[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5275 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 5275

To establish a Federal Housing Trust Fund to provide decent, safe, and 
    affordable housing for low-income families lacking such housing.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 1994

Mr. Owens introduced the following bill; which was referred jointly to 
the Committees on Ways and Means and Banking, Finance and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To establish a Federal Housing Trust Fund to provide decent, safe, and 
    affordable housing for low-income families lacking such housing.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Housing 
Trust Fund Act of 1994''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
TITLE I--REDUCTION OF CERTAIN TAX BENEFITS FOR HIGHER INCOME TAXPAYERS 
                AND ESTABLISHMENT OF HOUSING TRUST FUND

Sec. 101. Reduction of certain tax benefits for higher income 
                            taxpayers.
Sec. 102. Repeal of increase in basis of property acquired from a 
                            decedent; phasein of capital gains tax on 
                            inherited property.
Sec. 103. Establishment of Housing Trust Fund.
TITLE II--ADMINISTRATION OF HOUSING TRUST FUND AND ENTITLEMENT PROGRAM 
               FOR FORMULA GRANTS FOR AFFORDABLE HOUSING

Sec. 201. Grants for eligible public entities.
Sec. 202. Eligible activities for use of grant amounts.
Sec. 203. Housing costs assistance program.
Sec. 204. Housing supply assistance program.
Sec. 205. Affordability.
Sec. 206. Eligible public entities.
Sec. 207. Requirements of eligible public entities.
Sec. 208. Trust Fund grant plans.
Sec. 209. Allocation of Trust Fund amounts for States, entitlement 
                            communities, and Indian tribes.
Sec. 210. Grant allotments.
Sec. 211. Maintenance of State and local effort.
Sec. 212. Compliance.
Sec. 213. Administrative expenses.
Sec. 214. Housing Trust Fund Program Advisory Committee.
Sec. 215. Administrator of Trust Fund in Department of Housing and 
                            Urban Development.
Sec. 216. Definitions.
Sec. 217. Regulations.

TITLE I--REDUCTION OF CERTAIN TAX BENEFITS FOR HIGHER INCOME TAXPAYERS 
                AND ESTABLISHMENT OF HOUSING TRUST FUND

SEC. 101. REDUCTION OF CERTAIN TAX BENEFITS FOR HIGHER INCOME 
              TAXPAYERS.

    (a) In General.--Part I of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to definition of gross income, 
adjusted gross income, taxable income, etc.) is amended by adding at 
the end the following new section:

``SEC. 69. LIMITATION ON CERTAIN TAX BENEFITS FOR HIGHER INCOME 
              TAXPAYERS.

    ``(a) In General.--In the case of an individual, the limitations of 
this section apply if the taxpayer's modified adjusted gross income for 
the taxable year exceeds $75,000.
    ``(b) Limitations on Deduction for Mortgage Interest and Property 
Taxes.--In the case of a taxpayer to whom this section applies for the 
taxable year--
            ``(1) the amount of qualified residence interest (as 
        defined in section 163(h)(3)) which is allowed as a deduction 
        under section 163 shall not exceed the applicable percentage of 
        such interest, and
            ``(2) the amount of real property taxes which is allowed as 
        a deduction under section 164 shall not exceed the applicable 
        percentage of such taxes.
    ``(c) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--The term `applicable percentage' means 
        100 percent reduced (but not below the 50 percent) by 3 
        percentage points for each $1,000 by which the modified 
        adjusted gross income of the taxpayer for the taxable year 
        exceeds $75,000.
            ``(2) Phase-in.--In the case of taxable years beginning 
        before January 1, 2000, paragraph (1) shall be applied by 
        substituting for `50 percent' the percentage determined in 
        accordance with the following table:

        ``In the case of taxable
                                                         The percentage
        years beginning in calendar year:
                                                              is:      
                1996.................................    90 percent    
                1997.................................    80 percent    
                1998.................................    70 percent    
                1999.................................   60 percent.    

    ``(d) Modified Adjusted Gross Income.--For purposes of this 
section, the term `modified adjusted gross income' means adjusted gross 
income--
            ``(1) determined without regard to this section, sections 
        911, 931, and 933, and the deductions referred to in subsection 
        (b), and
            ``(2) increased by the amount of interest received or 
        accrued by the individual during the taxable year which is 
        exempt from tax.
    ``(e) Coordination With Section 68.--This section shall be applied 
before section 68 with respect to the deductions referred to in 
subsection (b).''
    (b) Conforming Amendment.--The table of sections for such part I is 
amended by adding at the end the following new item:

                              ``Sec. 69. Limitation on certain tax 
                                        benefits for higher income 
                                        taxpayers.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 102. REPEAL OF INCREASE IN BASIS OF PROPERTY ACQUIRED FROM A 
              DECEDENT; PHASEIN OF CAPITAL GAINS TAX ON INHERITED 
              PROPERTY.

    (a) In General.--Section 1014 of the Internal Revenue Code of 1986 
(relating to basis of property acquired from a decedent) is hereby 
repealed.
    (b) Basis To Be Determined Under Rules Applicable to Gifts.--
Section 1015 of such Code (relating to basis of property acquired by 
gifts and transfers in trusts) is amended by adding at the end the 
following new subsection:
    ``(f) Property Acquired From or Passing From a Decedent.--
            ``(1) In general.--Property acquired from a decedent dying 
        after December 31, 1995, or passed from such a decedent shall 
        be treated for purposes of subsection (a) as acquired by gift 
        for purposes of this section.
            ``(2) Property acquired from a decedent.--Section 1014(b) 
        (as in effect on the day before the date of the enactment of 
        the Federal Housing Trust Fund Act of 1994) shall apply for 
        purposes of whether property is considered to have been 
        acquired from or to have passed from the decedent.
            ``(3) Increase in basis for estate tax paid.--
                    ``(A) In general.--The basis of any property which 
                this subsection applies shall be the basis determined 
                under subsection (a) increased by the portion of the 
                aggregate death tax adjustment which is allocated to 
                the property pursuant to this paragraph.
                    ``(B) Limitation.--The death tax adjustment for any 
                property shall not exceed--
                            ``(i) the net appreciation in such 
                        property, multiplied by
                            ``(ii) the Federal marginal estate tax 
                        rate.
                    ``(C) Net appreciation.--For purposes of this 
                paragraph, the net appreciation in value of any 
                property is the amount by which--
                            ``(i) the fair market value of such 
                        property, exceeds
                            ``(ii) the initial basis of such property 
                        increased by the minimum basis adjustment of 
                        such property.
            ``(4) Aggregate death tax adjustment.--In the case of any 
        estate--
                    ``(A) In general.--The aggregate death tax 
                adjustment is the product of--
                            ``(i) the aggregate net appreciation of all 
                        properties which have net appreciation, and
                            ``(ii) the Federal marginal estate tax 
                        rate.
                    ``(B) Limitation.--The amount taken into account 
                under subparagraph (A)(i) shall not exceed the taxable 
                estate.
                    ``(C) Federal marginal estate tax rate.--The term 
                `Federal marginal estate tax rate' means the highest 
                rate in the rate schedule set forth in section 
                2001(c)--
                            ``(i) which is used in determining the 
                        tentative tax under section 2001(b)(1) with 
                        respect to the estate of the decedent, and
                            ``(ii) the amount subject to which is at 
                        least $50,000.
                In no event shall the Federal marginal estate tax rate 
                be less than 30 percent.
            ``(5) Allocation rules.--The executor shall allocate the 
        adjustments under this subsection among the properties on the 
        return of the tax imposed by chapter 11.''
    (c) Phase-in of Capital Gains Tax on Inherited Property.--
Subsection (h) of section 1 of such Code (relating to maximum capital 
gains rate) is amended to read as follows:
    ``(h) Maximum Capital Gains Rate.--
            ``(1) In general.--If a taxpayer has a net capital gain for 
        any taxable year, then the tax imposed by this section shall 
        not exceed the sum of--
                    ``(A) a tax computed at the rates and in the same 
                manner as if this subsection had not been enacted on 
                the greater of--
                            ``(i) taxable income reduced by the amount 
                        of the net capital gain, or
                            ``(ii) the amount of taxable income taxed 
                        at a rate below 28 percent, plus
                    ``(B) a tax equal to the sum of--
                            ``(i) the applicable percentage of so much 
                        of such net capital gain as is attributable to 
                        property acquired by the taxpayer from a 
                        decedent dying after December 31, 1995 (or 
                        passed to the taxpayer from such a decedent), 
                        and
                            ``(ii) 28 percent of the amount of the 
                        taxable income in excess of the sum of the 
                        amount determined under subparagraph (A) and 
                        the net capital gain described in clause (i) of 
                        this subparagraph.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the term `applicable percentage' means--
                    ``(A) 10 percent in the case of taxable years 
                ending during 1996,
                    ``(B) 15 percent in the case of taxable years 
                ending during 1997,
                    ``(C) 20 percent in the case of taxable years 
                ending during 1998, and
                    ``(D) 25 percent in the case of taxable years 
                ending during 1999.
            ``(3) Election to mark-to-market property acquired from a 
        decedent.--If the taxpayer elects this paragraph with respect 
        to any property described in paragraph (1)(B)(i), such property 
        shall be treated as sold (for its fair market value as of the 
        first day of the taxpayer year) and any gain or loss shall be 
        treated as received or accrued on such day.''
    (d) Conforming Amendments.--
            (1) The table of sections for part II of subchapter O of 
        chapter 1 of such Code is amended by striking the item relating 
        to section 1014.
            (2) The heading of section 1015 of such Code is amended to 
        read as follows:

``SEC. 1015. BASIS OF PROPERTY ACQUIRED BY GIFT, FROM A DECEDENT, OR 
              TRANSFERRED IN TRUST.''

