42 U.S.C. § 1437d — Contract provisions and requirements; loans and annual contributions

(a) Conditions and elevators. The Secretary may put any promise, condition, or other provision into a loan, contribution, sale, lease, mortgage, or other agreement made under this chapter if the Secretary considers it necessary to keep the project focused on lower-income housing in a way consistent with the public housing agency plan. Except for housing mainly for elderly or disabled families, the contract must say that a high-rise elevator project may not be provided for families with children unless the Secretary decides that there is no practical alternative. (b) Limits on development costs. (1) Each contract for a loan, other than a preliminary loan, or for contributions for developing, acquiring, or operating public housing must say that the project’s total development cost used to calculate annual contributions under this chapter may not exceed the amount determined under paragraph (2) for the proper type of structure, unless the Secretary allows otherwise. In all cases, it may not exceed 110 percent of that amount unless the Secretary finds good cause to allow it. (2) To determine that amount, the Secretary must multiply the project’s construction-cost guideline by 1.6 for an elevator-type structure and by 1.75 for a structure without elevators. The construction-cost guideline must be based on the average current construction costs listed by at least two nationally recognized residential construction-cost indexes for publicly bid construction of good and sound quality. (3) When calculating total development cost under paragraph (2), the Secretary may count only capital assistance that the Secretary provides to a public housing agency and that is authorized for use in developing public housing. The Secretary must leave out all other amounts, including money from the HOME investment partnerships program under title II of the Cranston-Gonzalez National Affordable Housing Act and the community development block grants program under title I of the Housing and Community Development Act of 1974. (4) The Secretary may limit how much capital funds a public housing agency may use for housing construction costs. Those costs include the actual construction costs of the units, builders’ overhead and profit, utilities from the street, and final landscaping. (c) Maximum income limits, certifications, eligibility notices, hearings, and sound management. Every contribution contract must provide that—(1) the Secretary may require a public housing agency to review and change its maximum income limits if changed local conditions make that necessary to accomplish this chapter’s purposes; (2) the agency must determine and certify to the Secretary that every family in the project was admitted under properly adopted rules and approved income limits, and must review the incomes of families living in the project at least once a year; (3) the agency must promptly tell an applicant who is found ineligible why, and, if the applicant asks within a reasonable time, give the applicant an opportunity for an informal hearing. It must also tell an eligible applicant the approximate occupancy date when that date can reasonably be determined; and (4) the agency must follow procedures and requirements prescribed by the Secretary to ensure sound project management, including these requirements: (A) The agency must make public-housing units available for occupancy. It may create a preference system for families with particular characteristics. Each preference system must be based on local housing needs and priorities, using generally accepted data sources, including information from public comment under section 1437c–1(f) and requirements for the relevant jurisdiction’s comprehensive housing affordability strategy. (B) The agency must have satisfactory procedures for promptly paying and collecting rent and promptly processing evictions for nonpayment. (C) It must create effective relationships between tenants and management so that satisfactory tenant-security and project-maintenance standards are developed. The agency, together with tenant councils where they exist, must fully and effectively enforce those standards. (D) Local housing-authority management must develop workable homeownership-opportunity programs for low-income families able to take on homeownership responsibilities. (E) Each agency receiving assistance under this subchapter must establish and maintain an accounting system for rent collections and costs for each project or operating-cost center identified by the Secretary. Costs include administrative, utility, maintenance, repair, and other operating costs. The collections and costs must be available to the public and submitted to the proper local public official identified by the Secretary. The Secretary may allow an agency that owns or operates fewer than 500 units to account on an agency-wide basis instead. (F) The agency must ensure and maintain compliance with subtitle C of title VI of the Housing and Community Development Act of 1992 and regulations issued under that subtitle. (d) Real and personal property taxes, payments in place of taxes, cash, or tax forgiveness. Every contribution contract for a low-income housing project must say that the Secretary will not make contributions available unless the project, except for any part not assisted under this chapter, is exempt from all real and personal property taxes imposed by the State, city, county, or other political subdivision. The contract must require the public housing agency to make payments in place of taxes equal to 10 percent of the project’s total shelter rents, or a smaller amount if (i) State law sets a smaller amount, (ii) the local governing body agrees to a smaller amount in its required cooperation agreement