[Federal Register Volume 66, Number 190 (Monday, October 1, 2001)]
[Rules and Regulations]
[Pages 50004-50006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24434]



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Part II





Department of Housing and Urban Development





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24 CFR Part 985



Revisions to SEMAP Lease-Up Indicator; Interim Rule



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Tenant-Based Section 8 Program, Procedures; Notice

  Federal Register / Vol. 66, No. 190 / Monday, October 1, 2001 / Rules 
and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 985

[Docket No. FR-4604-I-01]
RIN 2577-AC21


Revisions to SEMAP Lease-Up Indicator

AGENCY: Office of the Assistant Secretary for Public and Indian 
Housing, HUD.

ACTION: Interim rule.

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SUMMARY: This interim rule revises the way HUD measures and verifies 
performance under the lease-up indicator for the Section 8 Management 
Assessment Program (SEMAP). Specifically, the interim rule revises the 
lease-up standard to measure the number of units leased against the 
number of units reserved and under Annual Contributions Contract (ACC), 
instead of against the number of units budgeted. This revised standard 
is consistent with established HUD policy on voucher renewals and unit 
allocations as formulated during negotiated rulemaking pursuant to the 
Quality Housing and Work Responsibility Act of 1998. In addition, this 
interim rule also revises the SEMAP regulations to provide for 
automated signature of the required SEMAP certification.

DATES: Effective Date: October 31, 2001. Comments Due Date: November 
30, 2001.

ADDRESSES: Interested persons are invited to submit comments regarding 
this interim rule to the Regulations Division, Office of General 
Counsel, Room 10276, Department of Housing and Urban Development, 451 
Seventh Street, SW, Washington, DC 20410-0500. Communications should 
refer to the above docket number and title. Facsimile (FAX) comments 
are not acceptable. A copy of each communication submitted will be 
available for public inspection and copying between 7:30 a.m. and 5:30 
p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Director, Real Estate 
and Housing Performance Division, Office of Public and Assisted Housing 
Delivery, Office of Public and Indian Housing, Room 4210, 451 Seventh 
Street, SW, Room 4210, Washington, DC 20410; telephone: (202) 708-0477 
(this is not a toll-free number). Persons with hearing or speech-
impairments may access this number via TTY by calling the toll-free 
Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Section 8 Management Assessment Program (SEMAP)

    HUD's regulations at 24 CFR part 985 describe the policies and 
procedures governing the Section 8 Management Assessment Program 
(SEMAP). SEMAP provides for objective measurement of the performance of 
a public housing agency (PHA) in key areas of the Section 8 tenant-
based assistance program. SEMAP enables HUD to ensure program integrity 
and accountability by identifying PHA management capabilities and 
deficiencies and by improving risk assessment to effectively target 
monitoring and program assistance. PHAs can use the SEMAP performance 
analysis to assess their own program operations.

