[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR1003.606]

[Page 800-801]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
 
PART 1003_COMMUNITY DEVELOPMENT BLOCK GRANTS FOR INDIAN TRIBES AND ALASKA 
 
                  Subpart G_Other Program Requirements
 
Sec.  1003.606  Conflict of interest.

    (a) Applicability. (1) In the procurement of supplies, equipment, 
construction, and services by grantees and subgrantees, the conflict of 
interest provisions in 24 CFR 85.36 and 24 CFR 84.42 shall apply.
    (2) In all cases not governed by 24 CFR 85.36 and 24 CFR 84.42, the 
provisions of this section shall apply. Such cases include the provision 
of assistance by the grantee or by its subrecipients to businesses, 
individuals, and other private entities under eligible activities that 
authorize such assistance (e.g., rehabilitation, preservation, and other 
improvements of private properties or facilities under Sec.  1003.202; 
or grants, loans, and other assistance to businesses, individuals, and 
other private entities under Sec.  1003.203 or Sec.  1003.204.).
    (b) Conflicts prohibited. Except for the use of ICDBG funds to pay 
salaries and other related administrative or personnel costs, the 
general rule is that no persons described in paragraph (c) of this 
section who exercise or have exercised any functions or responsibilities 
with respect to ICDBG activities assisted under this part or who are in 
a position to participate in a decision-making process or gain inside 
information with regard to such activities, may obtain a personal or 
financial interest or benefit from an ICDBG assisted activity, or have 
an interest in any contract, subcontract or agreement with respect 
thereto, or the proceeds thereunder, either for themselves or those with 
whom they have family or business ties, during their tenure or for one 
year thereafter.
    (c) Persons covered. The conflict of interest provisions of 
paragraph (b) of this section apply to any person who is an employee, 
agent, consultant, officer, or elected or appointed official of the 
grantee, or of any designated public agencies, or CBDOs under Sec.  
1003.204, receiving funds under this part.
    (d) Exceptions requiring HUD approval.--(1) Threshold requirements. 
Upon the written request of a grantee, HUD may grant an exception to the 
provisions of paragraph (b) of this section on a case-by-case basis, 
when it determines that such an exception will serve to further the 
purposes of the Act and the effective and efficient administration of 
the grantee's program or project. An exception may be considered only 
after the grantee has provided the following:
    (i) A disclosure of the nature of the possible conflict, accompanied 
by an assurance that there has been public disclosure of the conflict 
and a description of how the public disclosure was made; and
    (ii) An opinion of the grantee's attorney that the interest for 
which the exception is sought would not violate Tribal laws on conflict 
of interest, or applicable State laws.
    (2) Factors to be considered for exceptions: In determining whether 
to grant a requested exception after the grantee has satisfactorily met 
the requirements of paragraph (d)(1) of this section, HUD shall consider 
the cumulative effect of the following factors, where applicable:
    (i) Whether the exception would provide a significant cost benefit 
or essential expert knowledge to the program or project which would 
otherwise not be available;
    (ii) Whether an opportunity was provided for open competitive 
bidding or negotiation;
    (iii) Whether the affected person has withdrawn from his or her 
functions or responsibilities, or from the decision-

[[Page 801]]

making process, with reference to the specific assisted activity in 
question;
    (iv) Whether the interest or benefit was present before the affected 
person was in a position as described in paragraph (b) of this section;
    (v) Whether undue hardship will result, either to the grantee or to 
the person affected, when weighed against the public interest served by 
avoiding the prohibited conflict;
    (vi) Any other relevant considerations.
    (e) Circumstances under which the conflict prohibition does not 
apply. (1) In instances where a person who might otherwise be deemed to 
be included under the conflict prohibition is a member of a group or 
class of beneficiaries of the assisted activity and receives generally 
the same interest or benefits as are being made available or provided to 
the group or class, the prohibition does not apply, except that if, by 
not applying the prohibition against conflict of interest, a violation 
of Tribal or State laws on conflict of interest would result, the 
prohibition does apply. However, if the assistance to be provided is 
housing rehabilitation (or repair) or new housing, a public disclosure 
of the nature of the assistance to be provided and the specific basis 
for the selection of the proposed beneficiaries must be made prior to 
the submission of an application to HUD. Evidence of this disclosure 
must be provided as a component of the application.
    (f) Record retention. All records pertaining to the grantee's 
decision under this section shall be maintained for HUD review upon 
request.

(Approved by the Office of Management and Budget under control number 
2577-0191)