[Congressional Record Volume 142, Number 6 (Wednesday, January 10, 1996)]
[Senate]
[Pages S136-S167]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           PUBLIC HOUSING REFORM AND EMPOWERMENT ACT OF 1995

  Mr. DOLE. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of calendar 295, S. 1260.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 1260) to reform and consolidate the public and 
     assisted housing programs of the United States, and to 
     redirect primary responsibility for these programs from the 
     Federal Government to States and localities, and for other 
     purposes.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the 
bill, which had been reported from the Committee on Banking, Housing, 
and Urban Affairs, with an amendment to strike all after the enacting 
clause and inserting in lieu thereof the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Public 
     Housing Reform and Empowerment Act of 1995''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Effective date.
Sec. 5. Proposed regulations; technical recommendations.
Sec. 6. Elimination of obsolete documents.
Sec. 7. Annual reports.

                   TITLE I--PUBLIC AND INDIAN HOUSING

Sec. 101. Declaration of policy.
Sec. 102. Membership on board of directors.
Sec. 103. Authority of public housing agencies.
Sec. 104. Definitions.
Sec. 105. Contributions for lower income housing projects.
Sec. 106. Public housing agency plan.
Sec. 107. Contract provisions and requirements.
Sec. 108. Expansion of powers.
Sec. 109. Public housing designated for the elderly and the disabled.
Sec. 110. Public housing capital and operating funds.
Sec. 111. Labor standards.
Sec. 112. Repeal of energy conservation; consortia and joint ventures.
Sec. 113. Repeal of modernization fund.
Sec. 114. Eligibility for public and assisted housing.
Sec. 115. Demolition and disposition of public housing.
Sec. 116. Repeal of family investment centers; voucher system for 
              public housing.
Sec. 117. Repeal of family self-sufficiency; homeownership 
              opportunities.
Sec. 118. Revitalizing severely distressed public housing.
Sec. 119. Mixed-income and mixed-ownership projects.
Sec. 120. Conversion of distressed public housing to tenant-based 
              assistance.
Sec. 121. Public housing mortgages and security interests.
Sec. 122. Linking services to public housing residents.
Sec. 123. Applicability to Indian housing.

                 TITLE II--SECTION 8 RENTAL ASSISTANCE

Sec. 201. Merger of the certificate and voucher programs.
Sec. 202. Repeal of Federal preferences.
Sec. 203. Portability.
Sec. 204. Leasing to voucher holders.
Sec. 205. Homeownership option.
Sec. 206. Technical and conforming amendments.
Sec. 207. Implementation.
Sec. 208. Effective date.

                  TITLE III--MISCELLANEOUS PROVISIONS

Sec. 301. Public housing flexibility in the CHAS.
Sec. 302. Repeal of certain provisions.
Sec. 303. Determination of income limits.
Sec. 304. Demolition of public housing.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) there exists throughout the Nation a need for decent, 
     safe, and affordable housing;
       (2) the inventory of public housing units owned and 
     operated by public housing agencies, an asset in which the 
     Federal Government has invested approximately 
     $90,000,000,000, has traditionally provided rental housing 
     that is affordable to low-income persons;
       (3) despite serving this critical function, the public 
     housing system is plagued by a series of problems, including 
     the concentration of very poor people in very poor 
     neighborhoods and disincentives for economic self-
     sufficiency;
       (4) the Federal method of overseeing every aspect of public 
     housing by detailed and complex statutes and regulations 
     aggravates the problem and places excessive administrative 
     burdens on public housing agencies;
       (5) the interests of low-income persons, and the public 
     interest, will best be served by a reformed public housing 
     program that--
       (A) consolidates many public housing programs into programs 
     for the operation and capital needs of public housing;
       (B) streamlines program requirements;
       (C) vests in public housing agencies that perform well the 
     maximum feasible authority, discretion, and control with 
     appropriate accountability to both public housing tenants and 
     localities; and
       (D) rewards employment and economic self-sufficiency of 
     public housing tenants;
       (6) voucher and certificate programs under section 8 of the 
     United States Housing Act of 1937 are successful for 
     approximately 80 percent of applicants, and a consolidation 
     of the voucher and certificate programs into a single, 
     market-driven program will assist in making section 8 tenant-
     based assistance more successful in assisting low-income 
     families in obtaining affordable housing and will increase 
     housing choice for low-income families; and
       (7) the needs of Indian families residing on Indian 
     reservations and other Indian areas will 

[[Page S137]]
     best be served by providing programs specifically designed to meet the 
     needs of Indian communities while promoting tribal self-
     governance and self-determination.
       (b) Purposes.--The purposes of this Act are--
       (1) to consolidate the various programs and activities 
     under the public housing programs administered by the 
     Secretary in a manner designed to reduce Federal 
     overregulation;
       (2) to redirect the responsibility for a consolidated 
     program to States, Indian tribes, localities, public housing 
     agencies, and public housing tenants;
       (3) to require Federal action to overcome problems of 
     public housing agencies with severe management deficiencies; 
     and
       (4) to consolidate and streamline tenant-based assistance 
     programs.

     SEC. 3. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Public housing agency.--The term ``public housing 
     agency'' has the same meaning as in section 3 of the United 
     States Housing Act of 1937.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 4. EFFECTIVE DATE.

       Except as otherwise specifically provided in this Act or 
     the amendments made by this Act, this Act and the amendments 
     made by this Act shall become effective on the date of 
     enactment of this Act.

     SEC. 5. PROPOSED REGULATIONS; TECHNICAL RECOMMENDATIONS.

       (a) Proposed Regulations.--Not later than 9 months after 
     the date of enactment of this Act, the Secretary shall submit 
     to the Congress proposed regulations that the Secretary 
     determines are necessary to carry out the United States 
     Housing Act of 1937, as amended by this Act.
       (b) Technical Recommendations.--Not later than 9 months 
     after the date of enactment of this Act, the Secretary shall 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Banking and 
     Financial Services of the House of Representatives, 
     recommended technical and conforming legislative changes 
     necessary to carry out this Act and the amendments made by 
     this Act.

     SEC. 6. ELIMINATION OF OBSOLETE DOCUMENTS.

       Effective 1 year after the date of enactment of this Act, 
     no rule, regulation, or order (including all handbooks, 
     notices, and related requirements) pertaining to public 
     housing or section 8 tenant-based programs issued or 
     promulgated under the United States Housing Act of 1937 
     before the date of enactment of this Act may be enforced by 
     the Secretary.

     SEC. 7. ANNUAL REPORTS.

       Not later than 1 year after the date of enactment of this 
     Act, and annually thereafter, the Secretary shall submit a 
     report to the Congress on the impact of the amendments made 
     by this Act on--
       (1) the demographics of public housing tenants and families 
     receiving tenant-based assistance under the United States 
     Housing Act of 1937; and
       (2) the economic viability of public housing agencies.
                   TITLE I--PUBLIC AND INDIAN HOUSING

     SEC. 101. DECLARATION OF POLICY.

       Section 2 of the United States Housing Act of 1937 (42 
     U.S.C. 1437) is amended to read as follows:

     ``SEC. 2. DECLARATION OF POLICY.

       ``It is the policy of the United States to promote the 
     general welfare of the Nation by employing the funds and 
     credit of the Nation, as provided in this title--
       ``(1) to assist States, Indian tribes, and political 
     subdivisions of States to remedy the unsafe housing 
     conditions and the acute shortage of decent and safe 
     dwellings for low-income families;
       ``(2) to assist States, Indian tribes, and political 
     subdivisions of States to address the shortage of housing 
     affordable to low-income families; and
       ``(3) consistent with the objectives of this title, to vest 
     in public housing agencies that perform well, the maximum 
     amount of responsibility and flexibility in program 
     administration, with appropriate accountability to both 
     public housing tenants and localities.''.

     SEC. 102. MEMBERSHIP ON BOARD OF DIRECTORS.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 27. MEMBERSHIP ON BOARD OF DIRECTORS.

       ``(a) Required Membership.--Except as provided in 
     subsection (b), the membership of the board of directors of 
     each public housing agency shall contain not less than 1 
     member who is a resident of a public housing project operated 
     by the public housing agency.
       ``(b) Exception.--Subsection (a) shall not apply to any 
     public housing agency in any State that requires the members 
     of the board of directors of a public housing agency to be 
     salaried and to serve on a full-time basis.
       ``(c) Nondiscrimination.--No person shall be prohibited 
     from serving on the board of directors or similar governing 
     body of a public housing agency because of the residence of 
     that person in a public housing project.''.

     SEC. 103. AUTHORITY OF PUBLIC HOUSING AGENCIES.

       (a) Authority of Public Housing Agencies.--
       (1) In general.--Section 3(a)(2) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(a)(2)) is amended to 
     read as follows:
       ``(2) Authority of public housing agencies.--
     Notwithstanding paragraph (1), a public housing agency may 
     adopt ceiling rents that reflect the reasonable market value 
     of the housing, but that are not less than the actual monthly 
     costs--
       ``(i) to operate the housing of the public housing agency; 
     and
       ``(ii) to make a deposit to a replacement reserve (in the 
     sole discretion of the public housing agency).
       ``(B) Minimum rent.--Notwithstanding paragraph (1), a 
     public housing agency may provide that each family residing 
     in a public housing project or receiving tenant-based or 
     project-based assistance under section 8 shall pay a minimum 
     monthly rent in an amount not to exceed $25 per month.
       ``(C) Police officers.--
       ``(i) In general.--Notwithstanding any other provision of 
     law, a public housing agency may, in accordance with the 
     public housing agency plan, allow a police officer who is not 
     otherwise eligible for residence in public housing to reside 
     in a public housing unit. The number and location of units 
     occupied by police officers under this clause, and the terms 
     and conditions of their tenancies, shall be determined by the 
     public housing agency.
       ``(ii) Definition.--As used in this subparagraph, the term 
     `police officer' means any person determined by a public 
     housing agency to be, during the period of residence of that 
     person in public housing, employed on a full-time basis as a 
     duly licensed professional police officer by a Federal, 
     State, tribal, or local government or by any agency thereof 
     (including a public housing agency having an accredited 
     police force).
       ``(D) Encouragement of self-sufficiency.--Each public 
     housing agency shall develop a rental policy that encourages 
     and rewards employment and economic self-sufficiency.''.
       (2) Regulations.--
       (A) In general.--The Secretary shall, by regulation, after 
     notice and an opportunity for public comment, establish such 
     requirements as may be necessary to carry out section 
     3(a)(2)(A) of the United States Housing Act of 1937, as 
     amended by paragraph (1).
       (B) Transition rule.--Prior to the issuance of final 
     regulations under paragraph (1), a public housing agency may 
     implement ceiling rents, which shall be--
       (i) determined in accordance with section 3(a)(2)(A) of the 
     United States Housing Act of 1937, as that section existed on 
     the day before the date of enactment of this Act;
       (ii) equal to the 95th percentile of the rent paid for a 
     unit of comparable size by tenants in the same public housing 
     project or a group of comparable projects totaling 50 units 
     or more; or
       (iii) equal to the fair market rent for the area in which 
     the unit is located.
       (b) Nontroubled Public Housing Agencies.--Section 3(a) of 
     the United States Housing Act of 1937 (42 U.S.C. 1437(a)) is 
     amended by adding at the end the following new paragraph:
       ``(3) Nontroubled public housing agencies.--
       ``(A) In general.--Notwithstanding the rent calculation 
     formula in paragraph (1), and subject to subparagraph (B), 
     the Secretary shall permit a public housing agency, other 
     than a public housing agency determined to be troubled 
     pursuant to 6(j), to determine the amount that a family 
     residing in public housing shall pay as rent.
       ``(B) Limitation.--With respect to a family whose income is 
     equal to or less than 50 percent of the median income for the 
     area, as determined by the Secretary with adjustments for 
     smaller and larger families, a public housing agency may not 
     require a family to pay as rent under subparagraph (A) an 
     amount that exceeds the greatest of--
       ``(i) 30 percent of the monthly adjusted income of the 
     family;
       ``(ii) 10 percent of the monthly income of the family;
       ``(iii) if the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that public agency to 
     meet the housing costs of the family, the portion of those 
     payments that is so designated; and
       ``(iv) $25.''.

     SEC. 104. DEFINITIONS.

       (a) Definitions.--
       (1) Single persons.--Section 3(b)(3) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)(3)) is amended--
       (A) in subparagraph (A), in the third sentence, by striking 
     ``the Secretary shall'' and all that follows before the 
     period at the end and inserting the following: ``the public 
     housing agency may give preference to single persons who are 
     elderly or disabled persons before single persons who are 
     otherwise eligible''; and
       (B) in subparagraph (B), in the second sentence, by 
     striking ``regulations of the Secretary'' and inserting 
     ``public housing agency plan''.
       (2) Adjusted income.--Section 3(b)(5) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)(5)) is amended to 
     read as follows:
       ``(5) Adjusted income.--The term `adjusted income' means 
     the income that remains after excluding--
       ``(A) $480 for each member of the family residing in the 
     household (other than the head of the household or the spouse 
     of the head of the household)--
       ``(i) who is under 18 years of age; or
       ``(ii) who is--

       ``(I) 18 years of age or older; and
       ``(II) a person with disabilities or a full-time student;

       ``(B) $400 for an elderly or disabled family;
       ``(C) the amount by which the aggregate of--
       ``(i) medical expenses for an elderly or disabled family; 
     and
       ``(ii) reasonable attendant care and auxiliary apparatus 
     expenses for each family member who 

[[Page S138]]
     is a person with disabilities, to the extent necessary to enable any 
     member of the family (including a member who is a person with 
     disabilities) to be employed;

     exceeds 3 percent of the annual income of the family;
       ``(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) with respect to a family assisted by an Indian 
     housing authority only, excessive travel expenses, not to 
     exceed $25 per family per week, for employment- or education-
     related travel; and
       ``(F) any other income that the public housing agency 
     determines to be appropriate, as provided in the public 
     housing agency plan.''.
       (3) Indian housing authority; indian tribe.--
       (A) In general.--Section 3(b) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437a(b)) is amended by striking 
     paragraphs (11) and (12) and inserting the following:
       ``(11) Indian housing authority.--The term `Indian housing 
     authority' means any entity that--
       ``(A) is authorized to engage or assist in the development 
     or operation of low-income housing for Indians; and
       ``(B) is established--
       ``(i) by exercise of the power of self-government of an 
     Indian tribe, independent of State law; or
       ``(ii) by operation of State law authorizing or enabling an 
     Indian tribe to create housing authorities for Indians, 
     including regional housing authorities in the State of 
     Alaska.
       ``(12) Indian tribe.--The term `Indian tribe' means the 
     governing body of any Indian or Alaska Native tribe, band, 
     nation, pueblo, village, or community that the Secretary of 
     the Interior acknowledges to exist as an Indian Tribe, 
     pursuant to the Federally Recognized Indian Tribe List Act of 
     1994.''.
       (B) Applicability.--The amendment made by subparagraph (A) 
     does not affect the existence, or the ability to operate, of 
     any Indian housing authority established before the date of 
     enactment of this Act by any State recognized tribe, band, 
     pueblo, group, community, or nation of Indians or Alaska 
     Natives that does not qualify as an Indian tribe under 
     section 3(b) of the United States Housing Act of 1937, as 
     amended by this paragraph.
       (b) Disallowance of Earned Income From Public Housing Rent 
     Determinations.--
       (1) In general.--Section 3 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437a) is amended--
       (A) by striking the undesignated paragraph at the end of 
     subsection (c)(3) (as added by section 515(b) of Public Law 
     101-625); and
       (B) by adding at the end the following new subsection:
       ``(d) Disallowance of Earned Income From Public Housing 
     Rent Determinations.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the rent payable under subsection (a) by a family--
       ``(A) that--
       ``(i) occupies a unit in a public housing project; or
       ``(ii) receives assistance under section 8; and
       ``(B) whose income increases as a result of employment of a 
     member of the family who was previously unemployed for 1 or 
     more years (including a family whose income increases as a 
     result of the participation of a family member in any family 
     self-sufficiency or other job training program);

     may not be increased as a result of the increased income due 
     to such employment during the 18-month period beginning on 
     the date on which the employment is commenced.
       ``(2) Phase-in of rate increases.--After the expiration of 
     the 18-month period referred to in paragraph (1), rent 
     increases due to the continued employment of the family 
     member described in paragraph (1)(B) shall be phased in over 
     a subsequent 3-year period.
       ``(3) Overall limitation.--Rent payable under subsection 
     (a) shall not exceed the amount determined under subsection 
     (a).''.
       (2) Applicability of amendment.--
       (A) Public housing.--Notwithstanding the amendment made by 
     paragraph (1), any tenant of public housing participating in 
     the program under the authority contained in the undesignated 
     paragraph at the end of section 3(c)(3) of the United States 
     Housing Act of 1937, as that paragraph existed on the day 
     before the date of enactment this Act, shall be governed by 
     that authority after that date.
       (B) Section 8.--The amendment made by paragraph (1) shall 
     apply to tenant-based assistance provided under section 8 of 
     the United States Housing Act of 1937, with funds 
     appropriated on or after October 1, 1996.
       (c) Definitions of Terms Used in Reference to Public 
     Housing.--
       (1) In general.--Section 3(c) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437a(c)) is amended--
       (A) in paragraph (1), by inserting ``and of the fees and 
     related costs normally involved in obtaining non-Federal 
     financing and tax credits with or without private and 
     nonprofit partners'' after ``carrying charges''; and
       (B) in paragraph (2), in the first sentence, by striking 
     ``security personnel),'' and all that follows through the 
     period and inserting the following: ``security personnel), 
     service coordinators, drug elimination activities, or 
     financing in connection with a public housing project, 
     including projects developed with non-Federal financing and 
     tax credits, with or without private and nonprofit 
     partners.''.
       (2) Technical correction.--Section 622(c) of the Housing 
     and Community Development Act of 1992 (Public Law 102-550; 
     106 Stat. 3817) is amended by striking `` `project.' '' and 
     inserting ``paragraph (3)''.
       (3) New definitions.--Section 3(c) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(c)) is amended by adding 
     at the end the following new paragraphs:
       ``(6) Public housing agency plan.--The term `public housing 
     agency plan' means the plan of the public housing agency 
     prepared in accordance with section 5A.
       ``(7) Disabled housing.--The term `disabled housing' means 
     any public housing project, building, or portion of a project 
     or building, that is designated by a public housing agency 
     for occupancy exclusively by disabled persons or families.
       ``(8) Elderly housing.--The term `elderly housing' means 
     any public housing project, building, or portion of a project 
     or building, that is designated by a public housing agency 
     exclusively for occupancy exclusively by elderly persons or 
     families, including elderly disabled persons or families.
       ``(9) Mixed-income project.--The term `mixed-income 
     project' means a public housing project that meets the 
     requirements of section 28.
       ``(10) Capital fund.--The term `Capital Fund' means the 
     fund established under section 9(c).
       ``(11) Operating fund.--The term `Operating Fund' means the 
     fund established under section 9(d).''.

     SEC. 105. CONTRIBUTIONS FOR LOWER INCOME HOUSING PROJECTS.

       (a) In General.--Section 5 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437c) is amended by striking subsections 
     (h) through (l).
       (b) Conforming Amendments.--The United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (1) in section 21(d), by striking ``section 5(h) or'';
       (2) in section 25(l)(1), by striking ``and for sale under 
     section 5(h)''; and
       (3) in section 307, by striking ``section 5(h) and''.

     SEC. 106. PUBLIC HOUSING AGENCY PLAN.

       (a) In General.--Title I of the United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended by inserting 
     after section 5 the following new section:

     ``SEC. 5A. PUBLIC HOUSING AGENCY PLAN.

       ``(a) In General.--
       ``(1) Submission.--Each public housing agency shall submit 
     to the Secretary a written public housing agency plan 
     developed in accordance with this section.
       ``(2) Consistency requirement.--Each public housing agency 
     plan submitted to the Secretary under paragraph (1) shall 
     be--
       ``(A) made in consultation with the local advisory board 
     established under subsection (c);
       ``(B) consistent with the comprehensive housing 
     affordability strategy for the jurisdiction in which the 
     public housing agency is located, as provided under title I 
     of the Cranston-Gonzalez National Affordable Housing Act, or, 
     with respect to any Indian tribe, a comprehensive plan 
     developed by the Indian tribe, if applicable; and
       ``(C) accompanied by a certification by an appropriate 
     State, tribal, or local public official that the plan meets 
     the requirements of subparagraph (B).
       ``(b) Contents.--Each public housing agency plan shall 
     contain, at a minimum, the following:
       ``(1) Certification.--
       ``(A) In general.--With respect to a public housing agency 
     that has not received assistance under this title as of the 
     date on which the public housing agency plan of that public 
     housing agency is submitted, or a public housing agency that 
     is subject to amended authority, a written certification that 
     the public housing agency is a governmental entity or public 
     body (or an agency or instrumentality thereof) that is 
     authorized to engage or assist in the development or 
     operation of low-income housing under this title.
       ``(B) Identification of certain references.--Subject to 
     subparagraph (A), any reference in any provision of law of 
     the jurisdiction authorizing the creation of the public 
     housing agency shall be identified and any legislative 
     declaration of purpose in regard thereto shall be set forth 
     in the certification with full text.
       ``(2) Statement of policy.--An annual statement of policy 
     identifying the primary goals and objectives of the public 
     housing agency for the year for which the statement is 
     submitted, together with any major developments, projects, or 
     programs, including all proposed costs and activities carried 
     out with the use of Capital Fund and Operating Fund 
     distributions made available to the public housing agency 
     under section 9.
       ``(3) Statement of needs.--An annual statement of the 
     housing needs of low-income families residing in the 
     community, and of other low-income families on the waiting 
     list of the public housing agency (including the housing 
     needs of elderly families and disabled families), and the 
     means by which the public housing agency intends, to the 
     maximum extent practicable, to address those needs.
       ``(4) General policies, rules, and regulations.--The 
     policies, rules, and regulations of the public housing agency 
     regarding--
       ``(A) the requirements for the selection and admission of 
     eligible families into the program or programs of the public 
     housing agency, including--
       ``(i) tenant screening policies;
       ``(ii) any preferences or priorities for selection and 
     admission;
       ``(iii) annual income verification procedures; and
       ``(iv) requirements relating to the administration of any 
     waiting lists of the public housing agency;
       ``(B) the procedure for assignment of families admitted 
     into the program to dwelling units owned, leased, managed, or 
     assisted by the public housing agency; 
     
[[Page S139]]

       ``(C) the requirements for occupancy of dwelling units, 
     including all standard lease provisions, and conditions for 
     continued occupancy, termination, and eviction;
       ``(D) procedures for establishing rents, including ceiling 
     rents and adjustments to income; and
       ``(E) procedures for designating certain public housing 
     projects, or portions of projects, for occupancy by elderly 
     families, disabled families, or by elderly and disabled 
     families.
       ``(5) Operation and management.--The policies, rules, and 
     regulations relating to the management of the public housing 
     agency, and the public housing projects and programs of the 
     public housing agency, including--
       ``(A) a description of the manner in which the public 
     housing agency is organized (including any consortia or joint 
     ventures) and staffed to perform the duties and functions of 
     the public housing agency and to administer the Operating 
     Fund distributions of the public housing agency;
       ``(B) policies relating to the rental of dwelling units 
     owned or operated by the public housing agency, including 
     policies designed to reduce vacancies;
       ``(C) policies relating to providing a safe and secure 
     environment in public housing units, including anticrime and 
     antidrug activities;
       ``(D) policies relating to the management and operation, or 
     participation in mixed-income projects, if applicable;
       ``(E) policies relating to services and amenities provided 
     or offered to assisted families, including the provision of 
     service coordinators and services designed for certain 
     populations, such as the elderly and disabled;
       ``(F) procedures for implementing the work requirements of 
     section 12(c);
       ``(G) procedures for identifying management weaknesses;
       ``(H) objectives for improving management practices;
       ``(I) a description of management initiatives to control 
     the costs of operating the public housing agency;
       ``(J) a plan for preventative maintenance and a plan for 
     routine maintenance;
       ``(K) policies relating to any plans for converting public 
     housing to a system of tenant-based assistance; and
       ``(L) policies relating to the operation of any 
     homeownership programs.
       ``(6) Capital fund requirements.--The policies, rules, and 
     regulations relating to the management and administration of 
     the Capital Fund distributions of the public housing agency, 
     including--
       ``(A) the capital needs of the public housing agency;
       ``(B) plans for capital expenditures related to providing a 
     safe and secure environment in public housing units, 
     including anticrime and antidrug activities;
       ``(C) policies relating to providing a safe and secure 
     environment in public housing units, including anticrime and 
     antidrug activities;
       ``(D) policies relating to the capital requirements of 
     mixed-income projects, if applicable;
       ``(E) an annual plan and, if appropriate, a 5-year plan of 
     the public housing agency for the capital needs of the 
     existing dwelling units of the public housing agency, each of 
     which shall include a general statement identifying the long-
     term viability and physical condition of each of the public 
     housing projects and other property of the public housing 
     agency, including cost estimates;
       ``(F) a plan to handle emergencies and other disasters;
       ``(G) the use of funds for new or additional units, 
     including capital contributions to mixed-income projects, if 
     applicable;
       ``(H) any plans for the sale of existing dwelling units to 
     low-income residents or organizations acting as conduits for 
     sales to such residents under a homeownership plan;
       ``(I) any plans for converting public housing units to a 
     system of tenant-based assistance; and
       ``(J) any plans for demolition and disposition of public 
     housing units, including any plans for replacement units and 
     any plans providing for the relocation of residents who will 
     be displaced by a demolition or disposition of units.
       ``(7) Economic and social self-sufficiency programs.--A 
     description of any policies, programs, plans, and activities 
     of the public housing agency for the enhancement of the 
     economic and social self-sufficiency of residents assisted by 
     the programs of the public housing agency.
       ``(8) Annual audit.--The results of an annual audit 
     (including any audit of management practices, as required by 
     the Secretary) of the public housing agency, which shall be 
     conducted by an independent certified public accounting firm 
     pursuant to generally accepted accounting principles.
       ``(c) Local Advisory Board.--
       ``(1) In general.--Except as provided in paragraph (5), 
     each public housing agency shall establish one or more local 
     advisory boards in accordance with this subsection, the 
     membership of which shall adequately reflect and represent 
     all of the residents of the dwelling units owned, operated, 
     or assisted by the public housing agency.
       ``(2) Membership.--Each local advisory board established 
     under this subsection shall be composed of the following 
     members:
       ``(A) Tenants.--Not less than 60 percent of the members of 
     the board shall be tenants of dwelling units owned, operated, 
     or assisted by the public housing agency, including 
     representatives of any resident organizations.
       ``(B) Other members.--The members of the board, other than 
     the members described in subparagraph (A), shall include--
       ``(i) representatives of the community in which the public 
     housing agency is located; and
       ``(ii) local government officials of the community in which 
     the public housing agency is located.
       ``(3) Purpose.--Each local advisory board established under 
     this subsection shall assist and make recommendations 
     regarding the development of the public housing agency plan. 
     The public housing agency shall consider the 
     recommendations of the local advisory board in preparing 
     the final public housing agency plan, and shall include a 
     copy of those recommendations in the public housing agency 
     plan submitted to the Secretary under this section.
       ``(4) Inapplicability to indian housing.--This subsection 
     does not apply to an Indian housing authority.
       ``(5) Waiver.--The Secretary may waive the requirements of 
     this subsection with respect to tenant representation on the 
     local advisory board of a public housing agency, if the 
     public housing agency demonstrates to the satisfaction of the 
     Secretary that a resident council or other tenant 
     organization of the public housing agency adequately 
     represents the interests of the tenants of the public housing 
     agency.
       ``(d) Publication of Notice.--
       ``(1) In general.--Not later than 45 days before the date 
     of a hearing conducted under paragraph (2) by the governing 
     body of a public housing agency, the public housing agency 
     shall publish a notice informing the public that--
       ``(A) the proposed public housing agency plan is available 
     for inspection at the principal office of the public housing 
     agency during normal business hours; and
       ``(B) a public hearing will be conducted to discuss the 
     public housing agency plan and to invite public comment 
     regarding that plan.
       ``(2) Public hearing.--Each public housing agency shall, at 
     a location that is convenient to residents, conduct a public 
     hearing, as provided in the notice published under paragraph 
     (1).
       ``(3) Adoption of plan.--After conducting the public 
     hearing under paragraph (2), and after considering all public 
     comments received and, in consultation with the local 
     advisory board, making any appropriate changes in the public 
     housing agency plan, the public housing agency shall--
       ``(A) adopt the public housing agency plan; and
       ``(B) submit the plan to the Secretary in accordance with 
     this section.
       ``(e) Coordinated Procedures.--Each public housing agency 
     (other than an Indian housing authority) shall, in 
     conjunction with the State or relevant unit of general local 
     government, establish procedures to ensure that the public 
     housing agency plan required by this section is consistent 
     with the applicable comprehensive housing affordability 
     strategy for the jurisdiction in which the public housing 
     agency is located, in accordance with title I of the 
     Cranston-Gonzalez National Affordable Housing Act.
       ``(f) Amendments and Modifications to Plans.--
       ``(1) In general.--Except as provided in paragraph (2), 
     nothing in this section shall preclude a public housing 
     agency, after submitting a plan to the Secretary in 
     accordance with this section, from amending or modifying any 
     policy, rule, regulation, or plan of the public housing 
     agency, except that no such significant amendment or 
     modification may be adopted or implemented--
       ``(A) other than at a duly called meeting of commissioners 
     (or other comparable governing body) of the public housing 
     agency that is open to the public; and
       ``(B) until notification of the amendment or modification 
     is provided to the Secretary and approved in accordance with 
     subsection (g)(2).
       ``(2) Consistency.--Each significant amendment or 
     modification to a public housing agency plan submitted to the 
     Secretary under this section shall--
       ``(A) meet the consistency requirement of subsection 
     (a)(2);
       ``(B) be subject to the notice and public hearing 
     requirements of subsection (d); and
       ``(C) be subject to approval by the Secretary in accordance 
     with subsection (g)(2).
       ``(g) Timing of Plans.--
       ``(1) In general.--
       ``(A) Initial submission.--Each public housing agency shall 
     submit the initial plan required by this section, and any 
     amendment or modification to the initial plan, to the 
     Secretary at such time and in such form as the Secretary 
     shall require.
       ``(B) Annual submission.--Not later than 60 days prior to 
     the start of the fiscal year of the public housing agency, 
     after initial submission of the plan required by this section 
     in accordance with subparagraph (A), each public housing 
     agency shall annually submit to the Secretary a plan update, 
     including any amendments or modifications to the public 
     housing agency plan.
       ``(2) Review and approval.--
       ``(A) Review.--After submission of the public housing 
     agency plan or any amendment or modification to the plan to 
     the Secretary, to the extent that the Secretary considers 
     such action to be necessary to make determinations under this 
     subparagraph, the Secretary shall review the public housing 
     agency plan (including any amendments or modifications 
     thereto) to determine whether the contents of the plan--
       ``(i) set forth the information required by this section to 
     be contained in a public housing agency plan;
       ``(ii) are consistent with information and data available 
     to the Secretary; and
       ``(iii) are prohibited by or inconsistent with any 
     provision of this title or other applicable law.
       ``(B) Approval.--
       ``(i) In general.--Except as provided in paragraph (3)(B), 
     not later than 60 days after the date on which a public 
     housing agency plan is submitted in accordance with this 
     section, the Secretary shall provide written notice to the 
     public housing agency if the plan has been disapproved, 
     stating with specificity the reasons for the disapproval.
       ``(ii) Failure to provide notice of disapproval.--If the 
     Secretary does not provide 

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     notice of disapproval under clause (i) before the expiration of the 60-
     day period described in clause (i), the public housing agency 
     plan shall be deemed to be approved by the Secretary.
       ``(3) Secretarial discretion.--
       ``(A) In general.--The Secretary may require such 
     additional information as the Secretary determines to be 
     appropriate for each public housing agency that is--
       ``(i) at risk of being designated as troubled under section 
     6(j); or
       ``(ii) designated as troubled under section 6(j).
       ``(B) Troubled agencies.--The Secretary shall provide 
     explicit written approval or disapproval, in a timely manner, 
     for a public housing agency plan submitted by any public 
     housing agency designated by the Secretary as a troubled 
     public housing agency under section 6(j).
       ``(4) Streamlined plan.--In carrying out this section, the 
     Secretary may establish a streamlined public housing agency 
     plan for--
       ``(A) public housing agencies that are determined by the 
     Secretary to be high performing public housing agencies; and
       ``(B) public housing agencies with less than 250 public 
     housing units that have not been designated as troubled under 
     section 6(j).''.
       (b) Implementation.--
       (1) Interim rule.--Not later than 120 days after the date 
     of enactment of this Act, the Secretary shall issue an 
     interim rule to require the submission of an interim public 
     housing agency plan by each public housing agency, as 
     required by section 5A of the United States Housing Act of 
     1937 (as added by subsection (a) of this section).
       (2) Final regulations.--Not later than 1 year after the 
     date of enactment of this Act, in accordance with the 
     negotiated rulemaking procedures set forth in subchapter III 
     of chapter 5 of title 5, United States Code, the Secretary 
     shall promulgate final regulations implementing section 5A of 
     the United States Housing Act of 1937, as added by subsection 
     (a) of this section.
       (3) Indian housing authorities.--In carrying out this 
     subsection, the Secretary may implement separate rules and 
     regulations for the Indian housing program.
       (c) Audit and Review; Report.--
       (1) Audit and review.--Not later than 1 year after the 
     effective date of final regulations promulgated under 
     subsection (b)(2), in order to determine the degree of 
     compliance with public housing agency plans approved under 
     section 5A of the United States Housing Act of 1937, as added 
     by this section, by public housing agencies, the Comptroller 
     General of the United States shall conduct--
       (A) a review of a representative sample of the public 
     housing agency plans approved under such section 5A before 
     that date; and
       (B) an audit and review of the public housing agencies 
     submitting those plans.
       (2) Report.--Not later than 2 years after the date on which 
     public housing agency plans are initially required to be 
     submitted under section 5A of the United States Housing Act 
     of 1937, as added by this section, the Comptroller General of 
     the United States shall submit to the Congress a report, 
     which shall include--
       (A) a description of the results of each audit and review 
     under paragraph (1); and
       (B) any recommendations for increasing compliance by public 
     housing agencies with their public housing agency plans 
     approved under section 5A of the United States Housing Act of 
     1937, as added by this section.

