a drug (For purposes of this section, a 
household member is ``currently engaged in'' the criminal activity if 
the person has engaged in the behavior recently enough to justify a 
reasonable belief that the behavior is current); or
    (ii) The PHA determines that it has reasonable cause to believe 
that a household member's illegal use or pattern of illegal use of a 
drug may threaten the health, safety, or right to peaceful enjoyment of 
the premises by other residents.
    (3) Persons convicted of methamphetamine production. The PHA must 
establish standards that permanently prohibit admission to the PHA's 
public housing program if any household member has ever been convicted 
of drug-related criminal activity for manufacture or production of 
methamphetamine on the premises of federally assisted housing.
    (4) Persons subject to sex offender registration requirement. The 
PHA must establish standards that prohibit admission to the PHA's 
public housing program if any member of the household is subject to a 
lifetime registration requirement under a State sex offender 
registration program. In the screening of applicants, the PHA must 
perform necessary criminal history background checks in the State where 
the housing is located and in other States where household members are 
known to have resided. (See part 5, subpart J of this title for 
provisions concerning access to sex offender registration records.)
    (b) Persons that abuse or show a pattern of abuse of alcohol. The 
PHA must establish standards that prohibit admission to the PHA's 
public housing program if the PHA determines that it has reasonable 
cause to believe that a household member's abuse or pattern of abuse of 
alcohol may threaten the health, safety, or right to peaceful enjoyment 
of the premises by other residents.
    (c) Use of criminal records. Before a PHA denies admission to the 
PHAs public housing program on the basis of a criminal record, the PHA 
must notify the household of the proposed action to be based on the 
information and must provide the subject of the record and the 
applicant with a copy of the criminal record and an opportunity to 
dispute the accuracy and relevance of that record. (See part 5, subpart 
J of this title for provisions concerning access to criminal records.)
    (d) Cost of obtaining criminal record. The PHA may not pass along 
to the applicant the costs of a criminal records check.

[[Page 28801]]

Sec. 960.205  Drug use by applicants: obtaining information from drug 
treatment facility.

    (a) Purpose. This section addresses a PHA's authority to request 
and obtain information from drug abuse treatment facilities concerning 
applicants. This section does not apply to information requested or 
obtained from drug abuse treatment facilities other than under the 
authority of section 6(t).
    (b) Additional terms used in this section are as follows:
    (1) Currently engaging in illegal use of a drug. Illegal use of a 
drug occurred recently enough to justify a reasonable belief that there 
is continuing illegal drug use by a household member.
    (2) Drug abuse treatment facility. An entity:
    (i) That holds itself out as providing, and provides, diagnosis, 
treatment, or referral for treatment with respect to the illegal drug 
use; and
    (ii) That is either an identified unit within a general care 
facility; or an entity other than a general medical care facility.
    (c) Authorization by household member for PHA to receive 
information from a drug abuse treatment facility. (1) The PHA may 
require each applicant to submit for all household members who are at 
least 18 years of age, and for each family head or spouse regardless of 
age, one or more consent forms signed by such household member that:
    (i) Requests any drug abuse treatment facility to inform the PHA 
only whether the drug abuse treatment facility has reasonable cause to 
believe that the household member is currently engaging in illegal drug 
use;
    (ii) Complies with the form of written consent required by 42 CFR 
2.31; and
    (iii) Authorizes the PHA to receive such information from the drug 
abuse treatment facility, and to utilize such information in 
determining whether to prohibit admission of the household member to 
the PHA's public housing program in accordance with Sec. 960.203. (See 
the Public Health Service Act, 42 U.S.C. 290dd-2, and implementing 
regulations at 42 CFR part 2, with respect to responsibilities of the 
drug abuse treatment facility.)
    (2) The consent form submitted for a proposed household member must 
expire automatically after the PHA has made a final decision to either 
approve or deny the admission of such person.
    (d) PHA request for information from drug use treatment facility. 
(1) The PHA may request that a drug abuse treatment facility disclose 
whether the drug abuse treatment facility has reasonable cause to 
believe that the proposed household member is currently engaging in the 
illegal use of a drug (as defined in Sec. 5.100 of this title).
    (2) The PHA's request to the drug abuse treatment facility must 
include a copy of the consent form signed by the proposed household 
member.
    (3) A drug abuse treatment facility is not liable for damages based 
on any information required to be disclosed under this section if such 
disclosure is consistent with section 543 of the Public Health Service 
Act (42 U.S.C. 290dd-2).
    (4) The PHA is not obligated to request information from a drug 
treatment facility under this section, and is not liable for damages 
for failing to request or receive such information.
    (5) A drug abuse treatment facility may charge the PHA a reasonable 
fee for information provided under this section. The PHA may not pass 
along to the applicant or tenant the costs of obtaining this 
information.
    (e) Prohibition of discriminatory treatment of applicants. (1) A 
PHA may request information from a drug abuse treatment facility under 
paragraph (d) of this section only if the PHA has adopted and has 
consistently implemented either of the following policies, obtaining a 
signed consent form from the proposed household members:
    (i) Policy A--Request for all families. Under Policy A, the PHA 
must submit a request for information to a drug abuse treatment 
facility in accordance with paragraph (d) of this section before 
admitting any family to the PHA's public housing program. For each such 
family, the request must be submitted for each proposed household 
member described in paragraph (c)(1) of this section.
    (ii) Policy B--Request for certain household members. Under Policy 
B, the PHA must submit a request to a drug abuse treatment facility 
only with respect to each proposed household member:
    (A) Whose criminal record indicates prior arrest or conviction for 
any criminal activity that may be a basis for denial of admission under 
Sec. 960.205; or
    (B) Whose prior tenancy records indicate that the proposed 
household member:
    (1) Engaged in the destruction of property;
    (2) Engaged in violent activity against another person; or
    (3) Interfered with the right of peaceful enjoyment of the premises 
of other residents.
    (4) The policy adopted by the PHA must be included in the PHA 
administrative plan and the PHA plan.
    (f) Records management and confidentiality. Each PHA that receives 
information from a drug abuse treatment facility under this section 
must establish and implement a system of records management that 
ensures that any information which the PHA receives from the drug abuse 
treatment facility about a person:
    (1) Is maintained confidentially in accordance with section 543 of 
the Public Health Service Act (12 U.S.C. 290dd-2);
    (2) Is not misused or improperly disseminated; and
    (3) Is destroyed, as applicable:
    (i) Not later than 5 business days after the PHA makes a final 
decision to admit the person as a household member under the PHA's 
public housing program; or
    (ii) If the PHA denies the admission of such person as a household 
member, in a timely manner after the date on which the statute of 
limitations for the commencement of a civil action based upon that 
denial of admissions has expired without the filing of a civil action 
or until final disposition of any such litigation.

