{"database": "openregs", "table": "cfr_sections", "is_view": false, "human_description_en": "where part_number = 248 sorted by section_id", "rows": [["14:14:4.0.1.1.25.0.8.1", 14, "Aeronautics and Space", "II", "A", "248", "PART 248\u2014SUBMISSION OF AUDIT REPORTS", "", "", "", "\u00a7 248.1 Applicability.", "FAA", "", "", "", "The requirements of this part shall be applicable to all air carriers subject to the requirements of part 241 of this subchapter."], ["14:14:4.0.1.1.25.0.8.2", 14, "Aeronautics and Space", "II", "A", "248", "PART 248\u2014SUBMISSION OF AUDIT REPORTS", "", "", "", "\u00a7 248.2 Filing of audit reports.", "FAA", "", "", "[ER-1351, 48 FR 32756, July 19, 1983, as amended by ER-1362, 48 FR 46265, Oct. 12, 1983; 60 FR 66725, Dec. 26, 1995; 75 FR 41584, July 16, 2010; Doc. No. DOT-OST-2014-0140, 84 FR 15932, Apr. 16, 2019]", "(a) Whenever any air carrier subject to \u00a7 248.1 shall have caused an annual audit of its books, records, and accounts to be made by independent public accountants, such air carrier shall file with the Office of Airline Information, in duplicate, a special report consisting of a true and complete copy of the audit report submitted by such independent public accountants, including all schedules, exhibits, and certificates included in, attached to, or submitted with or separately as a part of, the audit report.\n\n(b) Each air carrier subject to \u00a7 248.1 that does not cause an annual audit to be made of its books, records, and accounts for any fiscal year shall, at the close of such fiscal year file with the Bureau of Transportation Statistics' (BTS) Office of Airline Information, as a part of its periodic reports, a statement that no such audit has been performed.\n\n(c) Carriers shall submit their audit reports or their statement that no audit was performed in a format specified in accounting and reporting directives issued by the Bureau of Transportation Statistics' Director of Airline Information."], ["14:14:4.0.1.1.25.0.8.3", 14, "Aeronautics and Space", "II", "A", "248", "PART 248\u2014SUBMISSION OF AUDIT REPORTS", "", "", "", "\u00a7 248.4 Time for filing reports.", "FAA", "", "", "[ER-1351, 48 FR 32756, July 19, 1983, as amended at 60 FR 66725, Dec. 26, 1995]", "The report required by this part shall be filed with the Office of Airline Information within 15 days after the due date of the appropriate periodic BTS Form 41 Report, filed for the 12-month period covered by the audit report, or the date the accountant submits its audit report to the air carrier, whichever is later."], ["14:14:4.0.1.1.25.0.8.4", 14, "Aeronautics and Space", "II", "A", "248", "PART 248\u2014SUBMISSION OF AUDIT REPORTS", "", "", "", "\u00a7 248.5 Withholding from public disclosure.", "FAA", "", "", "[ER-420, 29 FR 13799, Oct. 7, 1964, as amended at 60 FR 66725, Dec. 26, 1995]", "The special reports required to be filed by \u00a7 248.2 shall be withheld from public disclosure, until further order of the BTS, if such treatment is requested by the air carrier at the time of filing."], ["17:17:5.0.1.1.8.1.13.1", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.1 Purpose and scope.", "SEC", "", "", "[65 FR 40362, June 29, 2000, as amended at 69 FR 71329, Dec. 8, 2004]", "(a)  Purpose.  This subpart governs the treatment of nonpublic personal information about consumers by the financial institutions listed in paragraph (b) of this section. This subpart:\n\n(1) Requires a financial institution to provide notice to customers about its privacy policies and practices;\n\n(2) Describes the conditions under which a financial institution may disclose nonpublic personal information about consumers to nonaffiliated third parties; and\n\n(3) Provides a method for consumers to prevent a financial institution from disclosing that information to most nonaffiliated third parties by \u201copting out\u201d of that disclosure, subject to the exceptions in \u00a7\u00a7 248.13, 248.14, and 248.15.\n\n(b)  Scope.  Except with respect to \u00a7 248.30(b), this subpart applies only to nonpublic personal information about individuals who obtain financial products or services primarily for personal, family, or household purposes from the institutions listed below. This subpart does not apply to information about companies or about individuals who obtain financial products or services primarily for business, commercial, or agricultural purposes. This part applies to brokers, dealers, and investment companies, as well as to investment advisers that are registered with the Commission. It also applies to foreign (non-resident) brokers, dealers, investment companies and investment advisers that are registered with the Commission. These entities are referred to in this subpart as \u201cyou.\u201d This subpart does not apply to foreign (non-resident) brokers, dealers, investment companies and investment advisers that are not registered with the Commission. Nothing in this subpart modifies, limits, or supersedes the standards governing individually identifiable health information promulgated by the Secretary of Health and Human Services under the authority of sections 262 and 264 of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d-1320d-8)."], ["17:17:5.0.1.1.8.1.13.2", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.2 Model privacy form: rule of construction.", "SEC", "", "", "[74 FR 62984, Dec. 1, 2009]", "(a)  Model privacy form.  Use of the model privacy form in appendix A to subpart A of this part, consistent with the instructions in appendix A to subpart A, constitutes compliance with the notice content requirements of \u00a7\u00a7 248.6 and 248.7 of this part, although use of the model privacy form is not required.\n\n(b)  Examples.  The examples in this part provide guidance concerning the rule's application in ordinary circumstances. The facts and circumstances of each individual situation, however, will determine whether compliance with an example, to the extent practicable, constitutes compliance with this part.\n\n(c)  Substituted compliance with CFTC financial privacy rules by futures commission merchants and introducing brokers.  Except with respect to \u00a7 248.30(b), any futures commission merchant or introducing broker (as those terms are defined in the Commodity Exchange Act (7 U.S.C. 1,  et seq. )) registered by notice with the Commission for the purpose of conducting business in security futures products pursuant to section 15(b)(11)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(11)(A)) that is subject to and in compliance with the financial privacy rules of the Commodity Futures Trading Commission (17 CFR part 160) will be deemed to be in compliance with this part."], ["17:17:5.0.1.1.8.1.13.3", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.3 Definitions.", "SEC", "", "", "[65 FR 40362, June 29, 2000, as amended at 66 FR 45147, Aug. 27, 2001; 74 FR 40431, Aug. 11, 2009]", "As used in this subpart, unless the context requires otherwise:\n\n(a)  Affiliate  of a broker, dealer, or investment company, or an investment adviser registered with the Commission means any company that controls, is controlled by, or is under common control with the broker, dealer, or investment company, or investment adviser registered with the Commission. In addition, a broker, dealer, or investment company, or an investment adviser registered with the Commission will be deemed an affiliate of a company for purposes of this subpart if:\n\n(1) That company is regulated under Title V of the GLBA by the Federal Trade Commission or by a Federal functional regulator other than the Commission; and\n\n(2) Rules adopted by the Federal Trade Commission or another federal functional regulator under Title V of the GLBA treat the broker, dealer, or investment company, or investment adviser registered with the Commission as an affiliate of that company.\n\n(b)  Broker  has the same meaning as in section 3(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)).\n\n(c)(1)  Clear and conspicuous  means that a notice is reasonably understandable and designed to call attention to the nature and significance of the information in the notice.\n\n(2)  Examples \u2014(i)  Reasonably understandable.  You make your notice reasonably understandable if you:\n\n(A) Present the information in the notice in clear, concise sentences, paragraphs, and sections;\n\n(B) Use short explanatory sentences or bullet lists whenever possible;\n\n(C) Use definite, concrete, everyday words and active voice whenever possible;\n\n(D) Avoid multiple negatives;\n\n(E) Avoid legal and highly technical business terminology whenever possible; and\n\n(F) Avoid explanations that are imprecise and readily subject to different interpretations.\n\n(ii)  Designed to call attention.  You design your notice to call attention to the nature and significance of the information in it if you:\n\n(A) Use a plain-language heading to call attention to the notice;\n\n(B) Use a typeface and type size that are easy to read;\n\n(C) Provide wide margins and ample line spacing;\n\n(D) Use boldface or italics for key words; and\n\n(E) Use distinctive type size, style, and graphic devices, such as shading or sidebars when you combine your notice with other information.\n\n(iii)  Notices on web sites.  If you provide a notice on a web page, you design your notice to call attention to the nature and significance of the information in it if you use text or visual cues to encourage scrolling down the page if necessary to view the entire notice and ensure that other elements on the web site (such as text, graphics, hyperlinks, or sound) do not distract attention from the notice, and you either:\n\n(A) Place the notice on a screen that consumers frequently access, such as a page on which transactions are conducted; or\n\n(B) Place a link on a screen that consumers frequently access, such as a page on which transactions are conducted, that connects directly to the notice and is labeled appropriately to convey the importance, nature, and relevance of the notice.\n\n(d)  Collect  means to obtain information that you organize or can retrieve by the name of an individual or by identifying number, symbol, or other identifying particular assigned to the individual, irrespective of the source of the underlying information.\n\n(e)  Commission  means the Securities and Exchange Commission.\n\n(f)  Company  means any corporation, limited liability company, business trust, general or limited partnership, association, or similar organization.\n\n(g)(1)  Consumer  means an individual who obtains or has obtained a financial product or service from you that is to be used primarily for personal, family, or household purposes, or that individual's legal representative.\n\n(2)  Examples.  (i) An individual is your consumer if he or she provides nonpublic personal information to you in connection with obtaining or seeking to obtain brokerage services or investment advisory services, whether or not you provide brokerage services to the individual or establish a continuing relationship with the individual.\n\n(ii) An individual is not your consumer if he or she provides you only with his or her name, address, and general areas of investment interest in connection with a request for a prospectus, an investment adviser brochure, or other information about financial products or services.\n\n(iii) An individual is not your consumer if he or she has an account with another broker or dealer (the introducing broker-dealer) that carries securities for the individual in a special omnibus account with you (the clearing broker-dealer) in the name of the introducing broker-dealer, and when you receive only the account numbers and transaction information of the introducing broker-dealer's consumers in order to clear transactions.\n\n(iv) If you are an investment company, an individual is not your consumer when the individual purchases an interest in shares you have issued only through a broker or dealer or investment adviser who is the record owner of those shares.\n\n(v) An individual who is a consumer of another financial institution is not your consumer solely because you act as agent for, or provide processing or other services to, that financial institution.\n\n(vi) An individual is not your consumer solely because he or she has designated you as trustee for a trust.\n\n(vii) An individual is not your consumer solely because he or she is a beneficiary of a trust for which you are a trustee.\n\n(viii) An individual is not your consumer solely because he or she is a participant or a beneficiary of an employee benefit plan that you sponsor or for which you act as a trustee or fiduciary.\n\n(h)  Consumer reporting agency  has the same meaning as in section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)).\n\n(i)  Control  of a company means the power to exercise a controlling influence over the management or policies of a company whether through ownership of securities, by contract, or otherwise. Any person who owns beneficially, either directly or through one or more controlled companies, more than 25 percent of the voting securities of any company is presumed to control the company. Any person who does not own more than 25 percent of the voting securities of any company will be presumed not to control the company. Any presumption regarding control may be rebutted by evidence, but, in the case of an investment company, will continue until the Commission makes a decision to the contrary according to the procedures described in section 2(a)(9) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(9)).\n\n(j)  Customer  means a consumer who has a customer relationship with you.\n\n(k)(1)  Customer relationship  means a continuing relationship between a consumer and you under which you provide one or more financial products or services to the consumer that are to be used primarily for personal, family, or household purposes.\n\n(2)  Examples \u2014(i)  Continuing relationship.  A consumer has a continuing relationship with you if:\n\n(A) The consumer has a brokerage account with you, or if a consumer's account is transferred to you from another broker-dealer;\n\n(B) The consumer has an investment advisory contract with you (whether written or oral);\n\n(C) The consumer is the record owner of securities you have issued if you are an investment company;\n\n(D) The consumer holds an investment product through you, such as when you act as a custodian for securities or for assets in an Individual Retirement Arrangement;\n\n(E) The consumer purchases a variable annuity from you;\n\n(F) The consumer has an account with an introducing broker or dealer that clears transactions with and for its customers through you on a fully disclosed basis;\n\n(G) You hold securities or other assets as collateral for a loan made to the consumer, even if you did not make the loan or do not effect any transactions on behalf of the consumer; or\n\n(H) You regularly effect or engage in securities transactions with or for a consumer even if you do not hold any assets of the consumer.\n\n(ii)  No continuing relationship.  A consumer does not, however, have a continuing relationship with you if you open an account for the consumer solely for the purpose of liquidating or purchasing securities as an accommodation, i.e., on a one time basis, without the expectation of engaging in other transactions.\n\n(l)  Dealer  has the same meaning as in section 3(a)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(5)).\n\n(m)  Federal functional regulator  means:\n\n(1) The Board of Governors of the Federal Reserve System;\n\n(2) The Office of the Comptroller of the Currency;\n\n(3) The Board of Directors of the Federal Deposit Insurance Corporation;\n\n(4) The Director of the Office of Thrift Supervision;\n\n(5) The National Credit Union Administration Board\n\n(6) The Securities and Exchange Commission; and\n\n(7) The Commodity Futures Trading Commission.\n\n(n)(1)  Financial institution  means any institution the business of which is engaging in activities that are financial in nature or incidental to such financial activities as described in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)).\n\n(2)  Financial institution  does not include:\n\n(i) The Federal Agricultural Mortgage Corporation or any entity chartered and operating under the Farm Credit Act of 1971 (12 U.S.C. 2001  et seq. ); or\n\n(ii) Institutions chartered by Congress specifically to engage in securitizations, secondary market sales (including sales of servicing rights), or similar transactions related to a transaction of a consumer, as long as such institutions do not sell or transfer nonpublic personal information to a nonaffiliated third party.\n\n(o)(1)  Financial product or service  means any product or service that a financial holding company could offer by engaging in an activity that is financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)).\n\n(2)  Financial service  includes your evaluation or brokerage of information that you collect in connection with a request or an application from a consumer for a financial product or service.\n\n(p)  GLBA  means the Gramm-Leach-Bliley Act (Pub. L. No. 106-102, 113 Stat. 1338 (1999)).\n\n(q)  Investment adviser  has the same meaning as in section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)).\n\n(r)  Investment company  has the same meaning as in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3), and includes a separate series of the investment company.\n\n(s)(1)  Nonaffiliated third party  means any person except:\n\n(i) Your affiliate; or\n\n(ii) A person employed jointly by you and any company that is not your affiliate (but  nonaffiliated third party  includes the other company that jointly employs the person).\n\n(2)  Nonaffiliated third party  includes any company that is an affiliate solely by virtue of your or your affiliate's direct or indirect ownership or control of the company in conducting merchant banking or investment banking activities of the type described in section 4(k)(4)(H) or insurance company investment activities of the type described in section 4(k)(4)(I) of the Bank Holding Company Act (12 U.S.C. 1843(k)(4)(H) and (I)).\n\n(t)(1)  Nonpublic personal information  means:\n\n(i) Personally identifiable financial information; and\n\n(ii) Any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived using any personally identifiable financial information that is not publicly available information.\n\n(2)  Nonpublic personal information  does not include:\n\n(i) Publicly available information, except as included on a list described in paragraph (t)(1)(ii) of this section or when the publicly available information is disclosed in a manner that indicates the individual is or has been your consumer; or\n\n(ii) Any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived without using any personally identifiable financial information that is not publicly available information.\n\n(3)  Examples of lists.  (i) Nonpublic personal information includes any list of individuals' names and street addresses that is derived in whole or in part using personally identifiable financial information that is not publicly available information, such as account numbers.\n\n(ii) Nonpublic personal information does not include any list of individuals' names and addresses that contains only publicly available information, is not derived in whole or in part using personally identifiable financial information that is not publicly available information, and is not disclosed in a manner that indicates that any of the individuals on the list is a consumer of a financial institution.\n\n(u)(1)  Personally identifiable financial information  means any information:\n\n(i) A consumer provides to you to obtain a financial product or service from you;\n\n(ii) About a consumer resulting from any transaction involving a financial product or service between you and a consumer; or\n\n(iii) You otherwise obtain about a consumer in connection with providing a financial product or service to that consumer.\n\n(2)  Examples \u2014(i)  Information included.  Personally identifiable financial information includes:\n\n(A) Information a consumer provides to you on an application to obtain a loan, credit card, or other financial product or service;\n\n(B) Account balance information, payment history, overdraft history, and credit or debit card purchase information;\n\n(C) The fact that an individual is or has been one of your customers or has obtained a financial product or service from you;\n\n(D) Any information about your consumer if it is disclosed in a manner that indicates that the individual is or has been your consumer;\n\n(E) Any information that a consumer provides to you or that you or your agent otherwise obtain in connection with collecting on a loan or servicing a loan;\n\n(F) Any information you collect through an Internet \u201ccookie\u201d (an information collecting device from a web server); and\n\n(G) Information from a consumer report.\n\n(ii)  Information not included.  Personally identifiable financial information does not include:\n\n(A) A list of names and addresses of customers of an entity that is not a financial institution; or\n\n(B) Information that does not identify a consumer, such as aggregate information or blind data that does not contain personal identifiers such as account numbers, names, or addresses.\n\n(v)(1)  Publicly available information  means any information that you reasonably believe is lawfully made available to the general public from:\n\n(i) Federal, State, or local government records;\n\n(ii) Widely distributed media; or\n\n(iii) Disclosures to the general public that are required to be made by federal, State, or local law.\n\n(2)  Examples \u2014(i)  Reasonable belief.  (A) You have a reasonable belief that information about your consumer is made available to the general public if you have confirmed, or your consumer has represented to you, that the information is publicly available from a source described in paragraphs (v)(1)(i)-(iii) of this section;\n\n(B) You have a reasonable belief that information about your consumer is made available to the general public if you have taken steps to submit the information, in accordance with your internal procedures and policies and with applicable law, to a keeper of federal, State, or local government records that is required by law to make the information publicly available.\n\n(C) You have a reasonable belief that an individual's telephone number is lawfully made available to the general public if you have located the telephone number in the telephone book or the consumer has informed you that the telephone number is not unlisted.\n\n(D) You do not have a reasonable belief that information about a consumer is publicly available solely because that information would normally be recorded with a keeper of federal, State, or local government records that is required by law to make the information publicly available, if the consumer has the ability in accordance with applicable law to keep that information nonpublic, such as where a consumer may record a deed in the name of a blind trust.\n\n(ii)  Government records.  Publicly available information in government records includes information in government real estate records and security interest filings.\n\n(iii)  Widely distributed media.  Publicly available information from widely distributed media includes information from a telephone book, a television or radio program, a newspaper, or a web site that is available to the general public on an unrestricted basis. A web site is not restricted merely because an Internet service provider or a site operator requires a fee or a password, so long as access is available to the general public.\n\n(w)  You  means:\n\n(1) Any broker or dealer;\n\n(2) Any investment company; and\n\n(3) Any investment adviser registered with the Commission under the Investment Advisers Act of 1940."], ["17:17:5.0.1.1.8.1.13.4", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.4 Initial privacy notice to consumers required.", "SEC", "", "", "", "(a)  Initial notice requirement.  You must provide a clear and conspicuous notice that accurately reflects your privacy policies and practices to:\n\n(1)  Customer.  An individual who becomes your customer, not later than when you establish a customer relationship, except as provided in paragraph (e) of this section; and\n\n(2)  Consumer.  A consumer, before you disclose any nonpublic personal information about the consumer to any nonaffiliated third party, if you make such a disclosure other than as authorized by \u00a7\u00a7 248.14 and 248.15.\n\n(b)  When initial notice to a consumer is not required.  You are not required to provide an initial notice to a consumer under paragraph (a) of this section if:\n\n(1) You do not disclose any nonpublic personal information about the consumer to any nonaffiliated third party, other than as authorized by \u00a7\u00a7 248.14 and 248.15; and\n\n(2) You do not have a customer relationship with the consumer.\n\n(c)  When you establish a customer relationship \u2014(1)  General rule.  You establish a customer relationship when you and the consumer enter into a continuing relationship.\n\n(2)  Special rule for loans.  You do not have a customer relationship with a consumer if you buy a loan made to the consumer but do not have the servicing rights for that loan.\n\n(3)  Examples of establishing customer relationship.  You establish a customer relationship when the consumer:\n\n(i) Effects a securities transaction with you or opens a brokerage account with you under your procedures;\n\n(ii) Opens a brokerage account with an introducing broker or dealer that clears transactions with and for its customers through you on a fully disclosed basis;\n\n(iii) Enters into an advisory contract with you (whether in writing or orally); or\n\n(iv) Purchases shares you have issued (and the consumer is the record owner of the shares), if you are an investment company.\n\n(d)  Existing customers.  When an existing customer obtains a new financial product or service from you that is to be used primarily for personal, family, or household purposes, you satisfy the initial notice requirements of paragraph (a) of this section as follows:\n\n(1) You may provide a revised privacy notice, under \u00a7 248.8, that covers the customer's new financial product or service; or\n\n(2) If the initial, revised, or annual notice that you most recently provided to that customer was accurate with respect to the new financial product or service, you do not need to provide a new privacy notice under paragraph (a) of this section.\n\n(e)  Exceptions to allow subsequent delivery of notice.  (1) You may provide the initial notice required by paragraph (a)(1) of this section within a reasonable time after you establish a customer relationship if:\n\n(i) Establishing the customer relationship is not at the customer's election;\n\n(ii) Providing notice not later than when you establish a customer relationship would substantially delay the customer's transaction and the customer agrees to receive the notice at a later time; or\n\n(iii) A nonaffiliated broker or dealer or investment adviser establishes a customer relationship between you and a consumer without your prior knowledge.\n\n(2)  Examples of exceptions \u2014(i)  Not at customer's election.  Establishing a customer relationship is not at the customer's election if the customer's account is transferred to you by a trustee selected by the Securities Investor Protection Corporation (\u201cSIPC\u201d) and appointed by a United States Court.\n\n(ii)  Substantial delay of customer's transaction.  Providing notice not later than when you establish a customer relationship would substantially delay the customer's transaction when you and the individual agree over the telephone to enter into a customer relationship involving prompt delivery of the financial product or service.\n\n(iii)  No substantial delay of customer's transaction.  Providing notice not later than when you establish a customer relationship would not substantially delay the customer's transaction when the relationship is initiated in person at your office or through other means by which the customer may view the notice, such as on a web site.\n\n(f)  Delivery.  When you are required to deliver an initial privacy notice by this section, you must deliver it according to \u00a7 248.9. If you use a short-form initial notice for non-customers according to \u00a7 248.6(d), you may deliver your privacy notice according to \u00a7 248.6(d)(3)."], ["17:17:5.0.1.1.8.1.13.5", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.5 Annual privacy notice to customers required.", "SEC", "", "", "[65 FR 40362, June 29, 2000, as amended at 89 FR 47786, June 3, 2024]", "(a)(1)  General rule.  Except as provided by paragraph (e) of this section, you must provide a clear and conspicuous notice to customers that accurately reflects your privacy policies and practices not less than annually during the continuation of the customer relationship.  Annually  means at least once in any period of 12 consecutive months during which that relationship exists. You may define the 12-consecutive-month period, but you must apply it to the customer on a consistent basis.\n\n(2)  Example.  You provide a notice annually if you define the 12-consecutive-month period as a calendar year and provide the annual notice to the customer once in each calendar year following the calendar year in which you provided the initial notice. For example, if a customer opens an account on any day of year 1, you must provide an annual notice to that customer by December 31 of year 2.\n\n(b)(1)  Termination of customer relationship.  You are not required to provide an annual notice to a former customer.\n\n(2)  Examples.  Your customer becomes a former customer when:\n\n(i) The individual's brokerage account is closed;\n\n(ii) The individual's investment advisory contract is terminated;\n\n(iii) You are an investment company and the individual is no longer the record owner of securities you have issued; or\n\n(iv) You are an investment company and your customer has been determined to be a lost securityholder as defined in 17 CFR 240.17a-24(b).\n\n(c)  Special rule for loans.  If you do not have a customer relationship with a consumer under the special provision for loans in \u00a7 248.4(c)(2), then you need not provide an annual notice to that consumer under this section.\n\n(d)  Delivery.  When you are required to deliver an annual privacy notice by this section, you must deliver it according to \u00a7 248.9.\n\n(e)  Exception to annual privacy notice requirement \u2014(1)  When exception available.  You are not required to deliver an annual privacy notice if you:\n\n(i) Provide nonpublic personal information to nonaffiliated third parties only in accordance with \u00a7 248.13, \u00a7 248.14, or \u00a7 248.15; and\n\n(ii) Have not changed your policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed to the customer under \u00a7 248.6(a)(2) through (5) and (9) in the most recent privacy notice provided pursuant to this part.\n\n(2)  Delivery of annual privacy notice after financial institution no longer meets the requirements for exception.  If you have been excepted from delivering an annual privacy notice pursuant to paragraph (e)(1) of this section and change your policies or practices in such a way that you no longer meet the requirements for that exception, you must comply with paragraph (e)(2)(i) or (ii) of this section, as applicable.\n\n(i)  Changes preceded by a revised privacy notice.  If you no longer meet the requirements of paragraph (e)(1) of this section because you change your policies or practices in such a way that \u00a7 248.8 requires you to provide a revised privacy notice, you must provide an annual privacy notice in accordance with the timing requirement in paragraph (a) of this section, treating the revised privacy notice as an initial privacy notice.\n\n(ii)  Changes not preceded by a revised privacy notice.  If you no longer meet the requirements of paragraph (e)(1) of this section because you change your policies or practices in such a way that \u00a7 248.8 does not require you to provide a revised privacy notice, you must provide an annual privacy notice within 100 days of the change in your policies or practices that causes you to no longer meet the requirement of paragraph (e)(1) of this section.\n\n(iii)  Examples.  (A) You change your policies and practices in such a way that you no longer meet the requirements of paragraph (e)(1) of this section effective April 1 of year 1. Assuming you define the 12-consecutive-month period pursuant to paragraph (a) of this section as a calendar year, if you were required to provide a revised privacy notice under \u00a7 248.8 and you provided that notice on March 1 of year 1, you must provide an annual privacy notice by December 31 of year 2. If you were not required to provide a revised privacy notice under \u00a7 248.8, you must provide an annual privacy notice by July 9 of year 1.\n\n(B) You change your policies and practices in such a way that you no longer meet the requirements of paragraph (e)(1) of this section, and so provide an annual notice to your customers. After providing the annual notice to your customers, you once again meet the requirements of paragraph (e)(1) of this section for an exception to the annual notice requirement. You do not need to provide additional annual notice to your customers until such time as you no longer meet the requirements of paragraph (e)(1) of this section."], ["17:17:5.0.1.1.8.1.13.6", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.6 Information to be included in privacy notices.", "SEC", "", "", "[65 FR 40362, June 29, 2000, as amended at 74 FR 62985, Dec. 1, 2009]", "(a)  General rule.  The initial, annual, and revised privacy notices that you provide under \u00a7\u00a7 248.4, 248.5, and 248.8 must include each of the following items of information that applies to you or to the consumers to whom you send your privacy notice, in addition to any other information you wish to provide:\n\n(1) The categories of nonpublic personal information that you collect;\n\n(2) The categories of nonpublic personal information that you disclose;\n\n(3) The categories of affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information, other than those parties to whom you disclose information under \u00a7\u00a7 248.14 and 248.15;\n\n(4) The categories of nonpublic personal information about your former customers that you disclose and the categories of affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information about your former customers, other than those parties to whom you disclose information under \u00a7\u00a7 248.14 and 248.15;\n\n(5) If you disclose nonpublic personal information to a nonaffiliated third party under \u00a7 248.13 (and no other exception applies to that disclosure), a separate statement of the categories of information you disclose and the categories of third parties with whom you have contracted;\n\n(6) An explanation of the consumer's right under \u00a7 248.10(a) to opt out of the disclosure of nonpublic personal information to nonaffiliated third parties, including the method(s) by which the consumer may exercise that right at that time;\n\n(7) Any disclosures that you make under section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)(iii)) (that is, notices regarding the ability to opt out of disclosures of information among affiliates);\n\n(8) Your policies and practices with respect to protecting the confidentiality and security of nonpublic personal information; and\n\n(9) Any disclosure that you make under paragraph (b) of this section.\n\n(b)  Description of nonaffiliated third parties subject to exceptions.  If you disclose nonpublic personal information to third parties as authorized under \u00a7\u00a7 248.14 and 248.15, you are not required to list those exceptions in the initial or annual privacy notices required by \u00a7\u00a7 248.4 and 248.5. When describing the categories with respect to those parties, it is sufficient to state that you make disclosures to other nonaffiliated companies:\n\n(1) For your everyday business purposes such as [ include all that apply ] to process transactions, maintain account(s), respond to court orders and legal investigations, or report to credit bureaus; or\n\n(2) As permitted by law.\n\n(c)  Examples \u2014(1)  Categories of nonpublic personal information that you collect.  You satisfy the requirement to categorize the nonpublic personal information that you collect if you list the following categories, as applicable:\n\n(i) Information from the consumer;\n\n(ii) Information about the consumer's transactions with you or your affiliates;\n\n(iii) Information about the consumer's transactions with nonaffiliated third parties; and\n\n(iv) Information from a consumer-reporting agency.\n\n(2)  Categories of nonpublic personal information you disclose.  (i) You satisfy the requirement to categorize the nonpublic personal information that you disclose if you list the categories described in paragraph (e)(1) of this section, as applicable, and a few examples to illustrate the types of information in each category.\n\n(ii) If you reserve the right to disclose all of the nonpublic personal information about consumers that you collect, you may simply state that fact without describing the categories or examples of the nonpublic personal information you disclose.\n\n(3)  Categories of affiliates and nonaffiliated third parties to whom you disclose.  You satisfy the requirement to categorize the affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information if you list the following categories, as applicable, and a few examples to illustrate the types of third parties in each category:\n\n(i) Financial service providers;\n\n(ii) Non-financial companies; and\n\n(iii) Others.\n\n(4)  Disclosures under exception for service providers and joint marketers.  If you disclose nonpublic personal information under the exception in \u00a7 248.13 to a nonaffiliated third party to market products or services that you offer alone or jointly with another financial institution, you satisfy the disclosure requirement of paragraph (a)(5) of this section if you:\n\n(i) List the categories of nonpublic personal information you disclose, using the same categories and examples you used to meet the requirements of paragraph (a)(2) of this section, as applicable; and\n\n(ii) State whether the third party is:\n\n(A) A service provider that performs marketing services on your behalf or on behalf of you and another financial institution; or\n\n(B) A financial institution with which you have a joint marketing agreement.\n\n(5)  Simplified notices.  If you do not disclose, and do not wish to reserve the right to disclose, nonpublic personal information to affiliates or nonaffiliated third parties except as authorized under \u00a7\u00a7 248.14 and 248.15, you may simply state that fact, in addition to the information you must provide under paragraphs (a)(1), (a)(8), (a)(9), and (b) of this section.\n\n(6)  Confidentiality and security.  You describe your policies and practices with respect to protecting the confidentiality and security of nonpublic personal information if you do both of the following:\n\n(i) Describe in general terms who is authorized to have access to the information; and\n\n(ii) State whether you have security practices and procedures in place to ensure the confidentiality of the information in accordance with your policy. You are not required to describe technical information about the safeguards you use.\n\n(d)  Short-form initial notice with opt out notice for non-customers.  (1) You may satisfy the initial notice requirements in \u00a7\u00a7 248.4(a)(2), 248.7(b), and 248.7(c) for a consumer who is not a customer by providing a short-form initial notice at the same time as you deliver an opt out notice as required in \u00a7 248.7.\n\n(2) A short-form initial notice must:\n\n(i) Be clear and conspicuous;\n\n(ii) State that your privacy notice is available upon request; and\n\n(iii) Explain a reasonable means by which the consumer may obtain the privacy notice.\n\n(3) You must deliver your short-form initial notice according to \u00a7 248.9. You are not required to deliver your privacy notice with your short-form initial notice. You instead may simply provide the consumer a reasonable means to obtain your privacy notice. If a consumer who receives your short-form notice requests your privacy notice, you must deliver your privacy notice according to \u00a7 248.9.\n\n(4)  Examples of obtaining privacy notice.  You provide a reasonable means by which a consumer may obtain a copy of your privacy notice if you:\n\n(i) Provide a toll-free telephone number that the consumer may call to request the notice; or\n\n(ii) For a consumer who conducts business in person at your office, maintain copies of the notice on hand that you provide to the consumer immediately upon request.\n\n(e)  Future disclosures.  Your notice may include:\n\n(1) Categories of nonpublic personal information that you reserve the right to disclose in the future, but do not currently disclose; and\n\n(2) Categories of affiliates or nonaffiliated third parties to whom you reserve the right in the future to disclose, but to whom you do not currently disclose, nonpublic personal information.\n\n(f)  Model privacy form.  Pursuant to \u00a7 248.2(a) and appendix A to subpart A of this part, Form S-P meets the notice content requirements of this section."], ["17:17:5.0.1.1.8.1.13.7", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.7 Form of opt out notice to consumers; opt out methods.", "SEC", "", "", "[65 FR 40362, June 29, 2000, as amended at 74 FR 62985, Dec. 1, 2009]", "(a)(1)  Form of opt out notice.  If you are required to provide an opt out notice under \u00a7 248.10(a), you must provide a clear and conspicuous notice to each of your consumers that accurately explains the right to opt out under that section. The notice must state:\n\n(i) That you disclose or reserve the right to disclose nonpublic personal information about your consumer to a nonaffiliated third party;\n\n(ii) That the consumer has the right to opt out of that disclosure; and\n\n(iii) A reasonable means by which the consumer may exercise the opt out right.\n\n(2)  Examples \u2014(i)  Adequate opt out notice.  You provide adequate notice that the consumer can opt out of the disclosure of nonpublic personal information to a nonaffiliated third party if you:\n\n(A) Identify all of the categories of nonpublic personal information that you disclose or reserve the right to disclose, and all of the categories of nonaffiliated third parties to which you disclose the information, as described in \u00a7 248.6(a)(2) and (3) and state that the consumer can opt out of the disclosure of that information; and\n\n(B) Identify the financial products or services that the consumer obtains from you, either singly or jointly, to which the opt out direction would apply.\n\n(ii)  Reasonable opt out means.  You provide a reasonable means to exercise an opt out right if you:\n\n(A) Designate check-off boxes in a prominent position on the relevant forms with the opt out notice;\n\n(B) Include a reply form together with the opt out notice;\n\n(C) Provide an electronic means to opt out, such as a form that can be sent via electronic mail or a process at your web site, if the consumer agrees to the electronic delivery of information; or\n\n(D) Provide a toll-free telephone number that consumers may call to opt out.\n\n(iii)  Unreasonable opt out means.  You  do not  provide a reasonable means of opting out if:\n\n(A) The only means of opting out is for the consumer to write his or her own letter to exercise that opt out right; or\n\n(B) The only means of opting out as described in any notice subsequent to the initial notice is to use a check-off box that you provided with the initial notice but did not include with the subsequent notice.\n\n(iv)  Specific opt out means.  You may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer.\n\n(b)  Same form as initial notice permitted.  You may provide the opt out notice together with or on the same written or electronic form as the initial notice you provide in accordance with \u00a7 248.4.\n\n(c)  Initial notice required when opt out notice delivered subsequent to initial notice.  If you provide the opt out notice after the initial notice in accordance with \u00a7 248.4, you must also include a copy of the initial notice with the opt out notice in writing or, if the consumer agrees, electronically.\n\n(d)  Joint relationships.  (1) If two or more consumers jointly obtain a financial product or service from you, you may provide a single opt out notice. Your opt out notice must explain how you will treat an opt out direction by a joint consumer.\n\n(2) Any of the joint consumers may exercise the right to opt out. You may either:\n\n(i) Treat an opt out direction by a joint consumer as applying to all of the associated joint consumers; or\n\n(ii) Permit each joint consumer to opt out separately.\n\n(3) If you permit each joint consumer to opt out separately, you must permit one of the joint consumers to opt out on behalf of all of the joint consumers.\n\n(4) You may not require  all  joint consumers to opt out before you implement  any  opt out direction.\n\n(5)  Example.  If John and Mary have a joint brokerage account with you and arrange for you to send statements to John's address, you may do any of the following, but you must explain in your opt out notice which opt out policy you will follow:\n\n(i) Send a single opt out notice to John's address, but you must accept an opt out direction from either John or Mary;\n\n(ii) Treat an opt out direction by either John or Mary as applying to the entire account. If you do so, and John opts out, you may not require Mary to opt out as well before implementing John's opt out direction; or\n\n(iii) Permit John and Mary to make different opt out directions. If you do so:\n\n(A) You must permit John and Mary to opt out for each other.\n\n(B) If both opt out, you must permit both to notify you in a single response (such as on a form or through a telephone call).\n\n(C) If John opts out and Mary does not, you may only disclose nonpublic personal information about Mary, but not about John and not about John and Mary jointly.\n\n(e)  Time to comply with opt out.  You must comply with a consumer's opt out direction as soon as reasonably practicable after you receive it.\n\n(f)  Continuing right to opt out.  A consumer may exercise the right to opt out at any time.\n\n(g)  Duration of consumer's opt out direction.  (1) A consumer's direction to opt out under this section is effective until the consumer revokes it in writing or, if the consumer agrees, electronically.\n\n(2) When a customer relationship terminates, the customer's opt out direction continues to apply to the nonpublic personal information that you collected during or related to that relationship. If the individual subsequently establishes a new customer relationship with you, the opt out direction that applied to the former relationship does not apply to the new relationship.\n\n(h)  Delivery.  When you are required to deliver an opt out notice by this section, you must deliver it according to \u00a7 248.9.\n\n(i)  Model privacy form.  Pursuant to \u00a7 248.2(a) and appendix A to subpart A of this part, Form S-P meets the notice content requirements of this section."], ["17:17:5.0.1.1.8.1.13.8", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.8 Revised privacy notices.", "SEC", "", "", "", "(a)  General rule.  Except as otherwise authorized in this subpart, you must not, directly or through any affiliate, disclose any nonpublic personal information about a consumer to a nonaffiliated third party other than as described in the initial notice that you provided to that consumer under \u00a7 248.4, unless:\n\n(1) You have provided to the consumer a clear and conspicuous revised notice that accurately describes your policies and practices;\n\n(2) You have provided to the consumer a new opt out notice;\n\n(3) You have given the consumer a reasonable opportunity, before you disclose the information to the nonaffiliated third party, to opt out of the disclosure; and\n\n(4) The consumer does not opt out.\n\n(b)  Examples.  (1) Except as otherwise permitted by \u00a7\u00a7 248.13, 248.14, and 248.15, you must provide a revised notice before you:\n\n(i) Disclose a new category of nonpublic personal information to any nonaffiliated third party;\n\n(ii) Disclose nonpublic personal information to a new category of nonaffiliated third party; or\n\n(iii) Disclose nonpublic personal information about a former customer to a nonaffiliated third party, if that former customer has not had the opportunity to exercise an opt out right regarding that disclosure.\n\n(2) A revised notice is not required if you disclose nonpublic personal information to a new nonaffiliated third party that you adequately described in your prior notice.\n\n(c)  Delivery.  When you are required to deliver a revised privacy notice by this section, you must deliver it according to \u00a7 248.9."], ["17:17:5.0.1.1.8.1.13.9", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.9 Delivering privacy and opt out notices.", "SEC", "", "", "", "(a)  How to provide notices.  You must provide any privacy notices and opt out notices, including short-form initial notices that this subpart requires so that each consumer can reasonably be expected to receive actual notice in writing or, if the consumer agrees, electronically.