     SEC. 107. CONTRACT PROVISIONS AND REQUIREMENTS.

       (a) Conditions.--Section 6(a) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437d(a)) is amended--
       (1) in the first sentence, by inserting ``, in a manner 
     consistent with the public housing agency plan'' before the 
     period; and
       (2) by striking the second sentence.
       (b) Repeal of Federal Preferences; Revision of Maximum 
     Income Limits; Certification of Compliance With Requirements; 
     Notification of Eligibility.--Section 6(c) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437d(c)) is amended to 
     read as follows:
       ``(c) [Reserved.]''.
       (c) Excess Funds.--Section 6(e) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(e)) is amended to read 
     as follows:
       ``(e) [Reserved.]''.
       (d) Performance Indicators for Public Housing Agencies.--
     Section 6(j) of the United States Housing Act of 1937 (42 
     U.S.C. 1437d(j)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (B)--
       (i) by striking ``obligated'' and inserting ``provided''; 
     and
       (ii) by striking ``unexpended'' and inserting ``unobligated 
     by the public housing agency'';
       (B) in subparagraph (D), by striking ``energy'' and 
     inserting ``utility'';
       (C) by redesignating subparagraph (H) as subparagraph (J); 
     and
       (D) by inserting after subparagraph (G) the following new 
     subparagraphs:
       ``(H) The extent to which the public housing agency 
     provides--
       ``(i) effective programs and activities to promote the 
     economic self-sufficiency of public housing tenants; and
       ``(ii) public housing tenants with opportunities for 
     involvement in the administration of the public housing.
       ``(I) The extent to which the public housing agency 
     successfully meets the goals and carries out the activities 
     and programs of the public housing agency plan under section 
     5(A).''; and
       (2) in paragraph (2)(A)(i), by inserting after the first 
     sentence the following: ``The Secretary may use a simplified 
     set of indicators for public housing agencies with less than 
     250 public housing units.''.
       (e) Leases.--Section 6(l) of the United States Housing Act 
     of 1937 (42 U.S.C. 1437d(l)) is amended--
       (1) in paragraph (3), by striking ``not be less than'' and 
     all that follows before the semicolon and inserting ``be the 
     period of time required under State law''; and
       (2) in paragraph (5), by striking ``on or near such 
     premises''.
       (f) Public Housing Assistance to Foster Care Children.--
     Section 6(o) of the United States Housing Act of 1937 (42 
     U.S.C. 1437d(o)) is amended by striking ``Subject'' and all 
     that follows through ``, in'' and inserting ``In''.
       (g) Preference for Areas With Inadequate Supply of Very 
     Low-Income Housing.--Section 6(p) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(p)) is amended to read 
     as follows:
       ``(p) [Reserved.]''.
       (h) Availability of Criminal Records for Screening and 
     Eviction; Eviction for Drug-Related Activity.--Section 6 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437d) is 
     amended by adding at the end the following new subsections:
       ``(q) Availability of Records.--
       ``(1) In general.--
       ``(A) Provision of information.--Notwithstanding any other 
     provision of law, except as provided in subparagraph (B), the 
     National Crime Information Center, police departments, and 
     other law enforcement agencies shall, upon request, provide 
     information to public housing agencies regarding the criminal 
     conviction records of adult applicants for, or tenants of, 
     public housing for purposes of applicant screening, lease 
     enforcement, and eviction.
       ``(B) Exception.--Except as provided under any provision of 
     State, tribal, or local law, no law enforcement agency 
     described in subparagraph (A) shall provide information under 
     this paragraph relating to any criminal conviction if the 
     date of that conviction occurred 5 or more years prior to the 
     date on which the request for the information is made.
       ``(2) Opportunity to dispute.--Before an adverse action is 
     taken on the basis of a criminal record, the public housing 
     agency shall provide the tenant or applicant with a copy of 
     the criminal record and an opportunity to dispute the 
     accuracy and relevance of that record.
       ``(3) Fee.--A public housing agency may be charged a 
     reasonable fee for information provided under paragraph (1).
       ``(4) Records management.--Each public housing agency shall 
     establish and implement a system of records management that 
     ensures that any criminal record received by the public 
     housing agency is--
       ``(A) maintained confidentially;
       ``(B) not misused or improperly disseminated; and
       ``(C) destroyed, once the purpose for which the record was 
     requested has been accomplished.
       ``(5) Definition.--For purposes of this subsection, the 
     term `adult' means a person who is 18 years of age or older, 
     or who has been convicted of a crime as an adult under any 
     Federal, State, or tribal law.
       ``(r) Eviction for Drug-Related Activity.--Any tenant 
     evicted from housing assisted under this title by reason of 
     drug-related criminal activity (as that term is defined in 
     section 8(f)(5)) shall not be eligible for housing assistance 
     under this title during the 3-year period beginning on the 
     date of such eviction, unless the evicted tenant successfully 
     completes a rehabilitation program approved by the public 
     housing agency (which shall include a waiver of this 
     subsection if the circumstances leading to eviction no longer 
     exist).''.
       (i) Transition Rule Relating to Preferences.--During the 
     period beginning on the date of enactment of this Act and 
     ending on the date on which the initial public housing agency 
     plan of a public housing agency is approved under section 5A 
     of the United States Housing Act of 1937, as added by this 
     Act, the public housing agency may establish local 
     preferences for making available public housing under the 
     United States Housing Act of 1937 and for providing tenant-
     based assistance under section 8 of that Act.

     SEC. 108. EXPANSION OF POWERS.

       (a) In General.--Section 6(j)(3) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(j)(3)) is amended--
       (1) in subparagraph (A)--
       (A) by redesignating clauses (iii) and (iv) as clauses (iv) 
     and (v), respectively; and
       (B) by inserting after clause (ii) the following new 
     clause:
       ``(iii) take possession of the public housing agency, 
     including any project or function of the agency, including 
     any project or function under any other provision of this 
     title;'';
       (2) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (E) through (G), respectively;
       (3) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B)(i) If a public housing agency is identified as 
     troubled under this subsection, the Secretary shall notify 
     the agency of the troubled status of the agency.
       ``(ii) The Secretary may give a public housing agency a 1-
     year period, beginning on the later of the date on which the 
     agency receives notice from the Secretary of the troubled 
     status of the agency under clause (i), and the date of 
     enactment of the Public Housing Reform and Empowerment Act of 
     1995, within which to demonstrate improvement satisfactory to 
     the Secretary. Nothing in this clause shall preclude the 
     Secretary from taking any action the Secretary considers 
     necessary before the commencement or the expiration of the 
     1-year period described in this clause.
       ``(iii) Upon the expiration of the 1-year period described 
     in clause (ii), if the troubled public housing agency has not 
     demonstrated improvement satisfactory to the Secretary and 
     the Secretary has not yet declared the agency to be in 

[[Page S141]]
     breach of the contract of the agency with the Federal Government under 
     this title, the Secretary shall declare the public housing 
     agency to be in substantial default, as described in 
     subparagraph (A).
       ``(iv) Upon declaration of a substantial default under 
     clause (iii), the Secretary--
       ``(I) shall either--

       ``(aa) petition for the appointment of a receiver pursuant 
     to subparagraph (A)(ii);
       ``(bb) take possession of the public housing agency or any 
     public housing projects of the public housing agency pursuant 
     to subparagraph (A)(iii); or
       ``(cc) take such actions as the Secretary determines to be 
     necessary to cure the substantial default; and

       ``(II) may, in addition, take other appropriate action.
       ``(C)(i) If a receiver is appointed pursuant to 
     subparagraph (A)(ii), in addition to the powers accorded by 
     the court appointing the receiver, the receiver--
       ``(I) may abrogate any contract that substantially impedes 
     correction of the substantial default;
       ``(II) may demolish and dispose of the assets of the public 
     housing agency, in accordance with section 18, including the 
     transfer of properties to resident-supported nonprofit 
     entities;
       ``(III) if determined to be appropriate by the Secretary, 
     may require the establishment, as permitted by applicable 
     State, tribal, and local law, of one or more new public 
     housing agencies; and
       ``(IV) shall not be subject to any State, tribal, or local 
     law relating to civil service requirements, employee rights, 
     procurement, or financial or administrative controls that, in 
     the determination of the receiver, substantially impedes 
     correction of the substantial default.
       ``(ii) For purposes of this subparagraph, the term `public 
     housing agency' includes any project or function of a public 
     housing agency, as appropriate, including any project or 
     function under any other provision of this title.
       ``(D)(i) If the Secretary takes possession of a public 
     housing agency, or any project or function of the agency, 
     pursuant to subparagraph (A)(iii), the Secretary--
       ``(I) may abrogate any contract that substantially impedes 
     correction of the substantial default;
       ``(II) may demolish and dispose of the assets of the public 
     housing agency, in accordance with section 18, including the 
     transfer of properties to resident-supported nonprofit 
     entities;
       ``(III) may require the establishment, as permitted by 
     applicable State, tribal, and local law, of one or more new 
     public housing agencies;
       ``(IV) shall not be subject to any State, tribal, or local 
     law relating to civil service requirements, employee rights, 
     procurement, or financial or administrative controls that, in 
     the determination of the Secretary, substantially impedes 
     correction of the substantial default; and
       ``(V) shall have such additional authority as a district 
     court of the United States has conferred under like 
     circumstances on a receiver to fulfill the purposes of the 
     receivership.
       ``(ii) The Secretary may appoint, on a competitive or 
     noncompetitive basis, an individual or entity as an 
     administrative receiver to assume the responsibilities of the 
     Secretary under this subparagraph for the administration of a 
     public housing agency. The Secretary may delegate to the 
     administrative receiver any or all of the powers given the 
     Secretary by this subparagraph, as the Secretary determines 
     to be appropriate.
       ``(iii) Regardless of any delegation under this 
     subparagraph, an administrative receiver may not require the 
     establishment of one or more new public housing agencies 
     pursuant to clause (i)(III), unless the Secretary first 
     approves an application by the administrative receiver to 
     authorize such establishment.
       ``(iv) For purposes of this subparagraph, the term `public 
     housing agency' includes any project or function of a public 
     housing agency, as appropriate, including any project or 
     function under any other provision of this title.''; and
       (4) by adding at the end the following new subparagraph:
       ``(H) If the Secretary (or an administrative receiver 
     appointed by the Secretary) takes possession of a public 
     housing agency (including any project or function of the 
     agency), or if a receiver is appointed by a court, the 
     Secretary or receiver shall be deemed to be acting not in the 
     official capacity of that person or entity, but rather in the 
     capacity of the public housing agency, and any liability 
     incurred, regardless of whether the incident giving rise to 
     that liability occurred while the Secretary or receiver was 
     in possession of the public housing agency (including any 
     project or function of the agency), shall be the liability of 
     the public housing agency.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall apply to a public housing agency that is found to be in 
     substantial default, on or after the date of enactment of 
     this Act, with respect to the covenants or conditions to 
     which the agency is subject (as such substantial default is 
     defined in the contract for contributions of the agency) or 
     with respect to an agreement entered into under section 
     6(j)(2)(C) of the United States Housing Act of 1937.

     SEC. 109. PUBLIC HOUSING DESIGNATED FOR THE ELDERLY AND THE 
                   DISABLED.

       (a) In General.--Section 7 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437e) is amended to read as follows:

     ``SEC. 7. AUTHORITY TO PROVIDE DESIGNATED HOUSING.

       ``(a) In General.--Notwithstanding any other provision of 
     law, a public housing agency may, in the discretion of the 
     public housing agency and without approval by the Secretary, 
     designate public housing projects or mixed-income projects 
     (or portions of projects) for occupancy as elderly housing, 
     disabled housing, or elderly and disabled housing. The public 
     housing agency shall establish requirements for this section, 
     including priorities for occupancy, in the public housing 
     agency plan.
       ``(b) Priority for Occupancy.--
       ``(1) In general.--In determining priority for admission to 
     public housing projects (or portions of projects) that are 
     designated for occupancy under this section, the public 
     housing agency may make units in such projects (or portions 
     of projects) available only to the types of families for whom 
     the project is designated.
       ``(2) Eligibility of near-elderly families.--If a public 
     housing agency determines that there are insufficient numbers 
     of elderly families to fill all the units in a public housing 
     project (or portion thereof) designated under this section 
     for occupancy by only elderly families, the agency may 
     provide that near-elderly families who qualify for occupancy 
     may occupy dwelling units in the public housing project (or 
     portion thereof).
       ``(3) Vacancy.--Notwithstanding paragraphs (1) and (2), in 
     designating a public housing project (or portion thereof) for 
     occupancy by only certain types of families under this 
     section, a public housing agency shall make any dwelling unit 
     that is ready for occupancy in such a project (or portion 
     thereof) that has been vacant for more than 60 consecutive 
     days generally available for occupancy (subject to this 
     title) without regard to that designation.
       ``(c) Availability of Housing.--
       ``(1) Tenant choice.--The decision of any disabled family 
     not to occupy or accept occupancy in an appropriate public 
     housing project or to otherwise accept any assistance made 
     available to the family under this title shall not adversely 
     affect the family with respect to a public housing agency 
     making available occupancy in other appropriate public 
     housing projects or to otherwise make assistance available to 
     that family under this title.
       ``(2) Discriminatory selection.--Paragraph (1) does not 
     apply to any family that decides not to occupy or accept an 
     appropriate dwelling unit in public housing or to accept 
     assistance under this Act on the basis of the race, color, 
     religion, gender, disability, familial status, or national 
     origin of occupants of the housing or the surrounding area.
       ``(3) Appropriateness of dwelling units.--This section may 
     not be construed to require a public housing agency to offer 
     occupancy in any dwelling unit assisted under this Act to any 
     family that is not of appropriate family size for the 
     dwelling unit.
       ``(d) Prohibition of Evictions.--Any tenant who is lawfully 
     residing in a dwelling unit in a public housing project may 
     not be evicted or otherwise required to vacate that unit as a 
     result of the designation of the public housing project (or 
     portion thereof) under this section or as a result of any 
     other action taken by the Secretary or any public housing 
     agency pursuant to this section.
       ``(e) Limitation on Occupancy in Designated Projects.--
       ``(1) Occupancy limitation.--Notwithstanding any other 
     provision of law, a dwelling unit in a public housing project 
     (or portion of a project) that is designated under subsection 
     (a) shall not be occupied by any person whose illegal use (or 
     pattern of illegal use) of a controlled substance or abuse 
     (or pattern of abuse) of alcohol--
       ``(A) constitutes a disability; and
       ``(B) provides reasonable cause for the public housing 
     agency to believe that such occupancy could interfere with 
     the health, safety, or right to peaceful enjoyment of the 
     premises by the tenants of the public housing project.
       ``(2) Required statement.--A public housing agency may not 
     make a dwelling unit in a public housing project (or portion 
     of a project) designated under subsection (a) available for 
     occupancy to any family, unless the application for occupancy 
     by that family is accompanied by a signed statement that no 
     person who will be occupying the unit illegally uses a 
     controlled substance, or abuses alcohol, in a manner that 
     would interfere with the health, safety, or right to peaceful 
     enjoyment of the premises by the tenants of the public 
     housing project.''.
       (b) Lease Provisions.--Section 6(l) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(l)) is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) by redesignating paragraph (6) as paragraph (7); and
       (3) by inserting after paragraph (5) following new 
     paragraph:
       ``(6) provide that any occupancy in violation of section 
     7(e)(1) or the furnishing of any false or misleading 
     information pursuant to section 7(e)(2) shall be cause for 
     termination of tenancy; and''.
       (c) Conforming Amendment.--Section 6(c)(4)(A) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437(b)(4)(A)) is 
     amended by striking ``section 7(a)'' and inserting ``section 
     7''.

     SEC. 110. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.

       (a) In General.--Section 9 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437g) is amended to read as follows:

     ``SEC. 9. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.

       ``(a) In General.--Except for assistance provided under 
     section 8 of this Act or as otherwise provided in the Public 
     Housing Reform and Empowerment Act of 1995, all programs 
     under which assistance is provided for public housing under 
     this Act on the day before October 1, 1997, shall be merged, 
     as appropriate, into either--
       ``(1) the Capital Fund established under subsection (c); or
       ``(2) the Operating Fund established under subsection (d).
     
[[Page S142]]

       ``(b) Use of Existing Funds.--With the exception of funds 
     made available pursuant to section 8 or section 20(f) and 
     funds made available for the urban revitalization 
     demonstration program authorized under the Department of 
     Veterans Affairs and Housing and Urban Development, and 
     Independent Agencies Appropriations Acts--
       ``(1) funds made available to the Secretary for public 
     housing purposes that have not been obligated by the 
     Secretary to a public housing agency as of October 1, 1997, 
     shall be made available, for the period originally provided 
     in law, for use in either the Capital Fund or the Operating 
     Fund, as appropriate; and
       ``(2) funds made available to the Secretary for public 
     housing purposes that have been obligated by the Secretary to 
     a public housing agency but that, as of October 1, 1997, have 
     not been obligated by the public housing agency, may be made 
     available by that public housing agency, for the period 
     originally provided in law, for use in either the Capital 
     Fund or the Operating Fund, as appropriate.
       ``(c) Capital Fund.--
       ``(1) In general.--The Secretary shall establish a Capital 
     Fund for the purpose of making assistance available to public 
     housing agencies to carry out capital and management 
     activities, including--
       ``(A) the development and modernization of public housing 
     projects, including the redesign, reconstruction, and 
     reconfiguration of public housing sites and buildings and the 
     development of mixed-income projects;
       ``(B) vacancy reduction;
       ``(C) addressing deferred maintenance needs and the 
     replacement of dwelling equipment;
       ``(D) planned code compliance;
       ``(E) management improvements;
       ``(F) demolition and replacement;
       ``(G) tenant relocation;
       ``(H) capital expenditures to facilitate programs to 
     improve the economic empowerment and self-sufficiency of 
     public housing tenants; and
       ``(I) capital expenditures to improve the security and 
     safety of residents.
       ``(2) Establishment of capital fund formula.--The Secretary 
     shall develop a formula for providing assistance under the 
     Capital Fund, which may take into account--
       ``(A) the number of public housing dwelling units owned or 
     operated by the public housing agency and the percentage of 
     those units that are occupied by very low-income families;
       ``(B) if applicable, the reduction in the number of public 
     housing units owned or operated by the public housing agency 
     as a result of any conversion to a system of tenant-based 
     assistance;
       ``(C) the costs to the public housing agency of meeting the 
     rehabilitation and modernization needs, and meeting the 
     reconstruction, development, and demolition needs of public 
     housing dwelling units owned and operated by the public 
     housing agency;
       ``(D) the degree of household poverty served by the public 
     housing agency;
       ``(E) the costs to the public housing agency of providing a 
     safe and secure environment in public housing units owned and 
     operated by the public housing agency; and
       ``(F) the ability of the public housing agency to 
     effectively administer the Capital Fund distribution of the 
     public housing agency.
       ``(d) Operating Fund.--
       ``(1) In general.--The Secretary shall establish an 
     Operating Fund for the purpose of making assistance available 
     to public housing agencies for the operation and management 
     of public housing, including--
       ``(A) procedures and systems to maintain and ensure the 
     efficient management and operation of public housing units;
       ``(B) activities to ensure a program of routine 
     preventative maintenance;
       ``(C) anticrime and antidrug activities, including the 
     costs of providing adequate security for public housing 
     tenants;
       ``(D) activities related to the provision of services, 
     including service coordinators for elderly persons or persons 
     with disabilities;
       ``(E) activities to provide for management and 
     participation in the management of public housing by public 
     housing tenants;
       ``(F) the costs associated with the operation and 
     management of mixed-income projects, to the extent 
     appropriate (including the funding of an operating reserve to 
     ensure affordability for low-income families in lieu of the 
     availability of operating funds for public housing units in a 
     mixed-income project);
       ``(G) the reasonable costs of insurance;
       ``(H) the reasonable energy costs associated with public 
     housing units, with an emphasis on energy conservation; and
       ``(I) the costs of administering a public housing work 
     program under section 12, including the costs of any related 
     insurance needs.
       ``(2) Establishment of operating fund formula.--The 
     Secretary shall establish a formula for providing assistance 
     under the Operating Fund, which may take into account--
       ``(A) standards for the costs of operation and reasonable 
     projections of income, taking into account the character and 
     location of the public housing project and characteristics of 
     the families served, or the costs of providing comparable 
     services as determined with criteria or a formula 
     representing the operations of a prototype well-managed 
     public housing project;
       ``(B) the number of public housing dwelling units owned and 
     operated by the public housing agency, the percentage of 
     those units that are occupied by very low-income families, 
     and, if applicable, the reduction in the number of public 
     housing units as a result of any conversion to a system of 
     tenant-based assistance;
       ``(C) the degree of household poverty served by a public 
     housing agency;
       ``(D) the extent to which the public housing agency 
     provides programs and activities designed to promote the 
     economic self-sufficiency and management skills of public 
     housing tenants;
       ``(E) the number of dwelling units owned and operated by 
     the public housing agency that are chronically vacant and the 
     amount of assistance appropriate for those units;
       ``(F) the costs of the public housing agency associated 
     with anticrime and antidrug activities, including the costs 
     of providing adequate security for public housing tenants; 
     and
       ``(G) the ability of the public housing agency to 
     effectively administer the Operating Fund distribution of the 
     public housing agency.
       ``(e) Limitations on Use of Funds.--
       ``(1) In general.--Each public housing agency may use not 
     more than 20 percent of the Capital Fund distribution of the 
     public housing agency for activities that are eligible for 
     assistance under the Operating Fund under subsection (d), if 
     the public housing agency plan provides for such use.
       ``(2) New construction.--
       ``(A) In general.--A public housing agency may not use any 
     of the Capital Fund or Operating Fund distributions of the 
     public housing agency for the purpose of constructing any 
     public housing unit, if such construction would result in a 
     net increase in the number of public housing units owned or 
     operated by the public housing agency on the date of 
     enactment of the Public Housing Reform and Empowerment Act of 
     1995, including any public housing units demolished as part 
     of any revitalization effort.
       ``(B) Exception.--Notwithstanding subparagraph (A), a 
     public housing agency may use the Capital Fund or Operating 
     Fund distributions of the public housing agency for the 
     construction and operation of housing units that are 
     available and affordable to low-income families in excess of 
     the limitations on new construction set forth in subparagraph 
     (A), except that the formulae established under subsections 
     (c)(2) and (d)(2) shall not provide additional funding for 
     the specific purpose of allowing construction and operation 
     of housing in excess of those limitations.''.
       ``(f) Operating and Capital Assistance to Resident 
     Management Corporations.--The Secretary shall directly 
     provide operating and capital assistance under this section 
     to each resident management corporation managing a public 
     housing project pursuant to a contract under this section, 
     which assistance shall be used for purposes of operating the 
     public housing project and performing such other eligible 
     activities with respect to the project as may be provided 
     under the contract.
       ``(g) Indian Housing Programs.--To the extent provided in 
     advance in appropriations Acts, the Secretary shall carry out 
     housing programs for Indians in accordance with such formulas 
     and programs as the Secretary shall establish by regulation.
       ``(h) Technical Assistance.--To the extent approved in 
     advance in appropriations Acts, the Secretary may make grants 
     or enter into contracts in accordance with this subsection 
     for purposes of providing, either directly or indirectly--
       ``(1) technical assistance to public housing agencies, 
     resident councils, resident organizations, and resident 
     management corporations, including assistance relating to 
     monitoring and inspections;
       ``(2) training for public housing agency employees and 
     tenants;
       ``(3) data collection and analysis; and
       ``(4) training, technical assistance, and education to 
     assist public housing agencies that are--
       ``(A) at risk of being designated as troubled under section 
     6(j) from being so designated; and
       ``(B) designated as troubled under section 6(j) in 
     achieving the removal of that designation.
       ``(i) Emergency Reserve.--
       ``(1) In general.--
       ``(A) Set-aside.--In each fiscal year, the Secretary shall 
     set aside not more than 2 percent of the amount made 
     available for use under the capital fund to carry out this 
     section for that fiscal year for use in accordance with this 
     subsection.
       ``(B) Use of funds.--
       ``(i) Emergencies.--Amounts set aside under this paragraph 
     shall be available to the Secretary for use in connection 
     with emergencies, as determined by the Secretary, and in 
     connection with housing needs resulting from any settlement 
     of litigation.
       ``(ii) Additional funds.--To the extent that there are 
     funds from amounts set aside under this paragraph in excess 
     to the needs described in clause (i), the Secretary may use 
     those funds for the costs of establishing and administering a 
     witness relocation program, which shall be established by the 
     Secretary in conjunction with the Attorney General of the 
     United States.
       ``(2) Allocation.--
       ``(A) In general.--Amounts set aside under this subsection 
     shall initially be allocated based on the emergency and 
     litigation settlement needs of public housing agencies, in 
     such manner, and in such amounts as the Secretary shall 
     determine.
       ``(B) Publication.--The Secretary shall publish the use of 
     any amounts allocated under this subsection in the Federal 
     Register.''.
       (b) Implementation; Effective Date; Transition Period.--
       (1) Implementation.--Not later than 1 year after the date 
     of enactment of this Act, in accordance with the negotiated 
     rulemaking procedures set forth in subchapter III of chapter 
     5 of title 5, United States Code, the Secretary shall 
     establish the formulas described in subsections (c)(3) and 
     (d)(2) of section 9 of the Public Housing Reform and 
     Empowerment Act of 1995, as amended by this section.
       (2) Effective date.--The formulas established under 
     paragraph (1) shall be effective only with respect to amounts 
     made available under section 9 of the United States Housing 

[[Page S143]]
     Act of 1937, as amended by this section, in fiscal year 1998 or in any 
     succeeding fiscal year.
       (3) Transition period.--Prior to the effective date 
     described in paragraph (2), the Secretary shall provide that 
     each public housing agency shall receive funding under 
     sections 9 and 14 of the United States Housing Act of 1937, 
     as those sections existed on the day before the date of 
     enactment of this Act.
       (c) Drug Elimination Grants.--
       (1) Funding authorization.--
       (A) In general.--To the extent provided in advance in 
     appropriations Acts for fiscal years 1996 and 1997, the 
     Secretary shall make grants for--
       (i) use in eliminating drug-related crime under the Public 
     and Assisted Housing Drug Elimination Act of 1990; and
       (ii) drug elimination clearinghouse services authorized by 
     section 5143 of the Drug-Free Public Housing Act of 1988.
       (B) Set-aside.--Of any amounts made available to carry out 
     subparagraph (A), the Secretary shall set aside amounts for 
     grants, technical assistance, contracts, and other 
     assistance, and for training, program assessment, and 
     execution for or on behalf of public housing agencies and 
     resident organizations (including the cost of necessary 
     travel for participants in such training).
       (2) Program requirements.--The use of amounts made 
     available under paragraph (1) shall be governed by the Public 
     and Assisted Housing Drug Elimination Act of 1990, except as 
     follows:
       (A) Formula allocation.--Notwithstanding the Public and 
     Assisted Housing Drug Elimination Act of 1990, after setting 
     aside amounts for assisted housing under section 5130(b) of 
     such Act, the Secretary may make grants to public housing 
     agencies in accordance with a formula established by the 
     Secretary, which shall--
       (i) take into account the needs of the public housing 
     agency for anticrime funding, and the amount of funding that 
     the public housing agency has received under the Public and 
     Assisted Housing Drug Elimination Act of 1990 during fiscal 
     years 1993, 1994, and 1995; and
       (ii) not exclude an eligible public housing agency that has 
     not received funding during the period described in clause 
     (i).
       (B) Other types of crime.--For purposes of this subsection, 
     the Secretary may define the term ``drug-related crime'' to 
     include criminal actions other than those described in 
     section 5126(2) of the Public and Assisted Housing Drug 
     Elimination Act of 1990.
       (3) Sunset.--No grant may be made under this subsection on 
     or after October 1, 1998.

     SEC. 111. LABOR STANDARDS.

       Section 12 of the United States Housing Act of 1937 (42 
     U.S.C. 1437j) is amended by adding at the end the following 
     new subsection:
       ``(c) Work Requirement.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, each adult member of each family assisted under this 
     title shall contribute not less than 8 hours of volunteer 
     work per month (not to include any political activity) within 
     the community in which that adult resides.
       ``(2) Inclusion in plan.--Each public housing agency shall 
     include in the public housing agency plan a detailed 
     description of the manner in which the public housing agency 
     intends to implement and administer paragraph (1).
       ``(3) Exemptions.--The Secretary may provide an exemption 
     from paragraph (1) for any adult who is--
       ``(A) not less than 62 years of age;
       ``(B) a person with disabilities who is unable, as 
     determined in accordance with guidelines established by the 
     Secretary, to comply with this section;
       ``(C) working not less than 20 hours per week, a student, 
     receiving vocational training, or otherwise meeting work, 
     training, or educational requirements of a public assistance 
     program; or
       ``(D) a single parent or the spouse of an otherwise exempt 
     individual who is the primary caretaker of one or more 
     children who are 6 years of age or younger.''.

     SEC. 112. REPEAL OF ENERGY CONSERVATION; CONSORTIA AND JOINT 
                   VENTURES.

       Section 13 of the United States Housing Act of 1937 (42 
     U.S.C. 1437k) is amended to read as follows:

     ``SEC. 13. CONSORTIA, JOINT VENTURES, AFFILIATES, AND 
                   SUBSIDIARIES OF PUBLIC HOUSING AGENCIES.

       ``(a) Consortia.--
       ``(1) In general.--Any 2 or more public housing agencies 
     may participate in a consortium for the purpose of 
     administering any or all of the housing programs of those 
     public housing agencies in accordance with this section.
       ``(2) Effect.--With respect to any consortium described in 
     paragraph (1)--
       ``(A) any assistance made available under this title to 
     each of the public housing agencies participating in the 
     consortium shall be paid to the consortium; and
       ``(B) all planning and reporting requirements imposed upon 
     each public housing agency participating in the consortium 
     with respect to the programs operated by the consortium shall 
     be consolidated.
       ``(3) Restrictions.--
       ``(A) Agreement.--Each consortium described in paragraph 
     (1) shall be formed and operated in accordance with a 
     consortium agreement, and shall be subject to the 
     requirements of a joint public housing agency plan, which 
     shall be submitted by the consortium in accordance with 
     section 5A.
       ``(B) Minimum requirements.--The Secretary shall specify 
     minimum requirements relating to the formation and operation 
     of consortia and the minimum contents of consortium 
     agreements under this paragraph.
       ``(b) Joint Ventures.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, a public housing agency, in accordance with the public 
     housing agency plan, may--
       ``(A) form and operate wholly owned or controlled 
     subsidiaries (which may be nonprofit corporations) and other 
     affiliates, any of which may be directed, managed, or 
     controlled by the same persons who constitute the board of 
     commissioners or other similar governing body of the public 
     housing agency, or who serve as employees or staff of the 
     public housing agency; or
       ``(B) enter into joint ventures, partnerships, or other 
     business arrangements with, or contract with, any person, 
     organization, entity, or governmental unit, with respect to 
     the administration of the programs of the public housing 
     agency, including any program that is subject to this title.
       ``(2) Use of income.--Any income generated under paragraph 
     (1) shall be used for low-income housing or to benefit the 
     tenants of the public housing agency.
       ``(3) Audits.--The Comptroller General of the United 
     States, the Secretary, and the Inspector General of the 
     Department of Housing and Urban Development may conduct an 
     audit of any activity undertaken under paragraph (1) at any 
     time.''.

     SEC. 113. REPEAL OF MODERNIZATION FUND.