            (3) The table of sections for part II of subchapter O of 
        chapter 1 of such Code is amended by striking the item relating 
        to section 1015 and inserting the following new item:

                              ``Sec. 1015. Basis of property acquired 
                                        by gift, from a decedent, or 
                                        transferred in trust.''
    (e) Effective Dates.--
            (1) Carryover basis.--Except as provided in paragraph (2), 
        the amendments made by this section shall apply to decedents 
        dying after December 31, 1995.
            (2) Tax on inherited property.--The amendment made by 
        subsection (c) shall apply to taxable years ending after 
        December 31, 1995.

SEC. 103. ESTABLISHMENT OF HOUSING TRUST FUND.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 (relating to trust funds) is amended by adding at the end 
thereof the following new section:

``SEC. 9512. HOUSING TRUST FUND.

    ``(a) Creation of Trust Fund.--There is hereby established in the 
Treasury of the United States a trust fund to be known as the `Housing 
Trust Fund', consisting of such amounts as may be appropriated or 
credited to such trust fund as provided in this section, section 
9602(b) of this title, or section 201(e) or 212(a)(3)(B) of the Federal 
Housing Trust Fund Act of 1994.
    ``(b) Credits to Trust Fund.--There are hereby appropriated to the 
Housing Trust Fund amounts equivalent to the increase in income tax 
liability attributable to section 69.
    ``(c) Expenditures From Trust Fund.--Amounts in the Housing Trust 
Fund are available each fiscal year to the Secretary of Housing and 
Urban Development for carrying out title II of the Federal Housing 
Trust Fund Act of 1994, but shall not be available for any other 
purpose.''.
    (b) Clerical Amendment.--The table of sections for such subchapter 
A is amended by adding at the end thereof the following new item:

                              ``Sec. 9512. Housing Trust Fund.''.

TITLE II--ADMINISTRATION OF HOUSING TRUST FUND AND ENTITLEMENT PROGRAM 
               FOR FORMULA GRANTS FOR AFFORDABLE HOUSING

SEC. 201. GRANTS FOR ELIGIBLE PUBLIC ENTITIES.

    (a) In General.--The Secretary of Housing and Urban Development 
shall, for fiscal year 1995 and each fiscal year thereafter, make a 
grant under this title to each eligible public entity for which an 
allotment is made under section 210. The amount of the grant for such 
an eligible public entity shall be equal to the amount of the allotment 
for the eligible public entity determined in accordance with section 
209.
    (b) Use of Trust Funds.--Grants under this title shall be made only 
using amounts from the Housing Trust Fund established in section 9512 
of the Internal Revenue Code of 1986.
    (c) Entitlement Status of Grants.--
            (1) In general.--Subject to subsection (d), each eligible 
        public entity is entitled to payment of the grant required by 
        subsection (a) for fiscal year 1995 and each subsequent fiscal 
        year.
            (2) Rule of construction.--Paragraph (1) may not be 
        construed to establish, with respect to this section, an 
        entitlement of any individual to have carried out on behalf of 
        the individual any activity authorized in this title.
    (d) Limitations.--An entitlement is established pursuant to 
subsection (a) for a fiscal year for an eligible public entity--
            (1) only to the extent that there are amounts in the Fund 
        and only to the extent of the amount of the allotment made 
        under section 210 for the entity; and
            (2) only if the allotment for the entity has not been 
        terminated pursuant to section 212(c)(1).
    (e) Duration of Availability of Grant Amounts.--With respect to the 
24-month period beginning on the date on which a grant under subsection 
(a) for a fiscal year becomes available to an eligible public entity, 
any portion of the grant that is not obligated by the entity before the 
expiration of such period shall be covered into the Fund and be 
available for grants under such subsection for the following fiscal 
year.
    (f) Payment of Grant Amounts.--The grant amounts for each eligible 
public entity shall be paid directly to the agency designated pursuant 
to section 206(2) by the eligible public entity and shall be available 
only for activities authorized under section 202.

SEC. 202. ELIGIBLE ACTIVITIES FOR USE OF GRANT AMOUNTS.

    (a) In General.--Grant amounts provided under this title for a 
fiscal year may be expended by the eligible public entity receiving the 
grant only in accordance with the Trust Fund grant plan for the entity 
for such year approved by the Secretary under section 208 to carry 
out--
            (1) a housing costs assistance program under section 203;
            (2) a housing supply assistance program under section 204; 
        and
            (3) administrative activities, to the extent provided in 
        subsection (c).
    (b) Allocation of Grant Amounts Between Programs.--
            (1) In general.--Except to the extent provided in 
        subsection (a)(3) and paragraph (2) of this subsection, from 
        the grant amounts provided to an eligible public entity for a 
        fiscal year, the entity shall use--
                    (A) the amount provided to the entity under 
                paragraph (1)(A), (2)(A), or (3)(A), as applicable, of 
                section 210(a) for carrying out the housing costs 
                assistance program under section 203 of the entity; and
                    (B) the amount provided to the entity under 
                paragraph (1)(B), (2)(B), or (3)(B), as applicable, of 
                section 210(a) for carrying out the housing supply 
                assistance program under section 204 of the entity.
            (2) Exception.--If in any fiscal year any grant amounts 
        referred to in paragraph (1)(A) remain available for commitment 
        for housing costs assistance for eligible families 9 months 
        after such amounts are first made available to the eligible 
        public entity because of a lack of eligible families or the 
        failure of eligible families to obtain suitable dwelling units, 
        the eligible public entity may use such amounts for carrying 
        out the housing supply assistance program of the entity.
    (c) Administrative Expenses.--
            (1) Limitation.--An eligible public entity that receives 
        grant amounts for a fiscal year may use for administrative 
        expenses relating to carrying out the housing costs assistance 
        program and housing supply assistance program of the entity not 
        more than the applicable percentage of such amounts as the 
        Secretary shall establish by regulation for purposes of this 
        subsection. The Secretary may establish different percentage 
        limitations based on the amount of grant amounts received, but 
        no such limitation may exceed 6 percent.
            (2) Included expenses.--For purposes of paragraph (1), the 
        term ``administrative expenses'' includes expenses relating to 
        performance reports required under section 212(a), expenses of 
        a public entity in administering a grant under this section, 
        and expenses of a public entity or other subgrantee 
        organization or entity in administering a housing costs 
        assistance program or housing supply assistance program.

SEC. 203. HOUSING COSTS ASSISTANCE PROGRAM.

