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Treasury Proposes Rule to Prohibit Discrimination on Basis of Disability

The U.S. Department of the Treasury (Treasury) published a proposed rule to implement Section 504 of the “Rehabilitation Act of 1973” for programs that provide federal financial assistance. Section 504 prohibits discrimination on the basis of disability. The proposed rule also describes Treasury’s intended investigation, conciliation, and enforcement procedures pertaining to Section 504.

The preamble to the proposed rule notes that Treasury recipients have been subject to Section 504 since 1973, but Treasury acknowledges that it “will be issuing Section 504 federal financial assistance regulations for the first time,” fulfilling its statutory obligation to issue agency-specific rules. Although Treasury has not had regulations regarding Section 504, it asserts that the proposed rule would not substantially change the existing duty of recipients of federal financial assistance to refrain from discriminating on the basis of disability.

The proposed rule would not apply to the Low Income Housing Tax Credit (LIHTC) program, which the Congressional Joint Committee on Taxation estimates will cost $8.3 billion in FY17. The proposed rule would apply to the Capital Magnet Fund and the Community Development Financial Institutions (CDFI) Fund.

Federal financial assistance would be defined as any grant, contract, sub-grant, contract under a grant, cooperative agreement, formula allocation, loan, or other arrangement by which Treasury provides or otherwise makes available assistance in the form of:

  1. Funds,
  2. Services of federal personnel, or
  3. Real and personal property or any such interest in such property, including:
    1. A sale, transfer, lease, or use of federal property for less than fair market value, for reduced consideration, or in recognition of the public nature of a recipient’s program or activity;
    2. Proceeds from a subsequent sale, transfer, or lease of federal property if the federal share of its fair market value is not returned to the federal government; or
    3. Any other thing of value by way of grant, loan, contract, or cooperative agreement.

(Note that this definition is not the same as the one in the final Treasury rule pertaining to Title VI of the Civil Rights Act of 1964. See separate article in this Memo to Members at http://nlihc.org/article/treasury-issues-final-rule-enforce-title-vi-civil-rights-act-1964.)

Comments on the proposed rule are due March 6, 2017.

The propose rule, published on January 3, 2017 is at: http://bit.ly/2iB9t1K