with the agency, or (iii) the smaller amount is due to a local public body other than the agency failing to perform an obligation under that agreement. If the project is not exempt from all such taxes, the contract must instead say that the Secretary will not make contributions available until the State, city, county, or other political subdivision where the project is located contributes, through cash or tax forgiveness, the amount by which the project’s taxes exceed 10 percent of its shelter rents. (e) Repealed. Public Law 105–276, title V, section 529(2), October 21, 1998, 112 Stat. 2569. (f) Housing quality requirements. (1) General rule. Each contribution contract for a public housing agency must require the agency to keep its public housing in a condition that meets or exceeds the housing-quality standards established under paragraph (2). (2) Federal standards. The Secretary must establish standards that ensure public-housing units are safe and habitable. They must address habitability, including maintenance, health and sanitation, the condition of dwellings, and their construction. To the greatest extent practicable, they must be consistent with the standards under section 1437f(o)(8)(B)(i). For this subsection, the Secretary may decide whether a State or local jurisdiction’s laws, regulations, standards, or codes meet or exceed these standards. (3) Annual inspections. Every public housing agency that owns or operates public housing must inspect each public-housing project every year to determine whether its units are maintained as paragraph (1) requires. The agency must keep the inspection results and provide them when the Secretary, the HUD Inspector General, or an auditor conducting an audit under section 1437c(h) asks for them. (g) Serious default, transfer of title, possession, return, and outstanding obligations. A contribution contract, including one that changes or replaces an earlier contract, may provide that—(1) when the agency seriously defaults on a promise or condition to which it is subject, as the contract defines that default, the agency must, at the Secretary’s choice, either transfer title to the project when the Secretary finally and conclusively decides that transfer is needed to accomplish this chapter’s purposes, or give the Secretary possession of the project as it then exists; and (2) the Secretary must return title or possession of the project as it exists at that time to the agency or its successor, if either exists, under the contract’s terms and as soon as practicable after either (i) the Secretary is satisfied that all project defaults have been fixed and that the project will thereafter be operated under the contract to fulfill this chapter’s purposes, or (ii) the duty to make annual contributions ends, unless the agency then has a defaulted obligation or promise to the Secretary. Earlier transfers and returns do not use up the right to require another transfer or delivery of possession if a later serious default occurs. If the contract contains provisions that the Secretary decides comply with this subsection, and the agency has pledged the debt-service part of annual contributions as security for principal and interest on its obligations, the Secretary must continue making those annual contributions available for the project while any obligation remains outstanding. The Secretary may promise in the contract that each year the contributions will at least equal the amount that, together with income or other project funds actually available when the contribution is made, is enough to pay all principal and interest installments due during the next 12 months on the secured obligations. Contributions may never exceed the contract’s stated maximum amount or continue longer than the contract’s remaining maximum period. (h) New-construction contracts. On or after October 1, 1983, the Secretary may enter a contract involving only new construction only if the agency satisfies the Secretary that new construction in the neighborhood where housing is needed would cost less than acquiring, or acquiring and rehabilitating, housing there, including any reserve fund under subsection (i). (i) Reserve fund and major repairs. When a public housing agency applies in connection with acquiring housing for public housing, the Secretary may create and set aside a reserve fund of no more than 30 percent of the acquisition cost. The fund may be used for major repairs to that housing. (j) Performance indicators for public housing agencies. (1) The Secretary must develop and publish in the Federal Register indicators for evaluating the management performance of public housing agencies and resident management corporations. The Secretary must establish the indicators by rule under section 553 of title 5. They must allow evaluation in all major areas of management operations. To the extent practicable, the indicators for agencies must include: (A) the number and percentage of vacant units in the agency’s inventory, including its progress during the previous three years in reducing vacancies; (B) the amount and percentage of Capital Fund money under section 1437g(d) that remains unobligated after three years; (C) the percentage of rent not collected; (D) utility use, adjusted as appropriate for different regions and unit sizes; (E) the average time needed to repair and prepare vacant units for use; (F) the share of outstanding maintenance work orders, including the agency’s progress during the previous three years in reducing the time needed to complete them; (G) the percentage of units the agency fails to inspect within the time the Secretary considers appropriate to find maintenance or modernization needs, with appropriate adjustments for large and small agencies; (H) the extent to which the agency (i) coordinates, promotes, or provides effective