    (a) Requirement to Carry Out Program.--Each eligible public entity 
that receives grant amounts under paragraph (1)(A), (2)(A), or (3)(A), 
as applicable, of section 210(a) shall carry out a housing costs 
assistance program under this section using such grant amounts to 
provide financial assistance on behalf of eligible families for the 
rental or purchase of dwelling units occupied by such families.
    (b) Eligible Housing.--A housing costs assistance program may 
provide assistance on behalf of an eligible family only for the costs 
of--
            (1) renting a dwelling unit that is--
                    (A) affordable housing;
                    (B) under lease for occupancy by the family as its 
                principal residence; and
                    (C) except as provided in subsection (e)(4), 
                located in the jurisdiction of the eligible public 
                entity carrying out the program; or
            (2) purchasing a dwelling unit that is--
                    (A) the principal residence of the family;
                    (B) security for (or subject to a mortgage that 
                secures) repayment of the outstanding obligation of a 
                loan made for purchase of the dwelling by the family; 
                and
                    (C) except as provided in subsection (e)(4), 
                located in the jurisdiction of the eligible public 
                entity carrying out the program.
    (c) Amount of Assistance.--The amount of financial assistance 
provided under a housing costs assistance program on behalf of an 
eligible family shall be the amount equal to the amount by which the 
fair market rental for a dwelling unit of the size appropriate for the 
family in the applicable housing market area exceeds the lesser of 30 
percent of the adjusted income of the family or 5 percent of the gross 
income of the family.
    (d) Priorities.--If the grant amounts provided for a fiscal year 
for an eligible public entity are insufficient to provide assistance 
under the housing costs assistance program of the entity for all 
eligible families residing in the jurisdiction of the entity--
            (1) 70 percent of the grant amounts received by the entity 
        under paragraph (1)(A), (2)(A), or (3)(A), as applicable, of 
        section 210(a) shall be used subject to a preference for 
        assisting eligible families described in section 8(d)(1)(A)(i) 
        of the United States Housing Act of 1937; and
            (2) 30 percent of such grant amounts shall be used subject 
        to a preference for assisting eligible families who qualify 
        under a system of local preferences established by the eligible 
        public entity.
    (e) Method of Assistance.--Under a housing costs assistance program 
under this section--
            (1) the eligible public entity carrying out the program 
        shall make assistance payments on behalf of the eligible family 
        assisted to the owner of, or mortgage servicer for, the 
        dwelling unit occupied by the eligible family;
            (2) the owner of a rental dwelling unit to be occupied by a 
        family assisted under the program shall enter into a contract 
        with the eligible public entity that--
                    (A) provides for making of the assistance payments 
                under the program;
                    (B) has a term not shorter than the term of the 
                lease for the dwelling unit and not longer than 60 
                months; and
                    (C) provides that the housing shall be subject to 
                the procedures established under section 207(b)(3) by 
                the eligible public entity to ensure compliance of the 
                housing with housing codes or quality standards;
            (3) a family assisted under the program who is purchasing 
        the dwelling occupied by the family shall enter into a contract 
        with the eligible public entity that--
                    (A) provides for the making the assistance payments 
                under the program;
                    (B) has a term not longer than 60 months, which 
                shall be renewable subject only to the availability of 
                amounts, the need for such assistance, and compliance 
                by the assisted family with the conditions of the 
                program; and
                    (C) provides that the housing shall be subject to 
                the procedures established under section 207(b)(3) by 
                the eligible public entity to ensure compliance of the 
                housing with housing codes or quality standards; and
            (4) any eligible family on behalf of whom assistance is 
        provided under the program and who moves to an affordable 
        dwelling unit located not more than 100 miles from the 
        jurisdiction of the eligible public entity providing such 
        assistance may use the assistance to rent or purchase the 
        dwelling unit.
    (f) Housing Choice Assistance.--
            (1) In general.--A housing costs assistance program may 
        reserve not more than 20 percent of the amount of assistance 
        available for any fiscal year under the program for use only to 
        provide assistance under the program for eligible families who 
        are minority families and are moving to dwelling units located 
        in areas without high concentrations of persons living in 
        poverty.
            (2) Authority to increase assistance.--Notwithstanding 
        subsection (c), the amount of financial assistance provided 
        under a housing costs assistance program on behalf of an 
        eligible family who meets the requirements for assistance with 
        amounts reserved under this subsection may exceed the amount 
        determined under subsection (c), but only to the extent 
        necessary to enable the family assisted to relocate to and 
        maintain residence in an affordable dwelling unit in an area 
        described in paragraph (1) of this subsection.
            (3) Amount of increase.--In no event may the amount of such 
        financial assistance exceed the sum of--
                    (A) the cost of relocating to a dwelling unit in an 
                area described in paragraph (1); and
                    (B) the difference between (i) the amount by which 
                125 percent of the fair market rental for a dwelling 
                unit of the size appropriate for the family and located 
                in the applicable housing market (to which the family 
                is moving), and (ii) the lesser of 30 percent of the 
                adjusted income of the family or 5 percent of the gross 
                income of the family.
    (g) Housing Counseling.--Each family assisted under a housing costs 
assistance program shall be provided counseling regarding housing 
quality, obtaining a decent and affordable dwelling unit, and the 
choice of a neighborhood in which to reside.
    (h) Requirements for Homeownership Assistance.--The Secretary shall 
by regulation establish requirements applicable to housing costs 
assistance programs established under this section to provide that, in 
the case of assistance for purchase of a dwelling unit--
            (1) such assistance is provided only on behalf of eligible 
        families for whom the terms of the purchase (including the loan 
        amount and interest rate, other financing provisions, and other 
        obligations) are reasonable, taking into consideration the 
        assets, income, and obligations of the eligible family 
        assisted; and
            (2) upon the sale of the dwelling unit by the eligible 
        family, the housing costs assistance program shall recapture 
        from any net proceeds of the sale the amount necessary to avoid 
        any unreasonable profit to the eligible family and make such 
        amount available for use under the program.

SEC. 204. HOUSING SUPPLY ASSISTANCE PROGRAM.

    (a) Requirement to Carry Out Program.--Each eligible public entity 
that receives grant amounts under paragraph (1)(B), (2)(B), or (3)(B), 
as applicable, of section 210(a) shall carry out a housing supply 
assistance program under this section using such grant amounts to 
provide financial assistance for increasing the supply of affordable 
housing in the jurisdiction of the eligible public entity.
    (b) Eligible Housing Development Activities.--
            (1) In general.--A housing supply assistance program shall 
        provide assistance for the development of affordable housing 
        for rental or homeownership. Such assistance may be provided 
        for the acquisition, new construction, reconstruction, and 
        moderate or substantial rehabilitation of affordable housing, 
        which may include costs for real property acquisition, site 
        improvement, conversion, and demolition, financing costs, 
        relocation expenses of any displaced persons, families, 
        businesses, or organizations, reasonable administrative and 
        planning costs, and any other expenses as the Secretary may 
        provide.
            (2) Affordability requirement.--Any housing for which 
        assistance is provided pursuant to paragraph (1) with grant 
        amounts shall be subject to binding restrictions sufficient to 
        ensure that, for the entire useful life of the housing, the 
        housing is used as affordable housing.
            (3) Cost limits.--The Secretary shall by regulation 
        establish limitations on the amount of assistance provided 
        under a housing assistance supply program that may be used for 
        administrative, planning, and development costs of affordable 
        housing.
            (4) Required number of units for extremely low-, very low-, 
        and low-income families.--Of the number of dwelling units in 
        housing assisted under this subsection under the housing supply 
        assistance program of an eligible public entity in a fiscal 
        year--
                    (A) the percentage of such number that are subject 
                to binding restrictions ensuring affordability to, and 
                priority for occupancy by, extremely low-income 
                families shall not be less than the percentage of low-
                income renter families with housing problems in the 
                jurisdiction of the eligible public entity that are 
                extremely low-income families, as determined based on 
                the most recent information available from the 
                Secretary;
                    (B) the percentage of such number that are subject 
                to binding restrictions ensuring affordability to, and 
                priority for occupancy by, very low-income families 
                shall not be less than the percentage of low-income 
                renter families with housing problems in the 
                jurisdiction of the eligible public entity that are 
                very low-income families (but not extremely low-income 
                families), as determined based on the most recent 
                information available from the Secretary; and
                    (C) the percentage of such number that are subject 
                to binding restrictions ensuring affordability to, and 
                priority for occupancy by, low-income families shall 
                not be less than the percentage of low-income renter 
                families with housing problems in the jurisdiction of 
                the eligible public entity that are low-income families 
                (but not very low-income families), as determined based 
                on the most recent information available from the 
                Secretary.
            (5) Required proportion of rental units to homeownership 
        units.--Of the number of dwelling units in housing assisted 
        under this subsection under a housing supply assistance program 
        of an eligible public entity in a fiscal year, the percentage 
        of such number that are units available for rental shall not be 
        less than the percentage that is 10 percent less than the 
        percentage of low-income families with housing problems in the 
        jurisdiction of the entity that are renters, as determined 
        based on the most recent information available to the 
        Secretary.
            (6) Required proportion of assisted units in poverty 
        areas.--Of the number of dwelling units in housing assisted 
        under this subsection under a housing supply assistance program 
        of an eligible public entity in a fiscal year, the percentage 
        of such number that are located in poverty areas shall not be 
        less than the percentage of the number of low-income families 
        residing within the jurisdiction of the entity that reside 
        within poverty areas, as determined based on the most recent 
        information available to the Secretary.
            (7) Allocation for rural areas.--Of the grant amounts 
        available for a fiscal year for a public entity that is a State 
        to carry out a housing supply assistance program under this 
        section, the State shall allocate an amount for each rural area 
        based on a formula, determined by the Secretary, that 
        determines the need for such assistance in each such area based 
        on the number of extremely low- and very low-income families 
        residing in the area. The weight given under the formula to the 
        number of extremely low-income families residing in a rural 
        area shall be twice the weight given under the formula to the 
        number of such very-low income families.
    (c) Eligible Housing Repair Activities.--
            (1) In general.--A housing supply assistance program may 
        provide assistance for emergency repairs of housing, abatement 
        of lead-based paint, and removal of such other hazards in 
        housing as the Secretary shall provide.
            (2) Limitation on housing assisted.--Assistance may be 
        provided under paragraph (1) only if--
                    (A) the housing assisted is subject to binding 
                restrictions sufficient to ensure that, for the entire 
                useful life of the housing, the housing is used as 
                affordable housing; or
                    (B) the activities conducted with such assistance 
                are conducted on behalf of residents of the housing who 
                are very low-income families to enable such families to 
                remain in the housing.
    (d) Eligible Housing Services Activities.--
            (1) In general.--A housing supply assistance program may 
        provide assistance for carrying out services relating to the 
        development of decent and affordable housing, eliminating 
        segregation in the availability and occupancy of such housing, 
        and improving the capacity of moderate-income families to 
        obtain and maintain such housing.
            (2) Eligible activities.--Activities eligible for 
        assistance under this subsection shall include--
                    (A) fair housing enforcement activities;
                    (B) counseling relating to housing and neighborhood 
                choice;
                    (C) counseling regarding homeownership and tenant 
                affairs and responsibilities;
                    (D) support services for nonprofit organizations 
                engaged in developing or managing affordable housing;
                    (E) employment training for moderate-income 
                families;
                    (F) development of the capacity of community 
                housing development organizations and tenant 
                organizations;
                    (G) supportive services for moderate-income 
                residents of affordable housing (including day care and 
                job counseling);
                    (H) technical assistance to organizations in 
                developing proposals for assistance under the housing 
                supply assistance program; and
                    (I) other services as the Secretary may provide.
            (3) Limitation on availability of amounts.--The Secretary 
        shall establish, by regulation, limitations on the portion of 
        grant amounts for a fiscal year received by an eligible public 
        entity and available for carrying out a housing supply 
        assistance program that may be used for services under this 
        subsection. The limitations shall be expressed in terms of 
        percentages of the grant amounts available for carrying out the 
        housing supply assistance program, none of which may exceed 15 
        percent and which shall progressively decrease as such amount 
        increases.
    (e) Prohibited Uses.--Amounts available for carrying out a housing 
assistance supply program may not be used--
            (1) to provide tenant-based assistance for the rental of a 
        dwelling unit, including providing replacement units for public 
        housing to meet the requirements under section 18 of the United 
        States Housing Act of 1937;
            (2) provide non-Federal matching contributions required 
        under any other Federal program;
            (3) provide assistance authorized under section 9 of the 
        United States Housing Act of 1937;
            (4) carry out activities authorized under section 14 of the 
        United States Housing Act of 1937; or
            (5) provide assistance to eligible low-income housing under 
        the provisions of the Emergency Low Income Housing Preservation 
        Act of 1987 or the Low-Income Housing Preservation and Resident 
        Homeownership Act of 1990, except in the case of such 
        assistance in connection with acquisition of the housing by a 
        priority purchaser (as such term is defined in section 231(a) 
        of the Low-Income Housing Preservation and Resident 
        Homeownership Act of 1990).
    (f) Economic Opportunities for Low-Income Persons.--Amounts 
available to carry out a housing supply assistance program shall be 
considered the provision of housing assistance for purposes of section 
3 of the Housing and Urban Development Act of 1968. The Secretary shall 
issue regulations to carry out the provisions of such section with 
respect to assistance provided under housing supply assistance 
programs.
    (g) Eligible Housing Providers.--Assistance for activities under 
this section may be provided to any entity capable, in the 
determination of the eligible public entity providing the assistance, 
to carry out such activities, including nonprofit organizations, 
cooperative housing organizations, public housing agencies and other 
public agencies, and for-profit housing providers.
    (h) Use of Assistance Under Other Programs.--Except as provided in 
subsection (e), amounts available to carry out a housing supply 
assistance program may be used for activities under other Federal, 
State, and local programs to the extent the use of such assistance 
complies with the requirements under this title.