Sec. 960.206  Waiting list: Local preferences in admission to public 
housing program.

    (a) Establishment of PHA local preferences. (1) The PHA may adopt a 
system of local preferences for selection of families admitted to the 
PHA's public housing program. The PHA system of selection preferences 
must be based on local housing needs and priorities as determined by 
the PHA. In determining such needs and priorities, the PHA shall use 
generally accepted data sources. Such sources include public comment on 
the PHA plan (as received pursuant to Sec. 903.17 of this chapter), and 
on the consolidated plan for the relevant jurisdiction (as received 
pursuant to part 91 of this title).
    (2) The PHA may limit the number of applicants that qualify for any 
local preference.
    (3) PHA adoption and implementation of local preferences is subject 
to HUD requirements concerning income-targeting (Sec. 960.202(b)), 
deconcentration and income-mixing (Sec. 903.7), and selection 
preferences for developments designated exclusively for elderly or 
disabled families or for mixed population developments (Sec. 960.407).
    (4) The PHA must inform all applicants about available preferences 
and must give applicants an opportunity to show that they qualify for 
available preferences.
    (b) Particular local preferences--(1) Residency requirements or 
preferences.
    (i) Residency requirements are prohibited. Although a PHA is not 
prohibited from adopting a residency preference, the PHA may only adopt 
or

[[Page 28802]]

