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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Proposed Rules
the participants knowledge of the PHA, ability to contribute technical expertise with regard to the PHAs specific problem areas, and authority to make preliminary commitments of support, financial or otherwise.
d PHA review of the CAA. The PHA
will have 10 days to review the CAA.
During this 10-day period, the PHA
shall resolve any claimed discrepancies in the CAA with HUD, and discuss any recommended changes and target dates for improvement to be incorporated in the final CAA. Unless the time period is extended by HUD, the CAA is to be executed 30 days following issuance of the draft CAA.
e Maximum recovery period. 1
Upon the expiration of the one-year period that started on the date on which the PHA receives initial notice of a troubled performer designation, the PHA shall improve its performance in order to no longer be considered troubled under the assessment.
2 Reserved.
f Parties to the CAA. A CAA shall be executed by:
1 The PHA Board Chairperson supported by a Board resolution, or a receiver pursuant to a court-ordered receivership agreement, if applicable or other AME acting in lieu of the PHA
Board;
2 The PHA Executive Director, or a designated receiver pursuant to a courtordered receivership agreement, if applicable, or other AME-designated Chief Executive Officer; and 3 The field office.
g Involvement of resident leadership in the CAA. HUD encourages the inclusion of the resident leadership in the execution of the CAA.
h Failure to execute CAA or make substantial improvement under CAA.
1 If a troubled performer PHA fails or refuses to execute an CAA within the period provided in paragraph d of this section, or a troubled performer PHA
operating under an executed CAA does not achieve a passing physical inspection score, as provided in paragraph e of this section, the field office shall refer the PHA to the Assistant Secretary to determine such remedial actions, consistent with the provisions of the ACC and other HUD
regulations, including, but not limited to, remedies available for substantial default.
i Continuation of services to residents. To the extent feasible, while a PHA is in a troubled performer status, all services to residents will continue uninterrupted.

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902.107 Withholding, denying, and rescinding troubled designation.

a Withholding designation. In exceptional circumstances, even though a PHA has satisfied the requirements for high performer or non-troubled designations, HUD may conduct any review as it may determine necessary, and may deny or rescind incentives or high performer designation or nontroubled performer designation, in the case of a PHA that:
1 Is operating under a special agreement with HUD e.g., a civil rights compliance agreement;
2 Is involved in litigation that bears directly upon the physical performance of a PHA;
3 Is operating under a court order;
4 Demonstrates substantial evidence of fraud or misconduct, including evidence that the PHAs certifications, submitted in accordance with this part, are not supported by the facts, as evidenced by such sources as a HUD
review, routine reports, an Office of Inspector General investigation/audit, an independent auditors audit, or an investigation by any appropriate legal authority; or 5 Demonstrates substantial noncompliance in one or more areas of a PHAs required compliance with applicable laws and regulations, including areas not assessed under the small rural assessment. Areas of substantial noncompliance include, but are not limited to, noncompliance with civil rights, nondiscrimination and fair housing laws and regulations, or the ACC. Substantial noncompliance casts doubt on the capacity of a PHA to preserve and protect its public housing projects and operate them consistent with federal laws and regulations.
b High performer and standard designations. If a high performer designation is denied or rescinded, the PHA shall be designated either a nontroubled performer, or troubled performer, depending on the nature and seriousness of the matter or matters constituting the basis for HUDs action.
If a non-troubled performer designation is denied or rescinded, the PHA shall be designated as a troubled performer.
c Effect on score. The denial or rescission of a designation of high performer or non-troubled performer shall not affect the PHAs numerical small rural assessment score, except where the denial or rescission is under paragraph a4 of this section.
902.109 Right to petition and appeal troubled designation.

a Appeal of troubled performer designation and petition for removal of
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troubled performer designation. A PHA
may take any of the following actions:
1 Appeal its troubled performer designation;
2 Petition for removal of troubled performer designation; and 3 Appeal any refusal of a petition to remove troubled performer designation.
b Appeal of small rural Assessment score. 1 If a PHA believes that an objectively verifiable and material errors exists in its small rural assessment score, which, if corrected, will result in a significant change in the PHAs score and its designation, the PHA may appeal its score in accordance with the procedures of paragraphs c, d, and e of this section. A significant change in a score is a change that would cause the PHAs score to increase, resulting in a higher designation for the PHA i.e., from troubled performer to non-troubled performer, or from nontroubled to high performer.
2 A PHA may not appeal its score or designation based on the subsequent correction of deficiencies identified as a result of a projects physical inspection.
c Appeal and petition procedures.
1 To appeal a troubled performer designation or petition for the removal of a troubled performer designation, a PHA must submit a request in writing to the Deputy Assistant Secretary of the Real Estate Assessment Center, which must be received by HUD no later than 30 days following the issuance of the score to the PHA.
2 To appeal the denial of a petition to remove a troubled performer designation, a PHA must submit a written request to the Deputy Assistant Secretary of the Real Estate Assessment Center, which must be received by HUD
no later than 30 days after HUDs decision to refuse to remove the PHAs troubled performer designation.
3 An appeal of a troubled performer designation or an appeal of the denial of a petition for removal of a troubled performer designation must include the PHAs supporting documentation and reasons for the appeal or petition. An appeal of an assessment score must be accompanied by the PHAs evidence that a material error occurred. An appeal or petition submitted to HUD
without supporting documentation will not be considered and will be returned to the PHA.
d Denial, withholding, or rescission.
A PHA that disagrees with the basis for denial, withholding, or rescission of its designation under 902.66 may make a written request for reinstatement within 30 days of notification by HUD of the denial or rescission of the designation to the Assistant Secretary, and the request
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