SEC. 205. AFFORDABILITY.

    (a) In General.--The Secretary shall issue regulations establishing 
requirements that must be met for housing to be considered affordable 
housing for purposes of this title.
    (b) Content.--The regulations under subsection (a) shall include 
requirements regarding--
            (1) in the case of rental dwelling units, the maximum 
        monthly rents for the units, which shall take into 
        consideration the fair market rentals for the relevant area 
        and, if applicable, the income group for which the unit is to 
        be affordable; and
            (2) in the case of homeownership dwelling units--
                    (A) the maximum purchase price of the units;
                    (B) resale restrictions appropriate--
                            (i) to allow for subsequent purchase of the 
                        property only by an eligible family at a price 
                        that will--
                                    (I) provide the owner with a fair 
                                return on investment, including any 
                                improvements; and
                                    (II) ensure that the housing will 
                                remain affordable; or
                            (ii) to recapture from any net proceeds of 
                        the sale the amount necessary to avoid any 
                        unreasonable profit to the seller and make such 
                        amount available for use under the program; and
            (3) in the case of multifamily housing--
                    (A) the number or percentage of units in the 
                housing that comply with the applicable requirements 
                established under paragraph (1) or (2); and
                    (B) the number or percentage of units in the 
                housing available for occupancy only by eligible 
                families.
    (c) Standards for Income Groups.--The Secretary shall issue 
regulations establishing requirements that must be met for a dwelling 
unit to be considered affordable for purposes of this title for each of 
the income groups.

SEC. 206. ELIGIBLE PUBLIC ENTITIES.

    For purposes of this title, the term ``eligible public entity'' 
means, with respect to a fiscal year, a public entity that meets the 
following requirements:
            (1) Submission of chas.--The public entity has submitted to 
        the Secretary a comprehensive housing affordability strategy 
        under section 105 of the Cranston-Gonzalez National Affordable 
        Housing Act for such year that has been approved under such 
        section.
            (2) Designation of recipient agency.--The public entity has 
        designated or established a public agency of the government of 
        the public entity for purposes of carrying out this title for 
        the public entity, which such agency--
                    (A) is governed by a board of directors or other 
                similar governing body whose members--
                            (i) are appointed by the chief executive 
                        officer of the government for the public 
                        entity, except that not less than 50 percent of 
                        the members shall be individuals who were 
                        recommended for membership by individuals and 
                        entities other than the agency referred to in 
                        the matter preceding subparagraph (A) or any 
                        official of the government for the public 
                        entity or of such agency;
                            (ii) include--
                                    (I) not less than 1 individual who 
                                is homeless at the time of such 
                                appointment or previously was homeless;
                                    (II) not less than 1 individual who 
                                represents a nonprofit organization 
                                significantly engaged in low-income 
                                housing advocacy activities; and
                                    (III) not less than 1 individual 
                                who represents a nonprofit organization 
                                significantly engaged in providing 
                                housing assistance and supportive 
                                services to low-income and homeless 
                                families; and
                            (iii) in the case of an agency for a public 
                        entity that is a State, complies with the 
                        requirements for geographic distribution that 
                        the Secretary shall establish to ensure that 
                        the various geographic areas of the State are 
                        fairly represented in the membership of the 
                        governing body; and
                    (B) complies with requirements that the Secretary 
                shall establish to ensure that the agency is capable of 
                carrying out activities under this title for the public 
                entity, including receiving and distributing the grant 
                for the public entity, conducting activities under 
                sections 203 and 204 or selecting subgrantee 
                organizations and entities to undertake such 
                activities, and monitoring such activities in 
                accordance with section 212(a).
            (3) Plan.--The public entity has submitted to the Secretary 
        a Trust Fund grant plan in accordance with section 208 for the 
        fiscal year that has been approved by the Secretary under such 
        section.
            (4) Compliance with program requirements.--The public 
        entity has entered into an agreement with the Secretary, as the 
        Secretary may require, to comply with the provisions of this 
        title and the Trust Fund grant plan for such year for the 
        entity that is approved by the Secretary.

SEC. 207. REQUIREMENTS OF ELIGIBLE PUBLIC ENTITIES.