       (a) In General.--Section 14 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437l) is repealed.
       (b) Conforming Amendments.--The United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (1) in section 5(c)(5), by striking ``for use under section 
     14 or'';
       (2) in section 5(c)(7)--
       (A) in subparagraph (A)--
       (i) by striking clause (iii); and
       (ii) by redesignating clauses (iv) through (x) as clauses 
     (iii) through (ix), respectively; and
       (B) in subparagraph (B)--
       (i) by striking clause (iii); and
       (ii) by redesignating clauses (iv) through (x) as clauses 
     (iii) through (ix), respectively;
       (3) in section 6(j)(1)--
       (A) by striking subparagraph (B); and
       (B) by redesignating subparagraphs (C) through (H) as 
     subparagraphs (B) through (G), respectively;
       (4) in section 6(j)(2)(A)--
       (A) in clause (i), by striking ``The Secretary shall also 
     designate,'' and all that follows through the period at the 
     end; and
       (B) in clause (iii), by striking ``(including designation 
     as a troubled agency for purposes of the program under 
     section 14)'';
       (5) in section 6(j)(2)(B)--
       (A) in clause (i), by striking ``and determining that an 
     assessment under this subparagraph will not duplicate any 
     review conducted under section 14(p)''; and
       (B) in clause (ii)--
       (i) by striking ``(I) the agency's comprehensive plan 
     prepared pursuant to section 14 adequately and appropriately 
     addresses the rehabilitation needs of the agency's inventory, 
     (II)'' and inserting ``(I)''; and
       (ii) by striking ``(III)'' and inserting ``(II)'';
       (6) in section 6(j)(3)--
       (A) in clause (ii), by adding ``and'' at the end;
       (B) by striking clause (iii); and
       (C) by redesignating clause (iv) as clause (iii);
       (7) in section 6(j)(4)--
       (A) in subparagraph (D), by adding ``and'' at the end;
       (B) in subparagraph (E), by striking ``; and'' at the end 
     and inserting a period; and
       (C) by striking subparagraph (F);
       (8) in section 20--
       (A) by striking subsection (c) and inserting the following:
       ``(c) [Reserved.]''; and
       (B) by striking subsection (f) and inserting the following:
       ``(f) [Reserved.]'';
       (9) in section 21(a)(2)--
       (A) by striking subparagraph (A); and
       (B) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively;
       (10) in section 21(a)(3)(A)(v), by striking ``the building 
     or buildings meet the minimum safety and livability standards 
     applicable under section 14, and'';
       (11) in section 25(b)(1), by striking ``From amounts 
     reserved'' and all that follows through ``the Secretary may'' 
     and inserting the following: To the extent approved in 
     appropriations Acts, the Secretary may'';
       (12) in section 25(e)(2)--
       (A) by striking ``The Secretary'' and inserting ``To the 
     extent approved in appropriations Acts, the Secretary''; and
       (B) by striking ``available annually from amounts under 
     section 14'';
       (13) in section 25(e), by striking paragraph (3);
       (14) in section 25(f)(2)(G)(i), by striking ``including--'' 
     and all that follows through ``an explanation'' and inserting 
     ``including an explanation'';
       (15) in section 25(i)(1), by striking the second sentence; 
     and
       (16) in section 202(b)(2)--
       (A) by striking ``(b) Financial Assistance.--'' and all 
     that follows through ``The Secretary may,'' and inserting the 
     following:
       ``(b) Financial Assistance.--The Secretary may''; and
       (B) by striking paragraph (2).

     SEC. 114. ELIGIBILITY FOR PUBLIC AND ASSISTED HOUSING.

       Section 16 of the United States Housing Act of 1937 (42 
     U.S.C. 1437n) is amended to read as follows:

     ``SEC. 16. ELIGIBILITY FOR PUBLIC AND ASSISTED HOUSING.

       ``(a) Income Eligibility for Certain Public and Assisted 
     Housing.--
     
[[Page S144]]

       ``(1) In general.--Of the dwelling units of a public 
     housing agency, including dwelling units receiving tenant-
     based assistance under section 8 and public housing units in 
     a designated mixed-income project, made available for 
     occupancy in any fiscal year of the public housing agency--
       ``(A) not less than 40 percent shall be occupied by 
     families whose incomes do not exceed 30 percent of the area 
     median income for those families;
       ``(B) not less than 75 percent shall be occupied by 
     families whose incomes do not exceed 60 percent of the area 
     median income for those families; and
       ``(C) any remaining dwelling units may be made available 
     for families whose incomes do not exceed 80 percent of the 
     area median income for those families.
       ``(2) Establishment of different standards.--
     Notwithstanding paragraph (1), if approved by the Secretary, 
     a public housing agency, in accordance with the public 
     housing agency plan, may for good cause establish and 
     implement an occupancy standard other than the standard 
     described in paragraph (1).
       ``(3) Mixed-income housing standard.--Each public housing 
     agency plan submitted by a public housing agency shall 
     include a plan for achieving a diverse income mix among 
     tenants in each public housing project of the public housing 
     agency and among the scattered site public housing of the 
     public housing agency.
       ``(b) Ineligibility of Illegal Drug Users and Alcohol 
     Abusers.--Notwithstanding any other provision of law, a 
     public housing agency shall establish standards for 
     occupancy in public housing dwelling units--
       ``(1) that prohibit occupancy in any such unit by any 
     person--
       ``(A) who the public housing agency determines is illegally 
     using a controlled substance; or
       ``(B) if the public housing agency determines that it has 
     reasonable cause to believe that such person's illegal use 
     (or pattern of illegal use) of a controlled substance, or 
     abuse (or pattern of abuse) of alcohol, could interfere with 
     the health, safety, or right to peaceful enjoyment of the 
     premises by the tenants of the public housing project; and
       ``(2) that allow the public housing agency to terminate the 
     tenancy in any public housing unit of any person--
       ``(A) if the public housing agency determines that such 
     person is illegally using a controlled substance; or
       ``(B) whose illegal use of a controlled substance, or whose 
     abuse of alcohol, is determined by the public housing agency 
     to interfere with the health, safety, or right to peaceful 
     enjoyment of the premises by the tenants of the public 
     housing project.
       ``(c) Inapplicability to Indian Housing.--This section does 
     not apply to any dwelling unit assisted by an Indian housing 
     authority.''.

     SEC. 115. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.

       (a) In General.--Section 18 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437p) is amended to read as follows:

     ``SEC. 18. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.

       ``(a) Applications for Demolition and Disposition.--Except 
     as provided in subsection (b), not later than 60 days after 
     receiving an application by a public housing agency for 
     authorization, with or without financial assistance under 
     this title, to demolish or dispose of a public housing 
     project or a portion of a public housing project (including 
     any transfer to a resident-supported nonprofit entity), the 
     Secretary shall approve the application, if the public 
     housing agency certifies--
       ``(1) in the case of--
       ``(A) an application proposing demolition of a public 
     housing project or a portion of a public housing project, 
     that--
       ``(i) the project or portion of the public housing project 
     is obsolete as to physical condition, location, or other 
     factors, making it unsuitable for housing purposes; and
       ``(ii) no reasonable program of modifications is cost-
     effective to return the public housing project or portion of 
     the project to useful life; and
       ``(B) an application proposing the demolition of only a 
     portion of a public housing project, that the demolition will 
     help to assure the viability of the remaining portion of the 
     project;
       ``(2) in the case of an application proposing disposition 
     of a public housing project or other real property subject to 
     this title by sale or other transfer, that--
       ``(A) the retention of the property is not in the best 
     interests of the tenants or the public housing agency 
     because--
       ``(i) conditions in the area surrounding the public housing 
     project adversely affect the health or safety of the tenants 
     or the feasible operation of the project by the public 
     housing agency; or
       ``(ii) disposition allows the acquisition, development, or 
     rehabilitation of other properties that will be more 
     efficiently or effectively operated as low-income housing;
       ``(B) the public housing agency has otherwise determined 
     the disposition to be appropriate for reasons that are--
       ``(i) in the best interests of the tenants and the public 
     housing agency;
       ``(ii) consistent with the goals of the public housing 
     agency and the public housing agency plan; and
       ``(iii) otherwise consistent with this title; or
       ``(C) for property other than dwelling units, the property 
     is excess to the needs of a public housing project or the 
     disposition is incidental to, or does not interfere with, 
     continued operation of a public housing project;
       ``(3) that the public housing agency has specifically 
     authorized the demolition or disposition in the public 
     housing agency plan, and has certified that the actions 
     contemplated in the public housing agency plan comply with 
     this section;
       ``(4) that the public housing agency--
       ``(A) will provide for the payment of the relocation 
     expenses of each tenant to be displaced;
       ``(B) will ensure that the amount of rent paid by the 
     tenant following relocation will not exceed the amount 
     permitted under this title; and
       ``(C) will not commence demolition or complete disposition 
     until all tenants residing in the unit are relocated;
       ``(5) that the net proceeds of any disposition will be 
     used--
       ``(A) unless waived by the Secretary, for the retirement of 
     outstanding obligations issued to finance the original public 
     housing project or modernization of the project; and
       ``(B) to the extent that any proceeds remain after the 
     application of proceeds in accordance with subparagraph (A), 
     for the provision of low-income housing or to benefit the 
     tenants of the public housing agency; and
       ``(6) that the public housing agency has complied with 
     subsection (c).
       ``(b) Disapproval of Applications.--The Secretary shall 
     disapprove an application submitted under subsection (a) if 
     the Secretary determines that any certification made by the 
     public housing agency under that subsection is clearly 
     inconsistent with information and data available to the 
     Secretary.
       ``(c) Tenant Opportunity To Purchase in Case of Proposed 
     Disposition.--
       ``(1) In general.--In the case of a proposed disposition of 
     a public housing project or portion of a project, the public 
     housing agency shall, in appropriate circumstances, as 
     determined by the Secretary, initially offer the property to 
     any eligible resident organization, eligible resident 
     management corporation, or nonprofit organization supported 
     by the residents, if that entity has expressed an interest, 
     in writing, to the public housing agency in a timely manner, 
     in purchasing the property for continued use as low-income 
     housing.
       ``(2) Timing.--
       ``(A) Thirty-day notice.--A resident organization, resident 
     management corporation, or other resident-supported nonprofit 
     entity referred to in paragraph (1) may express interest in 
     purchasing property that is the subject of a disposition, as 
     described in paragraph (1), during the 30-day period 
     beginning on the date of notification of a proposed sale of 
     the property.
       ``(B) Sixty-day notice.--If an entity expresses written 
     interest in purchasing a property, as provided in 
     subparagraph (A), no disposition of the property shall occur 
     during the 60-day period beginning on the date of receipt of 
     that written notice, during which time that entity shall be 
     given the opportunity to obtain a firm commitment for 
     financing the purchase of the property.
       ``(d) Replacement Units.--Notwithstanding any other 
     provision of law, replacement housing units for public 
     housing units demolished in accordance with this section may 
     be built on the original public housing location or in the 
     same neighborhood as the original public housing location if 
     the number of those replacement units is fewer than the 
     number of units demolished.''.
       (b) Homeownership Replacement Plan.--
       (1) In general.--Section 304(g) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437aaa-3(g)), as amended by 
     section 1002(b) of the Emergency Supplemental Appropriations 
     for Additional Disaster Assistance, for Anti-terrorism 
     Initiatives, for Assistance in the Recovery from the Tragedy 
     that Occurred At Oklahoma City, and Rescissions Act, 1995, is 
     amended to read as follows:
       ``(g) [Reserved.]''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be effective with respect to any plan for the 
     demolition, disposition, or conversion to homeownership of 
     public housing that is approved by the Secretary after 
     September 30, 1995.
       (c) Uniform Relocation and Real Property Acquisition Act.--
     The Uniform Relocation and Real Property Acquisition Act 
     shall not apply to activities under section 18 of the United 
     States Housing Act of 1937, as amended by this section.

     SEC. 116. REPEAL OF FAMILY INVESTMENT CENTERS; VOUCHER SYSTEM 
                   FOR PUBLIC HOUSING.

       (a) In General.--Section 22 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437t) is amended to read as follows:

     ``SEC. 22. VOUCHER SYSTEM FOR PUBLIC HOUSING.

       ``(a) In General.--
       ``(1) Authorization.--A public housing agency may convert 
     any public housing project (or portion thereof) owned and 
     operated by the public housing agency to a system of tenant-
     based assistance in accordance with this section.
       ``(2) Requirements.--In converting to a tenant-based system 
     of assistance under this section, the public housing agency 
     shall develop a conversion assessment and plan under 
     subsection (b) in consultation with the appropriate public 
     officials, with significant participation by the residents of 
     the project (or portion thereof), which assessment and plan 
     shall--
       ``(A) be consistent with and part of the public housing 
     agency plan; and
       ``(B) describe the conversion and future use or disposition 
     of the public housing project, including an impact analysis 
     on the affected community.
       ``(b) Conversion Assessment and Plan.--
       ``(1) In general.--Not later than 2 years after the date of 
     enactment of the Public Housing Reform and Empowerment Act of 
     1995, each public housing agency shall assess the status of 
     each public housing project owned and operated by that public 
     housing agency, and shall submit to the Secretary an 
     assessment that includes--
     
[[Page S145]]

       ``(A) a cost analysis that demonstrates whether or not the 
     cost (both on a net present value basis and in terms of new 
     budget authority requirements) of providing tenant-based 
     assistance under section 8 for the same families 
     in substantially similar dwellings over the same period of 
     time is less expensive than continuing public housing 
     assistance in the public housing project proposed for 
     conversion for the remaining useful life of the project;
       ``(B) an analysis of the market value of the public housing 
     project proposed for conversion both before and after 
     rehabilitation, and before and after conversion;
       ``(C) an analysis of the rental market conditions with 
     respect to the likely success of tenant-based assistance 
     under section 8 in that market for the specific residents of 
     the public housing project proposed for conversion, including 
     an assessment of the availability of decent and safe 
     dwellings renting at or below the payment standard 
     established for tenant-based assistance under section 8 by 
     the public housing agency;
       ``(D) the impact of the conversion to a system of tenant-
     based assistance under this section on the neighborhood in 
     which the public housing project is located; and
       ``(E) a plan that identifies actions, if any, that the 
     public housing agency would take with regard to converting 
     any public housing project or projects (or portions thereof) 
     of the public housing agency to a system of tenant-based 
     assistance.
       ``(2) Streamlined assessment.--At the discretion of the 
     Secretary or at the request of a public housing agency, the 
     Secretary may waive any or all of the requirements of 
     paragraph (1) or otherwise require a streamlined assessment 
     with respect to any public housing project or class of public 
     housing projects.
       ``(3) Implementation of conversion plan.--
       ``(A) In general.--A public housing agency may implement a 
     conversion plan only if the conversion assessment under this 
     section demonstrates that the conversion--
       ``(i) will not be more expensive than continuing to operate 
     the public housing project (or portion thereof) as public 
     housing; and
       ``(ii) will principally benefit the residents of the public 
     housing project (or portion thereof) to be converted, the 
     public housing agency, and the community.
       ``(B) Disapproval.--The Secretary shall disapprove a 
     conversion plan only if the plan is plainly inconsistent with 
     the conversion assessment under subsection (b) or if there is 
     reliable information and data available to the Secretary that 
     contradicts that conversion assessment.
       ``(c) Other Requirements.--To the extent approved by the 
     Secretary, the funds used by the public housing agency to 
     provide tenant-based assistance under section 8 shall be 
     added to the housing assistance payment contract administered 
     by--
       ``(1) the public housing agency; or
       ``(2) any entity administering the contract on behalf of 
     the public housing agency.
       ``(d) Inapplicability to Indian Housing.--This section does 
     not apply to any Indian housing authority.''.
       (b) Savings Provision.--The amendment made by subsection 
     (a) does not affect any contract or other agreement entered 
     into under section 22 of the United States Housing Act of 
     1937, as that section existed on the day before the date of 
     enactment of this Act.

     SEC. 117. REPEAL OF FAMILY SELF-SUFFICIENCY; HOMEOWNERSHIP 
                   OPPORTUNITIES.

       (a) In General.--Section 23 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437u) is amended to read as follows:

     ``SEC. 23. PUBLIC HOUSING HOMEOWNERSHIP OPPORTUNITIES.

       ``(a) In General.--Notwithstanding any other provision of 
     law, a public housing agency may, in accordance with this 
     section--
       ``(1) sell any public housing unit in any public housing 
     project of the public housing agency to--
       ``(A) the low-income tenants of the public housing agency; 
     or
       ``(B) any organization serving as a conduit for sales to 
     those persons; and
       ``(2) provide assistance to public housing residents to 
     facilitate the ability of those residents to purchase a 
     principal residence.
       ``(b) Right of First Refusal.--In making any sale under 
     this section, the public housing agency shall initially offer 
     the public housing unit at issue to the tenant or tenants 
     occupying that unit, if any, or to an organization serving as 
     a conduit for sales to any such tenant.
       ``(c) Sale Prices, Terms, and Conditions.--Any sale under 
     this section may involve such prices, terms, and conditions 
     as the public housing agency may determine in accordance with 
     procedures set forth in the public housing agency plan.
       ``(d) Purchase Requirements.--
       ``(1) In general.--Each tenant that purchases a dwelling 
     unit under subsection (a) shall, as of the date on which the 
     purchase is made--
       ``(A) intend to occupy the property as a principal 
     residence; and
       ``(B) submit a written certification to the public housing 
     agency that such tenant will occupy the property as a 
     principal residence for a period of not less than 12 months 
     beginning on that date.
       ``(2) Recapture.--Except for good cause, as determined by a 
     public housing agency in the public housing agency plan, if, 
     during the 1-year period beginning on the date on which any 
     tenant acquires a public housing unit under this section, 
     that public housing unit is resold, the public housing agency 
     shall recapture 75 percent of the amount of any proceeds from 
     that resale that exceed the sum of--
       ``(A) the original sale price for the acquisition of the 
     property by the qualifying tenant;
       ``(B) the costs of any improvements made to the property 
     after the date on which the acquisition occurs; and
       ``(C) any closing costs incurred in connection with the 
     acquisition.
       ``(e) Protection of Nonpurchasing Tenants.--If a public 
     housing tenant does not exercise the right of first refusal 
     under subsection (b) with respect to the public housing unit 
     in which the tenant resides, the public housing agency 
     shall--
       ``(1) ensure that either another public housing unit or 
     rental assistance under section 8 is made available to the 
     tenant; and
       ``(2) provide for the payment of the reasonable relocation 
     expenses of the tenant.
       ``(f) Net Proceeds.--
       ``(1) In general.--The net proceeds of any sales under this 
     section remaining after payment of all costs of the sale and 
     any unassumed, unpaid indebtedness owed in connection with 
     the dwelling units sold under this section unless waived by 
     the Secretary, shall be used for purposes relating to low-
     income housing and in accordance with the public housing 
     agency plan.
       ``(2) Indian housing.--The net proceeds described in 
     paragraph (1) may be used by Indian housing authorities for 
     housing for families whose incomes exceed the income levels 
     established under this title for low-income families.
       ``(g) Homeownership Assistance.--From amounts distributed 
     to a public housing agency under section 9, or from other 
     income earned by the public housing agency, the public 
     housing agency may provide assistance to public housing 
     residents to facilitate the ability of those residents to 
     purchase a principal residence, including a residence other 
     than a residence located in a public housing project.''.
       (b) Conforming Amendments.--The United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (1) in section 8(y)(7)(A)--
       (A) by striking ``, (ii)'' and inserting ``, and (ii)''; 
     and
       (B) by striking ``, and (iii)'' and all that follows before 
     the period at the end; and
       (2) in section 25(l)(2)--
       (A) in the first sentence, by striking ``, consistent with 
     the objectives of the program under section 23,''; and
       (B) by striking the second sentence.
       (c) Savings Provision.--The amendments made by this section 
     do not affect any contract or other agreement entered into 
     under section 23 of the United States Housing Act of 1937, as 
     that section existed on the day before the date of enactment 
     of this Act.

     SEC. 118. REVITALIZING SEVERELY DISTRESSED PUBLIC HOUSING.

       Section 24 of the United States Housing Act of 1937 (42 
     U.S.C. 1437v) is amended to read as follows:

     ``SEC. 24. REVITALIZING SEVERELY DISTRESSED PUBLIC HOUSING.

       ``(a) In General.--To the extent provided in advance in 
     appropriations Acts, the Secretary may make grants to public 
     housing agencies for the purposes of--
       ``(1) enabling the demolition of obsolete public housing 
     projects or portions thereof;
       ``(2) revitalizing sites (including remaining public 
     housing units) on which such public housing projects are 
     located;
       ``(3) the provision of replacement housing, which will 
     avoid or lessen concentrations of very low-income families; 
     and
       ``(4) the provision of tenant-based assistance under 
     section 8 for use as replacement housing.
       ``(b) Competition.--The Secretary shall make grants under 
     this section on the basis of a competition, which shall be 
     based on such factors as--
       ``(1) the need for additional resources for addressing a 
     severely distressed public housing project;
       ``(2) the need for affordable housing in the community;
       ``(3) the supply of other housing available and affordable 
     to a family receiving tenant-based assistance under section 
     8; and
       ``(4) the local impact of the proposed revitalization 
     program.
       ``(c) Terms and Conditions.--The Secretary may impose such 
     terms and conditions on recipients of grants under this 
     section as the Secretary determines to be appropriate to 
     carry out the purposes of this section, except that such 
     terms and conditions shall be similar to the terms and 
     conditions of either--
       ``(1) the urban revitalization demonstration program 
     authorized under the Departments of Veterans Affairs and 
     Housing and Urban Development and Independent Agencies 
     Appropriations Acts; or
       ``(2) section 24 of the United States Housing Act of 1937, 
     as such section existed before the date of enactment of the 
     Public Housing Reform and Empower Act of 1995.
       ``(d) Alternative Management.--The Secretary may require 
     any recipient of a grant under this section to make 
     arrangements with an entity other than the public housing 
     agency to carry out the purposes for which the grant was 
     awarded, if the Secretary determines that such action is 
     necessary for the timely and effective achievement of the 
     purposes for which the grant was awarded.
       ``(e) Inapplicability to Indian Housing.--This section does 
     not apply to any Indian housing authority.
       ``(f) Sunset.--No grant may be made under this section on 
     or after October 1, 1998.''.

     SEC. 119. MIXED-INCOME AND MIXED-OWNERSHIP PROJECTS.

       (a) In General.--The United States Housing Act of 1937 (42 
     U.S.C. 1437 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 28. MIXED-INCOME AND MIXED-OWNERSHIP PROJECTS.

       ``(a) In General.--A public housing agency may own, 
     operate, assist, or otherwise participate in one or more 
     mixed-income projects in accordance with this section.
     
[[Page S146]]

       ``(b) Requirements.--
       ``(1) Mixed-income project.--For purposes of this section, 
     the term `mixed-income project' means a project that meets 
     the requirements of paragraph (2) and that is occupied both 
     by one or more very low-income families and by one or more 
     families that are not very low-income families.
       ``(2) Structure of projects.--Each mixed-income project 
     shall be developed--
       ``(A) in a manner that ensures that units are made 
     available in the project, by master contract, individual 
     lease, or equity interest for occupancy by eligible families 
     identified by the public housing agency for a period of not 
     less than 20 years;
       ``(B) in a manner that ensures that the number of public 
     housing units bears approximately the same proportion to the 
     total number of units in the mixed-income project as the 
     value of the total financial commitment provided by the 
     public housing agency bears to the value of the total 
     financial commitment in the project, or shall not be less 
     than the number of units that could have been developed under 
     the conventional public housing program with the assistance; 
     and
       ``(C) in accordance with such other requirements as the 
     Secretary may prescribe by regulation.
       ``(3) Types of projects.--The term `mixed-income project' 
     includes a project that is developed--
       ``(A) by a public housing agency or by an entity affiliated 
     with a public housing agency;
       ``(B) by a partnership, a limited liability company, or 
     other entity in which the public housing agency (or an entity 
     affiliated with a public housing agency) is a general 
     partner, managing member, or otherwise participates in the 
     activities of that entity;
       ``(C) by any entity that grants to the public housing 
     agency the option to purchase the public housing project 
     during the 20-year period beginning on the date of initial 
     occupancy of the public housing project in accordance with 
     section 42(l)(7) of the Internal Revenue Code of 1986; or
       ``(D) in accordance with such other terms and conditions as 
     the Secretary may prescribe by regulation.
       ``(c) Taxation.--
       ``(1) In general.--A public housing agency may elect to 
     have all public housing units in a mixed-income project 
     subject to local real estate taxes, except that such units 
     shall be eligible at the discretion of the public housing 
     agency for the taxing requirements under section 6(d).
       ``(2) Low-income housing tax credit.--With respect to any 
     unit in a mixed-income project that is assisted pursuant to 
     the low-income housing tax credit under section 42 of the 
     Internal Revenue Code of 1986, the rents charged to the 
     tenants may be set at levels not to exceed the amounts 
     allowable under that section.
       ``(d) Restriction.--No assistance provided under section 9 
     shall be used by a public housing agency in direct support of 
     any unit rented to a family that is not a low-income family, 
     except that this subsection does not apply to the Mutual Help 
     Homeownership Program authorized under section 202 of this 
     Act.
       ``(e) Effect of Certain Contract Terms.--If an entity that 
     owns or operates a mixed-income project under this section 
     enters into a contract with a public housing agency, the 
     terms of which obligate the entity to operate and maintain a 
     specified number of units in the project as public housing 
     units in accordance with the requirements of this Act for the 
     period required by law, such contractual terms may provide 
     that, if, as a result of a reduction in appropriations under 
     section 9, or any other change in applicable law, the public 
     housing agency is unable to fulfill its contractual 
     obligations with respect to those public housing units, that 
     entity may deviate, under procedures and requirements 
     developed through regulations by the Secretary, from 
     otherwise applicable restrictions under this Act regarding 
     rents, income eligibility, and other areas of public housing 
     management with respect to a portion or all of those public 
     housing units, to the extent necessary to preserve the 
     viability of those units while maintaining the low-income 
     character thereof to the maximum extent practicable.''.
       (b) Regulations.--The Secretary shall issue such 
     regulations as may be necessary to promote the development of 
     mixed-income projects, as that term is defined in section 28 
     of the United States Housing Act of 1937, as added by this 
     Act.

     SEC. 120. CONVERSION OF DISTRESSED PUBLIC HOUSING TO TENANT-
                   BASED ASSISTANCE.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 29. CONVERSION OF DISTRESSED PUBLIC HOUSING TO TENANT-
                   BASED ASSISTANCE.

       ``(a) Identification of Units.--To the extent approved in 
     advance in appropriations Acts, each public housing agency 
     shall identify all public housing projects of the public 
     housing agency--
       ``(1) that are on the same or contiguous sites;
       ``(2) that the public housing agency determines to be 
     distressed, which determination shall be made in accordance 
     with guidelines established by the Secretary, which 
     guidelines shall be based on the criteria established in the 
     Final Report of the National Commission on Severely 
     Distressed Public Housing (August 1992);
       ``(3) identified as distressed housing under paragraph (2) 
     for which the public housing agency cannot assure the long-
     term viability as public housing through reasonable 
     modernization expenses, density reduction, achievement of a 
     broader range of family income, or other measures; and
       ``(4) for which the estimated cost, during the remaining 
     useful life of the project, of continued operation and 
     modernization as public housing exceeds the estimated cost, 
     during the remaining useful life of the project, of providing 
     tenant-based assistance under section 8 for all families in 
     occupancy, based on appropriate indicators of cost (such as 
     the percentage of total development costs required for 
     modernization).
       ``(b) Consultation.--Each public housing agency shall 
     consult with the appropriate public housing tenants and the 
     appropriate unit of general local government in identifying 
     any public housing projects under subsection (a).
       ``(c) Removal of Units From the Inventories of Public 
     Housing Agencies.--
       ``(1) In general.--
       ``(A) Development of plan.--Each public housing agency 
     shall develop and, to the extent provided in advance in 
     appropriations Acts, carry out a 5-year plan in conjunction 
     with the Secretary for the removal of public housing units 
     identified under subsection (a) from the inventory of the 
     public housing agency and the annual contributions contract.
       ``(B) Approval of plan.--The plan required under 
     subparagraph (A) shall--
       ``(i) be included as part of the public housing agency 
     plan;
       ``(ii) be certified by the relevant local official to be in 
     accordance with the comprehensive housing affordability 
     strategy under title I of the Housing and Community 
     Development Act of 1992; and
       ``(iii) include a description of any disposition and 
     demolition plan for the public housing units.
       ``(2) Extensions.--The Secretary may extend the 5-year 
     deadline described in paragraph (1) by not more than an 
     additional 5 years if the Secretary makes a determination 
     that the deadline is impracticable.
       ``(d) Conversion to Tenant-Based Assistance.--
       ``(1) In general.--With respect to any public housing 
     project that has not received a grant for assistance under 
     the urban revitalization demonstration program authorized 
     under the Departments of Veterans Affairs and Housing and 
     Urban Development and Independent Agencies Appropriations 
     Acts or under section 24 of the United States Housing Act of 
     1937, the Secretary shall make authority available to a 
     public housing agency to provide assistance under this Act to 
     families residing in any public housing project that is 
     removed from the inventory of the public housing agency and 
     the annual contributions contract pursuant to this section.
       ``(2) Plan requirements.--Each plan under subsection (c) 
     shall require the agency to--
       ``(A) notify families residing in the public housing 
     project, consistent with any guidelines issued by the 
     Secretary governing such notifications, that--
       ``(i) the public housing project will be removed from the 
     inventory of the public housing agency; and
       ``(ii) the families displaced by such action will receive 
     tenant-based or project-based assistance or occupancy in a 
     unit operated or assisted by the public housing agency;
       ``(B) provide any necessary counseling for families 
     displaced by such action; and
       ``(C) provide any reasonable relocation expenses for 
     families displaced by such action.
       ``(e) Removal by Secretary.--The Secretary shall take 
     appropriate actions to ensure removal of any public housing 
     project identified under subsection (a) from the inventory of 
     a public housing agency, if the public housing agency fails 
     to adequately develop a plan under subsection (c) with 
     respect to that project, or fails to adequately implement 
     such plan in accordance with the terms of the plan.
       ``(f) Administration.--
       ``(1) In general.--The Secretary may require a public 
     housing agency to provide to the Secretary or to public 
     housing tenants such information as the Secretary considers 
     to be necessary for the administration of this section.
       ``(2) Applicability of section 18.--Section 18 does not 
     apply to the demolition of public housing projects removed 
     from the inventory of the public housing agency under this 
     section.
       ``(g) Inapplicability to Indian Housing.--This section does 
     not apply to any Indian housing authority.''.

     SEC. 121. PUBLIC HOUSING MORTGAGES AND SECURITY INTERESTS.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 30. PUBLIC HOUSING MORTGAGES AND SECURITY INTERESTS.

       ``(a) General Authorization.--The Secretary may, upon such 
     terms and conditions as the Secretary may prescribe, 
     authorize a public housing agency to mortgage or otherwise 
     grant a security interest in any public housing project or 
     other property of the public housing agency.
       ``(b) Terms and Conditions.--
       ``(1) Criteria for approval.--In making any authorization 
     under subsection (a), the Secretary may consider--
       ``(A) the ability of the public housing agency to use the 
     proceeds of the mortgage or security interest for low-income 
     housing uses;
       ``(B) the ability of the public housing agency to make 
     payments on the mortgage or security interest; and
       ``(C) such other criteria as the Secretary may specify.
       ``(2) Terms and conditions of mortgages and security 
     interests obtained.--Each mortgage or security interest 
     granted under this section shall be--
       ``(A) for a term that--
       ``(i) is consistent with the terms of private loans in the 
     market area in which the public housing project or property 
     at issue is located; and
       ``(ii) does not exceed 30 years; and
       ``(B) subject to conditions that are consistent with the 
     conditions to which private loans in 

[[Page S147]]
     the market area in which the subject project or other property is 
     located are subject.
       ``(3) No full faith and credit.--No action taken under this 
     section shall result in any liability to the Federal 
     Government.''.

     SEC. 122. LINKING SERVICES TO PUBLIC HOUSING RESIDENTS.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 31. SERVICES FOR PUBLIC HOUSING RESIDENTS.

       ``(a) In General.--To the extent provided in advance in 
     appropriations Acts, the Secretary may make grants to public 
     housing agencies (including Indian housing authorities) on 
     behalf of public housing residents, or directly to resident 
     management corporations, resident councils, or resident 
     organizations (including nonprofit entities supported by 
     residents), for the purposes of providing a program of 
     supportive services and resident empowerment activities to 
     assist public housing residents in becoming economically 
     self-sufficient.
       ``(b) Eligible Activities.--Grantees under this section may 
     use such amounts only for activities on or near the public 
     housing agency or public housing project that are designed to 
     promote the self-sufficiency of public housing residents, 
     including activities relating to--
       ``(1) physical improvements to a public housing project in 
     order to provide space for supportive services for residents;
       ``(2) the provision of service coordinators;
       ``(3) the provision of services related to work readiness, 
     including academic skills, job training, job search skills, 
     tutoring, adult literacy, transportation, and child care, 
     except that grants received under this section shall not 
     comprise more than 50 percent of the costs of providing such 
     services;
       ``(4) resident management activities; and
       ``(5) other activities designed to improve the economic 
     self-sufficiency of residents.
       ``(c) Funding Distribution.--
       ``(1) In general.--Except for amounts provided under 
     subsection (d), the Secretary may distribute amounts made 
     available under this section on the basis of a competition or 
     a formula, as appropriate.
       ``(2) Factors for distribution.--Factors for distribution 
     under paragraph (1) shall include--
       ``(A) the demonstrated capacity of the applicant to carry 
     out a program of supportive services or resident empowerment 
     activities; and
       ``(B) the ability of the applicant to leverage additional 
     resources for the provision of services.
       ``(d) Funding for Resident Councils.--Of amounts 
     appropriated for activities under this section, not less than 
     $25,000,000 shall be provided directly to resident councils, 
     resident organizations, and resident management 
     corporations.''.

     SEC. 123. APPLICABILITY TO INDIAN HOUSING.

       In accordance with section 201(b)(2) of the United States 
     Housing Act of 1937, except as otherwise provided in this 
     Act, this title and the amendments made by this title shall 
     apply to public housing developed or operated pursuant to a 
     contract between the Secretary and an Indian housing 
     authority, as that term is defined in section 3(b) of the 
     United States Housing Act of 1937.
                 TITLE II--SECTION 8 RENTAL ASSISTANCE

     SEC. 201. MERGER OF THE CERTIFICATE AND VOUCHER PROGRAMS.

