section_id,title_number,title_name,chapter,subchapter,part_number,part_name,subpart,subpart_name,section_number,section_heading,agency,authority,source_citation,amendment_citations,full_text 20:20:1.0.2.8.37.0.155.1,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.1 Introduction.,SSA,,,,"(a) Explanation of representative payment. This part explains the principles and procedures that the Board follows in determining whether to make representative payment and in selecting a representative payee. It also explains the responsibilities that a representative payee has concerning the use of the funds which he or she receives on behalf of an annuitant. A representative payee may be either a person or an organization selected by the Board to receive benefits on behalf of an annuitant. A representative payee will be selected if the Board believes that the interest of an annuitant will be served by representative payment rather than direct payment of benefits. Generally, the Board will appoint a representative payee if it determines that the annuitant is not able to manage or direct the management of benefit payments in his or her interest. (b) Statutory authority. Section 12 of the Railroad Retirement Act provides that every annuitant and claimant shall be conclusively presumed to have been competent until the date on which the Board receives a notice in writing that a legal guardian or other person legally vested with the care of the person or estate of an incompetent or a minor has been appointed: Provided, however, That despite receiving such notice, the Board may, if it finds the interests of such annuitant or claimant to be served thereby, recognize actions by, conduct transactions with, and make payments to such annuitant or claimant. (c) Policy used to determine whether to make representative payment. (1) In accordance with section 12 of the Railroad Retirement Act, the Board's policy is that every annuitant has the right to manage his or her own benefits. However, some annuitants due to mental or physical condition or due to their youth may be unable to do so. If the Board determines that the interests of an annuitant would be better served if benefit payments were certified to another person as representative payee, the Board will appoint a representative payee in accordance with the procedures set forth in this part. The Board may appoint a representative payee even if the annuitant is a legally competent individual. If the annuitant is a legally incompetent individual, the Board may appoint the legal guardian or some other person as a representative payee. (2) If payment is being made directly to an annuitant and a question arises concerning his or her ability to manage or direct the management of benefit payments, the Board may, if the annuitant is 18 years old or older and has not been adjudged legally incompetent, continue to pay the annuitant until the Board makes a determination about his or her ability to manage or direct the management of benefit payments and the selection of a representative payee." 20:20:1.0.2.8.37.0.155.10,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.10 Use of benefit payments.,SSA,,,,"(a) Current maintenance. Payments made to an individual as representative payee on behalf of an annuitant shall be considered as having been applied for the use and benefit of the annuitant when they are used for the annuitant's current maintenance. Current maintenance includes costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items. (b) Institutional care. If an annuitant is receiving care in a Federal, state, or private institution because of mental or physical incapacity, current maintenance includes the customary charges made by the institution in providing care and maintenance, as well as expenditures for those items which will aid in the annuitant's recovery or release from the institution or expenses for personal needs which will improve the annuitant's conditions while in the institution. (c) Support of legal dependents. If the current maintenance needs of the annuitant are met, the representative payee may use part of the payments for the support of the annuitant's legally dependent spouse, child, and/or parent. (d) Claims of creditors. Where a debt arose prior to the first month for which benefits are certified to a representative payee, the representative payee may satisfy such debt out of present benefit payments only if the current and reasonably foreseeable needs of the annuitant are met. If the accrual is not required for the annuitant's current maintenance and the annuitant had no foreseeable needs which would require large disbursements, the expenditure of the accrual or part thereof for the past due maintenance charges would be consistent with the Board's guidelines." 20:20:1.0.2.8.37.0.155.11,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.11 Conservation and investment of benefit payments.,SSA,,,,"(a) General. If benefit payments made to a representative payee are not needed for the annuitant's current maintenance or reasonably foreseeable needs or the support of legal dependents or to pay creditors in accordance with § 266.10, they shall be conserved or invested on behalf of the annuitant. Such funds must be invested in accordance with the rules applicable to investment of trust estates by trustees. Any investment must show clearly that the representative payee holds the property in trust for the annuitant. (b) Preferred investments. Preferred investments for excess funds are deposits in an interest or dividend paying account in a bank, trust company, credit union, or savings and loan association which is insured under either Federal or State law, direct obligations of the United States Government or obligations for which both principal and interest are guaranteed unconditionally by the United States Government. The account must be in a form which shows clearly that the representative payee has only a fiduciary, and not a personal, interest in the funds. If the payee is the legally appointed guardian or fiduciary of the annuitant, the account may be established to indicate this relationship. If the payee is not the legally appointed guardian or fiduciary, the accounts may be established as follows: (1) For U.S. Savings Bonds— (Name of annuitant) (Social Security Number), for whom (Name of payee) is representative payee for Railroad Retirement benefits; (Name of annuitant) (Social Security Number), for whom (Name of payee) is representative payee for Railroad Retirement benefits; (2) For interest or dividend paying accounts— (Name of annuitant) by (Name of payee), representative payee. (Name of annuitant) by (Name of payee), representative payee. (c) Interest and dividend payments. The interest and dividends which result from an investment are the property of the annuitant and may not be considered to be the property of the representative payee. (d) Prohibition against commingling. The representative payee shall not commingle his or her personal funds with the representative payments. A representative payee may consolidate and maintain an annuitant's funds in an account with other annuitants if he or she maintains a separate, accurate and complete accounting of each annuitant's funds under his or her control." 20:20:1.0.2.8.37.0.155.12,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,"§ 266.12 Effect of matters or actions submitted or taken by legal guardian, etc.",SSA,,,,"All matters and actions in connection with an annuity submitted or taken by the guardian or other person legally vested with the care of the person or estate of an incompetent or a minor shall be considered by the Board in the same manner and with the same effect as though such matters or actions had been submitted or taken by the ward, if the ward had capacity to act in his or her own behalf; Provided, however, That the Board may, if it deems it necessary, require the guardian or other person legally vested with the care of the person or estate of an incompetent or a minor to submit a certified copy of an order from the court of appointment authorizing some particular action which the guardian or other person legally vested with the care of the person or estate desires to take in connection with the application." 20:20:1.0.2.8.37.0.155.13,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.13 When a new representative payee will be selected.,SSA,,,,"When the Board learns that the interests of the annuitant are not served by continuing payment to the present representative payee or that the present representative payee is no longer able to carry out the payee responsibilities, the Board will undertake to find a new representative payee. The Board will select a new representative payee if the Board finds a preferred payee or if the present payee— (a) Has not used the benefit payments on the annuitant's behalf in accordance with the guidelines in this part; (b) Has not carried out the other responsibilities described in this part; (c) Dies; (d) No longer wishes to be representative payee; (e) Is unable to manage the benefit payments; or (f) Fails to cooperate, within a reasonable time, in providing evidence, accounting, or other information which the Board requests." 20:20:1.0.2.8.37.0.155.14,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.14 When representative payment will be stopped.,SSA,,,,"If an annuitant receiving representative payment shows the Board that he or she is mentally and physically able to manage or direct the management of benefit payments, the Board will make direct payment to the annuitant. Information which the annuitant may give to the Board to support his or her request for direct payment include the following: (a) A physician's statement regarding the annuitant's condition, or a statement by a medical officer of the institution where the annuitant is or was confined, showing that the annuitant is able to manage or direct the management of his or her funds; (b) A certified copy of a court order restoring the annuitant's rights in a case where an annuitant was adjudged legally incompetent; or (c) Other evidence which establishes the annuitant's ability to manage or direct the management of benefits." 20:20:1.0.2.8.37.0.155.15,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.15 Transfer of accumulated benefit payments.,SSA,,,,"A representative payee who has conserved or invested funds from railroad retirement payments made to him or her on behalf of an annuitant shall, upon direction of the Board, transfer any such funds (including interest or dividends earned from investment of such funds) to a successor representative payee appointed by the Board, or, at the option of the Board, shall transfer such funds, including interest, to the Board for payment to a successor payee or to the annuitant." 20:20:1.0.2.8.37.0.155.2,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.2 Recognition by the Board of a person to act in behalf of another.,SSA,,,,"(a) Regardless of the receipt of written notice of the appointment of a guardian or other person legally vested with the care of the person or estate of an incompetent or a minor who is receiving or claiming benefits or to whom any right or privilege is extended under the law, the Board may, in its discretion, validly recognize actions by and conduct transactions with others acting on behalf of the individual found by the Board to be a minor or to be unable to manage his or her affairs, if the Board finds such actions or transactions to be in the best interest of such individual. (b) In the absence of a written notice of the appointment of a guardian or other person legally vested with the care of the person or estate of an incompetent or minor, the Board shall, except where special circumstances appear, recognize a person to act on behalf of an individual under the following circumstances: (1) When the individual has been adjudged mentally incompetent by a court having jurisdiction to do so; (2) When the individual has been committed to a mental institution by a court having jurisdiction to do so; (3) When the individual is an inmate of a mental institution; (4) When the individual is less than 16 years of age; or (5) When the individual is between 16 and 18 years of age and is in the care of another person and does not have the capacity to act on his or her own behalf." 20:20:1.0.2.8.37.0.155.3,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.3 Information considered in determining whether to make representative payments.,SSA,,,,"In determining whether to make representative payment, the Board may consider the following information: (a) Evidence of legal guardianship. Evidence of the appointment of a legal guardian or other person legally vested with the care of the person or estate of an incompetent or a minor shall be a certified copy of the court's determination. (b) Medical evidence. The Board may use medical evidence, when such is available, to help determine whether an annuitant is capable of managing or directing the management of benefit payments. For example, a statement by a physician or other medical professional based upon his or her recent examination of the annuitant and his or her knowledge of the annuitant's present condition will be used in the Board's determination, if it includes information concerning the nature of the annuitant's illness, the annuitant's chances for recovery and the opinion of the physician or other medical professional as to whether the annuitant is able to manage or direct the management of benefit payments. (c) Other evidence. The Board may also consider statements of relatives, friends, and other people in a position to know and observe the annuitant, which contain information helpful to the Board in deciding whether the annuitant is able to manage or direct the management of benefit payments." 20:20:1.0.2.8.37.0.155.4,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.4 Information considered in selecting a representative payee.,SSA,,,,"In selecting a representative payee, the Board tries to select the person, agency, organization or institution that will best serve the interest of the annuitant. In making this selection, the Board may consider such factors as the following: (a) The relationship of the person to the annuitant, including the type of relationship, e.g., family or legal guardianship; degree of relationship, if the person is a family member; and the length of association, if a non-family member; (b) The amount of interest that the person shows in the annuitant, including the contributions the person makes to the welfare of the annuitant and the contacts and frequency of such contacts with the annuitant; (c) Any legal authority the person, agency, organization or institution has to act on behalf of the annuitant; (d) Whether the potential payee has custody of the annuitant; (e) Whether the potential payee is in a position to know of and look after the needs of the annuitant; (f) Verification of the social security account number, name, address, telephone number, place of employment, and main source of income if applicable, accepted as part of any person's application for designation as a representative payee, unless such person's identification has already been established to the satisfaction of the Board; (g) Whether an applicant for designation as a representative payee has ever been convicted of a felony or misdemeanor under the statutes administered by the Board or the Social Security Act, or convicted of a felony under any other Federal or State law; and (h) Whether the services of such person as representative payee have previously been terminated, suspended, or declined by the Board or the Social Security Administration for: (1) Misuse of the benefits of the annuitant for whom they were intended; (2) Failure to comply with any provision of or regulation under the Railroad Retirement Act or the Social Security Act; or (3) Failure to meet the requirements of this part. (i) Whether the potential payee is a creditor of the annuitant. A creditor who provides goods and services to the annuitant ordinarily may not serve as a representative payee unless such appointment poses no substantial conflict of interest and unless the creditor is: (1) A relative who resides with the annuitant; (2) A legal guardian or legal representative of the annuitant; or (3) A licensed or certified care facility (or owner, administrator or employee thereof) where there annuitant resides." 20:20:1.0.2.8.37.0.155.5,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.5 Order of preference in selecting a representative payee.,SSA,,,,"As a guide in selecting a representative payee, categories of preferred payees have been established. These preferences are flexible. The primary concern of the Board is to select the payee who will best serve the annuitant's interest. The preferences are: (a) For annuitants 18 years old or older, the preference is: (1) A legal guardian, spouse, or other relative who has custody of the annuitant or who demonstrates strong concern for the personal welfare of the annuitant; (2) A friend who has custody of the annuitant or demonstrates strong concern for the personal welfare of the annuitant; (3) A public or nonprofit agency or institution having custody of the annuitant; (4) A private institution operated for profit and licensed under State law, which has custody of the annuitant; and (5) Persons other than those listed above who are qualified to carry out the responsibilities of a representative payee and who are able and willing to serve as a payee for an annuitant; e.g., members of community groups or organizations who volunteer to serve as representative payee for an annuitant. (b) For annuitants under age 18, the preference is: (1) A natural or adoptive parent who has custody of the annuitant, or a legal guardian; (2) A natural or adoptive parent who does not have custody of the annuitant, but is contributing toward the annuitant's support and is demonstrating strong concern for the annuitant's well-being; (3) A relative or stepparent who has custody of the annuitant; (4) A natural or adoptive parent who does not have custody of the annuitant and is not contributing toward his or her support but is demonstrating strong concern for the annuitant's well-being; (5) A relative who does not have custody of the annuitant but is contributing toward the annuitant's support and is demonstrating concern for the annuitant's well-being; (6) A relative or close friend who does not have custody of the annuitant but is demonstrating concern for the annuitant's well-being; and (7) An authorized social agency or custodial institution." 20:20:1.0.2.8.37.0.155.6,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.6 Information to be submitted by a representative payee-applicant; face-to-face interview.,SSA,,,,"Before the Board selects a representative payee, the Board may request the payee-applicant to provide information concerning the factors listed in § 266.4 of this part. An employee of the Board may also conduct a face-to-face interview with the payee-applicant." 20:20:1.0.2.8.37.0.155.7,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.7 Accountability of a representative payee.,SSA,,,,"(a) A representative payee is accountable for the use of benefits. The Board will require periodic written reports from representative payees. The Board may also, at the Board's option, verify how a representative payee used benefit payments. A representative payee must keep records of what was done with all benefit payments in order to make accounting reports. The Board may ask the following questions: (1) The amount of benefit payments on hand at the beginning of the accounting period; (2) How the benefit payments were used; (3) How much of the benefit payments were saved and how the savings were invested; (4) Where the annuitant lived during the accounting period; (5) The amount of the annuitant's income from other sources during the accounting period. The Board may ask for information about other funds to enable the Board to evaluate the use of benefit payments; and (6) Whether the representative payee has been convicted of a felony or misdemeanor offense under the statutes administered by the Board or by the Social Security Administration within the past 15 years or whether any such charges are pending. (b) An individual to whom payments are certified as representative payee on behalf of an annuitant shall submit a written report in such form and at such times as the Board may require, accounting for the payments certified to him or her on behalf of the annuitant. If, however, such payee is a court-appointed fiduciary and, as such, is required to make an annual accounting to the court, a true copy of each such account filed with the court may be submitted in lieu of the accounting form prescribed by the Board. If any representative payee fails to submit the required accounting within a reasonable period of time after it is requested, no further payments shall be made to him or her on behalf of the annuitant unless for good cause shown, the default of the representative payee is excused by the Board, and the required accounting is thereafter submitted. (c) At any time after the Board has selected a representative payee, the Board may ask such payee to submit information showing a continuing relationship to the annuitant and a continuing responsibility for the care of the annuitant. If the representative payee does not give the Board the requested information within a reasonable period of time, the Board may stop paying such payee unless the Board determines that the payee had a good reason for not complying with the Board's request, and the Board receives the information requested. (d) Where, pursuant to paragraph (b) or (c) of this section, the Board suspends payments, such suspension shall not exceed a period of 30 days; thereafter, the payments will be made to the annuitant except where the annuitant is an unemancipated minor under age 18 or where in the Board's judgment the interests of the annuitant would not be served by releasing payment to the annuitant." 20:20:1.0.2.8.37.0.155.8,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.8 Advance notice of the determination to make representative payment.,SSA,,,,"(a) As a general rule, whenever the Board intends to make representative payment and to name a representative payee, the Board will notify the annuitant or, in the case of an unemancipated minor under age 18, or an individual who is legally incompetent, the individual acting on his or her behalf of the Board's proposed actions. Such notice will tell the person that the Board plans to name a representative payee and who that payee will be. The notice will also ask the person to contact the Board within 15 days of the date of the notice if he or she objects to either proposed action. If he or she objects to either proposed action, the objecting party may— (1) Review the evidence upon which the proposed actions will be based; and (2) Submit any additional evidence regarding the proposed actions. (b) If the objecting party objects to the proposed actions, the Board will review its proposed determinations and consider any additional information provided. The Board will then issue a decision on whether to appoint a representative payee and who that payee will be. If the objecting party is dissatisfied with either determination, he or she may request a reconsideration under part 260 of this chapter. (c) If the objecting party does not file a timely objection to the proposed actions, the Board will issue a decision on whether to appoint a representative payee and who that payee will be. If the objecting party is dissatisfied with either determination, he or she may request a reconsideration under part 260 of this chapter. (d) A request for reconsideration or an appeal from a determination under this section under part 260 of this chapter shall not prevent the Board from making payments to a representative payee during the pendency of such reconsideration or appeal. (e) The Board's failure or refusal to select an individual as representative payee or the Board's termination of representative payee status with respect to an individual is not subject to a request for reconsideration or an appeal under part 260 of this chapter by such individual." 20:20:1.0.2.8.37.0.155.9,20,Employees' Benefits,II,B,266,PART 266—REPRESENTATIVE PAYMENT,,,,§ 266.9 Responsibilities of a representative payee.,SSA,,,,"(a) A representative payee shall, subject to review by the Board and to such requirements as it may from time-to-time prescribe, apply the payments made to him or her on behalf of the annuitant only for the use and benefit of such annuitant, and in a manner and for purposes which are in the annuitant's best interests. (b) A representative payee shall notify the Board of any event that will affect the amount of benefits the annuitant receives or the right of the annuitant to receive benefits. (c) A representative payee shall notify the Board of any change in his or her circumstances that would affect performance of the payee responsibilities." 24:24:2.1.1.2.28.1.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,A,Subpart A—General Provisions,,§ 266.1 Purpose and scope.,HUD,,,"[85 FR 83440, Dec. 22, 2020]","(a) Authority and scope. (1) Section 542 of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z-22), directs the Secretary of the Department of Housing and Urban Development (HUD), acting through the Federal Housing Administration (FHA), to carry out programs that will provide new forms of Federal credit enhancement for multifamily loans. Section 542, entitled, “Multifamily Mortgage Credit Programs,” provides insurance authority independent from that provided by the National Housing Act. (2) Section 542(c) of the Housing and Community Development Act of 1992 specifically directs HUD to carry out a program of risk-sharing with qualified State and local housing finance agencies (HFAs). The qualified HFAs are authorized to underwrite and process loans. HUD provides full mortgage insurance on affordable multifamily housing projects processed by such HFAs under this program. Through risk-sharing agreements with HUD, HFAs contract to reimburse HUD for a portion of the loss from any defaults that occur while HUD insurance is in force. (3) The extent to which HUD directs qualified HFAs regarding their underwriting standards, loan terms and conditions, and asset management and servicing procedures is related to the proportion of the risk taken by an HFA. (b) Purpose. The primary purpose of this program is to provide credit enhancement for multifamily loans, i.e., utilization of full insurance by HUD, pursuant to risk-sharing agreements with qualified housing finance agencies, for the development of affordable housing. The utilization of Federal credit enhancements increases access to capital markets and, thereby, increases the supply of affordable multifamily housing. By permitting HFAs to underwrite, process, and service loans and to manage and dispose of properties that fall into default, affordable housing is made available to eligible families and individuals in a timely manner." 24:24:2.1.1.2.28.1.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,A,Subpart A—General Provisions,,§ 266.5 Definitions.