programs and activities promoting residents’ economic self-sufficiency and (ii) gives residents opportunities to participate in public-housing administration; (I) the extent to which the agency (i) uses effective screening and eviction policies and other anticrime strategies and (ii) coordinates with local officials and project residents in developing and carrying out those strategies; (J) the extent to which the agency provides acceptable basic housing conditions; and (K) any other factors the Secretary considers appropriate, limited to the seven factors in the statute plus five more. The statute also directs the Secretary to (1) run the evaluation system flexibly so agencies are not penalized for circumstances outside their control; (2) reflect in the indicator weights how physical condition and neighborhood environment make projects harder or easier to manage; and (3) decide whether an agency is “troubled with respect to the program under section 1437l of this title” using only factors related to its ability to carry out that program. (2)(A)(i) Using section 553 rulemaking, the Secretary must establish procedures for designating troubled agencies. The procedures must identify serious and substantial performance failures measured by paragraph (1)’s indicators and other factors the Secretary considers appropriate. An agency that broadly fails to provide acceptable basic housing conditions must be designated troubled. The Secretary may use simpler indicators for agencies with fewer than 250 units. The Secretary must also designate by rule agencies troubled regarding Capital Fund assistance under section 1437g(d). (ii) After consulting, as appropriate, with national organizations representing agencies and public officials, the Secretary may identify and commend agencies that meet paragraph (1)’s standards in an exemplary way. (iii) The Secretary must establish procedures to appeal a troubled designation, seek its removal, and appeal a refusal to remove it, including designations concerning Capital Fund assistance. (B)(i) After designating an agency with more than 250 units as troubled, and deciding that this assessment would not duplicate a comparable recent review, the Secretary must arrange an independent on-site management assessment. (ii) When appropriate, considering the agency’s indicator performance, the assessment team must also examine the resident population and physical inventory, including whether (I) the agency’s comprehensive plan adequately addresses rehabilitation needs, (II) residents are involved in and informed about major management decisions, and (III) projects are severely distressed and eligible for section 1437v assistance. (iii) The assessment must be done by knowledgeable people selected by the Secretary who have public-housing and real-estate-management expertise. The team must consult residents and public and private entities in the jurisdiction. It must give the Secretary and agency a written report containing at least recommendations for management improvements needed to eliminate or substantially remedy deficiencies. (C) After reviewing that report when applicable and consulting the assessment team, the Secretary must try to make an agreement with each troubled agency. The agreement must state (i) performance targets and other requirements for a specified time; (ii) strategies for meeting them, including technical help the Secretary will provide; and (iii) incentives or sanctions for carrying out the strategies effectively, including appropriate funding restrictions. When appropriate, it must also state a plan for increasing resident participation in agency management. The Secretary and agency must seek help from local public and private entities as much as practicable. (D) These rules also apply to resident management corporations. (3)(A) Despite other law or a contribution contract, when events or conditions amount to a serious default by an agency under its promises, conditions, or paragraph (2) agreement, the Secretary may (i) seek competing proposals from other agencies and private housing managers, who may, in the Secretary’s discretion, be chosen by current residents through Secretary-established procedures, to manage all or part of the agency’s housing or programs; (ii) ask a federal district court or the appropriate State court to appoint a receiver, which may be another agency or a private management corporation; (iii) seek competing proposals from agencies and private entities experienced in construction management to oversee Capital Fund assistance; (iv) take possession of all or part of the agency, including any project or program under this subchapter; or (v) require the agency to make other arrangements acceptable to the Secretary and in the best interests of residents and families assisted under section 1437f. Residents of a troubled agency may petition the Secretary in writing for one or more of these actions. The Secretary must timely respond in writing with the planned action, if any, and, when relevant, why it differs from the residents’ proposal. (B)(i) If an agency is identified as troubled, the Secretary must notify it. (ii)(I) One year after the later of the agency’s first notice or October 21, 1998, the agency must improve its indicator performance by at least half the difference between its latest measurement and the measurement needed to remove the troubled designation. (II) Two years after that later date, it must improve enough to no longer be troubled. (III) If it fails either deadline, the Secretary must, for an agency with 1,250 or more units, ask for a receiver; for an agency with fewer than 1,250 units, the Secretary may either ask for a receiver or take possession and appoint an administrative receiver, competitively or noncompetitively, to perform the Secretary’s administrative