       Section 8(o) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(o)) is amended to read as follows:
       ``(o) Voucher Program.--
       ``(1) Payment standard.--
       ``(A) In general.--The Secretary may provide assistance to 
     public housing agencies for tenant-based assistance using a 
     payment standard established in accordance with subparagraph 
     (B). The payment standard shall be used to determine the 
     monthly assistance that may be paid for any family, as 
     provided in paragraph (2).
       ``(B) Establishment of payment standard.--The payment 
     standard shall not exceed 120 percent of the fair market 
     rental established under subsection (c) and shall be not less 
     than 90 percent of that fair market rental.
       ``(C) Set-aside.--The Secretary may set aside not more than 
     5 percent of the budget authority available under this 
     subsection as an adjustment pool. The Secretary shall use 
     amounts in the adjustment pool to make adjusted payments to 
     public housing agencies under subparagraph (A), to ensure 
     continued affordability, if the Secretary determines that 
     additional assistance for such purpose is necessary, based on 
     documentation submitted by a public housing agency.
       ``(D) Approval.--The Secretary may require a public housing 
     agency to submit the payment standard of the public housing 
     agency to the Secretary for approval.
       ``(E) Review.--The Secretary--
       ``(i) shall monitor rent burdens and review any payment 
     standard that results in a significant percentage of the 
     families occupying units of any size paying more than 30 
     percent of adjusted income for rent; and
       ``(ii) may require a public housing agency to modify the 
     payment standard of the public housing agency based on the 
     results of that review.
       ``(2) Amount of monthly assistance payment.--
       ``(A) Families receiving tenant-based assistance; rent does 
     not exceed payment standard.--For a family receiving tenant-
     based assistance under this title, if the rent for that 
     family (including the amount allowed for tenant-paid 
     utilities) does not exceed the payment standard established 
     under paragraph (1), the monthly assistance payment to that 
     family shall be equal to the amount by which the rent exceeds 
     the greatest of the following amounts, rounded to the nearest 
     dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that agency to meet the 
     housing costs of the family, the portion of those payments 
     that is so designated.
       ``(B) Families receiving tenant-based assistance; rent 
     exceeds payment standard.--For a family receiving tenant-
     based assistance under this title, if the rent for that 
     family (including the amount allowed for tenant-paid 
     utilities) exceeds the payment standard established under 
     paragraph (1), the monthly assistance payment to that family 
     shall be equal to the amount by which the applicable payment 
     standard exceeds the greatest of the following amounts, 
     rounded to the nearest dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that agency to meet the 
     housing costs of the family, the portion of those payments 
     that is so designated.
       ``(C) Families receiving project-based assistance.--For a 
     family receiving project-based assistance under this title, 
     the rent that the family is required to pay shall be 
     determined in accordance with section 3(a)(1), and the amount 
     of the housing assistance payment shall be determined in 
     accordance with subsection (c)(3) of this section.
       ``(3) Forty percent limit.--At the time a family initially 
     receives tenant-based assistance under this title with 
     respect to any dwelling unit, the total amount that a family 
     may be required to pay for rent may not exceed 40 percent of 
     the monthly adjusted income of the family.
       ``(4) Eligible families.--At the time a family initially 
     receives assistance under this subsection, a family shall 
     qualify as--
       ``(A) a very low-income family;
       ``(B) a family previously assisted under this title;
       ``(C) a low-income family that meets eligibility criteria 
     specified by the public housing agency;
       ``(D) a family that qualifies to receive a voucher in 
     connection with a homeownership program approved under title 
     IV of the Cranston-Gonzalez National Affordable Housing Act; 
     or
       ``(E) a family that qualifies to receive a voucher under 
     section 223 or 226 of the Low-Income Housing Preservation and 
     Resident Homeownership Act of 1990.
       ``(5) Annual review of family income.--Each public housing 
     agency shall, not less frequently than annually, conduct a 
     review of the family income of each family receiving 
     assistance under this subsection.
       ``(6) Selection of families.--
       ``(A) In general.--Each public housing agency may establish 
     local preferences consistent with the public housing agency 
     plan submitted by the public housing agency under section 5A.
       ``(B) Eviction for drug-related activity.--Any individual 
     or family evicted from housing assisted under this subsection 
     by reason of drug-related criminal activity (as defined in 
     subsection (f)(5)) shall not be eligible for housing 
     assistance under this title during the 3-year period 
     beginning on the date of such eviction, unless the evicted 
     tenant successfully completes a rehabilitation program 
     approved by the public housing agency (which shall include a 
     waiver for any member of the family of an individual 
     prohibited from receiving assistance under this title whom 
     the public housing agency determines clearly did not 
     participate in and had no knowledge of that criminal 
     activity, or if the circumstances leading to the eviction no 
     longer exist).
       ``(C) Selection of tenants.--The selection of tenants shall 
     be made by the owner of the dwelling unit, subject to the 
     annual contributions contract between the Secretary and the 
     public housing agency.
       ``(7) Lease.--Each housing assistance payment contract 
     entered into by the public housing agency and the owner of a 
     dwelling unit--
       ``(A) shall provide that the screening and selection of 
     families for those units shall be the function of the owner;
       ``(B) shall provide that the lease between the tenant and 
     the owner shall be for a term of not less than 1 year, except 
     that the public housing agency may approve a shorter term for 
     an initial lease between the tenant and the dwelling unit 
     owner if the public housing agency determines that such 
     shorter term would improve housing opportunities for the 
     tenant;
       ``(C) except as otherwise provided by the public housing 
     agency, may provide for a termination of the tenancy of a 
     tenant assisted under this subsection after 1 year;
       ``(D) shall provide that the dwelling unit owner shall 
     offer leases to tenants assisted under this subsection that--
       ``(i) are in a standard form used in the locality by the 
     dwelling unit owner; and
       ``(ii) contain terms and conditions that--

       ``(I) are consistent with State, tribal, and local law; and
       ``(II) apply generally to tenants in the property who are 
     not assisted under this section;

       ``(E) shall provide that the dwelling unit owner may not 
     terminate the tenancy of any person assisted under this 
     subsection during the term of a lease that meets the 
     requirements of this section unless the owner determines, on 
     the same basis and in the same manner as would apply to a 
     tenant in the property who does not receive assistance under 
     this subsection, that--
     
[[Page S148]]

       ``(i) the tenant has committed a serious violation of the 
     terms and conditions of the lease;
       ``(ii) the tenant has violated applicable Federal, State, 
     or local law; or
       ``(iii) other good cause for termination of the tenancy 
     exists; and
       ``(F) shall provide that any termination of tenancy under 
     this subsection shall be preceded by the provision of written 
     notice by the owner to the tenant specifying the grounds for 
     that action, and any relief shall be consistent with 
     applicable State, tribal, and local law.
       ``(8) Inspection of units by public housing agencies.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for each dwelling unit for which a housing assistance payment 
     contract is established under this subsection, the public 
     housing agency shall--
       ``(i) inspect the unit before any assistance payment is 
     made to determine whether the dwelling unit meets housing 
     quality standards for decent and safe housing established--

       ``(I) by the Secretary for purposes of this subsection; or
       ``(II) by local housing codes or by codes adopted by public 
     housing agencies that--

       ``(aa) meet or exceed housing quality standards; and
       ``(bb) do not severely restrict housing choice; and
       ``(ii) make periodic inspections during the contract term.
       ``(B) Leasing of units owned by public housing agency.--If 
     an eligible family assisted under this subsection leases a 
     dwelling unit that is owned by a public housing agency 
     administering assistance under this subsection, the Secretary 
     shall require the unit of general local government, or 
     another entity approved by the Secretary, to make inspections 
     and rent determinations as required by this paragraph.
       ``(9) Expedited inspection procedures.--
       ``(A) Demonstration project.--Not later than 1 year after 
     the date of enactment of the Public Housing Reform and 
     Empowerment Act of 1995, the Secretary shall establish a 
     demonstration project to identify efficient procedures to 
     determine whether units meet housing quality standards for 
     decent and safe housing established by the Secretary.
       ``(B) Procedures included.--The demonstration project shall 
     include the development of procedures to be followed in any 
     case in which a family receiving tenant-based assistance 
     under this subsection is moving into a dwelling unit, or in 
     which a family notifies the public housing agency that a 
     dwelling unit, in which the family no longer resides, fails 
     to meet housing quality standards. The Secretary shall also 
     establish procedures for the expedited repair and inspection 
     of units that do not meet housing quality standards.
       ``(C) Recommendations.--Not later than 2 years after the 
     date on which the demonstration under this paragraph is 
     implemented, the Secretary shall submit a report to the 
     Congress, which shall include an analysis of the 
     demonstration and any recommendations for changes to the 
     demonstration.
       ``(10) Vacated units.--If a family vacates a dwelling unit, 
     no assistance payment may be made under this subsection for 
     the dwelling unit after the month during which the unit was 
     vacated.
       ``(11) Rent.--
       ``(A) Reasonable market rent.--The rent for dwelling units 
     for which a housing assistance payment contract is 
     established under this subsection shall be reasonable in 
     comparison with rents charged for comparable dwelling units 
     in the private, unassisted, local market.
       ``(B) Negotiated rent.--A public housing agency shall, at 
     the request of a family receiving tenant-based assistance 
     under this subsection, assist that family in negotiating a 
     reasonable rent with a dwelling unit owner. A public housing 
     agency shall review the rent for a unit under consideration 
     by the family (and all rent increases for units under lease 
     by the family) to determine whether the rent (or rent 
     increase) requested by the owner is reasonable. If a public 
     housing agency determines that the rent (or rent increase) 
     for a dwelling unit is not reasonable, the public housing 
     agency shall not make housing assistance payments to the 
     owner under this subsection with respect to that unit.
       ``(C) Units exempt from local rent control.--If a dwelling 
     unit for which a housing assistance payment contract is 
     established under this subsection is exempt from local rent 
     control provisions during the term of that contract, the rent 
     for that unit shall be reasonable in comparison with other 
     units in the market area that are exempt from local rent 
     control provisions.
       ``(D) Timely payments.--Each public housing agency shall 
     make timely payment of any amounts due to a dwelling unit 
     owner under this subsection. The housing assistance payment 
     contract between the owner and the public housing agency may 
     provide for penalties for the late payment of amounts due 
     under the contract, which shall be imposed on the public 
     housing agency in accordance with generally accepted 
     practices in the local housing market.
       ``(E) Penalties.--Unless otherwise authorized by the 
     Secretary, each public housing agency shall pay any penalties 
     from administrative fees collected by the public housing 
     agency, except that no penalty shall be imposed if the late 
     payment is due to factors that the Secretary determines are 
     beyond the control of the public housing agency.
       ``(12) Manufactured housing.--
       ``(A) In general.--A public housing agency may make 
     assistance payments in accordance with this subsection on 
     behalf of a family that utilizes a manufactured home as a 
     principal place of residence. Such payments may be made for 
     the rental of the real property on which the manufactured 
     home owned by any such family is located.
       ``(B) Rent calculation.--
       ``(i) Charges included.--For assistance pursuant to this 
     paragraph, the rent for the space on which a manufactured 
     home is located and with respect to which assistance payments 
     are to be made shall include maintenance and management 
     charges and tenant-paid utilities.
       ``(ii) Payment standard.--The public housing agency shall 
     establish a payment standard for the purpose of determining 
     the monthly assistance that may be paid for any family under 
     this paragraph. The payment standard may not exceed an amount 
     approved or established by the Secretary.
       ``(iii) Monthly assistance payment.--The monthly assistance 
     payment under this paragraph shall be determined in 
     accordance with paragraph (2).
       ``(13) Contract for assistance payments.--
       ``(A) In general.--If the Secretary enters into an annual 
     contributions contract under this subsection with a public 
     housing agency pursuant to which the public housing agency 
     will enter into a housing assistance payment contract with 
     respect to an existing structure under this subsection--
       ``(i) the housing assistance payment contract may not be 
     attached to the structure unless the owner agrees to 
     rehabilitate or newly construct the structure other than with 
     assistance under this Act, and otherwise complies with this 
     section; and
       ``(ii) the public housing agency may approve a housing 
     assistance payment contract for such existing structure for 
     not more than 15 percent of the funding available for tenant-
     based assistance administered by the public housing agency 
     under this section.
       ``(B) Extension of contract term.--In the case of a housing 
     assistance payment contract that applies to a structure under 
     this paragraph, a public housing agency shall enter into a 
     contract with the owner, contingent upon the future 
     availability of appropriated funds for the purpose of 
     renewing expiring contracts for assistance payments, as 
     provided in appropriations Acts, to extend the term of the 
     underlying housing assistance payment contract for such 
     period as the Secretary determines to be appropriate to 
     achieve long-term affordability of the housing. The contract 
     shall obligate the owner to have such extensions of the 
     underlying housing assistance payment contract accepted by 
     the owner and the successors in interest of the owner.
       ``(C) Rent calculation.--For project-based assistance under 
     this paragraph, housing assistance payment contracts shall 
     establish rents and provide for rent adjustments in 
     accordance with subsection (c).
       ``(D) Adjusted rents.--With respect to rents adjusted under 
     this paragraph--
       ``(i) the adjusted rent for any unit shall not exceed the 
     rent for a comparable unassisted unit of similar quality, 
     type, and age in the market area; and
       ``(ii) the provisions of subsection (c)(2)(A) do not apply.
       ``(14) Inapplicability to tenant-based assistance.--
     Subsection (c) does not apply to tenant-based assistance 
     under this subsection.
       ``(15) Homeownership option.--
       ``(A) In general.--A public housing agency providing 
     assistance under this subsection may, at the option of the 
     agency, provide assistance for homeownership under subsection 
     (y).
       ``(B) Alternative administration.--A public housing agency 
     may contract with a nonprofit organization to administer a 
     homeownership program under subsection (y).
       ``(16) Indian housing programs.--Notwithstanding any other 
     provision of law, in carrying out this section, the Secretary 
     shall establish such separate formulas and programs as may be 
     necessary to carry out housing programs for Indians under 
     this section.''.

     SEC. 202. REPEAL OF FEDERAL PREFERENCES.

       (a) Section 8 Existing and Moderate Rehabilitation.--
     Section 8(d)(1)(A) of the United States Housing Act of 1937 
     (42 U.S.C. 1437f(d)(1)(A)) is amended to read as follows:
       ``(A) the selection of tenants shall be the function of the 
     owner, subject to the annual contributions contract between 
     the Secretary and the agency, except that with respect to the 
     certificate and moderate rehabilitation programs only, for 
     the purpose of selecting families to be assisted, the public 
     housing agency may establish, after public notice and an 
     opportunity for public comment, a written system of 
     preferences for selection that are not inconsistent with the 
     comprehensive housing affordability strategy for the 
     jurisdiction in which the project is located, in accordance 
     with title I of the Cranston-Gonzalez National Affordable 
     Housing Act;''.
       (b) Section 8 New Construction and Substantial 
     Rehabilitation.--
       (1) Repeal.--Section 545(c) of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 1437f note) is 
     amended to read as follows:
       ``(c) [Reserved.]''.
       (2) Prohibition.--The provisions of section 8(e)(2) of the 
     United States Housing Act of 1937, as in existence on the day 
     before October 1, 1983, that require tenant selection 
     preferences shall not apply with respect to--
       (A) housing constructed or substantially rehabilitated 
     pursuant to assistance provided under section 8(b)(2) of the 
     United States Housing Act of 1937, as in existence on the day 
     before October 1, 1983; or
       (B) projects financed under section 202 of the Housing Act 
     of 1959, as in existence on the day before the date of 
     enactment of the Cranston-Gonzalez National Affordable 
     Housing Act.
       (c) Rent Supplements.--Section 101(k) of the Housing and 
     Urban Development Act of 1965 (12 U.S.C. 1701s(k)) is amended 
     to read as follows:
       ``(k) [Reserved.]''.
       (d) Conforming Amendments.--
     
[[Page S149]]

       (1) United states housing act of 1937.--The United States 
     Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (A) in section 6(o), by striking ``preference rules 
     specified in'' and inserting ``written selection criteria 
     established pursuant to'';
       (B) in section 7(a)(2), by striking ``according to the 
     preferences for occupancy under'' and inserting ``in 
     accordance with the written selection criteria established 
     pursuant to'';
       (C) in section 7(a)(3), by striking ``who qualify for 
     preferences for occupancy under'' and inserting ``who meet 
     the written selection criteria established pursuant to'';
       (D) in section 8(d)(2)(A), by striking the last sentence;
       (E) in section 8(d)(2)(H), by striking ``Notwithstanding 
     subsection (d)(1)(A)(i), an'' and inserting ``An''; and
       (F) in section 16(c), in the second sentence, by striking 
     ``the system of preferences established by the agency 
     pursuant to section 6(c)(4)(A)(ii)'' and inserting ``the 
     written selection criteria established by the public housing 
     agency pursuant to section 6(c)(4)(A)''.
       (2) Cranston-gonzalez national affordable housing act.--The 
     Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
     12704 et seq.) is amended--
       (A) in section 455(a)(2)(D)(iii), by striking ``would 
     qualify for a preference under'' and inserting ``meet the 
     written selection criteria established pursuant to''; and
       (B) in section 522(f)(6)(B), by striking ``any preferences 
     for such assistance under section 8(d)(1)(A)(i)'' and 
     inserting ``the written selection criteria established 
     pursuant to section 8(d)(1)(A)''.
       (3) Low-income housing preservation and resident 
     homeownership act of 1990.--The second sentence of section 
     226(b)(6)(B) of the Low-Income Housing Preservation and 
     Resident Homeownership Act of 1990 (12 U.S.C. 4116(b)(6)(B)) 
     is amended by striking ``requirement for giving preferences 
     to certain categories of eligible families under'' and 
     inserting ``written selection criteria established pursuant 
     to''.
       (4) Housing and community development act of 1992.--Section 
     655 of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13615) is amended by striking ``preferences for 
     occupancy'' and all that follows before the period at the end 
     and inserting ``selection criteria established by the owner 
     to elderly families according to such written selection 
     criteria, and to near-elderly families according to such 
     written selection criteria, respectively''.
       (5) References in other law.--Any reference in any Federal 
     law other than any provision of any law amended by paragraphs 
     (1) through (5) of this subsection or section 201 to the 
     preferences for assistance under section 6(c)(4)(A)(i), 
     8(d)(1)(A)(i), or 8(o)(3)(B) of the United States Housing Act 
     of 1937, as those sections existed on the day before the 
     effective date of this title, shall be considered to refer to 
     the written selection criteria established pursuant to 
     section 6(c)(4)(A), 8(d)(1)(A), or 8(o)(6)(A), respectively, 
     of the United States Housing Act of 1937, as amended by this 
     subsection and section 201 of this Act.

     SEC. 203. PORTABILITY.

       Section 8(r) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(r)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``assisted under subsection (b) or (o)'' 
     and inserting ``receiving tenant-based assistance under 
     subsection (o)''; and
       (B) by striking ``the same State'' and all that follows 
     before the semicolon and inserting ``any area in which a 
     program is being administered under this section'';
       (2) in paragraph (3)--
       (A) by striking ``(b) or''; and
       (B) by adding at the end the following new sentence: ``The 
     Secretary shall establish procedures for the compensation of 
     public housing agencies that issue vouchers to families that 
     move into or out of the jurisdiction of the public housing 
     agency under portability procedures. The Secretary may 
     reserve amounts available for assistance under subsection (o) 
     to compensate those public housing agencies.''; and
       (3) by adding at the end the following new paragraph:
       ``(5) Lease violations.--A family may not receive a voucher 
     from a public housing agency and move to another jurisdiction 
     under the tenant-based assistance program if the family has 
     moved out of the assisted dwelling unit of the family in 
     violation of a lease.''.

     SEC. 204. LEASING TO VOUCHER HOLDERS.

       Section 8(t) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(t)) is amended to read as follows:
       ``(t) [Reserved.]''.

     SEC. 205. HOMEOWNERSHIP OPTION.

       Section 8(y) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(y)) is amended--
       (1) in paragraph (1)(A), by inserting before the semicolon 
     ``, or owns or is acquiring shares in a cooperative'';
       (2) in paragraph (1)(B), by striking ``(i) participates'' 
     and all that follows through ``(ii) demonstrates'' and 
     inserting ``demonstrates'';
       (3) by striking paragraph (2) and inserting the following:
       ``(2) Determination of amount of assistance.--
       ``(A) Monthly expenses do not exceed payment standard.--If 
     the monthly homeownership expenses, as determined in 
     accordance with requirements established by the Secretary, do 
     not exceed the payment standard, the monthly assistance 
     payment shall be the amount by which the homeownership 
     expenses exceed the highest of the following amounts, rounded 
     to the nearest dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency, and a portion of those 
     payments, adjusted in accordance with the actual housing 
     costs of the family, is specifically designated by that 
     agency to meet the housing costs of the family, the portion 
     of those payments that is so designated.
       ``(B) Monthly expenses exceed payment standard.--If the 
     monthly homeownership expenses, as determined in accordance 
     with requirements established by the Secretary, exceed the 
     payment standard, the monthly assistance payment shall be the 
     amount by which the applicable payment standard exceeds the 
     highest of the following amounts, rounded to the nearest 
     dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that agency to meet the 
     housing costs of the family, the portion of those payments 
     that is so designated.'';
       (4) by striking paragraphs (3) through (5); and
       (5) by redesignating paragraphs (6) through (8) as 
     paragraphs (3) through (5), respectively.

     SEC. 206. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Contract Provisions and Requirements.--Section 
     6(p)(1)(B) of the United States Housing Act of 1937 (42 
     U.S.C. 1437d(p)(1)(B)) is amended by striking ``holding 
     certificates and vouchers'' and inserting ``receiving tenant-
     based assistance''.
       (b) Lower Income Housing Assistance.--Section 8 of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f) is 
     amended--
       (1) in subsection (a), by striking the second and third 
     sentences;
       (2) in subsection (b)--
       (A) in the subsection heading, by striking ``Rental 
     Certificates and''; and
       (B) in the first undesignated paragraph--
       (i) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary''; and
       (ii) by striking the second sentence;
       (3) in subsection (c)--
       (A) in paragraph (3)--
       (i) by striking ``(A)''; and
       (ii) by striking subparagraph (B);
       (B) in the first sentence of paragraph (4), by striking 
     ``or by a family that qualifies to receive'' and all that 
     follows through ``1990'';
       (C) by striking paragraph (5) and redesignating paragraph 
     (6) as paragraph (5);
       (D) by striking paragraph (7) and redesignating paragraphs 
     (8) through (10) as paragraphs (6) through (8), respectively;
       (E) in paragraph (6), as redesignated, by inserting 
     ``(other than a contract under section 8(o))'' after 
     ``section'';
       (F) in paragraph (7), as redesignated, by striking ``(but 
     not less than 90 days in the case of housing certificates or 
     vouchers under subsection (b) or (o))'' and inserting ``, 
     other than a contract under subsection (o)''; and
       (G) in paragraph (8), as redesignated, by striking 
     ``housing certificates or vouchers under subsection (b) or 
     (o)'' and inserting ``tenant-based assistance under this 
     section'';
       (4) in subsection (d)--
       (A) in paragraph (1)(B)(iii), by striking ``on or near such 
     premises''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking the third sentence and 
     all that follows through the end of the subparagraph; and
       (ii) by striking subparagraphs (B) through (E) and 
     redesignating subparagraphs (F) through (H) as subparagraphs 
     (B) through (D), respectively;
       ``(B) [Reserved.]'';
       (5) in subsection (f)--
       (A) in paragraph (6), by striking ``(d)(2)'' and inserting 
     ``(o)(11)''; and
       (B) in paragraph (7)--
       (i) by striking ``(b) or''; and
       (ii) by inserting before the period the following: ``and 
     that provides for the eligible family to select suitable 
     housing and to move to other suitable housing'';
       (6) by striking subsection (j) and inserting the following:
       ``(j) [Reserved.]'';
       (7) by striking subsection (n) and inserting the following:
       ``(n) [Reserved.]'';
       (8) in subsection (q)--
       (A) in the first sentence of paragraph (1), by striking 
     ``and housing voucher programs under subsections (b) and 
     (o)'' and inserting ``program under this section'';
       (B) in paragraph (2)(A)(i), by striking ``and housing 
     voucher programs under subsections (b) and (o)'' and 
     inserting ``program under this section''; and
       (C) in paragraph (2)(B), by striking ``and housing voucher 
     programs under subsections (b) and (o)'' and inserting 
     ``program under this section'';
       (9) in subsection (u), by striking ``certificates or'' each 
     place that term appears; and
       (10) in subsection (x)(2), by striking ``housing 
     certificate assistance'' and inserting ``tenant-based 
     assistance''.
       (c) Public Housing Homeownership and Management 
     Opportunities.--Section 21(b)(3) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437s(b)(3)) is amended--
       (1) in the first sentence, by striking ``(at the option of 
     the family) a certificate under section 8(b)(1) or a housing 
     voucher under section 8(o)'' and inserting ``tenant-based 
     assistance under section 8''; and
       (2) by striking the second sentence.
       (d) Documentation of Excessive Rent Burdens.--Section 
     550(b) of the Cranston-Gonzalez 

[[Page S150]]
     National Affordable Housing Act (42 U.S.C. 1437f note) is amended--
       (1) in paragraph (1), by striking ``assisted under the 
     certificate and voucher programs established'' and inserting 
     ``receiving tenant-based assistance'';
       (2) in the first sentence of paragraph (2)--
       (A) by striking ``, for each of the certificate program and 
     the voucher program'' and inserting ``for the tenant-based 
     assistance under section 8''; and
       (B) by striking ``participating in the program'' and 
     inserting ``receiving tenant-based assistance''; and
       (3) in paragraph (3), by striking ``assistance under the 
     certificate or voucher program'' and inserting ``tenant-based 
     assistance under section 8 of the United States Housing Act 
     of 1937''.
       (e) Grants for Community Residences and Services.--Section 
     861(b)(1)(D) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12910(b)(1)(D)) is amended by striking 
     ``certificates or vouchers'' and inserting ``assistance''.
       (f) Section 8 Certificates and Vouchers.--Section 931 of 
     the Cranston-Gonzalez National Affordable Housing Act (42 
     U.S.C. 1437c note) is amended by striking ``assistance under 
     the certificate and voucher programs under sections 8(b) and 
     (o) of such Act'' and inserting ``tenant-based assistance 
     under section 8 of the United States Housing Act of 1937''.
       (g) Assistance for Displaced Tenants.--Section 223(a) of 
     the Housing and Community Development Act of 1987 (12 U.S.C. 
     4113(a)) is amended by striking ``assistance under the 
     certificate and voucher programs under sections 8(b) and 
     8(o)'' and inserting ``tenant-based assistance under section 
     8''.
       (h) Rural Housing Preservation Grants.--Section 533(a) of 
     the Housing Act of 1949 (42 U.S.C. 1490m(a)) is amended in 
     the second sentence by striking ``assistance payments as 
     provided by section 8(o)'' and inserting ``tenant-based 
     assistance as provided under section 8''.
       (i) Repeal of Moving to Opportunities for Fair Housing 
     Demonstration.--Section 152 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 1437f note) is repealed.
       (j) Preferences for Elderly Families and Persons.--Section 
     655 of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13615) is amended by striking ``the first sentence of 
     section 8(o)(3)(B)'' and inserting ``section 8(o)(6)(A)''.
       (k) Assistance for Troubled Multifamily Housing Projects.--
     Section 201(m)(2)(A) of the Housing and Community Development 
     Amendments of 1978 (12 U.S.C. 1715z-1a(m)(2)(A)) is amended 
     by striking ``section 8(b)(1)'' and inserting ``section 8''.
       (l) Management and Disposition of Multifamily Housing 
     Projects.--Section 203(g)(2) of the Housing and Community 
     Development Amendments of 1978 (12 U.S.C. 1701z-11(g)(2)), as 
     amended by section 101(b) of the Multifamily Housing Property 
     Disposition Reform Act of 1994, is amended by striking 
     ``8(o)(3)(B)'' and inserting ``8(o)(6)(A)''.

     SEC. 207. IMPLEMENTATION.

       In accordance with the negotiated rulemaking procedures set 
     forth in subchapter III of chapter 5 of title 5, United 
     States Code, the Secretary shall issue such regulations as 
     may be necessary to implement the amendments made by this 
     title after notice and opportunity for public comment.

     SEC. 208. EFFECTIVE DATE.

       (a) In General.--The amendments made by this title shall 
     become effective not later than 1 year after the date of 
     enactment of this Act.
       (b) Conversion Assistance.--
       (1) In general.--The Secretary may provide for the 
     conversion of assistance under the certificate and voucher 
     programs under subsections (b) and (o) of section 8 of the 
     United States Housing Act of 1937, as those sections existed 
     on the day before the effective date of the amendments made 
     by this title, to the voucher program established by the 
     amendments made by this title.
       (2) Continued applicability.--The Secretary may apply the 
     provisions of the United States Housing Act of 1937, or any 
     other provision of law amended by this title, as those 
     provisions existed on the day before the effective date of 
     the amendments made by this title, to assistance obligated by 
     the Secretary before that effective date for the certificate 
     or voucher program under section 8 of the United States 
     Housing Act of 1937, if the Secretary determines that such 
     action is necessary for simplification of program 
     administration, avoidance of hardship, or other good cause.
                  TITLE III--MISCELLANEOUS PROVISIONS

     SEC. 301. PUBLIC HOUSING FLEXIBILITY IN THE CHAS.

       Section 105(b) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12705(b)) is amended--
       (1) by redesignating the second paragraph designated as 
     paragraph (17) (as added by section 681(2) of the Housing and 
     Community Development Act of 1992) as paragraph (20);
       (2) by redesignating paragraph (17) (as added by section 
     220(b)(3) of the Housing and Community Development Act of 
     1992) as paragraph (19);
       (3) by redesignating the second paragraph designated as 
     paragraph (16) (as added by section 220(c)(1) of the Housing 
     and Community Development Act of 1992) as paragraph (18);
       (4) in paragraph (16)--
       (A) by striking the period at the end and inserting a 
     semicolon; and
       (B) by striking ``(16)'' and inserting ``(17)'';
       (5) by redesignating paragraphs (11) through (15) as 
     paragraphs (12) through (16), respectively; and
       (6) by inserting after paragraph (10) the following new 
     paragraph:
       ``(11) describe the manner in which the plan of the 
     jurisdiction will help address the needs of public housing 
     and coordinate with the local public housing agency plan 
     under section 5A of the United States Housing Act of 1937;''.

     SEC. 302. REPEAL OF CERTAIN PROVISIONS.

       (a) Maximum Annual Limitation on Rent Increases Resulting 
     From Employment.--
       (1) Repeal.--Section 957 of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12714) is repealed.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be deemed to have the same effective date as section 
     957 of the Cranston-Gonzalez National Affordable Housing Act.
       (b) Economic Independence.--
       (1) Repeal.--Section 923 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 12714 note) is repealed.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be deemed to have the same effective date as section 
     923 of the Housing and Community Development Act of 1992.

     SEC. 303. DETERMINATION OF INCOME LIMITS.

       (a) In General.--Section 3(b)(2) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)(2)) is amended--
       (1) in the fourth sentence--
       (A) by striking ``County,'' and inserting ``and Rockland 
     Counties''; and
       (B) by inserting ``each'' before ``such county''; and
       (2) in the fifth sentence, by striking ``County'' each 
     place that term appears and inserting ``and Rockland 
     Counties''.
       (b) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall issue regulations 
     implementing the amendments made by subsection (a).

     SEC. 304. DEMOLITION OF PUBLIC HOUSING.

       (a) Repeal.--Section 415 of the Department of Housing and 
     Urban Development--Independent Agencies Appropriations Act, 
     1988 (Public Law 100-202; 101 Stat. 1329-213) is repealed.
       (b) Funding Availability.--Notwithstanding any other 
     provision of law, beginning on the date of enactment of this 
     Act, the public housing projects described in section 415 of 
     the Department of Housing and Urban Development--Independent 
     Agencies Appropriations Act, 1988, as that section existed on 
     the day before the date of enactment of this Act, shall be 
     eligible for demolition under--
       (1) section 14 of the United States Housing Act of 1937, as 
     that section existed on the day before the date of enactment 
     of this Act; and
       (2) section 9 of the United States Housing Act of 1937, as 
     amended by this Act.


                           Amendment No. 3117

  (Purpose: To amend the bill with respect to housing, and for other 
                               purposes)

  Mr. DOLE. Mr. President, I understand there is a managers' amendment 
at the desk on behalf of Senator Mack.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Kansas [Mr. Dole] for Mr. Mack, proposes 
     an amendment numbered 3117.

  Mr. DOLE. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 190, beginning on line 14, strike ``Certain Public 
     and Assisted Housing'' and replace with ``Public Housing''.
       On page 190, beginning on line 17, strike ``dwelling units 
     receiving tenant-based assistance under section 8 and''.
       On page 191, redesignate subsections (b) and (c) as (c) and 
     (d), and insert on line 23:
       (b) Income Eligibility for Certain Assisted Housing.--
       (1) In general.--Of the dwelling units receiving tenant-
     based assistance under section 8 made available for occupancy 
     in any fiscal year of the public housing agency--
       (A) not less than 50 percent shall be occupied by families 
     whose incomes do not exceed 30 percent of the area median 
     income for those families; and
       (B) any remaining dwelling units may be made available for 
     families whose incomes do not exceed 80 percent of the area 
     median income for those families.
       (2) Establishment of different standards.--Notwithstanding 
     paragraph (1), if approved by the Secretary, a public housing 
     agency, in accordance with the public housing agency plan, 
     may for good cause establish and implement an occupancy 
     standard other than the standard described in paragraph (1).
       On page 255, after line 25, insert the following new 
     section:

     SEC. 209. DEFINITION.

       For the purposes of this title, public housing agency has 
     the same meaning as section 3 of the United States Housing 
     Act of 1937, except that such term shall also include any 
     other nonprofit entity serving more than one local government 
     jurisdiction that was administering the Section 8 tenant-
     based assistance program pursuant to a contract with the 
     Secretary or a public housing agency prior to the date of 
     enactment of this Act.
       On page 259, after line 7, insert the following new 
     section:

     SEC. 305. COORDINATION OF TAX CREDITS AND SECTION 8.