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, Dec. 22, 2020]","Act means the Housing and Community Development Act of 1992. Affordable housing means a project that meets the requirements for a qualified low-income housing project under section 42(g) of the Internal Revenue Code of 1986 (26 U.S.C. 42(g)). For purposes of this part, the reference to a utility allowance in 26 U.S.C. 42(g) includes charges for the occupancy of a cooperative unit. Board and Care/Assisted Living Facility means a residential facility for independent living that is regulated by State or local government that provides continuous protective oversight and assistance with the activities of daily living to frail elderly persons or other persons needing such assistance. Continuous protective oversight may range from as little as awareness on the part of management staff of residents' whereabouts (and the ability to intervene in the event of crisis) to a higher level of services and assistance. Assistance with the activities of daily living may include, but is not limited to, bathing, dressing, eating, getting in and out of bed or chairs, walking, going outdoors, using the toilet, laundry, home management, meal preparation, shopping, supervision of medication, and housework. Commissioner means the Federal Housing Commissioner or the Commissioner's authorized representative. Contract of insurance means the agreement evidenced by the endorsement of the Commissioner upon the credit instrument given in connection with an insured mortgage, incorporating by reference the regulations in this part and the applicable provisions of the Act. Credit subsidy means the cost of a direct loan or loan guarantee under the Federal Credit Reform Act of 1990 (subtitle B of title XIII of the Omnibus Budget Reconciliation Act of 1990, Public Law 101-508, approved Nov. 5, 1990). Debenture means the instrument issued by the HFA to HUD upon payment of an insurance claim by HUD. The instrument must be in the standard form of a State or Municipal Debenture issued under the Uniform Commercial Code, where applicable, and must be supported by the full faith and credit of the HFA. The instrument must define the terms and conditions and the risk-sharing portion which the HFA will pay at the end of the term of the Debenture, and must be for the full amount of the claim payment. The term Debenture may include similar instruments, such as promissory notes and bonds, as mutually agreed upon by the Commissioner and the HFA. Designated offices means the local HUD offices that are assigned the responsibility for program monitoring, imposing or recommending sanctions for program violations, and conducting informal hearings. Firm approval letter means a letter issued by HUD to an HFA upon the positive completion of the HUD-retained reviews described in § 266.210. The letter will apportion units to the project and provide that, so long as the HFA is in good standing and absent fraud or misrepresentation by the HFA, HUD will endorse the project mortgage for insurance upon presentation by the HFA of the required Closing Docket and certifications required by this part and the Commissioner's administrative requirements. Housing finance agency or HFA means any public body, agency, or instrumentality created by a specific act of a State legislature or local municipality empowered to finance activities designed to provide housing and related facilities, through land acquisition, construction or rehabilitation. The term State includes the several States, Puerto Rico, the District of Columbia, Guam, the Trust Territory of the Pacific Islands, American Samoa and the Virgin Islands. Insured mortgage means a valid single first lien given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instrument, if any, secured thereby. Any other financing permitting on property insured under this part must be expressly subordinate to the insured mortgage. Level I participants means HFAs that elect to take 50 percent or more of the risk of loss in 10 percent increments on mortgages issued under this program. Level II participants means HFAs that elect to take 10 or 25 percent of the risk of loss on mortgages issued under this program, dependent on the loan-to-replacement cost or loan-to-value ratio of the project to be insured. Mortgage means such a single first lien upon the real estate as is commonly given to secure advances on, or the unpaid purchase price of, real estate under the laws of the jurisdiction where the real estate is situated, together with the credit instruments, if any, secured thereby. Mortgagee means the original lender under a mortgage and its successors and assigns approved by the Commissioner. Mortgagor means the original borrower under a mortgage and its successor and assigns. Multifamily housing means housing accommodations on the mortgaged property that are designed principally for residential use, conform to standards satisfactory to the Commissioner, and consist of not less than 5 rental units (including cooperative units) on 1 site. These units may be detached, semidetached, row house, or multifamily structures. Qualified HFA means an HFA that meets the requirements described in § 266.100(a). Risk-Sharing Agreement means a contract between an HFA and the Commissioner that incorporates the terms, obligations, and conditions specified in this part. Secondary financing means any grant, loan, inferior lien, or other form of indebtedness used during loan origination prior to HUD endorsement to finance a multifamily property insured under this part which is inferior to the insured mortgage as defined above and does not have first priority for payment. Single Room Occupancy, or SRO, projects means multifamily projects consisting of units that are not required to contain food preparation or sanitary facilities for occupancy by single individuals capable of independent living." 24:24:2.1.1.2.28.1.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,A,Subpart A—General Provisions,,§ 266.15 Risk-Sharing Agreement.,HUD,,,"[61 FR 7947, Feb. 29, 1996]",Execution of a Risk-Sharing Agreement is a prerequisite to participation in this program. The Risk-Sharing Agreement shall be in a form acceptable to the Commissioner. 24:24:2.1.1.2.28.1.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,A,Subpart A—General Provisions,,§ 266.20 Effect of amendments.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, Dec. 22, 2020]",The Commissioner may amend the regulations in this part from time to time. Amendments to the regulations will not adversely affect the interest of a lender under a contract of insurance on any mortgage already insured or on any mortgage to be insured on which HUD has already issued its firm approval letter. 24:24:2.1.1.2.28.1.216.5,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,A,Subpart A—General Provisions,,§ 266.25 Limitation on HUD insurance liability.,HUD,,,,"The Commissioner shall have no obligation to recognize or deal with anyone other than the HFA in its role as mortgagee of record and as party to a risk-sharing agreement with HUD with respect to the rights, benefits, and obligations of the HFA under the contract of insurance." 24:24:2.1.1.2.28.1.216.6,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,A,Subpart A—General Provisions,,§ 266.30 Nonapplicability of 24 CFR part 246.,HUD,,,"[85 FR 83441, Dec. 22, 2020]","The regulations at 24 CFR part 246, pertaining to local rent control, do not apply to projects that are security for mortgages insured under this part." 24:24:2.1.1.2.28.2.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.100 Qualified housing finance agency (HFA).,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 62 FR 20088, Apr. 24, 1997; 85 FR 83441, Dec. 22, 2020]","(a) Qualifications. To participate in the program, an HFA must apply and be specifically approved for the program described in this part, in addition to being approved as a mortgagee under § 202.10 of this part. The HFA must maintain eligibility by continuing to comply with the requirements set forth in the Risk-Sharing Agreement and this part. To qualify for participation in the program described in this part, an HFA must: (1) Carry an issuer credit rating of “A” or better, or an equivalent as evaluated by Standard and Poor's or any other nationally recognized rating agency; or (2) Receive an overall rating of “A” for the HFA for its general obligation bonds from a nationally recognized rating agency; or (3) Otherwise demonstrate its capacity as a sound and experienced HFA based on, but not limited to, experience in financing multifamily housing, fund balances, administrative capabilities, investment policy, internal controls, financial management, portfolio quality, and State or local support; and (4) Be a HUD-approved multifamily mortgagee in good standing; and (5) Have at least five years experience in multifamily underwriting; and (6) Certify that: (i) The Department of Justice has not brought a civil rights suit against the HFA, and no suit is pending; (ii) There has not been an adjudication of a civil rights violation in a civil action brought against the HFA by a private individual, unless the HFA is operating in compliance with a court order, or implementing a HUD-approved compliance agreement designed to correct the areas of noncompliance; (iii) There are no outstanding findings of noncompliance with civil rights statutes, Executive Orders, or regulations as a result of formal administrative proceedings, or the Secretary has not issued a charge against the HFA under the Fair Housing Act, unless the HFA is operating under a compliance agreement designed to correct the areas of noncompliance. (b) Approval levels. Approval levels consist of the following: (1) Level I approval to originate, service, and dispose of multifamily mortgages where the HFA uses its own underwriting standards, loan terms and conditions, and asset management and servicing procedures, and assumes 50 to 90 percent of the risk of loss (in 10 percent increments). (2) Level II approval to originate, service, and dispose of multifamily mortgages where the HFA uses underwriting standards, loan terms and conditions, and asset management and servicing procedures approved by HUD, and: (i) When the loan-to-replacement cost ratio for new construction and substantial rehabilitation projects or the loan-to-value ratio for existing projects is greater than or equal to 75 percent, the HFA shall assume 25 percent of the risk of loss. (ii) When the loan-to-replacement cost ratio for new construction and substantial rehabilitation or the loan-to-value ratio for existing projects is less than 75 percent, the HFA shall assume 10 percent, or 25 percent at the HFA's option, of the risk of loss. (3) For HFAs who plan to use Level I and Level II processing, the underwriting standards, loan terms and conditions, and asset management and servicing procedures to be used on Level II loans must be approved by HUD. (4) Every five years, HUD will review the underwriting standards, loan terms and conditions, and asset management and servicing procedures for HFAs with Level II approval. HUD may require changes to these procedures as a condition for continued Level II approval." 24:24:2.1.1.2.28.2.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.105 Application requirements.,HUD,,,"[61 FR 7947, Feb. 29, 1996, as amended at 85 FR 83441, Dec. 22, 2020]","(a) Applications for approval as a HUD-approved multifamily mortgagee. HFAs that are not HUD-approved mortgagees at the time of their application to participate in the program under this part must submit, concurrently, separate applications for approval to participate in the program and for approval to operate as a HUD-approved mortgagee. Application for approval as a HUD-approved mortgagee must be submitted to HUD in accordance with the applicable HUD requirements. (b) Applications for participation in program. Applications from HFAs for approval to participate in the program under this part may be submitted at any time, and must be submitted in the form and manner established by HUD." 24:24:2.1.1.2.28.2.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.110 Reserve requirements.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83441, Dec. 22, 2020]","(a) HFAs with an issuer credit rating of “A” or better or overall rating of “A” or better on general obligation bonds. An HFA with an issuer credit rating of “A” or better, or an equivalent designation, or an HFA with an overall rating of “A” or better on its general obligation bonds, is not required to have additional reserves so long as the HFA maintains that designation or rating, unless the Commissioner determines that a prescribed level of reserves is necessary. If the designation or rating is lost, the HFA must immediately establish a reserve account funded in accordance with the requirements set forth in paragraph (b) of this section. The reserve account must reflect all loans in the HFA's portfolio endorsed under this part. (b) Other HFAs. (1) For other HFAs, a specifically identified dedicated account consisting entirely of liquid assets ( i.e., cash or cash equivalents or readily marketable securities) must be established and maintained in a financial institution acceptable to HUD. This account may be drawn upon by HUD and may be used by the HFA only with the prior written approval of HUD for the purpose of meeting the HFA's risk-sharing obligations under this part. The account must be established prior to the execution of any risk-sharing agreement under this part in an initial amount of not less than $500,000. Thereafter, the HFA must deposit at each loan closing and thereafter maintain the following additional amounts in the dedicated account: (i) $10.00 per $1,000 of the unpaid principal balance that is equal to or less than $50 million; plus (ii) $7.50 per $1,000 of the unpaid principal balance that is greater than $50 million and less than $150 million; plus (iii) $5.00 per $1,000 of the unpaid principal balance that is greater than $150 million. (2) The Commissioner may determine that higher levels of reserves may be necessary." 24:24:2.1.1.2.28.2.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.115 Program monitoring and evaluation.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83441, Dec. 22, 2020]","(a) HFA certifications. HUD will rely heavily on the certifications required of an HFA under this part and such additional certifications as the Commissioner may require in administrative procedures. An HFA's continued participation in the program is predicated upon compliance with these certifications and its recommending for endorsement only those mortgages that comply with requirements of the program, including the HFA's origination, underwriting and closing procedures incorporated by reference into the Risk-Sharing Agreement. (b) Monitoring and evaluation. Monitoring and evaluation activities will focus on compliance with program requirements and performance of the HFA in meeting program objectives of providing affordable housing. They will enable HUD to evaluate the effectiveness of the program as required by section 542(d)(3) of the Act. (c) Responsibility for monitoring and evaluation. The Commissioner or designee will be responsible for overall program monitoring and evaluation. (d) HFA submissions. (1) For each loan insured under this part, basic underwriting and closing information must be submitted in a format specified by HUD and must accompany the closing docket submitted in accordance with § 266.420(b). Information relative to project management and servicing (including disposition) will be required after endorsement. (2) The HFA must submit semi-annual reports setting forth the original mortgage amounts and outstanding principal balances on mortgages the HFA has underwritten, and the status of all projects insured under this part (e.g., current, in default, acquired, under workout agreement, in bankruptcy). For projects where the mortgagor has declared bankruptcy, the HFA must submit information containing the date the bankruptcy was filed and the date the HFA requested the Court to dismiss the bankruptcy proceedings." 24:24:2.1.1.2.28.2.216.5,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.120 Actions for which sanctions may be imposed.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83441, Dec. 22, 2020]","Results of monitoring or other reviews may serve as the basis for the Commissioner's imposing sanctions on the HFA. Violations for which sanctions may be imposed include, but are not limited to: (a) Commission of fraud or making a material misrepresentation by the HFA with respect to any mortgage insured or to any other matter under this part. (b) Assignment or transfer of interest in any insured mortgage not in accord with the requirements of this part. (c) Engagement in business practices that do not conform to generally accepted practices of prudent lenders or that demonstrate irresponsibility. (d) Actions or conduct for which sanctions may be imposed against the HFA by HUD's Mortgagee Review Board under 24 CFR 25.9, which pertains to “notice of administrative action”. (e) Failure to: (1) Reveal in its application for participation in the program all the information required by this part; (2) Notify HUD in a timely manner of any pending or actual changes that would adversely affect HFA operations or financial status; (3) Comply with all eligibility requirements for participation in the program; (4) Issue debentures in the event of an initial claim payment by HUD, or to reimburse HUD for payment of a claim; (5) Maintain an issuer credit rating of “A” or better, or an equivalent designation, or overall rating of “A” on general obligation bonds (or if such rating is lost, comply with paragraph (e)(6) of this section); (6) Establish and maintain a dedicated account, if required, or meet other financial obligations under this program; (7) Perform underwriting, insurance of advances, cost certification, management, servicing or property disposition functions in a prudent and acceptable manner based on the standards incorporated by reference into the Risk-sharing Agreement; (8) Submit financial and other reports required by this part; (9) Comply with any regulatory requirement or with the Risk-Sharing Agreement; (10) Maintain any other standards HUD may establish for participation in this program; (11) Enforce the regulatory agreement provisions with respect to individual projects; (12) Maintain a default ratio acceptable to HUD relative to the HFA's own portfolio and the defaults experienced under this part by other program participants; (13) Consider adequately special risk circumstances without compensating for the higher risks of such transactions ( e.g., high loan-to-value ratios in areas with high vacancy or default rates); or (14) Remit mortgage insurance premiums on a timely basis or failure to refund or credit mortgagor's accounts with overpaid mortgage insurance premiums." 24:24:2.1.1.2.28.2.216.6,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.125 Scope and nature of sanctions.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83441, Dec. 22, 2020]","(a) Actions by Designated Office. Depending on the nature and extent of the noncompliance with the requirements of this part, the Designated Office may take any of the following actions: (1) Require that the HFA execute a trust agreement, establish a trust account in accordance with such agreement, and fund such account which may be drawn upon by HUD for purposes of meeting the HFA's risk-sharing obligations; (2) Require the HFA to assume a higher portion of risk for the subject and future mortgages; (3) Recommend to the Commissioner that the HFA be required to contract its loan servicing or property disposition functions to a third party; (4) Recommend to the Commissioner that the mortgage insurance be terminated in cases of fraud or material misrepresentation by the HFA, or transfer of interest in an insured mortgage or assignment of the mortgage not in accord with the requirements of this part; (5) Recommend to the Commissioner that approval for the HFA to participate in the program be suspended or withdrawn; (6) Recommend to the Commissioner that the HFA's mortgagee approval be withdrawn pursuant to 24 CFR part 25 (regulations of the Mortgagee Review Board) and/or that penalties be imposed pursuant to 24 CFR part 30 (regulations pertaining to Civil Money Penalties; Certain Prohibited Contact); (7) Require additional financial or other reports as may be necessary to monitor the activities of the HFA more closely. (8) Require the HFA to revise any or all of its underwriting, processing, asset management, or servicing policies and procedures as directed by the Commissioner. (b) Actions by Headquarters. HUD Headquarters may impose any of the sanctions set forth or recommended in paragraph (a) of this section based upon its responsibilities for monitoring and overall program oversight. (c) Effect of suspension or withdrawal. A suspension or withdrawal action will not affect any mortgage insurance endorsement in effect on the date of the suspension or withdrawal action. (d) HFA right to informal hearing. (1) Any sanction imposed by a designated office in writing will be immediately effective, will state the grounds for the action, and provide for the HFA's right to an informal hearing before the designated office representative or designee in the designated office. The HFA may request an informal hearing within 10 working days of receipt of the suspension or withdrawal action and the Designated Office shall give the HFA an opportunity to be heard within 10 working days of receipt of the HFA's request. The HFA may be represented by counsel. The Designated Office Representative, or his or her designee, will advise the HFA in writing of the decision within 10 working days of the informal hearing, which decision will constitute final HUD action. (2) Sanctions imposed by Headquarters will be handled in a similar manner, except that the informal hearing shall be before the Commissioner or his or her designee." 24:24:2.1.1.2.28.2.216.7,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,B,Subpart B—Housing Finance Agency Requirements,,§ 266.130 Reinsurance.,HUD,,,,"Reinsurance will be permitted for the portion of the HFA risk, subject to the following requirements: (a) Neither HUD's nor the HFA's position shall be subordinated; (b) The reinsurance may not be used to reduce any reserve or fund balance requirements; and (c) Such reinsurance does not incur an obligation to the Federal Government." 24:24:2.1.1.2.28.3.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.200 Eligible projects.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83441, Dec. 22, 2020]","(a) Minimum project size. Projects insured under this part must consist of five or more rental dwelling units (including cooperative dwelling units) on one site. The site may consist of two or more non-contiguous parcels of land situated so as to comprise a readily marketable real estate entity within an area small enough to allow convenient and efficient management. The units may be detached, semi-detached, row houses, multifamily structures, or mobile home parks (exclusive of the mobile homes). (b) New construction or substantial rehabilitation. Insurance under this part shall be for the purpose of financing the new construction or substantial rehabilitation of projects meeting the other requirements of this part as follows: (1) New construction occurs when all project and construction elements are installed as part of the work. (2) Substantial rehabilitation occurs when the scope of work to improve an existing project exceeds in aggregate cost a sum equal to the base per dwelling unit limit times the applicable high cost factor established by the Commissioner, or when the scope of work involves the replacement of two or more building systems. Replacement is when the cost of replacement work exceeds 50% of the cost of replacing the entire system. The base per dwelling unit limit is $15,933 for 2019, and will be adjusted annually based on the percentage change in the consumer price index. (c) Existing projects. Financing of existing properties for acquisition or refinancing without substantial rehabilitation is allowed. (1) If the financing will result in the preservation of affordable housing, where the property will be maintained as affordable housing for a period of at least 20 years, regardless of whether the loan is prepaid; and (2) Project occupancy is not less than 93 percent (to include consideration of rent in arrears), based on the average occupancy in the project over the most recent 12 months; and (3) The loan to be refinanced has not been in default within the 12 months prior to the date of the application for refinancing; and (4) A capital needs assessment is performed, and funds escrowed for all necessary repairs and replacement reserves funded for future capital repairs; and (5) If the project is subject to a Housing Assistance Payment (HAP) contract, and is not a project financed under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q) by a Level I participant, then: (i) The owner of the property agrees to renew the HAP contract for a 20-year term; (ii) Existing and post-refinance HAP residual receipts are set aside to be used to reduce future HAP payments; and (iii) The HUD-insured mortgage does not exceed an amount supportable by the lower of the unit rents being collected under the rental assistance agreement or the unit rents being collected at unassisted projects in the market area that are similar in amenities and location to the project for which insurance is being requested; and (6) For Level II participants only, the HUD-insured mortgage may not exceed the sum of the existing indebtedness, cost of refinancing, or acquisition, the cost of repairs and reasonable transaction costs as determined by the Commissioner. (This paragraph does not apply to Level I participants.) (d) Projects receiving section 8 rental subsidies or other rental subsidies. Projects receiving project-based housing assistance payments under section 8 of the U.S. Housing Act of 1937 (42 U.S.C.1437f) or other rental subsidies and meeting the requirements of this part may be insured under this part only if the mortgage does not exceed an amount supportable by the lower of the unit rents being or to be collected under the rental assistance agreement or the unit rents being collected at unassisted projects in the market that are similar in amenities and location to the project for which insurance is being requested. This paragraph does not apply to projects of Level I participants if those projects are financed under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q). (e) SRO projects. Single room occupancy (SRO) projects, as defined in § 266.5, are eligible for insurance under this part. Units in SRO projects must be subject to 30-calendar day or longer leases; however, rent payments may be made on a weekly basis in SRO projects. (f) Board and care/assisted living facilities. Board and care projects and assisted living facilities may be insured if the facilities meet the definition of those terms in § 266.5. (g) Elderly projects. Projects or parts of projects specifically designed for the use and occupancy by elderly families. An elderly family means any household where the head or spouse is 62 years of age or older, including children under 18, and also any single person who is 62 years of age or older. (h) Housing for older persons. Projects eligible for and in compliance with 42 U.S.C. 3607(b) and 24 CFR part 100, subpart E. (i) Zoning requirements. Projects insured under this part must meet applicable zoning and other State/local government requirements." 