    (a) Citizen Participation Procedures.--Each eligible public entity 
that receives grant amounts for a fiscal year shall establish 
procedures, in accordance with regulations that the Secretary shall 
issue to carry out this subsection, to ensure the participation of 
citizens in determinations relating to the programs for assistance 
under sections 203 and 204, subject to the following requirements:
            (1) Covered issues.--The citizen participation procedures 
        under this subsection shall apply to any determinations made 
        for the eligible public entity regarding the following issues:
                    (A) Identifying the housing needs of the entity and 
                priorities for use of grant amounts for addressing such 
                needs.
                    (B) Developing requirements and procedures for 
                expending grant amounts.
                    (C) Reviewing proposals for assistance with grant 
                amounts and determining the allocation of grant amounts 
                among such proposals.
                    (D) Monitoring and reviewing the performance of the 
                eligible public entity in complying with the Trust Fund 
                grant plan of the entity.
                    (E) Recommending and developing improvements in the 
                operations of the eligible public entity to implement 
                the Trust Fund grant plan of the entity.
                    (F) Amending or changing the Trust Fund grant plan 
                for the entity.
                    (G) Submitting a performance review under section 
                212(a) for the entity.
                    (H) Establishing a system of local preferences 
                under section 203(d)(2) for housing costs assistance.
                    (I) Such other issues as the Secretary may provide.
            (2) Procedure.--The citizen participation requirements 
        under this subsection for an eligible public entity shall 
        provide for--
                    (A) public hearings to obtain the views of 
                citizens, public agencies, and other interested parties 
                regarding significant actions referred to in paragraph 
                (1), which shall be conducted a reasonable period of 
                time before any such action is taken;
                    (B) publication of each performance review under 
                section 212(a) and any substantial amendment to or 
                change in the Trust Fund grant plan for the entity; and
                    (C) a procedure for submission of complaints and 
                grievances regarding the operation of the programs of 
                the public entity assisted under this title and for a 
                written response by the public entity to each such 
                grievance and complaint not later than 15 days after 
                submission.
    (b) Housing Quality Standards and Enforcement.--
            (1) Section 8 standards.--Except as provided in paragraph 
        (2), each dwelling unit assisted with grant amounts shall be 
        maintained in the condition that is required under the housing 
        quality standards established under section 8 of the United 
        States Housing Act of 1937 with respect to dwelling units 
        assisted under such section.
            (2) Establishment of local standards.--Each dwelling unit 
        assisted with grant amounts provided to an eligible public 
        entity whose jurisdiction is subject to a housing code or 
        quality standards that have been determined by the Secretary to 
        provide protection for the health and safety of housing 
        residents equivalent to or greater than the protection provided 
        by the standards applicable to housing assisted under section 8 
        of the United States Housing Act of 1937 shall be maintained in 
        compliance with such local code or standards.
            (3) Enforcement.--Each eligible public entity that receives 
        grant amounts for a fiscal year shall have in effect 
        procedures, in accordance with regulations that the Secretary 
        shall issue to carry out this paragraph, to ensure that each 
        dwelling unit of housing assisted with grant amounts is 
        maintained in accordance with the housing code or quality 
        standards applicable under paragraph (1) or (2). Such 
        procedures may include providing for the voluntary transfer of 
        housing that violates such code or standards in a significant 
        manner to an owner who will remedy such violations and maintain 
        the housing in accordance with such code or standards.
    (c) Prevention of Displacement.--
            (1) In general.--Each eligible public entity that receives 
        grant amounts for a fiscal year shall establish standards and 
        procedures, in accordance with regulations established by the 
        Secretary, to minimize the displacement of moderate-income 
        families by activities conducted in whole or in part with grant 
        amounts.
            (2) Relocation assistance.--The standards and procedures 
        shall ensure that any such family involuntarily displaced by 
        such activities--
                    (A) is provided assistance under the housing costs 
                assistance program, if such family is an eligible 
                family; and
                    (B) is provided assistance in obtaining and 
                relocating to a reasonable and suitable alternative 
                dwelling unit of decent and affordable housing.
    (d) Prohibition of Assistance by States for Entitlement 
Communities.--An eligible public entity that is a State that receives 
grant amounts for a fiscal year may not use any of such amounts for 
carrying out eligible activities under section 202(a) in entitlement 
communities within the State.
    (e) Enforcement of Requirements.--Each eligible public entity that 
receives grant amounts for a fiscal year shall have in effect 
procedures, in accordance with regulations that the Secretary shall 
issue to carry out this subsection, to ensure that any grant amounts 
provided to any subgrantee to carry out a housing costs assistance 
program or a housing supply assistance program are used in accordance 
with the requirements of this title.

SEC. 208. TRUST FUND GRANT PLANS.

    (a) Requirements for Approval.--A Trust Fund grant plan for a 
public entity for a fiscal year is in accordance with this section only 
if the plan complies with following requirements:
            (1) Submission.--The plan is submitted not later than 90 
        days before the commencement of the fiscal year by the agency 
        of the public entity designated under section 206(2).
            (2) Housing costs assistance program.--The plan--
                    (A) provides for using grant amounts to the extent 
                provided in section 202(b)(1)(A) to carry out a housing 
                costs assistance program in accordance with section 203 
                within the jurisdiction of the public entity;
                    (B) describes how assistance will be provided under 
                the program to assist minority families to move to 
                areas without high concentrations of persons living in 
                poverty;
                    (C) describes how families receiving assistance 
                under the program will be provided counseling in 
                accordance with section 203(g); and
                    (D) describes the operation of the program and 
                identifies and describes the entities administrating 
                the program.
            (3) Housing supply assistance program.--The plan--
                    (A) provides for using grant amounts to the extent 
                provided in section 202(b)(1)(B) to carry out a housing 
                supply assistance program in accordance with section 
                204 within the jurisdiction of the public entity;
                    (B) describes, for each income group, the shortage 
                of decent housing in the jurisdiction of the public 
                entity that is affordable for the income group;
                    (C) describes how, and the extent to which, the 
                program will remedy such shortages;
                    (D) describes the priorities for the types of 
                housing to be provided under the program, the areas for 
                locating housing to be provided under the program, and 
                the families to be offered occupancy in such housing;
                    (E) describes how the program will comply with the 
                requirements under section 207(c) regarding avoiding 
                displacement and providing assistance for families 
                involuntarily displaced;
                    (F) describes the provisions under the program to 
                comply with section 207(b) regarding ensuring housing 
                quality; and
                    (G) describes the operation of the program and 
                identifies and describes the entities administrating 
                the program.
            (4) Certification of previous compliance.--With respect to 
        fiscal year 1996 and subsequent fiscal years, the plan contains 
        a certification that, for the most recent fiscal year for which 
        the eligible public entity received a grant under this title, 
        the entity complied with the requirements under this title.
            (5) Citizen participation in preparation.--The public 
        entity has, in preparing the plan--
                    (A) made available to citizens, public agencies, 
                and other interested parties reasonable and timely 
                access to meetings, information, and records relating 
                to any amounts the entity has received under this title 
                in previous years, the amount the entity expects to 
                receive for the fiscal year under this title, and the 
                proposed uses of the grant amounts;
                    (B) published the proposed plan in a manner that, 
                in the determination of the Secretary, affords affected 
                citizens, public agencies, and other interested parties 
                a reasonable opportunity to examine its content and to 
                submit comments on the proposed plan;
                    (C) held 1 or more public hearings to obtain the 
                views of citizens, public agencies, and other 
                interested parties on the needs of the public entity 
                with respect to eligible families and the supply of 
                affordable housing;
                    (D) considered any comments or views of citizens in 
                preparing the final plan for submission under this 
                section and attached a summary of such comments or 
                views to the plan submitted; and
                    (E) made the plan submitted available to the 
                public.
            (6) Ongoing citizen participation.--The plan describes the 
        procedures for ongoing citizen participation required under 
        section 207(a).
            (7) Housing quality enforcement measures.--The plan 
        describes the procedures developed to comply with the 
        requirement under section 207(b)(3) to enforce the housing code 
        or quality standards applicable to housing assisted under this 
        title.
            (8) Other.--The plan contains any other information that 
        the Secretary considers appropriate to carry out the purposes 
        of this title.
    (b) Review.--
            (1) In general.--Upon the submission of a Trust Fund grant 
        plan under this section, the Secretary shall review the plan to 
        determine whether it is in accordance with this section. Not 
        later than 90 days after receipt by the Secretary, the 
        Secretary shall approve the plan unless the Secretary 
        determines that it has not been submitted in accordance with 
        this section, in which case the Secretary shall disapprove the 
        plan.
            (2) Notification.--The Secretary shall immediately notify 
        the public entity submitting a plan, in writing, of any 
        approval or disapproval of the plan. A plan shall be considered 
        to have been approved under this subsection for purposes of 
        section 206(3) unless the Secretary provides notice under this 
        paragraph of disapproval during the period referred to 
        paragraph (1) of this subsection.
            (3) Disapproval.--In the case of a plan disapproved by the 
        Secretary, the Secretary shall include with the notification of 
        disapproval a written description of the reasons for the 
        disapproval identifying the specific deficiencies of the plan.
            (4) Amendments and resubmission.--Any public entity whose 
        plan has been disapproved may amend or resubmit the plan during 
        the 60-day period beginning upon notice of disapproval. The 
        Secretary shall review, and approve or disapprove, a plan 
        amended or resubmitted under this paragraph not later than 60 
        days after receipt of the resubmitted plan, and shall 
        immediately notify the public entity amending or resubmitting 
        the plan, in writing, of such approval or disapproval. A plan 
        resubmitted or amended under this paragraph shall be considered 
        to have been approved under this subsection for purposes of 
        section 206(3) unless the Secretary provides notice under this 
        paragraph of disapproval during such period.
    (c) Updated Plans.--A public entity may, for any fiscal year, 
submit to the Secretary a Trust Fund grant plan that was submitted by 
the public entity for a preceding fiscal year and approved under this 
section by the Secretary, together with written changes or amendments 
to such plan. Such plan, together with such changes and amendments, 
shall be considered for purposes of this title to be the Trust Fund 
grant plan submitted by such public entity for the fiscal year.