\n\n(b)(1)  Examples of reasonable expectation of actual notice.  You may reasonably expect that a consumer will receive actual notice if you:\n\n(i) Hand-deliver a printed copy of the notice to the consumer;\n\n(ii) Mail a printed copy of the notice to the last known address of the consumer;\n\n(iii) For the consumer who conducts transactions electronically, post the notice on the electronic site and require the consumer to acknowledge receipt of the notice as a necessary step to obtaining a particular financial product or service; or\n\n(iv) For an isolated transaction with the consumer, such as an ATM transaction, post the notice on the ATM screen and require the consumer to acknowledge receipt of the notice as a necessary step to obtaining the particular financial product or service.\n\n(2)  Examples of unreasonable expectation of actual notice.  You may not, however, reasonably expect that a consumer will receive actual notice of your privacy policies and practices if you:\n\n(i) Only post a sign in your branch or office or generally publish advertisements of your privacy policies and practices; or\n\n(ii) Send the notice via electronic mail to a consumer who does not obtain a financial product or service from you electronically.\n\n(c)  Annual notices only.  (1) You may reasonably expect that a customer will receive actual notice of your annual privacy notice if:\n\n(i) The customer uses your web site to access financial products and services electronically and agrees to receive notices at the web site and you post your current privacy notice continuously in a clear and conspicuous manner on the web site; or\n\n(ii) The customer has requested that you refrain from sending any information regarding the customer relationship, and your current privacy notice remains available to the customer upon request.\n\n(2)  Example of reasonable expectation of receipt of annual privacy notice.  You may reasonably expect that consumers who share an address will receive actual notice of your annual privacy notice if you deliver the notice with or in a stockholder or shareholder report under the conditions in 17 CFR 270.30d-1(f) or 17 CFR 270.30d-2(b), or with or in a prospectus under the conditions in 17 CFR 230.154.\n\n(d)  Oral description of notice insufficient.  You may not provide any notice required by this subpart solely by orally explaining the notice, either in person or over the telephone.\n\n(e)  Retention or accessibility of notices for customers.  (1) For customers only, you must provide the initial notice required by \u00a7 248.4(a)(1), the annual notice required by \u00a7 248.5(a), and the revised notice required by \u00a7 248.8, so that the customer can retain them or obtain them later in writing or, if the customer agrees, electronically.\n\n(2)  Examples of retention or accessibility.  You provide a privacy notice to the customer so that the customer can retain it or obtain it later if you:\n\n(i) Hand-deliver a printed copy of the notice to the customer;\n\n(ii) Mail a printed copy of the notice to the last known address of the customer; or\n\n(iii) Make your current privacy notice available on a web site (or a link to another web site) for the customer who obtains a financial product or service electronically and agrees to receive the notice at the web site.\n\n(f)  Joint notice with other financial institutions.  You may provide a joint notice from you and one or more of your affiliates or other financial institutions, as identified in the notice, as long as the notice is accurate with respect to you and the other institutions.\n\n(g)  Joint relationships.  If two or more consumers jointly obtain a financial product or service from you, you may satisfy the initial, annual, and revised notice requirements of paragraph (a) of this section by providing one notice to those consumers jointly."], ["17:17:5.0.1.1.8.1.14.10", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.10 Limits on disclosure of nonpublic personal information to nonaffiliated third parties.", "SEC", "", "", "", "(a)(1)  Conditions for disclosure.  Except as otherwise authorized in this subpart, you may not, directly or through any affiliate, disclose any nonpublic personal information about a consumer to a nonaffiliated third party unless:\n\n(i) You have provided to the consumer an initial notice as required under \u00a7 248.4;\n\n(ii) You have provided to the consumer an opt out notice as required in \u00a7 248.7;\n\n(iii) You have given the consumer a reasonable opportunity, before you disclose the information to the nonaffiliated third party, to opt out of the disclosure; and\n\n(iv) The consumer does not opt out.\n\n(2)  Opt out definition.  Opt out means a direction by the consumer that you not disclose nonpublic personal information about that consumer to a nonaffiliated third party, other than as permitted by \u00a7\u00a7 248.13, 248.14, and 248.15.\n\n(3)  Examples of reasonable opportunity to opt out.  You provide a consumer with a reasonable opportunity to opt out if:\n\n(i)  By mail.  You mail the notices required in paragraph (a)(1) of this section to the consumer and allow the consumer to opt out by mailing a form, calling a toll-free telephone number, or any other reasonable means within 30 days after the date you mailed the notices.\n\n(ii)  By electronic means.  A customer opens an on-line account with you and agrees to receive the notices required in paragraph (a)(1) of this section electronically, and you allow the customer to opt out by any reasonable means within 30 days after the date that the customer acknowledges receipt of the notices in conjunction with opening the account.\n\n(iii)  Isolated transaction with consumer.  For an isolated transaction, such as the provision of brokerage services to a consumer as an accommodation, you provide the consumer with a reasonable opportunity to opt out if you provide the notices required in paragraph (a)(1) of this section at the time of the transaction and request that the consumer decide, as a necessary part of the transaction, whether to opt out before completing the transaction.\n\n(b)  Application of opt out to all consumers and all nonpublic personal information.  (1) You must comply with this section, regardless of whether you and the consumer have established a customer relationship.\n\n(2) Unless you comply with this section, you may not, directly or through any affiliate, disclose any nonpublic personal information about a consumer that you have collected, regardless of whether you collected it before or after receiving the direction to opt out from the consumer.\n\n(c)  Partial opt out.  You may allow a consumer to select certain nonpublic personal information or certain nonaffiliated third parties with respect to which the consumer wishes to opt out."], ["17:17:5.0.1.1.8.1.14.11", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.11 Limits on redisclosure and reuse of information.", "SEC", "", "", "", "(a)(1)  Information you receive under an exception.  If you receive nonpublic personal information from a nonaffiliated financial institution under an exception in \u00a7 248.14 or \u00a7 248.15, your disclosure and use of that information is limited as follows:\n\n(i) You may disclose the information to the affiliates of the financial institution from which you received the information;\n\n(ii) You may disclose the information to your affiliates, but your affiliates may, in turn, disclose and use the information only to the extent that you may disclose and use the information; and\n\n(iii) You may disclose and use the information pursuant to an exception in \u00a7 248.14 or \u00a7 248.15 in the ordinary course of business to carry out the activity covered by the exception under which you received the information.\n\n(2)  Example.  If you receive a customer list from a nonaffiliated financial institution in order to provide account-processing services under the exception in \u00a7 248.14(a), you may disclose that information under any exception in \u00a7 248.14 or \u00a7 248.15 in the ordinary course of business in order to provide those services. You could also disclose that information in response to a properly authorized subpoena or in the ordinary course of business to your attorneys, accountants, and auditors. You could not disclose that information to a third party for marketing purposes or use that information for your own marketing purposes.\n\n(b)(1)  Information you receive outside of an exception.  If you receive nonpublic personal information from a nonaffiliated financial institution other than under an exception in \u00a7 248.14 or \u00a7 248.15, you may disclose the information only:\n\n(i) To the affiliates of the financial institution from which you received the information;\n\n(ii) To your affiliates, but your affiliates may, in turn, disclose the information only to the extent that you can disclose the information; and\n\n(iii) To any other person, if the disclosure would be lawful if made directly to that person by the financial institution from which you received the information.\n\n(2)  Example.  If you obtain a customer list from a nonaffiliated financial institution outside of the exceptions in \u00a7\u00a7 248.14 and 248.15:\n\n(i) You may use that list for your own purposes;\n\n(ii) You may disclose that list to another nonaffiliated third party only if the financial institution from which you purchased the list could have lawfully disclosed the list to that third party. That is, you may disclose the list in accordance with the privacy policy of the financial institution from which you received the list, as limited by the opt out direction of each consumer whose nonpublic personal information you intend to disclose, and you may disclose the list in accordance with an exception in \u00a7 248.14 or \u00a7 248.15, such as in the ordinary course of business to your attorneys, accountants, or auditors.\n\n(c)  Information you disclose under an exception.  If you disclose nonpublic personal information to a nonaffiliated third party under an exception in \u00a7 248.14 or \u00a7 248.15, the third party may disclose and use that information only as follows:\n\n(1) The third party may disclose the information to your affiliates;\n\n(2) The third party may disclose the information to its affiliates, but its affiliates may, in turn, disclose and use the information only to the extent that the third party may disclose and use the information; and\n\n(3) The third party may disclose and use the information pursuant to an exception in \u00a7 248.14 or \u00a7 248.15 in the ordinary course of business to carry out the activity covered by the exception under which it received the information.\n\n(d)  Information you disclose outside of an exception.  If you disclose nonpublic personal information to a nonaffiliated third party other than under an exception in \u00a7 248.14 or \u00a7 248.15, the third party may disclose the information only:\n\n(1) To your affiliates;\n\n(2) To its affiliates, but its affiliates, in turn, may disclose the information only to the extent the third party can disclose the information; and\n\n(3) To any other person, if the disclosure would be lawful if you made it directly to that person."], ["17:17:5.0.1.1.8.1.14.12", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.12 Limits on sharing account number information for marketing purposes.", "SEC", "", "", "", "(a)  General prohibition on disclosure of account numbers.  You must not, directly or through an affiliate, disclose, other than to a consumer reporting agency, an account number or similar form of access number or access code for a consumer's credit card account, deposit account, or transaction account to any nonaffiliated third party for use in telemarketing, direct mail marketing, or other marketing through electronic mail to the consumer.\n\n(b)  Exceptions.  Paragraph (a) of this section does not apply if you disclose an account number or similar form of access number or access code:\n\n(1) To your agent or service provider solely in order to perform marketing for your own products or services, as long as the agent or service provider is not authorized to directly initiate charges to the account; or\n\n(2) To a participant in a private label credit card program or an affinity or similar program where the participants in the program are identified to the customer when the customer enters into the program.\n\n(c)  Example\u2014Account number.  An account number, or similar form of access number or access code, does not include a number or code in an encrypted form, as long as you do not provide the recipient with a means to decode the number or code."], ["17:17:5.0.1.1.8.1.15.13", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.13 Exception to opt out requirements for service providers and joint marketing.", "SEC", "", "", "", "(a)  General rule.  (1) The opt out requirements in \u00a7\u00a7 248.7 and 248.10 do not apply when you provide nonpublic personal information to a nonaffiliated third party to perform services for you or functions on your behalf, if you:\n\n(i) Provide the initial notice in accordance with \u00a7 248.4; and\n\n(ii) Enter into a contractual agreement with the third party that prohibits the third party from disclosing or using the information other than to carry out the purposes for which you disclosed the information, including use under an exception in \u00a7 248.14 or \u00a7 248.15 in the ordinary course of business to carry out those purposes.\n\n(2)  Example.  If you disclose nonpublic personal information under this section to a financial institution with which you perform joint marketing, your contractual agreement with that institution meets the requirements of paragraph (a)(1)(ii) of this section if it prohibits the institution from disclosing or using the nonpublic personal information except as necessary to carry out the joint marketing or under an exception in \u00a7 248.14 or \u00a7 248.15 in the ordinary course of business to carry out that joint marketing.\n\n(b)  Service may include joint marketing.  The services a nonaffiliated third party performs for you under paragraph (a) of this section may include marketing of your own products or services or marketing of financial products or services offered pursuant to joint agreements between you and one or more financial institutions.\n\n(c)  Definition of joint agreement.  For purposes of this section,  joint agreement  means a written contract pursuant to which you and one or more financial institutions jointly offer, endorse, or sponsor a financial product or service."], ["17:17:5.0.1.1.8.1.15.14", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.14 Exceptions to notice and opt out requirements for processing and servicing transactions.", "SEC", "", "", "", "(a)  Exceptions for processing and servicing transactions at consumer's request.  The requirements for initial notice in \u00a7 248.4(a)(2), for the opt out in \u00a7\u00a7 248.7 and 248.10, and for initial notice in \u00a7 248.13 in connection with service providers and joint marketing, do not apply if you disclose nonpublic personal information as necessary to effect, administer, or enforce a transaction that a consumer requests or authorizes, or in connection with:\n\n(1) Processing or servicing a financial product or service that a consumer requests or authorizes;\n\n(2) Maintaining or servicing the consumer's account with you, or with another entity as part of a private label credit card program or other extension of credit on behalf of such entity; or\n\n(3) A proposed or actual securitization, secondary market sale (including sales of servicing rights), or similar transaction related to a transaction of the consumer.\n\n(b)  Necessary to effect, administer, or enforce a transaction  means that the disclosure is:\n\n(1) Required, or is one of the lawful or appropriate methods, to enforce your rights or the rights of other persons engaged in carrying out the financial transaction or providing the product or service; or\n\n(2) Required, or is a usual, appropriate, or acceptable method:\n\n(i) To carry out the transaction or the product or service business of which the transaction is a part, and record, service, or maintain the consumer's account in the ordinary course of providing the financial service or financial product;\n\n(ii) To administer or service benefits or claims relating to the transaction or the product or service business of which it is a part;\n\n(iii) To provide a confirmation, statement, or other record of the transaction, or information on the status or value of the financial service or financial product to the consumer or the consumer's agent or broker;\n\n(iv) To accrue or recognize incentives or bonuses associated with the transaction that are provided by you or any other party;\n\n(v) To underwrite insurance at the consumer's request or for reinsurance purposes, or for any of the following purposes as they relate to a consumer's insurance: Account administration, reporting, investigating, or preventing fraud or material misrepresentation, processing premium payments, processing insurance claims, administering insurance benefits (including utilization review activities), participating in research projects, or as otherwise required or specifically permitted by federal or State law; or\n\n(vi) In connection with:\n\n(A) The authorization, settlement, billing, processing, clearing, transferring, reconciling or collection of amounts charged, debited, or otherwise paid using a debit, credit, or other payment card, check, or account number, or by other payment means;\n\n(B) The transfer of receivables, accounts, or interests therein; or\n\n(C) The audit of debit, credit, or other payment information."], ["17:17:5.0.1.1.8.1.15.15", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.15 Other exceptions to notice and opt out requirements.", "SEC", "", "", "", "(a)  Exceptions to notice and opt out requirements.  The requirements for initial notice in \u00a7 248.4(a)(2), for the opt out in \u00a7\u00a7 248.7 and 248.10, and for initial notice in \u00a7 248.13 in connection with service providers and joint marketing do not apply when you disclose nonpublic personal information:\n\n(1) With the consent or at the direction of the consumer, provided that the consumer has not revoked the consent or direction;\n\n(2)(i) To protect the confidentiality or security of your records pertaining to the consumer, service, product, or transaction;\n\n(ii) To protect against or prevent actual or potential fraud, unauthorized transactions, claims, or other liability;\n\n(iii) For required institutional risk control or for resolving consumer disputes or inquiries;\n\n(iv) To persons holding a legal or beneficial interest relating to the consumer; or\n\n(v) To persons acting in a fiduciary or representative capacity on behalf of the consumer;\n\n(3) To provide information to insurance rate advisory organizations, guaranty funds or agencies, agencies that are rating you, persons that are assessing your compliance with industry standards, and your attorneys, accountants, and auditors;\n\n(4) To the extent specifically permitted or required under other provisions of law and in accordance with the Right to Financial Privacy Act of 1978 (12 U.S.C. 3401  et seq. ), to law enforcement agencies (including a federal functional regulator, the Secretary of the Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II (Records and Reports on Monetary Instruments and Transactions) and 12 U.S.C. Chapter 21 (Financial Recordkeeping), a State insurance authority, with respect to any person domiciled in that insurance authority's State that is engaged in providing insurance, and the Federal Trade Commission), self-regulatory organizations, or for an investigation on a matter related to public safety;\n\n(5)(i) To a consumer reporting agency in accordance with the Fair Credit Reporting Act (15 U.S.C. 1681  et seq. ), or\n\n(ii) From a consumer report reported by a consumer reporting agency;\n\n(6) In connection with a proposed or actual sale, merger, transfer, or exchange of all or a portion of a business or operating unit if the disclosure of nonpublic personal information concerns solely consumers of such business or unit; or\n\n(7)(i) To comply with federal, State, or local laws, rules and other applicable legal requirements;\n\n(ii) To comply with a properly authorized civil, criminal, or regulatory investigation, or subpoena or summons by federal, State, or local authorities; or\n\n(iii) To respond to judicial process or government regulatory authorities having jurisdiction over you for examination, compliance, or other purposes as authorized by law.\n\n(b)  Examples of consent and revocation of consent.  (1) A consumer may specifically consent to your disclosure to a nonaffiliated mortgage lender of the value of the assets in the consumer's brokerage or investment advisory account so that the lender can evaluate the consumer's application for a mortgage loan.\n\n(2) A consumer may revoke consent by subsequently exercising the right to opt out of future disclosures of nonpublic personal information as permitted under \u00a7 248.7(f)."], ["17:17:5.0.1.1.8.1.16.16", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.16 Protection of Fair Credit Reporting Act.", "SEC", "", "", "", "Nothing in this subpart shall be construed to modify, limit, or supersede the operation of the Fair Credit Reporting Act (15 U.S.C. 1681  et seq. ), and no inference shall be drawn on the basis of the provisions of this subpart regarding whether information is transaction or experience information under section 603 of that Act."], ["17:17:5.0.1.1.8.1.16.17", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.17 Relation to State laws.", "SEC", "", "", "[65 FR 40362, June 29, 2000, as amended at 89 FR 47786, June 3, 2024", "(a)  In general.  This subpart shall not be construed as superseding, altering, or affecting any statute, regulation, order, or interpretation in effect in any State, except to the extent that such State statute, regulation, order, or interpretation is inconsistent with the provisions of this subpart, and then only to the extent of the inconsistency.\n\n(b)  Greater protection under State law.  For purposes of this section, a State statute, regulation, order, or interpretation is not inconsistent with the provisions of this subpart if the protection such statute, regulation, order, or interpretation affords any consumer is greater than the protection provided under this subpart, as determined by the Consumer Financial Protection Bureau, after consultation with the Commission, on theConsumer Financial Protection Bureau's own motion, or upon the petition of any interested party."], ["17:17:5.0.1.1.8.1.16.18", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.18 Effective date; transition rule.", "SEC", "", "", "", "(a)  Effective date.  This subpart is effective November 13, 2000. In order to provide sufficient time for you to establish policies and systems to comply with the requirements of this subpart, the compliance date for this subpart is July 1, 2001.\n\n(b)(1)  Notice requirement for consumers who are your customers on the compliance date.  By July 1, 2001, you must have provided an initial notice, as required by \u00a7 248.4, to consumers who are your customers on July 1, 2001.\n\n(2)  Example.  You provide an initial notice to consumers who are your customers on July 1, 2001, if, by that date, you have established a system for providing an initial notice to all new customers and have mailed the initial notice to all your existing customers.\n\n(c)  Two-year grandfathering of service agreements.  Until July 1, 2002, a contract that you have entered into with a nonaffiliated third party to perform services for you or functions on your behalf satisfies the provisions of \u00a7 248.13(a)(2), even if the contract does not include a requirement that the third party maintain the confidentiality of nonpublic personal information, as long as you entered into the agreement on or before July 1, 2000."], ["17:17:5.0.1.1.8.1.16.19", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7\u00a7 248.19-248.29 [Reserved]", "SEC", "", "", "", ""], ["17:17:5.0.1.1.8.1.16.20", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7 248.30 Procedures to safeguard customer information, including response programs for unauthorized access to customer information and customer notice; disposal of customer information and consumer information.", "SEC", "", "", "[89 FR 47786, June 3, 2024]", "(a)  Policies and procedures to safeguard customer information \u2014(1)  General requirements.  Every covered institution must develop, implement, and maintain written policies and procedures that address administrative, technical, and physical safeguards for the protection of customer information.\n\n(2)  Objectives.  These written policies and procedures must be reasonably designed to:\n\n(i) Ensure the security and confidentiality of customer information;\n\n(ii) Protect against any anticipated threats or hazards to the security or integrity of customer information; and\n\n(iii) Protect against unauthorized access to or use of customer information that could result in substantial harm or inconvenience to any customer.\n\n(3)  Response programs for unauthorized access to or use of customer information.  Written policies and procedures in paragraph (a)(1) of this section must include a program reasonably designed to detect, respond to, and recover from unauthorized access to or use of customer information, including customer notification procedures. This response program must include procedures for the covered institution to:\n\n(i) Assess the nature and scope of any incident involving unauthorized access to or use of customer information and identify the customer information systems and types of customer information that may have been accessed or used without authorization;\n\n(ii) Take appropriate steps to contain and control the incident to prevent further unauthorized access to or use of customer information; and\n\n(iii) Notify each affected individual whose sensitive customer information was, or is reasonably likely to have been, accessed or used without authorization in accordance with paragraph (a)(4) of this section unless the covered institution determines, after a reasonable investigation of the facts and circumstances of the incident of unauthorized access to or use of sensitive customer information, that the sensitive customer information has not been, and is not reasonably likely to be, used in a manner that would result in substantial harm or inconvenience.\n\n(4)  Notifying affected individuals of unauthorized access or use \u2014(i)  Notification obligation.  Unless a covered institution has determined, after a reasonable investigation of the facts and circumstances of the incident of unauthorized access to or use of sensitive customer information that occurred at the covered institution or one of its service providers that is not itself a covered institution, that sensitive customer information has not been, and is not reasonably likely to be, used in a manner that would result in substantial harm or inconvenience, the covered institution must provide a clear and conspicuous notice, or ensure that such notice is provided, to each affected individual whose sensitive customer information was, or is reasonably likely to have been, accessed or used without authorization. The notice must be transmitted by a means designed to ensure that each affected individual can reasonably be expected to receive actual notice in writing.\n\n(ii)  Affected individuals.  If an incident of unauthorized access to or use of customer information has occurred or is reasonably likely to have occurred, but the covered institution is unable to identify which specific individuals' sensitive customer information has been accessed or used without authorization, the covered institution must provide notice to all individuals whose sensitive customer information resides in the customer information system that was, or was reasonably likely to have been, accessed or used without authorization. Notwithstanding the foregoing, if the covered institution reasonably determines that a specific individual's sensitive customer information that resides in the customer information system was not accessed or used without authorization, the covered institution is not required to provide notice to that individual under this paragraph.\n\n(iii)  Timing.  A covered institution must provide the notice as soon as practicable, but not later than 30 days, after becoming aware that unauthorized access to or use of customer information has occurred or is reasonably likely to have occurred unless the United States Attorney General determines that the notice required under this rule poses a substantial risk to national security or public safety, and notifies the Commission of such determination in writing, in which case the covered institution may delay providing such notice for a time period specified by the Attorney General, up to 30 days following the date when such notice was otherwise required to be provided. The notice may be delayed for an additional period of up to 30 days if the Attorney General determines that the notice continues to pose a substantial risk to national security or public safety and notifies the Commission of such determination in writing. In extraordinary circumstances, notice required under this section may be delayed for a final additional period of up to 60 days if the Attorney General determines that such notice continues to pose a substantial risk to national security and notifies the Commission of such determination in writing. Beyond the final 60-day delay under this paragraph (a)(4)(iii), if the Attorney General indicates that further delay is necessary, the Commission will consider additional requests for delay and may grant such delay through Commission exemptive order or other action.\n\n(iv)  Notice contents.  The notice must:\n\n(A) Describe in general terms the incident and the type of sensitive customer information that was or is reasonably believed to have been accessed or used without authorization;\n\n(B) Include, if the information is reasonably possible to determine at the time the notice is provided, any of the following: the date of the incident, the estimated date of the incident, or the date range within which the incident occurred;\n\n(C) Include contact information sufficient to permit an affected individual to contact the covered institution to inquire about the incident, including the following: a telephone number (which should be a toll-free number if available), an email address or equivalent method or means, a postal address, and the name of a specific office to contact for further information and assistance;\n\n(D) If the individual has an account with the covered institution, recommend that the customer review account statements and immediately report any suspicious activity to the covered institution;\n\n(E) Explain what a fraud alert is and how an individual may place a fraud alert in the individual's credit reports to put the individual's creditors on notice that the individual may be a victim of fraud, including identity theft;\n\n(F) Recommend that the individual periodically obtain credit reports from each nationwide credit reporting company and that the individual have information relating to fraudulent transactions deleted;\n\n(G) Explain how the individual may obtain a credit report free of charge; and\n\n(H) Include information about the availability of online guidance from the Federal Trade Commission and  usa.gov  regarding steps an individual can take to protect against identity theft, a statement encouraging the individual to report any incidents of identity theft to the Federal Trade Commission, and include the Federal Trade Commission's website address where individuals may obtain government information about identity theft and report suspected incidents of identity theft.\n\n(5)  Service providers.  (i) A covered institution's response program prepared in accordance with paragraph (a)(3) of this section must include the establishment, maintenance, and enforcement of written policies and procedures reasonably designed to require oversight, including through due diligence and monitoring, of service providers, including to ensure that the covered institution notifies affected individuals as set forth in paragraph (a)(4) of this section. The policies and procedures must be reasonably designed to ensure service providers take appropriate measures to:\n\n(A) Protect against unauthorized access to or use of customer information; and\n\n(B) Provide notification to the covered institution as soon as possible, but no later than 72 hours after becoming aware that a breach in security has occurred resulting in unauthorized access to a customer information system maintained by the service provider. Upon receipt of such notification, the covered institution must initiate its incident response program adopted pursuant to paragraph (a)(3) of this section.\n\n(ii) As part of its incident response program, a covered institution may enter into a written agreement with its service provider to notify affected individuals on the covered institution's behalf in accordance with paragraph (a)(4) of this section.\n\n(iii) Notwithstanding a covered institution's use of a service provider in accordance with paragraphs (a)(5)(i) and (ii) of this section, the obligation to ensure that affected individuals are notified in accordance with paragraph (a)(4) of this section rests with the covered institution.\n\n(b)  Disposal of consumer information and customer information \u2014(1)  Standard.  Every covered institution, other than notice-registered broker-dealers, must properly dispose of consumer information and customer information by taking reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.\n\n(2)  Written policies, procedures, and records.  Every covered institution, other than notice-registered broker-dealers, must adopt and implement written policies and procedures that address the proper disposal of consumer information and customer information according to the standard identified in paragraph (b)(1) of this section.\n\n(3)  Relation to other laws.  Nothing in this paragraph (b) shall be construed:\n\n(i) To require any covered institution to maintain or destroy any record pertaining to an individual that is not imposed under other law; or\n\n(ii) To alter or affect any requirement imposed under any other provision of law to maintain or destroy records.\n\n(c)  Recordkeeping.  (1) Every covered institution that is an investment company under the Investment Company Act of 1940 (15 U.S.C. 80a), but is not registered under section 8 thereof (15 U.S.C. 80a-8), must make and maintain:\n\n(i) The written policies and procedures required to be adopted and implemented pursuant to paragraph (a)(1) of this section;\n\n(ii) The written documentation of any detected unauthorized access to or use of customer information, as well as any response to, and recovery from such unauthorized access to or use of customer information required by paragraph (a)(3) of this section;\n\n(iii) The written documentation of any investigation and determination made regarding whether notification is required pursuant to paragraph (a)(4) of this section, including the basis for any determination made, any written documentation from the United States Attorney General related to a delay in notice, as well as a copy of any notice transmitted following such determination;\n\n(iv) The written policies and procedures required to be adopted and implemented pursuant to paragraph (a)(5)(i) of this section;\n\n(v) The written documentation of any contract or agreement entered into pursuant to paragraph (a)(5) of this section; and\n\n(vi) The written policies and procedures required to be adopted and implemented pursuant to paragraph (b)(2) of this section.\n\n(2) In the case of covered institutions described in paragraph (c)(1) of this section, such records, apart from any policies and procedures, must be preserved for a time period not less than six years, the first two years in an easily accessible place. In the case of policies and procedures required under paragraphs (a) and (b)(2) of this section, covered institutions described in paragraph (c)(1) of this section must maintain a copy of such policies and procedures in effect, or that at any time within the past six years were in effect, in an easily accessible place.\n\n(d)  Definitions.  As used in this section, unless the context otherwise requires:\n\n(1)  Consumer information  means:\n\n(i) Any record about an individual, whether in paper, electronic or other form, that is a consumer report or is derived from a consumer report, or a compilation of such records, that a covered institution maintains or otherwise possesses for a business purpose regardless of whether such information pertains to:\n\n(A) Individuals with whom the covered institution has a customer relationship; or\n\n(B) To the customers of other financial institutions where such information has been provided to the covered institution.\n\n(ii) Consumer information does not include information that does not identify individuals, such as aggregate information or blind data.\n\n(2)  Consumer report  has the same meaning as in section 603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)).\n\n(3)  Covered institution  means any broker or dealer, any investment company, and any investment adviser or transfer agent registered with the Commission or another appropriate regulatory agency (\u201cARA\u201d) as defined in section 3(a)(34)(B) of the Securities Exchange Act of 1934.\n\n(4)  Customer.  (i) Customer has the same meaning as in \u00a7 248.3(j) unless the covered institution is a transfer agent registered with the Commission or another ARA.\n\n(ii) With respect to a transfer agent registered with the Commission or another ARA, for purposes of this section,  customer  means any natural person who is a securityholder of an issuer for which the transfer agent acts or has acted as a transfer agent.\n\n(5)  Customer information.  (i) Customer information for any covered institution other than a transfer agent registered with the Commission or another ARA means any record containing nonpublic personal information as defined in \u00a7 248.3(t) about a customer of a financial institution, whether in paper, electronic or other form, that is in the possession of a covered institution or that is handled or maintained by the covered institution or on its behalf regardless of whether such information pertains to:\n\n(A) Individuals with whom the covered institution has a customer relationship; or\n\n(B) To the customers of other financial institutions where such information has been provided to the covered institution.\n\n(ii) With respect to a transfer agent registered with the Commission or another ARA,  customer information  means any record containing nonpublic personal information as defined in \u00a7 248.3(t) identified with any natural person, who is a securityholder of an issuer for which the transfer agent acts or has acted as transfer agent, that is in the possession of a transfer agent or that is handled or maintained by the transfer agent or on its behalf, regardless of whether such information pertains to individuals with whom the transfer agent has a customer relationship, or pertains to the customers of other financial institutions and has been provided to the transfer agent.\n\n(6)  Customer information systems  means the information resources owned or used by a covered institution, including physical or virtual infrastructure controlled by such information resources, or components thereof, organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of customer information to maintain or support the covered institution's operations.\n\n(7)  Disposal  means:\n\n(i) The discarding or abandonment of consumer information or customer information; or\n\n(ii) The sale, donation, or transfer of any medium, including computer equipment, on which consumer information or customer information is stored.\n\n(8)  Notice-registered broker-dealer  means a broker or dealer registered by notice with the Commission under section 15(b)(11) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(11)).\n\n(9)  Sensitive customer information.  (i) Sensitive customer information means any component of customer information alone or in conjunction with any other information, the compromise of which could create a reasonably likely risk of substantial harm or inconvenience to an individual identified with the information.\n\n(ii) Examples of sensitive customer information include:\n\n(A) Customer information uniquely identified with an individual that has a reasonably likely use as a means of authenticating the individual's identity, including\n\n( 1 ) A Social Security number, official State- or government-issued driver's license or identification number, alien registration number, government passport number, employer or taxpayer identification number;\n\n( 2 ) A biometric record;\n\n( 3 ) A unique electronic identification number, address, or routing code;\n\n( 4 ) Telecommunication identifying information or access device (as defined in 18 U.S.C. 1029(e)); or\n\n(B) Customer information identifying an individual or the individual's account, including the individual's account number, name or online user name, in combination with authenticating information such as information described in paragraph (d)(9)(ii)(A) of this section, or in combination with similar information that could be used to gain access to the customer's account such as an access code, a credit card expiration date, a partial Social Security number, a security code, a security question and answer identified with the individual or the individual's account, or the individual's date of birth, place of birth, or mother's maiden name.\n\n(10)  Service provider  means any person or entity that receives, maintains, processes, or otherwise is permitted access to customer information through its provision of services directly to a covered institution.\n\n(11)  Transfer agent  has the same meaning as in section 3(a)(25) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(25))."], ["17:17:5.0.1.1.8.1.16.21", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "A", "Subpart A\u2014Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Personal Information", "", "\u00a7\u00a7 248.31-248.100 [Reserved]", "SEC", "", "", "", ""], ["17:17:5.0.1.1.8.2.17.1", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.101 Purpose and scope.", "SEC", "", "", "", "(a)  Purpose.  The purpose of this subpart is to implement section 624 of the Fair Credit Reporting Act, 15 U.S.C. 1681,  et seq.  (\u201cFCRA\u201d). Section 624, which was added to the FCRA by section 214 of the Fair and Accurate Credit Transactions Act of 2003, Public Law 108-159, 117 Stat. 1952 (2003) (\u201cFACT Act\u201d or \u201cAct\u201d), regulates the use of consumer information received from an affiliate to make marketing solicitations.\n\n(b)  Scope.  This subpart applies to any broker or dealer other than a notice-registered broker or dealer, to any investment company, and to any investment adviser or transfer agent registered with the Commission. These entities are referred to in this subpart as \u201cyou.\u201d"], ["17:17:5.0.1.1.8.2.17.10", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.126 Delivery of opt out notices.", "SEC", "", "", "", "(a)  In general.  The opt out notice must be provided so that each consumer can reasonably be expected to receive actual notice. For opt out notices provided electronically, the notice may be provided in compliance with either the electronic disclosure provisions in this subpart or the provisions in section 101 of the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001,  et seq.\n\n(b)  Examples of reasonable expectation of actual notice.  A consumer may reasonably be expected to receive actual notice if the affiliate providing the notice:\n\n(1) Hand-delivers a printed copy of the notice to the consumer;\n\n(2) Mails a printed copy of the notice to the last known mailing address of the consumer;\n\n(3) Provides a notice by e-mail to a consumer who has agreed to receive electronic disclosures by e-mail from the affiliate providing the notice; or\n\n(4) Posts the notice on the Internet Web site at which the consumer obtained a product or service electronically and requires the consumer to acknowledge receipt of the notice.\n\n(c)  Examples of no reasonable expectation of actual notice.  A consumer may not reasonably be expected to receive actual notice if the affiliate providing the notice:\n\n(1) Only posts the notice on a sign in a branch or office or generally publishes the notice in a newspaper;\n\n(2) Sends the notice by e-mail to a consumer who has not agreed to receive electronic disclosures by e-mail from the affiliate providing the notice; or\n\n(3) Posts the notice on an Internet Web site without requiring the consumer to acknowledge receipt of the notice."], ["17:17:5.0.1.1.8.2.17.11", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.127 Renewal of opt out elections.", "SEC", "", "", "", "(a)  Renewal notice and opt out requirement \u2014(1)  In general.  After the opt out period expires, you may not make marketing solicitations to a consumer who previously opted out, unless:\n\n(i) The consumer has been given a renewal notice that complies with the requirements of this section and \u00a7\u00a7 248.124 through 248.126, and a reasonable opportunity and a reasonable and simple method to renew the opt out, and the consumer does not renew the opt out; or\n\n(ii) An exception in \u00a7 248.121(c) applies.\n\n(2)  Renewal period.  Each opt out renewal must be effective for a period of at least five years as provided in \u00a7 248.122(b).\n\n(3)  Affiliates who may provide the notice.  The notice required by this paragraph must be provided:\n\n(i) By the affiliate that provided the previous opt out notice, or its successor; or\n\n(ii) As part of a joint renewal notice from two or more members of an affiliated group of companies, or their successors, that jointly provided the previous opt out notice.\n\n(b)  Contents of renewal notice.  The renewal notice must be clear, conspicuous, and concise, and must accurately disclose:\n\n(1) The name of the affiliate(s) providing the notice. If the notice is provided jointly by multiple affiliates and each affiliate shares a common name, such as \u201cABC,\u201d then the notice may indicate it is being provided by multiple companies with the ABC name or multiple companies in the ABC group or family of companies, for example, by stating that the notice is provided by \u201call of the ABC companies,\u201d \u201cthe ABC banking, credit card, insurance, and securities companies,\u201d or by listing the name of each affiliate providing the notice. But if the affiliates providing the joint notice do not all share a common name, then the notice must either separately identify each affiliate by name or identify each of the common names used by those affiliates, for example, by stating that the notice is provided by \u201call of the ABC and XYZ companies\u201d or by \u201cthe ABC banking and securities companies and the XYZ insurance companies\u201d;\n\n(2) A list of the affiliates or types of affiliates whose use of eligibility information is covered by the notice, which may include companies that become affiliates after the notice is provided to the consumer. If each affiliate covered by the notice shares a common name, such as \u201cABC,\u201d then the notice may indicate that it applies to multiple companies with the ABC name or multiple companies in the ABC group or family of companies, for example, by stating that the notice is provided by \u201call of the ABC companies,\u201d \u201cthe ABC banking, credit card, insurance, and securities companies,\u201d or by listing the name of each affiliate providing the notice. But if the affiliates covered by the notice do not all share a common name, then the notice must either separately identify each covered affiliate by name or identify each of the common names used by those affiliates, for example, by stating that the notice applies to \u201call of the ABC and XYZ companies\u201d or to \u201cthe ABC banking and securities companies and the XYZ insurance companies\u201d;\n\n(3) A general description of the types of eligibility information that may be used to make marketing solicitations to the consumer;\n\n(4) That the consumer previously elected to limit the use of certain information to make marketing solicitations to the consumer;\n\n(5) That the consumer's election has expired or is about to expire;\n\n(6) That the consumer may elect to renew the consumer's previous election;\n\n(7) If applicable, that the consumer's election to renew will apply for the specified period of time stated in the notice and that the consumer will be allowed to renew the election once that period expires; and\n\n(8) A reasonable and simple method for the consumer to opt out.\n\n(c)  Timing of the renewal notice \u2014(1)  In general.  A renewal notice may be provided to the consumer either:\n\n(i) A reasonable period of time before the expiration of the opt out period; or\n\n(ii) Any time after the expiration of the opt out period but before marketing solicitations that would have been prohibited by the expired opt out are made to the consumer.\n\n(2)  Combination with annual privacy notice.  