implement residency preferences in accordance with non-discrimination 
and equal opportunity requirements listed at Sec. 5.105(a) of this 
title.
    (ii) A residency preference is a preference for admission of 
persons who reside in a specified geographic area (``residency 
preference area''). A county or municipality may be used as a residency 
preference area. An area smaller than a county or municipality may not 
be used as a residency preference area.
    (iii) Any PHA residency preferences must be included in the 
statement of PHA policies that govern eligibility, selection and 
admission to the program, which is included in the PHA annual plan (or 
supporting documents) pursuant to part 903 of this chapter. Such 
policies must specify that use of a residency preference will not have 
the purpose or effect of delaying or otherwise denying admission to the 
program based on the race, color, ethnic origin, gender, religion, 
disability, or age of any member of an applicant family.
    (iv) A residency preference must not be based on how long an 
applicant has resided or worked in a residency preference area.
    (v) Applicants who are working or who have been notified that they 
are hired to work in a residency preference area must be treated as 
residents of the residency preference area. The PHA may treat graduates 
of, or active participants in, education and training programs in a 
residency preference area as residents of the residency preference area 
if the education or training program is designed to prepare individuals 
for the job market.
    (2) Preference for working families. The PHA may adopt a preference 
for admission of working families (families where the head, spouse, or 
sole member, is employed). However, an applicant must be given the 
benefit of the working family preference if the head and spouse, or 
sole member is age 62 or older, or is a person with disabilities.
    (3) Preference for person with disabilities. The PHA may adopt a 
preference for admission of families that include a person with 
disabilities. However, the PHA may not adopt a preference for persons 
with a specific disability.
    (4) Preference for victims of domestic violence. The PHA should 
consider whether to adopt a local preference for admission of families 
that include victims of domestic violence.
    (5) Preference for single persons who are elderly, displaced, 
homeless or a person with disabilities. The PHA may adopt a preference 
for admission of single persons who are age 62 or older, displaced, 
homeless, or persons with disabilities over other single persons.
    (c) Selection for particular unit. In selecting a family to occupy 
a particular unit, the PHA may match characteristics of the family with 
the type of unit available, for example, number of bedrooms. In 
selection of families to occupy units with special accessibility 
features for persons with disabilities, the PHA must first offer such 
units to families which include persons with disabilities who require 
such accessibility features (see Secs. 8.27 and 100.202 of this title).
    (d) Housing assistance limitation for single persons. A single 
person who is not an elderly or displaced person, or a person with 
disabilities, or the remaining member of a resident family may not be 
provided a housing unit with two or more bedrooms.
    (e) Selection method. (1) The PHA must use the following to select 
among applicants on the waiting list with the same priority for 
admission:
    (i) Date and time of application; or
    (ii) A drawing or other random choice technique.
    (2) The method for selecting applicants must leave a clear audit 
trail that can be used to verify that each applicant has been selected 
in accordance with the method specified in the PHA plan.

Sec. 960.208  Notification to applicants.

    (a) The PHA must promptly notify any applicant determined to be 
ineligible for admission to a project of the basis for such 
determination, and must provide the applicant upon request, within a 
reasonable time after the determination is made, with an opportunity 
for an informal hearing on such determination.
    (b) When a determination has been made that an applicant is 
eligible and satisfies all requirements for admission, including the 
tenant selection criteria, the applicant must be notified of the 
approximate date of occupancy insofar as that date can be reasonably 
determined.

PART 966--PUBLIC HOUSING LEASE AND GRIEVANCE PROCEDURE

    25. The authority citation for part 966 is revised to read as 
follows:

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

    26. The heading for part 966 is revised to read as set forth above.

    27. Revise Sec. 966.1 to read as follows:

Sec. 966.1  Purpose and applicability.

    (a) This part is applicable to public housing.
    (b) Subpart A of this part prescribes the provisions that must be 
incorporated in leases for public housing dwelling units.
    (c) Subpart B of this part prescribes public housing grievance 
hearing requirements.

    28. Add a new Sec. 966.2 to read as follows:

Sec. 966.2  Definitions.

    The following terms are defined in part 5, subpart A of this title: 
1937 Act, covered person, drug, drug-related criminal activity, 
federally assisted housing, guest, household, HUD, other person under 
the tenant's control, public housing, premises, public housing agency, 
Section 8, violent criminal activity.

    29. In Sec. 966.4, revise paragraphs (d)(1), (f)(12), (1)(2), 
(1)(3)(i), and (1)(5) to read as follows:

Sec. 966.4  Lease requirements.

* * * * *
    (d) Tenant's right to use and occupancy. (1) The lease shall 
provide that the tenant shall have the right to exclusive use and 
occupancy of the leased unit by the members of the household authorized 
to reside in the unit in accordance with the lease, including 
reasonable accommodation of their guests. The term guest is defined in 
24 CFR 5.100.
* * * * *
    (f) Tenant's obligations. The lease shall provide that the tenant 
shall be obligated: * * *
    (12) (i) To assure that no tenant, member of the tenant's 
household, or guest engages in:
    (A) Any criminal activity that threatens the health, safety or 
right to peaceful enjoyment of the premises by other residents; or
    (B) Any drug-related criminal activity on or off the premises;
    (ii) To assure that no other person under the tenant's control 
engages in:
    (A) Any criminal activity that threatens the health, safety or 
right to peaceful enjoyment of the premises by other residents; or
    (B) Any drug-related criminal activity on the premises;
    (iii) To assure that no member of the household engages in an abuse 
or pattern of abuse of alcohol that affects the health, safety, or 
right to peaceful enjoyment of the premises by other residents.
* * * * *
    (1) * * *
    (2) Grounds for termination of tenancy. The PHA may terminate the 
tenancy only for:

[[Page 28803]]

    (i) Serious or repeated violation of material terms of the lease, 
such as the following:
    (A) Failure to make payments due under the lease;
    (B) Failure to fulfill household obligations, as described in 
paragraph (f) of this section;
    (ii) Other good cause. Other good cause includes, but is not 
limited to, the following:
    (A) Criminal activity or alcohol abuse as provided in paragraph 
(1)(5) of this section;
    (B) Discovery after admission of facts that made the tenant 
ineligible;
    (C) Discovery of material false statements or fraud by the tenant 
in connection with an application for assistance or with reexamination 
of income;
    (D) Failure of a family member to comply with service requirement 
provisions of part 960, subpart F, of this chapter--as grounds only for 
non-renewal of the lease and termination of tenancy at the end of the 
twelve-month lease term; and
    (E) Failure to accept the PHA's offer of a lease revision to an 
existing lease: that is on a form adopted by the PHA in accordance with 
Sec. 966.3; with written notice of the offer of the revision at least 
60 calendar days before the lease revision is scheduled to take effect; 
and with the offer specifying a reasonable time limit within that 
period for acceptance by the family.
    (3) Lease termination notice. (i) The PHA must give written notice 
of lease termination of:
    (A) 14 days in the case of failure to pay rent;
    (B) A reasonable period of time considering the seriousness of the 
situation (but not to exceed 30 days):
    (1) If the health or safety of other residents, PHA employees, or 
persons residing in the immediate vicinity of the premises is 
threatened; or
    (2) If any member of the household has engaged in any drug-related 
criminal activity or violent criminal activity; or
    (3) If any member of the household has been convicted of a felony;
    (C) 30 days in any other case, except that if a State or local law 
allows a shorter notice period, such shorter period shall apply.
* * * * *
    (5) PHA termination of tenancy for criminal activity or alcohol 
abuse. 
    (i) Evicting drug criminals. (A) Methamphetamine conviction. The 
PHA must immediately terminate the tenancy if the PHA determines that 
any member of the household has ever been convicted of drug-related 
criminal activity for manufacture or production of methamphetamine on 
the premises of federally assisted housing.
    (B) Drug crime on or off the premises. The lease must provide that 
drug-related criminal activity engaged in on or off the premises by any 
tenant, member of the tenant's household or guest, and any such 
activity engaged in on the premises by any other person under the 
tenant's control, is grounds for the PHA to terminate tenancy. In 
addition, the lease must provide that a PHA may evict a family when the 
PHA determines that a household member is illegally using a drug or 
when the PHA determines that a pattern of illegal use of a drug 
interferes with the health, safety, or right to peaceful enjoyment of 
the premises by other residents.
    (ii) Evicting other criminals. (A) Threat to other residents. The 
lease must provide that any criminal activity by a covered person that 
threatens the health, safety, or right to peaceful enjoyment of the 
premises by other residents (including PHA management staff residing on 
the premises) or threatens the health, safety, or right to peaceful 
enjoyment of their residences by persons residing in the immediate 
vicinity of the premises is grounds for termination of tenancy.
    (B) Fugitive felon or parole violator. The PHA may terminate the 
tenancy if a tenant is fleeing to avoid prosecution, or custody or 
confinement after conviction, for a crime, or attempt to commit a 
crime, that is a felony under the laws of the place from which the 
individual flees, or that, in the case of the State of New Jersey, is a 
high misdemeanor; or violating a condition of probation or parole 
imposed under Federal or State law.
    (iii) Eviction for criminal activity. (A) Evidence. The PHA may 
evict the tenant by judicial action for criminal activity in accordance 
with this section if the PHA determines that the covered person has 
engaged in the criminal activity, regardless of whether the covered 
person has been arrested or convicted for such activity and without 
satisfying the standard of proof used for a criminal conviction.
    (B) Notice to Post Office. When a PHA evicts an individual or 
family for criminal activity, the PHA must notify the local post office 
serving the dwelling unit that the individual or family is no longer 
residing in the unit.
    (iv) Use of criminal record. If the PHA seeks to terminate the 
tenancy for criminal activity as shown by a criminal record, the PHA 
must notify the household of the proposed action to be based on the 
information and must provide the subject of the record and the tenant 
with a copy of the criminal record before a PHA grievance hearing or 
court trial concerning the termination of tenancy or eviction. The 
tenant must be given an opportunity to dispute the accuracy and 
relevance of that record in the grievance hearing or court trial.
    (v) Cost of obtaining criminal record. The PHA may not pass along 
to the tenant the costs of a criminal records check.
    (vi) Evicting alcohol abusers. The PHA must establish standards 
that allow termination of tenancy if the PHA determines that a 
household member has:
    (A) Engaged in abuse or pattern of abuse of alcohol that threatens 
the health, safety, or right to peaceful enjoyment of the premises by 
other residents; or
    (B) Furnished false or misleading information concerning illegal 
drug use, alcohol abuse, or rehabilitation of illegal drug users or 
alcohol abusers.
    (vii) PHA action, generally. (A) Assessment under PHAS. Under the 
Public Housing Assessment System (PHAS), PHAs that have adopted 
policies, implemented procedures and can document that they 
appropriately evict any public housing residents who engage in certain 
activity detrimental to the public housing community receive points. 
(See 24 CFR 902.43(a)(5).) This policy takes into account the 
importance of eviction of such residents to public housing communities 
and program integrity, and the demand for assisted housing by families 
who will adhere to lease responsibilities.
    (B) Consideration of circumstances. In a manner consistent with 
such policies, procedures and practices, the PHA may consider all 
circumstances relevant to a particular case such as the seriousness of 
the offending action, the extent of participation by the leaseholder in 
the offending action, the effects that the eviction would have on 
family members not involved in the offending activity and the extent to 
which the leaseholder has shown personal responsibility and has taken 
all reasonable steps to prevent or mitigate the offending action.
    (C) Exclusion of culpable household member. The PHA may require a 
tenant to exclude a household member in order to continue to reside in 
the assisted unit, where that household member has participated in or 
been culpable for action or failure to act that warrants termination.
    (D) Consideration of rehabilitation. In determining whether to 
terminate tenancy for illegal drug use or a pattern of illegal drug use 
by a household member who is no longer engaging in