24:24:2.1.1.2.28.3.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.205 Ineligible projects.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83442, Dec. 22, 2020]","The following projects and facilities are not eligible for insurance under this part: (a) Transient housing or hotels. Rental for transient or hotel purposes. For purposes of this part, rental for transient or hotel purposes means: (1) Rental for any period less than 30 calendar days, or (2) Any rental, if the occupants of the housing accommodations are provided customary hotel services such as room service for food and beverages, maid service, furnishing and laundering of linens, or valet service. (b) Projects in military impact areas. A project located in a military impact area, as determined by HUD. A military impact area is generally a small or medium size metropolitan housing market area or a remote or isolated nonmetropolitan area where: (1) Military-connected households comprise 25 percent or more of the total households in the market area. Military-connected households include active duty military personnel, civilian employees of the military service (Department of Defense) or other Federal agency at or in support of the installation, and employees of contractors and sub-contractors directly associated with the military installation, and their dependents. Unaccompanied active duty military personnel housed in military-controlled group quarters housing (barracks, BOQ's) are excluded; and (2) There is concern about the continued stability of the current level of military strength and mission at the installation based on public announcements from the U.S. Department of Defense or the military service of impending changes; and (3) The complete reduction of military-connected households living in nonmilitary rental housing over a 5 year period, at an annual average decline of 20 percent, would, taking into account growth in the civilian economy and normal changes in the housing inventory, cause an adverse impact on the private rental market resulting in an increase in the rental vacancy rate in the housing market of 10 percent or more at the end of that period. (c) Retirement service centers. Projects designed for the elderly with extensive services and luxury accommodations that provide for central kitchens and dining rooms with food service or mandatory services. (d) Nursing homes or intermediate care facilities. Nursing homes and intermediate care facilities licensed and regulated by State or local government and providing nursing and medical care." 24:24:2.1.1.2.28.3.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.210 HUD-retained review functions.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 60 FR 16573, Mar. 31, 1995; 85 FR 83442, Dec. 22, 2020]","Certain functions are retained by the Commissioner. The HFA must submit any information or certification required by the Commissioner to permit determination of compliance with requirements concerning: (a) Previous participation of principals. Previous participation of the principals of the mortgagor, general contractor, consultant or management agent in accordance with the Previous Participation and Clearance Review Procedures of 24 CFR 200.210 through 200.218. (b) Intergovernmental review. Intergovernmental review of Federal programs under Executive Order 12372, as implemented in 24 CFR part 52. (c) Subsidy layering. The Commissioner, or Housing Credit Agencies as defined by section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42), through such delegation as may be in effect by regulation hereafter, shall review all projects receiving tax credits and some form of HUD assistance for any excess subsidy provided to individual projects and reduce subsidy sources in accordance with outstanding guidelines. (d) Davis-Bacon Act. The Commissioner shall obtain and provide to the HFA the appropriate U.S. Department of Labor wage rate determinations under the Davis-Bacon Act, where they apply under this part." 24:24:2.1.1.2.28.3.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.215 Functions delegated by HUD to HFAs.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83442, Dec. 22, 2020]","The following functions are delegated by HUD to the HFAs: (a) Affirmative Fair Housing Marketing Plan (AFHMP). The HFA will perform information collection, reviews and ministerial activities associated with the review and approval of the AFHMP for all projects. (Enforcement of fair housing and equal opportunity laws is the responsibility of HUD.) (b) Labor standards and prevailing wage requirements. The HFA will perform information collection (e.g., payroll review and routine interviews) and other routine administration and enforcement functions regarding labor standards, in accordance with § 266.225(e). (Enforcement of Davis-Bacon prevailing wage requirements and labor standards is the responsibility of HUD.) (c) Insurance of advances. In cases involving insured advances, the HFA will approve periodic advances of mortgage insurance proceeds during construction of the project subject to terms specified by the Commissioner. (d) Cost certification. The HFA will perform cost certification functions on each insured loan subject to terms specified by the Commissioner. (e) Lead-based paint. The HFA will perform functions related to Lead-based paint requirements as set forth in 24 CFR part 35, subparts A, B, G, and R." 24:24:2.1.1.2.28.3.216.5,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.217 Environmental review requirements.,HUD,,,"[85 FR 83442, Dec. 22, 2020]","The responsible entity, as defined in 24 CFR part 58 (Environmental Review Procedures for Entities Assuming HUD Environmental Responsibilities), assumes legal responsibility for compliance with the requirements of the National Environmental Policy Act of 1969 and related laws and authorities. The responsible entity will visit each project site proposed for insurance under this part and prepare the applicable environmental reviews as set forth in 24 CFR part 58. HUD may make a finding in accordance with 24 CFR 58.11, Legal Capacity and Performance, and may perform the environmental review itself under 24 CFR part 50 (Protection and Enhancement of Environmental Quality). In all cases the environmental review must be completed before HUD may issue the firm approval letter." 24:24:2.1.1.2.28.3.216.6,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.220 Nondiscrimination in housing and employment.,HUD,,,"[85 FR 83442, Dec. 22, 2020]","The mortgagor must certify to the HFA that, so long as the mortgage is insured under this part, the mortgagor will: (a) Not use tenant selection procedures that discriminate against families with children, except in the case of a project qualifying for and complying with the requirements of the “housing for older persons” exemption, as defined in section 807(b)(2) of the Fair Housing Act (42 U.S.C. 3607(b)) and further described in 24 CFR part 100, subpart E. Projects receiving Federal financial assistance in which elderly families include minor children may not avail themselves of the housing for older persons exemption; (b) Determine eligibility for admission and continued occupancy without regard to actual or perceived sexual orientation, gender identity, or marital status and refrain from inquiries about sexual orientation and gender identity in accordance with 24 CFR 5.105(a)(2); (c)(1) Comply with: (i) The Fair Housing Act (42 U.S.C. 3601 through 3619), as implemented by 24 CFR part 100; (ii) Titles II and III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 through 12213), as implemented by 28 CFR part 35; (iii) Section 3 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u), as implemented by 24 CFR part 135; (iv) The Equal Credit Opportunity Act (15 U.S.C. 1691-1691f), as implemented by 12 CFR part 202; (v) Executive Order 11063, as amended by Executive Order 12259 (3 CFR 1958-1963 Comp., p. 652 and 3 CFR 1980 Comp., p. 307), and implemented by 24 CFR part 107; (vi) Executive Order 11246 (3 CFR 1964-1965 Comp., p. 339), as implemented by 41 CFR part 60; and (vii) Other applicable Federal laws and regulations issued pursuant to these authorities; and applicable State and local fair housing and equal opportunity laws. (2) In addition to the authorities listed in paragraph (c)(1) of this section, a mortgagor that receives Federal financial assistance must also certify to the HFA that, so long as the mortgage is insured under this part, it will comply with: (i) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d), as implemented by 24 CFR part 1; (ii) The Age Discrimination Act of 1975 (42 U.S.C. 6101 through 6107), as implemented by 24 CFR part 146; and (iii) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), as implemented by 24 CFR part 8." 24:24:2.1.1.2.28.3.216.7,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,C,Subpart C—Program Requirements,,§ 266.225 Labor standards.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83443, Dec. 22, 2020]","(a) Applicability of Davis-Bacon. (1) All laborers and mechanics employed by contractors or subcontractors on a project insured under this part shall be paid not less than the wages prevailing in the locality in which the work was performed for the corresponding classes of laborers and mechanics employed in construction of a similar character, as determined by the Secretary of the U.S. Department of Labor (Secretary of Labor) in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 3141 et seq. ), where the project meets all of the following conditions: (i) Advances for construction of the project are insured under this part; (ii) The project involves new construction or substantial rehabilitation; and (iii) The project will contain 12 or more dwelling units. (2) Projects that do not meet these conditions are not subject to Davis-Bacon wage rates except to the extent required as a condition of other Federal assistance to the project. (b) Volunteers. The provisions of this section shall not apply to volunteers under the conditions set out in 24 CFR part 70 (Use of Volunteers on Projects Subject to Davis-Bacon and HUD-Determined Wage Rates). In applying 24 CFR part 70, insurance under this part shall be treated as a program for which there is a statutory exemption for volunteers. (c) Labor standards. Any contract, subcontract, or building loan agreement executed for a project subject to Davis-Bacon wage rates under paragraph (a) of this section shall comply with all labor standards and provisions of the U.S. Department of Labor regulations in 29 CFR parts 1, 3, and 5 that would be applicable to a mortgage insurance program to which Davis-Bacon wage rates are made applicable by statute, provided, that regulatory provisions relating to investigations and enforcement by the U.S. Department of Labor shall not be applicable, and enforcement of Davis-Bacon labor standards shall be the responsibility of the Commissioner in accordance with paragraph (e) of this section. (d) Advances. (1) No advance under a mortgage on a project subject to Davis-Bacon wage rates under paragraph (a) of this section shall be eligible for insurance under this part unless the HFA determines (in accordance with the Commissioner's administrative procedures) that the general contractor or any subcontractor or any firm, corporation, partnership or association in which the contractor or subcontractor has a substantial interest was not, on the date the contract or subcontract was executed, on the ineligible list established by the Comptroller General of the United States, pursuant to 29 CFR 5.12, issued by the Secretary of Labor. (2) No advance under any mortgage on a project subject to Davis-Bacon wage rates under paragraph (a) of this section shall be insured under this part unless there is filed with the application for the advance, and no such mortgage shall be insured under this part unless there is filed with the HFA after completion of the construction or substantial rehabilitation, a certificate or certificates in the form required by the Commissioner, supported by such other information as the Commissioner may prescribe, certifying that the laborers and mechanics employed in the construction of the project involved have been paid not less than the wages determined by the Secretary of Labor to be prevailing in accordance with paragraph (a) of this section. (e) Responsibility for enforcement and administration. The Commissioner retains responsibility for enforcement of labor standards under this section, but the Commissioner may delegate to the HFA information collection ( e.g., payroll review and routine interviews) and other routine administration and enforcement functions, subject to monitoring by the Commissioner. Where routine administration and enforcement functions are delegated to the HFA, the HFA shall bear financial responsibility for any deficiency in payment of prevailing wages or, where applicable under 29 CFR part 1 (Procedures for Predetermination of Wage Rates), any increase in compensation to a contractor, that is attributable to any failure properly to carry out its delegated functions. For example, failure of an HFA to supply or ensure inclusion of the proper contract clauses or wage determination in a contract or building loan agreement may require the HFA to fund increased compensation to a contractor as the result of increased wages attributable to incorporation of the proper clauses and wage determination." 24:24:2.1.1.2.28.4.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,D,"Subpart D—Processing, Development, and Approval",,§ 266.300 HFAs accepting 50 percent or more of risk.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83443, Dec. 22, 2020]","(a) Underwriting standards. An HFA electing to take 50 percent or more of the risk on loans may use its own underwriting standards and loan terms and conditions (as disclosed and submitted with its application) to underwrite and approve loans without further review by HUD. (b) HFA responsibilities. The HFA is responsible for the performance of all functions except those HUD-retained functions specified in §§ 266.210 and 266.225(e). After acceptance of an application for a loan to be insured under this part, the HFA must: (1) Determine that a market for the project exists, taking into consideration any comments from the local HUD office relative to the potential adverse impact the project will have on existing or proposed Federally insured and assisted projects in the area. (2) Establish the maximum insurable mortgage and review plans and specifications for compliance with HFA standards; (3) Arrange for the performance of an environmental review in accordance with § 266.217; (4) Determine the acceptability of the proposed mortgagor and management agent; (5) Approve the Affirmative Fair Housing Marketing Plan, required by § 266.215(a); and (6) Make any other determinations necessary to ensure acceptability of the proposed project. (c) HUD-retained reviews. After positive completion of the HUD-retained reviews specified in § 266.210(a) and (b) the local HUD office will issue a firm approval letter. (d) Inspections and other reviews. The HFA is responsible for inspections during construction, processing and approving advances of mortgage proceeds during construction, review and approval of cost certification, and closing of the loan. (e) Endorsement of mortgage note for insurance. So long as the HFA is in good standing, and absent fraud or material misrepresentation on the part of the HFA, the Commissioner or designee will endorse the mortgage note for insurance upon presentation by the HFA of the Closing Docket and certifications required in § 266.420(b), subject to HUD's right to adjust under § 266.417." 24:24:2.1.1.2.28.4.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,D,"Subpart D—Processing, Development, and Approval",,§ 266.305 HFAs accepting less than 50 percent of risk.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83443, Dec. 22, 2020]","(a) Underwriting standards. The underwriting standards and loan terms and conditions of any HFA electing to take less than 50 percent of the risk on certain projects are subject to review, modification, and approval by HUD in accordance with § 266.100(b). These HFAs may assume 25 percent or 10 percent of the risk depending upon the loan-to-replacement-cost or loan-to-value ratios of the projects to be insured as specified in § 266.100(b)(2)(i) and (ii). Large loans, as defined by HUD for its insured multifamily mortgage programs, require prior approval by the Commissioner. (b) HFA responsibilities. The HFA is responsible for the performance of all functions except those HUD-retained functions specified in § 266.210 and 266.225(e). After acceptance of an application for a loan to be insured under this part, the HFA must: (1) Determine that a market for the project exists, taking into consideration any comments from the local HUD office relative to the potential adverse impact the project will have on existing or proposed Federally insured and assisted projects in the area; (2) Establish the maximum insurable mortgage, and review plans and specifications for compliance with HFA standards as approved by HUD; (3) Arrange for the performance of an environmental review in accordance with § 266.217; (4) Determine the acceptability of the proposed mortgagor and management agent; (5) Approve the Affirmative Fair Housing Marketing Plan, required by § 266.215(a); and (6) Make any other determinations necessary to ensure acceptability of the proposed project. (c) HUD-retained reviews. After positive completion of the HUD-retained reviews specified in § 266.210(a) and (b), the local HUD office will issue a firm approval letter. (d) Inspections and other reviews. The HFA is responsible for inspections during construction, processing and approving advances of mortgage proceeds during construction, review and approval of cost certification, and closing of the loan. (e) Endorsement of mortgage note for insurance. So long as the HFA is in good standing, and absent fraud or material misrepresentation on the part of the HFA, the Commissioner or designee will endorse the mortgage note for insurance upon presentation by the HFA of the Closing Docket and certifications required in § 266.420(b), subject to HUD's right to adjust under § 266.417." 24:24:2.1.1.2.28.4.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,D,"Subpart D—Processing, Development, and Approval",,§ 266.310 Insurance of advances or insurance upon completion; applicability of requirements.,HUD,,,,"(a) General. HUD will agree to insure periodic advances of mortgage proceeds or to insure the entire mortgage upon completion of construction for projects involving new construction or substantial rehabilitation. Existing projects without the need for substantial rehabilitation will be considered insurance upon completion cases. In insurance upon completion cases, only the permanent loan is insured and a single endorsement is required after satisfactory completion of construction, substantial rehabilitation or repairs. In periodic advances cases, progress payments approved by the HFA and both an initial and final endorsement on the mortgage are required. (b) Insurance of advances. Periodic advances will be authorized by the HFA subject to terms specified by the Commissioner. (c) Insurance upon completion —(1) New construction and substantial rehabilitation. An HFA may approve a loan that will be insured upon completion of construction of the project. The HFA approval must prescribe a designated period during which the mortgagor must start construction or substantial rehabilitation. If construction or rehabilitation is started as required, the approval will be valid for the period estimated by the HFA for construction and loan closing, including any extension approved by the HFA. (2) Existing projects with no substantial rehabilitation. Existing projects with or without repairs are only insured upon completion, although HFAs may permit noncritical repairs to be completed after endorsement upon establishment of escrows acceptable to the HFA. (d) Requirements applicable to both periodic advances and insurance upon completion cases —(1) Inspections. The HFA must inspect projects under this part at such times during construction, substantial rehabilitation, or repairs as the HFA determines. The inspections must be conducted to assure compliance with plans and specifications, work write-ups, and other contract documents. (2) Approval of advances. At all times, the loan must be kept in balance, and advances approved only if warranted by construction progress evidenced through HFA inspection, as well as in accord with plans, specifications, work write-ups and other contract documents. In approving advances, HFAs must make certain that other mortgageable items are supported with proper bills and/or receipts before funds can be approved and advanced for insurance. (3) Cost certification. In order to ensure that the final amount for insurance is supported by certified costs: (i) The mortgagor (and general contractor, if there is an identity of interest with the mortgagor) must execute a certificate of actual costs, in a form acceptable to the HFA, when all physical improvements are completed to the satisfaction of the HFA and before final endorsement; and (ii) The cost certification provided by the mortgagor must be audited by an independent public accountant. (4) Contestability. Although the HFA has authority to approve the mortgagor's (and general contractor's) certification of cost, the certification will be contestable by the Commissioner during the period up to and including final endorsement of the mortgage. After final endorsement, the certification will be final and incontestable except for fraud or material misrepresentation on the part of the mortgagor (and/or general contractor). (5) Assurance of completion. The mortgagor must furnish assurance of completion of the project in accordance with any requirements of the HFA as to form and amount. (6) Latent defects escrow. The mortgagor must furnish an escrow or other form of assurance required by the HFA to ensure that latent defects can be remedied within the time period required by the HFA. (e) Mortgagee of record. The HFA must remain the mortgagee of record as long as mortgage insurance is in force." 24:24:2.1.1.2.28.4.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,D,"Subpart D—Processing, Development, and Approval",,§ 266.315 Recordkeeping requirements.,HUD,,,,"The mortgagor and the builder, if there is an identity of interest with the mortgagor, shall keep and maintain records of all costs of any construction or other cost items not representing work under the general contract and to make available such records for review by the HFA or HUD, if requested." 24:24:2.1.1.2.28.5.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.400 Property requirements—real estate.,HUD,,,,"The mortgage must be on real estate held: (a) In fee simple; (b) Under a renewable lease of not less than 99 years; or (c) Under a lease executed by a governmental agency, or other lessor approved by the HFA, that has a term at least 10 years beyond the end of the mortgage term." 24:24:2.1.1.2.28.5.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.402 Recordation.,HUD,,,,"At the time of initial endorsement in the case of insurance of advances or at the time of final endorsement in the case of insurance upon completion, the HFA shall make certain that the mortgage and the regulatory agreement are recorded." 24:24:2.1.1.2.28.5.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.405 Title.,HUD,,,,"(a) Eligibility of title. Marketable title to the mortgaged property must be vested in the mortgagor on the date the mortgage is filed for record. (b) Title evidence. The HFA must receive a title insurance policy that ensures that marketable title is vested in the mortgagor, that a survey acceptable to the HFA has been performed, and that no existing impediments to title concern, or exist on, the property." 24:24:2.1.1.2.28.5.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.410 Mortgage provisions.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83444, Dec. 22, 2020]","(a) Form. The mortgage and note must be executed on a form approved by the HFA for use in the jurisdiction in which the property is located. (b) Mortgagor. The mortgage must be executed by a mortgagor determined eligible by the HFA. (c) First lien. The mortgage must be a single first lien on property that has first priority for payment and that conforms with property standards prescribed by the HFA. (d) Single asset mortgagor. The mortgage must require that the mortgagor is a single asset mortgagor. (e) Amortization. The mortgage must provide for complete amortization ( i.e., be regularly amortizing) over the term of the mortgage. The complete amortization requirement does not apply to: (1) Construction loans, or (2) Level I participants where the loan has a minimum term of 17 years that would amortize over a maximum period of 40 years and the HFA's underwriting standards, loan terms and conditions, and asset management and servicing procedures have been approved by HUD. (f) Use restrictions. The mortgage must contain a covenant prohibiting the use of the property for any purpose other than the purpose intended on the day the mortgage was executed. The conversion of a project from rental to cooperative is not a “change in use” as that term is employed in the mortgage since the property will continue to have a residential use both before and after conversion. (g) Hazard insurance. The mortgage must contain a covenant, acceptable to the HFA, that binds the mortgagor to keep the property insured by one or more standard policies for fire and other hazards stipulated by the HFA. A standard mortgagee clause making loss payable to the HFA must be included in the mortgage. The HFA is responsible for assuring that insurance is maintained in force and in the amount required by this paragraph and the mortgage. The HFA must ensure that the insurance coverage is in an amount that will comply with the coinsurance clause applicable to the location and character of the property, but not less than 80 percent of the actual cash value of the insurable improvements and equipment. If the mortgagor does not obtain the required insurance, the HFA must do so and assess the mortgagor for such costs. These insurance requirements apply as long as the HFA retains an interest in the project and final claim settlement has not been completed or the contract of insurance has not been otherwise terminated. (h) Modification of terms. The mortgage must contain a covenant requiring that, in the event that the HFA and owner agree to a modification of the terms of the mortgage ( e.g., to reflect a reduction of the interest rate if reductions are realized in the underlying bond rates for the project), Section 8 rents would be reduced in accordance with HUD guidelines. (i) Regulatory Agreement. The mortgage must contain a provision incorporating the Regulatory Agreement by reference." 