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Federal Register / Vol. 86, No. 8 / Wednesday, January 13, 2021 / Proposed Rules
must inspect the random sample of units in accordance with paragraph d1 at least once every three years.

PART 985SECTION 8 MANAGEMENT
ASSESSMENT PROGRAM SEMAP
AND SMALL RURAL PHA
ASSESSMENTS
48. The authority citation for 24 CFR
part 985 is revised to read as follows:

Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437z10, and 3535d.

49. Revise the heading of Part 985 to read as set forth above.
50. In 985.1, revise paragraph b and add paragraph c to read as follows:

985.1

Purpose and applicability.

b Applicability. This rule applies to PHA administration of the tenant-based Section 8 rental program part 982 of this title, the project-based voucher program part 983 of this title to the extent that PBV family and unit data are reported and measured under the stated HUD verification method, and enrollment levels and contributions to escrow accounts for Section 8
participants under the family selfsufficiency program FSS part 984 of this title.
c Small rural PHA assessments.
Subpart D covers the HCV and PBV
assessment for a small rural PHA as defined in 902.101 of this title. Section 985.3 and subparts B and C of this part do not apply to small rural PHAs.
51. Add subpart D to read as follows:
Subpart DSmall rural PHA
Assessment Sec.
985.201 Applicability.
985.203 Assessment indicators and HUD
verification methods.
985.205 Determination of assessment rating.
985.207 Frequency of assessments.
985.209 Troubled small rural PHAs.
985.211 Small rural PHAs assessment records.
Authority: 42 U.S.C. 1437a, 1437c, 1437f, 1437z10, and 3535d.
985.201

Applicability.

a This subpart applies to small rural PHAs as defined in 902.101 of this title.
b Small rural PHAs shall be assessed and rated on the indicators and methodology of this subpart and shall not be subject to the SEMAP
requirements.
985.203 Assessment indicators and HUD
verification methods.

a This section describes the performance indicators used to assess a
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PHAs designation as troubled resulting from the small rural PHA assessment.
HUD will use the verification method identified for each indicator. The four indicators are determined on a pass or fail basis.
b1 Inspection standards. This indicator shows whether the PHA
applies the correct inspection standards to HCV and PBV unit inspections 2 HUD verification method. The PHAs assessment certification and onsite HUD review when applicable.
3 Rating. The PHA passes the indicator if it applied the correct inspection standards for all unit HCV
and PBV unit inspections conducted during the assessment period. If the PHA applied the incorrect inspection standards for any HCV or PBV unit inspection during the assessment period, the PHA fails the indicator.
c1 Initial unit inspections. This indicator determines if the PHA
conducted the initial HQS inspections within the required time period.
2 HUD verification method. HUD
systems show percent of newly leased units where the beginning date of the assistance contract is before the date the unit passed the initial unit inspection or, if the PHA employed the PHA initial inspection option for non-life threatening deficiencies or alternative inspections, the timing requirements for the applicable PHA initial inspection option.
3 Rating. The PHA passes the indicator if at least 98 percent of units placed under HAP contract during the assessment period passed the initial PHA HQS inspection within the required time period. If fewer than 98
percent of units placed under HAP
contract during the assessment period passed the HQS inspection within the required time periods, the PHA fails the indicator.
d1 Frequency of HQS inspections.
This indicator determines, for units that have been under HAP contract for at least three years, whether the PHA reinspected tenant-based units under HAP
contract and the required sample of PBV
units at least once during the three year period from the last PHA inspection.
2 HUD verification method. HUD
systems show that the percentage of units above that have been re-inspected within the required three-year period from the last inspection.
3 Rating. The PHA passes the indicator if at least 98 percent of the units described above have been reinspected within the required three-year period from the last inspection. The PHA fails the indicator if fewer than 98
percent of the units described above
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have been re-inspected within the required three-year period.
e1 Unit condition enforcement.
This indicator shows whether, following the inspection of a unit under contract where the unit fails to meet the required standards, any cited life-threatening and non-life threatening deficiencies are corrected within the required cure period in accordance with 982.404
and 983.103 of this title. In addition, if HQS deficiencies are not corrected timely, the indicator shows whether the PHA stops abates housing assistance payments beginning no later than the first of the month following the specified correction period or terminates the HAP contract or, for family-caused defects, takes prompt and vigorous action to enforce the family obligations. 982.404 of this title 2 HUD verification method. The PHA certification and on-site HUD
review if performed, and HUD system data.
3 Rating. In order to pass the indicator, the applicable verification method, which may include sampling, determines that the PHA took corrective action within the required timeframes for at least 98% of inspections with identified life-threatening or other HQS
deficiencies.
f1 PHA submission of certifications. The PHA must submit its certifications for the applicable indicators within the designated timeframe required by HUD, and in the form and manner as required by HUD.
HUD will issue instructions on the submission of PHA certifications by Federal Register notice, which will be subject to public comment.
2 Failure to submit. Failure of the PHA to submit any certification in accordance with this paragraph will result in the PHA failing the indicator and the PHA will be designated as troubled under the small rural PHA
assessment.
985.205
rating.

Determination of assessment
a High performer designation. 1 A
PHA is designated a high performer under the small rural PHA assessment if the PHA has passed all four indicators identified in 985.203 and the PHA has:
i Utilized at least 98 percent of its HCV budget authority based on the most recent calendar year data or the percent of HCV units leased by renters or occupied by homeowners for the most recent calendar year was at least 98
percent;
ii Did not end that calendar year with excess HAP reserves; and
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