       Notwithstanding any other provision of law, rehabilitation 
     activities undertaken in 

[[Page S151]]
     projects using the Low-Income Housing Tax Credit allocated to 
     developments in the City of New Brunswick, New Jersey, in 
     1991, are hereby deemed to have met the requirements for 
     rehabilitation in accordance with clause (ii) of the third 
     sentence of section 8(d)(2)(A) of the United States Housing 
     Act of 1937, as amended.''
       At the appropriate place, add the following:

     SEC.   . ELIGIBILITY FOR PUBLIC AND ASSISTED HOUSING.

       Section 214 of the Housing and Community Development Act of 
     1980 (42 U.S.C. 1436a) is amended--
       (1) in subsection (b), by inserting before the period at 
     the end the following: ``and includes any other assistance 
     provided under the United States Housing Act of 1937'';
       (2) by adding at the end the following new subsection:
       ``(h) Verification of Eligibility.--
       ``(1) In general.--Except in the case of an election under 
     paragraph (2)(A), no individual or family applying for 
     financial assistance may receive such financial assistance 
     prior to the affirmative establishment and verification of 
     eligibility of that individual or family under this section 
     by the Secretary or other appropriate entity.
       ``(2) Rules applicable to public housing agencies.--A 
     public housing agency (as that term is defined in section 3 
     of the United States Housing Act of 1937)--
       ``(A) may elect not to comply with this section; and
       ``(B) in complying with this section--
       ``(i) may initiate procedures to affirmatively establish or 
     verify the eligibility of an individual or family under this 
     section at any time at which the public housing agency 
     determines that such eligibility is in question, regardless 
     of whether or not that individual or family is at or near the 
     top of the waiting list of the public housing agency;
       ``(ii) may affirmatively establish or verify the 
     eligibility of an individual or family under this section in 
     accordance with the procedures set forth in section 
     274A(b)(1) of the Immigration and Nationality Act; and
       ``(iii) shall have access to any relevant information 
     contained in the SAVE system (or any successor thereto) that 
     relates to any individual or family applying for financial 
     assistance.
       ``(3) Eligibility of families.--For purposes of this 
     subsection, with respect to a family, the term `eligibility' 
     means the eligibility of each family member.''.
       Amend the table of contents accordingly.

  Mr. DOLE. Mr. President, I ask unanimous consent that the amendment 
be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the amendment (No. 3117) was agreed to.
  Mr. MACK. Mr. President, I urge my colleagues to support S. 1260, the 
Public Housing Reform and Empowerment Act of 1995. S. 1260 represents a 
major revision of the U.S. Housing Act of 1937 to reform and 
consolidate the public and assisted housing programs of the United 
States and redirect primary responsibility for those programs away from 
Federal bureaucracy toward the States and localities. This bill 
represents an important first step toward a complete overhaul of 
Federal housing programs to address the needs of low-income families 
more efficiently and effectively.
  This legislation addresses a growing crisis in the Nation's public 
housing system. Over the years, micro management by both Congress and 
the Department of Housing and Urban Development [HUD] have saddled 
housing authorities with rules and regulations that make it difficult 
for even the best of them to operate efficiently and effectively. Even 
more important has been the destructive impact these rules have had on 
the ability of families to move up and out of public housing and become 
economically self-sufficient. In far too many places, public housing, 
which was intended to provide a housing platform from which lower 
income families could achieve their own aspirations of economic 
independence, have become warehouses of poverty that rob poor families 
of their hope and dignity.
  Compounding the structural problems of public housing are the dual 
concerns of budget and HUD capacity. Public housing agencies are facing 
a significant decline in Federal resources. Given these limited 
resources, housing authorities need the increased flexibility to use 
their funds in a manner that helps to maintain decent, safe, and 
affordable housing for their residents. In addition, HUD itself 
potentially faces a significant reduction in overall staffing over the 
next 5 years. The prospect of diminishing staff resources means that 
HUD will lack the capacity to maintain the same degree of oversight and 
control that it has exercised over the public housing system in recent 
decades.
  S. 1260 addresses the crisis in public housing by consolidating 
public housing funding into two flexible block grants and transferring 
greater responsibility over the operation and management of public 
housing from HUD to local housing agencies. In addition, it creates a 
new streamlined voucher program that is more market-friendly and 
provides greater housing choices for low-income families.
  The bill also ends Federal requirements that have prevented housing 
authorities from demolishing their obsolete housing stock, concentrated 
and isolated the poorest of poor, and created disincentives for public 
housing residents to work and improve their lives.

  While allowing well-run housing authorities much more discretion, S. 
1260 also cracks down on those housing authorities that are troubled. 
Although small in number, these authorities with severe management 
problems control almost 15 percent of the Nation's public housing 
stock. HUD would be required to take over or appoint a receiver for 
housing authorities that are unable to make significant improvements in 
their operations. The legislation would also give HUD expanded powers 
to break up or reconfigure troubled authorities, dispose of their 
assets, or abrogate contracts that impede correction of the housing 
authority's problems.
  I would like to express my deep appreciation to Senators D'Amato and 
Bond, who cosponsored this bill, for their keen interest and active 
support of this legislation. I also wish to express my appreciation for 
the cooperation and support from Senators Sarbanes and Kerry. This bill 
truly reflects bipartisan cooperation, and it specifically addresses 
many of the concerns that have been raised by the minority. Finally, I 
also want to thank Secretary Cisneros for HUD's participation in the 
development of this bill. We have endeavored to accommodate the 
Department's concerns to the greatest extent possible.
  Mr. FAIRCLOTH. Mr. President, I support S. 1260. I do not object to 
the unanimous-consent request to take up S. 1260.
  In my opinion, the only glaring omission from this bill is that we do 
not address the future of the Department of Housing and Urban 
Development.
  However, in consultation with Chairman D'Amato and Senator Mack, they 
have both agreed to request in writing a study from both the GAO and 
Congressional Budget Office as to the most efficient method for 
eliminating HUD.
  I am pleased with this result. I think this advances this issue much 
further. I have already introduced legislation with Senator Dole, S. 
1145, to eliminate HUD. Next year, this Congress needs to take up the 
issue of HUD's very existence. Armed with these studies from both CBO 
and GAO, I think we get closer to accomplishing the elimination of HUD.
  HUD was created in 1965. When it was created, the purpose of this 
Department was to revitalize our urban areas and provide safe, decent 
housing for all Americans.
  I think HUD has been a failure. Since 1965, HUD has spent hundreds of 
billions of dollars. Yet despite this massive spending, I do not think 
the American people are any better off.
  HUD is a massive bureaucracy with over 11,000 employees, and over 240 
housing programs--so many that the Secretary of HUD did not even know 
HUD had that many. HUD has over $192 billion in unused budget 
authority. HUD has even entangled the American taxpayer in 23,000 long-
term contracts that run until the year 2020.
  HUD's spending is increasing so rapidly that by the year 2000, 
housing assistance will be the largest discretionary spending function 
in our budget.
  Knowing all of this, I do not see how the United States can afford 
not to abolish HUD. I have often said that if one wanted to provide 
housing assistance to 4 million families, would anyone design the 
current HUD as the method to do so? Certainly the answer is no.
  Again, let me thank Senators D'Amato and Mack. I hope that this study 
is the beginning by which we can reshape Federal housing policies and 
end HUD as a Cabinet agency.
  Mr. DOLE. Mr. President, I ask unanimous consent that the committee 
amendment, as amended, be agreed to, 

[[Page S152]]
the bill be deemed read a third time, passed, the motion to reconsider 
be laid upon the table, and any statements relating to the bill be 
placed at the appropriate place in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 1260), as amended, was deemed read the third time and 
passed, as follows:

                                S. 1260

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Public 
     Housing Reform and Empowerment Act of 1996''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. Effective date.
Sec. 5. Proposed regulations; technical recommendations.
Sec. 6. Elimination of obsolete documents.
Sec. 7. Annual reports.

                   TITLE I--PUBLIC AND INDIAN HOUSING

Sec. 101. Declaration of policy.
Sec. 102. Membership on board of directors.
Sec. 103. Authority of public housing agencies.
Sec. 104. Definitions.
Sec. 105. Contributions for lower income housing projects.
Sec. 106. Public housing agency plan.
Sec. 107. Contract provisions and requirements.
Sec. 108. Expansion of powers.
Sec. 109. Public housing designated for the elderly and the disabled.
Sec. 110. Public housing capital and operating funds.
Sec. 111. Labor standards.
Sec. 112. Repeal of energy conservation; consortia and joint ventures.
Sec. 113. Repeal of modernization fund.
Sec. 114. Eligibility for public and assisted housing.
Sec. 115. Demolition and disposition of public housing.
Sec. 116. Repeal of family investment centers; voucher system for 
              public housing.
Sec. 117. Repeal of family self-sufficiency; homeownership 
              opportunities.
Sec. 118. Revitalizing severely distressed public housing.
Sec. 119. Mixed-income and mixed-ownership projects.
Sec. 120. Conversion of distressed public housing to tenant-based 
              assistance.
Sec. 121. Public housing mortgages and security interests.
Sec. 122. Linking services to public housing residents.
Sec. 123. Applicability to Indian housing.

                 TITLE II--SECTION 8 RENTAL ASSISTANCE

Sec. 201. Merger of the certificate and voucher programs.
Sec. 202. Repeal of Federal preferences.
Sec. 203. Portability.
Sec. 204. Leasing to voucher holders.
Sec. 205. Homeownership option.
Sec. 206. Technical and conforming amendments.
Sec. 207. Implementation.
Sec. 208. Definition.
Sec. 209. Effective date.

                  TITLE III--MISCELLANEOUS PROVISIONS

Sec. 301. Public housing flexibility in the CHAS.
Sec. 302. Repeal of certain provisions.
Sec. 303. Determination of income limits.
Sec. 304. Demolition of public housing.
Sec. 305. Coordination of tax credits and section 8.
Sec. 306. Eligibility for public and assisted housing.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) there exists throughout the Nation a need for decent, 
     safe, and affordable housing;
       (2) the inventory of public housing units owned and 
     operated by public housing agencies, an asset in which the 
     Federal Government has invested approximately 
     $90,000,000,000, has traditionally provided rental housing 
     that is affordable to low-income persons;
       (3) despite serving this critical function, the public 
     housing system is plagued by a series of problems, including 
     the concentration of very poor people in very poor 
     neighborhoods and disincentives for economic self-
     sufficiency;
       (4) the Federal method of overseeing every aspect of public 
     housing by detailed and complex statutes and regulations 
     aggravates the problem and places excessive administrative 
     burdens on public housing agencies;
       (5) the interests of low-income persons, and the public 
     interest, will best be served by a reformed public housing 
     program that--
       (A) consolidates many public housing programs into programs 
     for the operation and capital needs of public housing;
       (B) streamlines program requirements;
       (C) vests in public housing agencies that perform well the 
     maximum feasible authority, discretion, and control with 
     appropriate accountability to both public housing tenants and 
     localities; and
       (D) rewards employment and economic self-sufficiency of 
     public housing tenants;
       (6) voucher and certificate programs under section 8 of the 
     United States Housing Act of 1937 are successful for 
     approximately 80 percent of applicants, and a consolidation 
     of the voucher and certificate programs into a single, 
     market-driven program will assist in making section 8 tenant-
     based assistance more successful in assisting low-income 
     families in obtaining affordable housing and will increase 
     housing choice for low-income families; and
       (7) the needs of Indian families residing on Indian 
     reservations and other Indian areas will best be served by 
     providing programs specifically designed to meet the needs of 
     Indian communities while promoting tribal self-governance and 
     self-determination.
       (b) Purposes.--The purposes of this Act are--
       (1) to consolidate the various programs and activities 
     under the public housing programs administered by the 
     Secretary in a manner designed to reduce Federal 
     overregulation;
       (2) to redirect the responsibility for a consolidated 
     program to States, Indian tribes, localities, public housing 
     agencies, and public housing tenants;
       (3) to require Federal action to overcome problems of 
     public housing agencies with severe management deficiencies; 
     and
       (4) to consolidate and streamline tenant-based assistance 
     programs.

     SEC. 3. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Public housing agency.--The term ``public housing 
     agency'' has the same meaning as in section 3 of the United 
     States Housing Act of 1937.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 4. EFFECTIVE DATE.

       Except as otherwise specifically provided in this Act or 
     the amendments made by this Act, this Act and the amendments 
     made by this Act shall become effective on the date of 
     enactment of this Act.

     SEC. 5. PROPOSED REGULATIONS; TECHNICAL RECOMMENDATIONS.

       (a) Proposed Regulations.--Not later than 9 months after 
     the date of enactment of this Act, the Secretary shall submit 
     to the Congress proposed regulations that the Secretary 
     determines are necessary to carry out the United States 
     Housing Act of 1937, as amended by this Act.
       (b) Technical Recommendations.--Not later than 9 months 
     after the date of enactment of this Act, the Secretary shall 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Banking and 
     Financial Services of the House of Representatives, 
     recommended technical and conforming legislative changes 
     necessary to carry out this Act and the amendments made by 
     this Act.

     SEC. 6. ELIMINATION OF OBSOLETE DOCUMENTS.

       Effective 1 year after the date of enactment of this Act, 
     no rule, regulation, or order (including all handbooks, 
     notices, and related requirements) pertaining to public 
     housing or section 8 tenant-based programs issued or 
     promulgated under the United States Housing Act of 1937 
     before the date of enactment of this Act may be enforced by 
     the Secretary.

     SEC. 7. ANNUAL REPORTS.

       Not later than 1 year after the date of enactment of this 
     Act, and annually thereafter, the Secretary shall submit a 
     report to the Congress on the impact of the amendments made 
     by this Act on--
       (1) the demographics of public housing tenants and families 
     receiving tenant-based assistance under the United States 
     Housing Act of 1937; and
       (2) the economic viability of public housing agencies.
                   TITLE I--PUBLIC AND INDIAN HOUSING

     SEC. 101. DECLARATION OF POLICY.

       Section 2 of the United States Housing Act of 1937 (42 
     U.S.C. 1437) is amended to read as follows:

     ``SEC. 2. DECLARATION OF POLICY.

       ``It is the policy of the United States to promote the 
     general welfare of the Nation by employing the funds and 
     credit of the Nation, as provided in this title--
       ``(1) to assist States, Indian tribes, and political 
     subdivisions of States to remedy the unsafe housing 
     conditions and the acute shortage of decent and safe 
     dwellings for low-income families;
       ``(2) to assist States, Indian tribes, and political 
     subdivisions of States to address the shortage of housing 
     affordable to low-income families; and
       ``(3) consistent with the objectives of this title, to vest 
     in public housing agencies that perform well, the maximum 
     amount of responsibility and flexibility in program 
     administration, with appropriate accountability to both 
     public housing tenants and localities.''.

     SEC. 102. MEMBERSHIP ON BOARD OF DIRECTORS.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 27. MEMBERSHIP ON BOARD OF DIRECTORS.

       ``(a) Required Membership.--Except as provided in 
     subsection (b), the membership of the board of directors of 
     each public housing agency shall contain not less than 1 
     member who is a resident of a public housing project operated 
     by the public housing agency.
       ``(b) Exception.--Subsection (a) shall not apply to any 
     public housing agency in any 

[[Page S153]]
     State that requires the members of the board of directors of a public 
     housing agency to be salaried and to serve on a full-time 
     basis.
       ``(c) Nondiscrimination.--No person shall be prohibited 
     from serving on the board of directors or similar governing 
     body of a public housing agency because of the residence of 
     that person in a public housing project.''.

     SEC. 103. AUTHORITY OF PUBLIC HOUSING AGENCIES.

       (a) Authority of Public Housing Agencies.--
       (1) In general.--Section 3(a)(2) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(a)(2)) is amended to 
     read as follows:
       ``(2) Authority of public housing agencies.--
     Notwithstanding paragraph (1), a public housing agency may 
     adopt ceiling rents that reflect the reasonable market value 
     of the housing, but that are not less than the actual monthly 
     costs--
       ``(i) to operate the housing of the public housing agency; 
     and
       ``(ii) to make a deposit to a replacement reserve (in the 
     sole discretion of the public housing agency).
       ``(B) Minimum rent.--Notwithstanding paragraph (1), a 
     public housing agency may provide that each family residing 
     in a public housing project or receiving tenant-based or 
     project-based assistance under section 8 shall pay a minimum 
     monthly rent in an amount not to exceed $25 per month.
       ``(C) Police officers.--
       ``(i) In general.--Notwithstanding any other provision of 
     law, a public housing agency may, in accordance with the 
     public housing agency plan, allow a police officer who is not 
     otherwise eligible for residence in public housing to reside 
     in a public housing unit. The number and location of units 
     occupied by police officers under this clause, and the terms 
     and conditions of their tenancies, shall be determined by the 
     public housing agency.
       ``(ii) Definition.--As used in this subparagraph, the term 
     `police officer' means any person determined by a public 
     housing agency to be, during the period of residence of that 
     person in public housing, employed on a full-time basis as a 
     duly licensed professional police officer by a Federal, 
     State, tribal, or local government or by any agency thereof 
     (including a public housing agency having an accredited 
     police force).
       ``(D) Encouragement of self-sufficiency.--Each public 
     housing agency shall develop a rental policy that encourages 
     and rewards employment and economic self-sufficiency.''.
       (2) Regulations.--
       (A) In general.--The Secretary shall, by regulation, after 
     notice and an opportunity for public comment, establish such 
     requirements as may be necessary to carry out section 
     3(a)(2)(A) of the United States Housing Act of 1937, as 
     amended by paragraph (1).
       (B) Transition rule.--Prior to the issuance of final 
     regulations under paragraph (1), a public housing agency may 
     implement ceiling rents, which shall be--
       (i) determined in accordance with section 3(a)(2)(A) of the 
     United States Housing Act of 1937, as that section existed on 
     the day before the date of enactment of this Act;
       (ii) equal to the 95th percentile of the rent paid for a 
     unit of comparable size by tenants in the same public housing 
     project or a group of comparable projects totaling 50 units 
     or more; or
       (iii) equal to the fair market rent for the area in which 
     the unit is located.
       (b) Nontroubled Public Housing Agencies.--Section 3(a) of 
     the United States Housing Act of 1937 (42 U.S.C. 1437(a)) is 
     amended by adding at the end the following new paragraph:
       ``(3) Nontroubled public housing agencies.--
       ``(A) In general.--Notwithstanding the rent calculation 
     formula in paragraph (1), and subject to subparagraph (B), 
     the Secretary shall permit a public housing agency, other 
     than a public housing agency determined to be troubled 
     pursuant to 6(j), to determine the amount that a family 
     residing in public housing shall pay as rent.
       ``(B) Limitation.--With respect to a family whose income is 
     equal to or less than 50 percent of the median income for the 
     area, as determined by the Secretary with adjustments for 
     smaller and larger families, a public housing agency may not 
     require a family to pay as rent under subparagraph (A) an 
     amount that exceeds the greatest of--
       ``(i) 30 percent of the monthly adjusted income of the 
     family;
       ``(ii) 10 percent of the monthly income of the family;
       ``(iii) if the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that public agency to 
     meet the housing costs of the family, the portion of those 
     payments that is so designated; and
       ``(iv) $25.''.

     SEC. 104. DEFINITIONS.

       (a) Definitions.--
       (1) Single persons.--Section 3(b)(3) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)(3)) is amended--
       (A) in subparagraph (A), in the third sentence, by striking 
     ``the Secretary shall'' and all that follows before the 
     period at the end and inserting the following: ``the public 
     housing agency may give preference to single persons who are 
     elderly or disabled persons before single persons who are 
     otherwise eligible''; and
       (B) in subparagraph (B), in the second sentence, by 
     striking ``regulations of the Secretary'' and inserting 
     ``public housing agency plan''.
       (2) Adjusted income.--Section 3(b)(5) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)(5)) is amended to 
     read as follows:
       ``(5) Adjusted income.--The term `adjusted income' means 
     the income that remains after excluding--
       ``(A) $480 for each member of the family residing in the 
     household (other than the head of the household or the spouse 
     of the head of the household)--
       ``(i) who is under 18 years of age; or
       ``(ii) who is--

       ``(I) 18 years of age or older; and
       ``(II) a person with disabilities or a full-time student;

       ``(B) $400 for an elderly or disabled family;
       ``(C) the amount by which the aggregate of--
       ``(i) medical expenses for an elderly or disabled family; 
     and
       ``(ii) reasonable attendant care and auxiliary apparatus 
     expenses for each family member who is a person with 
     disabilities, to the extent necessary to enable any member of 
     the family (including a member who is a person with 
     disabilities) to be employed;

     exceeds 3 percent of the annual income of the family;
       ``(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) with respect to a family assisted by an Indian 
     housing authority only, excessive travel expenses, not to 
     exceed $25 per family per week, for employment- or education-
     related travel; and
       ``(F) any other income that the public housing agency 
     determines to be appropriate, as provided in the public 
     housing agency plan.''.
       (3) Indian housing authority; indian tribe.--
       (A) In general.--Section 3(b) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437a(b)) is amended by striking 
     paragraphs (11) and (12) and inserting the following:
       ``(11) Indian housing authority.--The term `Indian housing 
     authority' means any entity that--
       ``(A) is authorized to engage or assist in the development 
     or operation of low-income housing for Indians; and
       ``(B) is established--
       ``(i) by exercise of the power of self-government of an 
     Indian tribe, independent of State law; or
       ``(ii) by operation of State law authorizing or enabling an 
     Indian tribe to create housing authorities for Indians, 
     including regional housing authorities in the State of 
     Alaska.
       ``(12) Indian tribe.--The term `Indian tribe' means the 
     governing body of any Indian or Alaska Native tribe, band, 
     nation, pueblo, village, or community that the Secretary of 
     the Interior acknowledges to exist as an Indian Tribe, 
     pursuant to the Federally Recognized Indian Tribe List Act of 
     1994.''.
       (B) Applicability.--The amendment made by subparagraph (A) 
     does not affect the existence, or the ability to operate, of 
     any Indian housing authority established before the date of 
     enactment of this Act by any State recognized tribe, band, 
     pueblo, group, community, or nation of Indians or Alaska 
     Natives that does not qualify as an Indian tribe under 
     section 3(b) of the United States Housing Act of 1937, as 
     amended by this paragraph.
       (b) Disallowance of Earned Income From Public Housing Rent 
     Determinations.--
       (1) In general.--Section 3 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437a) is amended--
       (A) by striking the undesignated paragraph at the end of 
     subsection (c)(3) (as added by section 515(b) of Public Law 
     101-625); and
       (B) by adding at the end the following new subsection:
       ``(d) Disallowance of Earned Income From Public Housing 
     Rent Determinations.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the rent payable under subsection (a) by a family--
       ``(A) that--
       ``(i) occupies a unit in a public housing project; or
       ``(ii) receives assistance under section 8; and
       ``(B) whose income increases as a result of employment of a 
     member of the family who was previously unemployed for 1 or 
     more years (including a family whose income increases as a 
     result of the participation of a family member in any family 
     self-sufficiency or other job training program);

     may not be increased as a result of the increased income due 
     to such employment during the 18-month period beginning on 
     the date on which the employment is commenced.
       ``(2) Phase-in of rate increases.--After the expiration of 
     the 18-month period referred to in paragraph (1), rent 
     increases due to the continued employment of the family 
     member described in paragraph (1)(B) shall be phased in over 
     a subsequent 3-year period.
       ``(3) Overall limitation.--Rent payable under subsection 
     (a) shall not exceed the amount determined under subsection 
     (a).''.
       (2) Applicability of amendment.--
       (A) Public housing.--Notwithstanding the amendment made by 
     paragraph (1), any tenant of public housing participating in 
     the program under the authority contained in 

[[Page S154]]
     the undesignated paragraph at the end of section 3(c)(3) of the United 
     States Housing Act of 1937, as that paragraph existed on the 
     day before the date of enactment this Act, shall be governed 
     by that authority after that date.
       (B) Section 8.--The amendment made by paragraph (1) shall 
     apply to tenant-based assistance provided under section 8 of 
     the United States Housing Act of 1937, with funds 
     appropriated on or after October 1, 1996.
       (c) Definitions of Terms Used in Reference to Public 
     Housing.--
       (1) In general.--Section 3(c) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437a(c)) is amended--
       (A) in paragraph (1), by inserting ``and of the fees and 
     related costs normally involved in obtaining non-Federal 
     financing and tax credits with or without private and 
     nonprofit partners'' after ``carrying charges''; and
       (B) in paragraph (2), in the first sentence, by striking 
     ``security personnel),'' and all that follows through the 
     period and inserting the following: ``security personnel), 
     service coordinators, drug elimination activities, or 
     financing in connection with a public housing project, 
     including projects developed with non-Federal financing and 
     tax credits, with or without private and nonprofit 
     partners.''.
       (2) Technical correction.--Section 622(c) of the Housing 
     and Community Development Act of 1992 (Public Law 102-550; 
     106 Stat. 3817) is amended by striking `` `project.' '' and 
     inserting ``paragraph (3)''.
       (3) New definitions.--Section 3(c) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(c)) is amended by adding 
     at the end the following new paragraphs:
       ``(6) Public housing agency plan.--The term `public housing 
     agency plan' means the plan of the public housing agency 
     prepared in accordance with section 5A.
       ``(7) Disabled housing.--The term `disabled housing' means 
     any public housing project, building, or portion of a project 
     or building, that is designated by a public housing agency 
     for occupancy exclusively by disabled persons or families.
       ``(8) Elderly housing.--The term `elderly housing' means 
     any public housing project, building, or portion of a project 
     or building, that is designated by a public housing agency 
     exclusively for occupancy exclusively by elderly persons or 
     families, including elderly disabled persons or families.
       ``(9) Mixed-income project.--The term `mixed-income 
     project' means a public housing project that meets the 
     requirements of section 28.
       ``(10) Capital fund.--The term `Capital Fund' means the 
     fund established under section 9(c).
       ``(11) Operating fund.--The term `Operating Fund' means the 
     fund established under section 9(d).''.

     SEC. 105. CONTRIBUTIONS FOR LOWER INCOME HOUSING PROJECTS.

       (a) In General.--Section 5 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437c) is amended by striking subsections 
     (h) through (l).
       (b) Conforming Amendments.--The United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (1) in section 21(d), by striking ``section 5(h) or'';
       (2) in section 25(l)(1), by striking ``and for sale under 
     section 5(h)''; and
       (3) in section 307, by striking ``section 5(h) and''.

     SEC. 106. PUBLIC HOUSING AGENCY PLAN.

       (a) In General.--Title I of the United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended by inserting 
     after section 5 the following new section:

     ``SEC. 5A. PUBLIC HOUSING AGENCY PLAN.

       ``(a) In General.--
       ``(1) Submission.--Each public housing agency shall submit 
     to the Secretary a written public housing agency plan 
     developed in accordance with this section.
       ``(2) Consistency requirement.--Each public housing agency 
     plan submitted to the Secretary under paragraph (1) shall 
     be--
       ``(A) made in consultation with the local advisory board 
     established under subsection (c);
       ``(B) consistent with the comprehensive housing 
     affordability strategy for the jurisdiction in which the 
     public housing agency is located, as provided under title I 
     of the Cranston-Gonzalez National Affordable Housing Act, or, 
     with respect to any Indian tribe, a comprehensive plan 
     developed by the Indian tribe, if applicable; and
       ``(C) accompanied by a certification by an appropriate 
     State, tribal, or local public official that the plan meets 
     the requirements of subparagraph (B).
       ``(b) Contents.--Each public housing agency plan shall 
     contain, at a minimum, the following:
       ``(1) Certification.--
       ``(A) In general.--With respect to a public housing agency 
     that has not received assistance under this title as of the 
     date on which the public housing agency plan of that public 
     housing agency is submitted, or a public housing agency that 
     is subject to amended authority, a written certification that 
     the public housing agency is a governmental entity or public 
     body (or an agency or instrumentality thereof) that is 
     authorized to engage or assist in the development or 
     operation of low-income housing under this title.
       ``(B) Identification of certain references.--Subject to 
     subparagraph (A), any reference in any provision of law of 
     the jurisdiction authorizing the creation of the public 
     housing agency shall be identified and any legislative 
     declaration of purpose in regard thereto shall be set forth 
     in the certification with full text.
       ``(2) Statement of policy.--An annual statement of policy 
     identifying the primary goals and objectives of the public 
     housing agency for the year for which the statement is 
     submitted, together with any major developments, projects, or 
     programs, including all proposed costs and activities carried 
     out with the use of Capital Fund and Operating Fund 
     distributions made available to the public housing agency 
     under section 9.
       ``(3) Statement of needs.--An annual statement of the 
     housing needs of low-income families residing in the 
     community, and of other low-income families on the waiting 
     list of the public housing agency (including the housing 
     needs of elderly families and disabled families), and the 
     means by which the public housing agency intends, to the 
     maximum extent practicable, to address those needs.
       ``(4) General policies, rules, and regulations.--The 
     policies, rules, and regulations of the public housing agency 
     regarding--
       ``(A) the requirements for the selection and admission of 
     eligible families into the program or programs of the public 
     housing agency, including--
       ``(i) tenant screening policies;
       ``(ii) any preferences or priorities for selection and 
     admission;
       ``(iii) annual income verification procedures; and
       ``(iv) requirements relating to the administration of any 
     waiting lists of the public housing agency;
       ``(B) the procedure for assignment of families admitted 
     into the program to dwelling units owned, leased, managed, or 
     assisted by the public housing agency;
       ``(C) the requirements for occupancy of dwelling units, 
     including all standard lease provisions, and conditions for 
     continued occupancy, termination, and eviction;
       ``(D) procedures for establishing rents, including ceiling 
     rents and adjustments to income; and
       ``(E) procedures for designating certain public housing 
     projects, or portions of projects, for occupancy by elderly 
     families, disabled families, or by elderly and disabled 
     families.
       ``(5) Operation and management.--The policies, rules, and 
     regulations relating to the management of the public housing 
     agency, and the public housing projects and programs of the 
     public housing agency, including--
       ``(A) a description of the manner in which the public 
     housing agency is organized (including any consortia or joint 
     ventures) and staffed to perform the duties and functions of 
     the public housing agency and to administer the Operating 
     Fund distributions of the public housing agency;
       ``(B) policies relating to the rental of dwelling units 
     owned or operated by the public housing agency, including 
     policies designed to reduce vacancies;
       ``(C) policies relating to providing a safe and secure 
     environment in public housing units, including anticrime and 
     antidrug activities;
       ``(D) policies relating to the management and operation, or 
     participation in mixed-income projects, if applicable;
       ``(E) policies relating to services and amenities provided 
     or offered to assisted families, including the provision of 
     service coordinators and services designed for certain 
     populations, such as the elderly and disabled;
       ``(F) procedures for implementing the work requirements of 
     section 12(c);
       ``(G) procedures for identifying management weaknesses;
       ``(H) objectives for improving management practices;
       ``(I) a description of management initiatives to control 
     the costs of operating the public housing agency;
       ``(J) a plan for preventative maintenance and a plan for 
     routine maintenance;
       ``(K) policies relating to any plans for converting public 
     housing to a system of tenant-based assistance; and
       ``(L) policies relating to the operation of any 
     homeownership programs.
       ``(6) Capital fund requirements.--The policies, rules, and 
     regulations relating to the management and administration of 
     the Capital Fund distributions of the public housing agency, 
     including--
       ``(A) the capital needs of the public housing agency;
       ``(B) plans for capital expenditures related to providing a 
     safe and secure environment in public housing units, 
     including anticrime and antidrug activities;
       ``(C) policies relating to providing a safe and secure 
     environment in public housing units, including anticrime and 
     antidrug activities;
       ``(D) policies relating to the capital requirements of 
     mixed-income projects, if applicable;
       ``(E) an annual plan and, if appropriate, a 5-year plan of 
     the public housing agency for the capital needs of the 
     existing dwelling units of the public housing agency, each of 
     which shall include a general statement identifying the long-
     term viability and physical condition of each of the public 
     housing projects and other property of the public housing 
     agency, including cost estimates;
       ``(F) a plan to handle emergencies and other disasters;
     
[[Page S155]]