If you provide an annual privacy notice under the GLBA, providing a renewal notice with the last annual privacy notice provided to the consumer before expiration of the opt out period is a reasonable period of time before expiration of the opt out in all cases.\n\n(d)  No effect on opt out period.  An opt out period may not be shortened by sending a renewal notice to the consumer before expiration of the opt out period, even if the consumer does not renew the opt out."], ["17:17:5.0.1.1.8.2.17.12", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.128 Effective date, compliance date, and prospective application.", "SEC", "", "", "", "(a)  Effective date.  This subpart is effective September 10, 2009.\n\n(b)  Mandatory compliance date.  Compliance with this subpart is required not later than January 1, 2010.\n\n(c)  Prospective application.  The provisions of this subpart do not prohibit you from using eligibility information that you receive from an affiliate to make a marketing solicitation to a consumer if you receive such information prior to January 1, 2010. For purposes of this section, you are deemed to receive eligibility information when such information is placed into a common database and is accessible by you."], ["17:17:5.0.1.1.8.2.17.2", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.102 Examples.", "SEC", "", "", "", "The examples in this subpart are not exclusive. The examples in this subpart provide guidance concerning the rules' application in ordinary circumstances. The facts and circumstances of each individual situation, however, will determine whether compliance with an example, to the extent applicable, constitutes compliance with this subpart. Examples in a paragraph illustrate only the issue described in the paragraph and do not illustrate any other issue that may arise under this subpart. Similarly, the examples do not illustrate any issues that may arise under other laws or regulations."], ["17:17:5.0.1.1.8.2.17.3", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7\u00a7 248.103-248.119 [Reserved]", "SEC", "", "", "", ""], ["17:17:5.0.1.1.8.2.17.4", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.120 Definitions.", "SEC", "", "", "", "As used in this subpart, unless the context requires otherwise:\n\n(a)  Affiliate  of a broker, dealer, or investment company, or an investment adviser or transfer agent registered with the Commission means any person that is related by common ownership or common control with the broker, dealer, or investment company, or the investment adviser or transfer agent registered with the Commission. In addition, a broker, dealer, or investment company, or an investment adviser or transfer agent registered with the Commission will be deemed an affiliate of a company for purposes of this subpart if:\n\n(1) That company is regulated under section 214 of the FACT Act, Public Law 108-159, 117 Stat. 1952 (2003), by a government regulator other than the Commission; and\n\n(2) Rules adopted by the other government regulator under section 214 of the FACT Act treat the broker, dealer, or investment company, or investment adviser or transfer agent registered with the Commission as an affiliate of that company.\n\n(b)  Broker  has the same meaning as in section 3(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)). A \u201cbroker\u201d does not include a broker registered by notice with the Commission under section 15(b)(11) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(11)).\n\n(c)  Clear and conspicuous  means reasonably understandable and designed to call attention to the nature and significance of the information presented.\n\n(d)  Commission  means the Securities and Exchange Commission.\n\n(e)  Company  means any corporation, limited liability company, business trust, general or limited partnership, association, or similar organization.\n\n(f)  Concise \u2014(1)  In general.  The term \u201cconcise\u201d means a reasonably brief expression or statement.\n\n(2)  Combination with other required disclosures.  A notice required by this subpart may be concise even if it is combined with other disclosures required or authorized by Federal or State law.\n\n(g)  Consumer  means an individual.\n\n(h)  Control  of a company means the power to exercise a controlling influence over the management or policies of a company whether through ownership of securities, by contract, or otherwise. Any person who owns beneficially, either directly or through one or more controlled companies, more than 25 percent of the voting securities of any company is presumed to control the company. Any person who does not own more than 25 percent of the voting securities of any company will be presumed not to control the company. Any presumption regarding control may be rebutted by evidence, but, in the case of an investment company, will continue until the Commission makes a decision to the contrary according to the procedures described in section 2(a)(9) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(9)).\n\n(i)  Dealer  has the same meaning as in section 3(a)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(5)). A \u201cdealer\u201d does not include a dealer registered by notice with the Commission under section 15(b)(11) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(11)).\n\n(j)  Eligibility information  means any information the communication of which would be a consumer report if the exclusions from the definition of \u201cconsumer report\u201d in section 603(d)(2)(A) of the FCRA did not apply. Eligibility information does not include aggregate or blind data that does not contain personal identifiers such as account numbers, names, or addresses.\n\n(k)  FCRA  means the Fair Credit Reporting Act (15 U.S.C. 1681,  et seq. ).\n\n(l)  GLBA  means the Gramm-Leach-Bliley Act (15 U.S.C. 6801,  et seq. ).\n\n(m)  Investment adviser  has the same meaning as in section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)).\n\n(n)  Investment company  has the same meaning as in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3) and includes a separate series of the investment company.\n\n(o)  Marketing solicitation \u2014(1)  In general.  The term \u201cmarketing solicitation\u201d means the marketing of a product or service initiated by a person to a particular consumer that is:\n\n(i) Based on eligibility information communicated to that person by its affiliate as described in this subpart; and\n\n(ii) Intended to encourage the consumer to purchase or obtain such product or service.\n\n(2)  Exclusion of marketing directed at the general public.  A marketing solicitation does not include marketing communications that are directed at the general public. For example, television, general circulation magazine, billboard advertisements and publicly available Web sites that are not directed to particular consumers would not constitute marketing solicitations, even if those communications are intended to encourage consumers to purchase products and services from the person initiating the communications.\n\n(3)  Examples of marketing solicitations.  A marketing solicitation would include, for example, a telemarketing call, direct mail, e-mail, or other form of marketing communication directed to a particular consumer that is based on eligibility information received from an affiliate.\n\n(p)  Person  means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.\n\n(q)  Pre-existing business relationship \u2014(1)  In general.  The term \u201cpre-existing business relationship\u201d means a relationship between a person, or a person's licensed agent, and a consumer based on:\n\n(i) A financial contract between the person and the consumer which is in force on the date on which the consumer is sent a solicitation covered by this subpart;\n\n(ii) The purchase, rental, or lease by the consumer of the person's goods or services, or a financial transaction (including holding an active account or a policy in force or having another continuing relationship) between the consumer and the person, during the 18-month period immediately preceding the date on which the consumer is sent a solicitation covered by this subpart; or\n\n(iii) An inquiry or application by the consumer regarding a product or service offered by that person during the three-month period immediately preceding the date on which the consumer is sent a solicitation covered by this subpart.\n\n(2)  Examples of pre-existing business relationships.  (i) If a consumer has a brokerage account with a broker-dealer that is currently in force, the broker-dealer has a pre-existing business relationship with the consumer and can use eligibility information it receives from its affiliates to make solicitations to the consumer about its products or services.\n\n(ii) If a consumer has an investment advisory contract with a registered investment adviser, the investment adviser has a pre-existing business relationship with the consumer and can use eligibility information it receives from its affiliates to make solicitations to the consumer about its products or services.\n\n(iii) If a consumer was the record owner of securities issued by an investment company, but the consumer redeems these securities, the investment company has a pre-existing business relationship with the consumer and can use eligibility information it receives from its affiliates to make solicitations to the consumer about its products or services for 18 months after the date the consumer redeemed the investment company's securities.\n\n(iv) If a consumer applies for a margin account offered by a broker-dealer, but does not obtain a product or service from or enter into a financial contract or transaction with the broker-dealer, the broker-dealer has a pre-existing business relationship with the consumer and can therefore use eligibility information it receives from its affiliates to make solicitations to the consumer about its products or services for three months after the date of the application.\n\n(v) If a consumer makes a telephone inquiry to a broker-dealer about its products or services and provides contact information to the broker-dealer, but does not obtain a product or service from or enter into a financial contract or transaction with the institution, the broker-dealer has a pre-existing business relationship with the consumer and can therefore use eligibility information it receives from its affiliates to make solicitations to the consumer about its products or services for three months after the date of the inquiry.\n\n(vi) If a consumer makes an inquiry by e-mail to a broker-dealer about one of its affiliated investment company's products or services but does not obtain a product or service from, or enter into a financial contract or transaction with the broker-dealer or the investment company, the broker-dealer and the investment company both have a pre-existing business relationship with the consumer and can therefore use eligibility information they receive from their affiliates to make solicitations to the consumer about their products or services for three months after the date of the inquiry.\n\n(vii) If a consumer who has a pre-existing business relationship with an investment company that is part of a group of affiliated companies makes a telephone call to the centralized call center for the affiliated companies to inquire about products or services offered by a broker-dealer affiliated with the investment company, and provides contact information to the call center, the call constitutes an inquiry to the broker-dealer. In these circumstances, the broker-dealer has a pre-existing business relationship with the consumer and can therefore use eligibility information it receives from the investment company to make solicitations to the consumer about its products or services for three months after the date of the inquiry.\n\n(3)  Examples where no pre-existing business relationship is created.  (i) If a consumer makes a telephone call to a centralized call center for a group of affiliated companies to inquire about the consumer's existing account at a broker-dealer, the call does not constitute an inquiry to any affiliate other than the broker-dealer that holds the consumer's account and does not establish a pre-existing business relationship between the consumer and any affiliate of the account-holding broker-dealer.\n\n(ii) If a consumer who has an advisory contract with a registered investment adviser makes a telephone call to an affiliate of the investment adviser to ask about the affiliate's retail locations and hours, but does not make an inquiry about the affiliate's products or services, the call does not constitute an inquiry and does not establish a pre-existing business relationship between the consumer and the affiliate. Also, the affiliate's capture of the consumer's telephone number does not constitute an inquiry and does not establish a pre-existing business relationship between the consumer and the affiliate.\n\n(iii) If a consumer makes a telephone call to a broker-dealer in response to an advertisement offering a free promotional item to consumers who call a toll-free number, but the advertisement does not indicate that the broker-dealer's products or services will be marketed to consumers who call in response, the call does not create a pre-existing business relationship between the consumer and the broker-dealer because the consumer has not made an inquiry about a product or service offered by the institution, but has merely responded to an offer for a free promotional item.\n\n(r)  Transfer agent  has the same meaning as in section 3(a)(25) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(25)).\n\n(s)  You  means:\n\n(1) Any broker or dealer other than a broker or dealer registered by notice with the Commission under section 15(b)(11) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(11));\n\n(2) Any investment company;\n\n(3) Any investment adviser registered with the Commission under the Investment Advisers Act of 1940 (15 U.S.C. 80b-1,  et seq. ); and\n\n(4) Any transfer agent registered with the Commission under section 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78q-1)."], ["17:17:5.0.1.1.8.2.17.5", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.121 Affiliate marketing opt out and exceptions.", "SEC", "", "", "", "(a)  Initial notice and opt out requirement \u2014(1)  In general.  You may not use eligibility information about a consumer that you receive from an affiliate to make a marketing solicitation to the consumer, unless:\n\n(i) It is clearly and conspicuously disclosed to the consumer in writing or, if the consumer agrees, electronically, in a concise notice that you may use eligibility information about that consumer received from an affiliate to make marketing solicitations to the consumer;\n\n(ii) The consumer is provided a reasonable opportunity and a reasonable and simple method to \u201copt out,\u201d or the consumer prohibits you from using eligibility information to make marketing solicitations to the consumer; and\n\n(iii) The consumer has not opted out.\n\n(2)  Example.  A consumer has a brokerage account with a broker-dealer. The broker-dealer furnishes eligibility information about the consumer to its affiliated investment adviser. Based on that eligibility information, the investment adviser wants to make a marketing solicitation to the consumer about its discretionary advisory accounts. The investment adviser does not have a pre-existing business relationship with the consumer and none of the other exceptions apply. The investment adviser is prohibited from using eligibility information received from its broker-dealer affiliate to make marketing solicitations to the consumer about its discretionary advisory accounts unless the consumer is given a notice and opportunity to opt out and the consumer does not opt out.\n\n(3)  Affiliates who may provide the notice.  The notice required by this paragraph must be provided:\n\n(i) By an affiliate that has or has previously had a pre-existing business relationship with the consumer; or\n\n(ii) As part of a joint notice from two or more members of an affiliated group of companies, provided that at least one of the affiliates on the joint notice has or has previously had a pre-existing business relationship with the consumer.\n\n(b)  Making marketing solicitations \u2014(1)  In general.  For purposes of this subpart, you make a marketing solicitation if:\n\n(i) You receive eligibility information from an affiliate;\n\n(ii) You use that eligibility information to do one or more of the following:\n\n(A) Identify the consumer or type of consumer to receive a marketing solicitation;\n\n(B) Establish criteria used to select the consumer to receive a marketing solicitation; or\n\n(C) Decide which of your products or services to market to the consumer or tailor your marketing solicitation to that consumer; and\n\n(iii) As a result of your use of the eligibility information, the consumer is provided a marketing solicitation.\n\n(2)  Receiving eligibility information from an affiliate, including through a common database.  You may receive eligibility information from an affiliate in various ways, including when the affiliate places that information into a common database that you may access.\n\n(3)  Receipt or use of eligibility information by your service provider.  Except as provided in paragraph (b)(5) of this section, you receive or use an affiliate's eligibility information if a service provider acting on your behalf (whether an affiliate or a nonaffiliated third party) receives or uses that information in the manner described in paragraph (b)(1)(i) or (b)(1)(ii) of this section. All relevant facts and circumstances will determine whether a person is acting as your service provider when it receives or uses an affiliate's eligibility information in connection with marketing your products and services.\n\n(4)  Use by an affiliate of its own eligibility information.  Unless you have used eligibility information that you receive from an affiliate in the manner described in paragraph (b)(1)(ii) of this section, you do not make a marketing solicitation subject to this subpart if your affiliate:\n\n(i) Uses its own eligibility information that it obtained in connection with a pre-existing business relationship it has or had with the consumer to market your products or services to the affiliate's consumer; or\n\n(ii) Directs its service provider to use the affiliate's own eligibility information that it obtained in connection with a pre-existing business relationship it has or had with the consumer to market your products or services to the consumer, and you do not communicate directly with the service provider regarding that use.\n\n(5)  Use of eligibility information by a service provider \u2014(i)  In general.  You do not make a marketing solicitation subject to this subpart if a service provider (including an affiliated or third-party service provider that maintains or accesses a common database that you may access) receives eligibility information from your affiliate that your affiliate obtained in connection with a pre-existing business relationship it has or had with the consumer and uses that eligibility information to market your products or services to that affiliate's consumer, so long as:\n\n(A) Your affiliate controls access to and use of its eligibility information by the service provider (including the right to establish the specific terms and conditions under which the service provider may use such information to market your products or services);\n\n(B) Your affiliate establishes specific terms and conditions under which the service provider may access and use your affiliate's eligibility information to market your products and services (or those of affiliates generally) to your affiliate's consumers, such as the identity of the affiliated companies whose products or services may be marketed to the affiliate's consumers by the service provider, the types of products or services of affiliated companies that may be marketed, and the number of times your affiliate's consumers may receive marketing materials, and periodically evaluates the service provider's compliance with those terms and conditions;\n\n(C) Your affiliate requires the service provider to implement reasonable policies and procedures designed to ensure that the service provider uses your affiliate's eligibility information in accordance with the terms and conditions established by your affiliate relating to the marketing of your products or services;\n\n(D) Your affiliate is identified on or with the marketing materials provided to the consumer; and\n\n(E) You do not directly use your affiliate's eligibility information in the manner described in paragraph (b)(1)(ii) of this section.\n\n(ii)  Writing requirements.  (A) The requirements of paragraphs (b)(5)(i)(A) and (C) of this section must be set forth in a written agreement between your affiliate and the service provider; and\n\n(B) The specific terms and conditions established by your affiliate as provided in paragraph (b)(5)(i)(B) of this section must be set forth in writing.\n\n(6)  Examples of making marketing solicitations.  (i) A consumer has an investment advisory contract with a registered investment adviser that is affiliated with a broker-dealer. The broker-dealer receives eligibility information about the consumer from the investment adviser. The broker-dealer uses that eligibility information to identify the consumer to receive a marketing solicitation about brokerage products and services, and, as a result, the broker-dealer provides a marketing solicitation to the consumer about its brokerage services. Pursuant to paragraph (b)(1) of this section, the broker-dealer has made a marketing solicitation to the consumer.\n\n(ii) The same facts as in the example in paragraph (b)(6)(i) of this section, except that after using the eligibility information to identify the consumer to receive a marketing solicitation about brokerage products and services, the broker-dealer asks the registered investment adviser to send the marketing solicitation to the consumer and the investment adviser does so. Pursuant to paragraph (b)(1) of this section, the broker-dealer has made a marketing solicitation to the consumer because it used eligibility information about the consumer that it received from an affiliate to identify the consumer to receive a marketing solicitation about its products or services, and, as a result, a marketing solicitation was provided to the consumer about the broker-dealer's products and services.\n\n(iii) The same facts as in the example in paragraph (b)(6)(i) of this section, except that eligibility information about consumers who have an investment advisory contract with a registered investment adviser is placed into a common database that all members of the affiliated group of companies may independently access and use. Without using the investment adviser's eligibility information, the broker-dealer develops selection criteria and provides those criteria, marketing materials, and related instructions to the investment adviser. The investment adviser reviews eligibility information about its own consumers using the selection criteria provided by the broker-dealer to determine which consumers should receive the broker-dealer's marketing materials and sends the broker-dealer's marketing materials to those consumers. Even though the broker-dealer has received eligibility information through the common database as provided in paragraph (b)(2) of this section, it did not use that information to identify consumers or establish selection criteria; instead, the investment adviser used its own eligibility information. Therefore, pursuant to paragraph (b)(4)(i) of this section, the broker-dealer has not made a marketing solicitation to the consumer.\n\n(iv) The same facts as in the example in paragraph (b)(6)(iii) of this section, except that the registered investment adviser provides the broker-dealer's criteria to the investment adviser's service provider and directs the service provider to use the investment adviser's eligibility information to identify investment adviser consumers who meet the criteria and to send the broker-dealer's marketing materials to those consumers. The broker-dealer does not communicate directly with the service provider regarding the use of the investment adviser's information to market its products or services to the investment adviser's consumers. Pursuant to paragraph (b)(4)(ii) of this section, the broker-dealer has not made a marketing solicitation to the consumer.\n\n(v) An affiliated group of companies includes an investment company, a principal underwriter for the investment company, a retail broker-dealer, and a transfer agent that also acts as a service provider. Each affiliate in the group places information about its consumers into a common database. The service provider has access to all information in the common database. The investment company controls access to and use of its eligibility information by the service provider. This control is set forth in a written agreement between the investment company and the service provider. The written agreement also requires the service provider to establish reasonable policies and procedures designed to ensure that the service provider uses the investment company's eligibility information in accordance with specific terms and conditions established by the investment company relating to the marketing of the products and services of all affiliates, including the principal underwriter and the retail broker-dealer. In a separate written communication, the investment company specifies the terms and conditions under which the service provider may use the investment company's eligibility information to market the retail broker-dealer's products and services to the investment company's consumers. The specific terms and conditions are: a list of affiliated companies (including the retail broker-dealer) whose products or services may be marketed to the investment company's consumers by the service provider; the specific products or services or types of products or services that may be marketed to the investment company's consumers by the service provider; the categories of eligibility information that may be used by the service provider in marketing products or services to the investment company's consumers; the types or categories of the investment company's consumers to whom the service provider may market products or services of investment company affiliates; the number and types of marketing communications that the service provider may send to the investment company's consumers; and the length of time during which the service provider may market the products or services of the investment company's affiliates to its consumers. The investment company periodically evaluates the service provider's compliance with these terms and conditions. The retail broker-dealer asks the service provider to market brokerage services to certain of the investment company's consumers. Without using the investment company's eligibility information, the retail broker-dealer develops selection criteria and provides those criteria, its marketing materials, and related instructions to the service provider. The service provider uses the investment company's eligibility information from the common database to identify the investment company's consumers to whom brokerage services will be marketed. When the retail broker-dealer's marketing materials are provided to the identified consumers, the name of the investment company is displayed on the retail broker-dealer's marketing materials, an introductory letter that accompanies the marketing materials, an account statement that accompanies the marketing materials, or the envelope containing the marketing materials. The requirements of paragraph (b)(5) of this section have been satisfied, and the retail broker-dealer has not made a marketing solicitation to the consumer.\n\n(vi) The same facts as in the example in paragraph (b)(6)(v) of this section, except that the terms and conditions permit the service provider to use the investment company's eligibility information to market the products and services of other affiliates to the investment company's consumers whenever the service provider deems it appropriate to do so. The service provider uses the investment company's eligibility information in accordance with the discretion afforded to it by the terms and conditions. Because the terms and conditions are not specific, the requirements of paragraph (b)(5) of this section have not been satisfied.\n\n(c)  Exceptions.  The provisions of this subpart do not apply to you if you use eligibility information that you receive from an affiliate:\n\n(1) To make a marketing solicitation to a consumer with whom you have a pre-existing business relationship;\n\n(2) To facilitate communications to an individual for whose benefit you provide employee benefit or other services pursuant to a contract with an employer related to and arising out of the current employment relationship or status of the individual as a participant or beneficiary of an employee benefit plan;\n\n(3) To perform services on behalf of an affiliate, except that this paragraph shall not be construed as permitting you to send marketing solicitations on behalf of an affiliate if the affiliate would not be permitted to send the marketing solicitation as a result of the election of the consumer to opt out under this subpart;\n\n(4) In response to a communication about your products or services initiated by the consumer;\n\n(5) In response to an authorization or request by the consumer to receive solicitations; or\n\n(6) If your compliance with this subpart would prevent you from complying with any provision of State insurance laws pertaining to unfair discrimination in any State in which you are lawfully doing business.\n\n(d)  Examples of exceptions \u2014(1)  Example of the pre-existing business relationship exception.  A consumer has a brokerage account with a broker-dealer. The consumer also has a deposit account with the broker-dealer's affiliated depository institution. The broker-dealer receives eligibility information about the consumer from its depository institution affiliate and uses that information to make a marketing solicitation to the consumer about the broker-dealer's college savings accounts. The broker-dealer may make this marketing solicitation even if the consumer has not been given a notice and opportunity to opt out because the broker-dealer has a pre-existing business relationship with the consumer.\n\n(2)  Examples of service provider exception.  (i) A consumer has a brokerage account with a broker-dealer. The broker-dealer furnishes eligibility information about the consumer to its affiliate, a registered investment adviser. Based on that eligibility information, the investment adviser wants to make a marketing solicitation to the consumer about its advisory services. The investment adviser does not have a pre-existing business relationship with the consumer and none of the other exceptions in paragraph (c) of this section apply. The consumer has been given an opt out notice and has elected to opt out of receiving such marketing solicitations. The investment adviser asks a service provider to send the marketing solicitation to the consumer on its behalf. The service provider may not send the marketing solicitation on behalf of the investment adviser because, as a result of the consumer's opt out election, the investment adviser is not permitted to make the marketing solicitation.\n\n(ii) The same facts as in paragraph (d)(2)(i) of this section, except the consumer has been given an opt out notice, but has not elected to opt out. The investment adviser asks a service provider to send the solicitation to the consumer on its behalf. The service provider may send the marketing solicitation on behalf of the investment adviser because, as a result of the consumer's not opting out, the investment adviser is permitted to make the marketing solicitation.\n\n(3)  Examples of consumer-initiated communications.  (i) A consumer who is the record owner of shares in an investment company initiates a communication with an affiliated registered investment adviser about advisory services. The affiliated investment adviser may use eligibility information about the consumer it obtains from the investment company or any other affiliate to make marketing solicitations regarding the affiliated investment adviser's services in response to the consumer-initiated communication.\n\n(ii) A consumer who has a brokerage account with a broker-dealer contacts the broker-dealer to request information about how to save and invest for a child's college education without specifying the type of savings or investment vehicle in which the consumer may be interested. Information about a range of different products or services offered by the broker-dealer and one or more of its affiliates may be responsive to that communication. Such products, services, and investments may include the following: investments in affiliated investment companies; investments in section 529 plans offered by the broker-dealer; or trust services offered by a different financial institution in the affiliated group. Any affiliate offering products or services that would be responsive to the consumer's request for information about saving and investing for a child's college education may use eligibility information to make marketing solicitations to the consumer in response to this communication.\n\n(iii) A registered investment adviser makes a marketing call to the consumer without using eligibility information received from an affiliate. The investment adviser leaves a voice-mail message that invites the consumer to call a toll-free number to receive information about services offered by the investment adviser. If the consumer calls the toll-free number to inquire about the investment advisory services, the call is a consumer-initiated communication about a product or service, and the investment adviser may now use eligibility information it receives from its affiliates to make marketing solicitations to the consumer.\n\n(iv) A consumer calls a broker-dealer to ask about retail locations and hours, but does not request information about its products or services. The broker-dealer may not use eligibility information it receives from an affiliate to make marketing solicitations to the consumer because the consumer-initiated communication does not relate to the broker-dealer's products or services. Thus, the use of eligibility information received from an affiliate would not be responsive to the communication and the exception does not apply.\n\n(v) A consumer calls a broker-dealer to ask about retail locations and hours. The customer service representative asks the consumer if there is a particular product or service about which the consumer is seeking information. The consumer responds that the consumer wants to stop in and find out about mutual funds (i.e., registered open-end investment companies). The customer service representative offers to provide that information by telephone and mail additional information to the consumer. The consumer agrees and provides or confirms contact information for receipt of the materials to be mailed. The broker-dealer may use eligibility information it receives from an affiliate to make marketing solicitations to the consumer about mutual funds because such marketing solicitations would respond to the consumer-initiated communication about mutual funds.\n\n(4)  Examples of consumer authorization or request for marketing solicitations.  (i) A consumer who has a brokerage account with a broker-dealer authorizes or requests information about life insurance offered by the broker-dealer's insurance affiliate. The authorization or request, whether given to the broker-dealer or the insurance affiliate, would permit the insurance affiliate to use eligibility information about the consumer it obtains from the broker-dealer or any other affiliate to make marketing solicitations to the consumer about life insurance.\n\n(ii) A consumer completes an online application to open an online brokerage account with a broker-dealer. The broker-dealer's online application contains a blank check box that the consumer may check to authorize or request information from the broker-dealer's affiliates. The consumer checks the box. The consumer has authorized or requested marketing solicitations from the broker-dealer's affiliates.\n\n(iii) A consumer completes an online application to open an online brokerage account with a broker-dealer. The broker-dealer's online application contains a check box indicating that the consumer authorizes or requests information from the broker-dealer's affiliates. The consumer does not deselect the check box. The consumer has not authorized or requested marketing solicitations from the broker-dealer's affiliates.\n\n(iv) The terms and conditions of a brokerage account agreement contain preprinted boilerplate language stating that by applying to open an account the consumer authorizes or requests to receive solicitations from the broker-dealer's affiliates. The consumer has not authorized or requested marketing solicitations from the broker-dealer's affiliates.\n\n(e)  Relation to affiliate-sharing notice and opt out.  Nothing in this subpart limits the responsibility of a person to comply with the notice and opt out provisions of Section 603(d)(2)(A)(iii) of the FCRA (15 U.S.C. 1681a(d)(2)(A)(iii)) where applicable."], ["17:17:5.0.1.1.8.2.17.6", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.122 Scope and duration of opt out.", "SEC", "", "", "", "(a)  Scope of opt out \u2014(1)  In general.  Except as otherwise provided in this section, the consumer's election to opt out prohibits any affiliate covered by the opt out notice from using eligibility information received from another affiliate as described in the notice to make marketing solicitations to the consumer.\n\n(2)  Continuing relationship \u2014(i)  In general.  If the consumer establishes a continuing relationship with you or your affiliate, an opt out notice may apply to eligibility information obtained in connection with:\n\n(A) A single continuing relationship or multiple continuing relationships that the consumer establishes with you or your affiliates, including continuing relationships established subsequent to delivery of the opt out notice, so long as the notice adequately describes the continuing relationships covered by the opt out; or\n\n(B) Any other transaction between the consumer and you or your affiliates as described in the notice.\n\n(ii)  Examples of continuing relationships.  A consumer has a continuing relationship with you or your affiliate if the consumer:\n\n(A) Opens a brokerage account or enters into an advisory contract with you or your affiliate;\n\n(B) Obtains a loan for which you or your affiliate owns the servicing rights;\n\n(C) Purchases investment company shares in his or her own name;\n\n(D) Holds an investment through you or your affiliate; such as when you act or your affiliate acts as a custodian for securities or for assets in an individual retirement arrangement;\n\n(E) Enters into an agreement or understanding with you or your affiliate whereby you or your affiliate undertakes to arrange or broker a home mortgage loan for the consumer;\n\n(F) Enters into a lease of personal property with you or your affiliate; or\n\n(G) Obtains financial, investment, or economic advisory services from you or your affiliate for a fee.\n\n(3)  No continuing relationship \u2014(i)  In general.  If there is no continuing relationship between a consumer and you or your affiliate, and you or your affiliate obtain eligibility information about a consumer in connection with a transaction with the consumer, such as an isolated transaction or an application that is denied, an opt out notice provided to the consumer only applies to eligibility information obtained in connection with that transaction.\n\n(ii)  Examples of isolated transactions.  An isolated transaction occurs if:\n\n(A) The consumer uses your or your affiliate's ATM to withdraw cash from an account at another financial institution; or\n\n(B) A broker-dealer opens a brokerage account for the consumer solely for the purpose of liquidating or purchasing securities as an accommodation, i.e., on a one-time basis, without the expectation of engaging in other transactions.\n\n(4)  Menu of alternatives.  A consumer may be given the opportunity to choose from a menu of alternatives when electing to prohibit solicitations, such as by electing to prohibit solicitations from certain types of affiliates covered by the opt out notice but not other types of affiliates covered by the notice, electing to prohibit marketing solicitations based on certain types of eligibility information but not other types of eligibility information, or electing to prohibit marketing solicitations by certain methods of delivery but not other methods of delivery. However, one of the alternatives must allow the consumer to prohibit all marketing solicitations from all of the affiliates that are covered by the notice.\n\n(5)  Special rule for a notice following termination of all continuing relationships \u2014(i)  In general.  A consumer must be given a new opt out notice if, after all continuing relationships with you or your affiliate(s) are terminated, the consumer subsequently establishes another continuing relationship with you or your affiliate(s) and the consumer's eligibility information is to be used to make a marketing solicitation. The new opt out notice must apply, at a minimum, to eligibility information obtained in connection with the new continuing relationship. Consistent with paragraph (b) of this section, the consumer's decision not to opt out after receiving the new opt out notice would not override a prior opt out election by the consumer that applies to eligibility information obtained in connection with a terminated relationship, regardless of whether the new opt out notice applies to eligibility information obtained in connection with the terminated relationship.\n\n(ii)  Example.  A consumer has an advisory contract with a company that is registered with the Commission as both a broker-dealer and an investment adviser, and that is part of an affiliated group. The consumer terminates the advisory contract. One year after terminating the advisory contract, the consumer opens a brokerage account with the same company. The consumer must be given a new notice and opportunity to opt out before the company's affiliates may make marketing solicitations to the consumer using eligibility information obtained by the company in connection with the new brokerage account relationship, regardless of whether the consumer opted out in connection with the advisory contract.\n\n(b)  Duration of opt out.  The election of a consumer to opt out must be effective for a period of at least five years (the \u201copt out period\u201d) beginning when the consumer's opt out election is received and implemented, unless the consumer subsequently revokes the opt out in writing or, if the consumer agrees, electronically. An opt out period of more than five years may be established, including an opt out period that does not expire unless revoked by the consumer.\n\n(c)  Time of opt out.  A consumer may opt out at any time."], ["17:17:5.0.1.1.8.2.17.7", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.123 Contents of opt out notice; consolidated and equivalent notices.", "SEC", "", "", "", "(a)  Contents of opt out notice \u2014(1)  In general.  A notice must be clear, conspicuous, and concise, and must accurately disclose:\n\n(i)  The name of the affiliate(s) providing the notice.  If the notice is provided jointly by multiple affiliates and each affiliate shares a common name, such as \u201cABC,\u201d then the notice may indicate that it is being provided by multiple companies with the ABC name or multiple companies in the ABC group or family of companies, for example, by stating that the notice is provided by \u201call of the ABC companies,\u201d \u201cthe ABC banking, credit card, insurance, and securities companies,\u201d or by listing the name of each affiliate providing the notice. But if the affiliates providing the joint notice do not all share a common name, then the notice must either separately identify each affiliate by name or identify each of the common names used by those affiliates, for example, by stating that the notice is provided by \u201call of the ABC and XYZ companies\u201d or by \u201cthe ABC bank and securities companies and the XYZ insurance companies\u201d;\n\n(ii) A list of the affiliates or types of affiliates whose use of eligibility information is covered by the notice, which may include companies that become affiliates after the notice is provided to the consumer. If each affiliate covered by the notice shares a common name, such as \u201cABC,\u201d then the notice may indicate that it applies to multiple companies with the ABC name or multiple companies in the ABC group or family of companies, for example, by stating that the notice is provided by \u201call of the ABC companies,\u201d \u201cthe ABC banking, credit card, insurance, and securities companies,\u201d or by listing the name of each affiliate providing the notice. But if the affiliates covered by the notice do not all share a common name, then the notice must either separately identify each covered affiliate by name or identify each of the common names used by those affiliates, for example, by stating that the notice applies to \u201call of the ABC and XYZ companies\u201d or to \u201cthe ABC banking and securities companies and the XYZ insurance companies\u201d;\n\n(iii) A general description of the types of eligibility information that may be used to make marketing solicitations to the consumer;\n\n(iv) That the consumer may elect to limit the use of eligibility information to make marketing solicitations to the consumer;\n\n(v) That the consumer's election will apply for the specified period of time stated in the notice and, if applicable, that the consumer will be allowed to renew the election once that period expires;\n\n(vi) If the notice is provided to consumers who may have previously opted out, such as if a notice is provided to consumers annually, that the consumer who has chosen to limit marketing solicitations does not need to act again until the consumer receives a renewal notice; and\n\n(vii) A reasonable and simple method for the consumer to opt out.\n\n(2)  Joint relationships.  (i) If two or more consumers jointly obtain a product or service, a single opt out notice may be provided to the joint consumers. Any of the joint consumers may exercise the right to opt out.\n\n(ii) The opt out notice must explain how an opt out direction by a joint consumer will be treated. An opt out direction by a joint consumer may be treated as applying to all of the associated joint consumers, or each joint consumer may be permitted to opt out separately. If each joint consumer is permitted to opt out separately, one of the joint consumers must be permitted to opt out on behalf of all of the joint consumers and the joint consumers must be permitted to exercise their separate rights to opt out in a single response.\n\n(iii) It is impermissible to require all joint consumers to opt out before implementing any opt out direction.\n\n(3)  Alternative contents.  If the consumer is afforded a broader right to opt out of receiving marketing than is required by this subpart, the requirements of this section may be satisfied by providing the consumer with a clear, conspicuous, and concise notice that accurately discloses the consumer's opt out rights.\n\n(4)  Model notices.  Model notices are provided in the Appendix to this subpart.\n\n(b)  Coordinated and consolidated notices.  A notice required by this subpart may be coordinated and consolidated with any other notice or disclosure required to be issued under any other provision of law by the entity providing the notice, including but not limited to the notice described in section 603(d)(2)(A)(iii) of the FCRA (15 U.S.C. 1681a(d)(2)(A)(iii)) and the GLBA privacy notice.\n\n(c)  Equivalent notices.  A notice or other disclosure that is equivalent to the notice required by this subpart, and that is provided to a consumer together with disclosures required by any other provision of law, satisfies the requirements of this section."], ["17:17:5.0.1.1.8.2.17.8", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.124 Reasonable opportunity to opt out.", "SEC", "", "", "", "(a)  In general.  You must not use eligibility information that you receive from an affiliate to make marketing solicitations to a consumer about your products or services unless the consumer is provided a reasonable opportunity to opt out, as required by \u00a7 248.121(a)(1)(ii).\n\n(b)  Examples of a reasonable opportunity to opt out.  The consumer is given a reasonable opportunity to opt out if:\n\n(1)  By mail.  The opt out notice is mailed to the consumer. The consumer is given 30 days from the date the notice is mailed to elect to opt out by any reasonable means.\n\n(2)  By electronic means.  (i) The opt out notice is provided electronically to the consumer, such as by posting the notice at an Internet Web site at which the consumer has obtained a product or service. The consumer acknowledges receipt of the electronic notice. The consumer is given 30 days after the date the consumer acknowledges receipt to elect to opt out by any reasonable means.