24:24:2.1.1.2.28.5.216.5,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.415 Mortgage lien and other obligations.,HUD,,,,"(a) Liens. At the initial and final closing of the loan, the mortgagor and the HFA must certify, and the HFA must determine, that the property covered by the mortgage is free from all liens other than the lien of the insured mortgage, except that the property may be subject to such inferior lien or liens as approved by the HFA as long as the insured mortgage has first priority for payment. (b) Contractual obligations. At the final closing of the loan, the mortgagor and the HFA must certify, and the HFA must determine, that all contractual obligations in connection with the mortgage transaction, including the purchase of the property and the improvements to the property, are paid. An exception is made for obligations that are approved by the HFA and determined by the HFA to be of a lesser priority for payment than the obligation of the insured mortgage." 24:24:2.1.1.2.28.5.216.6,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.417 Authority to adjust mortgage insurance amount.,HUD,,,,"In order to protect the mortgage insurance funds, the Commissioner has authority in his or her sole discretion, at any time prior to and including final endorsement, to adjust the amount of the mortgage insurance." 24:24:2.1.1.2.28.5.216.7,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,E,Subpart E—Mortgage and Closing Requirements; HUD Endorsement,,§ 266.420 Closing and endorsement by the Commissioner.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83444, Dec. 22, 2020]","(a) Closing. Before disbursement of loan advances in periodic advances cases, and in all cases after completion of construction, repair or substantial rehabilitation, the HFA must hold a closing and submit a closing docket with required documentation to the Commissioner or the Commissioner's authorized Departmental representative for insurance of the mortgage by endorsement of the mortgage note. The note must provide that the mortgage is insured under section 542(c) of the Housing and Community Development Act of 1992 and the regulations set forth in this part that are in effect on the date of endorsement. The note must also specify the date of endorsement, i.e., the date of HUD endorsement of the project mortgage, and the risk of loss assumed by the HFA and by HUD. (b) Closing docket. The HFA's submission must include a certification that it has obtained written HUD approval of compliance with the requirements referred to in § 266.210, and certifications and information as follows: (1) Information concerning the mortgage amount and term, location, number and type of units, income and expenses, rents, projects and market occupancy percentages, value/replacement cost, interest rate, and similar statistical information in accordance with the Commissioner's administrative procedures. (2) Copies of the amortization schedule, Note and Risk-Sharing Agreement. (3) Certification that the loan has been processed, prudently underwritten (including a determination that a market exists for the project), cost certified (if the project is being submitted for final endorsement) and closed in full compliance with the HFA's standards and requirements (or where the mortgage is insured under Level II, in full compliance with the underwriting standards, loan terms and conditions, and asset management and servicing procedures, as approved by HUD). (4) At the time of final endorsement, for periodic advances cases, a certification that the advances were made in accordance with the mortgage pursuant to § 266.310. (5) A copy of the HFA-approved cost certification if the project is submitted for final endorsement. (6) A certification that equal employment requirements are followed. (7) A certification that the HFA has reviewed and approved the Affirmative Fair Housing Marketing Plan, required by § 266.215(a), and found it acceptable. (8) A certification that a dedicated account, if required, has been increased in accordance with § 266.110(b). (9) Certifications required under § 266.415 concerning liens and contractual obligations. (10) Copies of the Hazard Insurance Policy with a clause making the loss payable to the HFA. (11) For projects subject to Davis-Bacon prevailing requirements under § 266.225, the certification and information concerning payment of prevailing wage rates required by § 266.225(d). (12) Certified copies of mortgage (deed of trust) with attached regulatory agreement, and note for HUD files. (13) Certification that housing claiming the housing for older persons exemption is eligible for and complies with 42 U.S.C. 3607(b) and 24 CFR part 100, subpart E." 24:24:2.1.1.2.28.6.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,F,Subpart F—Project Management and Servicing,,§ 266.500 General.,HUD,,,"[85 FR 83444, Dec. 22, 2020]","(a) HFA responsibility for monitoring project owners. The HFA will have full responsibility for managing and servicing projects insured under this part (in accordance with procedures disclosed and submitted with its application and the requirements of this part). The HFA is responsible for monitoring and determining the compliance of the project owner in accordance with the provisions of this subpart. HUD will monitor the performance of the HFA, not the project owner, to determine its compliance with the provisions covered under this subpart. (b) HUD review of procedures for HFAs with Level II approval. Asset management and servicing procedures of any HFA electing to take less than 50 percent of the risk on certain projects are subject to review, modification, and approval by HUD in accordance with § 266.100(b)." 24:24:2.1.1.2.28.6.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,F,Subpart F—Project Management and Servicing,,§ 266.505 Regulatory agreement requirements.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 63 FR 46578, 46593, Sept. 1, 1998; 65 FR 16296, Mar. 27, 2000; 85 FR 83444, Dec. 22, 2020]","(a) General. (1) The HFA must execute a Regulatory Agreement, in recordable form, between the mortgagor and the HFA to be in force for the duration of the insured mortgage and note or bond. The Regulatory Agreement must include a description of the property. The Regulatory Agreement must be incorporated by reference into the mortgage and recorded with the mortgage. (2) The Regulatory Agreement executed between the HFA and the mortgagor must be binding upon the mortgagor and any of its successors and assigns and upon the HFA and any of its successors for so long as the mortgage is insured by HUD or HUD holds an HFA debenture issued in connection with a claim arising from the insured mortgage. The HFA may not assign the Regulatory Agreement. (3) The HFA will enforce the Regulatory Agreement and take actions against any mortgagors who violate its provisions. Such actions may involve a declaration of default and application to any court for specific performance of the agreement. (b) Requirements. The Regulatory Agreement must require the mortgagor to comply with the provisions of this part and obligate the mortgagor, among other things, to: (1) Make all payments due under the mortgage and note/bond. (2) Where necessary, establish a sinking fund for future capital needs. (3) Maintain the project as affordable housing, as defined in § 266.5. (4) Continue to use dwelling units for their original purposes. (5) Comply with such other requirements as may be established by the HFA and set forth in the Regulatory Agreement. (6) [Reserved] (7) Maintain complete books and records established solely for the project. (8) Comply with the Affirmative Fair Housing Marketing Plan, required by § 266.215(a), and all other fair housing and equal opportunity requirements. (9) Operate as a single asset mortgagor. (10) Make books and records available for HUD or U.S. Government Accountability Office (GAO) review with appropriate notification. (11) Permit HUD officials or employees to inspect the project upon request by the Commissioner. (c) Enforcement. The Regulatory Agreement shall be enforced by the HFA." 24:24:2.1.1.2.28.6.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,F,Subpart F—Project Management and Servicing,,§ 266.507 Maintenance requirements.,HUD,,,"[85 FR 83444, Dec. 22, 2020]","The mortgagor must maintain the project in accordance with the physical condition standards in 24 CFR part 5, subpart G (Physical Condition Standards and Inspection Requirements)." 24:24:2.1.1.2.28.6.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,F,Subpart F—Project Management and Servicing,,§ 266.510 HFA responsibilities.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 63 FR 46578, Sept. 1, 1998; 65 FR 16296, Mar. 27, 2000; 80 FR 75936, Dec. 7, 2015; 85 FR 83444, Dec. 22, 2020]","(a) Inspections. The HFA must perform inspections in accordance with the physical inspection procedures in 24 CFR part 5, subpart G (Physical Condition Standards and Inspection Requirements). (b) Annual audits of projects. The HFA must analyze projects' annual audits and provide a copy to HUD along with a summary of unresolved findings and actions planned, with target dates, to correct unresolved findings. (c) HFA's annual financial statement. The HFA must provide HUD with annual audited financial statement in accordance with the requirements of 2 CFR part 200, subpart F." 24:24:2.1.1.2.28.6.216.5,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,F,Subpart F—Project Management and Servicing,,§ 266.515 Record retention.,HUD,,,,"(a) Loan origination and servicing. Records pertaining to the mortgage loan origination and servicing of the loan must be maintained for as long as the insurance remains in force. (b) Defaults and claims. Records pertaining to a mortgage default and claim must be retained from the date of default through final settlement of the claim for a period of no less than three years after final settlement." 24:24:2.1.1.2.28.6.216.6,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,F,Subpart F—Project Management and Servicing,,§ 266.520 Program monitoring and compliance.,HUD,,,,HUD will monitor the performance of the HFA in accordance with the provisions covered under this subpart. 24:24:2.1.1.2.28.7.216.1,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.600 Mortgage insurance premium: Insurance upon completion.,HUD,,,"[85 FR 83444, Dec. 22, 2020]","(a) Initial premium. For projects insured upon completion, on the date of the final closing, the HFA shall pay to the Commissioner an initial premium in an amount established by the Commissioner under § 266.604. (b) Premium payable with first payment of principal. On the date of the first payment of principal the HFA shall pay a second premium (calculated on a per annum basis) in an amount established by the Commissioner under § 266.604. (c) Subsequent premiums. Until one of the conditions is met under § 266.606(a), the HFA on each anniversary of the date of the first principal payment shall pay to the Commissioner an annual mortgage insurance premium in an amount established by the Commissioner under § 266.604, without taking into account delinquent payments, or partial claim payment under § 266.630, or prepayments, for the year following the date on which the premium becomes payable." 24:24:2.1.1.2.28.7.216.2,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.602 Mortgage insurance premium: Insured advances.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83444, Dec. 22, 2020]","(a) Initial premium. For projects involving insured advances, on the date of the initial closing, the HFA shall pay to the Commissioner an initial premium equal to an amount established by the Commissioner under § 266.604. (b) Interim premium. On each anniversary of the initial closing, the HFA shall pay an interim mortgage insurance premium in an amount established by the Commissioner under § 266.604. The HFA shall continue to pay the interim mortgage insurance premiums until the date of the first principal payment. (c) Premium payable with first payment of principal. On the date of the first principal payment, the HFA shall pay a mortgage insurance premium in an amount established by the Commissioner under § 266.604. The HFA shall adjust this payment by deducting an amount equal to the portion of the last premium paid that is attributable to the months after the date of the first payment to principal. Any partial month is to be counted as a whole month. The HFA shall remit the net adjusted mortgage premium to the Commissioner and refund the amount of the adjustment (overpayment) to the mortgagor. (d) Subsequent premiums. Until one of the conditions is met under § 266.606(a), the HFA on each anniversary of the date of the first principal payment shall pay to the Commissioner an annual mortgage insurance premium in an amount established by the Commissioner under § 266.604, without taking into account delinquent payments, prepayments, or a partial claim payment under § 266.630, for the year following the date on which the premium becomes payable." 24:24:2.1.1.2.28.7.216.3,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.604 Mortgage insurance premium: Other requirements.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83444, Dec. 22, 2020]","(a) Premium calculations on or after first principal payment. The premiums payable to the Commissioner on and after the first principal payment shall be calculated in accordance with the amortization schedule prepared by the HFA for final closing and an amount established by the Commissioner through a notice published in the Federal Register and providing a 30-day comment period. After the comments have been considered, HUD will publish a final notice announcing the premium and its effective date. The premium shall not take into account delinquent payments or prepayments. (b) Future premium changes. Notice of future premium changes will be published in the Federal Register. The Commissioner will propose mortgage insurance premium changes for the Risk-Sharing Program and provide a 30-calendar day public comment period for the purpose of accepting comments on whether the proposed changes are appropriate. After the comments have been considered, HUD will publish a final notice announcing the premium and its effective date. (c) Closing information. The HFA shall provide final closing information to the Commissioner within 15 calendar days of the final closing in a format prescribed by the Commissioner. In addition, the HFA shall submit a copy of the amortization schedule. This amortization shall be used to compute and collect all future mortgage insurance premiums subject to § 266.600(c) or § 266.602(d). If the mortgage is modified, the HFA shall submit to the Commissioner a copy of the revised amortization schedule, which shall be used to compute and collect all future mortgage insurance premiums subject to § 266.600(c) or § 266.602(d). (d) Due date for premium payments. Mortgage insurance premiums are due on the first day of the month of the anniversary of the first payment to principal. Any premium received by the Commissioner more than 15 calendar days after the due date shall be assessed a late charge of 4 percent of the amount of the premium payment due. Mortgage insurance premiums that are paid to the Commissioner more than 30 calendar days after the due date shall begin to accrue interest at the rate prescribed by the Treasury Fiscal Requirements Manual." 24:24:2.1.1.2.28.7.216.4,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.606 Mortgage insurance premium: Duration and method of paying.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, Dec. 22, 2020]","(a) Duration of payments. Mortgage insurance premium payments must continue annually until one of the following occurs: (1) The mortgage is paid in full; (2) A deed to the HFA is filed for record; (3) An application for initial claim payment is received by the Commissioner; or (4) The contract of insurance is otherwise terminated. (b) Method of payment. The HFA shall pay any mortgage insurance premium required by this part in cash." 24:24:2.1.1.2.28.7.216.5,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.608 Mortgage insurance premium: Pro rata refund.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, Dec. 22, 2020]","If the contract of insurance is terminated by payment in full or is terminated by the HFA on a form prescribed by the Commissioner, after the date of the first payment to principal, the Commissioner shall refund any mortgage insurance premium for the period after the effective date of the termination of insurance. The refund shall be mailed to the HFA for credit to the mortgagor's account. In computing the pro rata portion of the annual mortgage insurance premium, the date of termination of insurance shall be the last day of the month in which the mortgage is prepaid or the Commissioner receives a notification of termination, whichever is later. No refund shall be made if the insurance was terminated because of the submission of an application for initial claim payment or if the termination occurs before the date of the first payment to principal." 24:24:2.1.1.2.28.7.216.6,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.610 Method of payment of mortgage insurance premiums.,HUD,,,"[63 FR 1303, Jan. 8, 1998]","In the cases that the Commissioner deems appropriate, the Commissioner may require, by means of instructions communicated to all affected mortgagees, that mortgage insurance premiums be remitted electronically." 24:24:2.1.1.2.28.7.217.7,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.612 Insurance endorsement.,HUD,,,,"(a) Initial endorsement. The Commissioner shall indicate his or her insurance of the mortgage by endorsing the original credit instrument. (b) Final endorsement. When all advances of mortgage proceeds have been made and all other applicable terms and conditions have been complied with to the satisfaction of the Commissioner, the Commissioner shall indicate on the original credit instrument the total of all advances that have been approved for insurance and again endorse such instrument. (c) Effect of endorsement. From the date of initial endorsement, the Commissioner and the HFA shall be bound by the provisions of this subpart to the same extent as if they had executed a contract including the provisions of this subpart and the applicable sections of the Act." 24:24:2.1.1.2.28.7.218.8,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.616 Transfer of partial interest under participation agreement.,HUD,,,,"The HFA may not assign the mortgage. However, a partial interest in an insured mortgage or pool of insured mortgages may be transferred under a participation agreement or arrangement (such as a declaration of trust or the issuance of pass-through certificates), without obtaining the approval of the Commissioner, if the following conditions are met: (a) Legal title to the insured mortgage or mortgages shall be held by the HFA; and (b) The participation agreement, declaration of trust or other instrument under which the partial interest is transferred shall provide that: (1) The HFA shall remain mortgagee of record under the contract of mortgage insurance; (2) The Commissioner shall have no obligation to recognize or deal with anyone other than the HFA with respect to the rights, benefits, and obligations of the mortgagee under the contract of insurance; and (3) The mortgagor shall have no obligation to recognize or do business with any one other than the HFA or, if applicable, its servicing agent with respect to rights, benefits, and obligations of the mortgagor or the mortgagee under the mortgage." 24:24:2.1.1.2.28.7.219.10,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.622 Notice and date of termination by the Commissioner.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, Dec. 22, 2020]",The Commissioner shall notify the HFA that the contract of insurance has been terminated and shall establish the effective date of termination. The termination shall be the last day of the month in which one of the events specified in § 266.620 occurs. 24:24:2.1.1.2.28.7.219.9,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.620 Termination of contract of insurance and indemnification.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83440, 83445, Dec. 22, 2020]","(a) The contract of insurance shall terminate if any of the following occurs: (1) The mortgage is paid in full; (2) The HFA acquires the mortgaged property and notifies the Commissioner that it will not file an insurance claim; (3) A party other than HFA acquires the property at a foreclosure sale; (4) The HFA notifies the Commissioner of Termination of Insurance (voluntary termination); (5) The HFA or its successors commit fraud or make a material misrepresentation to the Commissioner with respect to information culminating in the contract of insurance on the mortgage or while the contract of insurance is in existence; (6) The receipt by the Commissioner of an Application for Final Claims Settlement; (7) If the HFA acquires the mortgaged property and fails to make an initial claim. (b) In lieu of termination of the mortgage insurance contract pursuant to paragraph (a)(5) of this section, the Commissioner may, in his or her full discretion, permit a Level I participant rated “A” or higher to indemnify HUD, or otherwise reimburse HUD in a manner acceptable to the Commissioner, for the full amount of the mortgage claim." 24:24:2.1.1.2.28.7.220.11,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.626 Notice of default and filing an insurance claim.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","(a) Definition of default. (1) A monetary default exists when the mortgagor fails to make any payment due under the mortgage. (2) A covenant default exists when the mortgagor fails to perform any other covenant under the provision of the mortgage or the regulatory agreement, which is incorporated by reference in the mortgage. An HFA becomes eligible for insurance benefits on the basis of a covenant default only after the HFA has accelerated the debt and the owner has failed to pay the full amount due, thus converting a covenant default into a monetary default. (b) Date of default. For purposes of this subpart, the date of default is: (1) The date of the first uncorrected failure to perform a mortgage covenant or obligation; or (2) The date of the first failure to make a monthly payment that is not covered by subsequent payments, when such subsequent payments are applied to the overdue monthly payments in the order in which they were due. (c) Notice of default. If a default (as defined in paragraph (a) of this section) continues for a period of 30 calendar days, the HFA must notify the Commissioner within 10 calendar days thereafter, unless the default is cured within the 30-day period. Unless waived by the Commissioner, the HFA must submit this notice monthly, on a form prescribed by the Commissioner, until the default has been cured or the HFA has filed an application for an initial claim payment. In cases of mortgage acceleration, the mortgagee must first give notice of the default. (d) Timing of claim filing. Unless a written extension is granted by HUD, the HFA must file an application for initial claim payment (or, if appropriate, for partial claim payment) within 75 calendar days from the date of default and may do so as early as the first day of the month following the month for which a payment was missed. Upon request of the HFA, HUD may extend, up to 180 calendar days from the date of default, the deadline for filing a claim. In those cases where the HFA certifies that the project owner is in the process of transacting a bond refunder, refinancing the mortgage, or changing the ownership for the purpose of curing the default and bringing the mortgage current, HUD may extend the deadline for filing a claim beyond 180 calendar days, not to exceed 360 calendar days from the date of default." 24:24:2.1.1.2.28.7.220.12,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.628 Initial claim payments.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","(a) Determination of initial claim amount. (1) The initial claim amount is based on the unpaid principal balance of the mortgage note as of the date of default, plus interest at the mortgage note rate from date of default to date of initial claim payment. The mortgage note interest component of the initial claim amount is subject to curtailment as provided in paragraph (b) of this section. (2) HUD shall make an initial claim payment to the HFA that is equal to the initial claim amount, less any delinquent mortgage insurance premiums, late charges and interest, assessed under § 266.604(d). (3) The HFA must use the proceeds of the initial claim payment to retire any bonds or any other financing mechanisms securing the mortgage within 30 calendar days of the initial claim payment. Any excess funds resulting from such retirement or repayment shall be returned to HUD within 30 calendar days of the retirement. (b) Curtailment of interest for late filings. In determining the mortgage note interest component of the initial claim amount, if the HFA fails to meet any of the requirements of this section within the specified time (including any granted extension of time), HUD shall curtail the accrual of mortgage note interest by the number of days by which the required action was late. (c) Method of payment. HUD shall pay the claim in cash." 24:24:2.1.1.2.28.7.220.13,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.630 Partial payment of claims.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","(a) General. When the Commissioner receives a claim for a partial payment under § 266.626(d), the Commissioner may make a partial payment of claim in accordance with the requirements of this section. If the HFA has not previously received a partial claim payment, the HFA may file a claim for a partial claim payment under § 266.630. Otherwise, the HFA must file for an initial claim payment under § 266.628. (b) HFA submission. In addition to any other requirements set forth in administration instructions, the HFA must provide the following information with its application for a partial claim payment: (1) The amount by which the HFA will reduce the principal on the insured mortgage and the amount of delinquent interest on the insured mortgage that the HFA will defer based on the anticipated closing date; and (2) A certification that: (i) The amount of the principal reduction of the insured first mortgage does not exceed 50 percent of the unpaid principal balance; (ii) The relief resulting from the partial claim payment when considered with other resources available to the project are sufficient to restore the financial viability of the project; (iii) The project is or can (at reasonable cost) be made structurally sound; (iv) The management of the project is satisfactory; (v) The default under the insured mortgage was beyond the control of the mortgagor. (c) Claim processing —(1) Acceptable application. If the HFA's application is acceptable, the Commissioner shall notify the HFA to process the partial payment, which will include the modification of the existing mortgage and the execution by the mortgagor of a second mortgage payable to the HFA. When the second mortgage is closed, the HFA shall notify the Commissioner, in a form and manner prescribed in administrative instructions. Upon receipt of notice from the HFA, the Commissioner shall make the partial claim payment. (2) Unacceptable application. If the application is unacceptable, the Commissioner shall either advise the HFA of the information needed to make the application acceptable or return the application for further action. The HFA is granted an extension of 30 calendar days from the date of any notification for further action. (d) Requirements —(1) One partial claim payment. Only one partial claim payment may be made under a contract of insurance. (2) Partial claim payment amount. The amount of the partial claim payment is limited to 50% of the amount of relief provided by the HFA in the form of a reduction in principal and a reduction of delinquent interest due on the insured mortgage times the lesser of HUD's percentage of the risk of loss or 50 percent. (3) HFA second mortgage. Repayment of the relief provided by the HFA must be secured by a second mortgage to the HFA. This second mortgage may provide for postponed amortization and may not be assigned by the HFA. This second mortgage is not insured under this part and may not be insured under any other HUD-related insurance program. (4) Partial claim repayment by HFA. The HFA must remit to HUD a percentage of all amounts collected on the HFA's second mortgage within 15 calendar days of receipt by the HFA. The applicable percentage is equal to the percentage used in paragraph (d)(2) of this section to determine the partial claim payment amount. Payments made after the 15th day must include a 5 percent late charge plus accrued interest at the debenture rate. (5) Certified statements of amounts collected. As long as the second mortgage remains of record, the HFA must submit to the Commissioner an annual certified statement of the amounts collected by the HFA. The HFA must submit a final certified statement within 30 calendar days after the second mortgage is paid in full, foreclosed, or otherwise terminated." 