       ``(G) the use of funds for new or additional units, 
     including capital contributions to mixed-income projects, if 
     applicable;
       ``(H) any plans for the sale of existing dwelling units to 
     low-income residents or organizations acting as conduits for 
     sales to such residents under a homeownership plan;
       ``(I) any plans for converting public housing units to a 
     system of tenant-based assistance; and
       ``(J) any plans for demolition and disposition of public 
     housing units, including any plans for replacement units and 
     any plans providing for the relocation of residents who will 
     be displaced by a demolition or disposition of units.
       ``(7) Economic and social self-sufficiency programs.--A 
     description of any policies, programs, plans, and activities 
     of the public housing agency for the enhancement of the 
     economic and social self-sufficiency of residents assisted by 
     the programs of the public housing agency.
       ``(8) Annual audit.--The results of an annual audit 
     (including any audit of management practices, as required by 
     the Secretary) of the public housing agency, which shall be 
     conducted by an independent certified public accounting firm 
     pursuant to generally accepted accounting principles.
       ``(c) Local Advisory Board.--
       ``(1) In general.--Except as provided in paragraph (5), 
     each public housing agency shall establish one or more local 
     advisory boards in accordance with this subsection, the 
     membership of which shall adequately reflect and represent 
     all of the residents of the dwelling units owned, operated, 
     or assisted by the public housing agency.
       ``(2) Membership.--Each local advisory board established 
     under this subsection shall be composed of the following 
     members:
       ``(A) Tenants.--Not less than 60 percent of the members of 
     the board shall be tenants of dwelling units owned, operated, 
     or assisted by the public housing agency, including 
     representatives of any resident organizations.
       ``(B) Other members.--The members of the board, other than 
     the members described in subparagraph (A), shall include--
       ``(i) representatives of the community in which the public 
     housing agency is located; and
       ``(ii) local government officials of the community in which 
     the public housing agency is located.
       ``(3) Purpose.--Each local advisory board established under 
     this subsection shall assist and make recommendations 
     regarding the development of the public housing agency plan. 
     The public housing agency shall consider the recommendations 
     of the local advisory board in preparing the final public 
     housing agency plan, and shall include a copy of those 
     recommendations in the public housing agency plan submitted 
     to the Secretary under this section.
       ``(4) Inapplicability to indian housing.--This subsection 
     does not apply to an Indian housing authority.
       ``(5) Waiver.--The Secretary may waive the requirements of 
     this subsection with respect to tenant representation on the 
     local advisory board of a public housing agency, if the 
     public housing agency demonstrates to the satisfaction of the 
     Secretary that a resident council or other tenant 
     organization of the public housing agency adequately 
     represents the interests of the tenants of the public housing 
     agency.
       ``(d) Publication of Notice.--
       ``(1) In general.--Not later than 45 days before the date 
     of a hearing conducted under paragraph (2) by the governing 
     body of a public housing agency, the public housing agency 
     shall publish a notice informing the public that--
       ``(A) the proposed public housing agency plan is available 
     for inspection at the principal office of the public housing 
     agency during normal business hours; and
       ``(B) a public hearing will be conducted to discuss the 
     public housing agency plan and to invite public comment 
     regarding that plan.
       ``(2) Public hearing.--Each public housing agency shall, at 
     a location that is convenient to residents, conduct a public 
     hearing, as provided in the notice published under paragraph 
     (1).
       ``(3) Adoption of plan.--After conducting the public 
     hearing under paragraph (2), and after considering all public 
     comments received and, in consultation with the local 
     advisory board, making any appropriate changes in the public 
     housing agency plan, the public housing agency shall--
       ``(A) adopt the public housing agency plan; and
       ``(B) submit the plan to the Secretary in accordance with 
     this section.
       ``(e) Coordinated Procedures.--Each public housing agency 
     (other than an Indian housing authority) shall, in 
     conjunction with the State or relevant unit of general local 
     government, establish procedures to ensure that the public 
     housing agency plan required by this section is consistent 
     with the applicable comprehensive housing affordability 
     strategy for the jurisdiction in which the public housing 
     agency is located, in accordance with title I of the 
     Cranston-Gonzalez National Affordable Housing Act.
       ``(f) Amendments and Modifications to Plans.--
       ``(1) In general.--Except as provided in paragraph (2), 
     nothing in this section shall preclude a public housing 
     agency, after submitting a plan to the Secretary in 
     accordance with this section, from amending or modifying any 
     policy, rule, regulation, or plan of the public housing 
     agency, except that no such significant amendment or 
     modification may be adopted or implemented--
       ``(A) other than at a duly called meeting of commissioners 
     (or other comparable governing body) of the public housing 
     agency that is open to the public; and
       ``(B) until notification of the amendment or modification 
     is provided to the Secretary and approved in accordance with 
     subsection (g)(2).
       ``(2) Consistency.--Each significant amendment or 
     modification to a public housing agency plan submitted to the 
     Secretary under this section shall--
       ``(A) meet the consistency requirement of subsection 
     (a)(2);
       ``(B) be subject to the notice and public hearing 
     requirements of subsection (d); and
       ``(C) be subject to approval by the Secretary in accordance 
     with subsection (g)(2).
       ``(g) Timing of Plans.--
       ``(1) In general.--
       ``(A) Initial submission.--Each public housing agency shall 
     submit the initial plan required by this section, and any 
     amendment or modification to the initial plan, to the 
     Secretary at such time and in such form as the Secretary 
     shall require.
       ``(B) Annual submission.--Not later than 60 days prior to 
     the start of the fiscal year of the public housing agency, 
     after initial submission of the plan required by this section 
     in accordance with subparagraph (A), each public housing 
     agency shall annually submit to the Secretary a plan update, 
     including any amendments or modifications to the public 
     housing agency plan.
       ``(2) Review and approval.--
       ``(A) Review.--After submission of the public housing 
     agency plan or any amendment or modification to the plan to 
     the Secretary, to the extent that the Secretary considers 
     such action to be necessary to make determinations under this 
     subparagraph, the Secretary shall review the public housing 
     agency plan (including any amendments or modifications 
     thereto) to determine whether the contents of the plan--
       ``(i) set forth the information required by this section to 
     be contained in a public housing agency plan;
       ``(ii) are consistent with information and data available 
     to the Secretary; and
       ``(iii) are prohibited by or inconsistent with any 
     provision of this title or other applicable law.
       ``(B) Approval.--
       ``(i) In general.--Except as provided in paragraph (3)(B), 
     not later than 60 days after the date on which a public 
     housing agency plan is submitted in accordance with this 
     section, the Secretary shall provide written notice to the 
     public housing agency if the plan has been disapproved, 
     stating with specificity the reasons for the disapproval.
       ``(ii) Failure to provide notice of disapproval.--If the 
     Secretary does not provide notice of disapproval under clause 
     (i) before the expiration of the 60-day period described in 
     clause (i), the public housing agency plan shall be deemed to 
     be approved by the Secretary.
       ``(3) Secretarial discretion.--
       ``(A) In general.--The Secretary may require such 
     additional information as the Secretary determines to be 
     appropriate for each public housing agency that is--
       ``(i) at risk of being designated as troubled under section 
     6(j); or
       ``(ii) designated as troubled under section 6(j).
       ``(B) Troubled agencies.--The Secretary shall provide 
     explicit written approval or disapproval, in a timely manner, 
     for a public housing agency plan submitted by any public 
     housing agency designated by the Secretary as a troubled 
     public housing agency under section 6(j).
       ``(4) Streamlined plan.--In carrying out this section, the 
     Secretary may establish a streamlined public housing agency 
     plan for--
       ``(A) public housing agencies that are determined by the 
     Secretary to be high performing public housing agencies; and
       ``(B) public housing agencies with less than 250 public 
     housing units that have not been designated as troubled under 
     section 6(j).''.
       (b) Implementation.--
       (1) Interim rule.--Not later than 120 days after the date 
     of enactment of this Act, the Secretary shall issue an 
     interim rule to require the submission of an interim public 
     housing agency plan by each public housing agency, as 
     required by section 5A of the United States Housing Act of 
     1937 (as added by subsection (a) of this section).
       (2) Final regulations.--Not later than 1 year after the 
     date of enactment of this Act, in accordance with the 
     negotiated rulemaking procedures set forth in subchapter III 
     of chapter 5 of title 5, United States Code, the Secretary 
     shall promulgate final regulations implementing section 5A of 
     the United States Housing Act of 1937, as added by subsection 
     (a) of this section.
       (3) Indian housing authorities.--In carrying out this 
     subsection, the Secretary may implement separate rules and 
     regulations for the Indian housing program.
       (c) Audit and Review; Report.--
       (1) Audit and review.--Not later than 1 year after the 
     effective date of final regulations promulgated under 
     subsection (b)(2), in order to determine the degree of 
     compliance with public housing agency plans approved under 
     section 5A of the United States Housing Act of 1937, as added 
     by this section, by public housing agencies, the Comptroller 
     General of the United States shall conduct-- 
     
[[Page S156]]

       (A) a review of a representative sample of the public 
     housing agency plans approved under such section 5A before 
     that date; and
       (B) an audit and review of the public housing agencies 
     submitting those plans.
       (2) Report.--Not later than 2 years after the date on which 
     public housing agency plans are initially required to be 
     submitted under section 5A of the United States Housing Act 
     of 1937, as added by this section, the Comptroller General of 
     the United States shall submit to the Congress a report, 
     which shall include--
       (A) a description of the results of each audit and review 
     under paragraph (1); and
       (B) any recommendations for increasing compliance by public 
     housing agencies with their public housing agency plans 
     approved under section 5A of the United States Housing Act of 
     1937, as added by this section.

     SEC. 107. CONTRACT PROVISIONS AND REQUIREMENTS.

       (a) Conditions.--Section 6(a) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437d(a)) is amended--
       (1) in the first sentence, by inserting ``, in a manner 
     consistent with the public housing agency plan'' before the 
     period; and
       (2) by striking the second sentence.
       (b) Repeal of Federal Preferences; Revision of Maximum 
     Income Limits; Certification of Compliance With Requirements; 
     Notification of Eligibility.--Section 6(c) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437d(c)) is amended to 
     read as follows:
       ``(c) [Reserved.]''.
       (c) Excess Funds.--Section 6(e) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(e)) is amended to read 
     as follows:
       ``(e) [Reserved.]''.
       (d) Performance Indicators for Public Housing Agencies.--
     Section 6(j) of the United States Housing Act of 1937 (42 
     U.S.C. 1437d(j)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (B)--
       (i) by striking ``obligated'' and inserting ``provided''; 
     and
       (ii) by striking ``unexpended'' and inserting ``unobligated 
     by the public housing agency'';
       (B) in subparagraph (D), by striking ``energy'' and 
     inserting ``utility'';
       (C) by redesignating subparagraph (H) as subparagraph (J); 
     and
       (D) by inserting after subparagraph (G) the following new 
     subparagraphs:
       ``(H) The extent to which the public housing agency 
     provides--
       ``(i) effective programs and activities to promote the 
     economic self-sufficiency of public housing tenants; and
       ``(ii) public housing tenants with opportunities for 
     involvement in the administration of the public housing.
       ``(I) The extent to which the public housing agency 
     successfully meets the goals and carries out the activities 
     and programs of the public housing agency plan under section 
     5(A).''; and
       (2) in paragraph (2)(A)(i), by inserting after the first 
     sentence the following: ``The Secretary may use a simplified 
     set of indicators for public housing agencies with less than 
     250 public housing units.''.
       (e) Leases.--Section 6(l) of the United States Housing Act 
     of 1937 (42 U.S.C. 1437d(l)) is amended--
       (1) in paragraph (3), by striking ``not be less than'' and 
     all that follows before the semicolon and inserting ``be the 
     period of time required under State law''; and
       (2) in paragraph (5), by striking ``on or near such 
     premises''.
       (f) Public Housing Assistance to Foster Care Children.--
     Section 6(o) of the United States Housing Act of 1937 (42 
     U.S.C. 1437d(o)) is amended by striking ``Subject'' and all 
     that follows through ``, in'' and inserting ``In''.
       (g) Preference for Areas With Inadequate Supply of Very 
     Low-Income Housing.--Section 6(p) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(p)) is amended to read 
     as follows:
       ``(p) [Reserved.]''.
       (h) Availability of Criminal Records for Screening and 
     Eviction; Eviction for Drug-Related Activity.--Section 6 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437d) is 
     amended by adding at the end the following new subsections:
       ``(q) Availability of Records.--
       ``(1) In general.--
       ``(A) Provision of information.--Notwithstanding any other 
     provision of law, except as provided in subparagraph (B), the 
     National Crime Information Center, police departments, and 
     other law enforcement agencies shall, upon request, provide 
     information to public housing agencies regarding the criminal 
     conviction records of adult applicants for, or tenants of, 
     public housing for purposes of applicant screening, lease 
     enforcement, and eviction.
       ``(B) Exception.--Except as provided under any provision of 
     State, tribal, or local law, no law enforcement agency 
     described in subparagraph (A) shall provide information under 
     this paragraph relating to any criminal conviction if the 
     date of that conviction occurred 5 or more years prior to the 
     date on which the request for the information is made.
       ``(2) Opportunity to dispute.--Before an adverse action is 
     taken on the basis of a criminal record, the public housing 
     agency shall provide the tenant or applicant with a copy of 
     the criminal record and an opportunity to dispute the 
     accuracy and relevance of that record.
       ``(3) Fee.--A public housing agency may be charged a 
     reasonable fee for information provided under paragraph (1).
       ``(4) Records management.--Each public housing agency shall 
     establish and implement a system of records management that 
     ensures that any criminal record received by the public 
     housing agency is--
       ``(A) maintained confidentially;
       ``(B) not misused or improperly disseminated; and
       ``(C) destroyed, once the purpose for which the record was 
     requested has been accomplished.
       ``(5) Definition.--For purposes of this subsection, the 
     term `adult' means a person who is 18 years of age or older, 
     or who has been convicted of a crime as an adult under any 
     Federal, State, or tribal law.
       ``(r) Eviction for Drug-Related Activity.--Any tenant 
     evicted from housing assisted under this title by reason of 
     drug-related criminal activity (as that term is defined in 
     section 8(f)(5)) shall not be eligible for housing assistance 
     under this title during the 3-year period beginning on the 
     date of such eviction, unless the evicted tenant successfully 
     completes a rehabilitation program approved by the public 
     housing agency (which shall include a waiver of this 
     subsection if the circumstances leading to eviction no longer 
     exist).''.
       (i) Transition Rule Relating to Preferences.--During the 
     period beginning on the date of enactment of this Act and 
     ending on the date on which the initial public housing agency 
     plan of a public housing agency is approved under section 5A 
     of the United States Housing Act of 1937, as added by this 
     Act, the public housing agency may establish local 
     preferences for making available public housing under the 
     United States Housing Act of 1937 and for providing tenant-
     based assistance under section 8 of that Act.

     SEC. 108. EXPANSION OF POWERS.

       (a) In General.--Section 6(j)(3) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(j)(3)) is amended--
       (1) in subparagraph (A)--
       (A) by redesignating clauses (iii) and (iv) as clauses (iv) 
     and (v), respectively; and
       (B) by inserting after clause (ii) the following new 
     clause:
       ``(iii) take possession of the public housing agency, 
     including any project or function of the agency, including 
     any project or function under any other provision of this 
     title;'';
       (2) by redesignating subparagraphs (B) through (D) as 
     subparagraphs (E) through (G), respectively;
       (3) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B)(i) If a public housing agency is identified as 
     troubled under this subsection, the Secretary shall notify 
     the agency of the troubled status of the agency.
       ``(ii) The Secretary may give a public housing agency a 1-
     year period, beginning on the later of the date on which the 
     agency receives notice from the Secretary of the troubled 
     status of the agency under clause (i), and the date of 
     enactment of the Public Housing Reform and Empowerment Act of 
     1995, within which to demonstrate improvement satisfactory to 
     the Secretary. Nothing in this clause shall preclude the 
     Secretary from taking any action the Secretary considers 
     necessary before the commencement or the expiration of the 1-
     year period described in this clause.
       ``(iii) Upon the expiration of the 1-year period described 
     in clause (ii), if the troubled public housing agency has not 
     demonstrated improvement satisfactory to the Secretary and 
     the Secretary has not yet declared the agency to be in breach 
     of the contract of the agency with the Federal Government 
     under this title, the Secretary shall declare the public 
     housing agency to be in substantial default, as described in 
     subparagraph (A).
       ``(iv) Upon declaration of a substantial default under 
     clause (iii), the Secretary--
       ``(I) shall either--

       ``(aa) petition for the appointment of a receiver pursuant 
     to subparagraph (A)(ii);
       ``(bb) take possession of the public housing agency or any 
     public housing projects of the public housing agency pursuant 
     to subparagraph (A)(iii); or
       ``(cc) take such actions as the Secretary determines to be 
     necessary to cure the substantial default; and

       ``(II) may, in addition, take other appropriate action.
       ``(C)(i) If a receiver is appointed pursuant to 
     subparagraph (A)(ii), in addition to the powers accorded by 
     the court appointing the receiver, the receiver--
       ``(I) may abrogate any contract that substantially impedes 
     correction of the substantial default;
       ``(II) may demolish and dispose of the assets of the public 
     housing agency, in accordance with section 18, including the 
     transfer of properties to resident-supported nonprofit 
     entities;
       ``(III) if determined to be appropriate by the Secretary, 
     may require the establishment, as permitted by applicable 
     State, tribal, and local law, of one or more new public 
     housing agencies; and
       ``(IV) shall not be subject to any State, tribal, or local 
     law relating to civil service requirements, employee rights, 
     procurement, or financial or administrative controls that, in 
     the determination of the receiver, substantially impedes 
     correction of the substantial default.
       ``(ii) For purposes of this subparagraph, the term `public 
     housing agency' includes any project or function of a public 
     housing agency, as appropriate, including any project or 

[[Page S157]]
     function under any other provision of this title.
       ``(D)(i) If the Secretary takes possession of a public 
     housing agency, or any project or function of the agency, 
     pursuant to subparagraph (A)(iii), the Secretary--
       ``(I) may abrogate any contract that substantially impedes 
     correction of the substantial default;
       ``(II) may demolish and dispose of the assets of the public 
     housing agency, in accordance with section 18, including the 
     transfer of properties to resident-supported nonprofit 
     entities;
       ``(III) may require the establishment, as permitted by 
     applicable State, tribal, and local law, of one or more new 
     public housing agencies;
       ``(IV) shall not be subject to any State, tribal, or local 
     law relating to civil service requirements, employee rights, 
     procurement, or financial or administrative controls that, in 
     the determination of the Secretary, substantially impedes 
     correction of the substantial default; and
       ``(V) shall have such additional authority as a district 
     court of the United States has conferred under like 
     circumstances on a receiver to fulfill the purposes of the 
     receivership.
       ``(ii) The Secretary may appoint, on a competitive or 
     noncompetitive basis, an individual or entity as an 
     administrative receiver to assume the responsibilities of the 
     Secretary under this subparagraph for the administration of a 
     public housing agency. The Secretary may delegate to the 
     administrative receiver any or all of the powers given the 
     Secretary by this subparagraph, as the Secretary determines 
     to be appropriate.
       ``(iii) Regardless of any delegation under this 
     subparagraph, an administrative receiver may not require the 
     establishment of one or more new public housing agencies 
     pursuant to clause (i)(III), unless the Secretary first 
     approves an application by the administrative receiver to 
     authorize such establishment.
       ``(iv) For purposes of this subparagraph, the term `public 
     housing agency' includes any project or function of a public 
     housing agency, as appropriate, including any project or 
     function under any other provision of this title.''; and
       (4) by adding at the end the following new subparagraph:
       ``(H) If the Secretary (or an administrative receiver 
     appointed by the Secretary) takes possession of a public 
     housing agency (including any project or function of the 
     agency), or if a receiver is appointed by a court, the 
     Secretary or receiver shall be deemed to be acting not in the 
     official capacity of that person or entity, but rather in the 
     capacity of the public housing agency, and any liability 
     incurred, regardless of whether the incident giving rise to 
     that liability occurred while the Secretary or receiver was 
     in possession of the public housing agency (including any 
     project or function of the agency), shall be the liability of 
     the public housing agency.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall apply to a public housing agency that is found to be in 
     substantial default, on or after the date of enactment of 
     this Act, with respect to the covenants or conditions to 
     which the agency is subject (as such substantial default is 
     defined in the contract for contributions of the agency) or 
     with respect to an agreement entered into under section 
     6(j)(2)(C) of the United States Housing Act of 1937.

     SEC. 109. PUBLIC HOUSING DESIGNATED FOR THE ELDERLY AND THE 
                   DISABLED.

       (a) In General.--Section 7 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437e) is amended to read as follows:

     ``SEC. 7. AUTHORITY TO PROVIDE DESIGNATED HOUSING.

       ``(a) In General.--Notwithstanding any other provision of 
     law, a public housing agency may, in the discretion of the 
     public housing agency and without approval by the Secretary, 
     designate public housing projects or mixed-income projects 
     (or portions of projects) for occupancy as elderly housing, 
     disabled housing, or elderly and disabled housing. The public 
     housing agency shall establish requirements for this section, 
     including priorities for occupancy, in the public housing 
     agency plan.
       ``(b) Priority for Occupancy.--
       ``(1) In general.--In determining priority for admission to 
     public housing projects (or portions of projects) that are 
     designated for occupancy under this section, the public 
     housing agency may make units in such projects (or portions 
     of projects) available only to the types of families for whom 
     the project is designated.
       ``(2) Eligibility of near-elderly families.--If a public 
     housing agency determines that there are insufficient numbers 
     of elderly families to fill all the units in a public housing 
     project (or portion thereof) designated under this section 
     for occupancy by only elderly families, the agency may 
     provide that near-elderly families who qualify for occupancy 
     may occupy dwelling units in the public housing project (or 
     portion thereof).
       ``(3) Vacancy.--Notwithstanding paragraphs (1) and (2), in 
     designating a public housing project (or portion thereof) for 
     occupancy by only certain types of families under this 
     section, a public housing agency shall make any dwelling unit 
     that is ready for occupancy in such a project (or portion 
     thereof) that has been vacant for more than 60 consecutive 
     days generally available for occupancy (subject to this 
     title) without regard to that designation.
       ``(c) Availability of Housing.--
       ``(1) Tenant choice.--The decision of any disabled family 
     not to occupy or accept occupancy in an appropriate public 
     housing project or to otherwise accept any assistance made 
     available to the family under this title shall not adversely 
     affect the family with respect to a public housing agency 
     making available occupancy in other appropriate public 
     housing projects or to otherwise make assistance available to 
     that family under this title.
       ``(2) Discriminatory selection.--Paragraph (1) does not 
     apply to any family that decides not to occupy or accept an 
     appropriate dwelling unit in public housing or to accept 
     assistance under this Act on the basis of the race, color, 
     religion, gender, disability, familial status, or national 
     origin of occupants of the housing or the surrounding area.
       ``(3) Appropriateness of dwelling units.--This section may 
     not be construed to require a public housing agency to offer 
     occupancy in any dwelling unit assisted under this Act to any 
     family that is not of appropriate family size for the 
     dwelling unit.
       ``(d) Prohibition of Evictions.--Any tenant who is lawfully 
     residing in a dwelling unit in a public housing project may 
     not be evicted or otherwise required to vacate that unit as a 
     result of the designation of the public housing project (or 
     portion thereof) under this section or as a result of any 
     other action taken by the Secretary or any public housing 
     agency pursuant to this section.
       ``(e) Limitation on Occupancy in Designated Projects.--
       ``(1) Occupancy limitation.--Notwithstanding any other 
     provision of law, a dwelling unit in a public housing project 
     (or portion of a project) that is designated under subsection 
     (a) shall not be occupied by any person whose illegal use (or 
     pattern of illegal use) of a controlled substance or abuse 
     (or pattern of abuse) of alcohol--
       ``(A) constitutes a disability; and
       ``(B) provides reasonable cause for the public housing 
     agency to believe that such occupancy could interfere with 
     the health, safety, or right to peaceful enjoyment of the 
     premises by the tenants of the public housing project.
       ``(2) Required statement.--A public housing agency may not 
     make a dwelling unit in a public housing project (or portion 
     of a project) designated under subsection (a) available for 
     occupancy to any family, unless the application for occupancy 
     by that family is accompanied by a signed statement that no 
     person who will be occupying the unit illegally uses a 
     controlled substance, or abuses alcohol, in a manner that 
     would interfere with the health, safety, or right to peaceful 
     enjoyment of the premises by the tenants of the public 
     housing project.''.
       (b) Lease Provisions.--Section 6(l) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437d(l)) is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) by redesignating paragraph (6) as paragraph (7); and
       (3) by inserting after paragraph (5) following new 
     paragraph:
       ``(6) provide that any occupancy in violation of section 
     7(e)(1) or the furnishing of any false or misleading 
     information pursuant to section 7(e)(2) shall be cause for 
     termination of tenancy; and''.
       (c) Conforming Amendment.--Section 6(c)(4)(A) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437(b)(4)(A)) is 
     amended by striking ``section 7(a)'' and inserting ``section 
     7''.

     SEC. 110. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.

       (a) In General.--Section 9 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437g) is amended to read as follows:

     ``SEC. 9. PUBLIC HOUSING CAPITAL AND OPERATING FUNDS.

       ``(a) In General.--Except for assistance provided under 
     section 8 of this Act or as otherwise provided in the Public 
     Housing Reform and Empowerment Act of 1995, all programs 
     under which assistance is provided for public housing under 
     this Act on the day before October 1, 1997, shall be merged, 
     as appropriate, into either--
       ``(1) the Capital Fund established under subsection (c); or
       ``(2) the Operating Fund established under subsection (d).
       ``(b) Use of Existing Funds.--With the exception of funds 
     made available pursuant to section 8 or section 20(f) and 
     funds made available for the urban revitalization 
     demonstration program authorized under the Department of 
     Veterans Affairs and Housing and Urban Development, and 
     Independent Agencies Appropriations Acts--
       ``(1) funds made available to the Secretary for public 
     housing purposes that have not been obligated by the 
     Secretary to a public housing agency as of October 1, 1997, 
     shall be made available, for the period originally provided 
     in law, for use in either the Capital Fund or the Operating 
     Fund, as appropriate; and
       ``(2) funds made available to the Secretary for public 
     housing purposes that have been obligated by the Secretary to 
     a public housing agency but that, as of October 1, 1997, have 
     not been obligated by the public housing agency, may be made 
     available by that public housing agency, for the period 
     originally provided in law, for use in either the Capital 
     Fund or the Operating Fund, as appropriate.
     
[[Page S158]]

       ``(c) Capital Fund.--
       ``(1) In general.--The Secretary shall establish a Capital 
     Fund for the purpose of making assistance available to public 
     housing agencies to carry out capital and management 
     activities, including--
       ``(A) the development and modernization of public housing 
     projects, including the redesign, reconstruction, and 
     reconfiguration of public housing sites and buildings and the 
     development of mixed-income projects;
       ``(B) vacancy reduction;
       ``(C) addressing deferred maintenance needs and the 
     replacement of dwelling equipment;
       ``(D) planned code compliance;
       ``(E) management improvements;
       ``(F) demolition and replacement;
       ``(G) tenant relocation;
       ``(H) capital expenditures to facilitate programs to 
     improve the economic empowerment and self-sufficiency of 
     public housing tenants; and
       ``(I) capital expenditures to improve the security and 
     safety of residents.
       ``(2) Establishment of capital fund formula.--The Secretary 
     shall develop a formula for providing assistance under the 
     Capital Fund, which may take into account--
       ``(A) the number of public housing dwelling units owned or 
     operated by the public housing agency and the percentage of 
     those units that are occupied by very low-income families;
       ``(B) if applicable, the reduction in the number of public 
     housing units owned or operated by the public housing agency 
     as a result of any conversion to a system of tenant-based 
     assistance;
       ``(C) the costs to the public housing agency of meeting the 
     rehabilitation and modernization needs, and meeting the 
     reconstruction, development, and demolition needs of public 
     housing dwelling units owned and operated by the public 
     housing agency;
       ``(D) the degree of household poverty served by the public 
     housing agency;
       ``(E) the costs to the public housing agency of providing a 
     safe and secure environment in public housing units owned and 
     operated by the public housing agency; and
       ``(F) the ability of the public housing agency to 
     effectively administer the Capital Fund distribution of the 
     public housing agency.
       ``(d) Operating Fund.--
       ``(1) In general.--The Secretary shall establish an 
     Operating Fund for the purpose of making assistance available 
     to public housing agencies for the operation and management 
     of public housing, including--
       ``(A) procedures and systems to maintain and ensure the 
     efficient management and operation of public housing units;
       ``(B) activities to ensure a program of routine 
     preventative maintenance;
       ``(C) anticrime and antidrug activities, including the 
     costs of providing adequate security for public housing 
     tenants;
       ``(D) activities related to the provision of services, 
     including service coordinators for elderly persons or persons 
     with disabilities;
       ``(E) activities to provide for management and 
     participation in the management of public housing by public 
     housing tenants;
       ``(F) the costs associated with the operation and 
     management of mixed-income projects, to the extent 
     appropriate (including the funding of an operating reserve to 
     ensure affordability for low-income families in lieu of the 
     availability of operating funds for public housing units in a 
     mixed-income project);
       ``(G) the reasonable costs of insurance;
       ``(H) the reasonable energy costs associated with public 
     housing units, with an emphasis on energy conservation; and
       ``(I) the costs of administering a public housing work 
     program under section 12, including the costs of any related 
     insurance needs.
       ``(2) Establishment of operating fund formula.--The 
     Secretary shall establish a formula for providing assistance 
     under the Operating Fund, which may take into account--
       ``(A) standards for the costs of operation and reasonable 
     projections of income, taking into account the character and 
     location of the public housing project and characteristics of 
     the families served, or the costs of providing comparable 
     services as determined with criteria or a formula 
     representing the operations of a prototype well-managed 
     public housing project;
       ``(B) the number of public housing dwelling units owned and 
     operated by the public housing agency, the percentage of 
     those units that are occupied by very low-income families, 
     and, if applicable, the reduction in the number of public 
     housing units as a result of any conversion to a system of 
     tenant-based assistance;
       ``(C) the degree of household poverty served by a public 
     housing agency;
       ``(D) the extent to which the public housing agency 
     provides programs and activities designed to promote the 
     economic self-sufficiency and management skills of public 
     housing tenants;
       ``(E) the number of dwelling units owned and operated by 
     the public housing agency that are chronically vacant and the 
     amount of assistance appropriate for those units;
       ``(F) the costs of the public housing agency associated 
     with anticrime and antidrug activities, including the costs 
     of providing adequate security for public housing tenants; 
     and
       ``(G) the ability of the public housing agency to 
     effectively administer the Operating Fund distribution of the 
     public housing agency.
       ``(e) Limitations on Use of Funds.--
       ``(1) In general.--Each public housing agency may use not 
     more than 20 percent of the Capital Fund distribution of the 
     public housing agency for activities that are eligible for 
     assistance under the Operating Fund under subsection (d), if 
     the public housing agency plan provides for such use.
       ``(2) New construction.--
       ``(A) In general.--A public housing agency may not use any 
     of the Capital Fund or Operating Fund distributions of the 
     public housing agency for the purpose of constructing any 
     public housing unit, if such construction would result in a 
     net increase in the number of public housing units owned or 
     operated by the public housing agency on the date of 
     enactment of the Public Housing Reform and Empowerment Act of 
     1995, including any public housing units demolished as part 
     of any revitalization effort.
       ``(B) Exception.--Notwithstanding subparagraph (A), a 
     public housing agency may use the Capital Fund or Operating 
     Fund distributions of the public housing agency for the 
     construction and operation of housing units that are 
     available and affordable to low-income families in excess of 
     the limitations on new construction set forth in subparagraph 
     (A), except that the formulae established under subsections 
     (c)(2) and (d)(2) shall not provide additional funding for 
     the specific purpose of allowing construction and operation 
     of housing in excess of those limitations.''.
       ``(f) Operating and Capital Assistance to Resident 
     Management Corporations.--The Secretary shall directly 
     provide operating and capital assistance under this section 
     to each resident management corporation managing a public 
     housing project pursuant to a contract under this section, 
     which assistance shall be used for purposes of operating the 
     public housing project and performing such other eligible 
     activities with respect to the project as may be provided 
     under the contract.
       ``(g) Indian Housing Programs.--To the extent provided in 
     advance in appropriations Acts, the Secretary shall carry out 
     housing programs for Indians in accordance with such formulas 
     and programs as the Secretary shall establish by regulation.
       ``(h) Technical Assistance.--To the extent approved in 
     advance in appropriations Acts, the Secretary may make grants 
     or enter into contracts in accordance with this subsection 
     for purposes of providing, either directly or indirectly--
       ``(1) technical assistance to public housing agencies, 
     resident councils, resident organizations, and resident 
     management corporations, including assistance relating to 
     monitoring and inspections;
       ``(2) training for public housing agency employees and 
     tenants;
       ``(3) data collection and analysis; and
       ``(4) training, technical assistance, and education to 
     assist public housing agencies that are--
       ``(A) at risk of being designated as troubled under section 
     6(j) from being so designated; and
       ``(B) designated as troubled under section 6(j) in 
     achieving the removal of that designation.
       ``(i) Emergency Reserve.--
       ``(1) In general.--
       ``(A) Set-aside.--In each fiscal year, the Secretary shall 
     set aside not more than 2 percent of the amount made 
     available for use under the capital fund to carry out this 
     section for that fiscal year for use in accordance with this 
     subsection.
       ``(B) Use of funds.--
       ``(i) Emergencies.--Amounts set aside under this paragraph 
     shall be available to the Secretary for use in connection 
     with emergencies, as determined by the Secretary, and in 
     connection with housing needs resulting from any settlement 
     of litigation.
       ``(ii) Additional funds.--To the extent that there are 
     funds from amounts set aside under this paragraph in excess 
     to the needs described in clause (i), the Secretary may use 
     those funds for the costs of establishing and administering a 
     witness relocation program, which shall be established by the 
     Secretary in conjunction with the Attorney General of the 
     United States.
       ``(2) Allocation.--
       ``(A) In general.--Amounts set aside under this subsection 
     shall initially be allocated based on the emergency and 
     litigation settlement needs of public housing agencies, in 
     such manner, and in such amounts as the Secretary shall 
     determine.
       ``(B) Publication.--The Secretary shall publish the use of 
     any amounts allocated under this subsection in the Federal 
     Register.''.
       (b) Implementation; Effective Date; Transition Period.--
       (1) Implementation.--Not later than 1 year after the date 
     of enactment of this Act, in accordance with the negotiated 
     rulemaking procedures set forth in subchapter III of chapter 
     5 of title 5, United States Code, the Secretary shall 
     establish the formulas described in subsections (c)(3) and 
     (d)(2) of section 9 of the Public Housing Reform and 
     Empowerment Act of 1995, as amended by this section.
       (2) Effective date.--The formulas established under 
     paragraph (1) shall be effective only with respect to amounts 
     made available under section 9 of the United States Housing 
     Act of 1937, as amended by this section, in fiscal year 1998 
     or in any succeeding fiscal year.
     