responsibilities. These rules do not limit other action under subparagraph (A). (IV) Between filing the receiver petition and the receiver’s assumption of management, the Secretary may take possession and appoint an administrative receiver. (C) If a court appoints a receiver, the receiver may, in addition to court-granted powers, (i) cancel a contract that does not involve the United States or a federal agency if the receiver’s written determination, including its reasons, says the contract substantially prevents correction of the serious default, but only after reasonable renegotiation efforts fail; (ii) demolish and dispose of agency assets, including projects, under section 1437p, including transferring property to nonprofit entities supported by residents; (iii) seek creation of one or more new agencies when State and local law allows; (iv) seek consolidation of all or part of the agency into other well-managed agencies, with those agencies’ consent and as State and local law allows; and (v) disregard State or local civil-service, employee-rights except civil-rights, procurement, and financial or administrative-control laws when the receiver’s written determination, including its reasons, says a law substantially prevents correction. (D)(i) If the Secretary takes possession, the Secretary may likewise (I) cancel a non-federal contract after the Secretary’s written determination and failed renegotiation efforts; (II) demolish and dispose of assets under section 1437p, including transfer to resident-supported nonprofits; (III) seek new agencies as State and local law allows; (IV) seek consolidation into well-managed agencies with their consent and as State and local law allows; (V) disregard the listed State or local laws when the Secretary’s written determination says they substantially impede correction; and (VI) without a federal district court’s action, use additional authority that such a court could give a receiver to accomplish the receivership’s purposes. (ii) If the Secretary appoints an administrative receiver under subparagraph (B)(ii)(III)(bb), the Secretary may delegate any or all of these powers to that receiver as appropriate, subject to clause (iii). (iii) The administrative receiver may not create new agencies or consolidate an agency unless the Secretary first approves the receiver’s application for that action. (E) The Secretary may give receivers and other selected or appointed entities assistance the Secretary decides is necessary and available to fix severely worsening living conditions or related emergencies threatening residents’ or section 1437f families’ health, safety, or welfare. A decision under this paragraph cannot be reviewed by any federal, State, territorial, or possession court. (F) In a proceeding under subparagraph (A)(ii), once the court finds a serious default, it must appoint a receiver, without considering whether other remedies exist. The receiver must manage all or part of the agency consistently with this chapter and the court’s additional terms. The receiver may be another agency, a private management corporation, or another person or suitable entity. The court may grant temporary or preliminary relief while the Secretary’s petition is pending. (G) On any party’s petition, the court may end a receivership when it finds all defaults fixed or the agency is again able to perform its duties. (H) If the Secretary, an administrative receiver, or a court receiver takes possession, that person or entity is treated as acting for the public housing agency rather than in an official personal or federal capacity. Any liability incurred, whether the event causing it happened before or during possession, is the agency’s liability. (4) Sanctions for improper use of amounts. (A) If the Secretary finds that an agency receiving public-housing assistance under section 1437g has substantially failed to follow a public-housing-program provision of this chapter, the Secretary may, in addition to other authorized actions, (i) end assistance payments under section 1437g; (ii) withhold amounts from the agency’s total allocation under section 1437g; (iii) reduce future section 1437g payments by the amount not spent as this chapter requires; (iv) limit section 1437g assistance to unaffected programs, projects, or activities; (v) withhold amounts allocated to the agency under section 1437f; or (vi) order other corrective action. (B) When such action ends, the Secretary must (i) after a termination under clause (i), resume full section 1437g payments when first determining the agency will comply; (ii) after withholding under clause (ii) or (v), make the withheld amounts available as the Secretary considers appropriate to ensure compliance; (iii) after a restriction under clause (iv), remove it when first determining the agency will comply; or (iv) after other corrective action under clause (vi), stop that action when first determining the agency will comply. (5) Each year, as part of the Secretary’s report under section 3536, the Secretary must report (A) agencies designated troubled; (B) why they were designated and remain so; (C) agreements made with them; (D) progress under those agreements; (E) actions under paragraph (3), including authorized funds spent to support them; and (F) the status of agencies troubled regarding Capital Fund assistance and the amount they received. (6)(A) If needed to ensure a certification’s accuracy, the Secretary must require an independent auditor to review agency records or other information maintained under this section to support each certification about the agency’s or corporation’s performance. (B) The Secretary may withhold enough section 1437g assistance otherwise payable to cover the reasonable review cost. (7) These rules apply to resident management corporations in the same way as to public housing