\n\n(ii) The opt out notice is provided to the consumer by e-mail where the consumer has agreed to receive disclosures by e-mail from the person sending the notice. The consumer is given 30 days after the e-mail is sent to elect to opt out by any reasonable means.\n\n(3)  At the time of an electronic transaction.  The opt out notice is provided to the consumer at the time of an electronic transaction, such as a transaction conducted on an Internet Web site. The consumer is required to decide, as a necessary part of proceeding with the transaction, whether to opt out before completing the transaction. There is a simple process that the consumer may use to opt out at that time using the same mechanism through which the transaction is conducted.\n\n(4)  At the time of an in-person transaction.  The opt out notice is provided to the consumer in writing at the time of an in-person transaction. The consumer is required to decide, as a necessary part of proceeding with the transaction, whether to opt out before completing the transaction, and is not permitted to complete the transaction without making a choice. There is a simple process that the consumer may use during the course of the in-person transaction to opt out, such as completing a form that requires consumers to write a \u201cyes\u201d or \u201cno\u201d to indicate their opt out preference or that requires the consumer to check one of two blank check boxes\u2014one that allows consumers to indicate that they want to opt out and one that allows consumers to indicate that they do not want to opt out.\n\n(5)  By including in a privacy notice.  The opt out notice is included in a GLBA privacy notice. The consumer is allowed to exercise the opt out within a reasonable period of time and in the same manner as the opt out under that privacy notice."], ["17:17:5.0.1.1.8.2.17.9", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "B", "Subpart B\u2014Regulation S-AM: Limitations on Affiliate Marketing", "", "\u00a7 248.125 Reasonable and simple methods of opting out.", "SEC", "", "", "", "(a)  In general.  You must not use eligibility information about a consumer that you receive from an affiliate to make a marketing solicitation to the consumer about your products or services, unless the consumer is provided a reasonable and simple method to opt out, as required by \u00a7 248.121(a)(1)(ii).\n\n(b)  Examples \u2014(1)  Reasonable and simple opt out methods.  Reasonable and simple methods for exercising the opt out right include:\n\n(i) Designating a check-off box in a prominent position on the opt out form;\n\n(ii) Including a reply form and a self-addressed envelope together with the opt out notice;\n\n(iii) Providing an electronic means to opt out, such as a form that can be electronically mailed or processed at an Internet Web site, if the consumer agrees to the electronic delivery of information;\n\n(iv) Providing a toll-free telephone number that consumers may call to opt out; or\n\n(v) Allowing consumers to exercise all of their opt out rights described in a consolidated opt out notice that includes the GLBA privacy, FCRA affiliate sharing, and FCRA affiliate marketing opt outs, by a single method, such as by calling a single toll-free telephone number.\n\n(2)  Opt out methods that are not reasonable and simple.  Reasonable and simple methods for exercising an opt out right  do not  include:\n\n(i) Requiring the consumer to write his or her own letter;\n\n(ii) Requiring the consumer to call or write to obtain a form for opting out, rather than including the form with the opt out notice; or\n\n(iii) Requiring the consumer who receives the opt out notice in electronic form only, such as through posting at an Internet Web site, to opt out solely by paper mail or by visiting a different Web site without providing a link to that site.\n\n(c)  Specific opt out means.  Each consumer may be required to opt out through a specific means, as long as that means is reasonable and simple for that consumer."], ["17:17:5.0.1.1.8.3.17.1", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "C", "Subpart C\u2014Regulation S-ID: Identity Theft Red Flags", "", "\u00a7 248.201 Duties regarding the detection, prevention, and mitigation of identity theft.", "SEC", "", "", "", "(a)  Scope.  This section applies to a  financial institution  or  creditor,  as defined in the Fair Credit Reporting Act (15 U.S.C. 1681), that is:\n\n(1) A broker, dealer or any other person that is registered or required to be registered under the Securities Exchange Act of 1934;\n\n(2) An investment company that is registered or required to be registered under the Investment Company Act of 1940, that has elected to be regulated as a business development company under that Act, or that operates as an employees' securities company under that Act; or\n\n(3) An investment adviser that is registered or required to be registered under the Investment Advisers Act of 1940.\n\n(b)  Definitions.  For purposes of this subpart, and Appendix A of this subpart, the following definitions apply:\n\n(1)  Account  means a continuing relationship established by a person with a financial institution or creditor to obtain a product or service for personal, family, household or business purposes. Account includes a brokerage account, a  mutual fund  account ( i.e.,  an account with an open-end investment company), and an investment advisory account.\n\n(2) The term  board of directors  includes:\n\n(i) In the case of a branch or agency of a foreign financial institution or creditor, the managing official of that branch or agency; and\n\n(ii) In the case of a financial institution or creditor that does not have a board of directors, a designated employee at the level of senior management.\n\n(3)  Covered account  means:\n\n(i) An account that a financial institution or creditor offers or maintains, primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions, such as a brokerage account with a broker-dealer or an account maintained by a mutual fund (or its agent) that permits wire transfers or other payments to third parties; and\n\n(ii) Any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.\n\n(4)  Credit  has the same meaning as in 15 U.S.C. 1681a(r)(5).\n\n(5)  Creditor  has the same meaning as in 15 U.S.C. 1681m(e)(4).\n\n(6)  Customer  means a person that has a covered account with a financial institution or creditor.\n\n(7)  Financial institution  has the same meaning as in 15 U.S.C. 1681a(t).\n\n(8)  Identifying information  means any name or number that may be used, alone or in conjunction with any other information, to identify a specific person, including any\u2014\n\n(i) Name, Social Security number, date of birth, official State or government issued driver's license or identification number, alien registration number, government passport number, employer or taxpayer identification number;\n\n(ii) Unique biometric data, such as fingerprint, voice print, retina or iris image, or other unique physical representation;\n\n(iii) Unique electronic identification number, address, or routing code; or\n\n(iv) Telecommunication identifying information or access device (as defined in 18 U.S.C. 1029(e)).\n\n(9)  Identity theft  means a fraud committed or attempted using the identifying information of another person without authority.\n\n(10)  Red Flag  means a pattern, practice, or specific activity that indicates the possible existence of identity theft.\n\n(11)  Service provider  means a person that provides a service directly to the financial institution or creditor.\n\n(12)  Other definitions.\n\n(i)  Broker  has the same meaning as in section 3(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)).\n\n(ii)  Commission  means the Securities and Exchange Commission.\n\n(iii)  Dealer  has the same meaning as in section 3(a)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(5)).\n\n(iv)  Investment adviser  has the same meaning as in section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11)).\n\n(v)  Investment company  has the same meaning as in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3), and includes a separate series of the investment company.\n\n(vi) Other terms not defined in this subpart have the same meaning as in the Fair Credit Reporting Act (15 U.S.C. 1681  et seq. ).\n\n(c)  Periodic identification of covered accounts.  Each financial institution or creditor must periodically determine whether it offers or maintains covered accounts. As a part of this determination, a financial institution or creditor must conduct a risk assessment to determine whether it offers or maintains covered accounts described in paragraph (b)(3)(ii) of this section, taking into consideration:\n\n(1) The methods it provides to open its accounts;\n\n(2) The methods it provides to access its accounts; and\n\n(3) Its previous experiences with identity theft.\n\n(d)  Establishment of an Identity Theft Prevention Program \u2014\n\n(1)  Program requirement.  Each financial institution or creditor that offers or maintains one or more covered accounts must develop and implement a written Identity Theft Prevention Program (Program) that is designed to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account. The Program must be appropriate to the size and complexity of the financial institution or creditor and the nature and scope of its activities.\n\n(2)  Elements of the Program.  The Program must include reasonable policies and procedures to:\n\n(i) Identify relevant Red Flags for the covered accounts that the financial institution or creditor offers or maintains, and incorporate those Red Flags into its Program;\n\n(ii) Detect Red Flags that have been incorporated into the Program of the financial institution or creditor;\n\n(iii) Respond appropriately to any Red Flags that are detected pursuant to paragraph (d)(2)(ii) of this section to prevent and mitigate identity theft; and\n\n(iv) Ensure the Program (including the Red Flags determined to be relevant) is updated periodically, to reflect changes in risks to customers and to the safety and soundness of the financial institution or creditor from identity theft.\n\n(e)  Administration of the Program.  Each financial institution or creditor that is required to implement a Program must provide for the continued administration of the Program and must:\n\n(1) Obtain approval of the initial written Program from either its board of directors or an appropriate committee of the board of directors;\n\n(2) Involve the board of directors, an appropriate committee thereof, or a designated employee at the level of senior management in the oversight, development, implementation and administration of the Program;\n\n(3) Train staff, as necessary, to effectively implement the Program; and\n\n(4) Exercise appropriate and effective oversight of service provider arrangements.\n\n(f)  Guidelines.  Each financial institution or creditor that is required to implement a Program must consider the guidelines in Appendix A to this subpart and include in its Program those guidelines that are appropriate."], ["17:17:5.0.1.1.8.3.17.2", 17, "Commodity and Securities Exchanges", "II", "", "248", "PART 248\u2014REGULATIONS S-P, S-AM, AND S-ID", "C", "Subpart C\u2014Regulation S-ID: Identity Theft Red Flags", "", "\u00a7 248.202 Duties of card issuers regarding changes of address.", "SEC", "", "", "", "(a)  Scope.  This section applies to a person described in \u00a7 248.201(a) that issues a credit or debit card (card issuer).\n\n(b)  Definitions.  For purposes of this section:\n\n(1)  Cardholder  means a consumer who has been issued a  credit card  or  debit card  as defined in 15 U.S.C. 1681a(r).\n\n(2)  Clear and conspicuous  means reasonably understandable and designed to call attention to the nature and significance of the information presented.\n\n(3) Other terms not defined in this subpart have the same meaning as in the Fair Credit Reporting Act (15 U.S.C. 1681  et seq. ).\n\n(c)  Address validation requirements.  A card issuer must establish and implement reasonable written policies and procedures to assess the validity of a change of address if it receives notification of a change of address for a consumer's debit or credit card account and, within a short period of time afterwards (during at least the first 30 days after it receives such notification), the card issuer receives a request for an additional or replacement card for the same account. Under these circumstances, the card issuer may not issue an additional or replacement card, until, in accordance with its reasonable policies and procedures and for the purpose of assessing the validity of the change of address, the card issuer:\n\n(1)(i) Notifies the cardholder of the request:\n\n(A) At the cardholder's former address; or\n\n(B) By any other means of communication that the card issuer and the cardholder have previously agreed to use; and\n\n(ii) Provides to the cardholder a reasonable means of promptly reporting incorrect address changes; or\n\n(2) Otherwise assesses the validity of the change of address in accordance with the policies and procedures the card issuer has established pursuant to \u00a7 248.201.\n\n(d)  Alternative timing of address validation.  A card issuer may satisfy the requirements of paragraph (c) of this section if it validates an address pursuant to the methods in paragraph (c)(1) or (c)(2) of this section when it receives an address change notification, before it receives a request for an additional or replacement card.\n\n(e)  Form of notice.  Any written or electronic notice that the card issuer provides under this paragraph must be clear and conspicuous and be provided separately from its regular correspondence with the cardholder."], ["24:24:2.1.1.2.24.1.211.1", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "A", "Subpart A\u2014General", "", "\u00a7 248.1 Purpose.", "HUD", "", "", "", "The purpose of this part is to\u2014\n\n(a) Preserve and retain to the maximum extent practicable as housing affordable to low income families or persons those privately owned dwelling units that were produced for such purpose with Federal assistance, without unduly restricting the owners' prepayment rights;\n\n(b) Minimize the involuntary displacement of tenants currently residing in such housing;\n\n(c) Work in partnership with State and local government and the private sector in the provision and operation of housing that is affordable to very low, low and moderate income families; and\n\n(d) Facilitate the sale of housing to residents under a resident homeownership program."], ["24:24:2.1.1.2.24.1.211.2", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "A", "Subpart A\u2014General", "", "\u00a7 248.3 Applicability.", "HUD", "", "", "", "The requirements of subparts B and C of this part apply to any project that is eligible low income housing, as defined in subparts B and C of this part respectively, on or after November 1, 1987, except that such requirements shall not apply to a project which receives assistance under title IV, subtitle B of the Cranston-Gonzalez National Affordable Housing Act in connection with a homeownership program approved by the Commissioner thereunder."], ["24:24:2.1.1.2.24.1.211.3", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "A", "Subpart A\u2014General", "", "\u00a7 248.5 Election to proceed under subpart B or subpart C of this part.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37814, July 13, 1993]", "(a) Any owner who has not submitted a notice of intent prior to January 1, 1991, pursuant to either \u00a7 248.211 or \u00a7 248.105, shall proceed under subpart B of this part.\n\n(b) Any owner who has filed a plan of action with the Commissioner on or before October 11, 1990 pursuant to subpart C of this part, regardless of whether or not the Commissioner has approved such plan of action or whether the owner has received incentives thereunder, may proceed under subpart B of this part by submitting a notice of intent to the Commissioner in accordance with \u00a7 248.105 within 30 days after publication of revised Appraisal Guidelines or within thirty days after the Commissioner notifies the owner of HUD's final approval of the plan of action, whichever is later. The notice of intent shall state that the owner is exercising its conversion right pursuant to this section. If the owner fails to file a notice of intent within that period, the owner forfeits its right of conversion. In awarding incentives to an owner who elects to proceed under subpart B of this part in accordance with this section, the Commissioner shall take into consideration any incentives which the owner has already received under subpart C of this part.\n\n(c) Any owner of housing that becomes eligible low income housing, as defined in subpart B of this part, before January 1, 1991, and who before such date, filed a notice of intent under \u00a7 248.211 of subpart C of this part, may, unless a plan of action was submitted after October 11, 1990, elect to proceed under subpart B or under subpart C of this part. An owner must indicate its election by submitting to the Commissioner, within 30 days of the effective date of this part, a notice of election to proceed indicating whether it wishes to proceed under subpart B or subpart C of this part, or proceed under subpart B of this part until completion of the appraisals and then elect either subpart B or subpart C of this part. An owner who chooses to retain its option until after the completion of the appraisals under \u00a7 248.111 must submit a new notice of intent to the Commissioner within 30 days after receipt of the information provided by the Commissioner under \u00a7 248.131. The notice of intent shall be submitted in accordance with either \u00a7 248.105 (for owners electing to proceed under subpart B of this part) or \u00a7 248.211 (for owners electing to proceed under subpart C of this part). Any owner who fails to file a notice of intent within the 30-day period may not proceed under subpart C of this part, but may proceed under subpart B of this part by filing a new notice of intent thereafter. If an owner who has filed a notice of intent before January 1, 1991 elects under this paragraph to proceed under subpart C of this part, it may change its election within 30 days after receipt of the information provided by the Commissioner under \u00a7 248.131 by filing a new notice of intent under \u00a7 248.211. For purposes of calculating any time periods or deadlines under this part for actions following the filing of the notice of intent, the date on which the owner submits the new notice of intent under this paragraph shall be deemed the date of the filing of the notice of intent. Any owner who, exercising its option under paragraph (c) of this section, submits a notice of intent under \u00a7 248.211 after the Commissioner has incurred the cost of having an appraisal, or appraisals, performed pursuant to \u00a7 248.111 of subpart A of this part, shall reimburse the Commissioner for these expenses within 30 days of receipt of a bill covering these expenses.\n\n(d) For an owner who has elected under paragraph (c) of this section to proceed under subpart C of this part, the Commissioner shall provide sufficient assistance to enable a nonprofit organization that has purchased, or will purchase, eligible low income housing to meet project oversight costs, as that term is defined in \u00a7 248.201.\n\n(e) The Commissioner shall not refuse to offer incentives under \u00a7 248.231 to any owner who filed a notice of intent under \u00a7 248.211 before October 15, 1991, based solely on the date of filing of the plan action.\n\n(f) An owner who has filed a plan of action after October 11, 1990, pursuant to \u00a7 248.213, may not elect to proceed under subpart B of this part."], ["24:24:2.1.1.2.24.2.211.1", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.101 Definitions.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 57 FR 57314, Dec. 3, 1992; 58 FR 37814, July 13, 1993; 59 FR 14369, Mar. 28, 1994; 64 FR 26639, May 14, 1999; 80 FR 75936, Dec. 7, 2015]", "Acquisition Loan.  A loan or advance of credit made to a qualified purchaser of eligible low income housing and insured by the Commissioner under part 241, subpart E of this chapter.\n\nAdjusted Income.  Annual income, as specified in part 5 of this title, less allowances specified in the definition of \u201cAdjusted Income\u201d in part 5 of this title.\n\nAggregate Preservation Rent.  The extension preservation rent or transfer preservation rent, as defined under this section.\n\nAnnual Authorized Return.  That amount an owner of an eligible low income housing project may receive in distributions from the project each year, plus debt service payments payable each year attributable to the equity take-out portion of any loan approved under the plan of action, expressed as a percentage of the project's extension preservation equity.\n\nBona Fide Offer.  A certain and unambiguous offer to purchase an eligible low income housing project pursuant to subpart B of this part made in good faith by a qualified purchaser with the intent that such offer result in the execution of an enforceable, valid and binding contract. A bona fide offer shall include, for purposes of subpart B of this part, a contract of sale and an earnest money deposit, as set forth in \u00a7 248.157(g). For mandatory sales under \u00a7 248.161, the offer must include a contract of sale, an earnest money deposit and also be for a purchase price which equals the transfer preservation value.\n\nCapital Improvement Loan.  A direct loan originated by the Commissioner under part 219, subpart C of this chapter.\n\nCommunity-Based Nonprofit Organization.  A private nonprofit organization that\u2014\n\n(1) Is organized under State or local laws;\n\n(2) Has no part of its net earnings inuring to the benefit of any member, founder, contributor, or individual;\n\n(3) Is neither controlled by, nor under the direction of, individuals or entities seeking to derive profit or gain from the organization.\n\n(4) Has applied for, or has a tax exemption ruling from the Internal Revenue Service under section 501(c) of the Internal Revenue Code of 1986;\n\n(5) Does not include a public body (including the participating jurisdiction) or an instrumentality of a public body. An organization that is State or locally chartered may qualify as a community-based nonprofit organization; however, the State or local government may not have the right to appoint more than one-third of the membership of the organization's governing body and no more than one-third of the board members can be public officials;\n\n(6) Has standards of financial accountability that conform to 2 CFR 200.302 and 200.303;\n\n(7) Has among its purposes the provision of decent housing that is affordable to low-income and moderate-income persons, as evidenced in its charter, articles of incorporation, resolutions or by-laws;\n\n(8) Maintains accountability to low income community residents by\u2014\n\n(i) Maintaining at least one-third of its governing board's membership for low-income neighborhood residents, other low-income community residents, or elected representatives of low-income neighborhood organizations. For urban areas, \u201ccommunity\u201d may be a neighborhood or neighborhoods, city, county, or metropolitan area; for rural areas, \u201ccommunity\u201d may be a neighborhood or neighborhoods, town, village, county, or multi-county area (but not the entire State); and\n\n(ii) Providing a formal process for low-income, program beneficiaries to advise the organization on its decisions regarding the acquisition, rehabilitation and management of affordable housing.\n\nDefault.  For purposes of \u00a7 248.105(a), the failure of the owner to make any payment due under the mortgage (including the full amount of the debt if the mortgagee has accelerated the debt on the basis of a non-monetary default) within 30 days after such payment becomes due.\n\nEligible Low Income Housing.  Any project that is not subject to a use restriction imposed by the Commissioner that restricts the project to low and moderate income use for a period at least equal to the remaining term of the mortgage, and that is financed by a loan or mortgage\u2014\n\n(1) That is\u2014\n\n(i) Insured or held by the Commissioner under section 221(d)(3) of the National Housing Act and assisted under part 886, subpart A of this title because of a conversion from assistance under 215 of this chapter;\n\n(ii) Insured or held by the Commissioner under part 221 of this chapter and bearing a below market interest rate as provided under \u00a7 221.518(b) of this chapter;\n\n(iii) Insured, assisted, or held by the Commissioner or a State or State agency under part 236 of this chapter; or\n\n(iv) A purchase money mortgage held by the Commissioner with respect to a project which, immediately prior to HUD's acquisition, would have been classified under paragraphs (1)(i), (ii), or (iii) of this definition; and\n\n(2) That, under regulation or contract in effect before February 5, 1988, is or will within 24 months become eligible for prepayment without prior approval of the Commissioner.\n\nEquity Loan.  A loan or advance of credit to the owner of eligible low income housing and insured by the Commissioner under part 241, subpart E of this chapter.\n\nExtension Preservation Equity.  The extension preservation equity of a project is:\n\n(1) The extension preservation value of the project determined under \u00a7 248.111; less\n\n(2) The outstanding balance of any debt secured by the property.\n\nExtension Preservation Rent.  The extension preservation rent is the gross potential income for the project that would be required to support:\n\n(1) The annual authorized return;\n\n(2) Debt service on any rehabilitation loan for the project;\n\n(3) Debt service on the federally-assisted mortgage(s) for the project;\n\n(4) Project operating expenses; and\n\n(5) Adequate reserves.\n\nExtension Preservation Value.  The fair market value of the project based on the highest and best use of the project as multifamily market-rate rental housing.\n\nFair market rent.  The section 8 existing fair market rent published for effect and as defined under \u00a7 982.4 of this title, applicable to the jurisdiction in which the project is located, with adjustments, where appropriate, for projects in which tenants pay their own utilities. (No utility adjustments will be made to the fair market rent for purposes of determining the Federal cost limit.)\n\nFederal Cost Limit.  The greater of 120 percent of the section 8 existing fair market rent for the market area in which the project is located or 120 percent of the prevailing rents in the relevant local market area in which the project is located.\n\nFederally-assisted Mortgage.  Any mortgage as defined in this section, any insured operating loss loan secured by the project and any loan insured by the Commissioner under part 241 of this chapter.\n\nGood Cause.  With respect to displacement, the temporary or permanent uninhabitability of the project justifying relocation of all or some of the project's tenants (except where such uninhabitability is caused by the actions or inaction of the owner), or actions of the tenant that, under the terms of the tenant's lease and applicable regulations, constitute a basis for eviction.\n\nHOME Investment Trust Fund.  A public fund established in the general local or State government in which a project is located pursuant to title II of the Cranston-Gonzalez National Affordable Housing Act.\n\nHomeownership Program.  A program developed by a resident council for the sale of an eligible low income housing project to the tenants in accordance with the standards in \u00a7 248.173 or \u00a7 248.175.\n\nInterest Reduction Payments.  Payments made by the Commissioner pursuant to a contract to reduce the interest costs on a mortgage insured under part 236 of this chapter, as provided under subpart C of part 236 of this chapter.\n\nLimited Equity Cooperative.  A tenant cooperative corporation which, in a manner acceptable to the Secretary, restricts the initial and resale price of the shares of stock in the cooperative corporation so that the shares remain affordable to low income families and moderate income families.\n\nLow Income Affordability Restrictions.  Limits imposed by regulation or regulatory agreement on tenant rents, rent contributions, or income eligibility with respect to eligible low income housing.\n\nLow Income Families.  Families or persons whose incomes do not exceed the levels established for low income families under part 5 of this title.\n\nLow Vacancy Area.  A market area in which the current supply of decent, safe and sanitary, vacant, available rental units, as a proportion of the total overall rental inventory in the area is not sufficient to allow for normal growth and mobility, taking into account the need for vacancies resulting from turnover and to meet growth in renter households. The determination of a low vacancy area, as set forth in \u00a7 248.165(h), will be made by the Commissioner, utilizing the most recent available data for the market area on the rental inventory, renter households, rental vacancy rates and other factors as appropriate.\n\nModerate Income Families.  Families or persons whose incomes are between 80 percent and 95 percent of median area income, as determined by the Commissioner, with adjustments for smaller and larger families.\n\nMortgage.  The mortgage or deed of trust insured or held by the Commissioner or a State or State agency under parts 221 or 236 of this title or the purchase money mortgage taken back by the Commissioner in connection with the sale of a HUD-owned project and held by the Commissioner, where such mortgage, deed or trust or purchase money mortgage is secured by eligible low income housing.\n\nNonprofit Organization.  Any private, nonprofit organization or association that\u2014\n\n(1) Is incorporated under State or local law;\n\n(2) Has no part of its net earnings inuring to the benefit of any member, founder, contributor, or individual;\n\n(3) Complies with standards of financial accountability acceptable to the Commissioner; and\n\n(4) Has among its principal purposes significant activities related to the provision of decent housing that is affordable to very low, low, and moderate income families.\n\nNotice of Intent.  An owner's notification to the Commissioner of its intention to terminate the low income affordability restrictions on the project through prepayment of the mortgage or voluntary termination of the insurance contract, to extend the low income affordability restrictions on the project, or to transfer the project to a qualified purchaser.\n\nOwner.  The mortgagor or trustor under the mortgage secured by eligible low income housing.\n\nParticipating Jurisdiction.  For purposes of the resident homeownership program established in \u00a7 248.173, any State or unit of general local government that has been so designated in accordance with section 216 of the Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 12746).\n\nPlan of Action.  A plan providing for the termination of the low income affordability restrictions on the project through prepayment of the mortgage or voluntary termination of the insurance contract, for extension of the low income affordability restrictions on the project, or for the transfer of the project to a qualified purchaser. A homeownership program constitutes a plan of action for purposes of subpart B of this part.\n\nPrepayment.  Prepayment in full of a mortgage, or a partial prepayment or series of partial prepayments that reduces the mortgage term by a least six months, except where the prepayment in full or partial prepayment results from the application of condemnation proceeds.\n\nPreservation Equity.  The extension preservation equity or transfer preservation equity, as defined under this section.\n\nPreservation Value.  The extension preservation value or transfer preservation value, as defined under this section.\n\nPriority Purchaser.  Any entity that is not a related party to the owner and that is either\u2014\n\n(1) A resident council organized to acquire the project in accordance with a resident homeownership program that meets the requirements of subpart B of this part; or\n\n(2) Any nonprofit organization or State or local agency that agrees to maintain low income affordability restrictions for the remaining useful life of the project. A nonprofit organization or State or local agency that is affiliated with a for-profit entity for purposes of purchasing a project under subpart B of this part shall not be considered a priority purchaser.\n\nProject oversight costs.  Reasonable expenses incurred by a priority purchaser in carrying out its ongoing ownership responsibilities under an approved plan of action. Project oversight costs must be directly related to educating the priority purchaser's board of directors or otherwise supporting the board in its decision making. Project oversight costs may include staff, overhead, or third-party contract costs for:\n\n(1) Ensuring adequate and responsible participation by the board of directors and the membership of the priority purchaser in ownership decisions, including ensuring resident input in these decisions;\n\n(2) Facilitating long-range planning by the board of directors to ensure the physical, financial and social viability of the project for the entire time the project is maintained as low income housing; and\n\n(3) Assisting the ownership in complying with regulatory, use, loan and grant agreements.\n\nProprietary information.  That information which cannot be released to the public because it consists of trade secrets, confidential financial information, audits, personal financial information about partners in the ownership entity, or income data on project tenants. Where proprietary information cannot be separated from the rest of a document, the entire document shall be deemed \u201cproprietary information\u201d and shall not be releasable to the public. Where proprietary information can be reasonably segregated from the rest of the document, the proprietary information shall be deleted and the remainder of the document shall be releasable to the public.\n\nPublic Housing Agency.  A public housing agency, as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).\n\nQualified Purchaser.  Any entity that is not a related party to the owner and that agrees to maintain low income affordability restrictions for the remaining useful life of the project, and includes for-profit entities and priority purchasers.\n\nRegulatory Agreement.  The agreement executed by the owner and the Commissioner or a State agency providing for the regulation of the operation of the project.\n\nRelated Party.  An entity that, either directly or indirectly, is wholly or partially owned or controlled by the owner of the project being transferred under subpart B of this part, is under whole or partial common control with such owner, or has any financial interest in such owner or in which such owner has any financial interest. However, this shall not prohibit a nonprofit organization from buying out the interest of its limited dividend or for-profit partners in connection with the sale of eligible low income housing under subpart B of this part, as long as the sale is made on an arm's length basis and the partners who sell their interest completely divest themselves of any input in the continued operation of the project. The purchaser and the owner shall not be deemed related parties on the basis that financing is provided to the purchaser by the seller, or a management company affiliated with the seller, as long as:\n\n(1) Only a loan, and not a grant, is provided;\n\n(2) The financing is provided for the acquisition of the project, the rehabilitation of the project, or both;\n\n(3) In the case of financing for the acquisition of the project, the sum of the principal amount of the loan, plus the amount of the acquisition loan under section 241(f) of the National Housing Act (12 U.S.C. 1715z-6(f)), and any Federal grant to cover acquisition of the project, does not exceed the sum of the sales price and the expenses associated with the acquisition, loan closing and implementation of the plan of action; and in the case of financing for the rehabilitation of the project, the principal amount of the loan does not exceed the equity requirements applicable to the rehabilitation loan or capital improvement loan obtained by the purchaser under part 241 or part 219 of this chapter;\n\n(4) The loan is not a condition of accepting a bona fide offer or entering into a sales contract;\n\n(5) The seller has no input in the continued operation of the project as a result of the loan; and\n\n(6) In the case of a loan provided by a management company that is affiliated with the seller, the execution of a management contract between the purchaser and the management company is not a condition of the loan. This rule does not bar an owner, or former owner, from membership on a nonprofit organization's board of directors, as long as the owner, or former owner, participates only in his or her personal capacity, without compensation, and holds a nonvoting membership. The purchaser and the owner shall not be deemed related parties solely by reason of the purchaser's retention of a property management entity of a company that is owned or controlled by the owner or a principal thereof, if retention of the management company is neither a condition of sale nor part of consideration paid for the project and the property management contract is negotiated by the qualified purchaser on an arm's length basis.\n\nRelevant Local Market.  An area geographically smaller than the market area established by the Commissioner for purposes of determining the section 8 existing fair market rent, that is identifiable as a distinct rental market area in which similar projects and units would effectively compete with the subject project, for potential tenants.\n\nRelocation Expenses.  Relocation expenses shall consist of payment for\u2014\n\n(1) Advisory services, including timely information, counseling (including the provision of information on a resident's rights under the Fair Housing Act (42 U.S.C. 3601-3619)), and referrals to suitable, affordable, decent, safe and sanitary alternative housing; and\n\n(2) Payment for actual, reasonable moving expenses.\n\nRemaining Useful Life.  With respect to eligible low income housing, the period during which the physical characteristics of the project remain in a condition suitable for occupancy, assuming normal maintenance and repairs are made and major systems and capital components are replaced as becomes necessary.\n\nReserve for Replacements.  The escrow fund established under the regulatory agreement for the purpose of ensuring the availability of funds for needed repair and replacement costs.\n\nResident Council.  Any incorporated nonprofit organization or association in which membership is available to all the tenants, and only the tenants, of a particular project and\u2014\n\n(1) Is representative of the residents of the project;\n\n(2) Adopts written procedures providing for the election of officers on a regular basis; and\n\n(3) Has a democratically elected governing board, elected by the residents of the project.\n\nResidual Receipt Fund.  The fund established under the regulatory agreement for holding cash remaining after deducting from the surplus cash, as defined by the regulatory agreement, the amount of all allowable distributions.\n\nReturn on Investment.  The amount of allowable distributions that a purchaser of a project may receive under a plan of action under \u00a7 248.157 or \u00a7 248.161.\n\nSection 8 Assistance.  Assistance provided under parts 880 through 887 and 982 and 983 of this title.\n\nSpecial Needs Tenants.  Those \u201celderly persons,\u201d 62 years of age or older, \u201celderly families,\u201d or families that include \u201cdisabled persons,\u201d as such terms are defined in part 5 of this title, or large families of five or more persons and requiring units with three or more bedrooms.\n\nState assisted or subsidized mortgage.  A mortgage which is assisted or subsidized by an agency of a State government without any Federal mortgage subsidy.\n\nTenant Representative.  A designated officer of an organization of the project's tenants, a tenant who has been elected to represent the tenants of the project with respect to subpart B of this part, or a person or organization that has been formally designated or retained by an organization of the project's tenants to represent the tenants with respect to subpart B of this part.\n\nTermination of Low Income Affordability Restrictions.  The elimination of low income affordability restrictions under the regulatory agreement through termination of mortgage insurance or prepayment of the mortgage.\n\nTransfer Preservation Equity.  The transfer preservation equity of a project is:\n\n(1) The transfer preservation value of the project determined under \u00a7 248.111; less\n\n(2) The outstanding balance of the federally-assisted mortgage(s) for the project.\n\nTransfer Preservation Rent.  For purposes of receiving incentives pursuant to a sale of the project, transfer preservation rent shall be the gross income for the project that would be required to support:\n\n(1) Debt service on the loan for acquisition of the project;\n\n(2) Debt service on any rehabilitation loan for the project;\n\n(3) Debt service on the federally-assisted mortgage(s) for the housing;\n\n(4) Project operating expenses; and\n\n(5) Adequate reserves.\n\nTransfer Preservation Value.  The fair market value of the project based on its highest and best use.\n\nVery Low Income Families.  Families or persons whose incomes do not exceed the level established for very low income families under part 5 of this title.\n\nVoluntary Termination of Mortgage Insurance.  The termination of all rights under the mortgage insurance contract and of all obligations to pay future insurance premiums."], ["24:24:2.1.1.2.24.2.211.10", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.135 Plans of action.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37814, July 13, 1993]", "(a)  Submission.  An owner seeking to terminate the low income affordability restrictions through prepayment of the mortgage or voluntary termination under \u00a7 248.141, or to extend the low income affordability restrictions on the project under \u00a7 248.153, shall submit a plan of action to the Commissioner in the form and manner prescribed in paragraph (d) or (e) of this section respectively, within 6 months after receipt of the information from the Commissioner under \u00a7 248.131.\n\n(b)  Joint Submission.  An owner and purchaser seeking a transfer of the project under \u00a7\u00a7 248.157 or 248.161 shall jointly submit a plan of action to the Commissioner in the form and manner prescribed in paragraph (e) of this section within six months after the owner's acceptance of a bona fide offer under \u00a7 248.157 or the purchaser's making of a bona fide offer under \u00a7 248.161.\n\n(c)  Filing with the State or local government and tenants.  The owner shall notify the tenants of the plan of action by posting in each occupied building a summary of the plan of action and by delivery of a copy of the plan of action to the tenant representative, if any. In addition, the summary must indicate that a copy of the plan of action shall be available from the tenant representatives, whose names, addresses and telephone numbers are indicated on the summary, the local HUD field office, and the on-site office for the project, or if one is not available, in the location where rents are collected, for inspection and copying, at a reasonable cost, during normal business hours. Simultaneously with the submission to the Commissioner, the owner shall submit the plan of action to that officer of State or local government to whom the owner submitted a notice of intent under \u00a7 248.105(c). The Commissioner shall submit a copy of the plan of action to the chief executive officer of the appropriate agency of such State or local government which shall review the plan of action and advise the tenants of the project of any programs that are available to assist the tenants in carrying out the purposes of this subpart. The summary of the plan of action posted by the owner and the copies of the plan of action submitted to the tenant representative, the officer of State or local government to whom the owner submitted a notice of intent under \u00a7 248.105(c) and the chief executive officer of the appropriate State or local government, shall all state that, upon request, the tenants and the State or local government, may obtain from the owner or from the local HUD field office a copy of all documentation supporting the plan of action except for that documentation deemed \u201cproprietary information\u201d under \u00a7 248.101.\n\n(d)  Termination of affordability restrictions.  If the plan of action proposes to terminate the low income affordability restrictions through prepayment or voluntary termination in accordance with \u00a7 248.141, it shall include:\n\n(1) A description of any proposed changes in the status or terms of the mortgage or regulatory agreement;\n\n(2) A description of any proposed changes in the low income affordability restrictions;\n\n(3) A description of any change in ownership that is related to prepayment or voluntary termination;\n\n(4) An assessment of the effect of the proposed changes on existing tenants;\n\n(5) An analysis of the effect of the proposed changes on the supply of housing affordable to low and very low income families or persons in the community within which the project is located and in the area that the housing could reasonably be expected to serve;\n\n(6) A list of any waivers requested by the owner pursuant to \u00a7 248.7; and\n\n(7) Any other information that the Commissioner determines is necessary to achieve the purposes of subpart B of this part.\n\n(e)  Extension of affordability restrictions.  If the plan of action proposes to extend the low income affordability restrictions of the project in accordance with \u00a7 248.153 or transfer the project to a qualified purchaser in accordance with \u00a7\u00a7 248.157 or 248.161, the plan of action shall include:\n\n(1) A description of any proposed changes in the status or terms of the mortgage or regulatory agreement;\n\n(2) A description of the Federal incentives requested, including cash flow projections and analyses of how the owner will address any physical or financial deficiencies and maintain the low income affordability restrictions of the project;\n\n(3) A description of any assistance from State or local government agencies, including low income housing tax credits that have been offered to the owner or purchaser or for which the owner or purchaser has applied or intends to apply;\n\n(4) A description of any transfer of the property, including the identity of the transferee and a copy of any documents of sale;\n\n(5) An income profile of the tenants as of the date of submission of the plan of action and as of January 1, 1987 (based on the area median income limits established by the Commissioner in February 1987), or if the January 1, 1987 profile is unavailable, a certification from the owner stating its unavailability and a profile as of January 1, 1988, or, if that is also unavailable, a profile as of January 1, 1989;\n\n(6) A transfer of physical assets package, if a transfer is proposed;\n\n(7) A list of any waivers requested by the owner pursuant to \u00a7 248.7; and\n\n(8) Any other information that the Commissioner determines is necessary to achieve the purposes of subpart B of this part.\n\n(f)  Revisions.  The owner or owner and purchaser may from time to time revise and amend the plan of action as may be necessary to obtain approval under subpart B of this part and must amend the plan of action no later than 30 days after a change in any of the information required in paragraphs (d) or (e) of this section. The owner shall submit any revision to the Commissioner, and provide a copy of the revision and all documentation supporting the revision except for that documentation deemed \u201cproprietary information\u201d under \u00a7 248.101, to the parties, and in the manner, specified in paragraph (c) of this section.\n\n(g)  Failure to Submit.  If the owner fails to submit a plan of action to the Commissioner, when prepayment or termination is sought, within the 6 month period set forth in paragraph (a) of this section or, when a transfer is sought, if the owner and purchaser fail to submit a plan of action within the 6 month time period set forth in paragraph (b) of this section, the notice of intent filed by the owner under \u00a7 248.105 shall be ineffective for the purposes of subpart B of this part and the owner shall be barred from submitting another notice of intent under \u00a7 248.105 until 6 months after expiration of such period.\n\n(h)  Comment Period for tenants and State or local governments.  Upon submission of the plan of action by the owner, the tenants of the affected project and the State or local government shall have 60 days in which to provide comments on the plan of action to the Commissioner or to the owner, who will then submit the comments to the Commissioner. The Commissioner shall not approve a plan of action under subpart B of this part before the end of this 60-day period and all comments received during this period will be considered by the Commissioner in making its determination to approve or disapprove a plan of action.