B. Revisions to the SEMAP ``Lease-Up'' Indicator

    Under the current SEMAP regulation at Sec. 985.3(n), HUD determines 
the percent of units leased during the last completed PHA fiscal year 
by: (1) taking the unit months under Housing Assistance Payments (HAP) 
contract as shown on the PHA's latest approved year-end operating 
statement divided by 12; and (2) dividing by the number of units 
budgeted as shown on the PHA's approved budget for the same PHA fiscal 
year. On October 21, 1999 (64 FR 56894), HUD published its final rule 
implementing the statutory merger of the Section 8 tenant-based 
certificate and voucher programs into a new Housing Choice Voucher 
program. (The regulations for the new merged voucher program are 
located in 24 CFR part 982.) Due to the replacement of certificate 
funding with voucher funding, HUD has found that its data for the 
number of units budgeted, as shown on the PHA's approved certificate 
and voucher budgets for the last completed PHA fiscal year, often do 
not accurately reflect the number of units a PHA reasonably could have 
expected to lease during the fiscal year, and so are an inaccurate 
denominator for properly determining the lease-up rate. The number of 
budgeted units has been found to be unreliable for determining lease-up 
principally because HUD did not require that PHAs revise their 
certificate budgets downward late in the PHA fiscal year when 
certificate funding was replaced with voucher funding. Consequently, 
recent certificate program budgets may overstate the number of units 
PHAs actually expected to lease.
    Due to changes in the method of funding the Section 8 tenant-based 
program in 1999 (in particular the replacement of certificate funding 
increments with voucher funding), and the resulting changes in 
procedures concerning PHA certificate and voucher budgets, the current 
SEMAP lease-up standard and HUD's verification method for lease-up is 
no longer workable. Accordingly, HUD is issuing this interim rule, 
which revises the way HUD measures and verifies performance under the 
SEMAP lease-up indicator.
    This interim rule provides that a PHA's performance under the SEMAP 
indicator will be measured by: (1) taking the unit months under HAP 
contract, as shown on the PHA's last year-end operating statement 
recorded in HUDCAPS (the HUD accounting system); and (2) dividing by 
the number of unit months available for leasing, based on the number of 
reserved units for which HUD has obligated funding under Annual 
Contributions Contract (ACC), and adjusted to exclude funding 
increments obligated during the last PHA fiscal year and not available 
for leasing for the entire PHA fiscal year and any units for 
litigation. In the event a PHA has not leased the percent of units 
needed to attain the points specified for the SEMAP lease-up rating due 
to escalating housing assistance payments and insufficient allocated 
budget authority to support that percent of lease-up, HUD will 
consider, alternatively, whether the PHA has expended that percent of 
allocated budget authority.
    The method of verification of lease-up described in this interim 
rule is consistent with the policy established in HUD's October 21, 
1999 (64 FR 56882) final rule for the renewal of expiring ACCs in the 
tenant-based Section 8 programs, and in HUD's April 19, 2000 (65 FR 
21088) Federal Register notice on unit allocations, which requires that 
PHAs assist the number of families that equals the number of units 
under ACC with the PHA. Elsewhere in today's Federal Register, HUD is 
also publishing an amendment to the April 19, 2000 notice, to ensure a 
single consistent standard for lease-up of voucher assistance.

C. Signature of SEMAP Certification

    This interim rule also amends Sec. 985.101(a)(1) to remove the 
requirement that the SEMAP certification must be signed by the board of 
commissioners chairperson or by the chief executive officer of the unit 
of government. HUD is presently automating the SEMAP certification form 
for submission by PHAs via the Internet. As a result, it has become 
impractical to require the signatures of

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the board chairperson and chief executive officer of the unit of 
government. Automated signature authorization by the PHA executive 
director or, where the PHA is a unit of local government or a state, by 
the Section 8 program director, is sufficient.

II. Justification for Interim Rulemaking

    It is HUD's policy to publish rules for public comment before their 
issuance for effect, in accordance with its own regulations on 
rulemaking found at 24 CFR part 10. Part 10 provides, however, that 
prior public procedure will be omitted if HUD determines that it is 
``impracticable, unnecessary, or contrary to the public interest'' (24 
CFR 10.0). HUD finds that in this case prior comment is unnecessary.
    This interim rule amends Sec. 985.3(n) only to make a technical 
change to the SEMAP lease-up standard and the way HUD will verify a 
PHA's performance under the SEMAP lease-up indicator. The change 
corrects a method that has become unworkable due to changes in program 
policy, procedure and data quality. Further, the new lease-up standard 
and verification method described in this interim rule conforms to 
established program policy for Section 8 tenant-based program fund and 
unit utilization, which were developed with extensive public 
participation using negotiated rulemaking procedures. Promulgation of 
this interim rule will ensure a single consistent standard for lease-up 
of voucher assistance.
    Although HUD has determined that it is unnecessary for HUD to 
solicit public comment before issuing this rule for effect, HUD is 
issuing these amendments on an interim basis and invites public comment 
on the interim rule. All public comments will be considered in the 
development of the final rule.

III. Findings and Certifications

Environmental Impact

    This interim rule does not direct, provide for assistance or loan 
and mortgage insurance for, or otherwise govern or regulate, real 
property acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Therefore, in accordance with 24 CFR 50.19(c)(1) 
of the Department's regulations, this interim rule is categorically 
excluded from the requirements of the National Environmental Policy Act 
(42 U.S.C. 4321 et seq.).