24:24:2.1.1.2.28.7.220.14,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.632 Withdrawal of claim.,HUD,,,,"In case of a default and subsequent filing of claim, the HFA shall determine the form of workout or modification and will inform HUD of the type of mortgage relief determined to be appropriate. If the default is cured after the claim is made but before the initial claim payment is paid by HUD, the HFA may, in writing, withdraw the claim, and insurance will continue as if the default had not occurred." 24:24:2.1.1.2.28.7.220.15,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.634 Reinstatement of the contract of insurance.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","(a) Conditions for reinstatement. After the initial claim payment, HUD may reinstate the contract of insurance on the following conditions: (1) The HFA has not acquired the project; (2) The mortgagor has cured the default; and (3) The HFA requests that HUD reinstate the contract of insurance. (b) Notification of reinstatement. If reinstatement is acceptable to HUD, HUD shall notify the HFA of the date the contract of insurance will be reinstated and shall advise the HFA of the payment needed to reinstate the contract of insurance. (c) Payment. Within 30 calendar days of the date of the notice under paragraph (b) of this section, the HFA shall pay HUD an amount equal to the initial claim amount, as determined under § 266.628(a)(1), plus an amount equal to the accrued and unpaid interest on the HFA Debenture through the reinstatement date, plus an amount equal to the mortgage insurance premium for the period from the date of reinstatement of the contract of insurance to the next anniversary date for payment of the mortgage insurance premium. (d) Cancellation of debenture. Upon receipt from the HFA of the amount specified in paragraph (c) of this section, HUD shall return the HFA debenture for cancellation. (e) Continuation of contract of insurance. Upon reinstatement, the contract of insurance shall continue as if the default had not occurred." 24:24:2.1.1.2.28.7.220.16,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.636 Insuring new loans for defaulted projects.,HUD,,,,The HFA may not make another loan that is insured under this part to the same owner in the same project if HUD has paid a claim under this part. 24:24:2.1.1.2.28.7.220.17,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.638 Issuance of HFA Debenture.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","(a) Condition to initial claim payment. The HFA must issue an instrument in the form of a debenture to HUD within 30 calendar days of receiving the initial claim payment. The HFA Debenture shall meet the following requirements and shall be in a form that has been approved by HUD as part of the application approval process. (b) Term of HFA Debenture. The HFA Debenture shall be dated the same date that the initial claim payment is issued. The HFA Debenture shall have a term of 5 years in order to afford the mortgagor ample time to cure the default or the HFA time to foreclose and/or resell the project. HUD may provide a written extension of the 5-year term if the HFA certifies and provides documentation that the project owner has filed bankruptcy and the HFA is taking action to have the project discharged from the bankruptcy. The HFA Debenture shall, during this extended period, continue to bear interest as described below at HUD's published debenture rate at the earlier of initial endorsement or final endorsement. Interest shall be due and payable annually on the anniversary date of the initial claim payment. Interest is due on the full face amount of the HFA Debenture through the term of the HFA Debenture or through the date an application for final claim payment is received by the Commissioner. (c) HFA Debenture amount. (1) The HFA Debenture shall be for the full initial claim amount as determined under § 266.628(a)(1) (minus any excess funds returned to HUD under § 266.628(a)(3)). (2) The full amount of the HFA Debenture shall be payable to HUD upon maturity, unless the HFA Debenture is canceled because of: (i) A reinstatement of the contract of insurance under § 266.634; or (ii) Final claim settlement under § 266.654. (d) HFA Debenture interest rate. The HFA Debenture shall bear interest at HUD's published debenture rate at the earlier of initial endorsement or final endorsement. Interest shall be due and payable annually on the anniversary date of the initial claim payment and on the date of redemption when redeemed or canceled before an anniversary date. Interest shall be computed on the full face amount of the HFA Debenture through the term of the HFA Debenture. (e) Form of HFA Debenture. The HFA Debenture should follow the standard form of a State/Municipal Debenture issued under the Uniform Commercial Code, where applicable, and shall be supported by the full faith and credit of the HFA. For HFAs that operate as departments or divisions of States or units of local government and where such HFAs cannot pledge the full faith and credit of the HFA, such HFAs may collateralize their obligation through a letter of credit, reinsurance, or other forms of credit acceptable to the Commissioner. (f) Debenture registration. Unless otherwise required by law, including State or local laws, or other governing bodies, HUD will not require the HFA Debenture to be “Registered” (with the Securities and Exchange Commission) as it is a direct, or private, placement, and not a public offering, that is supported by the full faith and credit of the HFA." 24:24:2.1.1.2.28.7.220.18,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.640 Foreclosure and acquisition.,HUD,,,,The HFA is not required to foreclose the insured mortgage. It may accept a deed-in-lieu of foreclosure. 24:24:2.1.1.2.28.7.220.19,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.642 Appraisals.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","Where actions taken or caused to be taken by the HFA have the effect of the recovery of less than the face amount of the HFA Debenture held by HUD, an appraisal should be made to determine the value of the project. The appraisal should assume a willing buyer and a willing seller. The appraisal must be done within the 45-calendar-day period immediately preceding the date when the HFA files an application for final claim settlement. If at the time of final claim settlement the HFA has not sold the project, an appraisal should be made to determine the value of the project at its highest and best use." 24:24:2.1.1.2.28.7.220.20,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.644 Application for final claim settlement.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","The HFA shall file an application for final settlement in accordance with the Commissioner's administrative procedures not later than 30 calendar days after any of the following: (a) Sale of the property after foreclosure or after acquisition by deed-in-lieu of foreclosure; or (b) Expiration of the term of the HFA debenture." 24:24:2.1.1.2.28.7.220.21,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.646 Determining the amount of loss.,HUD,,,,"The amount of the total loss to be shared by HUD and the HFA is equal to: (a) The amount of the initial claim payment; (b) Plus all items set forth in § 266.648; and (c) Less all items set forth in § 266.650." 24:24:2.1.1.2.28.7.220.22,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.648 Items included in total loss.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","In computing the total loss, the following items are added to the amount described in § 266.646(a): (a) The amount of all payments that the HFA made from its own funds and not from project income for: (1) Taxes, special assessments, and water bills that are liens before the Mortgage; and (2) Fire and hazard insurance on the property. (b) A reasonable amount of acquisition costs actually paid by the HFA. These costs may not include loss or damage resulting from the invalidity or unenforceability of the Mortgage lien or the unmarketability of the Mortgagor's title. (c) Reasonable payments that the HFA made from its own funds and not from project income for: (1) Preservation, operation and maintenance of the property; (2) Repairs necessary to meet the requirements of local laws; (3) Expenses in connection with the sale of property; and (4) Bankruptcy expenses approved by HUD. (d) The amount of HFA Debenture interest paid by the HFA to HUD." 24:24:2.1.1.2.28.7.220.23,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.650 Items deducted from total loss.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83445, Dec. 22, 2020]","In computing insurance benefits, the following items are deducted from the amounts described in § 266.646(a) and (b): (a) All amounts received by the HFA on account of the mortgage after the date of default, including any partial payment of claim paid by HUD in the event a full claim follows a partial payment of claim; (b) All cash, and/or funds related to the mortgaged property, including deposits and escrows made for the account of the mortgagor that the HFA holds (or to which it is entitled); (c) The amount of any undrawn balance under a letter of credit that the HFA accepted in lieu of a cash deposit for an escrow agreement; (d) Any net income from the mortgaged property/project that the HFA received after the date of default. (e) The proceeds from the sale of the project or the appraised value of the project as provided in § 266.642 as follows: (1) If the HFA disposes of the project through a negotiated sale, the amount deducted shall be the higher of the sales price or the appraised value. (2) If the HFA disposes of the project through a competitive bid procedure approved by the Commissioner, the amount deducted shall be the sales price, even if it is lower than the appraised value. (3) If the HFA has not disposed of the project within 5 years from the date of issuance of the HFA Debentures (unless an extension has been granted pursuant to § 266.638), the amount deducted shall be the appraised value. (f) Any and all claims that the HFA has acquired in connection with the acquisition and sale of the property. Claims include but are not limited to returned premiums from canceled insurance policies, interest on investments of reserve for replacement funds, tax refunds, refunds of deposits left with utility companies, and amounts received as proceeds of a receivership. (g) The amount of daily HFA Debenture interest accrued but not paid from the anniversary date of the last HFA Debenture interest payment to the date an application for final claim payment is received by the Commissioner." 24:24:2.1.1.2.28.7.220.24,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.652 Determining share of loss.,HUD,,,,The total loss computed in § 266.646 shall be shared by HUD and the HFA in accordance with their respective percentage of risk as specified in the note and the addendum to the Risk-Sharing Agreement between HUD and the HFA. 24:24:2.1.1.2.28.7.220.25,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.654 Final claim settlement and HFA Debenture redemption.,HUD,,,"[59 FR 62524, Dec. 5, 1994, as amended at 85 FR 83446, Dec. 22, 2020]","(a) Final claim payment. If the initial claim amount, as determined under § 266.628(a)(1), is less than HUD's share of the loss, HUD shall make a final claim payment to the HFA that is equal to the difference between HUD's share of the loss and the initial claim amount and shall return the HFA Debenture to the HFA for cancellation. (b) HFA reimbursement payment. If the initial claim amount, as determined under § 266.628(a)(1), is more than HUD's share of the loss, the HFA shall, within 30 calendar days of notification by HUD of the amount due, remit to HUD an amount that is equal to the difference between the initial claim amount and HUD's share of the loss. The funds must be remitted in a manner prescribed in the Commissioner's administrative procedures. The HFA Debenture will be considered redeemed upon receipt of the cash payment. A 5 percent penalty will be charged and interest at the debenture rate will begin to accrue if the cash payment is not received within the prescribed period. If an HFA is in default under an existing debenture and files a claim on another project under this part, HUD will charge the HFA's Dedicated Account for the amount owed the Department. In cases of top-tier or A-rated HFA's which are not required to maintain a Dedicated Account, HUD will inform the rating agencies of the HFA's failure to pay on their debt obligation and of its violation of the Risk-Sharing Agreement. (c) Losses. Losses sustained as a consequence of the (sole) negligence of an HFA ( e.g., failure to acquire adequate hazard insurance where such insurance is available) shall be the sole obligation of the HFA, notwithstanding the risk apportionment otherwise agreed to by HUD and the HFA. (d) Supplemental claim. Any supplemental claim must be filed within one year from date of final claim settlement." 24:24:2.1.1.2.28.7.220.26,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.656 Recovery of costs after final claim settlement.,HUD,,,,"If, after final claim settlement, the HFA recovers additional sums as the result of the sale of the project or otherwise, the total amount of such recovery shall be shared by HUD and the HFA in accordance with the prescribed percentage of shared risk." 24:24:2.1.1.2.28.7.220.27,24,Housing and Urban Development,II,B,266,PART 266—HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED AFFORDABLE MULTIFAMILY PROJECT LOANS,G,Subpart G—Contract Rights and Obligations,,§ 266.658 Program monitoring and compliance.,HUD,,,,HUD will monitor the performance of the HFA for compliance with the provisions of this subpart. 40:40:29.0.1.1.1.11.27.1,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.500 Definitions for this subpart.,EPA,,,,"The following definitions apply to this subpart: Evaluated hazardous waste pharmaceutical means a prescription hazardous waste pharmaceutical that has been evaluated by a reverse distributor in accordance with § 266.510(a)(3) and will not be sent to another reverse distributor for further evaluation or verification of manufacture credit. Hazardous waste pharmaceutical means a pharmaceutical that is a solid waste, as defined in § 261.2, and exhibits one or more characteristics identified in part 261 subpart C or is listed in part 261 subpart D. A pharmaceutical is not a solid waste, as defined in § 261.2, and therefore not a hazardous waste pharmaceutical, if it is legitimately used/reused ( e.g., lawfully donated for its intended purpose) or reclaimed. An over-the-counter pharmaceutical, dietary supplement, or homeopathic drug is not a solid waste, as defined in § 261.2, and therefore not a hazardous waste pharmaceutical, if it has a reasonable expectation of being legitimately used/reused ( e.g., lawfully redistributed for its intended purpose) or reclaimed. Healthcare facility means any person that is lawfully authorized to— (1) Provide preventative, diagnostic, therapeutic, rehabilitative, maintenance or palliative care, and counseling, service, assessment or procedure with respect to the physical or mental condition, or functional status, of a human or animal or that affects the structure or function of the human or animal body; or (2) Distribute, sell, or dispense pharmaceuticals, including over-the-counter pharmaceuticals, dietary supplements, homeopathic drugs, or prescription pharmaceuticals. This definition includes, but is not limited to, wholesale distributors, third-party logistics providers that serve as forward distributors, military medical logistics facilities, hospitals, psychiatric hospitals, ambulatory surgical centers, health clinics, physicians' offices, optical and dental providers, chiropractors, long-term care facilities, ambulance services, pharmacies, long-term care pharmacies, mail-order pharmacies, retailers of pharmaceuticals, veterinary clinics, and veterinary hospitals. This definition does not include pharmaceutical manufacturers, reverse distributors, or reverse logistics centers. Household waste pharmaceutical means a pharmaceutical that is a solid waste, as defined in § 261.2, but is excluded from being a hazardous waste under § 261.4(b)(1). Long-term care facility means a licensed entity that provides assistance with activities of daily living, including managing and administering pharmaceuticals to one or more individuals at the facility. This definition includes, but is not limited to, hospice facilities, nursing facilities, skilled nursing facilities, and the nursing and skilled nursing care portions of continuing care retirement communities. Not included within the scope of this definition are group homes, independent living communities, assisted living facilities, and the independent and assisted living portions of continuing care retirement communities. Non-creditable hazardous waste pharmaceutical means a prescription hazardous waste pharmaceutical that does not have a reasonable expectation to be eligible for manufacturer credit or a nonprescription hazardous waste pharmaceutical that does not have a reasonable expectation to be legitimately used/reused or reclaimed. This includes but is not limited to, investigational drugs, free samples of pharmaceuticals received by healthcare facilities, residues of pharmaceuticals remaining in empty containers, contaminated personal protective equipment, floor sweepings, and clean-up material from the spills of pharmaceuticals. Non-hazardous waste pharmaceutical means a pharmaceutical that is a solid waste, as defined in § 261.2, and is not listed in 40 CFR part 261 subpart D, and does not exhibit a characteristic identified in 40 CFR part 261 subpart C. Non-pharmaceutical hazardous waste means a solid waste, as defined in § 261.2, that is listed in 40 CFR part 261 subpart D, or exhibits one or more characteristics identified in 40 CFR part 261 subpart C, but is not a pharmaceutical, as defined in this section. Pharmaceutical means any drug or dietary supplement for use by humans or other animals; any electronic nicotine delivery system ( e.g., electronic cigarette or vaping pen); or any liquid nicotine (e-liquid) packaged for retail sale for use in electronic nicotine delivery systems ( e.g., pre-filled cartridges or vials). This definition includes, but is not limited to, dietary supplements, as defined by the Federal Food, Drug and Cosmetic Act; prescription drugs, as defined by 21 CFR 203.3(y); over-the-counter drugs; homeopathic drugs; compounded drugs; investigational new drugs; pharmaceuticals remaining in non-empty containers; personal protective equipment contaminated with pharmaceuticals; and clean-up material from spills of pharmaceuticals. This definition does not include dental amalgam or sharps. Potentially creditable hazardous waste pharmaceutical means a prescription hazardous waste pharmaceutical that has a reasonable expectation to receive manufacturer credit and is— (1) In original manufacturer packaging (except pharmaceuticals that were subject to a recall); (2) Undispensed; and (3) Unexpired or less than one year past expiration date. The term does not include evaluated hazardous waste pharmaceuticals or nonprescription pharmaceuticals including, but not limited to, over-the-counter drugs, homeopathic drugs, and dietary supplements. Reverse distributor means any person that receives and accumulates prescription pharmaceuticals that are potentially creditable hazardous waste pharmaceuticals for the purpose of facilitating or verifying manufacturer credit. Any person, including forward distributors, third-party logistics providers, and pharmaceutical manufacturers, that processes prescription pharmaceuticals for the facilitation or verification of manufacturer credit is considered a reverse distributor." 40:40:29.0.1.1.1.11.27.10,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.509 Shipping potentially creditable hazardous waste pharmaceuticals from a healthcare facility or a reverse distributor to a reverse distributor.,EPA,,,,"(a) Shipping potentially creditable hazardous waste pharmaceuticals. A healthcare facility or a reverse distributor who transports or offers for transport potentially creditable hazardous waste pharmaceuticals off-site to a reverse distributor must comply with all applicable U.S. Department of Transportation regulations in 49 CFR part 171 through 180 for any potentially creditable hazardous waste pharmaceutical that meets the definition of hazardous material in 49 CFR 171.8. For purposes of the Department of Transportation regulations, a material is considered a hazardous waste if it is subject to the Hazardous Waste Manifest Requirements of the U.S. Environmental Protection Agency specified in 40 CFR part 262. Because a potentially creditable hazardous waste pharmaceutical does not require a manifest, it is not considered hazardous waste under the Department of Transportation regulations. (b) Delivery confirmation. Upon receipt of each shipment of potentially creditable hazardous waste pharmaceuticals, the receiving reverse distributor must provide confirmation (paper or electronic) to the healthcare facility or reverse distributor that initiated the shipment that the shipment of potentially creditable hazardous waste pharmaceuticals has arrived at its destination and is under the custody and control of the reverse distributor. (c) Procedures for when delivery confirmation is not received within 35 calendar days. If a healthcare facility or reverse distributor initiates a shipment of potentially creditable hazardous waste pharmaceuticals to a reverse distributor and does not receive delivery confirmation within 35 calendar days from the date that the shipment of potentially creditable hazardous waste pharmaceuticals was sent, the healthcare facility or reverse distributor that initiated the shipment must contact the carrier and the intended recipient ( i.e., the reverse distributor) promptly to report that the delivery confirmation was not received and to determine the status of the potentially creditable hazardous waste pharmaceuticals. (d) Exporting potentially creditable hazardous waste pharmaceuticals. A healthcare facility or reverse distributor that sends potentially creditable hazardous waste pharmaceuticals to a foreign destination must comply with the applicable sections of 40 CFR part 262 subpart H, except the manifesting requirement of § 262.83(c), in addition to paragraphs (a) through (c) of this section. (e) Importing potentially creditable hazardous waste pharmaceuticals. Any person that imports potentially creditable hazardous waste pharmaceuticals into the United States is subject to paragraphs (a) through (c) of this section in lieu of 40 CFR part 262 subpart H. Immediately after the potentially creditable hazardous waste pharmaceuticals enter the United States, they are subject to all applicable requirements of this subpart." 40:40:29.0.1.1.1.11.27.11,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.510 Standards for the management of potentially creditable hazardous waste pharmaceuticals and evaluated hazardous waste pharmaceuticals at reverse distributors.