\n\n(i)  Notification to tenants and the State or local government of plan of action approval.  Upon the Commissioner's approval of the plan of action, the owner shall notify tenants of the terms thereof by posting in each occupied building a summary of the plan of action and by delivery of a copy of the plan of action to the tenant representative, if any. In addition, the summary must indicate that a copy of the plan of action shall be available for inspection and copying during reasonable hours in a location convenient to the tenants."], ["24:24:2.1.1.2.24.2.211.11", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.141 Criteria for approval of a plan of action involving prepayment and voluntary termination.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37815, July 13, 1993; 64 FR 26639, May 14, 1999]", "(a)  Approval.  The Commissioner may approve a plan of action that provides for the termination of the low income affordability restrictions through prepayment of the mortgage or voluntary termination of the mortgage insurance contract only upon a written finding that\u2014\n\n(1) Implementation of the plan of action will not\u2014\n\n(i) Materially increase economic hardship for current tenants, and will not in any event result in a monthly rental payment by any current tenant that exceeds 30 percent of the monthly adjusted income of the tenant or an increase in the monthly rental payment in any year that exceeds 10 percent (whichever is lower); or in the case of a current tenant who already pays more than such percentage, an increase in the monthly rental payment in any year that exceeds the increase in the Consumer Price Index or 10 percent (whichever is lower); or\n\n(ii) Involuntarily displace current tenants (except for good cause) where comparable and affordable housing is not readily available, determined without regard to the availability of Federal housing assistance that would address any such hardship or involuntary displacement; and\n\n(2) The supply of vacant, comparable housing is sufficient to ensure that such prepayment will not materially affect\u2014\n\n(i) The availability of decent, safe, and sanitary housing affordable to low income and very low income families or persons in the area that the housing could reasonably be expected to serve;\n\n(ii) The ability of low income and very low income families or persons to find affordable, decent, safe, and sanitary housing near employment opportunities; or\n\n(iii) The housing opportunities of minorities in the community within which the housing is located.\n\n(3) There are no open audit findings, open findings of noncompliance with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); the Fair Housing Act (42 U.S.C. 3601-3619); Executive Order 11063 (3 CFR 1959-1963 comp., p. 652); the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107); section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); and all regulations promulgated under such statutes and authorities (including, but not limited to 24 CFR part 100), or outstanding violations of the regulatory agreement.\n\n(b) For purposes of approving a plan of action under this section, the Commissioner shall find that the requirements of paragraph (a)(1) of this section have been met if the owner agrees to execute a use agreement which provides that rents for all tenants residing at the project at the time of plan of action approval will not exceed the limit established in paragraph (a)(1)(i) of this section and that no tenant residing in the project at the time of plan of action approval will be involuntarily displaced without good cause.\n\n(c) For purposes of approving a plan of action under this section, the Commissioner shall find that the requirements of paragraph (a)(2) of this section have been met if the project is located in a housing market area which has been determined to have an adequate supply of decent, safe and sanitary rental housing; and it has been determined, based on the specific characteristics of the project, that the prepayment would not materially affect the housing opportunities of low and very-low income families.\n\n(1) For purposes of this section, a \u201chousing market area\u201d is defined as an area where rental housing units of similar characteristics are in relative competition with each other. If a project is in a non-metropolitan area, the housing market area is the county in which the project is located. If the project is located in a metropolitan area the housing market area is the primary metropolitan statistical area (PMSA), or in the case of very large metropolitan areas, the housing market area may be a portion of the PMSA.\n\n(2) For purposes of this section, a housing market area may be determined to have an adequate supply of decent, safe, and sanitary rental housing if the housing market area has a soft rental market. A soft rental market is a housing market area in which the supply of vacant available rental housing significantly exceeds the demand. A soft rental market exists if:\n\n(i) There is currently a surplus of rental housing such that the current excess supply of vacant available housing, plus units currently under construction, is expected to exceed demand for at least the next 24 months; or\n\n(ii) Within the next 12 months, based on the housing production (units currently under construction or with firm planning commitments), in combination with the current supply of available vacant units, supply is expected to exceed demand for at least 24 months.\n\n(3) In order to determine whether the housing market area has a soft rental market, the Commissioner shall consider data from the 1990 Decennial Census and the most recent available local data concerning changes in population, households, employment, the housing inventory, residential construction activity, and the current and anticipated supply/demand conditions within the overall rental market, as well as the occupancy and vacancy situation in assisted housing projects in the area, including information on waiting lists and the experience of voucher holders in finding units.\n\n(4) A determination must also be made on whether the prepayment would materially affect the housing opportunities of low and very-low income families in the area, based on the specific characteristics of the project including unit sizes, the type of tenants, e.g., elderly, handicapped, large families, minorities, the location of the project with respect to its proximity to employment opportunities; and the availability of other assisted housing within the immediate area. The prepayment would be determined to materially affect housing opportunities if:\n\n(i) The project is needed to assist in preserving low income housing in a neighborhood which is being revitalized;\n\n(ii) The project represents a rare source or the only source of low-and moderate-income rental housing in the immediate area;\n\n(iii) There is a shortage of the particular type of rental housing provided by the project such as units suitable for the disabled, single room occupancy, or units for large families;\n\n(iv) The preservation of the housing would be necessary to avoid adversely affecting the housing opportunities of low and very-low income families to find housing near employment opportunities; or\n\n(v) The preservation of the housing would be necessary to avoid adversely affecting the housing opportunities of minorities in the community within which the housing is located.\n\n(d) Once the Commissioner has compiled the necessary data and conducted the analysis under paragraph (c) of this section the Commissioner shall issue a written finding to the owner stating whether the plan of action to terminate the low income affordability restrictions is approved or disapproved. The written finding shall contain a specific determination of whether the market area is a soft rental market and prepayment would materially affect housing opportunities. The written finding shall include:\n\n(1) A statement as to whether the owner has agreed to execute a use agreement to protect current tenants, in accordance with paragraph (b) of this section;\n\n(2) A description of the geographic boundaries of the housing market area in which the project is located;\n\n(3) An analysis of current and anticipated supply/demand conditions in both the overall rental market and the assisted housing inventory; and\n\n(4) A discussion of whether the prepayment would materially affect the housing opportunities, given the specific characteristics of the project.\n\n(e)  Disapproval.  If the Commissioner determines a plan of action to prepay a mortgage or terminate an insurance contract fails to meet the requirements of paragraph (a) of this section, the Commissioner shall disapprove the plan and within a reasonable time, shall inform the owner of the reasons for disapproval and suggest alternatives. In the case of disapproval of the plan of action, except for the failure to meet the requirement of paragraph (a)(3) of this section, the notice of intent filed under \u00a7 248.105 shall be rendered ineffective for the purposes of this subtitle, and the owner, in order to receive incentives, must file a new notice of intent under such section. If the plan of action is disapproved because of an outstanding civil rights or audit finding, the finding must be closed before the Commissioner will approve a plan of action under this section."], ["24:24:2.1.1.2.24.2.211.12", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.145 Criteria for approval of a plan of action involving incentives.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 57 FR 57314, Dec. 3, 1992; 58 FR 37815, July 13, 1993]", "(a)  Approval.  The Commissioner may approve a plan of action for extension of the low income affordability restrictions on an eligible low income housing project or for transfer of the housing to a qualified purchaser, other than a resident council acquiring the project under a resident homeownership plan, only upon a finding that\u2014\n\n(1) Due diligence has been given to ensuring that the package of incentives set forth in the plan of action is, for the Federal Government, the least costly alternative that is consistent with the full achievement of the purposes of this subpart.\n\n(2) The project will be retained as housing affordable for very low, low and moderate income families and persons, as determined under paragraph (a)(8) of this section, for the remaining useful life of the project;\n\n(3) Throughout the remaining useful life of the project, adequate expenditures will be made for maintenance and operation of the project and the project meets the housing standards established in \u00a7 248.147 as determined by inspections conducted by the Commissioner;\n\n(4) Current tenants will not be involuntarily displaced, except for good cause;\n\n(5) Any increase in rent contributions for current tenants will be to a level that does not exceed 30 percent of the adjusted income of the tenant or the fair market rent, whichever is lower. However, the rent contributions of any tenants occupying the project at the time of any increase may not be reduced by reason of this paragraph, except with respect to tenants receiving section 8 assistance in accordance with paragraph (a)(7) of this section;\n\n(6) Any resulting increase in rents for current tenants (except for increases made necessary by increased operating costs) shall be phased in as follows:\n\n(i) If such increase is 30 percent or more, the increase shall be phased in equally over a period of not less than three years, with the first increase occurring upon the effective date of the plan of action, and the subsequent two increases occurring annually thereafter;\n\n(ii) If such increase is more than 10 percent but less than 30 percent, it shall be limited to not more than 10 percent per year;\n\n(7) Section 8 assistance shall be provided, to the extent appropriations are available, if necessary to mitigate any adverse effect on current very low and low income tenants;\n\n(8) Rents for units becoming available to new tenants shall be at levels approved by the Commissioner, taking into account any incentives provided under subpart B of this part, that will ensure, to the extent practicable, that the units will be available and affordable to the same proportions of very low, low and moderate income families and persons, including families and persons whose incomes are 95 percent or more of area median income, as based on the area median income limits established by the Commissioner in February 1987, as resided in the project as of the date of the tenant income profile submitted under \u00a7 248.135(e)(5), or the date the plan of action is approved, whichever date results in the highest proportion of very low income families. This limitation shall not prohibit a higher proportion of very low income families and persons from occupying the project;\n\n(9) Future rent adjustments shall be\u2014\n\n(i) Made by applying an annual factor, to be determined by the Commissioner, to the portion of rent attributable to operating expenses for the project, and, where the owner is a priority purchaser, to the portion of rent attributable to project oversight costs, as that term is defined in \u00a7 248.101; and\n\n(ii) Subject to a procedure, established by the Commissioner, for owners to apply for rent increases not adequately compensated by annual adjustment under paragraph (a)(9)(i) of this section, under which the Commissioner may increase rents in excess of the amount determined under paragraph (a)(9)(i) of this section only if the Commissioner determines such increases are necessary to reflect extraordinary necessary expenses of owning and maintaining the project;\n\n(10) Any savings from reductions in operating expenses due to management efficiencies shall be deposited in project reserves for replacement and the owner shall have periodic access to such reserves, to the extent the Commissioner determines that the level of the reserves is adequate and that the project is maintained in accordance with the standards established in \u00a7 248.147;\n\n(11) The mortgage on the project is current; and\n\n(12) There are no open audit findings, open findings of noncompliance with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); the Fair Housing Act (42 U.S.C. 3601-3619); Executive Order 11063 (3 CFR 1959-1963 comp., p. 652); the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107); section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); and all regulations promulgated under such statutes and authorities (including, but not limited to, 24 CFR part 100), or outstanding violations of the regulatory agreement.\n\n(b)  Compliance with housing standards.  No incentives under \u00a7 248.153 may be provided, other than to qualified purchasers under \u00a7\u00a7 248.157 and 245.161, and no distributions may be taken by the owner or purchaser, until the Commissioner determines that the project meets the housing standards set forth in \u00a7 248.147, except that incentives designed to correct deficiencies in the project may be provided.\n\n(c)  Implementation.  Any agreement to maintain the low income affordability restrictions for the remaining useful life of the project may be made through execution of a new regulatory agreement, modifications to the existing regulatory agreement or mortgage, or in the case of prepayment of a mortgage or voluntary termination of mortgage insurance, a recorded instrument.\n\n(d)  Determination of remaining useful life.  The Commissioner shall make determinations, on the record and after opportunity for a hearing, as to when the useful life of an eligible low income housing project has expired. Under procedures and standards to be established by the Commissioner, owners of eligible low income housing may petition the Commissioner for a determination that the useful life of such project has expired. Such petition may not be filed before the expiration of the 50-year period beginning upon the approval of a plan of action under subpart B of this part with respect to such project. In making a determination pursuant to a petition under paragraph (d) of this section, the Commissioner shall presume that the useful life of the project has not expired, and the owner shall have the burden of proof in establishing such expiration. The Commissioner may not determine that the useful life of any project has expired if such determination results primarily from failure to make regular and reasonable repairs and replacement, as became necessary. In making a determination regarding the useful life of any project pursuant to a petition submitted under paragraph (d) of this section, the Commissioner shall provide for comment by tenants of the project and interested persons and organizations with respect to the petition. The Commissioner shall also provide the tenants and interested persons and organizations with an opportunity to appeal a determination under paragraph (d) of this section.\n\n(e) In the case of any plans of action involving incentives the owner must agree to comply with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); the Fair Housing Act (42 U.S.C. 3601-3619); Executive Order 11063 (3 CFR 1959-1963 comp., p. 652); the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107); section 504 of the Rehabilitiation Act of 1973 (29 U.S.C. 794) (including the Department's Accessibility Guidelines (24 CFR chapter I, subchapter A, appendix II) and all regulations issued pursuant to these authorities."], ["24:24:2.1.1.2.24.2.211.13", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.147 Housing standards.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 64 FR 26639, May 14, 1999]", "(a)  Standards.  As a condition to receiving incentives under subpart B of this part, the owner shall agree to maintain the project in accordance with local housing codes and the housing quality standards set forth in \u00a7 886.307 of this title. Where a housing quality standard conflicts with local housing codes, the owner shall maintain the project in compliance with the standard that is stricter.\n\n(b)  Annual inspections.  The Commissioner shall inspect each project at least annually in order to determine compliance with the housing quality standards. At least 30 days prior to the inspection, the Commissioner shall notify any tenant representatives, or if none exist, the Commissioner shall provide the owner with a notice to be posted in each affected building, stating the time and date of the inspection and advising any interested tenants that they may accompany HUD personnel on the inspection and/or submit any comments they may have on the physical condition of the project. The Commissioner shall notify the owner of any deficiencies within 30 days following the inspection. The owner shall have 90 days from the date of such notification to correct any deficiencies cited by the Commissioner and shall promptly notify the Commissioner when such deficiencies have been corrected. The Commissioner shall reinspect the project upon such notification or, if the owner does not notify the Commissioner, upon the expiration of the 90-day period.\n\n(c)  Sanctions for noncompliance.  If the Commissioner determines, upon reinspection of the project, that the project is still not in compliance with the standards set forth in paragraph (a) of this section, the Commissioner shall take any action appropriate to bring the project into compliance, including\u2014\n\n(1) Directing the mortgagee, with respect to an equity take-out loan provided under part 241 of this chapter, to withhold the disbursement to the owner of any escrowed loan proceeds and requiring that such proceeds be used for repair of the project; and\n\n(2) Reduce the amount of the allowable distributions to 4 percent of extension preservation equity or (in the case of a purchaser 4 percent of cash invested, as appropriate, for the period ending upon a determination by the Commissioner that the project is in compliance with the standards and requiring that such amounts be used for repair.\n\n(d)  Continued compliance.  To ensure continued compliance with the standards set forth in paragraph (a) of this section for a project subject to any action under paragraph (c) of this section, the Commissioner may limit access of and use by the owner of such amounts set forth in paragraph (c) of this section, for not more than the 2-year period beginning upon the determination that the project is in compliance with the housing standards.\n\n(e)  Sanctions for continuous noncompliance.  If, upon inspection, the Commissioner determines that any eligible low income housing project has failed to comply with the standards established under this section for two consecutive years, the Commissioner may, upon notification to the owner of the noncompliance, take one or more of the following actions;\n\n(1) Subject to the availability of appropriations, provide assistance, other than project-based assistance attached to the project, under part 982 of this title for any tenant eligible for such assistance who desires to terminate occupancy in the project. For each unit in the project vacated pursuant to the provision of assistance under this paragraph, the Commissioner may, notwithstanding any other law or contract for assistance, cancel the provision of project-based assistance attached to the project for one dwelling unit, if the project is receiving such assistance, or convert the project-based assistance allocation for that unit to assistance under part 982 of this title;\n\n(2) In the case of projects for which an equity take-out loan has been made under part 241 of this chapter, direct the mortgagee to declare such a loan to be in default and accelerate the maturity date of the loan;\n\n(3) Declare, or direct the insured mortgagee to declare, any rehabilitation loan insured or provided by the Commissioner with respect to the project, including loans provided under part 219 of this chapter, to be in default and accelerate the maturity date of the loan; and\n\n(4) Suspend payments under or terminate any contract for project-based rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).\n\n(f)  Sanctions not exclusive.  The Commissioner may take any other action authorized by law or the project regulatory agreement to ensure that the project will be brought into compliance with the standards established under this section or with other requirements pertaining to the condition of the project."], ["24:24:2.1.1.2.24.2.211.14", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.149 Timetable for approval of a plan of action.", "HUD", "", "", "", "(a)  Notification of deficiencies.  Not later than 60 days after receipt of a plan of action, the Commissioner shall notify the owner in writing of any deficiencies that prevent the plan of action from being approved. Such notice shall describe alternative ways in which the plan may be revised to meet the criteria for approval set forth in \u00a7 248.145.\n\n(b)  Notification of approval.  Not later than 180 days after receipt of a plan of action, or such longer period as the owner requests, but not more than 365 days, the Commissioner shall notify the owner in writing whether the plan of action, including any revisions, is approved. If approval is withheld, the notice shall describe\u2014\n\n(1) The reasons for withholding approval; and\n\n(2) Suggestions to the owner for meeting the criteria for approval.\n\n(c)  Opportunity to revise.  The Commissioner shall give the owner a reasonable opportunity of not more than 60 days to revise the plan of action when approval is denied. If the owner fails to comply with this time period, it shall not be eligible for relief under paragraph (d) of this section.\n\n(d)  Delayed approval.  If the Commissioner fails to approve a plan of action within the time set forth in paragraph (b) of this section, the Commissioner shall provide incentives and assistance under subpart B of this part, to an owner who is entitled to receive such incentives and assistance, in the amount that the owner would have received if the Commissioner had complied with such time limitations. Paragraph (d) of this section does not apply to plans of action that are not approved because of deficiencies."], ["24:24:2.1.1.2.24.2.211.15", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.153 Incentives to extend low income use.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37815, July 13, 1993]", "(a)  Agreements by the Commissioner.  After approving a plan of action filed pursuant to \u00a7 248.145, from an owner of eligible low income housing that includes the owner's plan to extend the low income affordability restrictions of the project, the Commissioner shall, subject to the availability of appropriations for such purpose, enter into such agreements as are necessary to enable the owner to\u2014\n\n(1) Receive the annual authorized return for the project as determined under \u00a7 248.121 for each year after the approval of the plan of action;\n\n(2) Pay debt service on the federally-assisted mortgage(s) covering the project;\n\n(3) Pay debt service on any loan for rehabilitation of the project;\n\n(4) Meet project operating expenses; and\n\n(5) Establish adequate reserves.\n\n(b)  Permissible incentives.  Such agreements may include one or more of the following incentives, as determined necessary by the Commissioner:\n\n(1) Increased access to residual receipts accounts as necessary to enable the owner to realize the annual authorized return;\n\n(2) An increase in the rents permitted under an existing project-based section 8 contract;\n\n(3) Additional project-based section 8 assistance or an extension of any project-based assistance attached to the housing;\n\n(4) An increase in the rents on non-section 8 units occupied by current tenants up to the maximum allowable rents;\n\n(5) Financing of capital improvements under part 219 of this chapter;\n\n(6) Financing of rehabilitation through provision of insurance for a second mortgage under part 241 of this chapter;\n\n(7) Redirection of the Interest Reduction Payment subsidies to a second mortgage for projects which are insured, assisted, or held by the Commissioner or a State or State agency under part 236 of this chapter;\n\n(8) Access by the owner to a portion of the preservation equity in the project through provision of insurance for an acquisition or equity loan insured under part 241, subpart E of this chapter or through a non-insured mortgage loan approved by the Commissioner and the mortgagee;\n\n(9) An increase in the amount of allowable distributions up to the annual authorized return; and\n\n(10) Other incentives authorized in law.\n\n(c)  Limitation on the provision of permissible incentives.  (1) The total amount of incentives provided to a project under paragraphs (b)(2), (3), and (4) of this section shall not result in a projected rental income stream which exceeds the Federal cost limit.\n\n(2) The debt service on the loan obtained by the owner under paragraph (b)(8) of this section, when added to the allowable distributions under paragraph (b)(9) of this section, shall not exceed the annual authorized return.\n\n(d)  Rent phase-in period.  To the extent necessary to ensure that owners receive the annual authorized return during the tenant rent phase-in period established in \u00a7 248.145(a)(6), the Commissioner shall permit owners to receive the following additional incentives:\n\n(1) Access to residual receipts accounts;\n\n(2) Deferred remittance of excess rent payments; and\n\n(3) Increases in rents, as permitted under an existing Section 8 contract.\n\nThese incentives shall be provided to owners in the order listed. An owner will not be eligible to receive these additional incentives unless it can demonstrate that it is not receiving the annual authorized return. Once an owner has adequately demonstrated that it is not receiving the annual authorized return, the Commissioner will provide the owner with each incentive in turn during the rent phase-in period, until it has been determined that the owner is receiving the annual authorized return.\n\n(e)  Interest reduction subsidies.  Where Interest Reduction Payment subsidies are sought to be redirected, pursuant to paragraph (b)(7) of this section, the lender may not unreasonably withhold its consent to such redirection.\n\n(f)  Recalculation of section 236 basic rent and market rent.  With respect to any project with a mortgage insured or otherwise assisted pursuant to part 236 of this chapter, the basic rent and market rent, as defined in \u00a7 236.2 of this chapter, for each unit in such project may be increased to take into account the allowable distributions permitted under this section and the debt service on any equity loan, rehabilitation loan or acquisition loan approved under a plan of action under subpart B of this part."], ["24:24:2.1.1.2.24.2.211.16", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.157 Voluntary sale of housing not in excess of Federal cost limit.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37816, July 13, 1993]", "(a)  Offer to sell.  Where an owner has submitted a second notice of intent under \u00a7 248.133 for the purpose of transferring the project to a qualified purchaser, and the transfer preservation rent does not exceed the Federal cost limit, the owner shall offer the housing for transfer as provided in this section. The owner shall not be obligated to accept any offer made under this section, but may instead elect to retain the project and receive incentives under \u00a7 248.145.\n\n(b)  Notification of qualified purchasers.  Upon receipt of a second notice of intent to transfer the project to a qualified purchaser, the Commissioner shall notify potential qualified purchasers of the availability of the project for sale, and of the names and addresses of the owner, or of a person representing the owner in the sale of the project, by\u2014\n\n(1) Mailing notices to non-profit organizations;\n\n(2) Placing notices in the major local newspaper(s) in the jurisdiction in which the project is located;\n\n(3) Mailing notices to clearinghouse networks; and\n\n(4) Using any other means of notification which the Commissioner determines would be effective to notify potential qualified purchasers of the sale of the project.\n\n(c)  Right of first offer to priority purchasers.  (1) For the 6-month period beginning on the date of receipt by the Commissioner of a second notice of intent under \u00a7 248.133, the owner may accept a bona fide offer only from:\n\n(i) A resident council intending to purchase the project under \u00a7\u00a7 248.173 or 248.175, which has met the requirements for tenant support, pursuant to those sections;\n\n(ii) A resident council intending to purchase the project and retain it as rental housing, which has the support of a majority of the tenants; or\n\n(iii) A community-based nonprofit organization which has the support of a majority of the tenants.\n\n(2) If no bona fide offer to purchase the project is made and accepted during or at the end of the 6-month period specified in paragraph (c)(1) of this section, the owner may offer to sell the project during the next 6 months to any priority purchasers.\n\n(3) If no bona fide offer to purchase the project is made and accepted during or at the end of the 6-month period specified in paragraph (c)(2) of this section, the owner may offer to sell the project during the 3 months immediately following that period only to qualified purchasers.\n\n(d)  Purchase price.  The sale price, including assumption of the debt on the federally-assisted mortgage(s), or the amount of the debt on the federally-assisted mortgage(s) that the project is taken subject to, may not exceed the transfer preservation value of the project.\n\n(e)  Expression of interest.  Any priority purchaser seeking to make an offer during the 6-month periods specified in paragraph (c) of this section shall, and other qualified purchasers may, submit written notice thereof to the Commissioner. Such notice, if made by a priority purchaser seeking to make an offer during either 6-month priority purchaser marketing period, shall contain the following:\n\n(1) A statement identifying the priority purchaser as a State or local government agency, a nonprofit organization, or a resident council;\n\n(2) A copy of its articles of incorporation, charter and list of officers and directors, if the purchaser is a nonprofit organization or a resident council and in the case of a nonprofit organization, proof that the organization is, or has applied to be, a tax exempt organization in accordance with 26 U.S.C. 501(c); and\n\n(3) A statement as to whether the purchaser is affiliated with any other entity for purposes of purchasing the project and whether any Low Income Housing Tax Credits may be awarded in connection with the purchase of the project.\n\n(f)  Information from the Commissioner.  Within 30 days of receipt of an expression of interest by a priority purchaser, the Commissioner shall determine the status of the priority purchaser with respect to the categories listed in paragraph (h) of this section, and provide such purchaser with:\n\n(1) A list of all possible assistance available from the Federal Government to facilitate a transfer of the project;\n\n(2) The appraisal reports for the project as submitted under \u00a7 248.111;\n\n(3) The Commissioner's determination as to the priority status of the purchaser and as to whether the purchaser qualifies as a resident council, community-based nonprofit organization or State or local government entity;\n\n(4) A worksheet indicating the level of the earnest money deposit required upon the submission of a bona fide offer;\n\n(5) An acknowledgment of the purchaser's right to inspect the project; and\n\n(6) Any other relevant financial information that the Commissioner possesses concerning the project, including the information determined under \u00a7 248.121.\n\nWithin the same 30-day period, the Commissioner shall also notify the owner of the purchaser's expression of interest and instruct the owner to provide to the purchaser any information concerning the project that the Commissioner deems relevant to the transfer of the project.\n\n(g)  Bona fide offer.  A bona fide offer is an offer to purchase eligible low-income housing at a sales price which does not exceed the transfer preservation value of the project.\n\n(1) A bona fide offer must include the following:\n\n(i) A contract of sale signed by the purchaser, which states that acceptance of the contract is contingent upon approval by the Commissioner;\n\n(ii) An earnest money deposit from every qualified purchaser equal to the lesser of one percent of the transfer preservation value, $50,000 or $500 per unit, unless the purchaser is a resident council purchasing the project under a resident homeownership plan under \u00a7 248.173 or \u00a7 248.175, in which case the earnest money deposit shall be equal to $200 per unit from 75% of the occupied units; and\n\n(iii) If the purchaser is a resident council intending to purchase the project pursuant to a resident homeownership plan, the information required under \u00a7 248.173(b); or\n\n(iv) If the purchaser is a resident council intending to retain the project as rental housing, or a community-based nonprofit and the offer is submitted within the marketing period established in paragraph (c)(1) of this section, a resolution of the resident council, or a petition signed by tenants representing a majority of the units indicating their support of the offer.\n\n(2) An owner may waive the requirement of an earnest money deposit or agree to accept a smaller deposit for all qualified purchasers, except resident councils who intend to purchase the project pursuant to a resident homeownership plan under \u00a7 248.173 or \u00a7 248.175. In order to be effective:\n\n(i) The waiver must be indicated in the second notice of intent submitted under \u00a7 248.133 and the waiver must apply equally to all qualified purchasers, except resident councils who intend to purchase the project pursuant to a resident homeownership plan under \u00a7 248.173 or \u00a7 248.175; or\n\n(ii) If the second notice of intent has already been submitted, the owner must submit to the Commissioner, in writing, its decision to waive the earnest money deposit. The Commissioner shall notify all qualified purchasers who have submitted an expression of interest under paragraph (e) of this section that the owner has waived the earnest money deposit requirement.\n\n(h)  Retention and acceptance of offers.  The owner shall accept or reject any bona fide offer within 30 days of receipt of such offer. For an offer to be bona fide, it must meet the requirements of paragraph (g) of this section, as well as be submitted to the owner within the appropriate marketing period under paragraph (c) of this section. If an owner rejects any offer, it must return the earnest money deposit to the offeror at the time of rejection. A bona fide offer which is rejected by the owner will still be considered a bona fide offer for purposes of this section, even after the earnest money deposit has been returned. If an owner decides to accept the offer at a later date, the purchaser may renew the offer by resubmitting the earnest money deposit, if a deposit had originally been required, within 30 days of notification of the owner's acceptance of the offer.\n\n(i)  Submission of offer to HUD.  The purchaser shall submit the offer to the Commissioner. The Commissioner shall review the offer which is preliminarily accepted by the owner to determine whether it meets the requirements of a bona fide offer. The Commissioner shall notify the owner and purchaser, within 30 days after acceptance, whether the offer meets such requirements. The owner's preliminary acceptance of any offer pursuant to this section shall be conditional upon the Commissioner's certification that the offer is bona fide. If the Commissioner determines that the offer is not a bona fide offer, the offer will be considered invalid for the purposes of subpart B of this part.\n\n(j)  Submission of plan of action.  Upon a determination by the Commissioner that the offer is bona fide and final acceptance of such an offer, the owner and purchaser shall jointly submit a plan of action to the Commissioner pursuant to \u00a7 248.135. The plan of action shall include any request for assistance from the Commissioner for purposes of transferring the project.\n\n(k)  Requirements for plan of action approval.  If the qualified purchaser of the project is a resident council seeking to purchase the project under a resident homeownership program, the Commissioner may approve a plan of action only if the resident council's proposed resident homeownership program meets the requirements under \u00a7 248.173 or \u00a7 248.175. For all other qualified purchasers, the Commissioner may approve a plan of action submitted pursuant to this section only if the plan of action meets the criteria listed in \u00a7 248.145.\n\n(l)  Failure to consummate sales transaction.  (1) If the owner accepts an offer from a priority purchaser during either of the two 6-month periods specified in paragraph (c) of this section, and before the expiration of the period specified in paragraph (c) of this section, the sales transaction either falls through or does not close within 90 days after the Commissioner's approval of the plan of action, the owner shall:\n\n(i) Immediately notify the Commissioner that the sale has fallen through;\n\n(ii) Notify any other purchaser that had submitted an offer to purchase the project; and\n\n(iii) Resume holding the project open for sale for the remainder of the time periods specified in paragraph (c) of this section.\n\n(2) If the owner accepts an offer from a purchaser, and during the 3-month period specified in paragraph (c) of this section, or thereafter, the sales transaction either falls through or does not close within 90 days after the Commissioner's approval of the plan of action, the owner shall take the following steps:\n\n(i) Immediately notify the Commissioner that the sale has fallen through;\n\n(ii) Contact any other purchaser that had submitted an offer to purchase the project and give such purchaser and any other qualified purchaser 60 days from the date of notification to the Commissioner in which to resubmit an offer to purchase the project.\n\n(3) At any time during the 60-day period the owner may accept an offer submitted under paragraph (l)(2) of this section.\n\n(4) If an offer submitted during the 60-day period specified in paragraph (l)(2) of this section is made and accepted, but the sale is not consummated within 90 days of the Commissioner's approval of the plan of action for reasons not attributable in whole or in part to the owner, the owner may terminate the low-income affordability restrictions through prepayment or voluntary termination, subject to compliance with the provisions of \u00a7 248.165.\n\n(m)  Assistance.  Subject to the availability of amounts approved in appropriation acts, the Commissioner shall, for approvable plans of action, provide assistance sufficient to enable qualified purchasers to:\n\n(1) Acquire the eligible low income housing project from the current owner for a purchase price not greater than the transfer preservation value of the project;\n\n(2) Pay the debt service on the federally-assisted mortgage(s) covering the project;\n\n(3) Pay the debt service on any loan for the rehabilitation of the project;\n\n(4) Meet project operating expenses and establish adequate reserves for the housing, and in the case of a priority purchaser, meet project oversight costs;\n\n(5) Receive a distribution equal to an 8 percent annual return on any actual cash investment made to acquire or rehabilitate the project;\n\n(6) In the case of a priority purchaser, receive reimbursement for all reasonable transaction expenses associated with the acquisition, loan closing and implementation of an approved plan of action; and\n\n(7) In the case of an approved resident homeownership program, cover the costs of training for the resident council, homeownership counseling and training, the fees for the nonprofit entity or public agency working with the resident council, if such entity or agency is approved by the Commissioner, and costs related to relocation of tenants who elect to move. Assistance for such costs, exclusive of relocation expenses, shall not exceed $500 per unit or $200,000 for the project, whichever is less.\n\n(n)  Incentives.  The Commissioner may provide assistance for all qualified purchasers under this subpart in the form of one or more of the incentives authorized under \u00a7 248.153. The incentives provided by the Commissioner to any qualified purchaser may include an acquisition loan under subpart E of part 241 of this chapter.\n\n(o)  Grants to priority purchasers.  The Commissioner may provide assistance for priority purchasers under subpart B of this part in the form of a grant for each unit in the project in an amount, as determined by the Commissioner, that does not exceed the present value of the total of the projected fair market rent for the next ten years, or such longer period if additional assistance is necessary to cover the costs set forth in paragraph (m) of this section.\n\n(p)  Reimbursement of assistance.  The Commissioner reserves the right to seek reimbursement from a priority purchaser who, within ten years of approval of a plan of action, becomes affiliated with or transfers the project to any non-priority purchaser. The Commissioner shall be entitled to receive reimbursement for the difference between the assistance provided to the priority purchaser and the assistance that would have been provided in the same circumstances to a non-priority purchaser.\n\n(q)  Seller financing.  In order to finance the acquisition or rehabilitation of a project under this section, a qualified purchaser may receive take-back financing from the owner of the project. If the purpose of the seller financing is to aid acquisition of the project, the principal amount of such financing, together with an acquisition loan provided under part 241 of this chapter, may not exceed the transfer preservation equity of the project, plus, in the case of priority purchasers, any expenses associated with the acquisition, loan closing, and implementation of the plan of action. If the purpose of the seller financing is to fund rehabilitation of the project, the principal amount of such financing may not exceed the equity requirements for a rehabilitation loan under \u00a7 241.70 or \u00a7 219.305 of this chapter. The seller may not charge interest on any seller financing at a rate in excess of that of the Federal acquisition or rehabilitation loan."], ["24:24:2.1.1.2.24.2.211.17", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.161 Mandatory sale of housing in excess of the Federal cost limit.", "HUD", "", "", "", "(a)  In general.  With respect to any eligible low income housing for which the transfer preservation rent determined under \u00a7 248.121 exceeds the Federal cost limit, the owner shall offer the housing for transfer to qualified purchasers as provided in this section.\n\n(b)  Applicability of voluntary sale provisions.  The provisions of \u00a7 248.157, other than paragraphs (a) and (p) of this section thereof, shall be applicable to any sale conducted under this section. If the owner receives an offer to purchase the project for a sale price equal to the transfer preservation value of the project, as determined under \u00a7 248.111, the owner shall be obligated to accept the offer upon its receipt and sell the project to the purchaser. If the owner receives an offer to purchase the project for a sale price less than the transfer preservation value of the project, the owner may accept the offer, but is not obligated to do so. Any offer to purchase a project under this section for less than the transfer preservation value must comply with the requirements of a bona fide offer in \u00a7 248.101, except for the requirement that the sale price equal the transfer preservation value. At the time of submission of the offer, the potential purchaser must also submit the documentation required in \u00a7 248.157(g).\n\n(c)  Section 8 assistance.  Subject to the availability of amounts approved in appropriation acts, the Commissioner shall, for approvable plans of action, provide assistance to qualified purchasers under part 886, subpart A of this title sufficient to produce a gross potential income equal to the amount determined by multiplying 120 percent of the prevailing rents in the relevant local market in which the project is located by the number of units in the project, according to appropriate unit size, and any other incentives authorized under \u00a7 248.153 that would have been provided to a qualified purchaser under \u00a7 248.157.\n\n(d)  Grants to qualified purchasers.  From amounts made available by Congress, the Commissioner may make grants to assist in the completion of transfers under this section to any qualified purchasers. Any grant made pursuant to paragraph (d) of this section shall be in an amount not exceeding the difference between the amount of assistance provided under paragraph (c) of this section and the amount of assistance specified in \u00a7 248.157(m).\n\n(e)  Securing State and local funding.  The Commissioner shall assist any qualified purchaser of a project pursuant to this section in securing funding and other assistance, including tax and assessment reductions from State and local governments to facilitate a transfer under this section."], ["24:24:2.1.1.2.24.2.211.18", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.165 Assistance for displaced tenants.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 64 FR 26639, May 14, 1999]", "(a)  Section 8 assistance.  Each low income family that is displaced as a result of the prepayment of the mortgage, or voluntary termination of an insurance contract, on eligible low income housing shall, subject to the availability of funds, be offered the opportunity to receive tenant-based assistance under the Housing Choice Voucher Program in accordance with part 982 of this title.\n\n(b)  Notification of Commissioner.  The owner of any eligible low income housing project who prepays the mortgage or voluntarily terminates the mortgage insurance contract pursuant to subpart B of this part, shall notify the Commissioner of:\n\n(1) The names and addresses of all of the tenants in the project who will be displaced;\n\n(2) The size of the unit in which each of the displaced tenants is currently dwelling; and\n\n(3) The names of all of the displaced tenants who are special needs tenants, as that term is defined in \u00a7 248.101, as well as a statement as to the nature of their special need.\n\nThe owner shall provide the Commissioner with this information within 30 days of identifying such tenants for displacement, but in no event less than 30 days prior to the date when the tenants must vacate the premises.\n\n(c)  Relocation of displaced tenants.  The Commissioner shall coordinate with public housing agencies to ensure that any very low or low income family displaced from eligible low income housing as the result of prepayment of the mortgage or termination of the mortgage insurance contract on such project is able to acquire a suitable, affordable dwelling unit in the area where the project from which the displaced family is located. The Commissioner, upon receiving information from the owner under paragraph (b) of this section stating that certain tenants will be displaced, shall request from the public housing agencies located in the same area as the affected project, notices of vacancies in other affordable projects which would be suitable for the displaced tenants. The Commissioner shall convey the notices of vacancies to the tenants who will be displaced along with the addresses of the local public housing agencies.