agencies. (k) Administrative grievance procedures. By regulation, the Secretary must require each assisted public housing agency to establish and use a grievance procedure under which tenants (1) are told the specific reasons for proposed adverse agency action; (2) may request a hearing before an impartial person within the time allowed under subsection (l); (3) may examine documents, records, or regulations related to the proposed action; (4) may choose another person to represent them at a hearing; (5) may question witnesses and have others speak for them; and (6) receive the agency’s written decision. For a grievance about eviction or termination involving conduct threatening other tenants’ or employees’ health, safety, or peaceful enjoyment, violent or drug-related crime on or off the premises, or activity resulting in a felony conviction, the agency may use an expedited procedure set by rule or exclude the grievance if local law requires a court hearing before eviction and the Secretary decides that hearing provides basic due process. Basic due process does not have to include a chance to examine relevant agency documents. The agency must nevertheless give the tenant a reasonable chance before the hearing or trial to examine relevant documents, records, or regulations directly related to the eviction or termination. (l) Leases and termination. Each agency must use leases that (1) last 12 months and automatically renew for all purposes except failure to meet section 1437j(c)’s community-service requirements, while preserving a resident’s right to seek timely court relief for failure to renew on that ground; (2) contain no unreasonable terms; (3) require the agency to keep the project decent, safe, and sanitary; (4) require adequate written termination notice of no less than (A) a reasonable period, not more than 30 days, when the health or safety of other tenants, agency employees, or nearby persons is threatened, or for drug-related or violent crime or a felony conviction; (B) 14 days for unpaid rent; and (C) 30 days in every other case, unless State or local law allows a shorter period, which then applies; (5) allow termination only for a serious or repeated lease violation or other good cause; (6) state that criminal activity threatening other tenants’ health, safety, or peaceful enjoyment, or drug-related criminal activity on or off the premises, by a tenant, household member, guest, or other person under the tenant’s control is grounds for termination; (7) state that, despite State law, an eviction or termination notice must tell the tenant of the opportunity before a hearing or trial to examine relevant documents, records, or regulations directly related to the action; (7) also state that occupancy violating section 13661(b), concerning ineligibility of illegal drug users and alcohol abusers, or giving false or misleading information under section 13662, concerning termination for such users and abusers, is grounds for termination; and (9) state that immediate termination is allowed if the tenant (A) is fleeing to avoid prosecution, custody, or confinement after conviction for a crime or attempted crime that is a felony where the person fled, or, in New Jersey, a high misdemeanor, or (B) is violating a federal or State probation or parole condition. For paragraph (5), “drug-related criminal activity” means illegally making, selling, distributing, using, or possessing with intent to make, sell, distribute, or use a controlled substance as defined in section 802 of title 21. (m) Reporting. The Secretary may not impose unnecessarily repetitive or burdensome reporting duties on tenants or assisted public housing agencies. (n) Notice to the post office. When an agency evicts an individual or family for criminal activity, including drug-related criminal activity, it must tell the local post office serving the unit that the individual or family no longer lives there. (o) Housing help for children in foster care. When providing housing in low-income housing projects, an agency may coordinate with local child-welfare agencies to make units available to (1) families identified as lacking adequate housing when that lack is a main factor (A) in a child’s imminent placement in foster care or (B) in preventing a child’s discharge from foster care and reunification with family; and (2) young people leaving foster care when return to family or extended family or adoption is unavailable. (p) Repealed. Public Law 105–276, title V, section 519(b), October 21, 1998, 112 Stat. 2561. (q) Access to records. (1)(A) Despite other law, except for subparagraph (C), the National Crime Information Center, police departments, and other law-enforcement agencies must, on request, give agencies information about adult applicants’ or tenants’ criminal-conviction records for screening, lease enforcement, and eviction. (B) An agency may request records about project-based section 8 housing only when the housing is within the agency’s jurisdiction and its owner asks the agency to obtain them. The agency must make the request, may not give the information to the owner, and must make screening, lease-enforcement, and eviction decisions for the owner using the owner’s criteria. (C) Information about a juvenile conviction must be provided only when release is authorized by applicable State, tribal, or local law. (2) Before adverse action based on a criminal record, the agency must give the applicant or tenant a copy of the record and a chance to dispute its accuracy and relevance. (3) The agency may be charged a reasonable fee. If it obtains information for another owner, it may pass that fee to the requesting owner and charge additional reasonable fees for making the request and other actions under this subsection. (4) Each agency must manage records so every received criminal