[[Page 28804]]

such use, or for abuse or a pattern of abuse of alcohol by a household 
member who is no longer engaging in such abuse, the PHA may consider 
whether such household member is participating in or has successfully 
completed a supervised drug or alcohol rehabilitation program, or has 
otherwise been rehabilitated successfully (42 U.S.C. 13662). For this 
purpose, the PHA may require the tenant to submit evidence of the 
household member's current participation in, or successful completion 
of, a supervised drug or alcohol rehabilitation program or evidence of 
otherwise having been rehabilitated successfully.
    (E) Length of period of mandatory prohibition on admission. If a 
statute requires that the PHA prohibit admission of persons for a 
prescribed period of time after some disqualifying behavior or event, 
the PHA may apply that prohibition for a longer period of time.
    (F) Nondiscrimination limitation. The PHA's eviction actions must 
be consistent with fair housing and equal opportunity provisions of 
Sec. 5.105 of this title.
* * * * *

    30. In Sec. 966.51, revise paragraphs (a)(2)(i)(A) and (a)(2)(i)(B) 
and add paragraph (a)(2)(i)(C) to read as follows:

Sec. 966.51  Applicability.

    (a) * * *
    (2)(i) * * *
    (A) Any criminal activity that threatens the health, safety or 
right to peaceful enjoyment of the premises of other residents or 
employees of the PHA;
    (B) Any violent or drug-related criminal activity on or off such 
premises; or
    (C) Any criminal activity that resulted in felony conviction of a 
household member.
* * * * *

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

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

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

    32. Amend Sec. 982.4 as follows:
    a. Remove the definitions of drug-related criminal activity, drug-
trafficking, and violent criminal activity from paragraph (b);
    b. Revise paragraph (a)(2) to read as follows:

Sec. 982.4  Definitions.

    (a) * * *
    (2) Terms found elsewhere. The following terms are defined in part 
5, subpart A of this title: 1937 Act, covered person, drug, drug-
related criminal activity, federally assisted housing, guest, 
household, HUD, MSA, other person under the tenant's control, public 
housing, Section 8, and violent criminal activity. 
* * * * *

    33. In Sec. 982.54, add a new paragraph (d)(4)(iii) to read as 
follows:

Sec. 982.54  Administrative plan.