\n\n(d)  Relocation expenses.  The Commissioner shall require the owner of eligible low income housing who prepays or terminates the insurance contract resulting in the displacement of tenants to pay 50 percent of the relocation expenses of each family which is relocated, except that the Commissioner shall increase such percentage to the extent that State or local law of general applicability requires a higher payment by the owner.\n\n(e)  Continued occupancy.  Each owner who prepays the mortgage or terminates the mortgage insurance contract on eligible low income housing shall, as provided in paragraph (g) of this section, allow the tenants occupying units in such project on the date of submission of a notice of intent under \u00a7 248.105 to remain in the project for a period of three years, commencing on the date of prepayment or contract termination, at rent levels existing at the time of prepayment or termination, except for rent increases made necessary due to increased operating costs.\n\n(f)  Replacement unit.  In any case in which the Commissioner requires an owner to allow tenants to occupy units under paragraph (e) of this section, an owner may fulfill the requirements of such paragraph by providing such assistance necessary for the tenant to rent a decent, safe, and sanitary unit in another project for the same 3-year period and at a rental cost to the tenant not in excess of the rental amount the tenant would have been required to pay to the owner in the owner's project, except that the tenant must freely agree to waive the right to occupy the unit in the owner's project. The provisions of paragraph (d) of this section requiring an owner who prepays or terminates an insurance contract to pay a portion of the relocation expenses incurred by displaced tenants shall also be applicable to tenants who relocate pursuant to this paragraph.\n\n(g)  Applicability.  The provisions of paragraphs (e) and (f) of this section shall apply only to:\n\n(1) All tenants in eligible low income housing projects located in a low-vacancy area; and\n\n(2) Special needs tenants.\n\n(h)  Low Vacancy Areas.  The Commissioner shall notify the owner, within 30 days of the owner's request to prepay under \u00a7 248.169, whether the project is located in a low vacancy area for purposes of paragraph (g) of this section.\n\n(i)  Required acceptance of section 8 assistance.  Any owner who prepays the mortgage or terminates the mortgage insurance contract on eligible low income housing and maintains the project for residential rental occupancy may not refuse to rent, refuse to negotiate for the rental of, or otherwise make unavailable or deny the rental of a dwelling unit in such project to any person, or discriminate against any person in the terms, conditions, or privileges or rental of a unit, or in the provision of services or facilities in connection therewith, because the person receives tenant-based assistance under the Housing Choice Voucher Program.\n\n(j)  Regional pools.  In providing assistance under this section, the Commissioner shall allocate the assistance on a regional basis through the regional offices of the Department of Housing and Urban Development. The Commissioner shall allocate assistance under this section in a manner so that the total number of assisted units in each such region available for occupancy by, and affordable to, low income families and persons does not decrease because of the prepayment of a mortgage on eligible low income housing or the termination of an insurance contract on such project.\n\n(k) This section shall only apply to prepayments and terminations occurring pursuant to \u00a7\u00a7 248.157(l) and 248.169."], ["24:24:2.1.1.2.24.2.211.19", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.169 Permissible prepayment or voluntary termination and modification of commitments.", "HUD", "", "", "", "(a)  In general.  Notwithstanding any limitations on prepayment or voluntary termination under subpart B of this part, an owner may terminate the low income affordability restrictions through prepayment or voluntary termination, subject to compliance with the provisions of \u00a7 248.165, under one of the following circumstances:\n\n(1) The Commissioner approves a plan of action under \u00a7 248.153(a), but does not provide the assistance approved in such plan and contained in an executed use agreement between the Commissioner and the owner, including section 8 assistance or a loan provided under part 219 of this chapter, but not including insurance of a rehabilitation or equity take-out loan under part 241 of this chapter, during the 15-month period beginning on the date of final approval of the plan of action;\n\n(2) After the date that the project would have been eligible for prepayment pursuant to the terms of the mortgage, notwithstanding this part, the Commissioner approves a plan of action under \u00a7 248.157 or \u00a7 248.161, but does not provide the assistance approved in such plan, including section 8 assistance, a loan provided under part 219 of this chapter, a grant provided under \u00a7 248.157(o), or a grant under \u00a7 248.161(d), before the earlier of:\n\n(i) The expiration of the 2-month period beginning on the commencement of the first fiscal year beginning after such final approval; or\n\n(ii) The expiration of the 6-month period beginning on the date of final approval.\n\n(3) The Commissioner approves a plan of action under \u00a7\u00a7 248.157 or 248.161 for any eligible low income housing not covered by paragraph (a)(2) of this section, but does not provide the assistance approved in such plan before the earlier of:\n\n(i) The expiration of the 2-month period beginning on the commencement of the first fiscal year beginning after such final approval; or\n\n(ii) The expiration of the 9-month period beginning on the date of final approval.\n\n(4) An owner who intended to transfer the project to a qualified purchaser under \u00a7 248.157 or \u00a7 248.161, and fully complied with the provisions of such section,\n\n(i) Did not receive any bona fide offers from any qualified purchasers within the applicable time periods; or\n\n(ii) Received and accepted a bona fide offer from a qualified purchaser, but the sales transaction fell through for reasons not attributable in whole or in part to the owner, and the owner then complied with the requirements of \u00a7 248.157(l) and did not receive another bona fide offer from any qualified purchasers.\n\n(b)  Section 8 assistance.  When providing section 8 assistance, the Commissioner may enter into a contract with an owner, contingent upon the future availability of appropriations, for the purpose of renewing expiring contracts for rental assistance as provided in appropriations acts, to extend the term of such rental assistance for such additional period or periods necessary to carry out an approved plan of action. The contract and approved plan of action shall provide that, if the Commissioner is unable to extend the term of such rental assistance or is unable to develop a revised package of incentives providing benefits to the owner comparable to those received under the original approved plan of action, the Commissioner, upon the request of the owner, shall take the following actions, subject to the limitations under the following paragraphs:\n\n(1) Modify the binding commitments made pursuant to \u00a7 248.145(a)(2)-(10) that are dependent upon such rental assistance; or\n\n(2) If the Commissioner determines that such modification is infeasible, permit the owner to prepay the mortgage and terminate the plan of action and any implementing use agreements or restrictions, but only if the owner agrees in writing to comply with the provisions of \u00a7 248.165.\n\n(c)  Failure to provide section 8 assistance.  With regard to paragraph (b) of this section, the Commissioner shall notify the owner of an inability to either extend the term of section 8 rental assistance or to develop a revised package of incentives providing benefits comparable to those received under the original plan of action as soon as practicable upon discovering that fact. The owner shall inform the Commissioner in writing, within 30 days of receipt of the notice that, since the Commissioner is unable to fulfill the terms of the original plan of action, the owner intends to request that the Commissioner take action under paragraphs (b)(1) or (2) of this section. The Commissioner shall, no later than 90 days from receiving the owner's notice, take action to extend the rental assistance contract and to continue the binding commitments under \u00a7 248.145(a)(2)-(10)."], ["24:24:2.1.1.2.24.2.211.2", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.103 General prepayment limitation.", "HUD", "", "", "", "(a)  Prepayment.  An owner of eligible low income housing may prepay, and a mortgagee may accept prepayment of, a mortgage on such project only in accordance with a plan of action approved by the Commissioner.\n\n(b)  Termination.  A mortgage insurance contract with respect to eligible low income housing may be terminated pursuant to \u00a7 207.253 of this chapter only in accordance with a plan of action approved by the Commissioner.\n\n(c)  Foreclosure.  A mortgagee of a mortgage insured by the Commissioner may foreclose the mortgage on, or acquire by deed in lieu of foreclosure, any eligible low income housing only if the mortgagee also conveys title to the project to the Commissioner in connection with a claim for insurance benefits.\n\n(d)  Effect of unauthorized prepayment.  A mortgagee's acceptance of a prepayment in violation of paragraph (a) of this section, or the voluntary termination of a mortgage insurance contract in violation of paragraph (b) of this section, shall be null and void and any low income affordability restrictions on the project shall continue to apply to the project.\n\n(e)  Remedies for unauthorized prepayment.  A mortgagee's acceptance of a prepayment in violation of paragraph (a) of this section, or attempt to obtain voluntary termination of a mortgage insurance contract in violation of paragraph (b) of this section, is grounds for administrative action under parts 24 and 25 of this title, in addition to any other remedies available by law, including rescission of the prepayment or reinstatement of the insurance contract."], ["24:24:2.1.1.2.24.2.211.20", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.173 Resident homeownership program.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37816, July 13, 1993; 64 FR 26639, May 14, 1999; 80 FR 75936, Dec. 7, 2015]", "(a)  Formation of resident council.  Tenants seeking to purchase eligible low income housing in accordance with \u00a7\u00a7 248.157 and 248.161 shall organize a resident council for the purpose of developing a resident homeownership program in accordance with standards established by the Commissioner. In order to fulfill the purposes of this section, the resident council shall work with a public or private nonprofit organization or a public body, including an agency or instrumentality thereof. Such organization shall have sufficient experience to enable it to help the tenants to consider their options and to develop the capacity necessary to own and manage the project, where appropriate, and shall be approved by the Commissioner.\n\n(b)  Submission of expression of interest.  A resident council shall identify itself as such in an expression of interest submitted pursuant to \u00a7 248.157 or \u00a7 248.161 and shall state that, it is interested in purchasing the project pursuant to a homeownership program.\n\n(c)  Bona fide offer.  When submitting an offer to purchase the project pursuant to this section, the resident council must simultaneously submit a certified list of project tenants representing at least 75 percent of the occupied units in the project, and representing at least 50 percent of all of the units in the project, who have expressed an interest in participating in the homeownership program developed by the resident council. An offer made without this certified list will not be considered a bona fide offer for the purposes of subpart B of this part.\n\n(d)  Submission of a homeownership program.  (1) The resident council shall prepare a homeownership program acceptable to the Commissioner for giving all residents of the project an opportunity to become homeowners. The plan shall describe the major elements of, and schedules for, the homeownership program and demonstrate how the program complies with all applicable requirements of this section. The plan shall also describe the resident council's current abilities and proposed capacity-building activities to successfully carry out the homeownership program in compliance with this section. The homeownership program shall include, at a minimum, the following information:\n\n(i) The amount of grant funds requested from the Commissioner, and the expected amounts and sources of other funding;\n\n(ii) The proposed use of the grant funds to be received from HUD and of all other funds, including proceeds from the sale of units to initial purchasers, consistent with paragraph (h) of this section;\n\n(iii) A summary of major rehabilitation activities to be carried out, including repairs, replacements and improvements;\n\n(iv) The price at which the resident council intends to transfer ownership interests in, or shares representing, units in the project, broken down by unit size and/or type; the factors that will influence the establishment of such price, including, but not limited to, the resident council's acquisition cost, estimated rehabilitation costs, capitalization of reserves and organizational costs; how the price arrived at by the resident council compares to the estimated appraised value of the ownership interests or shares; and the underwriting standard that the resident council plans to use, or reasonably expects a public or private lender to use, for potential tenant purchasers, consistent with paragraph (g)(2) of this section;\n\n(v) The expected number of very low, low and moderate income tenants that will be initial owners under the program, consistent with paragraph (g)(1) of this section;\n\n(vi) A pro forma analysis which demonstrates the financial feasibility and viability of the homeownership program, based on the required conditions specified in paragraph (g) of this section;\n\n(vii) The financing arrangements that the tenants are expected to pursue or to be provided, including financing available through the resident council or a State or local governmental entity, and criteria for acceptability of conventional financing;\n\n(viii) A description of the estimated costs expected to be paid by the homeowner at closing;\n\n(ix) The type of homeownership contemplated, consistent with paragraph (f) of this section;\n\n(x) How the marketing of currently vacant units and units occupied by nonpurchasing tenants that become vacant will affect the sales price and occupancy charges to purchasers;\n\n(xi) A workable schedule of sale, subject to the limitations of paragraph (o) of this section, based on estimated tenant incomes;\n\n(xii) Any restrictions on resale by homeowners over and above those specified in paragraph (i) of this section, and any restrictions on homeowners' equity, over and above those specified in paragraph (k) of this section;\n\n(xiii) The qualifications of the resident council or the proposed management entity to manage the project, in compliance with paragraph (n) of this section;\n\n(xiv) The expected number of non-purchasing tenants and their eligibility for section 8 rental assistance under paragraph (m)(2) of this section;\n\n(xv) Expected scope and expenses of relocation activities, both for any temporary relocation due to rehabilitation as well as relocation assistance for nonpurchasing tenants, consistent with paragraph (m)(4) of this section;\n\n(xvi) Expected scope and costs of technical assistance, training and counseling for the resident council, purchasers and non-purchasing tenants; and\n\n(xvii) A certification that the resident council shall comply with the provisions of the Fair Housing Act (42 U.S.C. 3601-3619); title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); Executive Order 11063 (3 CFR 1959-1963 comp., p. 652); section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107); and all regulations issued pursuant to these statutes and authorities.\n\n(2) The Commissioner shall give the resident council a reasonable opportunity to revise the homeownership program if approval is denied.\n\n(e)  Approval of a homeownership program; assistance provided.  (1) When the Commissioner determines that the homeownership program submitted by the resident council meets the requirements of this section, is financially feasible, and is the least costly alternative that is consistent with establishing a viable homeownership program, the Commissioner shall approve the program.\n\n(2) In connection with an approved homeownership program the Commissioner shall provide assistance sufficient to pay the following costs:\n\n(i) The debt service on the federally-assisted mortgage(s) covering the project, when such mortgage is assumed by the resident council;\n\n(ii) The purchase price, which shall not exceed the transfer preservation value;\n\n(iii) Transaction costs, as provided in \u00a7 248.157(m)(6);\n\n(iv) Other costs, as provided in \u00a7 248.157(m)(7);\n\n(v) The costs of rehabilitation;\n\n(vi) The establishment of an adequate reserve for replacements; and\n\n(vii) If necessary, the establishment of operating reserve escrows including contingencies against unexpected increases in expenses or shortfalls in homeowners' payments.\n\n(3) Upon approval of the homeownership program, the Commissioner and the resident council shall enter into an agreement, which shall include, among other matters, procedures governing the drawdown of funds and remedies for noncompliance with the requirements of this section.\n\n(f)  Method of conversion.  The Commissioner shall approve the method for converting the project to homeownership, which may involve acquisition of ownership interests in, or shares representing, the units in a project under any arrangement determined by the Commissioner to be appropriate, such as cooperative ownership, and fee simple ownership, including condominium ownership.\n\n(g)  Required conditions.  The Commissioner shall require that the form of homeownership impose appropriate conditions, including conditions to assure that:\n\n(1) To the extent practicable, the number of initial owners that are very low, low, and moderate income persons at initial occupancy are of the same proportion of very low, low, and moderate income tenants (including families and persons whose incomes are 95 percent or more of area median income) as resided in the project on January 1, 1987 (or if the January 1, 1987 profile is unavailable, a certification from the owner stating its unavailability and a profile as of January 1, 1988, or, if that is also unavailable, a profile as of January 1, 1989) or as of the date of approval of the plan of action, whichever date results in the higher proportion of very low income families, except that the resident council may, at its option, increase the proportions of very low income and low income initial owners, however, no current tenant may be denied homeownership as a result of this paragraph;\n\n(2) Projected debt service payments, occupancy charges and utilities payable by the owners shall not exceed 35 percent of the monthly adjusted gross income of the owners;\n\n(3) The aggregate incomes of initial owners and other sources of funds for the project are sufficient to permit occupancy charges to cover the full operating costs of the project and any debt service; and\n\n(4) Each initial owner occupies the unit it acquires for at least the initial 15 years of ownership, unless the resident council determines that the initial owner is required to move outside the market area due to a change in employment or an emergency situation.\n\n(5) All units which remain as rental units, from the date of approval of the resident homeownership program, until they are purchased by an initial owner under the resident homeownership program, shall be maintained in accordance with \u00a7 248.145 (a)(5), (a)(6), (a)(7), (a)(8), and (a)(9).\n\n(h)  Use of proceeds from sales to eligible families.  The entity that transfers ownership interests in, or shares representing, units to eligible families, or another entity specified in the approved application, may use 50 percent of the proceeds, if any, from the initial sale for costs of the homeownership program, including improvements to the project, operating and replacement reserves for the project, additional homeownership opportunities in the project, and other project-related activities approved by the Commissioner. The remaining 50 percent of such proceeds shall be returned to the Commissioner for use under \u00a7\u00a7 248.157 and 248.161, subject to the availability of appropriations. Such entity shall keep, and make available to the Commissioner, all records necessary to calculate accurately payments due the Commissioner under paragraph (h) of this section.\n\n(i)  Restrictions on resale by homeowners.  Resale of a homeowner's interest in a project with an approved homeownership program may occur subject to any reasonable restrictions placed on such a transfer by the resident council and approved by the Commissioner.\n\n(1)  Transfer permitted.  A homeowner may transfer the homeowner's ownership interest in the unit, subject to the right to purchase under paragraph (i)(2) of this section, the requirement for the purchaser to execute a promissory note, if required under paragraph (i)(3) of this section and the restrictions on retention of sales proceeds in paragraph (k) of this section. An applicant may propose in its application, and HUD may approve, reasonable restrictions on the resale of units under the program.\n\n(2)  Right to purchase.  Where a resident management corporation, resident council, or cooperative has jurisdiction over the unit, it shall have the right to purchase the ownership interest in the unit from the initial homeowner for the amount specified in a firm contract between the homeowner and a prospective buyer. Where a resident management corporation, resident council, or a cooperative exercises a right to purchase, it shall resell the unit to an eligible family within a reasonable period of time.\n\n(3)  Promissory note required.  At closing, the initial homeowner shall execute a nonrecourse promissory note for a term of twenty years, in a form acceptable to HUD, equal to the difference between the fair market value of the unit and the purchase price, payable to the Commissioner, together with a mortgage securing the obligation of the note.\n\n(i) With respect to a sale by an initial homeowner, the note shall require payment upon sale by the initial homeowner, to the extent proceeds of the sale remain after paying off other outstanding debt incurred in connection with the purchase of the property, paying any other amounts due in connection with the sale, including closing costs and transfer taxes, and paying the family the amount of its equity in the property, computed in accordance with paragraph (k) of this section.\n\n(ii) With respect to a sale by an initial homeowner during the first six years after acquisition, the family may retain only the amount computed under paragraph (k) of this section. Any excess is distributed as provided in paragraph (1) of this section.\n\n(iii) With respect to a sale by an initial homeowner six to twenty years after acquisition, the amount payable under the note shall be reduced by 1/168th of the original principal amount of the note for each full month of ownership by the family after the end of the sixth year. The homeowner may retain all other proceeds of the sale.\n\n(j)  Execution of promissory note by subsequent purchaser.  Where a subsequent purchaser during the 20-year period, measured by the term of the initial promissory note, purchases the property for less than the then current fair market value, the purchaser shall also execute at closing such a promissory note and mortgage, for the amount of the discount. The term of the promissory note shall be the period remaining of the original 20-year period. The note shall require payment upon sale by the subsequent homeowner, to the extent proceeds of the sale remain after paying off other outstanding debt incurred in connection with the purchase of the property, and paying any other amounts due in connection with the sale (such as closing costs and transfer taxes). The amount payable on the note shall be reduced by a percentage of the original principal amount of the note for each full month of ownership by the subsequent homeowner. The percentage shall be computed by determining the percentage of the term of the promissory note that the homeowner has owned the property. The remainder may be retained by the subsequent homeowner selling the property.\n\n(k)  Homeowners' equity.  The amount of equity an initial homeowner has in the property is determined by computing the sum of the following:\n\n(1) The contribution to equity paid by the family, if any, including any down payment and any amount paid towards principal on a mortgage loan during the period of ownership;\n\n(2) The value of any improvements installed at the expense of the family during the family's tenure as owner, as determined by the resident council based on evidence of amounts spent on the improvements, including the cost of material and labor; and\n\n(3) The appreciated value, determined by applying the Consumer Price Index (urban consumers) against the contribution to equity under paragraphs (k) (1) and (2) of this section, excluding the value of any sweat equity or volunteer labor used to make improvements to the unit. The resident council may, at the time of initial sale, enter into an agreement with the family to set a maximum amount which this appreciation may not exceed.\n\n(l)  Use of recaptured funds.  Any net sales proceeds that may not be retained by the homeowner under the homeownership program approved under this section shall be paid to the HOME Investment Trust Fund for the unit of general local government in which the project is located. If the project is located in a unit of general local government that is not a participating jurisdiction, as such term is defined in \u00a7 248.101, any such net sales proceeds shall be paid to the HOME Investment Trust Fund for the State in which the project is located. With respect to any proceeds transferred to a HOME Investment Trust Fund under paragraph (1) of this section, the Commissioner shall take such actions as are necessary to ensure that the proceeds shall be immediately available for eligible activities to expand the supply of affordable housing under section 212 of the Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 12742). The Commissioner shall monitor the HOME Investment Trust Fund for each State and unit of local government and shall require maintenance of any records necessary to calculate accurately payments due under this paragraph (1) of this section.\n\n(m)  Protection of nonpurchasing families.  Nonpurchasing families who continue to reside in a project subject to a homeownership program approved under this section shall be protected as follows:\n\n(1)  Eviction.  No tenant residing in an eligible property on the date the Commissioner approves a plan of action may be evicted by reason of a homeownership program approved under this section. This does not preclude evictions for material violation of the terms of occupancy of the unit.\n\n(2)  Section 8 assistance.  If a tenant decides not to purchase a unit, or is not qualified to do so, the Commissioner shall ensure that tenant-based assistance under the Housing Choice Voucher Program in accordance with part 982 of this title is available for use in that or another property by each tenant that meets the eligibility requirements thereunder.\n\n(3)  Rent increases for ineligible tenants.  Rents for tenants who do not purchase a unit but are ineligible for assistance under paragraph (m)(2) of this section may be increased to a level that does not exceed 30 percent of the tenant's adjusted income or the section 8 existing fair market rent, whichever is lower. Rent increases shall be phased in in accordance with \u00a7 248.145(a)(6).\n\n(4)  Relocation assistance.  The resident council shall also inform each tenant that if the tenant chooses to move, the resident council, as owner of the project, will pay relocation expenses in accordance with the approved homeownership program. The provisions of \u00a7 248.165 shall not apply to resident councils who are project owners pursuant to an approved homeownership program under this section.\n\n(n)  Qualified management.  As a condition of approval of a homeownership program under subpart B of this section, the resident council shall have demonstrated its abilities to manage eligible properties by having done so effectively and efficiently for a period of not less than three years or by entering into a contract with a qualified management entity that meets such standards as the Commissioner may prescribe to ensure that the project will be maintained in a decent, safe and sanitary condition.\n\n(o)  Timely homeownership.  The resident council shall acquire ownership of the project no later than 90 days after final approval of a plan of action pursuant to this section. The resident council shall transfer ownership of units in the project (other than units occupied by nonpurchasing tenants) to the tenants within a reasonable time thereafter, but in no event more than 4 years from the date of transfer of the project to the resident council. The Commissioner may seek contractual remedies against any resident council which fails to transfer ownership of all units within the 4-year period. During the interim period when the project continues to be operated and managed as rental housing, the resident council shall utilize written tenant selection policies and criteria that are approved by the Commissioner as consistent with the purpose of providing housing for very low income families. The resident council shall promptly notify in writing any rejected applicant of the grounds for any rejection.\n\n(p)  Housing standards; inspections.  (1) Until the resident council has transferred all units in the project (other than those occupied by nonpurchasing tenants) to the initial purchasers, the project shall be maintained in accordance with the housing standards set forth in \u00a7 248.147.\n\n(2) The Commissioner shall inspect the project at least annually in order to determine compliance with paragraph (p)(1) of this section.\n\n(q)  Audits.  Each resident council shall be subject to the audit requirements in 2 CFR part 200, subpart F, and shall submit an annual audit to the Commissioner in such form as the Commissioner may prescribe. The resident council shall keep such records as may be reasonably necessary to fully disclose the amount and the disposition by such resident council of the proceeds of assistance received under subpart B of this part, including any proceeds from sales under paragraphs (h) and (l) of this section, the total cost of the homeownership program in connection with which such assistance is given or used, and the amount and nature of that portion of the program supplied by other sources, and such other sources as will facilitate an effective audit.\n\nThe Commissioner or his or her duly authorized representative shall have access for the purpose of audit and examination to any books, documents, papers, and records of the resident council that are pertinent to assistance received under subpart B of this part. The Comptroller General of the United States, or any of the duly authorized representatives of the Comptroller General, shall also have access, for the purpose of audit and examination, to any books, documents, papers, and records of the resident council that are pertinent to assistance received under subpart B of this part.\n\n(r)  Reports.  The resident council shall submit reports, as required by the Commissioner, in order to demonstrate continued compliance with the requirements of this section.\n\n(s)  Assumption of the federally assisted mortgage(s).  In connection with a resident homeownership plan, the resident council may assume a mortgage insured, held or assisted by the Commissioner under part 236 of this chapter or under part 221 of this chapter and bearing a below market interest rate as provided under \u00a7 221.518(b) of this chapter or may choose to pay off the mortgage. If the resident council decides to assume the mortgage, the project must be sold pursuant to \u00a7 248.175 and the project must be operated as a limited equity cooperative."], ["24:24:2.1.1.2.24.2.211.21", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.175 Resident homeownership program\u2014limited equity cooperative.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 37816, July 13, 1993]", "(a) Tenants may carry out a resident homeownership program through the purchase of eligible low income housing by a limited equity cooperative and the operation of the project as a limited equity cooperative.\n\n(b) The purchase of a project by a limited equity cooperative and the operation of the project by the limited equity cooperative shall be carried out in accordance with the provisions of \u00a7 248.173 (a), (b), (c), (d), (except that paragraph (d)(1)(i) of this section shall include a statement of the amount and type of incentives requested, rather than only the amount of grant funds requested), (e), (g)(3), (i) (except paragraphs (i)(1) and (3)), (m) and (n).\n\n(c) The purchase and operation of eligible low income housing by a limited equity cooperative under this section shall be carried out in accordance with all provisions of subpart B of this part otherwise, applicable to the transfer and operation of a project with continued low income affordability restrictions, except as provided in this section."], ["24:24:2.1.1.2.24.2.211.22", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.177 Delegated responsibility to State agencies.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1994, as amended at 60 FR 16379, Mar. 30, 1995]", "(a)  In general.  The Commissioner shall delegate some or all responsibility for implementing subpart B of this part to a State housing agency if such agency submits a preservation plan acceptable to the Commissioner.\n\n(b)  Approval.  State preservation plans shall be submitted in such a form and in accordance with such procedures as the Commissioner shall establish. The Commissioner may approve plans that contain:\n\n(1) An inventory of low income housing located within the State that is or will be eligible low income housing under subpart B of this part within five years;\n\n(2) A description of the agency's experience in the area of multifamily financing and restructuring;\n\n(3) A description of the administrative resources that the agency will commit to the processing of plans of action in accordance with subpart B of this part;\n\n(4) A description of the administrative resources that the agency will commit to the monitoring of approved plans of action in accordance with subpart B of this part;\n\n(5) An independent analysis of the performance of the multifamily housing inventory financed or otherwise monitored by the agency;\n\n(6) A certification by the public official responsible for submitting the consolidated plan under 24 CFR part 91 that the proposed activities are consistent with the approved consolidated plan of the State within which the eligible low income housing is located; and\n\n(7) Such other certifications or information that the Commissioner determines to be necessary to implement an approved State preservation plan, which may include incentives that are authorized under other provisions of subpart B of this part.\n\n(c)  Implementation agreements.  The Commissioner may enter into any agreements necessary to implement an approved State preservation plan, which may include incentives that are authorized under other provisions of subpart B of this part.\n\n(d)  Fees.  Any State agency with responsibility so delegated under subpart B of this part may not charge any owner of eligible low income housing any fee for accepting notices of intent, processing plans of action or any other process pursuant to approval of a plan of action under subpart B of this part. This prohibition shall not preclude:\n\n(1) An owner paying for its appraisal or share of a joint appraisal under the provisions of \u00a7 248.111; or\n\n(2) A State agency from collecting fees normally associated with providing and processing financing insured under part 241 of this chapter."], ["24:24:2.1.1.2.24.2.211.23", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.179 Consultation with other interested parties.", "HUD", "", "", "", "The Commissioner shall confer with any appropriate State or local government agency to confirm any State or local assistance that is available to achieve the purposes of subpart B of this part and shall give consideration to the views of any such agency when making determinations under subpart B of this part. The Commissioner shall also confer with appropriate interested parties that the Commissioner believes could assist in the development of a plan of action that best achieves the purposes of subpart B of this part."], ["24:24:2.1.1.2.24.2.211.24", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.181 Notice to tenants.", "HUD", "", "", "", "Except as provided in \u00a7\u00a7 248.105 and 248.133, with respect to the first and second notices of intent, with regard to all provisions of subpart B of this part which mandate that information or material be given to the tenants, by the Commissioner, the owner, or a qualified purchaser, or other party, this requirement shall be satisfied where the notifying entity:\n\n(a) Posts a copy of the information or material in readily accessible locations within each affected building, or posts notices in each location describing the information or material and specifying a location, as convenient to the tenants as is reasonably practical, where a copy may be examined and copied during reasonable hours; and\n\n(b) Supplies a copy of the information or material to a tenant representative, if any."], ["24:24:2.1.1.2.24.2.211.25", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.183 Preemption of State and local laws.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 57 FR 57314, Dec. 3, 1992]", "(a)  In general.  No State or political subdivision of a State may establish, continue in effect, or enforce any law or regulation that:\n\n(1) Restricts or inhibits the prepayment of any mortgage described in \u00a7 248.101 or the voluntary termination of any insurance contract pursuant to \u00a7 207.253 of this chapter on eligible low income housing projects;\n\n(2) Restricts or inhibits an owner of such projects from receiving the authorized annual return provided under \u00a7 248.121;\n\n(3) Is inconsistent with any provision of subpart B of this part, including any law, regulation, or other restriction that limits or impairs the ability of any owner of eligible low income housing to receive incentives authorized under subpart B of this part, including authorization to increase rental rates, transfer the project, obtain secondary financing, or use the proceeds of any such incentives; or\n\n(4) In its applicability to low income housing is limited only to eligible low income housing for which the owner has prepaid the mortgage or terminated the insurance contract.\n\n(b)  Effect.  Any law, regulation or restriction described in paragraph (a) of this section shall be ineffective and any eligible low income housing exempt from the law, regulation, or restriction, only to the extent that it violates the provisions of this section.\n\n(c)  Laws of general applicability: contractual restrictions.  This section shall not prevent the establishment, continuing in effect, or enforcement of any law or regulation of any State or political subdivision of a State not inconsistent with the provision of this subpart, such as any law or regulation relating to building standards, zoning limitations, health, safety, or habitability standards for housing, rent control, or conversion of rental housing to condominium or cooperative ownership, to the extent such law or regulation is of general applicability to both projects receiving Federal assistance and nonassisted projects. This section shall not preempt, annul or alter any contractual restrictions or obligations existing before November 28, 1990 or voluntarily entered into by an owner of eligible low income housing on or after that date, and that limit or prevent that owner from prepaying the mortgage on the project or terminating the mortgage insurance contract."], ["24:24:2.1.1.2.24.2.211.3", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.105 Notice of intent.", "HUD", "", "", "", "(a)  Eligibility for filing.  An owner of eligible low income housing intending to prepay the mortgage or voluntarily terminate the mortgage insurance contract pursuant to \u00a7 248.141, extend the low income affordability restrictions of the housing in accordance with \u00a7 248.153, or transfer the housing to a qualified purchaser under \u00a7 248.157, may file a notice of intent unless the mortgage covering the project\u2014\n\n(1) Continued in default or fell into default on or after the November 28, 1990, and the mortgage has been assigned to the Commissioner as a result of such default;\n\n(2) Continued in default or fell into default on or after November 28, 1990, while the mortgage was held by the Commissioner;\n\n(3) Fell into default prior to November 28, 1990, if the owner entered into a workout agreement prior to that date, and on or after that date, the owner has defaulted under the workout agreement (and, if the agreement was with an insured mortgagee, the mortgage has been assigned to the Commissioner as a result of the default under the workout agreement); or\n\n(4) Fell into default prior to November 28, 1990, but has been current since that date and the owner has not agreed to recompense the appropriate insurance fund for losses sustained by the fund as a result of any work-out or other arrangement agreed to by the Commissioner and the owner with respect to the defaulted mortgage.\n\n(b)  Filing with the Commissioner.  The notice of intent shall be filed with the HUD Field Office in whose jurisdiction the project is located. The notice of intent shall identify the project by name, project number and location. It shall contain a statement indicating whether the owner intends to extend the affordability restrictions on the project by retaining ownership of the project or transferring it to a qualified purchaser, or whether the owner intends to terminate the affordability restrictions on the project through prepayment of the mortgage or termination of the mortgage insurance contract. The notice of intent shall also request the tenants to notify the owner, the Commissioner, and the State or local officer identified in the notice of intent of any individual or organization that has been designated or retained by the tenants to represent the tenants with respect to the actions to be taken under subpart B of this part.\n\n(c)  Filing with the State or local government and tenants.  The owner simultaneously shall file the notice of intent with the chief executive officer of the appropriate State or local government in which the project is located, or any officer designated by executive order or State or local law to receive such information, and with the mortgagee. In addition, the owner shall deliver a copy of the notice of intent to each occupied unit in the project and to any tenant representative, if any, known to the owner, and shall post a copy of the notice of intent in readily accessible locations within each affected building of the project. The copies of the notice of intent delivered to the tenants and the tenant representative shall include a summary of possible outcomes of the filing which shall be furnished by the Commissioner. Upon the request of any non-English speaking tenants residing in the affected project, the owner shall tabulate the number and type of translations needed by the tenants and request the local HUD field office to provide the appropriate translations. The owner shall deliver a copy of the translated notice of intent to all of the tenants who requested such translation. The failure of an owner to comply with any non-federal notice requirements shall not invalidate the notice of intent."], ["24:24:2.1.1.2.24.2.211.4", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.111 Appraisal and preservation value of eligible low income housing.", "HUD", "", "", "[57 FR 12041, Apr. 8, 1992, as amended at 58 FR 4871, Jan. 15, 1993]", "(a)  Appraisal.  Upon receiving a notice of intent indicating an intent to extend the low income affordability restrictions under \u00a7 248.153 or transfer the project under \u00a7 248.157, the Commissioner shall provide for determination of the preservation values of the project pursuant to this section.\n\n(b)  Notice.  Within 30 days after the filing of a notice of intent to extend the income restrictions or to transfer the project, the Commissioner shall provide the owner with written notice of\u2014\n\n(1) The need for, and the rules and guidelines governing, an appraisal of the project;\n\n(2) The filing deadline for submission of the appraisal;\n\n(3) The need for an appraiser retained by the Commissioner to inspect the project and the project's financial records; and\n\n(4) Any delegation to an appropriate State agency, if any, by the Commissioner of responsibilities regarding the performance of an appraisal pursuant to this section.\n\n(c)  Appraisers.  The Commissioner and the owner shall each select and compensate an appraiser who shall:\n\n(1) Neither be an employee of the Federal Government nor an employee or officer of any entity that is affiliated with the owner or the mortgagee of record;\n\n(2) Be certified by the appropriate State agency under the standards established by the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 (12 U.S.C. 1451-1459); and\n\n(3) Have six years of experience in the appraisal profession and at least three years experience in the practice of appraising multifamily residential properties;\n\n(4) Is not the subject of a charge issued following a reasonable cause determination under the Fair Housing Act (42 U.S.C. 3601-3619).\n\n(d)  Guidelines.  The Commissioner shall provide to the owner and the appraiser retained by the Commissioner guidelines for conducting the appraisal. The guidelines established by the Commissioner shall be consistent with customary appraisal standards. The guidelines shall assume repayment of the existing federally-assisted mortgage(s), termination of the existing Federal low income affordability restrictions, simultaneous termination of any Federal rental assistance, and costs of compliance with any State or local laws of general applicability. The guidelines may permit reliance upon assessments of rehabilitation needs and other conversion costs determined by an appropriate State agency, as determined by the Commissioner.\n\n(e)  Operating expenses.  For the purpose of determining preservation values, the guidelines shall instruct the appraiser to use the greater of actual project operating expenses at the time of the appraisal, based on the average of the actual project operating expenses during the preceding three years, or projected operating expenses after conversion, as determined by the Commissioner. However, if the current year operating expenses are higher than those of the preceding three years and the Commissioner has made a determination that these costs are unlikely to decrease in the future, the appraiser shall use current year operating expenses rather than operating expenses for the preceding three years for purposes of comparison with projected operating expenses after conversion. Likewise, if the current year operating expenses are lower than those of the preceding years and the Commissioner has made a determination that these costs are unlikely to increase in the future, the appraiser shall use current year operating expenses rather than operating expenses for the preceding three years for purposes of comparison with projected expenses after conversion. Where the highest and best use of a project is not as rental housing, the appraiser shall use projected operating expenses assuming conversion of the project to its highest and best use.\n\n(f)  Preservation values.  The preservation values will be determined on the basis of the appraisals conducted by the owner's and the Commissioner's independent appraisers. Each appraiser will determine both the extension preservation value and the transfer preservation value, regardless of the owner's intentions as indicated in the notice of intent.\n\n(g)  Highest and best use as residential property.  