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54113, Aug. 9, 2023]","A reverse distributor may accept potentially creditable hazardous waste pharmaceuticals from off site and accumulate potentially creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals on site without a hazardous waste permit or without having interim status, provided that it complies with the following conditions: (a) Standards for reverse distributors managing potentially creditable hazardous waste pharmaceuticals and evaluated hazardous waste pharmaceuticals —(1) Notification. A reverse distributor must notify the EPA Regional Administrator, using the Site Identification Form (EPA Form 8700-12), that it is a reverse distributor operating under this subpart. (i) A reverse distributor that already has an EPA identification number must notify the EPA Regional Administrator, using the Site Identification Form (EPA Form 8700-12), that it is a reverse distributor, as defined in § 266.500, within 60 days of the effective date of this subpart, or within 60 days of becoming subject to this subpart. (ii) A reverse distributor that does not have an EPA identification number must obtain one by notifying the EPA Regional Administrator, using the Site Identification Form (EPA Form 8700-12), that it is a reverse distributor, as defined in § 266.500, within 60 days of the effective date of this subpart, or within 60 days of becoming subject to this subpart. (2) Inventory by the reverse distributor. A reverse distributor must maintain a current inventory of all the potentially creditable hazardous waste pharmaceuticals and evaluated hazardous waste pharmaceuticals that are accumulated on site. (i) A reverse distributor must inventory each potentially creditable hazardous waste pharmaceutical within 30 calendar days of each waste arriving at the reverse distributor. (ii) The inventory must include the identity ( e.g., name or national drug code) and quantity of each potentially creditable hazardous waste pharmaceutical and evaluated hazardous waste pharmaceutical. (iii) If the reverse distributor already meets the inventory requirements of this paragraph because of other regulatory requirements, such as State Board of Pharmacy regulations, the facility is not required to provide a separate inventory pursuant to this section. (3) Evaluation by a reverse distributor that is not a manufacturer. A reverse distributor that is not a pharmaceutical manufacturer must evaluate a potentially creditable hazardous waste pharmaceutical within 30 calendar days of the waste arriving at the reverse distributor to establish whether it is destined for another reverse distributor for further evaluation or verification of manufacturer credit or for a permitted or interim status treatment, storage, or disposal facility. (i) A potentially creditable hazardous waste pharmaceutical that is destined for another reverse distributor is still considered a “potentially creditable hazardous waste pharmaceutical” and must be managed in accordance with paragraph (b) of this section. (ii) A potentially creditable hazardous waste pharmaceutical that is destined for a permitted or interim status treatment, storage or disposal facility is considered an “evaluated hazardous waste pharmaceutical” and must be managed in accordance with paragraph (c) of this section. (4) Evaluation by a reverse distributor that is a manufacturer. A reverse distributor that is a pharmaceutical manufacturer must evaluate a potentially creditable hazardous waste pharmaceutical to verify manufacturer credit within 30 calendar days of the waste arriving at the facility and following the evaluation must manage the evaluated hazardous waste pharmaceuticals in accordance with paragraph (c) of this section. (5) Maximum accumulation time for hazardous waste pharmaceuticals at a reverse distributor. (i) A reverse distributor may accumulate potentially creditable hazardous waste pharmaceuticals and evaluated hazardous waste pharmaceuticals on site for 180 calendar days or less. The 180 days start after the potentially creditable hazardous waste pharmaceutical has been evaluated and applies to all hazardous waste pharmaceuticals accumulated on site, regardless of whether they are destined for another reverse distributor ( i.e., potentially creditable hazardous waste pharmaceuticals) or a permitted or interim status treatment, storage, or disposal facility ( i.e., evaluated hazardous waste pharmaceuticals). (ii) Aging pharmaceuticals. Unexpired pharmaceuticals that are otherwise creditable but are awaiting their expiration date ( i.e., aging in a holding morgue) can be accumulated for up to 180 days after the expiration date, provided that the unexpired pharmaceuticals are managed in accordance with paragraph (a) of this section and the container labeling and management standards in 266.510(c)(4)(i) through (vi). (6) Security at the reverse distributor facility. A reverse distributor must prevent unknowing entry and minimize the possibility for the unauthorized entry into the portion of the facility where potentially creditable hazardous waste pharmaceuticals and evaluated hazardous waste pharmaceuticals are kept. (i) Examples of methods that may be used to prevent unknowing entry and minimize the possibility for unauthorized entry include, but are not limited to: (A) A 24-hour continuous monitoring surveillance system; (B) An artificial barrier such as a fence; or (C) A means to control entry, such as keycard access. (ii) If the reverse distributor already meets the security requirements of this paragraph because of other regulatory requirements, such as Drug Enforcement Administration or State Board of Pharmacy regulations, the facility is not required to provide separate security measures pursuant to this section. (7) Contingency plan and emergency procedures at a reverse distributor. A reverse distributor that accepts potentially creditable hazardous waste pharmaceuticals from off site must prepare a contingency plan and comply with the other requirements of 40 CFR part 262 subpart M. (8) Closure of a reverse distributor. When closing an area where a reverse distributor accumulates potentially creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals, the reverse distributor must comply with § 262.17(a)(8)(ii) and (iii). (9) Reporting by a reverse distributor —(i) Unauthorized waste report. A reverse distributor must submit an unauthorized waste report if the reverse distributor receives waste from off site that it is not authorized to receive ( e.g., non-pharmaceutical hazardous waste, regulated medical waste). The reverse distributor must prepare and submit an unauthorized waste report to the EPA Regional Administrator within 45 calendar days after the unauthorized waste arrives at the reverse distributor and must send a copy of the unauthorized waste report to the healthcare facility (or other entity) that sent the unauthorized waste. The reverse distributor must manage the unauthorized waste in accordance with all applicable regulations. The unauthorized waste report must be signed by the owner or operator of the reverse distributor, or its authorized representative, and contain the following information: (A) The EPA identification number, name and address of the reverse distributor; (B) The date the reverse distributor received the unauthorized waste; (C) The EPA identification number, name, and address of the healthcare facility (or other entity) that shipped the unauthorized waste, if available; (D) A description and the quantity of each unauthorized waste the reverse distributor received; (E) The method of treatment, storage, or disposal for each unauthorized waste; and (F) A brief explanation of why the waste was unauthorized, if known. (ii) Additional reports. The EPA Regional Administrator may require reverse distributors to furnish additional reports concerning the quantities and disposition of potentially creditable hazardous waste pharmaceuticals and evaluated hazardous waste pharmaceuticals. (10) Recordkeeping by reverse distributors. A reverse distributor must keep the following records (paper or electronic) readily available upon request by an inspector. The periods of retention referred to in this section are extended automatically during the course of any unresolved enforcement action regarding the regulated activity, or as requested by the EPA Regional Administrator. (i) A copy of its notification on file for as long as the facility is subject to this subpart; (ii) A copy of the delivery confirmation and the shipping papers for each shipment of potentially creditable hazardous waste pharmaceuticals that it receives, and a copy of each unauthorized waste report, for at least three years from the date the shipment arrives at the reverse distributor; (iii) A copy of its current inventory for as long as the facility is subject to this subpart. (b) Additional standards for reverse distributors managing potentially creditable hazardous waste pharmaceuticals destined for another reverse distributor. A reverse distributor that does not have a permit or interim status must comply with the following conditions, in addition to the requirements in paragraph (a) of this section, for the management of potentially creditable hazardous waste pharmaceuticals that are destined for another reverse distributor for further evaluation or verification of manufacturer credit: (1) A reverse distributor that receives potentially creditable hazardous waste pharmaceuticals from a healthcare facility must send those potentially creditable hazardous waste pharmaceuticals to another reverse distributor within 180 calendar days after the potentially creditable hazardous waste pharmaceuticals have been evaluated or follow paragraph (c) of this section for evaluated hazardous waste pharmaceuticals. (2) A reverse distributor that receives potentially creditable hazardous waste pharmaceuticals from another reverse distributor must send those potentially creditable hazardous waste pharmaceuticals to a reverse distributor that is a pharmaceutical manufacturer within 180 calendar days after the potentially creditable hazardous waste pharmaceuticals have been evaluated or follow paragraph (c) of this section for evaluated hazardous waste pharmaceuticals. (3) A reverse distributor must ship potentially creditable hazardous waste pharmaceuticals destined for another reverse distributor in accordance with § 266.509. (4) Recordkeeping by reverse distributors. A reverse distributor must keep the following records (paper or electronic) readily available upon request by an inspector for each shipment of potentially creditable hazardous waste pharmaceuticals that it initiates to another reverse distributor, for at least three years from the date of shipment. The periods of retention referred to in this section are extended automatically during the course of any unresolved enforcement action regarding the regulated activity, or as requested by the EPA Regional Administrator. (i) The confirmation of delivery; and (ii) The DOT shipping papers prepared in accordance with 49 CFR part 172 subpart C, if applicable (c) Additional standards for reverse distributors managing evaluated hazardous waste pharmaceuticals. A reverse distributor that does not have a permit or interim status must comply with the following conditions, in addition to the requirements of paragraph (a) of this section, for the management of evaluated hazardous waste pharmaceuticals: (1) Accumulation area at the reverse distributor. A reverse distributor must designate an on-site accumulation area where it will accumulate evaluated hazardous waste pharmaceuticals. (2) Inspections of on-site accumulation area. A reverse distributor must inspect its on-site accumulation area at least once every seven calendar days, looking at containers for leaks and for deterioration caused by corrosion or other factors, as well as for signs of diversion. (3) Personnel training at a reverse distributor. Personnel at a reverse distributor that handle evaluated hazardous waste pharmaceuticals are subject to the training requirements of § 262.17(a)(7). (4) Labeling and management of containers at on-site accumulation areas. A reverse distributor accumulating evaluated hazardous waste pharmaceuticals in containers in an on-site accumulation area must: (i) Label the containers with the words, “hazardous waste pharmaceuticals”; (ii) Ensure the containers are in good condition and managed to prevent leaks; (iii) Use containers that are made of or lined with materials which will not react with, and are otherwise compatible with, the evaluated hazardous waste pharmaceuticals, so that the ability of the container to contain the waste is not impaired; (iv) Keep containers closed, if holding liquid or gel evaluated hazardous waste pharmaceuticals. If the liquid or gel evaluated hazardous waste pharmaceuticals are in their original, intact, sealed packaging; or repackaged, intact, sealed packaging, they are considered to meet the closed container standard; (v) Manage any container of ignitable or reactive evaluated hazardous waste pharmaceuticals, or any container of commingled incompatible evaluated hazardous waste pharmaceuticals so that the container does not have the potential to: (A) Generate extreme heat or pressure, fire or explosion, or violent reaction; (B) Produce uncontrolled toxic mists, fumes, dusts, or gases in sufficient quantities to threaten human health; (C) Produce uncontrolled flammable fumes or gases in sufficient quantities to pose a risk of fire or explosions; (D) Damage the structural integrity of the container of hazardous waste pharmaceuticals; or (E) Through other like means threaten human health or the environment; and (vi) Accumulate evaluated hazardous waste pharmaceuticals that are prohibited from being combusted because of the dilution prohibition of § 268.3(c) of this subchapter ( i.e., metal-bearing waste codes listed in appendix XI of part 268 of this subchapter, unless one or more criteria in § 268.3(c)(1) through (6) are met), or because it is prohibited from being lab packed due to § 268.42(c) of this subchapter ( i.e., waste codes listed in appendix IV of part 268 of this subchapter), in separate containers from other evaluated hazardous waste pharmaceuticals at the reverse distributor. (5) Hazardous waste numbers. Prior to shipping evaluated hazardous waste pharmaceuticals off site, all containers must be marked with the applicable EPA hazardous waste numbers ( i.e., hazardous waste codes), except as provided in § 266.508(a)(1)(iii)(C). A nationally recognized electronic system, such as bar coding or radio frequency identification tag, may be used to identify the applicable EPA hazardous waste numbers ( i.e., hazardous waste codes). (6) Shipments. A reverse distributor must ship evaluated hazardous waste pharmaceuticals that are destined for a permitted or interim status treatment, storage or disposal facility in accordance with the applicable shipping standards in § 266.508(a) or (b). (7) Procedures for a reverse distributor for managing rejected shipments. A reverse distributor that sends a shipment of evaluated hazardous waste pharmaceuticals to a designated facility with the understanding that the designated facility can accept and manage the waste, and later receives that shipment back as a rejected load in accordance with the manifest discrepancy provisions of § 264.72 or § 265.72 of this subchapter, may accumulate the rejected evaluated hazardous waste pharmaceuticals on site for up to an additional 90 calendar days in the on-site accumulation area provided the rejected shipment is managed in accordance with paragraphs (a) and (c) of this section. Upon receipt of the rejected shipment, the reverse distributor must: (i) Sign either: (A) Item 18c of the original manifest, if the original manifest was used for the returned shipment; or (B) Item 20 of the new manifest, if a new manifest was used for the returned shipment; (ii) Provide the transporter a copy of the manifest; (iii) Within 30 calendar days of receipt of the rejected shipment of the evaluated hazardous waste pharmaceuticals, send a copy of the manifest to the designated facility that returned the shipment to the reverse distributor; and (iv) Within 90 calendar days of receipt of the rejected shipment, transport or offer for transport the returned shipment of evaluated hazardous waste pharmaceuticals in accordance with the applicable shipping standards of § 266.508(a) or (b). (8) Land disposal restrictions. Evaluated hazardous waste pharmaceuticals are subject to the land disposal restrictions of 40 CFR part 268. A reverse distributor that accepts potentially creditable hazardous waste pharmaceuticals from off site must comply with the land disposal restrictions in accordance with § 268.7(a) requirements. (9) Reporting by a reverse distributor for evaluated hazardous waste pharmaceuticals —(i) Biennial reporting by a reverse distributor. A reverse distributor that ships evaluated hazardous waste pharmaceuticals off-site must prepare and submit a single copy of a biennial report to the EPA Regional Administrator by March 1 of each even numbered year in accordance with § 262.41. (ii) Exception reporting by a reverse distributor for a missing copy of the manifest. (A) For shipments from a reverse distributor to a designated facility. ( 1 ) If a reverse distributor does not receive a copy of the manifest with the signature of the owner or operator of the designated facility within 35 calendar days of the date the evaluated hazardous waste pharmaceuticals were accepted by the initial transporter, the reverse distributor must contact the transporter or the owner or operator of the designated facility to determine the status of the evaluated hazardous waste pharmaceuticals. ( 2 ) A reverse distributor must submit an exception report to the EPA Regional Administrator for the Region in which the reverse distributor is located if it has not received a copy of the manifest with the signature of the owner or operator of the designated facility within 45 calendar days of the date the evaluated hazardous waste pharmaceutical was accepted by the initial transporter. The exception report must include: ( i ) A legible copy of the manifest for which the reverse distributor does not have confirmation of delivery; and ( ii ) A cover letter signed by the reverse distributor, or its authorized representative, explaining the efforts taken to locate the evaluated hazardous waste pharmaceuticals and the results of those efforts. (B) For shipments rejected by the designated facility and shipped to an alternate facility. ( 1 ) A reverse distributor that does not receive a copy of the manifest with the signature of the owner or operator of the alternate facility within 35 calendar days of the date the evaluated hazardous waste pharmaceuticals were accepted by the initial transporter must contact the transporter or the owner or operator of the alternate facility to determine the status of the hazardous waste. The 35-day timeframe begins the date the evaluated hazardous waste pharmaceuticals are accepted by the transporter forwarding the hazardous waste shipment from the designated facility to the alternate facility. ( 2 ) A reverse distributor must submit an Exception Report to the EPA Regional Administrator for the Region in which the reverse distributor is located if it has not received a copy of the manifest with the signature of the owner or operator of the alternate facility within 45 calendar days of the date the evaluated hazardous waste pharmaceuticals were accepted by the initial transporter. The 45-day timeframe begins the date the evaluated hazardous waste pharmaceuticals are accepted by the transporter forwarding the hazardous waste pharmaceutical shipment from the designated facility to the alternate facility. The Exception Report must include: ( i ) A legible copy of the manifest for which the reverse distributor does not have confirmation of delivery; and ( ii ) A cover letter signed by the reverse distributor, or its authorized representative, explaining the efforts taken to locate the evaluated hazardous waste pharmaceuticals and the results of those efforts. (10) Recordkeeping by a reverse distributor for evaluated hazardous waste pharmaceuticals. (i) A reverse distributor must keep a log (written or electronic) of the inspections of the on-site accumulation area, required by paragraph (c)(2) of this section. This log must be retained as a record for at least three years from the date of the inspection. (ii) A reverse distributor must keep a copy of each manifest signed in accordance with § 262.23(a) for three years or until it receives a signed copy from the designated facility that received the evaluated hazardous waste pharmaceutical. This signed copy must be retained as a record for at least three years from the date the evaluated hazardous waste pharmaceutical was accepted by the initial transporter. (iii) A reverse distributor must keep a copy of each biennial report for at least three years from the due date of the report. (iv) A reverse distributor must keep a copy of each exception report for at least three years from the submission of the report. (v) A reverse distributor must keep records to document personnel training, in accordance with § 262.17(a)(7)(iv). (vi) All records must be readily available upon request by an inspector. The periods of retention referred to in this section are extended automatically during the course of any unresolved enforcement action regarding the regulated activity, or as requested by the EPA Regional Administrator. (d) When a reverse distributor must have a permit. A reverse distributor is an operator of a hazardous waste treatment, storage, or disposal facility and is subject to the requirements of 40 CFR parts 264, 265, and 267 and the permit requirements of 40 CFR part 270, if the reverse distributor: (1) Does not meet the conditions of this section; (2) Accepts manifested hazardous waste from off site; or (3) Treats or disposes of hazardous waste pharmaceuticals on site." 40:40:29.0.1.1.1.11.27.2,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.501 Applicability.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54112, Aug. 9, 2023]","(a) A healthcare facility that is a very small quantity generator when counting all of its hazardous waste, including both its hazardous waste pharmaceuticals and its non-pharmaceutical hazardous waste, remains subject to § 262.14 and is not subject to this subpart, except for §§ 266.505 and 266.507 and the optional provisions of § 266.504. (b) A healthcare facility that is a very small quantity generator when counting all of its hazardous waste, including both its hazardous waste pharmaceuticals and its non-pharmaceutical hazardous waste, has the option of complying with § 266.501(d) for the management of its hazardous waste pharmaceuticals as an alternative to complying with § 262.14 and the optional provisions of § 266.504. (c) A healthcare facility or reverse distributor remains subject to all applicable hazardous waste regulations with respect to the management of its non-pharmaceutical hazardous waste. (d) With the exception of healthcare facilities identified in paragraph (a) of this section, a healthcare facility is subject to the following in lieu of parts 262 through 265: (1) Sections 266.502 and 266.505 through 266.508 of this subpart with respect to the management of: (i) Non-creditable hazardous waste pharmaceuticals, and (ii) Potentially creditable hazardous waste pharmaceuticals if they are not destined for a reverse distributor. (2) Sections 266.502(a), 266.503, 266.505 through 266.507, and 266.509 with respect to the management of potentially creditable hazardous waste pharmaceuticals that are prescription pharmaceuticals and are destined for a reverse distributor. (e) A reverse distributor is subject to §§ 266.505 through 266.510 of this subpart in lieu of parts 262 through 265 with respect to the management of hazardous waste pharmaceuticals. (f) Hazardous waste pharmaceuticals generated or managed by entities other than healthcare facilities and reverse distributors ( e.g., pharmaceutical manufacturers and reverse logistics centers) are not subject to this subpart. Other generators are subject to 40 CFR part 262 for the generation and accumulation of hazardous wastes, including hazardous waste pharmaceuticals. (g) The following are not subject to 40 CFR parts 260 through 273, except as specified: (1) Pharmaceuticals that are not solid waste, as defined by § 261.2, because they are legitimately used/reused ( e.g., lawfully donated for their intended purpose) or reclaimed. (2) Over-the-counter pharmaceuticals, dietary supplements, or homeopathic drugs that are not solid wastes, as defined by § 261.2, because they have a reasonable expectation of being legitimately used/reused ( e.g., lawfully redistributed for their intended purpose) or reclaimed. (3) Pharmaceuticals being managed in accordance with a recall strategy that has been approved by the Food and Drug Administration in accordance with 21 CFR part 7 subpart C. This subpart does apply to the management of the recalled hazardous waste pharmaceuticals after the Food and Drug Administration approves the destruction of the recalled items. (4) Pharmaceuticals being managed in accordance with a recall corrective action plan that has been accepted by the Consumer Product Safety Commission in accordance with 16 CFR part 1115. This subpart does apply to the management of the recalled hazardous waste pharmaceuticals after the Consumer Product Safety Commission approves the destruction of the recalled items. (5) Pharmaceuticals stored according to a preservation order, or during an investigation or judicial proceeding until after the preservation order, investigation, or judicial proceeding has concluded and/or a decision is made to discard the pharmaceuticals. (6) Investigational new drugs for which an investigational new drug application is in effect in accordance with the Food and Drug Administration's regulations in 21 CFR part 312. This subpart does apply to the management of the investigational new drug after the decision is made to discard the investigational new drug or the Food and Drug Administration approves the destruction of the investigational new drug, if the investigational new drug is a hazardous waste. (7) Household waste pharmaceuticals, including those that have been collected by an authorized collector (as defined by the Drug Enforcement Administration), provided the authorized collector complies with the conditional exemption in §§ 266.506(a)(2) and 266.506(b)." 40:40:29.0.1.1.1.11.27.3,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.502 Standards for healthcare facilities managing non-creditable hazardous waste pharmaceuticals.