* * * * *
    (d) * * *
    (4) * * *
    (iii) Standards for denying admission or terminating assistance 
based on criminal activity or alcohol abuse in accordance with 
Sec. 982.553;
* * * * *

    34. In Sec. 982.310, revise paragraph (c) and add a new paragraph 
(h) to read as follows:

Sec. 982.310  Owner termination of tenancy.

* * * * *
    (c) Criminal activity. (1) Evicting drug criminals due to drug 
crime on or near the premises. The lease must provide that drug-related 
criminal activity engaged in, on or near the premises by any tenant, 
household member, or guest, or such activity engaged in on the premises 
by any other person under the tenant's control, is grounds for the 
owner to terminate tenancy. In addition, the lease must provide that 
the owner may evict a family when the owner determines that a household 
member is illegally using a drug or when the owner determines that a 
pattern of illegal use of a drug interferes with the health, safety, or 
right to peaceful enjoyment of the premises by other residents.
    (2) Evicting other criminals. (i) Threat to other residents. The 
lease must provide that the owner may terminate tenancy for any of the 
following types of criminal activity by a covered person:
    (A) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of the premises by other residents 
(including property management staff residing on the premises);
    (B) Any criminal activity that threatens the health, safety, or 
right to peaceful enjoyment of their residences by persons residing in 
the immediate vicinity of the premises; or
    (C) Any violent criminal activity on or near the premises by a 
tenant, household member, or guest, or any such activity on the 
premises by any other person under the tenant's control.
    (ii) Fugitive felon or parole violator. The lease must provide that 
the owner may terminate the tenancy if a tenant is:
    (A) Fleeing to avoid prosecution, or custody or confinement after 
conviction, for a crime, or attempt to commit a crime, that is a felony 
under the laws of the place from which the individual flees, or that, 
in the case of the State of New Jersey, is a high misdemeanor; or
    (B) Violating a condition of probation or parole imposed under 
Federal or State law.
    (3) Evidence of criminal activity. The owner may terminate tenancy 
and evict by judicial action a family for criminal activity by a 
covered person in accordance with this section if the owner determines 
that the covered person has engaged in the criminal activity, 
regardless of whether the covered person has been arrested or convicted 
for such activity and without satisfying the standard of proof used for 
a criminal conviction. (See part 5, subpart J, of this title for 
provisions concerning access to criminal records.)
* * * * *
    (h) Termination of tenancy decisions.--(1) General. If the law and 
regulation permit the owner to take an action but do not require action 
to be taken, the owner may take or not take the action in accordance 
with the owner's standards for eviction. The owner may consider all of 
the circumstances relevant to a particular eviction case, such as:
    (i) The seriousness of the offending action;
    (ii) The effect on the community of denial or termination or the 
failure of the owner to take such action;
    (iii) The extent of participation by the leaseholder in the 
offending action;
    (iv) The effect of denial of admission or termination of tenancy on 
household members not involved in the offending activity;
    (v) The demand for assisted housing by families who will adhere to 
lease responsibilities;
    (vi) The extent to which the leaseholder has shown personal 
responsibility and taken all reasonable steps to prevent or mitigate 
the offending action;
    (vii) The effect of the owner's action on the integrity of the 
program.
    (2) Exclusion of culpable household member. The owner may require a 
tenant to exclude a household member in order to continue to reside in 
the assisted unit, where that household member has participated in or 
been culpable for action or failure to act that warrants termination.
    (3) Consideration of rehabilitation. In determining whether to 
terminate

[[Page 28805]]

tenancy for illegal use of drugs or alcohol abuse by a household member 
who is no longer engaged in such behavior, the owner may consider 
whether such household member is participating in or has successfully 
completed a supervised drug or alcohol rehabilitation program, or has 
otherwise been rehabilitated successfully (42 U.S.C. 13661). For this 
purpose, the owner may require the tenant to submit evidence of the 
household member's current participation in, or successful completion 
of, a supervised drug or alcohol rehabilitation program or evidence of 
otherwise having been rehabilitated successfully.
    (4) Nondiscrimination limitation. The owner's termination of 
assistance actions must be consistent with fair housing and equal 
opportunity provisions of Sec. 5.105 of this title.

    35. Amend Sec. 982.551 by redesignating paragraph (m) as paragraph 
(n); adding a new paragraph (m); and revising paragraph (l) to read as 
follows:

Sec. 982.551  Obligations of participant.