In determining the extension preservation value of the project, the appraiser shall assume conversion of the project to market-rate rental housing. The appraiser shall, in accordance with the guidelines established by the Commissioner, determine the amount of rehabilitation expenditures, if any, that would be necessary to bring the project up to quality standards required to attract and sustain a market-rate tenancy upon conversion and assess other costs that the owner could reasonably be expected to incur if the owner converted the property to market-rate multifamily rental housing.\n\n(h)  Highest and best use.  In determining the transfer preservation value for the project, the appraiser shall assume conversion of the project to highest and best use for the property, and shall, in accordance with the guidelines established by the Commissioner, determine the amount of any rehabilitation expenditures, including demolition, that would be necessary to convert the project to such use and assess other costs that the owner could reasonably be expected to incur if the owner converted the property to its highest and best use.\n\n(i)  Submission of appraisal.  Within four months after the filing of the notice of intent:\n\n(1) The owner shall submit to the HUD Field Office in whose jurisdiction the project is located, the appraisal made by the owner's selected appraiser; and\n\n(2) The Commissioner's selected appraiser shall conduct and submit an appraisal to the Commissioner.\n\n(j)  Joint determination of preservation values.  No later than one month after the owner and the Commissioner exchange appraisals, the owner and the Commissioner shall, on the basis of the appraisals delivered to them, agree on the preservation values of the project. If no agreement as to preservation values can be reached, the owner and the Commissioner shall jointly select a third appraiser meeting the qualifications set forth in paragraph (c) of this section by the end of six months from the date that the notice of intent was filed. The cost of this third appraisal shall be borne equally by both parties. The third appraiser must comply with the guidelines set forth in paragraph (d) of this section and must conduct the appraisal and submit an appraisal within two months after accepting the assignment. The determination by the third appraiser of the project's preservation values shall be binding on both the owner and the Commissioner.\n\n(k)  Timeliness of appraisals.  The Commissioner may approve a plan of action to receive incentives under \u00a7\u00a7 248.153, 248.157 or 248.161 only based upon an appraisal conducted in accordance with this section that is not more than 30 months old, unless the failure of the Commissioner to approve the plan of action within the 30-month period was due to circumstances beyond the control of the owner."], ["24:24:2.1.1.2.24.2.211.5", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.121 Annual authorized return and aggregate preservation rents.", "HUD", "", "", "", "(a)  Annual authorized return.  For each eligible low income housing project appraised under \u00a7 248.111, the Commissioner shall set an annual authorized return on the project equal to 8 percent of the extension preservation equity.\n\n(b)  Aggregate preservation rents.  For each eligible low income housing project appraised under \u00a7 248.111, the Commissioner shall also determine the aggregate preservation rents. The aggregate preservation rents shall be used solely for the purposes of comparison with the Federal cost limit under \u00a7 248.123. Actual rents received by the owner (or a qualified purchaser) shall be determined pursuant to \u00a7\u00a7 248.153, 248.157, and 248.161.\n\n(c)  Extension preservation rent.  The extension preservation rent shall be the gross potential income for the project, as determined by the Commissioner, that would be required to support\u2014\n\n(1) The annual authorized return determined under paragraph (a) of this section;\n\n(2) Debt service on any rehabilitation loan for the project, assuming a market rate of interest and customary terms;\n\n(3) Debt service on the federally-assisted mortgage(s) for the project;\n\n(4) Project operating expenses as determined by the Commissioner; and\n\n(5) Adequate reserves.\n\n(d)  Transfer preservation rent.  The transfer preservation rent shall be the gross potential income for the project, as determined by the Commissioner, that would be required to support\u2014\n\n(1) Debt service on the loan for acquisition of the project;\n\n(2) Debt service on any rehabilitation loan for the project, assuming a market rate of interest and customary terms;\n\n(3) Debt service on the federally-assisted mortgage(s) for the project;\n\n(4) Project operating expenses as determined by the Commissioner; and\n\n(5) Adequate reserves.\n\n(e)  Adequate reserves and operating expenses.  For purposes of this section\u2014\n\n(1) Adequate reserves are the amount of funds which, when added to existing reserves, are sufficient to maintain the project, including needed deferred maintenance, at a level that meets the standards set forth in \u00a7 248.147; and\n\n(2) Project operating expenses shall be based on operating expenses for the preceding 3 years, adjusted for reasonable reductions in operating costs due to rehabilitation and energy improvements. For purposes of comparison to the gross rents used in determining the Federal cost limit, project operating expenses shall include the cost of utilities paid by the residents.\n\n(f)  Debt service.  For purposes of this section, the amount of debt service for an acquisition loan will be estimated based on the maximum loan to which the purchaser is entitled under \u00a7 241.1067 of this chapter. The debt service on any rehabilitation loan will be estimated using costs derived from the appraisals conducted under \u00a7 248.111, taking into account any funds provided for rehabilitation by State or local governments and assuming market rate interest rates."], ["24:24:2.1.1.2.24.2.211.6", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.123 Determination of Federal cost limit.", "HUD", "", "", "", "(a)  Initial determination.  For each eligible low income housing project appraised under \u00a7 248.111, the Commissioner shall determine whether the aggregate preservation rents for the project exceed the amount determined by multiplying the number of dwelling units in the project, according to appropriate unit sizes, by 120 percent of the section 8 existing fair market rent for the appropriate unit sizes.\n\n(b)  Relevant local markets.  If either the extension or transfer preservation rent for a project exceeds the amount determined under paragraph (a) of this section, the Commissioner shall determine whether such extension or transfer preservation rent exceeds the amount determined by multiplying the number of units in the project, according to the appropriate unit sizes, by 120 percent of the prevailing rents in the local market area. The relevant local market, and the prevailing rents in such relevant local market, shall be determined on the basis of the appraisal conducted by the appraiser selected by the Commissioner pursuant to \u00a7 248.111 and any other information that the Commissioner determines is appropriate. If there are no comparables in the relevant local market and it is not otherwise possible to determine prevailing rents in that area, the section 8 existing fair market rent shall be the sole measure for determining the Federal cost limit.\n\n(c)  Effect.  The extension or transfer preservation rent for an eligible low income housing project appraised under \u00a7 248.111 shall be considered to exceed the Federal cost limit only if the extension or transfer preservation rent exceeds the amount determined under paragraphs (a) and (b) of this section."], ["24:24:2.1.1.2.24.2.211.7", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.127 Limitations on action pursuant to Federal cost limit.", "HUD", "", "", "", "(a)  Retention of the project.  With respect to owners who seek to retain the project, the owner may file a plan of action to receive incentives under \u00a7 248.153, except that if the extension preservation rent exceeds the Federal cost limit, the amount of the incentives may not exceed an amount that can be supported by a projected income stream equal to the Federal cost limit.\n\n(b)  Transfer of the project.  With respect to owners who seek to transfer the project\u2014\n\n(1) If the transfer preservation rent does not exceed the Federal cost limit, or if the transfer preservation rent exceeds the Federal cost limit and the owner is willing to transfer the project at a price which will result in project rents that, on an aggregate level, do not exceed the Federal cost limit, the owner may file a second notice of intent indicating an intention to transfer the project under \u00a7 248.157; or\n\n(2) If the transfer preservation rent exceeds the Federal cost limit, the owner may file a second notice of intent to transfer the project under \u00a7 248.161 or, if no bona fide offers are received, to prepay the mortgage or terminate the mortgage insurance."], ["24:24:2.1.1.2.24.2.211.8", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.131 Information from the Commissioner.", "HUD", "", "", "", "(a)  Information to owners terminating affordability restrictions.  Within six months after receipt of a notice of intent to terminate the low income affordability restrictions under \u00a7 248.141, the Commissioner shall provide the owner with a description of the criteria for such termination and with information that the owner needs to prepare a plan of action. This shall include information concerning the standards under \u00a7 248.141 regarding the approval of a plan of action and a list of the Federal incentives authorized under \u00a7 248.153 and available to those projects for which a plan of action involving termination of low income affordability restrictions, through prepayment of the mortgage or termination of the mortgage insurance contract, would not be approvable. The Commissioner shall also provide the owner with any other relevant information which the Commissioner may possess.\n\n(b)  Information to owners extending affordability restrictions.  Within nine months of receipt of a notice of intent to extend the low income affordability restrictions under \u00a7 248.153 or to transfer the project under \u00a7 248.157, the Commissioner shall provide the owner who submitted the notice with\u2014\n\n(1) A statement of the preservation values of the project as determined under \u00a7 248.111;\n\n(2) A statement of the aggregate preservation rents for the project as calculated under \u00a7 248.121;\n\n(3) A statement of the applicable Federal cost limit for the market area (or relevant local market, if applicable) in which the project is located, and an explanation of the limitations under \u00a7 248.127 on the amount of assistance the Commissioner may provide based on such cost limits;\n\n(4) A statement of whether either of the aggregate preservation rents exceeds the Federal cost limit; and\n\n(5) A direction to file a plan of action and the information necessary to file a plan of action; or\n\n(6) A direction to submit a second notice of intent under \u00a7 248.133.\n\n(c)  Information to tenants and State or local governments.  The Commissioner shall provide any information provided to the owner under paragraphs (a) and (b) of this section to the tenant representative, if any, known to the Commissioner, and shall post a notice in each affected building informing tenants of the name(s), address(es), and telephone number(s) of the tenant representative(s) and appropriate personnel in the local HUD field office, from whom they may obtain this information. The Commissioner shall also provide this information to that officer of State or local government to whom the owner submitted a notice of intent pursuant to \u00a7 248.105(c). The Commissioner shall include in the information packet made available to the tenants any other information relating to their rights and opportunities, including\u2014\n\n(1) The potential opportunity of the tenants to become priority purchasers under \u00a7\u00a7 248.157 and 248.161; and\n\n(2) The potential opportunity of resident homeownership under \u00a7\u00a7 248.173 or 248.175."], ["24:24:2.1.1.2.24.2.211.9", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "B", "Subpart B\u2014Prepayments and Plans of Action Under the Low Income Housing Preservation and Resident Homeownership Act of 1990", "", "\u00a7 248.133 Second notice of intent.", "HUD", "", "", "", "(a)  Filing.  A second notice of intent must be filed by all owners who, after receiving the information provided by the Commissioner in \u00a7 248.131, elect to transfer the project under \u00a7\u00a7 248.157 or 248.161.\n\n(b)  Timeliness.  A second notice of intent must be submitted not later than 30 days after receipt of the information provided by the Commissioner under \u00a7 248.131. If an owner who is required to submit a second notice of intent fails to do so within this time period, the original notice of intent submitted under \u00a7 248.105 shall be void and ineffective for purposes of subpart B of this part.\n\n(c)  Filing with the State or local government and tenants.  The owner simultaneously shall file the second notice of intent with that officer of State and local government to whom the owner submitted a notice of intent under \u00a7 248.105(c) and with the mortgagee. In addition, the owner shall deliver a copy of the second notice of intent to each tenant representative known to the owner, and if none is known, then to each occupied unit in the project."], ["24:24:2.1.1.2.24.3.211.1", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.201 Definitions.", "HUD", "", "", "[55 FR 38952, Sept. 21, 1990. Redesignated at 57 FR 12041, Apr. 8, 1992, and amended at 57 FR 57314, Dec. 3, 1992; 58 FR 37816, July 13, 1993; 61 FR 5207, Feb. 9, 1996; 64 FR 26639, May 14, 1999]", "The terms  Fair Market Rent (FMR)  and  Section 8  are defined in 24 CFR part 5.\n\nAdjusted Income.  Annual income, as specified in \u00a7 251.21 of this chapter, less allowances specified in the definition of  Adjusted Income  in \u00a7 215.1 of this chapter.\n\nAllowable Distributions.  The amount of cash or other assets that the owner may withdraw from the project under the terms of the regulatory agreement, applicable regulations, and administrative instructions, including the segregation of cash or assets for subsequent withdrawal, and excluding repayment of advances made for reasonable and necessary expenses incident to the operation and maintenance of the project.\n\nCapital Improvement Loan.  A direct loan originated by the Commissioner under part 219, subpart C of this chapter.\n\nEligible Low Income Housing.  Any housing financed by a mortgage\u2014\n\n(a) That is\u2014\n\n(1) Insured or held by the Commissioner under section 221(d)(3) of the National Housing Act and assisted under part 886, subpart A of this title because of a conversion from assistance under part 215 of this chapter;\n\n(2) Insured or held by the Commissioner under part 221 of this chapter and bearing a below market interest rate as provided under \u00a7 221.518(b) of this chapter;\n\n(3) Insured, assisted, or held by the Commissioner or a State or State agency under part 236 of this chapter; or\n\n(4) A purchase money mortgage held by the Commissioner with respect to a project which, immediately prior to HUD's acquisition, would have been classified under paragraph (a) (1), (2), or (3) of this definition; and\n\n(b) That, under regulation or contract in effect before November 1, 1987, is, or within one year from the date of the notice of intent would become, eligible for prepayment without the prior approval of the Commissioner.\n\nEquity.  The Owner's investment in the housing project, as approved or determined by the Commissioner.\n\nEquity Loan.  A loan insured by the Commissioner under part 241, subpart E of this chapter.\n\nFlexible Subsidy Assistance.  Assistance provided by the Commissioner under part 219 of this chapter, other than a capital improvement loan.\n\nGood Cause.  Temporary or permanent uninhabitability of the project justifying relocation of all or some of the project's tenants (except where such uninhabitability is caused by the actions or inaction of the owner), or actions of the tenant that, under the terms of the tenant's lease and applicable regulations, constitute a basis for eviction.\n\nLimited Equity Cooperative.  A cooperative housing corporation in which income eligibility of purchasers or appreciation upon resale of membership shares, or both, are restricted in order to maintain the housing as available to and affordable by low and moderate income families and persons.\n\nLow Income Affordability Restrictions.  Limits imposed by regulation or regulatory agreement on tenant rents, rent contributions, or income eligibility with respect to eligible low income housing.\n\nLow-Income Families.  Families or persons whose incomes do not exceed the levels established for low-income families under part 5 of this title.\n\nModerate Income Families.  Families or persons whose incomes are between 80 percent and 95 percent of median area income, as determined by the Commissioner with adjustments for smaller and larger families.\n\nMortgage.  The mortgage or deed of trust insured or held by the Commissioner or a State or State agency under parts 221 or 236 of this chapter, or the purchase money mortgage taken back by the Commissioner in connection with the sale of a HUD-owned project and held by the Commissioner, where such mortgage, deed of trust or purchase money mortgage is secured by eligible low income housing.\n\nNotice of Intent.  An owner's notification of its intent to seek prepayment of its mortgage, termination of the mortgage insurance contract or amendment of the mortgage or regulatory agreement pursuant to this part.\n\nOwner.  The mortgagor or trustor under the mortgage secured by eligible low income housing.\n\nPlan of Action.  A plan providing for prepayment of the mortgage, termination of the mortgage insurance contract, or continuation of the mortgage in place, and providing for either the termination of low income affordability restrictions, or the continuation of the project's use as low-income housing under modified terms and conditions.\n\nPrepayment.  Prepayment in full of a mortgage, or a partial prepayment or series of partial prepayments that reduce the mortgage term by at least six months, except where the prepayment in full or partial prepayment results from the application of condemnation proceeds.\n\nProject oversight costs.  Reasonable expenses incurred by a nonprofit purchaser in carrying out its ongoing ownership responsibilities under an approved plan of action. Project oversight costs must be directly related to educating the nonprofit purchaser's board of directors or otherwise supporting the board in its decision making. Project oversight costs may include staff, overhead, or third-party contract costs for:\n\n(1) Ensuring adequate and responsible participation by the board of directors and the membership of the nonprofit purchaser in ownership decisions, including ensuring resident input in these decisions;\n\n(2) Facilitating long-range planning by the board of directors to ensure the physical, financial and social viability of the project for the entire time the project is maintained as low income housing; and\n\n(3) Assisting the ownership in complying with regulatory, use, loan and grant agreements.\n\nRegulatory Agreement.  The agreement executed by the owner and the Commissioner or a State agency providing for the Commissioner's regulation of the operation of the project.\n\nReserve for Replacements.  The escrow fund established under the regulatory agreement for the purpose of ensuring the availability of funds for needed repair and replacement costs.\n\nResidual Receipt Fund.  The fund established under the regulatory agreement for holding cash remaining after deducting from the surplus cash, as defined by the regulatory agreement, the amount of all allowable distributions.\n\nReturn on Investment.  The amount of allowable distributions, tax benefits, and other income or benefits received by the owner, as a percentage of the equity.\n\nTermination of Low Income Affordability Restrictions.  The elimination of low income affordability restrictions under the regulatory agreement through termination of mortgage insurance or prepayment of the mortgage.\n\nUse Agreement.  An agreement or covenant which is executed and recorded in the appropriate land records in connection with an approved plan of action, has lien priority over other mortgages and liens, is binding upon the owner and its successors and assigns, is enforceable by the Commissioner and by tenants, contains appropriate reporting requirements, and restricts or governs the use and operation of the project with respect to rent levels and increases, relocation, and, where appropriate, tenant eligibility, civil rights and other requirements. All tenants in occupancy at the time that the plan of action is approved will receive a copy of the use agreement.\n\nVery Low Income Families.  Families or persons whose incomes do not exceed the level established for very low income families under section 3(b) of the 1937 Act (42 U.S.C. 1437a(b))."], ["24:24:2.1.1.2.24.3.211.10", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.223 Alternative State strategy.", "HUD", "", "", "", "(a) The Commissioner may approve a State strategy providing for State approval of plans of action that involve termination of low income affordability restrictions only upon finding that it is a practicable statewide strategy that ensures at a minimum that\u2014\n\n(1) Current tenants will not be involuntarily displaced (except for good cause);\n\n(2) Housing opportunities for minorities will not be adversely affected in the communities in which the housing is located;\n\n(3) Any increase in rent for current tenants will be to a level that does not exceed 30 percent of the adjusted income of the tenants or fair market rent, whichever is lower, and any increase not necessitated by increased operating costs shall be phased in equally over not less than 3 years if the increase exceeds 10 percent;\n\n(4) Housing approved under the State strategy will remain affordable to very low income, low income and moderate income families for not less than the remaining term of the mortgage, if the housing is to be made available for rental use, or for not less than 40 years, if the housing is to be made available for homeownership;\n\n(5)(i) Not less than 80 percent of all units in eligible low income housing approved under the State strategy will be retained as affordable to families or persons meeting the income eligibility standards for initial occupancy that applied to housing on January 1, 1987; and\n\n(ii) Not less than 60 percent of the units in any one project will remain available to and affordable by such families or persons, within which not less than 20 percent of the units will remain available to and affordable by very low income families;\n\n(6) Expenditures for rehabilitation, maintenance and operation will be at a level necessary to maintain the housing as decent, safe and sanitary and for the period specified in paragraph (a)(4) of this section;\n\n(7) Not less than 25 percent of new assistance required to maintain the housing as available to and affordable by low income families in accordance with this section shall be provided through State and local actions, such as tax exempt financing, low income tax credits, State or local tax concessions, the provision of funds from housing finance agency reserves or housing trust funds, taxable bonds, and other incentives provided by the State or local governments; and\n\n(8) For each unit of eligible low income housing approved under the State strategy that is not retained as affordable housing to families or persons meeting the income eligibility standards for initial occupancy on January 1, 1987, the State will provide, with State funds, one additional unit of comparable housing in the same market area that is available to and affordable by such families and persons. Such units will be provided by conversion of existing units or construction of new units. These units or funds will be made available before the Commissioner approves the State strategy.\n\n(b)  Additional requirements.  (1) The State must enter into all agreements necessary to carry out the State strategy before receiving the Commissioner's approval.\n\n(2) Each State strategy shall include any other provision that the Commissioner determines to be necessary to implement the approved State strategy."], ["24:24:2.1.1.2.24.3.211.11", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.231 Incentives to extend low income use.", "HUD", "", "", "", "The Commissioner may agree to provide one or more of the following incentives to induce the project owner to extend the low income use of the project, if the Commissioner determines that such incentives are warranted under the standards in \u00a7 248.233 of this part:\n\n(a) An increase in the allowable distribution, or other measures to increase the rate of return;\n\n(b) Revisions to the method of calculating equity;\n\n(c) Increased access to residual receipts funds or excess reserve for replacements funds;\n\n(d) Provision of insurance for an equity loan;\n\n(e) An increase in the rents permitted under an existing section 8 contract, within statutory and regulatory limits otherwise applicable, or (subject to the availability of amounts provided in appropriations Acts) additional assistance under section 8 or an extension of any project-based assistance attached to the housing;\n\n(f) Provision of a capital improvement loan;\n\n(g) Other actions to facilitate a transfer or sale of the housing to a qualified nonprofit organization, limited equity tenant cooperative, public agency, or other entity acceptable to the Commissioner, such as expedited review of a request for approval of a transfer of physical assets;\n\n(h) Provision of flexible subsidy assistance;\n\n(i) Termination of HUD's limitations on distributions, and release of residual receipts and reserve for replacements funds, through prepayment of the mortgage; and\n\n(j) Any other incentives for which the owner is eligible."], ["24:24:2.1.1.2.24.3.211.12", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.233 Approval of a plan of action that includes incentives.", "HUD", "", "", "[55 FR 38952, Sept. 21, 1990. Redesignated and amended at 57 FR 12041, 12060, Apr. 8, 1992]", "The Commissioner may approve a plan of action that includes incentives, whether or not the plan of action allows for the prepayment of the mortgage, only upon a finding that\u2014\n\n(a) After taking into account local market conditions, the incentives are necessary to achieve the purposes of this part;\n\n(b) The incentives are necessary to provide a fair rate of return to the owner. Incentives will only be provided in cases where the project's current use does not represent its highest and best use;\n\n(c) The incentives are the least costly alternative for the Federal government to achieve the purposes of this part with respect to the housing;\n\n(d) Binding commitments have been made to ensure that\u2014\n\n(1) The housing will be retained as housing affordable for very low income families, low-income families, and moderate income families for the remaining term of the mortgage;\n\n(2) Throughout the remaining term of the mortgage, adequate expenditures will be made for the proper maintenance and operation of the housing;\n\n(3) Current tenants will not be involuntarily displaced (except for good cause);\n\n(4) Any increase in rent contributions for current tenants will be to a level that does not exceed 30 percent of the adjusted income of the tenant or the fair market rent, whichever is lower;\n\n(5) Any resulting increase in rents for current tenants (except for increases made necessary by increased operating costs) will be phased in equally over a period of not less than 3 years, if the increase is 30 percent or more, and will be limited to not more than 10 percent per year, if the increase is more than 10 percent but less than 30 percent;\n\n(6) Subject to the availability of funds, the Commissioner shall provide, and the owner shall accept, assistance under section 8 if the Commissioner determines that such assistance is necessary to mitigate any adverse effect of the rent increases on current tenants eligible for section 8 assistance; and\n\n(7) Rents for units becoming available to new tenants will be at levels approved by the Commissioner that will ensure, to the extent practicable, that the units will be available to and affordable, with 30 percent of adjusted income, by the same proportion of very low income families, low-income families, and moderate income families as resided in the housing as of January 1, 1987 (based on the area median income limits established by the Commissioner in February 1987), or the date the plan of action is approved, whichever date results in the highest proportion of very low income families.\n\n(i) For purposes of paragraph (d)(7) of this section\u2014\n\n(A) The percentage of moderate income families in occupancy as of January 1, 1987 shall include families who were admitted to the project as very low income, low income, or moderate income families but whose incomes had increased beyond the limit for moderate income families by January 1, 1987; and\n\n(B) The proportions established shall not prohibit a higher proportion of very low income families from occupying the housing.\n\n(ii) In approving rents under paragraph (d)(7) of this section, the Commissioner will take into account any additional incentives provided under this part and will make provision for annual rent adjustments necessary as a result of future reasonable increases in operating costs.\n\n(e) In cases where the owner agrees to maintain only a portion of the project as low income housing, the incentives provided under \u00a7 248.231 of this part and the standards imposed under this section shall be adjusted accordingly.\n\n(f) The Commissioner shall not approve a plan of action under this section if there are open findings of noncompliance with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); the Fair Housing Act (42 U.S.C. 3601-3619); Executive Order 11063 (3 CFR 1959-1963 comp., p. 652); the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107); section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); and all regulations promulgated under such statutes and authorities, or if there are open audit findings with respect to violations of the regulatory agreement."], ["24:24:2.1.1.2.24.3.211.13", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.234 Section 8 rental assistance.", "HUD", "", "", "[55 FR 38952, Sept. 21, 1990. Redesignated and amended at 57 FR 12041, 12060, Apr. 8, 1992]", "(a) When providing rental assistance under section 8, the Commissioner may enter into a contract with an owner, contingent upon the future availability of appropriations for the purpose of renewing expiring contracts for rental assistance as provided in appropriations Acts, to extend the term of such rental assistance for such additional period or periods as is necessary to carry out an approved plan of action.\n\n(b) The contract and the approved plan of action shall provide that, if the Commissioner is unable to develop a revised package of incentives providing benefits to the owner comparable to those received under the original approved plan of action, the Commissioner, upon the request of the owner, shall take the following actions (subject to the limitations under the following paragraphs):\n\n(1) Modification of the binding commitments made pursuant to \u00a7 248.233(d) that are dependent on such rental assistance.\n\n(2) If action under paragraph (b)(1) is not feasible, release of an owner from the binding commitments made pursuant to \u00a7 248.233(d) that are dependent on such rental assistance.\n\n(3) If actions under paragraphs (b)(1) and (2) would, in the determination of the Commissioner, result in the default of the insured loan, approval of the revised plan of action, notwithstanding \u00a7 248.221, that involves the termination of low-income affordability restrictions.\n\n(c) The approved plan of action shall specify actions that the Commissioner and the owner shall take to ensure that any tenants displaced as a result of actions taken under paragraph (b) of this section are relocated to affordable housing.\n\n(d) At least 30 days prior to making a request under the preceding sentence, an owner shall notify the Commissioner of the owner's intention to submit the request. The Commissioner shall have a period of 90 days following receipt of such notice to take action to extend the rental assistance contract and to continue the binding commitments under paragraph (b)."], ["24:24:2.1.1.2.24.3.211.14", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.241 Modification of existing regulatory agreements.", "HUD", "", "", "", "(a) If a plan of action is not approved within 300 days after initial submission, the Commissioner may, upon request of the owner and upon making a determination that the project's current use does not represent its highest and best use, modify existing regulatory agreements to\u2014\n\n(1) Prevent involuntary displacement of current tenants (except for good cause);\n\n(2) Ensure that adequate expenditures will be made for maintenance and operation of the housing;\n\n(3) Extend (subject to the availability of funds) any expiring project-based assistance on the housing for the term of the agreement;\n\n(4) Permit an increase in the allowable distribution that could be accommodated by an increase in the rents on occupied units to a level no higher than 30 percent of the adjusted income of the tenants, as determined by the Commissioner, except that rents shall not exceed the fair market rent, and any resulting increase in rents for current tenants shall be phased in equally over a period of no less than 3 years, unless such increase is less than 10 percent; and\n\n(5) Ensure that units becoming vacant during the term of the agreement are made available in accordance with \u00a7 248.233(d)(7) of this part.\n\n(b)  Expiration.  Agreements entered into under this section shall expire on February 5, 1992, unless earlier superseded by an agreement implementing a HUD-approved plan of action. Upon such expiration of the agreement on February 5, 1992, the housing covered by the agreement shall be subject to any law then affecting low income affordability restrictions."], ["24:24:2.1.1.2.24.3.211.15", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.251 Consultation with other interested parties.", "HUD", "", "", "", "The Commissioner will confer with any appropriate State or local government agency to confirm any State or local assistance that is available to achieve the purposes of this part and will give consideration to the views of the State or local agency when making the determinations under \u00a7\u00a7 248.221 and 248.233 of this part. The Commissioner also will confer with other interested parties that the Commissioner believes could assist in the development of a plan of action that best achieves the purposes of this part."], ["24:24:2.1.1.2.24.3.211.16", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.261 Agreements implementing plans of action and State strategies.", "HUD", "", "", "", "The Commissioner is authorized to enter into agreements, including those for the provision of incentives, necessary to implement any plan of action or State strategy approved by the Commissioner under this part."], ["24:24:2.1.1.2.24.3.211.2", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.203 General prepayment limitation.", "HUD", "", "", "", "(a) An owner of eligible low income housing may prepay, and a mortgagee may accept prepayment of, a mortgage on such housing only in accordance with a plan of action approved by the Commissioner.\n\n(b) A mortgage insurance contract with respect to eligible low income housing may be terminated pursuant to section 229 of the National Housing Act only in accordance with a plan of action approved by the Commissioner.\n\n(c) A mortgagee's acceptance of a prepayment in violation of paragraph (a) or termination of a mortgage insurance contract in violation of paragraph (b) of this section is grounds for administrative action under parts 24 and 25 of this title, in addition to any other remedies available by law, including rescission of the prepayment or reinstatement on the insurance contract."], ["24:24:2.1.1.2.24.3.211.3", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.211 Notice of intent to prepay.", "HUD", "", "", "[55 FR 38952, Sept. 21, 1990. Redesignated at 57 FR 12041, Apr. 8, 1992, and amended at 58 FR 37816, July 13, 1993]", "(a) An owner of eligible low-income housing seeking to prepay its mortgage or to negotiate changes in the terms of the mortgage or regulatory agreement in accordance with this part, including termination of the insurance contract pursuant to section 229 of the National Housing Act, shall file a notice of intent with the HUD field office in whose jurisdiction the project is located, and shall file a duplicate copy with the HUD Headquarters Office of Multifamily Housing Management, 451-7th Street, SW., Washington, DC 20410. The notice of intent shall identify the project by name, project number and location, briefly describe the owner's plans for the project, including any timetables or deadlines for actions to be taken, and the reason the owner seeks to prepay the mortgage or change the terms of the mortgage or regulatory agreement, and briefly describe any contacts that the owner has made or is making with other governmental agencies or other interested parties in connection with the notice of intent.\n\n(b) An owner simultaneously shall file the notice of intent with:\n\n(1) The chief executive officer of the appropriate State or local government in which the project is located, or any officer designated by executive order or State or local law to receive such information;\n\n(2) Each tenant in the project; and\n\n(3) The mortgagee.\n\nIn addition, the owner shall post a copy of the notice of intent in each occupied building in the project.\n\n(c) Upon receipt of a notice of intent, the Commissioner will provide the owner with information that the owner needs to prepare a plan of action. This information shall include information regarding the Commissioner's standards under \u00a7 248.221 of this part regarding the approval of a plan of action involving termination of low income affordability restrictions, and any relevant market area and demographic information that the Secretary has custody of and that the owner may use in preparing the plan of action; in addition, it shall include at a minimum a list of the Federal incentives authorized under \u00a7 248.231 of this part for those projects for which a plan of action involving termination of low income affordability restrictions would not be approvable.\n\n(d) Filing a notice of intent with the Commissioner will lead to one of the following results:\n\n(1) Where the project meets the requirements of \u00a7 248.221 of this part\u2014\n\n(i) The Commissioner will approve the prepayment or the termination of mortgage insurance pursuant to \u00a7 248.221 of this part, and all low income affordability restrictions will be terminated with respect to some or all of the units; however, the owner would be responsible for ensuring that displaced current tenants are relocated to affordable housing, if necessary.\n\n(ii) The Commissioner will approve the prepayment or termination of mortgage insurance pursuant to \u00a7 248.221 of this part, and all low income affordability restrictions will be terminated, except (where necessary because the project is located in a housing market where there is insufficient comparable, decent, safe and sanitary affordable housing to meet the needs of all current tenants) with regard to protection of current very low income, low income and moderate income tenants;\n\n(2) Where the plan of action would not be approvable under \u00a7 248.221 of this part\u2014\n\n(i) The Commissioner will approve prepayment or the termination of mortgage insurance, but the owner will receive assistance under a State, local or other Federal government housing program, and will receive incentives pursuant to \u00a7 248.231 of this part from the Federal government in return for agreeing to conditions related to the continued use of the project as low income housing in accordance with \u00a7 248.233 of this part.\n\n(ii) The Commissioner will not approve prepayment or the termination of mortgage insurance, but will provide incentives to the owner pursuant to \u00a7 248.231 of this part in accordance with a plan of action meeting the standards of \u00a7 248.233 of this part;\n\n(iii) The Commissioner will not approve prepayment or the termination of mortgage insurance, but, after failing to reach agreement on a negotiated plan of action, the owner and the Commissioner will agree to a package of incentives and restrictions prescribed by \u00a7 248.241 of this part; or\n\n(iv) The Commissioner will not approve prepayment or the termination of mortgage insurance, and will not offer incentives of any kind."], ["24:24:2.1.1.2.24.3.211.4", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.213 Plan of action.", "HUD", "", "", "[55 FR 38952, Sept. 21, 1990. Redesignated and amended at 57 FR 12041, 12060, Apr. 8, 1992; 58 FR 37816, July 13, 1993]", "(a)  Preparation and submission.  The owner shall submit the plan of action to the Commissioner in such form and manner as the Commissioner shall prescribe. The owner may submit the plan of action simultaneously to any appropriate State or local government agency, which shall, in reviewing the plan, consult with representatives of the tenants of the housing. An owner shall submit the plan of action to the Commissioner in such form and manner as the Commissioner shall prescribe. The owner shall notify the tenants of the plan of action by posting in each occupied building a summary of the plan of action and by delivery of a copy of the plan of action to the tenant representative, if any. In addition, the summary must indicate that a copy of the plan of action shall be available from the tenant representatives, whose names, addresses and telephone numbers are indicated on the summary, the local HUD field office, and the on-site office for the project, or if one is not available, in the location where rents are collected, for inspection and copying, at a reasonable cost, during normal business hours. Simultaneously with the submission to the Commissioner, the owner shall submit the plan of action to that officer of State or local government to whom the owner submitted a notice of intent under \u00a7 248.211(b). The summary of the plan of action posted by the owner and the copies of the plan of action submitted to the tenant representative and the officer of State or local government shall all state that, upon request, the tenants and the State or local government, may obtain from the owner or from the local HUD field office a copy of all documentation supporting the plan of action except for that documentation deemed \u201cproprietary information\u201d under \u00a7 248.101.\n\n(b)  Contents.  The plan of action shall include:\n\n(1) A description of any proposed changes in the status or terms of the mortgage or regulatory agreement, which may include a request for incentives to extend the low income use of the housing, as authorized under \u00a7 248.231 of this part; or may include a request to terminate the insurance contract.\n\n(2) A description of any assistance that could be provided by State or local government agencies, as determined by prior consultation between the owner and the agencies;\n\n(3) A description of any proposed changes in the low income affordability restrictions;\n\n(4) A description of any proposed changes in ownership related to the plan of action, prepayment or termination of mortgage insurance;\n\n(5) An assessment of the effect of the proposed changes on existing tenants.\n\n(6) In the case of a plan of action involving incentives, an appraisal using the residential income approach;\n\n(7) In the case of a plan of action involving the termination of low income affordability restrictions, a statement of the effect, if any, of the proposed changes on the supply of housing affordable to low and very low income families in the community within which the housing is located and in the area that the housing could reasonably be expected to serve; and\n\n(8) A market study which demonstrates that the project is located in a market area that would enable the Commissioner to make the findings set forth at \u00a7 248.221(b)(1); and\n\n(9) A list of any waivers requested by the owner pursuant to \u00a7 248.7 of this part; and\n\n(10) Any other information which the owner may choose to submit which would enable the owner to meet the criteria for approval of the proposed plan of action."], ["24:24:2.1.1.2.24.3.211.5", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.215 Notification of deficiencies.", "HUD", "", "", "", "Not later than 60 days after receipt of a plan of action, the Commissioner will notify the owner in writing of any deficiencies that prevent the plan of action from being approved. If deficiencies are found, the notice shall describe ways, if any, in which the plan of action could be revised to meet the criteria for approval."], ["24:24:2.1.1.2.24.3.211.6", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.217 Revisions to plan of action.", "HUD", "", "", "[58 FR 37817, July 13, 1993]", "The owner may from time to time revise the plan of action before its approval as may be necessary to obtain the commissioner's approval thereof. An owner shall submit any revision to the Commissioner, and provide a copy of the revision and all documentation supporting the revision except for that documentation deemed \u201cproprietary information\u201d under \u00a7 248.101, to the parties, and in the manner, specified in \u00a7 248.213(a)."], ["24:24:2.1.1.2.24.3.211.7", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.218 Tenant notice and opportunity to comment.", "HUD", "", "", "", "When the owner and the Commissioner have reached preliminary agreement on the terms of a plan of action, the Commissioner shall prepare a summary of such terms and the anticipated impact of the plan of action on the current tenants. The owner shall send a copy of the summary to each tenant in the project, and shall post a copy of the summary in each occupied building in the project. The summary shall notify tenants that they have sixty calendar days in which to submit any comments to the Commissioner, who shall take any such comments into account before giving final approval to the plan of action."], ["24:24:2.1.1.2.24.3.211.8", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.219 Notification of approval.", "HUD", "", "", "", "(a) Not later than 180 days after initial receipt of a plan of action, or within such longer period as the owner requests, the Commissioner shall notify the owner in writing whether the plan of action, including any revisions, is approved.\n\n(b) If approval is withheld, the notice will\u2014\n\n(1) Describe the reasons for withholding approval, including prolonged delay by the owner in submitting a revised plan of action;\n\n(2) Describe the actions that could be taken to meet the criteria for approval; and\n\n(3) Afford the owner a reasonable opportunity to revise the plan of action and seek approval."], ["24:24:2.1.1.2.24.3.211.9", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "C", "Subpart C\u2014Prepayment and Plans of Action Under the Emergency Low Income Preservation Act of 1987", "", "\u00a7 248.221 Approval of a plan of action that involves termination of low income affordability restrictions.", "HUD", "", "", "[55 FR 38952, Sept. 21, 1990. Redesignated and amended at 57 FR 12041, 12060, Apr. 8, 1992]", "The Commissioner may approve a plan of action that involves termination of the low income affordability restrictions only upon a written finding that\u2014\n\n(a) Implementation of the plan of action will not materially increase economic hardship for current tenants (and will not in any event result in: (1) A monthly rental payment by a current tenant that exceeds 30 percent of the monthly adjusted income of the tenant or an increase in the monthly rental payment in any year that exceeds 10 percent, whichever is lower, or (2) in the case of a current tenant who already pays more than such percentage, an increase in the monthly rental payment in any year that exceeds the increase in the Consumer Price Index or 10 percent, whichever is lower) or involuntarily displace current tenants (except for good cause) where comparable and affordable housing is not readily available, determined without regard to the availability of Federal housing assistance that would address any such hardship or involuntary displacement. Notwithstanding this limitation, the Commissioner may provide housing assistance to tenants if such assistance is not essential to the Commissioner's determination that the requirements of this paragraph have been met. The owner will agree to execute and allow the recordation of use agreements, where such agreements are necessary to safeguard current tenants against such adverse effects. Such use agreements will include a requirement that the owner comply with those provisions of part 247 of this chapter which relate to evictions; and\n\n(b)(1) The supply of vacant, comparable housing is sufficient to ensure that the prepayment will not materially affect\u2014\n\n(i) The availability of decent, safe and sanitary housing affordable to low-income and very low income families in the area that the housing could reasonably be expected to serve;\n\n(ii) The ability of low-income and very low income families to find decent, safe and sanitary housing near employment opportunities; or\n\n(iii) The housing opportunities of minorities in the community within which the housing is located; or\n\n(2) The plan of action has been approved by the appropriate State agency and any appropriate local government agency for the jurisdiction in which the housing is located as being in accordance with a State strategy approved by the Commissioner under \u00a7 248.223 of this part.