record is kept confidential, not misused or improperly shared, and destroyed after the purpose for requesting it is complete. (5) An agency may use the information only for this subsection’s purposes. It may not disclose it to anyone who is not an agency officer, employee, or authorized representative with a job-related need connected to admission, eviction, or ending assistance. Disclosure in a judicial eviction proceeding is allowed as necessary. The Secretary must by regulation establish procedures for use and confidentiality and standards for information agencies obtain for owners. (6) Anyone who knowingly and willfully requests or obtains covered-housing information under false pretenses, or knowingly and willfully discloses it to someone not legally entitled to receive it, commits a misdemeanor and may be fined up to $5,000. “Person” includes an agency officer, employee, or authorized representative. (7) An affected applicant or tenant may sue an agency for damages and other suitable relief if an agency officer, employee, or representative negligently or knowingly discloses information without authorization, or takes another negligent or knowing action inconsistent with this subsection. The federal district court where the person lives, where the action occurred, or where the responsible officer, employee, or representative lives has jurisdiction. Relief may include reasonable attorney fees and other litigation costs. (8) Definitions. (A) “Adult” means a person at least 18 years old or a person convicted as an adult under federal, State, or tribal law. (B) “Covered housing assistance” means (i) a public-housing dwelling unit; (ii) a dwelling unit with project-based assistance under section 1437f, including new construction and substantial rehabilitation; and (iii) tenant-based assistance under section 1437f. (C) “Owner” means, for assistance described in subparagraph (B)(ii), the entity or private person, including a cooperative or public housing agency, with the legal right to lease or sublease the assisted dwelling units. (r) Site-based waiting lists. (1) An agency may establish procedures for waiting lists for admission to its public-housing projects. The procedures may include site-based lists, despite contrary law, regulation, handbook, or notice, allowing applicants to apply directly to or designate the project or projects where they want to live. All procedures must comply with title VI of the Civil Rights Act of 1964, the Fair Housing Act, and other applicable civil-rights laws. (2) The agency must fully tell each applicant every available option for choosing a project. (s) Required access to criminal records. As a condition of admission to the public-housing or assisted-housing program under its jurisdiction, an agency may require each adult household member to give signed written authorization for the agency to obtain that member’s records described in subsection (q)(1) from the National Crime Information Center, police departments, and other law-enforcement agencies. (t) Information from drug abuse treatment facilities. (1) Authority. Despite other law except the Public Health Service Act, an agency may require each public-housing applicant to sign one or more written-consent forms allowing the agency to receive from a drug abuse treatment facility information only about whether the applicant is currently illegally using a controlled substance. (2) Confidentiality. (A) The consent form may ask only whether the facility has reasonable cause to believe the applicant is currently illegally using a controlled substance. (B) An agency receiving this information must manage it so that it (i) is kept confidential under section 543 of the Public Health Service Act, (ii) is not misused or improperly shared, and (iii) is destroyed, as applicable, no later than five business days after final approval of admission, or, if admission is denied, promptly after the limitation period for the applicant’s civil action based on that denial expires. (C) The signed consent automatically expires when the agency makes its final decision to approve or deny admission. (3) No discriminatory treatment. (A) The agency may require this consent only if it requires every public-housing applicant to sign the same form or forms. (B) The agency may ask a treatment facility only if it asks all applicants the same question, or asks the same question of every applicant for whom (I) the applicant’s criminal record shows a prior arrest or conviction, or (II) prior-tenancy records show that the applicant (aa) destroyed property, (bb) engaged in violence against another person, or (cc) interfered with another tenant’s peaceful enjoyment of the premises. (4) A treatment facility may charge the agency a reasonable fee. (5) The facility is not liable for damages based on information it must disclose under this subsection if the disclosure is consistent with section 543 of the Public Health Service Act. (6) The agency is not liable for damages because it chooses not to require applicants to sign consent forms. (7) Definitions. (A) “Drug abuse treatment facility” means an entity that is either (I) an identified unit within a general medical-care facility or (II) an entity other than a general medical-care facility, and that holds itself out as providing and does provide diagnosis, treatment, or treatment referral concerning illegal controlled-substance use. (B) “Controlled substance” has the meaning given in section 802 of title 21. (C) “Currently engaging in the illegal use of a controlled substance” means illegal use recent enough to support a reasonable belief that the applicant’s use is current or that continuing illegal use is a real and ongoing problem. (8) Effective date. This subsection took effect October 21, 1998, without needing guidance or a regulation from the Secretary.