SEC. 209. ALLOCATION OF TRUST FUND AMOUNTS FOR STATES, ENTITLEMENT 
              COMMUNITIES, AND INDIAN TRIBES.

    (a) Set Aside for HUD Administrative Activities.--For each fiscal 
year, the Secretary shall reserve for activities under section 213 an 
amount equal to 1 percent of the total amounts available for the fiscal 
year to carry out this title.
    (b) Entitlement Communities.--
            (1) In general.--In each fiscal year, the Secretary shall 
        allocate a portion of the total Fund grant amounts (as such 
        term is defined in section 217) for the fiscal year for grants 
        under this title for eligible public entities that are 
        entitlement communities.
            (2) Amount.--For a fiscal year, the amount allocated for 
        entitlement communities pursuant to paragraph (1) shall bear 
        the same ratio to the total Fund grant amounts for the fiscal 
        year that--
                    (A) the number of low-income families with a 
                housing problem who reside in an entitlement community 
                that is an eligible public entity, bears to
                    (B) the total number (for all States) of low-income 
                families with a housing problem.
    (c) Indian Tribes.--
            (1) In general.--In each fiscal year, the Secretary shall 
        allocate a portion of the total Fund grant amounts for the 
        fiscal year for eligible public entities that are Indian 
        tribes.
            (2) Amount.--For a fiscal year, the amount allocated for 
        Indian tribes pursuant to paragraph (1) shall bear the same 
        ratio to the total Fund grant amounts for the fiscal year 
        that--
                    (A) the number of low-income families who--
                            (i) have a housing problem,
                            (ii) have a head of household who is a 
                        member of an Indian tribe, and
                            (iii) reside on Indian land,
                bears to
                    (B) the total number (for all States) of low-income 
                families with a housing problem.
    (d) States.--
            (1) In general.--In each fiscal year, the Secretary shall 
        allocate a portion of the total Fund grant amounts for the 
        fiscal year for eligible public entities that are States.
            (2) Amount.--For a fiscal year, the amount allocated for 
        States pursuant to paragraph (1) shall be equal to the 
        difference between--
                    (A) the total Fund grant amounts for the fiscal 
                year; and
                    (B) the sum of the portions for allocation for the 
                fiscal year for entitlement communities and Indian 
                tribes, as determined under subsections (b) and (c), 
                respectively.
    (e) Source of Information Regarding Families With a Housing 
Problem.--In determining the ratios under subsections (b)(2) and 
(c)(2), the Secretary shall use the most recent information regarding 
the number of families with housing problems tabulated by the Bureau of 
the Census, Department of Commerce, pursuant to information compiled 
for use in preparing the comprehensive housing affordability strategies 
submitted by participating jurisdictions under section 105 of the 
Cranston-Gonzalez National Affordable Housing Act.

SEC. 210. GRANT ALLOTMENTS.

    (a) In General.--The amount of the allotment for an eligible public 
entity for a fiscal year shall be determined as follows:
            (1) Entitlement communities.--For an eligible public entity 
        that is an entitlement community, the amount of the allotment 
        shall be the sum of the following amounts:
                    (A) High housing costs.--The product of--
                            (i) 67 percent of the amount of the 
                        allocation under section 209(b) for the fiscal 
                        year for entitlement communities, and
                            (ii) the high housing cost ratio under 
                        subsection (b)(1) for the entitlement 
                        community,
                as adjusted by the Secretary in accordance with 
                subsection (c).
                    (B) Affordable housing supply.--The product of--
                            (i) 33 percent of the amount of the 
                        allocation under section 209(b) for the fiscal 
                        year for entitlement communities; and
                            (ii) the affordable housing supply 
                        multiplier under subsection (d) for the 
                        entitlement community.
            (2) Indian tribes.--For an eligible public entity that is 
        an Indian tribe, the amount of the allotment shall be the sum 
        of the following amounts:
                    (A) High housing costs.--The product of--
                            (i) 67 percent of the amount of the 
                        allocation under section 209(c) for the fiscal 
                        year for Indian tribes, and
                            (ii) the high housing cost ratio under 
                        subsection (b)(2) for the Indian tribe,
                as adjusted by the Secretary in accordance with 
                subsection (c).
                    (B) Affordable housing supply.--The product of--
                            (i) 33 percent of the amount of the 
                        allocation under section 209(c) for the fiscal 
                        year for Indian tribes; and
                            (ii) the affordable housing supply 
                        multiplier under subsection (d) for the Indian 
                        tribe.
            (3) States.--For an eligible public entity that is a State, 
        the amount of the allotment shall be the sum of the following 
        amounts:
                    (A) High housing costs.--The product of--
                            (i) 67 percent of the amount of the 
                        allocation under section 209(d) for the fiscal 
                        year for States, and
                            (ii) the high housing cost ratio under 
                        subsection (b)(3) for the State,
                as adjusted by the Secretary in accordance with 
                subsection (c).
                    (B) Affordable housing supply.--The product of--
                            (i) 33 percent of the amount of the 
                        allocation under section 209(d) for the fiscal 
                        year for States; and
                            (ii) the affordable housing supply 
                        multiplier under subsection (d) for the State.
    (b) High Housing Cost Ratio.--The ratio under this subsection for 
an eligible public entity shall be--
            (1) in the case of an entitlement community, the ratio of--
                    (A) the number of families residing in the 
                entitlement community who pay more than 50 percent of 
                the gross family income for housing costs, to
                    (B) the total number of families residing in 
                entitlement communities who pay more than 50 percent of 
                the gross family income for housing costs;
            (2) in the case of an Indian tribe, the ratio of--
                    (A) number of families who--
                            (i) pay more than 50 percent of the gross 
                        family income for housing costs,
                            (ii) have a head of household who is a 
                        member of the tribe, and
                            (iii) reside on Indian land of the tribe, 
                        to
                    (B) the total number of families who--
                            (i) pay more than 50 percent of the gross 
                        family income for housing costs,
                            (ii) have a head of household who is a 
                        member of an Indian tribe, and
                            (iii) reside on Indian land; and
            (3) in the case of a State, the ratio of--
                    (A) the number of families residing in the State 
                (but not within an entitlement community) who pay more 
                than 50 percent of the gross family income for housing 
                costs, to
                    (B) the total number of families residing in all 
                States (but not within an entitlement community) who 
                pay more than 50 percent of the gross family income for 
                housing costs.
    (c) Adjustment for High Housing Costs.--Adjustment of an amount for 
an eligible public entity in accordance with this subsection shall be 
an adjustment to the extent necessary to reflect the cost of affordable 
housing in the eligible public entity relative to the cost of 
affordable housing in other eligible entities, as determined by the 
Secretary. Any adjustment of amounts for a fiscal year in accordance 
with this subsection shall be made in such amounts so that the sum of 
the allotments for all eligible public entities resulting from 
paragraphs (1)(A), (2)(A), and (3)(A) of subsection (a) is equal to 67 
percent of the total Fund grant amounts for the fiscal year.
    (d) Affordable Housing Supply Multiplier.--
            (1) In general.--The Secretary shall, by regulation, 
        establish a formula to determine, for each eligible public 
        entity, a number (for purposes of this section referred to as 
        the ``affordable housing supply multiplier'') that reflects the 
        share, for each eligible public entity, of the total need in 
        all States for additional units of decent housing that is 
        permanently affordable for extremely low-, very low-, and low-
        income families of different size relative to the share of such 
        need for other eligible public entities, as adjusted to take 
        into consideration prevailing levels of construction and 
        rehabilitation costs.
            (2) Factors.--The formula established pursuant to paragraph 
        (1) shall be based on objective measures of inadequate housing 
        supply, including--
                    (A) population growth;
                    (B) costs of acquiring, rehabilitating, and 
                constructing affordable housing;
                    (C) relative fiscal incapacity to carry out 
                activities under section 204 without Federal 
                assistance; and
                    (D) special housing needs.
    (e) De Minimis Rule.--Notwithstanding subsection (a)--
            (1) if the allotment determined under subsection (a)(1) for 
        an entitlement community is less than $750,000, the amount of 
        the allotment for the entitlement community shall instead be 
        $750,000, and the allotment for each other entitlement 
        community shall be adjusted on a pro rata basis;
            (2) if the allotment determined under subsection (a)(2) for 
        an Indian tribe is less than $500,000, the amount of the 
        allotment for the Indian tribe shall instead be $500,000, and 
        the allotment for each other Indian tribe shall be adjusted on 
        a pro rata basis; and
            (3) if the allotment determined under subsection (a)(3) for 
        a State is less than $2,000,000, the amount of the allotment 
        for the State shall instead be $2,000,000, and the allotment 
        for each other State shall be adjusted on a pro rata basis.