* * * * *
    (l) Crime by household members. The members of the household may 
not engage in drug-related criminal activity or violent criminal 
activity or other criminal activity that threatens the health, safety 
or right to peaceful enjoyment of other residents and persons residing 
in the immediate vicinity of the premises (see Sec. 982.553).
    (m) Alcohol abuse by household members. The members of the 
household must not abuse alcohol in a way that threatens the health, 
safety or right to peaceful enjoyment of other residents and persons 
residing in the immediate vicinity of the premises.
* * * * *

    36. Amend Sec. 982.552 by revising paragraphs (b)(1), (c)(1)(iv) 
and (c)(2), and by adding new paragraph (c)(1)(xi), to read as follows:

Sec. 982.552  PHA denial or termination of assistance for family.

* * * * *
    (b) Requirement to deny admission or terminate assistance. (1) For 
provisions on denial of admission and termination of assistance for 
illegal drug use, other criminal activity, and alcohol abuse that would 
threaten other residents, see Sec. 982.553.
* * * * *
    (c) * * *
    (1) * * *
    (iv) If any member of the family has committed fraud, bribery, or 
any other corrupt or criminal act in connection with any Federal 
housing program (see also Sec. 982.553(a)(1));
* * * * *
    (xi) If the family has been engaged in criminal activity or alcohol 
abuse as described in Sec. 982.553.
    (2) Consideration of circumstances. In determining whether to deny 
or terminate assistance because of action or failure to act by members 
of the family:
    (i) The PHA may consider all relevant circumstances such as the 
seriousness of the case, the extent of participation or culpability of 
individual family members, mitigating circumstances related to the 
disability of a family member, and the effects of denial or termination 
of assistance on other family members who were not involved in the 
action or failure.
    (ii) The PHA may impose, as a condition of continued assistance for 
other family members, a requirement that other family members who 
participated in or were culpable for the action or failure will not 
reside in the unit. The PHA may permit the other members of a 
participant family to continue receiving assistance.
    (iii) In determining whether to deny admission or terminate 
assistance for illegal use of drugs or alcohol abuse by a household 
member who is no longer engaged in such behavior, the PHA consider 
whether such household member is participating in or has successfully 
completed a supervised drug or alcohol rehabilitation program, or has 
otherwise been rehabilitated successfully (42 U.S.C. 13661). For this 
purpose, the PHA may require the applicant or tenant to submit evidence 
of the household member's current participation in, or successful 
completion of, a supervised drug or alcohol rehabilitation program or 
evidence of otherwise having been rehabilitated successfully.
    (iv) If the family includes a person with disabilities, the PHA 
decision concerning such action is subject to consideration of 
reasonable accommodation in accordance with part 8 of this title.
    (v) Nondiscrimination limitation. The PHA's admission and eviction 
actions must be consistent with fair housing and equal opportunity 
provisions of Sec. 5.105 of this title.
* * * * *

    37. Revise Sec. 982.553 to read as follows:

Sec. 982.553  Denial of admission and termination of assistance for 
criminals and alcohol abusers.

    (a) Denial of admission. (1) Prohibiting admission of drug 
criminals.
    (i) The PHA must prohibit admission to the program of an applicant 
for three years from the date of eviction if a household member has 
been evicted from federally assisted housing for drug-related criminal 
activity. However, the PHA may admit the household if the PHA 
determines:
    (A) That the evicted household member who engaged in drug-related 
criminal activity has successfully completed a supervised drug 
rehabilitation program approved by the PHA; or
    (B) That the circumstances leading to eviction no longer exist (for 
example, the criminal household member has died or is imprisoned).
    (ii) The PHA must establish standards that prohibit admission if:
    (A) The PHA determines that any household member is currently 
engaging in illegal use of a drug;
    (B) The PHA determines that it has reasonable cause to believe that 
a household member's illegal drug use or a pattern of illegal drug use 
may threaten the health, safety, or right to peaceful enjoyment of the 
premises by other residents; or
    (C) Any household member has ever been convicted of drug-related 
criminal activity for manufacture or production of methamphetamine on 
the premises of federally assisted housing.
    (2) Prohibiting admission of other criminals--(i) Mandatory 
prohibition. The PHA must establish standards that prohibit admission 
to the program if any member of the household is subject to a lifetime 
registration requirement under a State sex offender registration 
program. In this screening of applicants, the PHA must perform criminal 
history background checks necessary to determine whether any household 
member is subject to a lifetime sex offender registration requirement 
in the State where the housing is located and in other States where the 
household members are known to have resided.
    (ii) Permissive prohibitions. (A) The PHA may prohibit admission of 
a household to the program if the PHA determines that any household 
member is currently engaged in, or has engaged in during a reasonable 
time before the admission:
    (1) Drug-related criminal activity;
    (2) Violent criminal activity;
    (3) Other criminal activity which may threaten the health, safety, 
or right to peaceful enjoyment of the premises by other residents or 
persons residing in the immediate vicinity; or
    (4) Other criminal activity which may threaten the health or safety 
of the owner, property management staff, or persons performing a 
contract