\n\n(c) There are no open audit findings, open findings of noncompliance with title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d); the Fair Housing Act (42 U.S.C. 3601-3619); Executive Order 11063 (3 CFR 1959-1963 comp., p. 652); the Age Discrimination Act of 1975 (42 U.S.C. 6101-6107); section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794); and all regulations promulgated under such statutes and authorities (including, but not limited to, 24 CFR part 100), or outstanding violations of the regulatory agreement.\n\n(d) Any plan of action approved under this section shall specify actions that the Commissioner and the owner shall take to ensure that tenants displaced as a result of the termination of low income affordability restrictions are relocated to affordable housing."], ["24:24:2.1.1.2.24.4.211.1", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.300 General.", "HUD", "", "", "", "Upon application by a State agency or a local public housing agency, the Commissioner may make available assistance for use in preventing the loss of housing affordable for low and moderate income families that is assisted under a State program under the terms of which the owner may prepay a State assisted or subsidized mortgage on such housing."], ["24:24:2.1.1.2.24.4.211.2", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.301 Initial application.", "HUD", "", "", "", "A State agency shall make an initial application to the Commissioner which:\n\n(a) Describes the manner by which the State housing program provides mortgage assistance or subsidy to private mortgagors to provide housing opportunities for low and moderate income families;\n\n(b) Includes copies of the authorizing legislation, any implementing regulations and any administrative guidance provided to owners;\n\n(c) Includes a comprehensive description of the terms and conditions under which a private owner may prepay the assisted or subsidized mortgage without the prior consent of the State agency;\n\n(d) Includes a complete set of pro forma mortgage and/or regulatory documents which evidence an owner's ability to prepay the assisted or subsidized mortgage without the consent of the State agency;\n\n(e) Includes a list of all properties assisted under the State or local housing program whose owners are eligible to prepay the assisted or subsidized mortgages without the consent of the State agency."], ["24:24:2.1.1.2.24.4.211.3", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.303 Approval of a State agency's initial application.", "HUD", "", "", "", "(a) The Commissioner will evaluate the State agency's application and will notify the State agency within 90 days of receipt that the program and properties qualify under subpart D of this part or that the program and properties do not qualify under subpart D of this part.\n\n(b) If the Commissioner determines that the program and projects do not qualify under subpart D of this part, it will state the reasons why the program and properties do not qualify and will give the State agency an opportunity to provide additional information, as the Commissioner determines, which would assist the Commissioner in qualifying the program and properties."], ["24:24:2.1.1.2.24.4.211.4", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.305 Applicability of subpart B of this part.", "HUD", "", "", "", "The provisions of subpart B of this part shall be applicable to any application of a State agency or local housing authority for assistance under subpart D of this part, except the following provisions:\n\nSec. \n \n 248.103 General prepayment limitation. \n \n 248.105 Notice of intent. \n \n 248.131 Information from the Commissioner: Only paragraph (a). \n \n 248.141 Criteria for approval of a plan of action involving prepayment and voluntary termination.\n \n 248.153 Incentives to extend low income use: Only paragraphs (a)(7), (d) and (e). \n \n 248.165 Assistance for displaced tenants. \n \n 248.169 Permissible prepayment or voluntary termination and modification of commitments. \n \n 248.173 Resident homeownership program: Only paragraph (s). \n \n 248.177 Delegated responsibility to State agencies.\n\nSec.\n\n248.103 General prepayment limitation.\n\n248.105 Notice of intent.\n\n248.131 Information from the Commissioner: Only paragraph (a).\n\n248.141 Criteria for approval of a plan of action involving prepayment and voluntary termination.\n\n248.153 Incentives to extend low income use: Only paragraphs (a)(7), (d) and (e).\n\n248.165 Assistance for displaced tenants.\n\n248.169 Permissible prepayment or voluntary termination and modification of commitments.\n\n248.173 Resident homeownership program: Only paragraph (s).\n\n248.177 Delegated responsibility to State agencies."], ["24:24:2.1.1.2.24.4.211.5", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.307 Authority to process and approve notices of intent and plans of action.", "HUD", "", "", "", "(a)  Delegation of authority.  State agencies which regulate or otherwise supervise owners of projects with State assisted or subsidized mortgages shall have the authority, reserved to the Commissioner under subpart B of this part, to process and approve all notices of intent and plans of action submitted to the State agency or local housing authority under subpart D of this part. State agencies may redelegate such authority to local housing authorities at their discretion.\n\n(b)  Designation of processing agency.  The Executive Director of the State agency whose State assisted or subsidized mortgage program has been approved under \u00a7 248.303 shall inform all owners of projects with State assisted or subsidized mortgages that the State agency or a designated local housing authority shall accept and process notices of intent and plans of action."], ["24:24:2.1.1.2.24.4.211.6", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.311 Notice of intent.", "HUD", "", "", "", "(a)  Eligibility for filing.  An owner of a project with a State assisted or subsidized mortgage intending to extend the low income affordability restrictions of the housing in accordance with \u00a7 248.153 or transfer the housing to a qualified purchaser under \u00a7 248.157 may file a notice of intent.\n\n(b)  Filing with the State agency.  The notice of intent shall be filed with the agency specified in \u00a7 248.307(b) or the agency which regulates or otherwise supervises the State assisted or subsidized mortgage. The notice of intent shall also request the tenants to notify the owner and the State agency of any individual or organization that has been designated or retained by the tenants to represent the tenants with respect to the actions to be taken under subpart B and subpart D of this part.\n\n(c)  Filing with HUD, mortgagee and tenants.  The owner simultaneously shall file the notice of intent with the local HUD field office having jurisdiction over the area in which the project is located and with the mortgagee, if any. In addition, the owner shall deliver a copy of the notice of intent to each tenant in the project and to any tenant representative, if any, known to the owner, and shall post a copy of the notice of intent in readily accessible locations within each affected building of the project. The copies of the notice of intent delivered to the tenants and the tenant representative shall include a summary of possible outcomes of the filing which shall be furnished by the State agency. Upon the request of any non-English speaking tenants residing in the affected project, the owner shall tabulate the number and type of translations needed by the tenants and request the State agency to provide the appropriate translations. The owner shall deliver a copy of the translated notice of intent to all of the tenants who requested such a translation. The failure of an owner to comply with any non-federal notice requirements shall not invalidate the notice of intent."], ["24:24:2.1.1.2.24.4.211.7", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.315 Preservation agreements.", "HUD", "", "", "", "(a)  Agreements required.  Owners of projects with State assisted or subsidized mortgages whose plans of action have been approved under \u00a7 248.307 shall enter into agreements, contracts and/or mortgage modifications with the State agency or local housing authority to maintain the housing as affordable to tenants in accordance with \u00a7 248.145. Such agreements may provide for the renewal of any assistance made available under \u00a7 248.319(c).\n\n(b)  Term of agreement.  Preservation agreements shall be coterminous with the expiration of any assistance provided under \u00a7 248.153 and made available in accordance with \u00a7 248.319(c)."], ["24:24:2.1.1.2.24.4.211.8", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "D", "Subpart D\u2014State Preservation Project Assistance", "", "\u00a7 248.319 Application for assistance.", "HUD", "", "", "", "(a)  Application for assistance.  State agencies or local housing authorities shall submit an application for assistance in a form prescribed by the Commissioner with the local HUD field office having jurisdiction over the project. The application shall include:\n\n(1) A copy of the approved plan of action, including all applicable notices of intent;\n\n(2) A copy of any worksheet or other document which demonstrates the extension and transfer preservation values of the project, the Federal cost limits (including the determination of relevant local market rents if applicable), and the preservation rents;\n\n(3) A request for each incentive required as part of the approved plan of action and the amount thereof;\n\n(4) A demonstration and certification by the Executive Director of the State agency or local housing authority that the assistance and incentives requested as part of the approved plan of action do not exceed the level of incentives required for a similarly situated project which is eligible low income housing as defined in subpart B of this part;\n\n(5) Copies of proposed agreements, contracts and mortgage modifications proposed pursuant to \u00a7 248.315.\n\n(b)  Notification of approval.  Not later than 90 days after receipt of the application for assistance, the local HUD field office shall notify the Executive Director of the State agency or local housing authority of the approval or disapproval of the application. If the application is disapproved, the notification shall state the reasons therefor and afford the State agency or local housing authority the opportunity to revise the application to make it approvable.\n\n(c)  Funding.  After approving the State agency's or local housing authority's application for assistance, the HUD field office shall make the assistance in the approved application available to the State agency or local housing authority within the time frames specified in \u00a7 248.169.\n\n(d)  Agreements.  The State agency or local housing authority shall provide the local HUD field office with a copy of all agreements entered into with the owner pursuant to \u00a7 248.315.\n\n(e)  Section 8 contract administration.  Any contract for Section 8 assistance made pursuant to the approved plan of action, the State agency's or local housing authority's application for assistance and the regulations at 24 CFR 886, subpart A shall be administered by the State agency or local housing authority pursuant to \u00a7 886.120 of this title."], ["24:24:2.1.1.2.24.5.211.1", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "E", "Subpart E\u2014Technical Assistance and Capacity Building", "", "\u00a7 248.401 Purposes.", "HUD", "", "", "", "The purposes of this subpart are:\n\n(a) To promote the ability of residents of eligible low income housing to participate meaningfully in the preservation process established by this part and affect decisions about the future of their housing;\n\n(b) To promote the ability of community-based nonprofit organizations and resident councils to acquire, rehabilitate, and competently own and manage eligible housing as rental or cooperative housing for low and moderate income people; and\n\n(c) To assist the Commissioner in discharging the obligation under \u00a7 248.157(b) to notify potential qualified purchasers of the availability of projects for sale and to otherwise facilitate the coordination and oversight of the preservation program established under this part."], ["24:24:2.1.1.2.24.5.211.2", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "E", "Subpart E\u2014Technical Assistance and Capacity Building", "", "\u00a7 248.405 Grants for building resident capacity and funding predevelopment costs.", "HUD", "", "", "", "(a)  General.  Assistance made available under this subpart shall be used for direct assistance grants to resident organizations and community-based nonprofit housing developers and resident councils to assist the acquisition of specific projects (including payment of reasonable administrative expense to participating intermediaries.) Assistance made available under subpart E of this part will be distributed on a noncompetitive basis. HUD will publish a Notice in the  Federal Register  announcing the availability of assistance, as well as the application requirements and procedures and selection criteria that HUD will use in making the assistance available.\n\n(b)  Allocation.  Thirty percent of the assistance made available under this subpart shall be used for resident capacity grants in accordance with paragraph (d) of this section. The remainder shall be used for predevelopment grants in connection with specific projects in accordance with paragraph (e) of this section.\n\n(c)  Limitation on grant amounts.  A resident capacity grant under paragraph (d) of this section may not exceed $30,000 per project and a grant under paragraph (e) of this section for predevelopment costs may not exceed $200,000 per project, exclusive of any fees paid to a participating intermediary by the Commissioner for administering grants under this subpart.\n\n(d)  Resident Capacity grants \u2014(1)  Use.  Resident capacity grants under paragraph (d) of this section shall be available to eligible applicants to cover expenses for resident outreach, incorporation of a resident organization or council, conducting democratic elections, training, leadership development, legal and other technical assistance to the board of directors, staff and members of the resident organization or council.\n\n(2)  Eligible housing.  Grants under this paragraph (d) of this section may be provided with respect to eligible low income housing for which the owner has filed a notice of intent under subpart B or subpart C of this part.\n\n(e)  Predevelopment grants \u2014(1)  Use.  Predevelopment grants under paragraph (e) of this section shall be made available to community-based nonprofit housing developers and resident councils to cover the cost of organizing a purchasing entity and pursuing an acquisition, including third party costs for training, development consulting, legal, appraisal, accounting, environmental, architectural and engineering, application fees, and sponsor's staff and overhead costs.\n\n(2)  Eligible housing.  These grants may only be made available with respect to any eligible low income housing project for which the owner has filed a notice of intent to transfer the housing to a qualified purchaser in accordance with \u00a7 248.105 or \u00a7 248.211, or has filed a notice of intent and entered into a binding agreement to sell the housing to a resident organization or nonprofit organization.\n\n(3)  Phase-in of grant payments.  Grant payments under paragraph (e) of this section shall be made in phases, based on performance benchmarks established by the Commissioner in consultation with intermediaries selected under \u00a7 248,415.\n\n(f)  Grant applications.  Grant applications for assistance under paragraphs (d) and (e) of this section shall be received monthly on a rolling basis and approved or rejected on at least a quarterly basis by intermediaries selected under \u00a7 248.415(b).\n\n(g)  Appeal.  If an application for assistance under paragraphs (d) or (e) of this section is denied, the applicant shall have the right to appeal the denial to the Commissioner and receive a binding determination within 30 days of the appeal."], ["24:24:2.1.1.2.24.5.211.3", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "E", "Subpart E\u2014Technical Assistance and Capacity Building", "", "\u00a7 248.410 Grants for other purposes.", "HUD", "", "", "", "The Commissioner may provide grants under this subpart E:\n\n(a) To resident-controlled or community-based nonprofit organizations with experience in resident education and organizing for the purpose of conducting community, city or countywide outreach and training programs to identify and organize residents of eligible low income housing; and\n\n(b) To State and local government agencies and nonprofit intermediaries for the purpose of carrying out such activities as the Commissioner deems appropriate to further the purposes of this part."], ["24:24:2.1.1.2.24.5.211.4", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "E", "Subpart E\u2014Technical Assistance and Capacity Building", "", "\u00a7 248.415 Delivery of assistance through intermediaries.", "HUD", "", "", "", "(a)  General.  The Commissioner shall approve and disburse assistance under \u00a7 248.405 and \u00a7 248.410 through eligible intermediaries selected by the Commissioner under paragraph (b) of this section. If the Commissioner does not receive an acceptable proposal from an intermediary offering to administer assistance under this section in a given State, the Commissioner shall administer the program in such State directly.\n\n(b)  Selection of eligible intermediaries \u2014(1)  In General.  The Commission shall invite applications from and shall select eligible intermediaries to administer assistance under subpart E of this part through Notices of Funding Availability published in the  Federal Register.  The process shall include provision for a reasonable administrative fee.\n\n(2)  Priority.  With respect to all forms of grants available under \u00a7 248.405, the criteria for selecting eligible intermediaries shall give priority to applications from eligible intermediaries with demonstrated expertise under subpart B or subpart C of this part.\n\n(3)  Criteria.  The criteria developed under this section shall:\n\n(i) Not assign any preference or priority to applications from eligible intermediaries based on their previous participation in administering or receiving Federal grants or loans (but may exclude applicants who have failed to perform under prior contracts of a similar nature);\n\n(ii) Require an applicant to prepare a proposal that demonstrates adequate staffing, qualifications, prior experience, and a plan for participation; and\n\n(iii) Permit an applicant to serve as the administrator of assistance made available under \u00a7 248.405(d) and (e), based on the applicant's suitability and interest.\n\n(4)  Geographic coverage.  The Commissioner may select more than one State or regional intermediary for a single State or region. The number of intermediaries chosen for each State or region may be based on the number of eligible low income housing projects in the State or region, provided there is no duplication of geographic coverage by intermediaries in the administration of the direct assistance grant program.\n\n(5)  National nonprofit intermediaries.  National nonprofit intermediaries shall be selected to administer the assistance made available under \u00a7 248.405 only with respect to State or regions for which no other eligible intermediary, acceptable to the Commissioner, has submitted a proposal to participate.\n\n(6)  Preference.  With respect to assistance made available under \u00a7 248.410, preference shall be given to eligible regional, State and local intermediaries, over national nonprofit organizations.\n\n(c)  Conflicts of interest.  Eligible intermediaries selected under paragraph (b) of this section to disburse assistance under \u00a7 248.405 shall certify that they will serve only as delegated program administrators, charged with the responsibility for reviewing and approving grant applications on behalf of the Commissioner. Selected intermediaries shall:\n\n(1) Establish appropriate procedures for grant administration and fiscal management, pursuant to standards established by the Commissioner; and\n\n(2) Receive a reasonable administrative fee, except that they may not provide other services to grant recipients with respect to projects that are the subject of the grant application and may not receive payment, directly or indirectly, from the proceeds of grants they have approved."], ["24:24:2.1.1.2.24.5.211.5", 24, "Housing and Urban Development", "II", "B", "248", "PART 248\u2014PREPAYMENT OF LOW INCOME HOUSING MORTGAGES", "E", "Subpart E\u2014Technical Assistance and Capacity Building", "", "\u00a7 248.420 Definitions.", "HUD", "", "", "", "Community-based nonprofit housing developer  means a nonprofit community development corporation that:\n\n(1) Has been classified by the Internal Revenue Service as an exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986;\n\n(2) Has been in existence for at least two years prior to the date of the grant application;\n\n(3) Has a record of service to low and moderate income people in the community in which the project is located;\n\n(4) Is organized at the neighborhood, city, county, or multi-county level; and\n\n(5) In the case of a corporation acquiring eligible low income housing under subpart B of this part, agrees to form a purchaser entity that conforms to the definition of a community-based nonprofit organization under such subpart and agrees to use its best efforts to secure majority tenant consent to the acquisition of the project for which grant assistance is requested.\n\nEligible intermediaries.  For purposes of this subpart, the term \u201celigible intermediary\u201d means a State, regional, or national nonprofit organization (including a quasi-public organization) or a State or local housing agency that:\n\n(1) Has as a central purpose the preservation of existing affordable housing and the prevention of displacement;\n\n(2) Does not receive direct Federal appropriations for operating support;\n\n(3) In the case of a national nonprofit organization, has been in existence for at least five years prior to the date of application and has been classified by the Internal Revenue Service as an exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986;\n\n(4) In the case of a regional or State nonprofit organization, has been in existence for at least three years prior to the date of application and has been classified by the Internal Revenue Service as an exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986 or is otherwise a tax-exempt entity;\n\n(5) Has a record of service to low income individuals or community-based nonprofit housing development in multiple communities and, with respect to intermediaries administering assistance under \u00a7 248.405, has experience with the allocation or administration of grant or loan funds; and\n\n(6) Meets standards of fiscal responsibility established by the Commissioner."], ["7:7:4.1.1.1.12.1.1.1", 7, "Agriculture", "II", "A", "248", "PART 248\u2014WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)", "A", "Subpart A\u2014General", "", "\u00a7 248.1 General purpose and scope.", "FNS", "", "", "", "This part announces regulations under which the Secretary of Agriculture shall carry out the WIC Farmers' Market Nutrition Program. The dual purposes of the FMNP are:\n\n(a) To provide resources in the form of fresh, nutritious, unprepared foods (fruits and vegetables) from farmers' markets to women, infants, and children who are nutritionally at risk and who are participating in the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) or are on the waiting list for the WIC Program; and\n\n(b) To expand the awareness, use of and sales at farmers' markets.\n\nThis will be accomplished through payment of cash grants to approved State agencies which administer the FMNP and deliver benefits at no cost to eligible persons. The FMNP shall be supplementary to the food stamp program carried out under the Food Stamp Act of 1977 (7 U.S.C. 2011  et seq. ) and to any other Federal or State program under which foods are distributed to needy families in lieu of food stamps."], ["7:7:4.1.1.1.12.1.1.2", 7, "Agriculture", "II", "A", "248", "PART 248\u2014WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)", "A", "Subpart A\u2014General", "", "\u00a7 248.2 Definitions.", "FNS", "", "", "[59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49745, Sept. 27, 1995; 64 FR 48076, Sept. 2, 1999; 73 FR 65249, Nov. 3, 2008]", "For the purpose of this part and all contracts, guidelines, instructions, forms and other documents related hereto, the term:\n\nAdministrative costs  means those direct and indirect costs, exclusive of food costs, as defined in \u00a7 248.12(b), which State agencies determine to be necessary to support FMNP operations. Administrative costs include, but are not limited to, the costs of administration, start-up, training, monitoring, auditing, the development of and accountability for coupon and market management, nutrition education, outreach, eligibility determination, and developing, printing, and distributing coupons.\n\nCompliance buy  means a covert, on-site investigation in which a FMNP representative poses as a FMNP participant and transacts one or more FMNP food coupons.\n\nCoupon  means a coupon, voucher, or other negotiable financial instrument by which benefits under the FMNP are transferred to recipients.\n\nDays  means calendar days.\n\nDemonstration project  means the Farmers' Market Coupon Demonstration Project authorized by section 17(m) of the Child Nutrition Act of 1966 (CNA), (42 U.S.C. 1786(m)), as amended by section 501 of the Hunger Prevention Act of 1988 (Pub. L. 100-435), enacted September 19, 1988. Public Law 102-314 authorized the Secretary to competitively award, subject to the availability of funds, a 3-year grant (which was subsequently extended for an additional year by Public Law 102-142) to up to 10 States that submitted applications that were approved for the establishment of demonstration projects designed to provide WIC participants with coupons that could be exchanged for fresh, nutritious, unprepared foods at farmers' markets. Those States are: Connecticut, Iowa, Maryland, Massachusetts, Michigan, New York, Pennsylvania, Texas, Vermont, and Washington.\n\nDepartment  means the U.S. Department of Agriculture.\n\nEligible foods  means fresh, nutritious, unprepared, locally grown fruits, vegetables and herbs for human consumption. Eligible foods may not be processed or prepared beyond their natural state except for usual harvesting and cleaning processes. Honey, maple syrup, cider, nuts, seeds, eggs, meat, cheese and seafood are examples of foods not eligible for purposes of the FMNP. State agencies shall consider locally grown to mean produce grown only within State borders but may also define it to include areas in neighboring States adjacent to its borders. Under no circumstances can produce grown outside of the United States and its territories be considered eligible foods.\n\nFarmer  means an individual authorized to sell produce at participating farmers' markets and/or roadside stands. Individuals who exclusively sell produce grown by someone else, such as wholesale distributors, cannot be authorized to participate in the FMNP. For purposes of this part, the term \u201cfarmer\u201d shall mean \u201cproducer\u201d as that term is used in section 17(m)(6)(D) of the CNA (42 U.S.C. 1786(m)(6)(D)). A participating State agency has the option to authorize individual farmers, farmers' markets and/or roadside stands.\n\nFarmers' market  means an association of local farmers who assemble at a defined location for the purpose of selling their produce directly to consumers.\n\nFiscal year  means the period of 12 calendar months beginning October 1 of any calendar year and ending September 30 of the following calendar year.\n\nFMNP funds  means Federal grant funds provided for the FMNP, plus the required matching funds.\n\nFNS  means the Food and Nutrition Service of the U.S. Department of Agriculture.\n\nFood costs  means the cost of eligible supplemental foods.\n\nHousehold  has the same definition as that of \u201cfamily\u201d defined in \u00a7 246.2 of this chapter. Each such family shall constitute a separate household for FMNP benefit issuance purposes.\n\nIn-kind contributions  means property or services which benefit the FMNP and which are contributed by non-Federal parties without charge to the FMNP.\n\nLocal agency  means any nonprofit entity or local government agency which issues FMNP coupons, and provides nutrition education and/or information on operational aspects of the FMNP to FMNP recipients.\n\nMatching requirement  means State, local or private funds, or program income, equal to not less than 30 percent of the administrative FMNP cost for the fiscal year. The Secretary may negotiate with an Indian State agency a lower percentage of matching funds, but not less than 10 percent of the administrative cost of the program, if the Indian State agency demonstrates to the Secretary financial hardship for the affected Indian tribe, band, group, or council. The match may be satisfied through expenditures for similar farmers' market programs which operate during the same period as the FMNP. Similar programs include other farmers' market programs which serve low-income women, infants and children (who may or may not be WIC participants or on the waiting list for WIC services), as well as other categories of low-income recipients, such as, but not limited to, low-income elderly persons.\n\nNonprofit agency  means a private agency which is exempt from income tax under the Internal Revenue Code of 1986, as amended, (26 U.S.C. 1  et. seq. ).\n\nNutrition education  means individual or group education sessions and the provision of information and educational materials designed to improve health status, achieve positive change in dietary habits, and emphasize relationships between nutrition and health, all in keeping with the individual's personal, cultural, and socioeconomic preferences.\n\nOIG  means the Department's Office of the Inspector General.\n\nProgram or FMNP  means the WIC Farmers' Market Nutrition Program authorized by section 17(m) of the Child Nutrition Act of 1966 (CNA) (42 U.S.C. 1786(m)), as amended. The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) is authorized by section 17 of the CNA, as amended. Within section 17, section 17(m) authorizes the FMNP.\n\nRecipient  means a person chosen by the State agency to receive FMNP benefits. Such person must be a woman, infant over 4 months of age, or child, who receives benefits under the WIC Program or is on the waiting list to receive benefits under the WIC Program.\n\nRoadside stand  means a location at which an individual farmer sells his/her produce directly to consumers. This is in contrast to a group or association of farmers selling their produce at a farmers' market.\n\nSFPD  means the Supplemental Food Programs Division of the Food and Nutrition Service of the U.S. Department of Agriculture.\n\nSimilar programs  means other farmers' market projects or programs which serve low-income women, infants and children, or other categories of recipients, such as, but not limited to, elderly persons.\n\nState  means any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Marianas Islands.\n\nState agency  means the agriculture department, the health department or any other agency approved by the chief executive officer of the State; an Indian tribe, band or group recognized by the Department of the Interior; an intertribal council or group which is an authorized representative of Indian tribes, bands or groups recognized by the Department of the Interior and which has an ongoing relationship with such tribes, bands or groups for other purposes and has contracted with them to administer the Program; or the appropriate area office of the Indian Health Service (IHS), an agency of the Department of Health and Human Services.\n\nState Plan  means a plan of FMNP operation and administration that describes the manner in which the State agency intends to implement, operate and administer all aspects of the FMNP within its jurisdiction in accordance with \u00a7 248.4.\n\nTotal FMNP funds  means the sum of the Federal funds provided to the State agency and non-Federal contributions provided by the State agency for FMNP purposes.\n\nWIC  means the Special Supplemental Nutrition Program for Women, Infants and Children authorized by section 17 of the Child Nutrition Act of 1966, as amended (42 U.S.C. 1771  et. seq. )."], ["7:7:4.1.1.1.12.1.1.3", 7, "Agriculture", "II", "A", "248", "PART 248\u2014WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)", "A", "Subpart A\u2014General", "", "\u00a7 248.3 Administration.", "FNS", "", "", "[59 FR 11517, Mar. 11, 1994, as amended at 76 FR 37983, June 29, 2011; 81 FR 66496, Sept. 28, 2016]", "(a)  Delegation to FNS.  Within the Department, FNS shall act on behalf of the Department in the administration of the FMNP. Within FNS, SFPD and the FNS Regional Offices are responsible for FMNP administration. FNS shall provide assistance to State agencies and evaluate all levels of FMNP operations to ensure that the goals of the FMNP are achieved in the most effective and efficient manner possible.\n\n(b)  Delegation to State agency.  The State agency is responsible for the effective and efficient administration of the FMNP in accordance with the requirements of this part; the requirements of the Department's regulations governing nondiscrimination (7 CFR parts 15, 15a and 15b), administration of grants (2 CFR part 200, subparts A, B, D, E and F and USDA implementing regulations 2 CFR part 400 and part 415), nonprocurement debarment/suspension (2 CFR part 180, OMB Guidelines to Agencies on Government-wide Debarment and Suspension and USDA implementing regulations 2 CFR part 417), drug-free workplace (2 CFR part 182, Government-wide Requirements for Drug-Free Workplace), and lobbying (2 CFR part 200, subpart E and USDA implementing regulations 2 CFR part 400, part 415 and part 418); and, Office of Management and Budget Circular A-130, FNS guidelines, and Instructions issued under the FNS Directives Management System. The State agency shall provide guidance to cooperating WIC State and local agencies on all aspects of FMNP operations. Pursuant to section 17(m)(2) of the CNA, State agencies may operate the FMNP locally through nonprofit organizations or local government entities and must ensure coordination among the appropriate agencies and organizations.\n\n(c)  Agreement and State Plan.  (1) Each State agency desiring to administer the FMNP shall annually submit a State Plan and enter into a written agreement with the Department for administration of the Program in the jurisdiction of the State agency in accordance with the provisions of this part.\n\n(2) The written agreement must include a statement that supports full use of Federal funds provided to State agencies for the administration of the FMNP, and excludes such funds from State budget restrictions or limitations, including hiring freezes, work furloughs, and travel restrictions.\n\n(d)  State agency ineligibility.  A State agency shall be ineligible to participate in the FMNP if State or local sales tax is collected on Program food purchases in the area in which it administers the Program, except that, if sales tax is collected on Program food purchases by sovereign Indian entities which are not State agencies, the State agency shall remain eligible so long as any farmers' markets collecting such tax are disqualified.\n\n(e)  Coordination with WIC agency.  The Chief Executive Officer of the State shall ensure coordination between the designated administering State agency and the WIC State agency, if different, by ensuring that the two agencies enter into a written agreement. Such coordination between agencies is necessary for the successful operation of the FMNP, because WIC participants or persons on the waiting list for WIC services are the only persons eligible to receive Federal benefits under the FMNP. The written agreement shall delineate the responsibilities of each agency, describe any compensation for services, and shall be signed by the designated representative of each agency. This agreement shall be submitted each year along with the State Plan.\n\n(f)  State staffing standards.  Each State agency shall ensure that sufficient staff is available to efficiently and effectively administer the FMNP. This shall include, but not be limited to, sufficient staff to provide nutrition education in coordination with the WIC Program, coupon and market management, fiscal reporting, monitoring, and training. The State agency shall provide an outline of administrative staff and job descriptions for staff whose salaries will be paid from program funds in their State Plans."], ["7:7:4.1.1.1.12.2.1.1", 7, "Agriculture", "II", "A", "248", "PART 248\u2014WIC FARMERS' MARKET NUTRITION PROGRAM (FMNP)", "B", "Subpart B\u2014State Agency Eligibility", "", "\u00a7 248.4 State Plan.", "FNS", "", "", "[59 FR 11517, Mar. 11, 1994, as amended at 60 FR 49746, Sept. 27, 1995; 64 FR 48076, Sept. 2, 1999; 73 FR 65249, Nov. 3, 2008]", "(a)  Requirements.  By November 15 of each year, each applying or participating State agency shall submit to FNS for approval a State Plan for the following year as a prerequisite to receiving funds under this section. The State Plan shall be signed by the State designated official responsible for ensuring that the Program is operated in accordance with the State Plan. FNS will provide written approval or denial of a completed State Plan or amendment within 30 days. Portions of the State Plan which do not change annually need not be resubmitted. However, the State agency shall provide the title of the sections that remain unchanged, as well as the year of the last Plan in which the sections were submitted. At a minimum, the Plan must address the following areas in sufficient detail to demonstrate the State agency's ability to meet the requirements of the FMNP:\n\n(1) A copy of the agreement between the designated administering State agency and the WIC State agency, if different, for services such as nutrition education, and documentation of coordinated efforts as required in \u00a7 248.3(e), as well as copies of agreements with agencies other than the WIC State agency.\n\n(2) Estimated number of recipients for the fiscal year, and proposed months of operation.\n\n(3) Estimated cost of the FMNP, including a minimum amount necessary to operate the FMNP.\n\n(4) Description of how the Program will achieve its dual purposes of providing a nutritional benefit to WIC (or waiting list) participants and expanding the awareness and use of farmers' markets.\n\n(5) Outline of administrative staff and job descriptions.\n\n(6) Detailed description of the recordkeeping system including, but not limited to, the system for maintaining records pertaining to financial operations, coupon issuance and redemption, and FMNP participation.\n\n(7) Detailed description of the financial management system, including, but not limited to documentation of how the State will meet the matching requirement and procedures for obligating funds.\n\n(8) Detailed description of the service area including:\n\n(i) The number and addresses of participating markets, roadside stands and area WIC clinics including a map outlining the service area and proximity of markets/roadside stands to clinics; and\n\n(ii) Estimated number of WIC participants and persons on the WIC waiting list that will receive FMNP coupons.\n\n(9) Description of the coupon issuance system including:\n\n(i) How the State agency will target areas with highest concentrations of eligible persons and greatest access to farmers' markets within the broadest possible geographic area;\n\n(ii) Annual benefit amount per recipient;\n\n(iii) Method for instructing recipients on the proper use of FMNP coupons and the purpose of the FMNP; and\n\n(iv) Method for ensuring that FMNP coupons are only issued to eligible recipients.\n\n(10) Detailed description of the coupon and farmers' market management system including:\n\n(i) Criteria for authorizing farmers' markets and/or roadside stands;\n\n(ii) Procedures for training farmers and market managers, at authorization, and annually thereafter;\n\n(iii) Procedures for monitoring farmers, farmers' markets and/or roadside stands;\n\n(iv) Description of system for identifying high risk farmers, farmers' markets and/or roadside stands and procedures for sanctioning farmers, farmers' markets and/or roadside stands;\n\n(v) Facsimile of the FMNP coupon;\n\n(vi) Identification of the fresh, nutritious, unprepared fruits, vegetables, and herbs which are eligible for purchase under the Program;\n\n(vii) Description of FMNP coupon replacement policy;\n\n(viii) Procedures for handling recipient and farmer/farmers' market complaints.\n\n(11) Detailed description of the FMNP coupon redemption process including:\n\n(i) Procedures for ensuring the secure transportation and storage of FMNP coupons;\n\n(ii) System for identifying and reconciling FMNP coupons;\n\n(iii) Timeframes for FMNP coupon redemption by recipients; submission for payment by markets, and payment by the State agency;\n\n(12) System for ensuring that FMNP coupons are redeemed only by authorized farmers, farmers' markets and/or roadside stands and only for eligible foods.\n\n(13) System for identifying FMNP coupons which are redeemed or submitted for payment outside valid dates or by unauthorized farmers, farmers' markets and/or roadside stands.\n\n(14) A copy of the written agreement to be used between the State agency and authorized farmers, farmers' markets and/or roadside stands. In those States which authorize farmers' markets, but not individual farmers, this agreement shall specify in detail the role of and procedures to be used by farmers' markets for monitoring and sanctioning farmers, and the appropriate procedures to be used by a farmer to appeal a sanction or disqualification imposed by a farmers' market.\n\n(15) If available, information on the change in consumption of fresh fruits and vegetables by recipients. This information shall be submitted as an addendum to the State Plan and shall be submitted at such a date specified by the Secretary.\n\n(16) If available, information on the effects of the program on farmers' markets. This information shall be submitted as an addendum to the State Plan and shall be submitted at such a date specified by the Secretary.\n\n(17) A description of the procedures the State agency will use to comply with the civil rights requirements described in \u00a7 248.7(a), including the processing of discrimination complaints.\n\n(18) State agencies which have not previously participated in the FMNP, shall provide the following additional information:\n\n(i) A statement assuring that if the State agency receives Federal funds, as specified under \u00a7 248.14 to operate the FMNP, and applies those funds to similar programs operated in the previous fiscal year with State or local funds, the amount of State and local funds that were available to similar programs in the fiscal year preceding the first year of operation shall not be reduced. The State agency shall include data in the State Plan showing that it did not reduce the amount of State and local funds available to the similar program in the preceding fiscal year.\n\n(ii) A capability statement which includes a summary description of any prior experience with farmers' market projects or programs, including information and data describing the attributes of such projects or programs.\n\n(19) For States making expansion requests, documentation which demonstrates:\n\n(i) The need for an increase in funding;\n\n(ii) That the use of the increased funding will be consistent with serving WIC participants, or persons on a waiting list for WIC benefits, by expanding benefits to more persons, by enhancing current benefits, or a combination of both, and expanding the awareness and use of farmers' markets;\n\n(iii) The ability to satisfactorily operate the existing FMNP;\n\n(iv) The management capabilities of the State agency to expand; and\n\n(v) Whether, in the case of a State agency that intends to use the funding to increase the value of the Federal share of the benefits received by a recipient, the funding provided will increase the rate of coupon redemption.\n\n(20) For those State agencies requesting the extra 2 percent administrative rate for market development or technical assistance to promote such development in disadvantaged areas or remote rural areas, an explanation of their justification and plans for the use of such funds.\n\n(b)  Amendments.  At any time after approval, the State agency may amend the State Plan to reflect changes. The State agency shall submit the amendments to FNS for approval. The amendments shall be signed by the State designated official responsible for ensuring that the FMNP is operated in accordance with the State Plan.\n\n(c)  Retention of copy.  A copy of the approved State Plan shall be kept on file at the State agency for public inspection."]], "truncated": false, "filtered_table_rows_count": 122, "expanded_columns": [], "expandable_columns": [], "columns": ["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"], "primary_keys": ["section_id"], "units": {}, "query": {"sql": "select 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 from cfr_sections where \"part_number\" = :p0 order by section_id limit 101", "params": {"p0": "248"}}, "facet_results": {"title_number": {"name": "title_number", "type": "column", "hideable": false, "toggle_url": "/openregs/cfr_sections.json?part_number=248", "results": [{"value": 24, "label": 24, "count": 57, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&title_number=24", "selected": false}, {"value": 17, "label": 17, "count": 35, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&title_number=17", "selected": false}, {"value": 7, "label": 7, "count": 26, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&title_number=7", "selected": false}, {"value": 14, "label": 14, "count": 4, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&title_number=14", "selected": false}], "truncated": false}, "agency": {"name": "agency", "type": "column", "hideable": false, "toggle_url": "/openregs/cfr_sections.json?part_number=248", "results": [{"value": "HUD", "label": "HUD", "count": 57, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&agency=HUD", "selected": false}, {"value": "SEC", "label": "SEC", "count": 35, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&agency=SEC", "selected": false}, {"value": "FNS", "label": "FNS", "count": 26, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&agency=FNS", "selected": false}, {"value": "FAA", "label": "FAA", "count": 4, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&agency=FAA", "selected": false}], "truncated": false}, "part_number": {"name": "part_number", "type": "column", "hideable": false, "toggle_url": "/openregs/cfr_sections.json?part_number=248", "results": [{"value": "248", "label": "248", "count": 122, "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json", "selected": true}], "truncated": false}}, "suggested_facets": [{"name": "title_name", "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&_facet=title_name"}, {"name": "subchapter", "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&_facet=subchapter"}, {"name": "part_name", "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&_facet=part_name"}, {"name": "subpart", "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&_facet=subpart"}, {"name": "subpart_name", "toggle_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&_facet=subpart_name"}], "next": "7~3A7~3A4~2E1~2E1~2E1~2E12~2E2~2E1~2E1,7~3A7~3A4~2E1~2E1~2E1~2E12~2E2~2E1~2E1", "next_url": "https://www.pawtectors.org/openregs/cfr_sections.json?part_number=248&_next=7~3A7~3A4~2E1~2E1~2E1~2E12~2E2~2E1~2E1%2C7~3A7~3A4~2E1~2E1~2E1~2E12~2E2~2E1~2E1&_sort=section_id", "private": false, "allow_execute_sql": true, "query_ms": 834.6174720209092, "source": "Federal Register API & Regulations.gov API", "source_url": "https://www.federalregister.gov/developers/api/v1", "license": "Public Domain (U.S. Government data)", "license_url": "https://www.regulations.gov/faq"}