SEC. 211. MAINTENANCE OF STATE AND LOCAL EFFORT.

    Assistance provided with grant amounts may not be used to replace 
other public funds previously used, or designated for use, for 
activities of the type eligible to be assisted under this title.

SEC. 212. COMPLIANCE.

    (a) Monitoring and Performance Reports.--
            (1) In general.--Each eligible public entity shall monitor 
        the programs for assistance under this title carried out by the 
        entity and activities assisted under such programs, and 
        annually conduct a review of the progress made in carrying out 
        the Trust Fund grant plan for the entity. Each eligible public 
        entity shall annually submit a report on such monitoring and 
        review, in the form established by the Secretary, which shall 
        include information describing the number and types of families 
        served, including the number of families in each income group 
        assisted under this title and the racial and ethnic status of 
        persons assisted.
            (2) Submission.--The Secretary shall establish dates for 
        submission of reports under this subsection and review the 
        reports and make such recommendations as the Secretary 
        considers appropriate to carry out the purposes of this title.
            (3) Failure to report.--If an eligible public entity fails 
        to submit a report to the Secretary in a timely manner or the 
        Secretary determines that the report is incomplete, assistance 
        under this title to the entity may be--
                    (A) withheld until a report satisfactory to the 
                Secretary is submitted; or
                    (B) withdrawn and credited to the Fund for 
                reallocation under section 209 of this title in the 
                succeeding fiscal year, but only if the Secretary 
                determines on the record, after notice to the entity 
                and an opportunity for a hearing, that the entity will 
                not submit a satisfactory report.
    (b) Performance Review by Secretary.--
            (1) In general.--The Secretary shall review the activities 
        of each eligible public entity that receives grant amounts for 
        a fiscal year in a timely manner after the conclusion of such 
        fiscal year. Such review shall include regular on-site visits 
        in accordance with a schedule established by the Secretary and 
        assessment of--
                    (A) management of grant amounts provided to the 
                eligible public entity;
                    (B) compliance by the eligible public entity with 
                the Trust Fund grant plan of the entity;
                    (C) the accuracy of eligible public entity in 
                preparing performance reports under subsection (a); and
                    (D) efforts of the eligible public entity to ensure 
                that housing assisted with grant amounts are maintained 
                in compliance with contractual agreements and the 
                requirements under this title.
            (2) Report.--For each eligible public entity that submits a 
        performance review under subsection (a), the Secretary shall 
        submit to the entity a written preliminary report evaluating 
        the performance review. During the 30-day period beginning upon 
        submission of the report, the eligible public entity may submit 
        to the Secretary comments regarding the report. After reviewing 
        such comments but not later than 30 days after the conclusion 
        of such period, the Secretary shall submit to the eligible 
        public entity a final report evaluating the performance report 
        of the entity. Upon submission to the eligible public entity, 
        the Secretary shall make the final report, together with the 
        comments submitted by the entity, publicly available.
    (c) Remedies for Noncompliance With Program Requirements.--
            (1) Available remedies.--If the Secretary finds on the 
        record, after reasonable notice and opportunity for hearing, 
        that an eligible public entity has failed to comply 
        substantially with any provision of this title, the Secretary, 
        until the Secretary determines that there is no longer any such 
        failure to comply, shall take one or more of the following 
        actions:
                    (A) Termination of the payment of assistance under 
                this title to the entity.
                    (B) Reduction of the amount of assistance under 
                this title to the entity by an amount equal to the 
                amount of such payments which were not expended in 
                accordance with this title.
                    (C) Limitation of the availability of payments 
                under this title to programs, projects, or activities 
                not affected by such failure to comply.
                    (D) Termination of the allotment for the entity for 
                subsequent fiscal years.
            (2) Civil action.--
                    (A) Availability.--In lieu of, or in addition to, 
                any action authorized by paragraph (1), the Secretary 
                may, if the Secretary has reason to believe that an 
                eligible public entity has failed to comply 
                substantially with any provision of this title, refer 
                the matter to the Attorney General of the United States 
                with a recommendation that an appropriate civil action 
                be commenced.
                    (B) Relief sought.--Upon such a referral the 
                Attorney General may bring a civil action in any United 
                States district court having venue thereof for such 
                relief as may be appropriate, including an action to 
                recover the amount of the assistance provided under 
                this title which was not expended in accordance with 
                this title, or for mandatory or injunctive relief.
            (3) Petition for review.--
                    (A) Availability.--Any eligible public entity which 
                receives notice under paragraph (1) of the termination, 
                reduction, or limitation of payments under this title 
                may, within 60 days after receiving such notice, file 
                with the United States Court of Appeals for the circuit 
                in which such State is located, or in the United States 
                Court of Appeals for the District of Columbia, a 
                petition for review of the Secretary's action. The 
                petitioner shall forthwith transmit copies of the 
                petition to the Secretary and the Attorney General of 
                the United States, who shall represent the Secretary in 
                the litigation.
                    (B) Filing of record.--The Secretary shall file in 
                the court a record of the proceeding on which the 
                Secretary based the action, as provided in section 2112 
                of title 28, United States Code. No objection to the 
                action of the Secretary shall be considered by the 
                court unless such objection has been urged before the 
                Secretary.
                    (C) Rules of proceeding.--The court shall have 
                jurisdiction to affirm or modify the action of the 
                Secretary or to set it aside in whole or in part. The 
                findings of fact by the Secretary, if supported by 
                substantial evidence on the record considered as a 
                whole, shall be conclusive. The court may order 
                additional evidence to be taken by the Secretary, and 
                to be made part of the record. The Secretary may modify 
                findings of fact made by the Secretary, or make new 
                findings, by reason of the new evidence so taken and 
                filed with the court, and the Secretary shall also file 
                such modified or new findings, which findings with 
                respect to questions of fact shall be conclusive if 
                supported by substantial evidence on the record 
                considered as a whole, and shall also file a 
                recommendation, if any, for the modification or setting 
                aside of the original action of the Secretary.
                    (D) Jurisdiction.--Upon the filing of the record 
                with the court, the jurisdiction of the court shall be 
                exclusive and its judgment shall be final, except that 
                such judgment shall be subject to review by the Supreme 
                Court of the United States upon writ of certiorari or 
                certification as provided in section 1254 of title 28, 
                United State Code.

SEC. 213. ADMINISTRATIVE EXPENSES.

    The Secretary may use the amounts reserved under section 209(a) for 
a fiscal year for conducting performance reviews under section 212(b), 
for costs of the Housing Trust Fund Advisory Committee under section 
213, and for costs of administration relating to carrying out this 
title.

SEC. 214. HOUSING TRUST FUND PROGRAM ADVISORY COMMITTEE.

    (a) Establishment.--There is hereby established the Housing Trust 
Fund Advisory Committee (in this section referred to as the 
``Committee'').
    (b) Membership.--
            (1) Appointment.--The Committee shall be composed of an odd 
        number of members, which is not less than 7 and not more than 
        15, who shall be appointed by the Secretary of Housing and 
        Urban Development.
            (2) Experience.--Not less than a majority of the members of 
        the Committee shall be individuals who--
                    (A) represent the interests of low-income families; 
                or
                    (B) have experience in issues regarding providing 
                affordable housing for low-income families and in 
                working on such issues with low-income families.
    (c) Chairperson.--The Chairperson of the Committee shall be 
designated by the Secretary at the time of appointment.
    (d) Terms.--
            (1) In general.--Each member of the Committee shall be 
        appointed for a term of 4 years, except as provided in 
        paragraphs (2) and (3).
            (2) Terms of initial appointees.--As designated by the 
        Secretary at the time of appointment, of the members first 
        appointed--
                    (A) not less than 1 shall be appointed for a term 
                of 1 year;
                    (B) not less than 2 shall be appointed for terms of 
                2 years;
                    (C) not less than 2 shall be appointed for terms of 
                3 years; and
                    (D) not less than 2 shall be appointed for terms of 
                4 years.
            (3) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of such term.
    (e) Duties.--The Committee shall meet not less than annually to--
            (1) review the use by eligible public entities of amounts 
        provided under this title to the entities from the Fund;
            (2) make recommendations to the Administrator for changes 
        in Federal policy to further the purposes of this title; and
            (3) consider such other matters relating to the Fund and 
        the housing costs assistance and housing supply assistance 
        programs under this title as the Committee considers 
        appropriate or requested by the Secretary, including--
                    (A) reviewing the allocation of amounts under 
                section 209;
                    (B) periodically reviewing the formulas and system 
                for grant allotments under section 210, including the 
                establishment of the high housing cost ratios, 
                adjustments for high housing costs, and affordable 
                housing supply multipliers; and
                    (C) analyzing the adequacy of the grant allotments 
                determined under section 210 for enabling public 
                entities to respond to the housing needs in their 
                jurisdictions.
    (f) Reimbursement for Expenses.--Members of the Committee shall 
serve without pay, but, to the extent amounts are available pursuant to 
section 209, shall be entitled to reimbursement for travel, 
subsistence, and other necessary expenses incurred in the performance 
of their duties.
    (g) Exemption From Automatic Termination Provisions.--Section 
14(a)(2)(B) of the Federal Advisory Committee Act (5 U.S.C. App.; 
relating to the termination of advisory committees) shall not apply to 
the Committee.