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) (the RFA), has reviewed and approved this interim rule 
and in so doing certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The reasons 
for HUD's determination are as follows:
    (1) A Substantial Number of Small Entities Will Not be Affected. 
The interim rule is exclusively concerned with public housing agencies 
that administer assistance under section 8 of the United States Housing 
Act of 1937. Specifically, the interim rule revises the way HUD 
measures and verifies PHA performance under the lease-up indicator for 
the Section 8 Management Assessment Program (SEMAP). Under the 
definition of ``Small governmental jurisdiction'' in section 601(5) of 
the RFA, the provisions of the RFA are applicable only to those few 
public housing agencies that are part of a political jurisdiction with 
a population of under 50,000 persons. The number of entities 
potentially affected by this rule is therefore not substantial
    (2) No Significant Economic Impact. The interim regulatory 
amendments will not change the amount of funding available under the 
Section 8 voucher program. Accordingly, the economic impact of this 
rule will not be significant, and it will not affect a substantial 
number of small entities.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic effect on a substantial number of small entities, 
HUD specifically invites comments regarding any less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on State and local 
governments and is not required by statute, or the rule preempts State 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This interim rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on State and local governments or preempt State law 
within the meaning of the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments, and on the private sector. This interim rule would not 
impose any Federal mandates on any State, local, or tribal governments, 
or on the private sector, within the meaning of the Unfunded Mandates 
Reform Act of 1995.

Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, Regulatory Planning and Review. OMB determined 
that this rule is a ``significant regulatory action'' as defined in 
section 3(f) of the Order (although not an economically significant 
regulatory action under the Order). Any changes made to this rule as a 
result of that review are identified in the docket file, which is 
available for public inspection in the office of the Department's Rules 
Docket Clerk, Room 10276, 451 Seventh Street, SW., Washington, DC 
20410-0500.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance Program numbers 
assigned to the Section 8 Management Assessment Program are 14.855 
and 14.857.

List of Subjects in 24 CFR Part 985

    Grant programs--housing and community development, Housing, Rent 
subsidies, Reporting and recordkeeping requirements.

    For the reasons described in the preamble, HUD amends 24 CFR part 
985 as follows:

PART 985--SECTION 8 MANAGEMENT ASSESSMENT PROGRAM (SEMAP)

    1. The authority citation for part 985 continues to read as 
follows:

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

    2. Revise Sec. 985.3(n) to read as follows:


Sec. 985.3  Indicators, HUD verification methods and ratings.

* * * * *
    (n) Lease-up. (1) This indicator shows whether the PHA enters HAP 
contracts for the number of units reserved under ACC for at least one 
year.
    (2) HUD verification method: (i) Percent of units leased during the 
last completed PHA fiscal year as determined by taking unit months 
under HAP contract as shown on the PHA's last year-end operating 
statement recorded in the HUD accounting system, and dividing by the 
number of unit months available for leasing, based on the number of 
reserved units for which

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HUD has obligated funding under ACC and adjusted to exclude units 
associated with funding increments obligated during the last PHA fiscal 
year and units obligated for litigation.
    (ii) In the event a PHA has not leased the percent of units needed 
to attain the points specified under paragraph (n)(3) of this section 
due to escalating housing assistance payments and insufficient 
allocated budget authority to support that percent of lease-up, HUD 
will consider alternatively, whether the PHA has expended that percent 
of allocated budget authority.
    (3) Rating: (i) The percent of units leased during the last PHA 
fiscal year was 98 percent or more, or the percent of allocated budget 
authority expended during the last PHA fiscal year was 98 percent or 
more. 20 points.
    (ii) The percent of units leased during the last PHA fiscal year 
was 95 to 97 percent, or the percent of allocated budget authority 
expended during the last PHA fiscal year was 95 to 97 percent. 15 
points.
    (iii) The percent of units leased during the last PHA fiscal year 
was less than 95 percent, and the percent of allocated budget authority 
expended during the last PHA fiscal year was less than 95 percent. 0 
points.
    3. Revise 985.101(a)(1) to read as follows:


Sec. 985.101  SEMAP certification.

    (a) * * *
    (1) The certification must be approved by PHA board resolution and 
signed by the PHA executive director. If the PHA is a unit of local 
government or a state, a resolution approving the certification is not 
required, and the certification must be executed by the Section 8 
program director.
* * * * *

    Dated: August 28, 2001.
Mel Martinez,
Secretary.
[FR Doc. 01-24434 Filed 9-28-01; 8:45 am]
BILLING CODE 4210-33-P