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54112, Aug. 9, 2023]","(a) Notification and withdrawal from this subpart for healthcare facilities managing hazardous waste pharmaceuticals —(1) Notification. A healthcare facility must notify the EPA Regional Administrator, using the Site Identification Form (EPA Form 8700-12), that it is a healthcare facility operating under this subpart. A healthcare facility is not required to fill out Box 10.B. (Waste Codes for Federally Regulated Hazardous Waste) of the Site Identification Form with respect to its hazardous waste pharmaceuticals. A healthcare facility must submit a separate notification (Site Identification Form) for each site or EPA identification number. (i) A healthcare facility that already has an EPA identification number must notify the EPA Regional Administrator, using the Site Identification Form (EPA Form 8700-12), that it is a healthcare facility as part of its next Biennial Report, if it is required to submit one; or if not required to submit a Biennial Report, within 60 days of the effective date of this subpart, or within 60 days of becoming subject to this subpart. (ii) A healthcare facility that does not have an EPA identification number must obtain one by notifying the EPA Regional Administrator, using the Site Identification Form (EPA Form 8700-12), that it is a healthcare facility as part of its next Biennial Report, if it is required to submit one; or if not required to submit a Biennial Report, within 60 days of the effective date of this subpart, or within 60 days of becoming subject to this subpart. (iii) A healthcare facility must keep a copy of its notification on file for as long as the healthcare facility is subject to this subpart. (2) Withdrawal. A healthcare facility that operated under this subpart but is no longer subject to this subpart, because it is a very small quantity generator under § 262.14, and elects to withdraw from this subpart, must notify the appropriate EPA Regional Administrator using the Site Identification Form (EPA Form 8700-12) that it is no longer operating under this subpart. A healthcare facility is not required to fill out Box 10.B. (Waste Codes for Federally Regulated Hazardous Waste) of the Site Identification Form with respect to its hazardous waste pharmaceuticals. A healthcare facility must submit a separate notification (Site Identification Form) for each EPA identification number. (i) A healthcare facility must submit the Site Identification Form notifying that it is withdrawing from this subpart before it begins operating under the conditional exemption of § 262.14. (ii) A healthcare facility must keep a copy of its withdrawal on file for three years from the date of signature on the notification of its withdrawal. (b) Training of personnel managing non-creditable hazardous waste pharmaceuticals at healthcare facilities. A healthcare facility must ensure that all personnel that manage non-creditable hazardous waste pharmaceuticals are thoroughly familiar with proper waste handling and emergency procedures relevant to their responsibilities during normal facility operations and emergencies. (c) Hazardous waste determination for non-creditable pharmaceuticals. A healthcare facility that generates a solid waste that is a non-creditable pharmaceutical must determine whether that pharmaceutical is a hazardous waste pharmaceutical ( i.e., it exhibits a characteristic identified in 40 CFR part 261 subpart C or is listed in 40 CFR part 261 subpart D) in order to determine whether the waste is subject to this subpart. A healthcare facility may choose to manage its non-hazardous waste pharmaceuticals as non-creditable hazardous waste pharmaceuticals under this subpart. (d) Standards for containers used to accumulate non-creditable hazardous waste pharmaceuticals at healthcare facilities. (1) A healthcare facility must place non-creditable hazardous waste pharmaceuticals in a container that is structurally sound, compatible with its contents, and that lacks evidence of leakage, spillage, or damage that could cause leakage under reasonably foreseeable conditions. (2) A healthcare facility that manages ignitable or reactive non-creditable hazardous waste pharmaceuticals, or that mixes or commingles incompatible non-creditable hazardous waste pharmaceuticals must manage the container so that it does not have the potential to: (i) Generate extreme heat or pressure, fire or explosion, or violent reaction; (ii) Produce uncontrolled toxic mists, fumes, dusts, or gases in sufficient quantities to threaten human health; (iii) Produce uncontrolled flammable fumes or gases in sufficient quantities to pose a risk of fire or explosions; (iv) Damage the structural integrity of the container of non-creditable hazardous waste pharmaceuticals; or (v) Through other like means threaten human health or the environment. (3) A healthcare facility must keep containers of non-creditable hazardous waste pharmaceuticals closed and secured in a manner that prevents unauthorized access to its contents. (4) A healthcare facility may accumulate non-creditable hazardous waste pharmaceuticals and non-hazardous non-creditable waste pharmaceuticals in the same container, except that non-creditable hazardous waste pharmaceuticals prohibited from being combusted because of the dilution prohibition of § 268.3(c) of this subchapter ( i.e., metal-bearing waste codes listed in appendix XI of part 268 of this subchapter, unless one or more criteria in § 268.3(c)(1) through (6) are met), or because it is prohibited from being lab packed due to § 268.42(c) ( i.e., waste codes listed in appendix IV of part 268), must be accumulated in separate containers, and labeled with all applicable EPA hazardous waste numbers ( i.e., hazardous waste codes). (e) Labeling containers used to accumulate non-creditable hazardous waste pharmaceuticals at healthcare facilities. A healthcare facility must label or clearly mark each container of non-creditable hazardous waste pharmaceuticals with the phrase “Hazardous Waste Pharmaceuticals.” (f) Maximum accumulation time for non-creditable hazardous waste pharmaceuticals at healthcare facilities. (1) A healthcare facility may accumulate non-creditable hazardous waste pharmaceuticals on site for one year or less without a permit or having interim status. (2) A healthcare facility that accumulates non-creditable hazardous waste pharmaceuticals on-site must demonstrate the length of time that the non-creditable hazardous waste pharmaceuticals have been accumulating, starting from the date it first becomes a waste. A healthcare facility may make this demonstration by any of the following methods: (i) Marking or labeling the container of non-creditable hazardous waste pharmaceuticals with the date that the non-creditable hazardous waste pharmaceuticals became a waste; (ii) Maintaining an inventory system that identifies the date the non-creditable hazardous waste pharmaceuticals being accumulated first became a waste; (iii) Placing the non-creditable hazardous waste pharmaceuticals in a specific area and identifying the earliest date that any of the non-creditable hazardous waste pharmaceuticals in the area became a waste. (g) Land disposal restrictions for non-creditable hazardous waste pharmaceuticals. The non-creditable hazardous waste pharmaceuticals generated by a healthcare facility are subject to the land disposal restrictions of 40 CFR part 268. A healthcare facility that generates non-creditable hazardous waste pharmaceuticals must comply with the land disposal restrictions in accordance with § 268.7(a) requirements, except that it is not required to identify the hazardous waste numbers ( i.e., hazardous waste codes) on the land disposal restrictions notification. (h) Procedures for healthcare facilities for managing rejected shipments of non-creditable hazardous waste pharmaceuticals. A healthcare facility that sends a shipment of non-creditable hazardous waste pharmaceuticals to a designated facility with the understanding that the designated facility can accept and manage the waste, and later receives that shipment back as a rejected load in accordance with the manifest discrepancy provisions of § 264.72 or § 265.72 of this subchapter may accumulate the rejected non-creditable hazardous waste pharmaceuticals on site for up to an additional 90 calendar days provided the rejected shipment is managed in accordance with paragraphs (d) and (e) of this section. Upon receipt of the rejected shipment, the healthcare facility must: (1) Sign either: (i) Item 18c of the original manifest, if the original manifest was used for the returned shipment; or (ii) Item 20 of the new manifest, if a new manifest was used for the returned shipment; (2) Provide the transporter a copy of the manifest; (3) Within 30 calendar days of receipt of the rejected shipment, send a copy of the manifest to the designated facility that returned the shipment to the healthcare facility; and (4) Within 90 calendar days of receipt of the rejected shipment, transport or offer for transport the returned shipment in accordance with the shipping standards of § 266.508(a). (i) Reporting by healthcare facilities for non-creditable hazardous waste pharmaceuticals —(1) Biennial reporting by healthcare facilities. Healthcare facilities are not subject to biennial reporting requirements under § 262.41, with respect to non-creditable hazardous waste pharmaceuticals managed under this subpart. (2) Exception reporting by healthcare facilities for a missing copy of the manifest —(i) For shipments from a healthcare facility to a designated facility. (A) If a healthcare facility does not receive a copy of the manifest with the signature of the owner or operator of the designated facility within 60 calendar days of the date the non-creditable hazardous waste pharmaceuticals were accepted by the initial transporter, the healthcare facility must submit: ( 1 ) A legible copy of the original manifest, indicating that the healthcare facility has not received confirmation of delivery, to the EPA Regional Administrator for the Region in which the healthcare facility is located; and ( 2 ) A handwritten or typed note on the manifest itself, or on an attached sheet of paper, stating that the return copy was not received and explaining the efforts taken to locate the non-creditable hazardous waste pharmaceuticals and the results of those efforts. (B) [Reserved] (ii) For shipments rejected by the designated facility and shipped to an alternate facility. (A) If a healthcare facility does not receive a copy of the manifest for a rejected shipment of the non-creditable hazardous waste pharmaceuticals that is forwarded by the designated facility to an alternate facility (using appropriate manifest procedures), with the signature of the owner or operator of the alternate facility, within 60 calendar days of the date the non-creditable hazardous waste was accepted by the initial transporter forwarding the shipment of non-creditable hazardous waste pharmaceuticals from the designated facility to the alternate facility, the healthcare facility must submit: ( 1 ) A legible copy of the original manifest, indicating that the healthcare facility has not received confirmation of delivery, to the EPA Regional Administrator for the Region in which the healthcare facility is located; and ( 2 ) A handwritten or typed note on the manifest itself, or on an attached sheet of paper, stating that the return copy was not received and explaining the efforts taken to locate the non-creditable hazardous waste pharmaceuticals and the results of those efforts. (B) [Reserved] (3) Additional reports. The EPA Regional Administrator may require healthcare facilities to furnish additional reports concerning the quantities and disposition of non-creditable hazardous waste pharmaceuticals. (j) Recordkeeping by healthcare facilities for non-creditable hazardous waste pharmaceuticals. (1) A healthcare facility must keep a copy of each manifest signed in accordance with § 262.23(a) for three years or until it receives a signed copy from the designated facility which received the non-creditable hazardous waste pharmaceuticals. This signed copy must be retained as a record for at least three years from the date the waste was accepted by the initial transporter. (2) A healthcare facility must keep a copy of each exception report for a period of at least three years from the date of the report. (3) A healthcare facility must keep records of any test results, waste analyses, or other determinations made to support its hazardous waste determination(s) consistent with § 262.11(f), for at least three years from the date the waste was last sent to on-site or off-site treatment, storage or disposal. A healthcare facility that manages all of its non-creditable non-hazardous waste pharmaceuticals as non-creditable hazardous waste pharmaceuticals is not required to keep documentation of hazardous waste determinations. (4) The periods of retention referred to in this section are extended automatically during the course of any unresolved enforcement action regarding the regulated activity, or as requested by the EPA Regional Administrator. (5) All records must be readily available upon request by an inspector. (k) Response to spills of non-creditable hazardous waste pharmaceuticals at healthcare facilities. A healthcare facility must immediately contain all spills of non-creditable hazardous waste pharmaceuticals and manage the spill clean-up materials as non-creditable hazardous waste pharmaceuticals in accordance with the requirements of this subpart. (l) Accepting non-creditable hazardous waste pharmaceuticals from an off-site healthcare facility that is a very small quantity generator. A healthcare facility may accept non-creditable hazardous waste pharmaceuticals from an off-site healthcare facility that is a very small quantity generator under § 262.14, without a permit or without having interim status, provided the receiving healthcare facility: (1) Is under the control of the same person (as defined in § 260.10) as the very small quantity generator healthcare facility that is sending the non-creditable hazardous waste pharmaceuticals off-site (“control,” for the purposes of this section, means the power to direct the policies of the healthcare facility, whether by the ownership of stock, voting rights, or otherwise, except that contractors who operate healthcare facilities on behalf of a different person as defined in § 260.10 of this chapter shall not be deemed to “control” such healthcare facilities) or has a contractual or other documented business relationship whereby the receiving healthcare facility supplies pharmaceuticals to the very small quantity generator healthcare facility; (2) Is operating under this subpart for the management of its non-creditable hazardous waste pharmaceuticals; (3) Manages the non-creditable hazardous waste pharmaceuticals that it receives from off site in compliance with this subpart; and (4) Keeps records of the non-creditable hazardous waste pharmaceuticals shipments it receives from off site for three years from the date that the shipment is received." 40:40:29.0.1.1.1.11.27.4,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.503 Standards for healthcare facilities managing potentially creditable hazardous waste pharmaceuticals.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54113, Aug. 9, 2023]","(a) Hazardous waste determination for potentially creditable pharmaceuticals. A healthcare facility that generates a solid waste that is a potentially creditable pharmaceutical must determine whether the potentially creditable pharmaceutical is a potentially creditable hazardous waste pharmaceutical ( i.e., it is listed in 40 CFR part 261 subpart D or exhibits a characteristic identified in 40 CFR part 261 subpart C). A healthcare facility may choose to manage its potentially creditable non-hazardous waste pharmaceuticals as potentially creditable hazardous waste pharmaceuticals under this subpart. (b) Accepting potentially creditable hazardous waste pharmaceuticals from an off-site healthcare facility that is a very small quantity generator. A healthcare facility may accept potentially creditable hazardous waste pharmaceuticals from an off-site healthcare facility that is a very small quantity generator under § 262.14, without a permit or without having interim status, provided the receiving healthcare facility: (1) Is under the control of the same person (as defined in § 260.10 of this subchapter) as the very small quantity generator healthcare facility that is sending the potentially creditable hazardous waste pharmaceuticals off site (“control,” for the purposes of this section, means the power to direct the policies of the healthcare facility, whether by the ownership of stock, voting rights, or otherwise, except that contractors who operate healthcare facilities on behalf of a different person as defined in § 260.10 of this subchapter shall not be deemed to “control” such healthcare facilities) or has a contractual or other documented business relationship whereby the receiving healthcare facility supplies pharmaceuticals to the very small quantity generator healthcare facility; (2) Is operating under this subpart for the management of its potentially creditable hazardous waste pharmaceuticals; (3) Manages the potentially creditable hazardous waste pharmaceuticals that it receives from off site in compliance with this subpart; and (4) Keeps records of the potentially creditable hazardous waste pharmaceuticals shipments it receives from off site for three years from the date that the shipment is received. (c) Prohibition. Healthcare facilities are prohibited from sending hazardous wastes other than potentially creditable hazardous waste pharmaceuticals to a reverse distributor. (d) Biennial Reporting by healthcare facilities. Healthcare facilities are not subject to biennial reporting requirements under § 262.41 with respect to potentially creditable hazardous waste pharmaceuticals managed under this subpart. (e) Recordkeeping by healthcare facilities. (1) A healthcare facility that initiates a shipment of potentially creditable hazardous waste pharmaceuticals to a reverse distributor must keep the following records (paper or electronic) for each shipment of potentially creditable hazardous waste pharmaceuticals for three years from the date of shipment: (i) The confirmation of delivery; and (ii) The shipping papers prepared in accordance with 49 CFR part 172 subpart C, if applicable. (2) The periods of retention referred to in this section are extended automatically during the course of any unresolved enforcement action regarding the regulated activity, or as requested by the EPA Regional Administrator. (3) All records must be readily available upon request by an inspector. (f) Response to spills of potentially creditable hazardous waste pharmaceuticals at healthcare facilities. A healthcare facility must immediately contain all spills of potentially creditable hazardous waste pharmaceuticals and manage the spill clean-up materials as non-creditable hazardous waste pharmaceuticals in accordance with this subpart." 40:40:29.0.1.1.1.11.27.5,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.504 Healthcare facilities that are very small quantity generators for both hazardous waste pharmaceuticals and non-pharmaceutical hazardous waste that are not operating under this subpart.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54113, Aug. 9, 2023]","(a) Potentially creditable hazardous waste pharmaceuticals. A healthcare facility that is a very small quantity generator for both hazardous waste pharmaceuticals and non-pharmaceutical hazardous waste may send its potentially creditable hazardous waste pharmaceuticals to a reverse distributor. (b) Off-site collection of hazardous waste pharmaceuticals generated by a healthcare facility that is a very small quantity generator. A healthcare facility that is a very small quantity generator for both hazardous waste pharmaceuticals and non-pharmaceutical hazardous waste may send its hazardous waste pharmaceuticals off site to another generator, provided: (1) The receiving healthcare facility meets the conditions in § 266.502(l) of this subpart and § 266.503(b), as applicable; or (2) The very small quantity generator healthcare facility meets the conditions in § 262.14(a)(5)(viii) and the receiving large quantity generator meets the conditions in § 262.17(f). (c) Long-term care facilities that are very small quantity generators. A long-term care facility that is a very small quantity generator for both hazardous waste pharmaceuticals and non-pharmaceutical hazardous waste may dispose of its hazardous waste pharmaceuticals (excluding contaminated personal protective equipment or clean-up materials) in an on-site collection receptacle of an authorized collector (as defined by the Drug Enforcement Administration) that is registered with the Drug Enforcement Administration provided the contents are collected, stored, transported, destroyed and disposed of in compliance with all applicable Drug Enforcement Administration regulations for controlled substances. (d) Long-term care facilities with 20 beds or fewer. A long-term care facility with 20 beds or fewer is presumed to be a very small quantity generator subject to § 262.14 for both hazardous waste pharmaceuticals and non-pharmaceutical hazardous waste and not subject to this subpart, except for §§ 266.505 and 266.507 and the other optional provisions of this section. The EPA Regional Administrator has the responsibility to demonstrate that a long-term care facility with 20 beds or fewer generates quantities of hazardous waste that are in excess of the very small quantity generator limits as defined in § 260.10. A long-term care facility with more than 20 beds that operates as a very small quantity generator under § 262.14 must demonstrate that it generates quantities of hazardous waste that are within the very small quantity generator limits as defined by § 260.10." 40:40:29.0.1.1.1.11.27.6,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.505 Prohibition on sewering hazardous waste pharmaceuticals.,EPA,,,"[88 FR 54113, Aug. 9, 2023]",All healthcare facilities—including very small quantity generators operating under § 262.14 of this subchapter in lieu of this subpart—and reverse distributors are prohibited from discharging hazardous waste pharmaceuticals to a sewer system that passes through to a publicly-owned treatment works. Healthcare facilities and reverse distributors remain subject to the prohibitions in 40 CFR 403.5(b). 40:40:29.0.1.1.1.11.27.7,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.506 Conditional exemption for hazardous waste pharmaceuticals that are also controlled substances and household waste pharmaceuticals collected by an authorized collector.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54113, Aug. 9, 2023]","(a) Conditional exemptions. Provided the conditions of paragraph (b) of this section are met, the following are exempt from 40 CFR parts 262 through 273: (1) Hazardous waste pharmaceuticals that are also listed on a schedule of controlled substances by the Drug Enforcement Administration in 21 CFR part 1308, and (2) Household waste pharmaceuticals that are collected by an authorized collector (as defined by the Drug Enforcement Administration) registered with the Drug Enforcement Administration that commingles the household waste pharmaceuticals with controlled substances from an ultimate user (as defined by the Drug Enforcement Administration). (b) Conditions for exemption. The hazardous waste pharmaceuticals must be: (1) Managed in compliance with the sewer prohibition of § 266.505; and (2) Collected, stored, transported, and disposed of in compliance with all applicable Drug Enforcement Administration regulations for controlled substances; and (3) Destroyed by a method that Drug Enforcement Administration has publicly deemed in writing to meet their non-retrievable standard of destruction or combusted at one of the following: (i) A permitted large municipal waste combustor, subject to 40 CFR part 62 subpart FFF or applicable state plan for existing large municipal waste combustors, or 40 CFR part 60 subparts Eb for new large municipal waste combustors; or (ii) A permitted small municipal waste combustor, subject to 40 CFR part 62 subpart JJJ or applicable state plan for existing small municipal waste combustors, or 40 CFR part 60 subparts AAAA for new small municipal waste combustors; or (iii) A permitted hospital, medical and infectious waste incinerator, subject to 40 CFR part 62, subpart HHH, or applicable state plan for existing hospital, medical and infectious waste incinerators, or 40 CFR part 60, subpart Ec, for new hospital, medical and infectious waste incinerators; or (iv) A permitted commercial and industrial solid waste incinerator, subject to 40 CFR part 62, subpart III, or applicable state plan for existing commercial and industrial solid waste incinerators, or 40 CFR part 60, subpart CCCC, for new commercial and industrial solid waste incinerators; or (v) A permitted hazardous waste combustor subject to 40 CFR part 63 subpart EEE." 40:40:29.0.1.1.1.11.27.8,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.507 Residues of hazardous waste pharmaceuticals in empty containers.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54113, Aug. 9, 2023]","(a) Stock, dispensing and unit-dose containers. A stock bottle, dispensing bottle, vial, or ampule (not to exceed 1 liter or 10,000 pills); or a unit-dose container ( e.g., a unit-dose packet, cup, wrapper, blister pack, or delivery device) is considered empty and the residues are not regulated as hazardous waste provided the pharmaceuticals have been removed from the stock bottle, dispensing bottle, vial, ampule, or the unit-dose container using the practices commonly employed to remove materials from that type of container. (b) Syringes. A syringe is considered empty and the residues are not regulated as hazardous waste under this subpart provided the contents have been removed by fully depressing the plunger of the syringe. At healthcare facilities operating under this subpart, if a syringe is not empty, the syringe must be placed with its remaining hazardous waste pharmaceuticals into a container that is managed and disposed of as a non-creditable hazardous waste pharmaceutical under this subpart and any applicable federal, state, and local requirements for sharps containers and medical waste. (c) Intravenous (IV) bags. An IV bag is considered empty and the residues are not regulated as hazardous waste provided the pharmaceuticals in the IV bag have been fully administered to a patient, or if the IV bag held non-acute hazardous waste pharmaceuticals and is empty as defined in § 261.7(b)(1) of this subchapter. At healthcare facilities operating under this subpart, if an IV bag is not empty, the IV bag must be placed with its remaining hazardous waste pharmaceuticals into a container that is managed and disposed of as a non-creditable hazardous waste pharmaceutical under this subpart. (d) Other containers, including delivery devices. At healthcare facilities operating under this subpart, hazardous waste pharmaceuticals remaining in all other types of unused, partially administered, or fully administered containers must be managed as non-creditable hazardous waste pharmaceuticals under this subpart, unless the container held non-acute hazardous waste pharmaceuticals and is empty as defined in § 261.7(b)(1) or (2) of this subchapter. This includes, but is not limited to, residues in inhalers, aerosol cans, nebulizers, tubes of ointments, gels, or creams." 