[[Page S159]]

       (3) Transition period.--Prior to the effective date 
     described in paragraph (2), the Secretary shall provide that 
     each public housing agency shall receive funding under 
     sections 9 and 14 of the United States Housing Act of 1937, 
     as those sections existed on the day before the date of 
     enactment of this Act.
       (c) Drug Elimination Grants.--
       (1) Funding authorization.--
       (A) In general.--To the extent provided in advance in 
     appropriations Acts for fiscal years 1996 and 1997, the 
     Secretary shall make grants for--
       (i) use in eliminating drug-related crime under the Public 
     and Assisted Housing Drug Elimination Act of 1990; and
       (ii) drug elimination clearinghouse services authorized by 
     section 5143 of the Drug-Free Public Housing Act of 1988.
       (B) Set-aside.--Of any amounts made available to carry out 
     subparagraph (A), the Secretary shall set aside amounts for 
     grants, technical assistance, contracts, and other 
     assistance, and for training, program assessment, and 
     execution for or on behalf of public housing agencies and 
     resident organizations (including the cost of necessary 
     travel for participants in such training).
       (2) Program requirements.--The use of amounts made 
     available under paragraph (1) shall be governed by the Public 
     and Assisted Housing Drug Elimination Act of 1990, except as 
     follows:
       (A) Formula allocation.--Notwithstanding the Public and 
     Assisted Housing Drug Elimination Act of 1990, after setting 
     aside amounts for assisted housing under section 5130(b) of 
     such Act, the Secretary may make grants to public housing 
     agencies in accordance with a formula established by the 
     Secretary, which shall--
       (i) take into account the needs of the public housing 
     agency for anticrime funding, and the amount of funding that 
     the public housing agency has received under the Public and 
     Assisted Housing Drug Elimination Act of 1990 during fiscal 
     years 1993, 1994, and 1995; and
       (ii) not exclude an eligible public housing agency that has 
     not received funding during the period described in clause 
     (i).
       (B) Other types of crime.--For purposes of this subsection, 
     the Secretary may define the term ``drug-related crime'' to 
     include criminal actions other than those described in 
     section 5126(2) of the Public and Assisted Housing Drug 
     Elimination Act of 1990.
       (3) Sunset.--No grant may be made under this subsection on 
     or after October 1, 1998.

     SEC. 111. LABOR STANDARDS.

       Section 12 of the United States Housing Act of 1937 (42 
     U.S.C. 1437j) is amended by adding at the end the following 
     new subsection:
       ``(c) Work Requirement.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, each adult member of each family assisted under this 
     title shall contribute not less than 8 hours of volunteer 
     work per month (not to include any political activity) within 
     the community in which that adult resides.
       ``(2) Inclusion in plan.--Each public housing agency shall 
     include in the public housing agency plan a detailed 
     description of the manner in which the public housing agency 
     intends to implement and administer paragraph (1).
       ``(3) Exemptions.--The Secretary may provide an exemption 
     from paragraph (1) for any adult who is--
       ``(A) not less than 62 years of age;
       ``(B) a person with disabilities who is unable, as 
     determined in accordance with guidelines established by the 
     Secretary, to comply with this section;
       ``(C) working not less than 20 hours per week, a student, 
     receiving vocational training, or otherwise meeting work, 
     training, or educational requirements of a public assistance 
     program; or
       ``(D) a single parent or the spouse of an otherwise exempt 
     individual who is the primary caretaker of one or more 
     children who are 6 years of age or younger.''.

     SEC. 112. REPEAL OF ENERGY CONSERVATION; CONSORTIA AND JOINT 
                   VENTURES.

       Section 13 of the United States Housing Act of 1937 (42 
     U.S.C. 1437k) is amended to read as follows:

     ``SEC. 13. CONSORTIA, JOINT VENTURES, AFFILIATES, AND 
                   SUBSIDIARIES OF PUBLIC HOUSING AGENCIES.

       ``(a) Consortia.--
       ``(1) In general.--Any 2 or more public housing agencies 
     may participate in a consortium for the purpose of 
     administering any or all of the housing programs of those 
     public housing agencies in accordance with this section.
       ``(2) Effect.--With respect to any consortium described in 
     paragraph (1)--
       ``(A) any assistance made available under this title to 
     each of the public housing agencies participating in the 
     consortium shall be paid to the consortium; and
       ``(B) all planning and reporting requirements imposed upon 
     each public housing agency participating in the consortium 
     with respect to the programs operated by the consortium shall 
     be consolidated.
       ``(3) Restrictions.--
       ``(A) Agreement.--Each consortium described in paragraph 
     (1) shall be formed and operated in accordance with a 
     consortium agreement, and shall be subject to the 
     requirements of a joint public housing agency plan, which 
     shall be submitted by the consortium in accordance with 
     section 5A.
       ``(B) Minimum requirements.--The Secretary shall specify 
     minimum requirements relating to the formation and operation 
     of consortia and the minimum contents of consortium 
     agreements under this paragraph.
       ``(b) Joint Ventures.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, a public housing agency, in accordance with the public 
     housing agency plan, may--
       ``(A) form and operate wholly owned or controlled 
     subsidiaries (which may be nonprofit corporations) and other 
     affiliates, any of which may be directed, managed, or 
     controlled by the same persons who constitute the board of 
     commissioners or other similar governing body of the public 
     housing agency, or who serve as employees or staff of the 
     public housing agency; or
       ``(B) enter into joint ventures, partnerships, or other 
     business arrangements with, or contract with, any person, 
     organization, entity, or governmental unit, with respect to 
     the administration of the programs of the public housing 
     agency, including any program that is subject to this title.
       ``(2) Use of income.--Any income generated under paragraph 
     (1) shall be used for low-income housing or to benefit the 
     tenants of the public housing agency.
       ``(3) Audits.--The Comptroller General of the United 
     States, the Secretary, and the Inspector General of the 
     Department of Housing and Urban Development may conduct an 
     audit of any activity undertaken under paragraph (1) at any 
     time.''.

     SEC. 113. REPEAL OF MODERNIZATION FUND.

       (a) In General.--Section 14 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437l) is repealed.
       (b) Conforming Amendments.--The United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (1) in section 5(c)(5), by striking ``for use under section 
     14 or'';
       (2) in section 5(c)(7)--
       (A) in subparagraph (A)--
       (i) by striking clause (iii); and
       (ii) by redesignating clauses (iv) through (x) as clauses 
     (iii) through (ix), respectively; and
       (B) in subparagraph (B)--
       (i) by striking clause (iii); and
       (ii) by redesignating clauses (iv) through (x) as clauses 
     (iii) through (ix), respectively;
       (3) in section 6(j)(1)--
       (A) by striking subparagraph (B); and
       (B) by redesignating subparagraphs (C) through (H) as 
     subparagraphs (B) through (G), respectively;
       (4) in section 6(j)(2)(A)--
       (A) in clause (i), by striking ``The Secretary shall also 
     designate,'' and all that follows through the period at the 
     end; and
       (B) in clause (iii), by striking ``(including designation 
     as a troubled agency for purposes of the program under 
     section 14)'';
       (5) in section 6(j)(2)(B)--
       (A) in clause (i), by striking ``and determining that an 
     assessment under this subparagraph will not duplicate any 
     review conducted under section 14(p)''; and
       (B) in clause (ii)--
       (i) by striking ``(I) the agency's comprehensive plan 
     prepared pursuant to section 14 adequately and appropriately 
     addresses the rehabilitation needs of the agency's inventory, 
     (II)'' and inserting ``(I)''; and
       (ii) by striking ``(III)'' and inserting ``(II)'';
       (6) in section 6(j)(3)--
       (A) in clause (ii), by adding ``and'' at the end;
       (B) by striking clause (iii); and
       (C) by redesignating clause (iv) as clause (iii);
       (7) in section 6(j)(4)--
       (A) in subparagraph (D), by adding ``and'' at the end;
       (B) in subparagraph (E), by striking ``; and'' at the end 
     and inserting a period; and
       (C) by striking subparagraph (F);
       (8) in section 20--
       (A) by striking subsection (c) and inserting the following:
       ``(c) [Reserved.]''; and
       (B) by striking subsection (f) and inserting the following:
       ``(f) [Reserved.]'';
       (9) in section 21(a)(2)--
       (A) by striking subparagraph (A); and
       (B) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively;
       (10) in section 21(a)(3)(A)(v), by striking ``the building 
     or buildings meet the minimum safety and livability standards 
     applicable under section 14, and'';
       (11) in section 25(b)(1), by striking ``From amounts 
     reserved'' and all that follows through ``the Secretary may'' 
     and inserting the following: To the extent approved in 
     appropriations Acts, the Secretary may'';
       (12) in section 25(e)(2)--
       (A) by striking ``The Secretary'' and inserting ``To the 
     extent approved in appropriations Acts, the Secretary''; and
       (B) by striking ``available annually from amounts under 
     section 14'';
       (13) in section 25(e), by striking paragraph (3);
       (14) in section 25(f)(2)(G)(i), by striking ``including--'' 
     and all that follows through ``an explanation'' and inserting 
     ``including an explanation'';
       (15) in section 25(i)(1), by striking the second sentence; 
     and
       (16) in section 202(b)(2)--
       (A) by striking ``(b) Financial Assistance.--'' and all 
     that follows through ``The Secretary may,'' and inserting the 
     following:
       ``(b) Financial Assistance.--The Secretary may''; and
       (B) by striking paragraph (2).
     
[[Page S160]]


     SEC. 114. ELIGIBILITY FOR PUBLIC AND ASSISTED HOUSING.

       Section 16 of the United States Housing Act of 1937 (42 
     U.S.C. 1437n) is amended to read as follows:

     ``SEC. 16. ELIGIBILITY FOR PUBLIC AND ASSISTED HOUSING.

       ``(a) Income Eligibility for Public Housing.--
       ``(1) In general.--Of the dwelling units of a public 
     housing agency, including public housing units in a 
     designated mixed-income project, made available for occupancy 
     in any fiscal year of the public housing agency--
       ``(A) not less than 40 percent shall be occupied by 
     families whose incomes do not exceed 30 percent of the area 
     median income for those families;
       ``(B) not less than 75 percent shall be occupied by 
     families whose incomes do not exceed 60 percent of the area 
     median income for those families; and
       ``(C) any remaining dwelling units may be made available 
     for families whose incomes do not exceed 80 percent of the 
     area median income for those families.
       ``(2) Establishment of different standards.--
     Notwithstanding paragraph (1), if approved by the Secretary, 
     a public housing agency, in accordance with the public 
     housing agency plan, may for good cause establish and 
     implement an occupancy standard other than the standard 
     described in paragraph (1).
       ``(3) Mixed-income housing standard.--Each public housing 
     agency plan submitted by a public housing agency shall 
     include a plan for achieving a diverse income mix among 
     tenants in each public housing project of the public housing 
     agency and among the scattered site public housing of the 
     public housing agency.
       ``(b) Income Eligibility for Certain Assisted Housing.--
       ``(1) In general.--Of the dwelling units receiving tenant-
     based assistance under section 8 made available for occupancy 
     in any fiscal year of the public housing agency--
       ``(A) not less than 50 percent shall be occupied by 
     families whose incomes do not exceed 30 percent of the area 
     median income for those families; and
       ``(B) any remaining dwelling units may be made available 
     for families whose incomes do not exceed 80 percent of the 
     area median income for those families.
       ``(2) Establishment of different standards.--
     Notwithstanding paragraph (1), if approved by the Secretary, 
     a public housing agency, in accordance with the public 
     housing agency plan, may for good cause establish and 
     implement an occupancy standard other than the standard 
     described in paragraph (1).
       ``(c) Ineligibility of Illegal Drug Users and Alcohol 
     Abusers.--Notwithstanding any other provision of law, a 
     public housing agency shall establish standards for occupancy 
     in public housing dwelling units--
       ``(1) that prohibit occupancy in any such unit by any 
     person--
       ``(A) who the public housing agency determines is illegally 
     using a controlled substance; or
       ``(B) if the public housing agency determines that it has 
     reasonable cause to believe that such person's illegal use 
     (or pattern of illegal use) of a controlled substance, or 
     abuse (or pattern of abuse) of alcohol, could interfere with 
     the health, safety, or right to peaceful enjoyment of the 
     premises by the tenants of the public housing project; and
       ``(2) that allow the public housing agency to terminate the 
     tenancy in any public housing unit of any person--
       ``(A) if the public housing agency determines that such 
     person is illegally using a controlled substance; or
       ``(B) whose illegal use of a controlled substance, or whose 
     abuse of alcohol, is determined by the public housing agency 
     to interfere with the health, safety, or right to peaceful 
     enjoyment of the premises by the tenants of the public 
     housing project.
       ``(d) Inapplicability to Indian Housing.--This section does 
     not apply to any dwelling unit assisted by an Indian housing 
     authority.''.

     SEC. 115. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.

       (a) In General.--Section 18 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437p) is amended to read as follows:

     ``SEC. 18. DEMOLITION AND DISPOSITION OF PUBLIC HOUSING.

       ``(a) Applications for Demolition and Disposition.--Except 
     as provided in subsection (b), not later than 60 days after 
     receiving an application by a public housing agency for 
     authorization, with or without financial assistance under 
     this title, to demolish or dispose of a public housing 
     project or a portion of a public housing project (including 
     any transfer to a resident-supported nonprofit entity), the 
     Secretary shall approve the application, if the public 
     housing agency certifies--
       ``(1) in the case of--
       ``(A) an application proposing demolition of a public 
     housing project or a portion of a public housing project, 
     that--
       ``(i) the project or portion of the public housing project 
     is obsolete as to physical condition, location, or other 
     factors, making it unsuitable for housing purposes; and
       ``(ii) no reasonable program of modifications is cost-
     effective to return the public housing project or portion of 
     the project to useful life; and
       ``(B) an application proposing the demolition of only a 
     portion of a public housing project, that the demolition will 
     help to assure the viability of the remaining portion of the 
     project;
       ``(2) in the case of an application proposing disposition 
     of a public housing project or other real property subject to 
     this title by sale or other transfer, that--
       ``(A) the retention of the property is not in the best 
     interests of the tenants or the public housing agency 
     because--
       ``(i) conditions in the area surrounding the public housing 
     project adversely affect the health or safety of the tenants 
     or the feasible operation of the project by the public 
     housing agency; or
       ``(ii) disposition allows the acquisition, development, or 
     rehabilitation of other properties that will be more 
     efficiently or effectively operated as low-income housing;
       ``(B) the public housing agency has otherwise determined 
     the disposition to be appropriate for reasons that are--
       ``(i) in the best interests of the tenants and the public 
     housing agency;
       ``(ii) consistent with the goals of the public housing 
     agency and the public housing agency plan; and
       ``(iii) otherwise consistent with this title; or
       ``(C) for property other than dwelling units, the property 
     is excess to the needs of a public housing project or the 
     disposition is incidental to, or does not interfere with, 
     continued operation of a public housing project;
       ``(3) that the public housing agency has specifically 
     authorized the demolition or disposition in the public 
     housing agency plan, and has certified that the actions 
     contemplated in the public housing agency plan comply with 
     this section;
       ``(4) that the public housing agency--
       ``(A) will provide for the payment of the relocation 
     expenses of each tenant to be displaced;
       ``(B) will ensure that the amount of rent paid by the 
     tenant following relocation will not exceed the amount 
     permitted under this title; and
       ``(C) will not commence demolition or complete disposition 
     until all tenants residing in the unit are relocated;
       ``(5) that the net proceeds of any disposition will be 
     used--
       ``(A) unless waived by the Secretary, for the retirement of 
     outstanding obligations issued to finance the original public 
     housing project or modernization of the project; and
       ``(B) to the extent that any proceeds remain after the 
     application of proceeds in accordance with subparagraph (A), 
     for the provision of low-income housing or to benefit the 
     tenants of the public housing agency; and
       ``(6) that the public housing agency has complied with 
     subsection (c).
       ``(b) Disapproval of Applications.--The Secretary shall 
     disapprove an application submitted under subsection (a) if 
     the Secretary determines that any certification made by the 
     public housing agency under that subsection is clearly 
     inconsistent with information and data available to the 
     Secretary.
       ``(c) Tenant Opportunity To Purchase in Case of Proposed 
     Disposition.--
       ``(1) In general.--In the case of a proposed disposition of 
     a public housing project or portion of a project, the public 
     housing agency shall, in appropriate circumstances, as 
     determined by the Secretary, initially offer the property to 
     any eligible resident organization, eligible resident 
     management corporation, or nonprofit organization supported 
     by the residents, if that entity has expressed an interest, 
     in writing, to the public housing agency in a timely manner, 
     in purchasing the property for continued use as low-income 
     housing.
       ``(2) Timing.--
       ``(A) Thirty-day notice.--A resident organization, resident 
     management corporation, or other resident-supported nonprofit 
     entity referred to in paragraph (1) may express interest in 
     purchasing property that is the subject of a disposition, as 
     described in paragraph (1), during the 30-day period 
     beginning on the date of notification of a proposed sale of 
     the property.
       ``(B) Sixty-day notice.--If an entity expresses written 
     interest in purchasing a property, as provided in 
     subparagraph (A), no disposition of the property shall occur 
     during the 60-day period beginning on the date of receipt of 
     that written notice, during which time that entity shall be 
     given the opportunity to obtain a firm commitment for 
     financing the purchase of the property.
       ``(d) Replacement Units.--Notwithstanding any other 
     provision of law, replacement housing units for public 
     housing units demolished in accordance with this section may 
     be built on the original public housing location or in the 
     same neighborhood as the original public housing location if 
     the number of those replacement units is fewer than the 
     number of units demolished.''.
       (b) Homeownership Replacement Plan.--
       (1) In general.--Section 304(g) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437aaa-3(g)), as amended by 
     section 1002(b) of the Emergency Supplemental Appropriations 
     for Additional Disaster Assistance, for Anti-terrorism 
     Initiatives, for Assistance in the Recovery from the Tragedy 
     that Occurred At Oklahoma City, and Rescissions Act, 1995, is 
     amended to read as follows:
       ``(g) [Reserved.]''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be effective with respect to any plan for the 
     demolition, disposition, or conversion to homeownership of 

[[Page S161]]
     public housing that is approved by the Secretary after September 30, 
     1995.
       (c) Uniform Relocation and Real Property Acquisition Act.--
     The Uniform Relocation and Real Property Acquisition Act 
     shall not apply to activities under section 18 of the United 
     States Housing Act of 1937, as amended by this section.

     SEC. 116. REPEAL OF FAMILY INVESTMENT CENTERS; VOUCHER SYSTEM 
                   FOR PUBLIC HOUSING.

       (a) In General.--Section 22 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437t) is amended to read as follows:

     ``SEC. 22. VOUCHER SYSTEM FOR PUBLIC HOUSING.

       ``(a) In General.--
       ``(1) Authorization.--A public housing agency may convert 
     any public housing project (or portion thereof) owned and 
     operated by the public housing agency to a system of tenant-
     based assistance in accordance with this section.
       ``(2) Requirements.--In converting to a tenant-based system 
     of assistance under this section, the public housing agency 
     shall develop a conversion assessment and plan under 
     subsection (b) in consultation with the appropriate public 
     officials, with significant participation by the residents of 
     the project (or portion thereof), which assessment and plan 
     shall--
       ``(A) be consistent with and part of the public housing 
     agency plan; and
       ``(B) describe the conversion and future use or disposition 
     of the public housing project, including an impact analysis 
     on the affected community.
       ``(b) Conversion Assessment and Plan.--
       ``(1) In general.--Not later than 2 years after the date of 
     enactment of the Public Housing Reform and Empowerment Act of 
     1995, each public housing agency shall assess the status of 
     each public housing project owned and operated by that public 
     housing agency, and shall submit to the Secretary an 
     assessment that includes--
       ``(A) a cost analysis that demonstrates whether or not the 
     cost (both on a net present value basis and in terms of new 
     budget authority requirements) of providing tenant-based 
     assistance under section 8 for the same families in 
     substantially similar dwellings over the same period of time 
     is less expensive than continuing public housing assistance 
     in the public housing project proposed for conversion for the 
     remaining useful life of the project;
       ``(B) an analysis of the market value of the public housing 
     project proposed for conversion both before and after 
     rehabilitation, and before and after conversion;
       ``(C) an analysis of the rental market conditions with 
     respect to the likely success of tenant-based assistance 
     under section 8 in that market for the specific residents of 
     the public housing project proposed for conversion, including 
     an assessment of the availability of decent and safe 
     dwellings renting at or below the payment standard 
     established for tenant-based assistance under section 8 by 
     the public housing agency;
       ``(D) the impact of the conversion to a system of tenant-
     based assistance under this section on the neighborhood in 
     which the public housing project is located; and
       ``(E) a plan that identifies actions, if any, that the 
     public housing agency would take with regard to converting 
     any public housing project or projects (or portions thereof) 
     of the public housing agency to a system of tenant-based 
     assistance.
       ``(2) Streamlined assessment.--At the discretion of the 
     Secretary or at the request of a public housing agency, the 
     Secretary may waive any or all of the requirements of 
     paragraph (1) or otherwise require a streamlined assessment 
     with respect to any public housing project or class of public 
     housing projects.
       ``(3) Implementation of conversion plan.--
       ``(A) In general.--A public housing agency may implement a 
     conversion plan only if the conversion assessment under this 
     section demonstrates that the conversion--
       ``(i) will not be more expensive than continuing to operate 
     the public housing project (or portion thereof) as public 
     housing; and
       ``(ii) will principally benefit the residents of the public 
     housing project (or portion thereof) to be converted, the 
     public housing agency, and the community.
       ``(B) Disapproval.--The Secretary shall disapprove a 
     conversion plan only if the plan is plainly inconsistent with 
     the conversion assessment under subsection (b) or if there is 
     reliable information and data available to the Secretary that 
     contradicts that conversion assessment.
       ``(c) Other Requirements.--To the extent approved by the 
     Secretary, the funds used by the public housing agency to 
     provide tenant-based assistance under section 8 shall be 
     added to the housing assistance payment contract administered 
     by--
       ``(1) the public housing agency; or
       ``(2) any entity administering the contract on behalf of 
     the public housing agency.
       ``(d) Inapplicability to Indian Housing.--This section does 
     not apply to any Indian housing authority.''.
       (b) Savings Provision.--The amendment made by subsection 
     (a) does not affect any contract or other agreement entered 
     into under section 22 of the United States Housing Act of 
     1937, as that section existed on the day before the date of 
     enactment of this Act.

     SEC. 117. REPEAL OF FAMILY SELF-SUFFICIENCY; HOMEOWNERSHIP 
                   OPPORTUNITIES.

       (a) In General.--Section 23 of the United States Housing 
     Act of 1937 (42 U.S.C. 1437u) is amended to read as follows:

     ``SEC. 23. PUBLIC HOUSING HOMEOWNERSHIP OPPORTUNITIES.

       ``(a) In General.--Notwithstanding any other provision of 
     law, a public housing agency may, in accordance with this 
     section--
       ``(1) sell any public housing unit in any public housing 
     project of the public housing agency to--
       ``(A) the low-income tenants of the public housing agency; 
     or
       ``(B) any organization serving as a conduit for sales to 
     those persons; and
       ``(2) provide assistance to public housing residents to 
     facilitate the ability of those residents to purchase a 
     principal residence.
       ``(b) Right of First Refusal.--In making any sale under 
     this section, the public housing agency shall initially offer 
     the public housing unit at issue to the tenant or tenants 
     occupying that unit, if any, or to an organization serving as 
     a conduit for sales to any such tenant.
       ``(c) Sale Prices, Terms, and Conditions.--Any sale under 
     this section may involve such prices, terms, and conditions 
     as the public housing agency may determine in accordance with 
     procedures set forth in the public housing agency plan.
       ``(d) Purchase Requirements.--
       ``(1) In general.--Each tenant that purchases a dwelling 
     unit under subsection (a) shall, as of the date on which the 
     purchase is made--
       ``(A) intend to occupy the property as a principal 
     residence; and
       ``(B) submit a written certification to the public housing 
     agency that such tenant will occupy the property as a 
     principal residence for a period of not less than 12 months 
     beginning on that date.
       ``(2) Recapture.--Except for good cause, as determined by a 
     public housing agency in the public housing agency plan, if, 
     during the 1-year period beginning on the date on which any 
     tenant acquires a public housing unit under this section, 
     that public housing unit is resold, the public housing agency 
     shall recapture 75 percent of the amount of any proceeds from 
     that resale that exceed the sum of--
       ``(A) the original sale price for the acquisition of the 
     property by the qualifying tenant;
       ``(B) the costs of any improvements made to the property 
     after the date on which the acquisition occurs; and
       ``(C) any closing costs incurred in connection with the 
     acquisition.
       ``(e) Protection of Nonpurchasing Tenants.--If a public 
     housing tenant does not exercise the right of first refusal 
     under subsection (b) with respect to the public housing unit 
     in which the tenant resides, the public housing agency 
     shall--
       ``(1) ensure that either another public housing unit or 
     rental assistance under section 8 is made available to the 
     tenant; and
       ``(2) provide for the payment of the reasonable relocation 
     expenses of the tenant.
       ``(f) Net Proceeds.--
       ``(1) In general.--The net proceeds of any sales under this 
     section remaining after payment of all costs of the sale and 
     any unassumed, unpaid indebtedness owed in connection with 
     the dwelling units sold under this section unless waived by 
     the Secretary, shall be used for purposes relating to low-
     income housing and in accordance with the public housing 
     agency plan.
       ``(2) Indian housing.--The net proceeds described in 
     paragraph (1) may be used by Indian housing authorities for 
     housing for families whose incomes exceed the income levels 
     established under this title for low-income families.
       ``(g) Homeownership Assistance.--From amounts distributed 
     to a public housing agency under section 9, or from other 
     income earned by the public housing agency, the public 
     housing agency may provide assistance to public housing 
     residents to facilitate the ability of those residents to 
     purchase a principal residence, including a residence other 
     than a residence located in a public housing project.''.
       (b) Conforming Amendments.--The United States Housing Act 
     of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (1) in section 8(y)(7)(A)--
       (A) by striking ``, (ii)'' and inserting ``, and (ii)''; 
     and
       (B) by striking ``, and (iii)'' and all that follows before 
     the period at the end; and
       (2) in section 25(l)(2)--
       (A) in the first sentence, by striking ``, consistent with 
     the objectives of the program under section 23,''; and
       (B) by striking the second sentence.
       (c) Savings Provision.--The amendments made by this section 
     do not affect any contract or other agreement entered into 
     under section 23 of the United States Housing Act of 1937, as 
     that section existed on the day before the date of enactment 
     of this Act.

     SEC. 118. REVITALIZING SEVERELY DISTRESSED PUBLIC HOUSING.

       Section 24 of the United States Housing Act of 1937 (42 
     U.S.C. 1437v) is amended to read as follows:

     ``SEC. 24. REVITALIZING SEVERELY DISTRESSED PUBLIC HOUSING.

       ``(a) In General.--To the extent provided in advance in 
     appropriations Acts, the Secretary may make grants to public 
     housing agencies for the purposes of--
       ``(1) enabling the demolition of obsolete public housing 
     projects or portions thereof;
       ``(2) revitalizing sites (including remaining public 
     housing units) on which such public housing projects are 
     located;
     
[[Page S162]]

       ``(3) the provision of replacement housing, which will 
     avoid or lessen concentrations of very low-income families; 
     and
       ``(4) the provision of tenant-based assistance under 
     section 8 for use as replacement housing.
       ``(b) Competition.--The Secretary shall make grants under 
     this section on the basis of a competition, which shall be 
     based on such factors as--
       ``(1) the need for additional resources for addressing a 
     severely distressed public housing project;
       ``(2) the need for affordable housing in the community;
       ``(3) the supply of other housing available and affordable 
     to a family receiving tenant-based assistance under section 
     8; and
       ``(4) the local impact of the proposed revitalization 
     program.
       ``(c) Terms and Conditions.--The Secretary may impose such 
     terms and conditions on recipients of grants under this 
     section as the Secretary determines to be appropriate to 
     carry out the purposes of this section, except that such 
     terms and conditions shall be similar to the terms and 
     conditions of either--
       ``(1) the urban revitalization demonstration program 
     authorized under the Departments of Veterans Affairs and 
     Housing and Urban Development and Independent Agencies 
     Appropriations Acts; or
       ``(2) section 24 of the United States Housing Act of 1937, 
     as such section existed before the date of enactment of the 
     Public Housing Reform and Empower Act of 1995.
       ``(d) Alternative Management.--The Secretary may require 
     any recipient of a grant under this section to make 
     arrangements with an entity other than the public housing 
     agency to carry out the purposes for which the grant was 
     awarded, if the Secretary determines that such action is 
     necessary for the timely and effective achievement of the 
     purposes for which the grant was awarded.
       ``(e) Inapplicability to Indian Housing.--This section does 
     not apply to any Indian housing authority.
       ``(f) Sunset.--No grant may be made under this section on 
     or after October 1, 1998.''.

     SEC. 119. MIXED-INCOME AND MIXED-OWNERSHIP PROJECTS.

       (a) In General.--The United States Housing Act of 1937 (42 
     U.S.C. 1437 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 28. MIXED-INCOME AND MIXED-OWNERSHIP PROJECTS.

       ``(a) In General.--A public housing agency may own, 
     operate, assist, or otherwise participate in one or more 
     mixed-income projects in accordance with this section.
       ``(b) Requirements.--
       ``(1) Mixed-income project.--For purposes of this section, 
     the term `mixed-income project' means a project that meets 
     the requirements of paragraph (2) and that is occupied both 
     by one or more very low-income families and by one or more 
     families that are not very low-income families.
       ``(2) Structure of projects.--Each mixed-income project 
     shall be developed--
       ``(A) in a manner that ensures that units are made 
     available in the project, by master contract, individual 
     lease, or equity interest for occupancy by eligible families 
     identified by the public housing agency for a period of not 
     less than 20 years;
       ``(B) in a manner that ensures that the number of public 
     housing units bears approximately the same proportion to the 
     total number of units in the mixed-income project as the 
     value of the total financial commitment provided by the 
     public housing agency bears to the value of the total 
     financial commitment in the project, or shall not be less 
     than the number of units that could have been developed under 
     the conventional public housing program with the assistance; 
     and
       ``(C) in accordance with such other requirements as the 
     Secretary may prescribe by regulation.
       ``(3) Types of projects.--The term `mixed-income project' 
     includes a project that is developed--
       ``(A) by a public housing agency or by an entity affiliated 
     with a public housing agency;
       ``(B) by a partnership, a limited liability company, or 
     other entity in which the public housing agency (or an entity 
     affiliated with a public housing agency) is a general 
     partner, managing member, or otherwise participates in the 
     activities of that entity;
       ``(C) by any entity that grants to the public housing 
     agency the option to purchase the public housing project 
     during the 20-year period beginning on the date of initial 
     occupancy of the public housing project in accordance with 
     section 42(l)(7) of the Internal Revenue Code of 1986; or
       ``(D) in accordance with such other terms and conditions as 
     the Secretary may prescribe by regulation.
       ``(c) Taxation.--
       ``(1) In general.--A public housing agency may elect to 
     have all public housing units in a mixed-income project 
     subject to local real estate taxes, except that such units 
     shall be eligible at the discretion of the public housing 
     agency for the taxing requirements under section 6(d).
       ``(2) Low-income housing tax credit.--With respect to any 
     unit in a mixed-income project that is assisted pursuant to 
     the low-income housing tax credit under section 42 of the 
     Internal Revenue Code of 1986, the rents charged to the 
     tenants may be set at levels not to exceed the amounts 
     allowable under that section.
       ``(d) Restriction.--No assistance provided under section 9 
     shall be used by a public housing agency in direct support of 
     any unit rented to a family that is not a low-income family, 
     except that this subsection does not apply to the Mutual Help 
     Homeownership Program authorized under section 202 of this 
     Act.
       ``(e) Effect of Certain Contract Terms.--If an entity that 
     owns or operates a mixed-income project under this section 
     enters into a contract with a public housing agency, the 
     terms of which obligate the entity to operate and maintain a 
     specified number of units in the project as public housing 
     units in accordance with the requirements of this Act for the 
     period required by law, such contractual terms may provide 
     that, if, as a result of a reduction in appropriations under 
     section 9, or any other change in applicable law, the public 
     housing agency is unable to fulfill its contractual 
     obligations with respect to those public housing units, that 
     entity may deviate, under procedures and requirements 
     developed through regulations by the Secretary, from 
     otherwise applicable restrictions under this Act regarding 
     rents, income eligibility, and other areas of public housing 
     management with respect to a portion or all of those public 
     housing units, to the extent necessary to preserve the 
     viability of those units while maintaining the low-income 
     character thereof to the maximum extent practicable.''.
       (b) Regulations.--The Secretary shall issue such 
     regulations as may be necessary to promote the development of 
     mixed-income projects, as that term is defined in section 28 
     of the United States Housing Act of 1937, as added by this 
     Act.

     SEC. 120. CONVERSION OF DISTRESSED PUBLIC HOUSING TO TENANT-
                   BASED ASSISTANCE.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 29. CONVERSION OF DISTRESSED PUBLIC HOUSING TO TENANT-
                   BASED ASSISTANCE.