SEC. 215. ADMINISTRATOR OF TRUST FUND IN DEPARTMENT OF HOUSING AND 
              URBAN DEVELOPMENT.

    Section 4 of the Department of Housing and Urban Development Act 
(42 U.S.C. 3533) is amended by adding at the end the following new 
subsection:
    ``(g) Administrator of Trust Fund.--There shall be in the 
Department an Administrator of the Housing Trust Fund, who shall be 
appointed by the President by and with the advice and consent of the 
Senate, who shall be responsible, on behalf of the Secretary, for 
administering amounts in the Housing Trust Fund established under 
section 9512 of the Internal Revenue Code of 1986 in accordance with 
title II of the Federal Housing Trust Fund Act of 1994.''.

SEC. 216. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
            (1) The term ``adjusted income'' means, with respect to a 
        family, the income of the family (from all sources) which 
        remains after excluding--
                    (A) $550 for each member of the family residing in 
                the household (other than the head of the household or 
                his spouse) who is under 18 years of age or who is 18 
                years of age or older and is disabled or handicapped or 
                a full-time student;
                    (B) $400 for any elderly or disabled family;
                    (C) the amount by which the aggregate of the 
                following expenses of the family exceeds 3 percent of 
                annual family income: (i) medical expenses for any 
                family, and (ii) reasonable attendant care and 
                auxiliary apparatus expenses for each handicapped 
                member of any family, to the extent necessary to enable 
                any member of such family (including such handicapped 
                member) to be employed;
                    (D) child care expenses to the extent necessary to 
                enable another member of the family to be employed or 
                to further his or her education;
                    (E) 10 percent of the earned income of the family;
                    (F) any payment made by a member of the family for 
                the support and maintenance of any child, spouse, or 
                former spouse who does not reside in the household, 
                except that the amount excluded under this subparagraph 
                shall not exceed the lesser of (i) the amount that such 
                family member has a legal obligation to pay; or (ii) 
                $550 for each individual for whom such payment is made;
                    (G) an amount equal to 50 percent of aggregate 
                amount of personal exemptions allowed under section 151 
                of the Internal Revenue Code of 1986 for the family; 
                and
                    (H) excessive travel expenses, not to exceed $25 
                per family per week, for employment- or education-
                related travel.
            (2) The term ``affordable'' means, with respect to a 
        particular income group, that a dwelling unit complies with the 
        requirements established under section 205(c) for the income 
        group.
            (3) The term ``affordable housing'' means housing that 
        complies with the requirements established under section 
        205(a).
            (4) The term ``city'' has the meaning given the term in 
        section 102(a) of the Housing and Community Development Act of 
        1974.
            (5) The term ``community housing development organization'' 
        has the meaning given the term in section 104 of the Cranston-
        Gonzalez National Affordable Housing Act.
            (6) The term ``decent'' means, with respect to housing, 
        that the housing is maintained in the condition required by the 
        housing quality standards established under section 8 of the 
        United States Housing Act of 1937 with respect to dwelling 
        units assisted under such section or in compliance with the 
        requirement under paragraph (2) of section 207(b), if 
        applicable.
            (7) The term ``eligible family'' means a household, 
        including a single person, for whom the fair market rental of a 
        dwelling unit of the size appropriate for the household and 
        located in the jurisdiction of the eligible public entity 
        providing assistance under this title for the family exceeds 30 
        percent of the household's adjusted monthly income.
            (8) The term ``eligible public entity'' means a public 
        entity that meets the requirements of section 206.
            (9) The term ``entitlement community'' means, with respect 
        to a fiscal year--
                    (A) any city within a metropolitan area which is 
                the central city of such area, as defined and used by 
                the Director of the Office of Management and Budget;
                    (B) any other city, within a metropolitan area that 
                has a population of 100,000 or more;
                    (C) any county that is classified for the fiscal 
                year as an urban county for purposes of the community 
                development block grant program under title I of the 
                Housing and Community Development Act of 1974; or
                    (D) any consortia of units of general local 
                government that the Secretary determines has sufficient 
                authority and administrative capacity to carry out the 
                functions of an entitlement community under this title 
                on behalf of its member jurisdictions.
            (10) The term ``extremely low-income family'' means a 
        household whose income does not exceed 30 percent of the median 
        income for the area, as determined by the Secretary with 
        adjustments for smaller and larger households.
            (11) The term ``fair market rental'' means the fair market 
        rental for a dwelling unit established under section 8 of the 
        United States Housing Act of 1937.
            (12) The term ``family with housing problems'' means a low-
        income family--
                    (A) that pays for housing costs an amount in excess 
                of 30 percent of the adjusted income of the family; or
                    (B) lives in a dwelling unit that is overcrowded or 
                that lacks kitchen or plumbing facilities.
            (13) The term ``Fund'' means the Housing Trust Fund 
        established by section 9512 of the Internal Revenue Code of 
        1986.
            (14) The term ``grant amounts'' means amounts provided 
        under this title to an eligible public entity.
            (15) The term ``homeless individual'' has the meaning given 
        the term in section 103 of the Stewart B. McKinney Homeless 
        Assistance Act.
            (16) The term ``housing costs'' means, with respect to a 
        family, the sum of the amounts paid by the family, in rent or 
        loan payments, for a dwelling unit and essential housing 
        utilities (not including telephone).
            (17) The term ``income group'' means the following groups:
                    (A) Extremely low-income families.
                    (B) Very low-income families.
                    (C) Low-income families.
                    (D) Moderate-income families.
            (18) The term ``Indian land'' means any real property owned 
        by an Indian tribe, any real property held in trust by the 
        United States for an Indian or Indian tribes, and any real 
        property held by an Indian or Indian tribes that is subject to 
        restrictions on alienation imposed by the United States.
            (19) The term ``Indian tribe'' has the meaning given the 
        term in section 102(a) of the Housing and Community Development 
        Act of 1974.
            (20) The term ``low-income family'' means a household whose 
        income does not exceed 80 percent of the median income for the 
        area, as determined by the Secretary with adjustments for 
        smaller and larger households. The term includes a very low-
        income family and an extremely low-income family.
            (21) The term ``moderate-income family'' means a household 
        whose income does not exceed 95 percent of the median income 
        for the area, as determined by the Secretary with adjustments 
        for smaller and larger households. The term includes a low-
        income family, a very low-income family, and an extremely low-
        income family.
            (22) The term ``poverty area'' means a census tract for 
        which more than 10 percent of the households are extremely low-
        income families or have incomes that do not exceed the poverty 
        line (as established by the Office of Management and Budget and 
        revised periodically in accordance with section 673(2) of the 
        Omnibus Budget Reconciliation Act of 1981) applicable to a 
        family of the size involved.
            (23) The term ``public entity'' means a State, an 
        entitlement community, or an Indian tribe.
            (24) The term ``rural area'' means any area of a State not 
        included within an area designated as an urbanized area by the 
        Bureau of the Census of the Department of Commerce.
            (25) The term ``Secretary'' means the Secretary of Housing 
        and Urban Development.
            (26) The term ``State'' means the States of the United 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Commonwealth of the Northern Mariana Islands, Guam, 
        the Virgin Islands, American Samoa, and any other territory or 
        possession of the United States.
            (27) The term ``total Fund grant amounts'' means, with 
        respect to a fiscal year, the difference between the total 
        amount from the Fund available for the fiscal year to carry out 
        this title and the amount reserved pursuant to section 208(a).
            (28) The term ``Trust Fund grant plan'' means, with respect 
        to a fiscal year, a plan under section 208 for the fiscal year 
        or an update under section 208(c) for the fiscal year of a plan 
        under such section submitted and approved for a previous fiscal 
        year.
            (29) The term ``unit of general local government'' any 
        city, town, township, county, parish, village, or other general 
        purpose political subdivision of a State.
            (30) The term ``very low-income family'' means a household 
        whose income does not exceed 50 percent of the median income 
        for the area, as determined by the Secretary with adjustments 
        for smaller and larger households. The term includes a very 
        low-income family.

SEC. 217. REGULATIONS.

    The Secretary shall issue regulations to implement the provisions 
of this title. The regulations shall be issued after notice and 
opportunity for public comment in accordance with the procedure under 
section 553 of title 5, United States Code, applicable to substantive 
rules (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such 
section). The regulations shall become effective not later than 180 
days after the date of the enactment of this Act.
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