40:40:29.0.1.1.1.11.27.9,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,P,Subpart P—Hazardous Waste Pharmaceuticals,,§ 266.508 Shipping non-creditable hazardous waste pharmaceuticals from a healthcare facility or evaluated hazardous waste pharmaceuticals from a reverse distributor.,EPA,,,"[84 FR 5940, Feb. 22, 2019, as amended at 88 FR 54113, Aug. 9, 2023; 88 FR 84713, Dec. 6, 2023; 89 FR 99732, Dec. 11, 2024]","(a) Shipping non-creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals. A healthcare facility must ship non-creditable hazardous waste pharmaceuticals and a reverse distributor must ship evaluated hazardous waste pharmaceuticals off-site to a designated facility (such as a permitted or interim status treatment, storage, or disposal facility) in compliance with: (1) The following pre-transport requirements, before transporting or offering for transport off-site: (i) Packaging. Package the waste in accordance with the applicable Department of Transportation regulations on hazardous materials under 49 CFR parts 173, 178, and 180. (ii) Labeling. Label each package in accordance with the applicable Department of Transportation regulations on hazardous materials under 49 CFR part 172 subpart E. (iii) Marking. (A) Mark each package of hazardous waste pharmaceuticals in accordance with the applicable Department of Transportation (DOT) regulations on hazardous materials under 49 CFR part 172 subpart D; (B) Mark each container of 119 gallons or less used in such transportation with the following words and information in accordance with the requirements of 49 CFR 172.304: HAZARDOUS WASTE—Federal Law Prohibits Improper Disposal. If found, contact the nearest police or public safety authority or the U.S. Environmental Protection Agency. Healthcare Facility's or Reverse distributor's Name and Address Healthcare Facility's or Reverse distributor's EPA Identification Number Manifest Tracking Number (C) Lab packs that will be incinerated in compliance with § 268.42(c) of this subchapter are not required to be marked with EPA hazardous waste numbers ( i.e., hazardous waste codes), except D004, D005, D006, D007, D008, D010, and D011, where applicable. A nationally recognized electronic system, such as bar coding or radio frequency identification tag, may be used to identify the applicable EPA hazardous waste numbers ( i.e., hazardous waste codes). (iv) Placarding. Placard or offer the initial transporter the appropriate placards according to Department of Transportation regulations for hazardous materials under 49 CFR part 172 subpart F. (2) The manifest requirements of 40 CFR part 262 subpart B, except that: (i) A healthcare facility shipping noncreditable hazardous waste pharmaceuticals is not required to list all applicable EPA hazardous waste numbers ( i.e., hazardous waste codes) in Item 13 of EPA Form 8700-22. (ii) A healthcare facility shipping non-creditable hazardous waste pharmaceuticals must write the word “PHRM” or “PHARMS” in Item 13 of EPA Form 8700-22. A healthcare facility may also include the applicable EPA hazardous waste numbers ( i.e., hazardous waste codes) in Item 13 of EPA Form 8700-22. (b) Exporting non-creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals. A healthcare facility or reverse distributor that exports non-creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals is subject to 40 CFR part 262 subpart H. (c) Importing non-creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals. Any person that imports non-creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals is subject to 40 CFR part 262 subpart H. A healthcare facility or reverse distributor may not accept imported non-creditable hazardous waste pharmaceuticals or evaluated hazardous waste pharmaceuticals unless they have a permit or interim status that allows them to accept hazardous waste from off site." 40:40:29.0.1.1.1.12.27.1,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,Q,Subpart Q—Ignitable Spent Refrigerants Recycled for Reuse,,§ 266.600 Purpose and applicability.,EPA,,,,"(a) The purpose of this subpart is to reduce emissions of ignitable spent refrigerants to the lowest achievable level by maximizing the recovery and safe recycling for reuse of such refrigerants during the service, repair, and disposal of appliances. (b) The requirements of this subpart operate in lieu of parts 260 through 270 of this chapter and apply to lower flammability spent refrigerants, as defined in § 266.601, where the refrigerant exhibits the hazardous waste characteristic of ignitability per § 261.21 of this chapter and is being recycled for reuse in the United States. (c) These requirements do not apply to other ignitable spent refrigerants. Ignitable spent refrigerants not subject to this subpart are subject to all applicable requirements of parts 260 through 270 of this chapter when recovered ( i.e., removed from an appliance and stored in an external container) and/or disposed of." 40:40:29.0.1.1.1.12.27.2,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,Q,Subpart Q—Ignitable Spent Refrigerants Recycled for Reuse,,§ 266.601 Definitions for this subpart.,EPA,,,,"For the purposes of this subpart, the following terms have the meanings given below: (a) Refrigerant has the same meaning as defined in 40 CFR 82.152. (b) Ignitable spent refrigerant is a used refrigerant that cannot be reused without first being processed, and that exhibits the hazardous characteristic of ignitability per § 261.21 of this chapter. Used refrigerants that can be legitimately reused without processing are not spent refrigerant. (c) Recycle for reuse, when referring to an ignitable spent refrigerant, means to process the refrigerant to remove contamination and prepare it to be used again. “Recycle for reuse” does not include recycling that involves burning for energy recovery or use in a manner constituting disposal as defined in § 261.2(c) of this chapter, or sham recycling as defined in § 261.2(g) of this chapter. (d) Lower flammability spent refrigerant means a spent refrigerant that is not considered highly flammable. Highly flammable refrigerants include but are not limited to the following chemicals: butane, isobutane, methane, propane, and/or propylene." 40:40:29.0.1.1.1.12.27.3,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,Q,Subpart Q—Ignitable Spent Refrigerants Recycled for Reuse,,§ 266.602 Standards for ignitable spent refrigerant recycled for reuse under this subpart.,EPA,,,,"(a) Persons who recover ( i.e., remove from an appliance and store in an external container) and/or recycle ignitable spent refrigerants for reuse either for further use in equipment of the same owner, or in compliance with motor vehicle air conditioner (MVAC) standards in 40 CFR part 82, subpart B, or who send recovered refrigerant off-site to be recycled for reuse must: (1) Recover and/or recycle for reuse the ignitable spent refrigerant using equipment that is certified for that type of refrigerant and appliance under §§ 82.36 and/or 82.158 of this chapter; and (2) Not speculatively accumulate the ignitable spent refrigerant per § 261.1(c) of this chapter. (b) Persons who receive ignitable spent refrigerants from off-site, and are not a transfer facility that stores the refrigerants for less than ten (10) days before sending the refrigerant to another site to be recycled for reuse, must: (1) If recovering the refrigerant, recover the ignitable spent refrigerant using equipment that is certified for that type of refrigerant and appliance under § 82.36 of this chapter; (2) Meet the applicable emergency preparedness and response requirements of 40 CFR part 261, subpart M; and (3) Not speculatively accumulate the ignitable spent refrigerant per § 261.1(c) of this chapter. (c) Persons receiving ignitable spent refrigerant from off-site to be recycled for reuse under this subpart must: (1) Maintain certification by EPA under § 82.164 of this chapter; (2) Meet the applicable emergency preparedness and response requirements of 40 CFR part 261, subpart M; and (3) Starting with the calendar year beginning January 1, 2029, not speculatively accumulate the ignitable spent refrigerant per § 261.1(c) of this chapter." 40:40:29.0.1.1.1.2.14.1,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,C,Subpart C—Recyclable Materials Used in a Manner Constituting Disposal,,§ 266.20 Applicability.,EPA,,,"[50 FR 666, Jan. 4, 1985, as amended at 52 FR 21307, June 5, 1987; 54 FR 36970, Sept. 6, 1989; 59 FR 43500, Aug. 24, 1994; 67 FR 48414, July 24, 2002; 77 FR 22232, Apr. 13, 2012]","(a) The regulations of this subpart apply to recyclable materials that are applied to or placed on the land: (1) Without mixing with any other substance(s); or (2) After mixing or combination with any other substance(s). These materials will be referred to throughout this subpart as “materials used in a manner that constitutes disposal.” (b) Products produced for the general public's use that are used in a manner that constitutes disposal and that contain recyclable materials are not presently subject to regulation if the recyclable materials have undergone a chemical reaction in the course of producing the products so as to become inseparable by physical means and if such products meet the applicable treatment standards in subpart D of part 268 (or applicable prohibition levels in § 268.32 of this chapter or RCRA section 3004(d), where no treatment standards have been established) for each recyclable material ( i.e. , hazardous waste) that they contain, and the recycler complies with § 268.7(b)(6) of this chapter. (c) Anti-skid/deicing uses of slags, which are generated from high temperature metals recovery (HTMR) processing of hazardous waste K061, K062, and F006, in a manner constituting disposal are not covered by the exemption in paragraph (b) of this section and remain subject to regulation. (d) Fertilizers that contain recyclable materials are not subject to regulation provided that: (1) They are zinc fertilizers excluded from the definition of solid waste according to § 261.4(a)(21) of this chapter; or (2) They meet the applicable treatment standards in subpart D of Part 268 of this chapter for each hazardous waste that they contain." 40:40:29.0.1.1.1.2.14.2,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,C,Subpart C—Recyclable Materials Used in a Manner Constituting Disposal,,§ 266.21 Standards applicable to generators and transporters of materials used in a manner that constitutes disposal.,EPA,,,,"Generators and transporters of materials that are used in a manner that constitutes disposal are subject to the applicable requirements of parts 262 and 263 of this chapter, and the notification requirement under section 3010 of RCRA." 40:40:29.0.1.1.1.2.14.3,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,C,Subpart C—Recyclable Materials Used in a Manner Constituting Disposal,,§ 266.22 Standards applicable to storers of materials that are to be used in a manner that constitutes disposal who are not the ultimate users.,EPA,,,"[75 FR 13006, Mar. 18, 2010]","Owners or operators of facilities that store recyclable materials that are to be used in a manner that constitutes disposal, but who are not the ultimate users of the materials, are regulated under all applicable provisions of subparts A through L of parts 264, 265 and 267, and parts 270 and 124 of this chapter and the notification requirement under section 3010 of RCRA." 40:40:29.0.1.1.1.2.14.4,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,C,Subpart C—Recyclable Materials Used in a Manner Constituting Disposal,,§ 266.23 Standards applicable to users of materials that are used in a manner that constitutes disposal.,EPA,,,"[50 FR 666, Jan. 4, 1985, as amended at 50 FR 28750, July 15, 1985; 59 FR 48042, Sept. 19, 1994]","(a) Owners or operators of facilities that use recyclable materials in a manner that constitutes disposal are regulated under all applicable provisions of subparts A through N of parts 124, 264, 265, 268, and 270 of this chapter and the notification requirement under section 3010 of RCRA. (These requirements do not apply to products which contain these recyclable materials under the provisions of § 266.20(b) of this chapter.) (b) The use of waste or used oil or other material, which is contaminated with dioxin or any other hazardous waste (other than a waste identified solely on the basis of ignitability), for dust suppression or road treatment is prohibited." 40:40:29.0.1.1.1.4.14.1,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,F,Subpart F—Recyclable Materials Utilized for Precious Metal Recovery,,§ 266.70 Applicability and requirements.,EPA,,,"[50 FR 666, Jan. 4, 1985, as amended at 61 FR 16315, Apr. 12, 1996; 71 FR 40277, July 14, 2006; 75 FR 13007, Mar. 18, 2010; 81 FR 85727, Nov. 28, 2016]","(a) The regulations of this subpart apply to recyclable materials that are reclaimed to recover economically significant amounts of gold, silver, platinum, palladium, iridium, osmium, rhodium, ruthenium, or any combination of these. (b) Persons who generate, transport, or store recyclable materials that are regulated under this subpart are subject to the following requirements: (1) Notification requirements under section 3010 of RCRA; (2) Subpart B of part 262 (for generators), 40 CFR 263.20 and 263.21 (for transporters), and 40 CFR 265.71 and 265.72 (for persons who store) of this chapter; and (3) For precious metals exported to or imported from other countries for recovery, 40 CFR part 262, subpart H and 265.12. (c) Persons who store recycled materials that are regulated under this subpart must keep the following records to document that they are not accumulating these materials speculatively (as defined in § 261.1(c) of this chapter); (1) Records showing the volume of these materials stored at the beginning of the calendar year; (2) The amount of these materials generated or received during the calendar year; and (3) The amount of materials remaining at the end of the calendar year. (d) Recyclable materials that are regulated under this subpart that are accumulated speculatively (as defined in § 261.1(c) of this chapter) are subject to all applicable provisions of parts 262 through 265, 267, 270, and 124 of this chapter." 40:40:29.0.1.1.1.5.14.1,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,G,Subpart G—Spent Lead-Acid Batteries Being Reclaimed,,§ 266.80 Applicability and requirements.,EPA,,,"[63 FR 71229, Dec. 24, 1998, as amended at 71 FR 40277, July 14, 2006; 75 FR 13007, Mar. 18, 2010; 75 FR 1261, Jan. 8, 2010; 81 FR 85727, Nov. 28, 2016; 81 FR 85827, Nov. 28, 2016]","(a) Are spent lead-acid batteries exempt from hazardous waste management requirements? If you generate, collect, transport, store, or regenerate lead-acid batteries for reclamation purposes, you may be exempt from certain hazardous waste management requirements. Use the following table to determine which requirements apply to you. Alternatively, you may choose to manage your spent lead-acid batteries under the “Universal Waste” rule in 40 CFR part 273. (b) If I store spent lead-acid batteries before I reclaim them but not through regeneration, which requirements apply? The requirements of paragraph (b) of this section apply to you if you store spent lead-acid batteries before you reclaim them, but you don't reclaim them through regeneration. The requirements are slightly different depending on your RCRA permit status. (1) For Interim Status Facilities, you must comply with: (i) Notification requirements under section 3010 of RCRA. (ii) All applicable provisions in subpart A of part 265 of this chapter. (iii) All applicable provisions in subpart B of part 265 of this chapter except § 265.13 (waste analysis). (iv) All applicable provisions in subparts C and D of part 265 of this chapter. (v) All applicable provisions in subpart E of part 265 of this chapter except §§ 265.71 and 265.72 (dealing with the use of the manifest and manifest discrepancies). (vi) All applicable provisions in subparts F through L of part 265 of this chapter. (vii) All applicable provisions in parts 270 and 124 of this chapter. (viii) All applicable provisions in part 267 of this chapter. (2) For Permitted Facilities: (i) Notification requirements under section 3010 of RCRA. (ii) All applicable provisions in subpart A of part 264 of this chapter. (iii) All applicable provisions in subpart B of part 264 of this chapter (but not § 264.13 (waste analysis). (iv) All applicable provisions in subparts C and D of part 264 of this chapter. (v) All applicable provisions in subpart E of part 264 of this chapter (but not § 264.71 or § 264.72 (dealing with the use of the manifest and manifest discrepancies). (vi) All applicable provisions in subparts F through L of part 264 of this chapter. (vii) All applicable provisions in parts 270 and 124 of this chapter. (viii) All applicable provisions in part 267 of this chapter." 40:40:29.0.1.1.1.6.14.1,40,Protection of Environment,I,I,266,PART 266—STANDARDS FOR THE MANAGEMENT OF SPECIFIC HAZARDOUS WASTES AND SPECIFIC TYPES OF HAZARDOUS WASTE MANAGEMENT FACILITIES,H,Subpart H—Hazardous Waste Burned in Boilers and Industrial Furnaces,,§ 266.100 Applicability.,EPA,,,"[56 FR 7208, Feb. 21, 1991]","(a) The regulations of this subpart apply to hazardous waste burned or processed in a boiler or industrial furnace (as defined in § 260.10 of this chapter) irrespective of the purpose of burning or processing, except as provided by paragraphs (b), (c), (d), (g), and (h) of this section. In this subpart, the term “burn” means burning for energy recovery or destruction, or processing for materials recovery or as an ingredient. The emissions standards of §§ 266.104, 266.105, 266.106, and 266.107 apply to facilities operating under interim status or under a RCRA permit as specified in §§ 266.102 and 266.103. (b) Integration of the MACT standards. (1) Except as provided by paragraphs (b)(2), (b)(3), and (b)(4) of this section, the standards of this part do not apply to a new hazardous waste boiler or industrial furnace unit that becomes subject to RCRA permit requirements after October 12, 2005; or no longer apply when an owner or operator of an existing hazardous waste boiler or industrial furnace unit demonstrates compliance with the maximum achievable control technology (MACT) requirements of part 63, subpart EEE, of this chapter by conducting a comprehensive performance test and submitting to the Administrator a Notification of Compliance under §§ 63.1207(j) and 63.1210(d) of this chapter documenting compliance with the requirements of part 63, subpart EEE, of this chapter. Nevertheless, even after this demonstration of compliance with the MACT standards, RCRA permit conditions that were based on the standards of this part will continue to be in effect until they are removed from the permit or the permit is terminated or revoked, unless the permit expressly provides otherwise. (2) The following standards continue to apply: (i) If you elect to comply with § 270.235(a)(1)(i) of this chapter to minimize emissions of toxic compounds from startup, shutdown, and malfunction events, § 266.102(e)(1) requiring operations in accordance with the operating requirements specified in the permit at all times that hazardous waste is in the unit, and § 266.102(e)(2)(iii) requiring compliance with the emission standards and operating requirements during startup and shutdown if hazardous waste is in the combustion chamber, except for particular hazardous wastes. These provisions apply only during startup, shutdown, and malfunction events; (ii) The closure requirements of §§ 266.102(e)(11) and 266.103(l); (iii) The standards for direct transfer of § 266.111; (iv) The standards for regulation of residues of § 266.112; and (v) The applicable requirements of subparts A through H, BB and CC of parts 264 and 265 of this chapter. (3) If you own or operate a boiler or hydrochloric acid production furnace that is an area source under § 63.2 of this chapter and you elect not to comply with the emission standards under §§ 63.1216, 63.1217, and 63.1218 of this chapter for particulate matter, semivolatile and low volatile metals, and total chlorine, you also remain subject to: (i) Section 266.105—Standards to control particulate matter; (ii) Section 266.106—Standards to control metals emissions, except for mercury; and (iii) Section 266.107—Standards to control hydrogen chloride and chlorine gas. (4) The particulate matter standard of § 266.105 remains in effect for boilers that elect to comply with the alternative to the particulate matter standard under §§ 63.1216(e) and 63.1217(e) of this chapter. (c) The following hazardous wastes and facilities are not subject to regulation under this subpart: (1) Used oil burned for energy recovery that is also a hazardous waste solely because it exhibits a characteristic of hazardous waste identified in subpart C of part 261 of this chapter. Such used oil is subject to regulation under part 279 of this chapter; (2) Gas recovered from hazardous or solid waste landfills when such gas is burned for energy recovery; (3) Hazardous wastes that are exempt from regulation under §§ 261.4 and 261.6(a)(3)(iii) and (iv) of this subchapter, and hazardous wastes that are subject to the conditions for exemption for very small quantity generators under § 262.14 of this subchapter; and (4) Coke ovens, if the only hazardous waste burned is EPA Hazardous Waste No. K087, decanter tank tar sludge from coking operations. (d) Owners and operators of smelting, melting, and refining furnaces (including pyrometallurgical devices such as cupolas, sintering machines, roasters, and foundry furnaces, but not including cement kilns, aggregate kilns, or halogen acid furnaces burning hazardous waste) that process hazardous waste solely for metal recovery are conditionally exempt from regulation under this subpart, except for §§ 266.101 and 266.112. (1) To be exempt from §§ 266.102 through 266.111, an owner or operator of a metal recovery furnace or mercury recovery furnace must comply with the following requirements, except that an owner or operator of a lead or a nickel-chromium recovery furnace, or a metal recovery furnace that burns baghouse bags used to capture metallic dusts emitted by steel manufacturing, must comply with the requirements of paragraph (d)(3) of this section, and owners or operators of lead recovery furnaces that are subject to regulation under the Secondary Lead Smelting NESHAP must comply with the requirements of paragraph (h) of this section. (i) Provide a one-time written notice to the Director indicating the following: (A) The owner or operator claims exemption under this paragraph; (B) The hazardous waste is burned solely for metal recovery consistent with the provisions of paragraph (d)(2) of this section; (C) The hazardous waste contains recoverable levels of metals; and (D) The owner or operator will comply with the sampling and analysis and recordkeeping requirements of this paragraph; (ii) Sample and analyze the hazardous waste and other feedstocks as necessary to comply with the requirements of this paragraph by using appropriate methods; and (iii) Maintain at the facility for at least three years records to document compliance with the provisions of this paragraph including limits on levels of toxic organic constituents and Btu value of the waste, and levels of recoverable metals in the hazardous waste compared to normal nonhazardous waste feedstocks. (2) A hazardous waste meeting either of the following criteria is not processed solely for metal recovery: (i) The hazardous waste has a total concentration of organic compounds listed in part 261, appendix VIII, of this chapter exceeding 500 ppm by weight, as-fired, and so is considered to be burned for destruction. The concentration of organic compounds in a waste as-generated may be reduced to the 500 ppm limit by bona fide treatment that removes or destroys organic constituents. Blending for dilution to meet the 500 ppm limit is prohibited and documentation that the waste has not been impermissibly diluted must be retained in the records required by paragraph (d)(1)(iii) of this section; or (ii) The hazardous waste has a heating value of 5,000 Btu/lb or more, as-fired, and so is considered to be burned as fuel. The heating value of a waste as-generated may be reduced to below the 5,000 Btu/lb limit by bona fide treatment that removes or destroys organic constituents. Blending for dilution to meet the 5,000 Btu/lb limit is prohibited and documentation that the waste has not been impermissibly diluted must be retained in the records required by paragraph (d)(1)(iii) of this section. (3) To be exempt from §§ 266.102 through 266.111, an owner or operator of a lead or nickel-chromium or mercury recovery furnace (except for owners or operators of lead recovery furnaces subject to regulation under the Secondary Lead Smelting NESHAP) or a metal recovery furnace that burns baghouse bags used to capture metallic dusts emitted by steel manufacturing, must provide a one-time written notice to the Director identifying each hazardous waste burned and specifying whether the owner or operator claims an exemption for each waste under this paragraph or paragraph (d)(1) of this section. The owners or operator must comply with the requirements of paragraph (d)(1) of this section for those wastes claimed to be exempt under that paragraph and must comply with the requirements below for those wastes claimed to be exempt under this paragraph (d)(3). (i) The hazardous wastes listed in appendices XI, XII, and XIII, part 266, and baghouse bags used to capture metallic dusts emitted by steel manufacturing are exempt from the requirements of paragraph (d)(1) of this section, provided that: (A) A waste listed in appendix XI of this part must contain recoverable levels of lead, a waste listed in appendix XII of this part must contain recoverable levels of nickel or chromium, a waste listed in appendix XIII of this part must contain recoverable levels of mercury and contain less than 500 ppm of 40 CFR part 261, appendix VIII organic constituents, and baghouse bags used to capture metallic dusts emitted by steel manufacturing must contain recoverable levels of metal; and (B) The waste does not exhibit the Toxicity Characteristic of § 261.24 of this chapter for an organic constituent; and (C) The waste is not a hazardous waste listed in subpart D of part 261 of this chapter because it is listed for an organic constituent as identified in appendix VII of part 261 of this chapter; and (D) The owner or operator certifies in the one-time notice that hazardous waste is burned under the provisions of paragraph (d)(3) of this section and that sampling and analysis will be conducted or other information will be obtained as necessary to ensure continued compliance with these requirements. Sampling and analysis shall be conducted according to paragraph (d)(1)(ii) of this section and records to document compliance with paragraph (d)(3) of this section shall be kept for at least three years. (ii) The Director may decide on a case-by-case basis that the toxic organic constituents in a material listed in appendix XI, XII, or XIII of this part that contains a total concentration of more than 500 ppm toxic organic compounds listed in appendix VIII, part 261 of this chapter, may pose a hazard to human health and the environment when burned in a metal recovery furnace exempt from the requirements of this subpart. In that situation, after adequate notice and opportunity for comment, the metal recovery furnace will become subject to the requirements of this subpart when burning that material. In making the hazard determination, the Director will consider the following factors: (A) The concentration and toxicity of organic constituents in the material; and (B) The level of destruction of toxic organic constituents provided by the furnace; and (C) Whether the acceptable ambient levels established in appendices IV or V of this part may be exceeded for any toxic organic compound that may be emitted based on dispersion modeling to predict the maximum annual average off-site ground level concentration. (e) The standards for direct transfer operations under § 266.111 apply only to facilities subject to the permit standards of § 266.102 or the interim status standards of § 266.103. (f) The management standards for residues under § 266.112 apply to any boiler or industrial furnace burning hazardous waste. (g) Owners and operators of smelting, melting, and refining furnaces (including pyrometallurgical devices such as cupolas, sintering machines, roasters, and foundry furnaces) that process hazardous waste for recovery of economically significant amounts of the precious metals gold, silver, platinum, palladium, iridium, osmium, rhodium, or ruthenium, or any combination of these are conditionally exempt from regulation under this subpart, except for § 266.112. To be exempt from §§ 266.101 through 266.111, an owner or operator must: (1) Provide a one-time written notice to the Director indicating the following: (i) The owner or operator claims exemption under this paragraph; (ii) The hazardous waste is burned for legitimate recovery of precious metal; and (iii) The owner or operator will comply with the sampling and analysis and recordkeeping requirements of this paragraph; and (2) Sample and analyze the hazardous waste as necessary to document that the waste contains economically significant amounts of the metals and that the treatment recovers economically significant amounts of precious metal; and (3) Maintain at the facility for at least three years records to document that all hazardous wastes burned are burned for recovery of economically significant amounts of precious metal. (h) Starting June 23, 1997, owners or operators of lead recovery furnaces that process hazardous waste for recovery of lead and that are subject to regulation under the Secondary Lead Smelting NESHAP, are conditionally exempt from regulation under this subpart, except for § 266.101. To be exempt, an owner or operator must provide a one-time notice to the Director identifying each hazardous waste burned and specifying that the owner or operator claims an exemption under this paragraph. The notice also must state that the waste burned has a total concentration of non-metal compounds listed in part 261, appendix VIII, of this chapter of less than 500 ppm by weight, as fired and as provided in paragraph (d)(2)(i) of this section, or is listed in appendix XI to this part 266."