[[Page 28806]]

administration function or responsibility on behalf of the PHA 
(including a PHA employee or a PHA contractor, subcontractor or agent).
    (B) The PHA may establish a period before the admission decision 
during which an applicant must not to have engaged in the activities 
specified in paragraph (a)(2)(i) of this section (``reasonable time'').
    (C) If the PHA previously denied admission to an applicant because 
a member of the household engaged in criminal activity, the PHA may 
reconsider the applicant if the PHA has sufficient evidence that the 
members of the household are not currently engaged in, and have not 
engaged in, such criminal activity during a reasonable period, as 
determined by the PHA, before the admission decision.
    (1) The PHA would have ``sufficient evidence'' if the household 
member submitted a certification that she or he is not currently 
engaged in and has not engaged in such criminal activity during the 
specified period and provided supporting information from such sources 
as a probation officer, a landlord, neighbors, social service agency 
workers and criminal records, which the PHA verified.
    (2) For purposes of this section, a household member is ``currently 
engaged in'' criminal activity if the person has engaged in the 
behavior recently enough to justify a reasonable belief that the 
behavior is current.
    (3) Prohibiting admission of alcohol abusers. The PHA must 
establish standards that prohibit admission to the program if the PHA 
determines that it has reasonable cause to believe that a household 
member's abuse or pattern of abuse of alcohol may threaten the health, 
safety, or right to peaceful enjoyment of the premises by other 
residents.
    (b) Terminating assistance--(1) Terminating assistance for drug 
criminals. (i) The PHA must establish standards that allow the PHA to 
terminate assistance for a family under the program if the PHA 
determines that:
    (A) Any household member is currently engaged in any illegal use of 
a drug; or
    (B) A pattern of illegal use of a drug by any household member 
interferes with the health, safety, or right to peaceful enjoyment of 
the premises by other residents.
    (ii) The PHA must immediately terminate assistance for a family 
under the program if the PHA determines that any member of the 
household has ever been convicted of drug-related criminal activity for 
manufacture or production of methamphetamine on the premises of 
federally assisted housing.
    (iii) The PHA must establish standards that allow the PHA to 
terminate assistance under the program for a family if the PHA 
determines that any family member has violated the family's obligation 
under Sec. 982.551 not to engage in any drug-related criminal activity.
    (2) Terminating assistance for other criminals. The PHA must 
establish standards that allow the PHA to terminate assistance under 
the program for a family if the PHA determines that any household 
member has violated the family's obligation under Sec. 982.551 not to 
engage in violent criminal activity.
    (3) Terminating assistance for alcohol abusers. The PHA must 
establish standards that allow termination of assistance for a family 
if the PHA determines that a household member's abuse or pattern of 
abuse of alcohol may threaten the health, safety, or right to peaceful 
enjoyment of the premises by other residents.
    (c) Evidence of criminal activity. The PHA may terminate assistance 
for criminal activity by a household member as authorized in this 
section if the PHA determines, based on a preponderance of the 
evidence, that the household member has engaged in the activity, 
regardless of whether the household member has been arrested or 
convicted for such activity.
    (d) Use of criminal record.--(1) Denial. If a PHA proposes to deny 
admission for criminal activity as shown by a criminal record, the PHA 
must provide the subject of the record and the applicant with a copy of 
the criminal record. The PHA must give the family an opportunity to 
dispute the accuracy and relevance of that record, in the informal 
review process in accordance with Sec. 982.554. (See part 5, subpart J 
for provision concerning access to criminal records.)
    (2) Termination of assistance. If a PHA proposes to terminate 
assistance for criminal activity as shown by a criminal record, the PHA 
must notify the household of the proposed action to be based on the 
information and must provide the subject of the record and the tenant 
with a copy of the criminal record. The PHA must give the family an 
opportunity to dispute the accuracy and relevance of that record in 
accordance with Sec. 982.555.
    (3) Cost of obtaining criminal record. The PHA may not pass along 
to the tenant the costs of a criminal records check.

    Dated: April 25, 2001.
Mel Martinez,
Secretary.
[FR Doc. 01-12840 Filed 5-23-01; 8:45 am]
BILLING CODE 4210-33-P 

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