       ``(a) Identification of Units.--To the extent approved in 
     advance in appropriations Acts, each public housing agency 
     shall identify all public housing projects of the public 
     housing agency--
       ``(1) that are on the same or contiguous sites;
       ``(2) that the public housing agency determines to be 
     distressed, which determination shall be made in accordance 
     with guidelines established by the Secretary, which 
     guidelines shall be based on the criteria established in the 
     Final Report of the National Commission on Severely 
     Distressed Public Housing (August 1992);
       ``(3) identified as distressed housing under paragraph (2) 
     for which the public housing agency cannot assure the long-
     term viability as public housing through reasonable 
     modernization expenses, density reduction, achievement of a 
     broader range of family income, or other measures; and
       ``(4) for which the estimated cost, during the remaining 
     useful life of the project, of continued operation and 
     modernization as public housing exceeds the estimated cost, 
     during the remaining useful life of the project, of providing 
     tenant-based assistance under section 8 for all families in 
     occupancy, based on appropriate indicators of cost (such as 
     the percentage of total development costs required for 
     modernization).
       ``(b) Consultation.--Each public housing agency shall 
     consult with the appropriate public housing tenants and the 
     appropriate unit of general local government in identifying 
     any public housing projects under subsection (a).
       ``(c) Removal of Units From the Inventories of Public 
     Housing Agencies.--
       ``(1) In general.--
       ``(A) Development of plan.--Each public housing agency 
     shall develop and, to the extent provided in advance in 
     appropriations Acts, carry out a 5-year plan in conjunction 
     with the Secretary for the removal of public housing units 
     identified under subsection (a) from the inventory of the 
     public housing agency and the annual contributions contract.
       ``(B) Approval of plan.--The plan required under 
     subparagraph (A) shall--
       ``(i) be included as part of the public housing agency 
     plan;
       ``(ii) be certified by the relevant local official to be in 
     accordance with the comprehensive housing affordability 
     strategy under title I of the Housing and Community 
     Development Act of 1992; and
       ``(iii) include a description of any disposition and 
     demolition plan for the public housing units.
       ``(2) Extensions.--The Secretary may extend the 5-year 
     deadline described in paragraph (1) by not more than an 
     additional 5 years if the Secretary makes a determination 
     that the deadline is impracticable.
       ``(d) Conversion to Tenant-Based Assistance.--
       ``(1) In general.--With respect to any public housing 
     project that has not received a grant for assistance under 
     the urban revitalization demonstration program authorized 
     under the Departments of Veterans Affairs and Housing and 
     Urban Development and Independent Agencies Appropriations 
     Acts or under section 24 of the United States Housing Act of 
     1937, the Secretary shall make authority available to a 
     public housing agency 

[[Page S163]]
     to provide assistance under this Act to families residing in any public 
     housing project that is removed from the inventory of the 
     public housing agency and the annual contributions contract 
     pursuant to this section.
       ``(2) Plan requirements.--Each plan under subsection (c) 
     shall require the agency to--
       ``(A) notify families residing in the public housing 
     project, consistent with any guidelines issued by the 
     Secretary governing such notifications, that--
       ``(i) the public housing project will be removed from the 
     inventory of the public housing agency; and
       ``(ii) the families displaced by such action will receive 
     tenant-based or project-based assistance or occupancy in a 
     unit operated or assisted by the public housing agency;
       ``(B) provide any necessary counseling for families 
     displaced by such action; and
       ``(C) provide any reasonable relocation expenses for 
     families displaced by such action.
       ``(e) Removal by Secretary.--The Secretary shall take 
     appropriate actions to ensure removal of any public housing 
     project identified under subsection (a) from the inventory of 
     a public housing agency, if the public housing agency fails 
     to adequately develop a plan under subsection (c) with 
     respect to that project, or fails to adequately implement 
     such plan in accordance with the terms of the plan.
       ``(f) Administration.--
       ``(1) In general.--The Secretary may require a public 
     housing agency to provide to the Secretary or to public 
     housing tenants such information as the Secretary considers 
     to be necessary for the administration of this section.
       ``(2) Applicability of section 18.--Section 18 does not 
     apply to the demolition of public housing projects removed 
     from the inventory of the public housing agency under this 
     section.
       ``(g) Inapplicability to Indian Housing.--This section does 
     not apply to any Indian housing authority.''.

     SEC. 121. PUBLIC HOUSING MORTGAGES AND SECURITY INTERESTS.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 30. PUBLIC HOUSING MORTGAGES AND SECURITY INTERESTS.

       ``(a) General Authorization.--The Secretary may, upon such 
     terms and conditions as the Secretary may prescribe, 
     authorize a public housing agency to mortgage or otherwise 
     grant a security interest in any public housing project or 
     other property of the public housing agency.
       ``(b) Terms and Conditions.--
       ``(1) Criteria for approval.--In making any authorization 
     under subsection (a), the Secretary may consider--
       ``(A) the ability of the public housing agency to use the 
     proceeds of the mortgage or security interest for low-income 
     housing uses;
       ``(B) the ability of the public housing agency to make 
     payments on the mortgage or security interest; and
       ``(C) such other criteria as the Secretary may specify.
       ``(2) Terms and conditions of mortgages and security 
     interests obtained.--Each mortgage or security interest 
     granted under this section shall be--
       ``(A) for a term that--
       ``(i) is consistent with the terms of private loans in the 
     market area in which the public housing project or property 
     at issue is located; and
       ``(ii) does not exceed 30 years; and
       ``(B) subject to conditions that are consistent with the 
     conditions to which private loans in the market area in which 
     the subject project or other property is located are subject.
       ``(3) No full faith and credit.--No action taken under this 
     section shall result in any liability to the Federal 
     Government.''.

     SEC. 122. LINKING SERVICES TO PUBLIC HOUSING RESIDENTS.

       Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.) is amended by adding at the end the following 
     new section:

     ``SEC. 31. SERVICES FOR PUBLIC HOUSING RESIDENTS.

       ``(a) In General.--To the extent provided in advance in 
     appropriations Acts, the Secretary may make grants to public 
     housing agencies (including Indian housing authorities) on 
     behalf of public housing residents, or directly to resident 
     management corporations, resident councils, or resident 
     organizations (including nonprofit entities supported by 
     residents), for the purposes of providing a program of 
     supportive services and resident empowerment activities to 
     assist public housing residents in becoming economically 
     self-sufficient.
       ``(b) Eligible Activities.--Grantees under this section may 
     use such amounts only for activities on or near the public 
     housing agency or public housing project that are designed to 
     promote the self-sufficiency of public housing residents, 
     including activities relating to--
       ``(1) physical improvements to a public housing project in 
     order to provide space for supportive services for residents;
       ``(2) the provision of service coordinators;
       ``(3) the provision of services related to work readiness, 
     including academic skills, job training, job search skills, 
     tutoring, adult literacy, transportation, and child care, 
     except that grants received under this section shall not 
     comprise more than 50 percent of the costs of providing such 
     services;
       ``(4) resident management activities; and
       ``(5) other activities designed to improve the economic 
     self-sufficiency of residents.
       ``(c) Funding Distribution.--
       ``(1) In general.--Except for amounts provided under 
     subsection (d), the Secretary may distribute amounts made 
     available under this section on the basis of a competition or 
     a formula, as appropriate.
       ``(2) Factors for distribution.--Factors for distribution 
     under paragraph (1) shall include--
       ``(A) the demonstrated capacity of the applicant to carry 
     out a program of supportive services or resident empowerment 
     activities; and
       ``(B) the ability of the applicant to leverage additional 
     resources for the provision of services.
       ``(d) Funding for Resident Councils.--Of amounts 
     appropriated for activities under this section, not less than 
     $25,000,000 shall be provided directly to resident councils, 
     resident organizations, and resident management 
     corporations.''.

     SEC. 123. APPLICABILITY TO INDIAN HOUSING.

       In accordance with section 201(b)(2) of the United States 
     Housing Act of 1937, except as otherwise provided in this 
     Act, this title and the amendments made by this title shall 
     apply to public housing developed or operated pursuant to a 
     contract between the Secretary and an Indian housing 
     authority, as that term is defined in section 3(b) of the 
     United States Housing Act of 1937.
                 TITLE II--SECTION 8 RENTAL ASSISTANCE

     SEC. 201. MERGER OF THE CERTIFICATE AND VOUCHER PROGRAMS.

       Section 8(o) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(o)) is amended to read as follows:
       ``(o) Voucher Program.--
       ``(1) Payment standard.--
       ``(A) In general.--The Secretary may provide assistance to 
     public housing agencies for tenant-based assistance using a 
     payment standard established in accordance with subparagraph 
     (B). The payment standard shall be used to determine the 
     monthly assistance that may be paid for any family, as 
     provided in paragraph (2).
       ``(B) Establishment of payment standard.--The payment 
     standard shall not exceed 120 percent of the fair market 
     rental established under subsection (c) and shall be not less 
     than 90 percent of that fair market rental.
       ``(C) Set-aside.--The Secretary may set aside not more than 
     5 percent of the budget authority available under this 
     subsection as an adjustment pool. The Secretary shall use 
     amounts in the adjustment pool to make adjusted payments to 
     public housing agencies under subparagraph (A), to ensure 
     continued affordability, if the Secretary determines that 
     additional assistance for such purpose is necessary, based on 
     documentation submitted by a public housing agency.
       ``(D) Approval.--The Secretary may require a public housing 
     agency to submit the payment standard of the public housing 
     agency to the Secretary for approval.
       ``(E) Review.--The Secretary--
       ``(i) shall monitor rent burdens and review any payment 
     standard that results in a significant percentage of the 
     families occupying units of any size paying more than 30 
     percent of adjusted income for rent; and
       ``(ii) may require a public housing agency to modify the 
     payment standard of the public housing agency based on the 
     results of that review.
       ``(2) Amount of monthly assistance payment.--
       ``(A) Families receiving tenant-based assistance; rent does 
     not exceed payment standard.--For a family receiving tenant-
     based assistance under this title, if the rent for that 
     family (including the amount allowed for tenant-paid 
     utilities) does not exceed the payment standard established 
     under paragraph (1), the monthly assistance payment to that 
     family shall be equal to the amount by which the rent exceeds 
     the greatest of the following amounts, rounded to the nearest 
     dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that agency to meet the 
     housing costs of the family, the portion of those payments 
     that is so designated.
       ``(B) Families receiving tenant-based assistance; rent 
     exceeds payment standard.--For a family receiving tenant-
     based assistance under this title, if the rent for that 
     family (including the amount allowed for tenant-paid 
     utilities) exceeds the payment standard established under 
     paragraph (1), the monthly assistance payment to that family 
     shall be equal to the amount by which the applicable payment 
     standard exceeds the greatest of the following amounts, 
     rounded to the nearest dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that agency to meet the 
     housing costs of the family, the portion of those payments 
     that is so designated.
       ``(C) Families receiving project-based assistance.--For a 
     family receiving project-

[[Page S164]]
     based assistance under this title, the rent that the family is required 
     to pay shall be determined in accordance with section 
     3(a)(1), and the amount of the housing assistance payment 
     shall be determined in accordance with subsection (c)(3) of 
     this section.
       ``(3) Forty percent limit.--At the time a family initially 
     receives tenant-based assistance under this title with 
     respect to any dwelling unit, the total amount that a family 
     may be required to pay for rent may not exceed 40 percent of 
     the monthly adjusted income of the family.
       ``(4) Eligible families.--At the time a family initially 
     receives assistance under this subsection, a family shall 
     qualify as--
       ``(A) a very low-income family;
       ``(B) a family previously assisted under this title;
       ``(C) a low-income family that meets eligibility criteria 
     specified by the public housing agency;
       ``(D) a family that qualifies to receive a voucher in 
     connection with a homeownership program approved under title 
     IV of the Cranston-Gonzalez National Affordable Housing Act; 
     or
       ``(E) a family that qualifies to receive a voucher under 
     section 223 or 226 of the Low-Income Housing Preservation and 
     Resident Homeownership Act of 1990.
       ``(5) Annual review of family income.--Each public housing 
     agency shall, not less frequently than annually, conduct a 
     review of the family income of each family receiving 
     assistance under this subsection.
       ``(6) Selection of families.--
       ``(A) In general.--Each public housing agency may establish 
     local preferences consistent with the public housing agency 
     plan submitted by the public housing agency under section 5A.
       ``(B) Eviction for drug-related activity.--Any individual 
     or family evicted from housing assisted under this subsection 
     by reason of drug-related criminal activity (as defined in 
     subsection (f)(5)) shall not be eligible for housing 
     assistance under this title during the 3-year period 
     beginning on the date of such eviction, unless the evicted 
     tenant successfully completes a rehabilitation program 
     approved by the public housing agency (which shall include a 
     waiver for any member of the family of an individual 
     prohibited from receiving assistance under this title whom 
     the public housing agency determines clearly did not 
     participate in and had no knowledge of that criminal 
     activity, or if the circumstances leading to the eviction no 
     longer exist).
       ``(C) Selection of tenants.--The selection of tenants shall 
     be made by the owner of the dwelling unit, subject to the 
     annual contributions contract between the Secretary and the 
     public housing agency.
       ``(7) Lease.--Each housing assistance payment contract 
     entered into by the public housing agency and the owner of a 
     dwelling unit--
       ``(A) shall provide that the screening and selection of 
     families for those units shall be the function of the owner;
       ``(B) shall provide that the lease between the tenant and 
     the owner shall be for a term of not less than 1 year, except 
     that the public housing agency may approve a shorter term for 
     an initial lease between the tenant and the dwelling unit 
     owner if the public housing agency determines that such 
     shorter term would improve housing opportunities for the 
     tenant;
       ``(C) except as otherwise provided by the public housing 
     agency, may provide for a termination of the tenancy of a 
     tenant assisted under this subsection after 1 year;
       ``(D) shall provide that the dwelling unit owner shall 
     offer leases to tenants assisted under this subsection that--
       ``(i) are in a standard form used in the locality by the 
     dwelling unit owner; and
       ``(ii) contain terms and conditions that--

       ``(I) are consistent with State, tribal, and local law; and
       ``(II) apply generally to tenants in the property who are 
     not assisted under this section;

       ``(E) shall provide that the dwelling unit owner may not 
     terminate the tenancy of any person assisted under this 
     subsection during the term of a lease that meets the 
     requirements of this section unless the owner determines, on 
     the same basis and in the same manner as would apply to a 
     tenant in the property who does not receive assistance under 
     this subsection, that--
       ``(i) the tenant has committed a serious violation of the 
     terms and conditions of the lease;
       ``(ii) the tenant has violated applicable Federal, State, 
     or local law; or
       ``(iii) other good cause for termination of the tenancy 
     exists; and
       ``(F) shall provide that any termination of tenancy under 
     this subsection shall be preceded by the provision of written 
     notice by the owner to the tenant specifying the grounds for 
     that action, and any relief shall be consistent with 
     applicable State, tribal, and local law.
       ``(8) Inspection of units by public housing agencies.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for each dwelling unit for which a housing assistance payment 
     contract is established under this subsection, the public 
     housing agency shall--
       ``(i) inspect the unit before any assistance payment is 
     made to determine whether the dwelling unit meets housing 
     quality standards for decent and safe housing established--

       ``(I) by the Secretary for purposes of this subsection; or
       ``(II) by local housing codes or by codes adopted by public 
     housing agencies that--

       ``(aa) meet or exceed housing quality standards; and
       ``(bb) do not severely restrict housing choice; and
       ``(ii) make periodic inspections during the contract term.
       ``(B) Leasing of units owned by public housing agency.--If 
     an eligible family assisted under this subsection leases a 
     dwelling unit that is owned by a public housing agency 
     administering assistance under this subsection, the Secretary 
     shall require the unit of general local government, or 
     another entity approved by the Secretary, to make inspections 
     and rent determinations as required by this paragraph.
       ``(9) Expedited inspection procedures.--
       ``(A) Demonstration project.--Not later than 1 year after 
     the date of enactment of the Public Housing Reform and 
     Empowerment Act of 1995, the Secretary shall establish a 
     demonstration project to identify efficient procedures to 
     determine whether units meet housing quality standards for 
     decent and safe housing established by the Secretary.
       ``(B) Procedures included.--The demonstration project shall 
     include the development of procedures to be followed in any 
     case in which a family receiving tenant-based assistance 
     under this subsection is moving into a dwelling unit, or in 
     which a family notifies the public housing agency that a 
     dwelling unit, in which the family no longer resides, fails 
     to meet housing quality standards. The Secretary shall also 
     establish procedures for the expedited repair and inspection 
     of units that do not meet housing quality standards.
       ``(C) Recommendations.--Not later than 2 years after the 
     date on which the demonstration under this paragraph is 
     implemented, the Secretary shall submit a report to the 
     Congress, which shall include an analysis of the 
     demonstration and any recommendations for changes to the 
     demonstration.
       ``(10) Vacated units.--If a family vacates a dwelling unit, 
     no assistance payment may be made under this subsection for 
     the dwelling unit after the month during which the unit was 
     vacated.
       ``(11) Rent.--
       ``(A) Reasonable market rent.--The rent for dwelling units 
     for which a housing assistance payment contract is 
     established under this subsection shall be reasonable in 
     comparison with rents charged for comparable dwelling units 
     in the private, unassisted, local market.
       ``(B) Negotiated rent.--A public housing agency shall, at 
     the request of a family receiving tenant-based assistance 
     under this subsection, assist that family in negotiating a 
     reasonable rent with a dwelling unit owner. A public housing 
     agency shall review the rent for a unit under consideration 
     by the family (and all rent increases for units under lease 
     by the family) to determine whether the rent (or rent 
     increase) requested by the owner is reasonable. If a public 
     housing agency determines that the rent (or rent increase) 
     for a dwelling unit is not reasonable, the public housing 
     agency shall not make housing assistance payments to the 
     owner under this subsection with respect to that unit.
       ``(C) Units exempt from local rent control.--If a dwelling 
     unit for which a housing assistance payment contract is 
     established under this subsection is exempt from local rent 
     control provisions during the term of that contract, the rent 
     for that unit shall be reasonable in comparison with other 
     units in the market area that are exempt from local rent 
     control provisions.
       ``(D) Timely payments.--Each public housing agency shall 
     make timely payment of any amounts due to a dwelling unit 
     owner under this subsection. The housing assistance payment 
     contract between the owner and the public housing agency may 
     provide for penalties for the late payment of amounts due 
     under the contract, which shall be imposed on the public 
     housing agency in accordance with generally accepted 
     practices in the local housing market.
       ``(E) Penalties.--Unless otherwise authorized by the 
     Secretary, each public housing agency shall pay any penalties 
     from administrative fees collected by the public housing 
     agency, except that no penalty shall be imposed if the late 
     payment is due to factors that the Secretary determines are 
     beyond the control of the public housing agency.
       ``(12) Manufactured housing.--
       ``(A) In general.--A public housing agency may make 
     assistance payments in accordance with this subsection on 
     behalf of a family that utilizes a manufactured home as a 
     principal place of residence. Such payments may be made for 
     the rental of the real property on which the manufactured 
     home owned by any such family is located.
       ``(B) Rent calculation.--
       ``(i) Charges included.--For assistance pursuant to this 
     paragraph, the rent for the space on which a manufactured 
     home is located and with respect to which assistance payments 
     are to be made shall include maintenance and management 
     charges and tenant-paid utilities.
       ``(ii) Payment standard.--The public housing agency shall 
     establish a payment standard for the purpose of determining 
     the monthly assistance that may be paid for any family under 
     this paragraph. The payment standard may not exceed an amount 
     approved or established by the Secretary.
     
[[Page S165]]

       ``(iii) Monthly assistance payment.--The monthly assistance 
     payment under this paragraph shall be determined in 
     accordance with paragraph (2).
       ``(13) Contract for assistance payments.--
       ``(A) In general.--If the Secretary enters into an annual 
     contributions contract under this subsection with a public 
     housing agency pursuant to which the public housing agency 
     will enter into a housing assistance payment contract with 
     respect to an existing structure under this subsection--
       ``(i) the housing assistance payment contract may not be 
     attached to the structure unless the owner agrees to 
     rehabilitate or newly construct the structure other than with 
     assistance under this Act, and otherwise complies with this 
     section; and
       ``(ii) the public housing agency may approve a housing 
     assistance payment contract for such existing structure for 
     not more than 15 percent of the funding available for tenant-
     based assistance administered by the public housing agency 
     under this section.
       ``(B) Extension of contract term.--In the case of a housing 
     assistance payment contract that applies to a structure under 
     this paragraph, a public housing agency shall enter into a 
     contract with the owner, contingent upon the future 
     availability of appropriated funds for the purpose of 
     renewing expiring contracts for assistance payments, as 
     provided in appropriations Acts, to extend the term of the 
     underlying housing assistance payment contract for such 
     period as the Secretary determines to be appropriate to 
     achieve long-term affordability of the housing. The contract 
     shall obligate the owner to have such extensions of the 
     underlying housing assistance payment contract accepted by 
     the owner and the successors in interest of the owner.
       ``(C) Rent calculation.--For project-based assistance under 
     this paragraph, housing assistance payment contracts shall 
     establish rents and provide for rent adjustments in 
     accordance with subsection (c).
       ``(D) Adjusted rents.--With respect to rents adjusted under 
     this paragraph--
       ``(i) the adjusted rent for any unit shall not exceed the 
     rent for a comparable unassisted unit of similar quality, 
     type, and age in the market area; and
       ``(ii) the provisions of subsection (c)(2)(A) do not apply.
       ``(14) Inapplicability to tenant-based assistance.--
     Subsection (c) does not apply to tenant-based assistance 
     under this subsection.
       ``(15) Homeownership option.--
       ``(A) In general.--A public housing agency providing 
     assistance under this subsection may, at the option of the 
     agency, provide assistance for homeownership under subsection 
     (y).
       ``(B) Alternative administration.--A public housing agency 
     may contract with a nonprofit organization to administer a 
     homeownership program under subsection (y).
       ``(16) Indian housing programs.--Notwithstanding any other 
     provision of law, in carrying out this section, the Secretary 
     shall establish such separate formulas and programs as may be 
     necessary to carry out housing programs for Indians under 
     this section.''.

     SEC. 202. REPEAL OF FEDERAL PREFERENCES.

       (a) Section 8 Existing and Moderate Rehabilitation.--
     Section 8(d)(1)(A) of the United States Housing Act of 1937 
     (42 U.S.C. 1437f(d)(1)(A)) is amended to read as follows:
       ``(A) the selection of tenants shall be the function of the 
     owner, subject to the annual contributions contract between 
     the Secretary and the agency, except that with respect to the 
     certificate and moderate rehabilitation programs only, for 
     the purpose of selecting families to be assisted, the public 
     housing agency may establish, after public notice and an 
     opportunity for public comment, a written system of 
     preferences for selection that are not inconsistent with the 
     comprehensive housing affordability strategy for the 
     jurisdiction in which the project is located, in accordance 
     with title I of the Cranston-Gonzalez National Affordable 
     Housing Act;''.
       (b) Section 8 New Construction and Substantial 
     Rehabilitation.--
       (1) Repeal.--Section 545(c) of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 1437f note) is 
     amended to read as follows:
       ``(c) [Reserved.]''.
       (2) Prohibition.--The provisions of section 8(e)(2) of the 
     United States Housing Act of 1937, as in existence on the day 
     before October 1, 1983, that require tenant selection 
     preferences shall not apply with respect to--
       (A) housing constructed or substantially rehabilitated 
     pursuant to assistance provided under section 8(b)(2) of the 
     United States Housing Act of 1937, as in existence on the day 
     before October 1, 1983; or
       (B) projects financed under section 202 of the Housing Act 
     of 1959, as in existence on the day before the date of 
     enactment of the Cranston-Gonzalez National Affordable 
     Housing Act.
       (c) Rent Supplements.--Section 101(k) of the Housing and 
     Urban Development Act of 1965 (12 U.S.C. 1701s(k)) is amended 
     to read as follows:
       ``(k) [Reserved.]''.
       (d) Conforming Amendments.--
       (1) United states housing act of 1937.--The United States 
     Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended--
       (A) in section 6(o), by striking ``preference rules 
     specified in'' and inserting ``written selection criteria 
     established pursuant to'';
       (B) in section 7(a)(2), by striking ``according to the 
     preferences for occupancy under'' and inserting ``in 
     accordance with the written selection criteria established 
     pursuant to'';
       (C) in section 7(a)(3), by striking ``who qualify for 
     preferences for occupancy under'' and inserting ``who meet 
     the written selection criteria established pursuant to'';
       (D) in section 8(d)(2)(A), by striking the last sentence;
       (E) in section 8(d)(2)(H), by striking ``Notwithstanding 
     subsection (d)(1)(A)(i), an'' and inserting ``An''; and
       (F) in section 16(c), in the second sentence, by striking 
     ``the system of preferences established by the agency 
     pursuant to section 6(c)(4)(A)(ii)'' and inserting ``the 
     written selection criteria established by the public housing 
     agency pursuant to section 6(c)(4)(A)''.
       (2) Cranston-gonzalez national affordable housing act.--The 
     Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
     12704 et seq.) is amended--
       (A) in section 455(a)(2)(D)(iii), by striking ``would 
     qualify for a preference under'' and inserting ``meet the 
     written selection criteria established pursuant to''; and
       (B) in section 522(f)(6)(B), by striking ``any preferences 
     for such assistance under section 8(d)(1)(A)(i)'' and 
     inserting ``the written selection criteria established 
     pursuant to section 8(d)(1)(A)''.
       (3) Low-income housing preservation and resident 
     homeownership act of 1990.--The second sentence of section 
     226(b)(6)(B) of the Low-Income Housing Preservation and 
     Resident Homeownership Act of 1990 (12 U.S.C. 4116(b)(6)(B)) 
     is amended by striking ``requirement for giving preferences 
     to certain categories of eligible families under'' and 
     inserting ``written selection criteria established pursuant 
     to''.
       (4) Housing and community development act of 1992.--Section 
     655 of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13615) is amended by striking ``preferences for 
     occupancy'' and all that follows before the period at the end 
     and inserting ``selection criteria established by the owner 
     to elderly families according to such written selection 
     criteria, and to near-elderly families according to such 
     written selection criteria, respectively''.
       (5) References in other law.--Any reference in any Federal 
     law other than any provision of any law amended by paragraphs 
     (1) through (5) of this subsection or section 201 to the 
     preferences for assistance under section 6(c)(4)(A)(i), 
     8(d)(1)(A)(i), or 8(o)(3)(B) of the United States Housing Act 
     of 1937, as those sections existed on the day before the 
     effective date of this title, shall be considered to refer to 
     the written selection criteria established pursuant to 
     section 6(c)(4)(A), 8(d)(1)(A), or 8(o)(6)(A), respectively, 
     of the United States Housing Act of 1937, as amended by this 
     subsection and section 201 of this Act.

     SEC. 203. PORTABILITY.

       Section 8(r) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(r)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``assisted under subsection (b) or (o)'' 
     and inserting ``receiving tenant-based assistance under 
     subsection (o)''; and
       (B) by striking ``the same State'' and all that follows 
     before the semicolon and inserting ``any area in which a 
     program is being administered under this section'';
       (2) in paragraph (3)--
       (A) by striking ``(b) or''; and
       (B) by adding at the end the following new sentence: ``The 
     Secretary shall establish procedures for the compensation of 
     public housing agencies that issue vouchers to families that 
     move into or out of the jurisdiction of the public housing 
     agency under portability procedures. The Secretary may 
     reserve amounts available for assistance under subsection (o) 
     to compensate those public housing agencies.''; and
       (3) by adding at the end the following new paragraph:
       ``(5) Lease violations.--A family may not receive a voucher 
     from a public housing agency and move to another jurisdiction 
     under the tenant-based assistance program if the family has 
     moved out of the assisted dwelling unit of the family in 
     violation of a lease.''.

     SEC. 204. LEASING TO VOUCHER HOLDERS.

       Section 8(t) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(t)) is amended to read as follows:
       ``(t) [Reserved.]''.

     SEC. 205. HOMEOWNERSHIP OPTION.

       Section 8(y) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(y)) is amended--
       (1) in paragraph (1)(A), by inserting before the semicolon 
     ``, or owns or is acquiring shares in a cooperative'';
       (2) in paragraph (1)(B), by striking ``(i) participates'' 
     and all that follows through ``(ii) demonstrates'' and 
     inserting ``demonstrates'';
       (3) by striking paragraph (2) and inserting the following:
       ``(2) Determination of amount of assistance.--
       ``(A) Monthly expenses do not exceed payment standard.--If 
     the monthly homeownership expenses, as determined in 
     accordance with requirements established by the Secretary, do 
     not exceed the payment standard, the monthly assistance 
     payment shall be the amount by which the homeownership 
     expenses exceed the highest of the following amounts, rounded 
     to the nearest dollar:
     
[[Page S166]]

       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency, and a portion of those 
     payments, adjusted in accordance with the actual housing 
     costs of the family, is specifically designated by that 
     agency to meet the housing costs of the family, the portion 
     of those payments that is so designated.
       ``(B) Monthly expenses exceed payment standard.--If the 
     monthly homeownership expenses, as determined in accordance 
     with requirements established by the Secretary, exceed the 
     payment standard, the monthly assistance payment shall be the 
     amount by which the applicable payment standard exceeds the 
     highest of the following amounts, rounded to the nearest 
     dollar:
       ``(i) Thirty percent of the monthly adjusted income of the 
     family.
       ``(ii) Ten percent of the monthly income of the family.
       ``(iii) If the family is receiving payments for welfare 
     assistance from a public agency and a part of those payments, 
     adjusted in accordance with the actual housing costs of the 
     family, is specifically designated by that agency to meet the 
     housing costs of the family, the portion of those payments 
     that is so designated.'';
       (4) by striking paragraphs (3) through (5); and
       (5) by redesignating paragraphs (6) through (8) as 
     paragraphs (3) through (5), respectively.

     SEC. 206. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Contract Provisions and Requirements.--Section 
     6(p)(1)(B) of the United States Housing Act of 1937 (42 
     U.S.C. 1437d(p)(1)(B)) is amended by striking ``holding 
     certificates and vouchers'' and inserting ``receiving tenant-
     based assistance''.
       (b) Lower Income Housing Assistance.--Section 8 of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f) is 
     amended--
       (1) in subsection (a), by striking the second and third 
     sentences;
       (2) in subsection (b)--
       (A) in the subsection heading, by striking ``Rental 
     Certificates and''; and
       (B) in the first undesignated paragraph--
       (i) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary''; and
       (ii) by striking the second sentence;
       (3) in subsection (c)--
       (A) in paragraph (3)--
       (i) by striking ``(A)''; and
       (ii) by striking subparagraph (B);
       (B) in the first sentence of paragraph (4), by striking 
     ``or by a family that qualifies to receive'' and all that 
     follows through ``1990'';
       (C) by striking paragraph (5) and redesignating paragraph 
     (6) as paragraph (5);
       (D) by striking paragraph (7) and redesignating paragraphs 
     (8) through (10) as paragraphs (6) through (8), respectively;
       (E) in paragraph (6), as redesignated, by inserting 
     ``(other than a contract under section 8(o))'' after 
     ``section'';
       (F) in paragraph (7), as redesignated, by striking ``(but 
     not less than 90 days in the case of housing certificates or 
     vouchers under subsection (b) or (o))'' and inserting ``, 
     other than a contract under subsection (o)''; and
       (G) in paragraph (8), as redesignated, by striking 
     ``housing certificates or vouchers under subsection (b) or 
     (o)'' and inserting ``tenant-based assistance under this 
     section'';
       (4) in subsection (d)--
       (A) in paragraph (1)(B)(iii), by striking ``on or near such 
     premises''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A), by striking the third sentence and 
     all that follows through the end of the subparagraph; and
       (ii) by striking subparagraphs (B) through (E) and 
     redesignating subparagraphs (F) through (H) as subparagraphs 
     (B) through (D), respectively;
       ``(B) [Reserved.]'';
       (5) in subsection (f)--
       (A) in paragraph (6), by striking ``(d)(2)'' and inserting 
     ``(o)(11)''; and
       (B) in paragraph (7)--
       (i) by striking ``(b) or''; and
       (ii) by inserting before the period the following: ``and 
     that provides for the eligible family to select suitable 
     housing and to move to other suitable housing'';
       (6) by striking subsection (j) and inserting the following:
       ``(j) [Reserved.]'';
       (7) by striking subsection (n) and inserting the following:
       ``(n) [Reserved.]'';
       (8) in subsection (q)--
       (A) in the first sentence of paragraph (1), by striking 
     ``and housing voucher programs under subsections (b) and 
     (o)'' and inserting ``program under this section'';
       (B) in paragraph (2)(A)(i), by striking ``and housing 
     voucher programs under subsections (b) and (o)'' and 
     inserting ``program under this section''; and
       (C) in paragraph (2)(B), by striking ``and housing voucher 
     programs under subsections (b) and (o)'' and inserting 
     ``program under this section'';
       (9) in subsection (u), by striking ``certificates or'' each 
     place that term appears; and
       (10) in subsection (x)(2), by striking ``housing 
     certificate assistance'' and inserting ``tenant-based 
     assistance''.
       (c) Public Housing Homeownership and Management 
     Opportunities.--Section 21(b)(3) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437s(b)(3)) is amended--
       (1) in the first sentence, by striking ``(at the option of 
     the family) a certificate under section 8(b)(1) or a housing 
     voucher under section 8(o)'' and inserting ``tenant-based 
     assistance under section 8''; and
       (2) by striking the second sentence.
       (d) Documentation of Excessive Rent Burdens.--Section 
     550(b) of the Cranston-Gonzalez National Affordable Housing 
     Act (42 U.S.C. 1437f note) is amended--
       (1) in paragraph (1), by striking ``assisted under the 
     certificate and voucher programs established'' and inserting 
     ``receiving tenant-based assistance'';
       (2) in the first sentence of paragraph (2)--
       (A) by striking ``, for each of the certificate program and 
     the voucher program'' and inserting ``for the tenant-based 
     assistance under section 8''; and
       (B) by striking ``participating in the program'' and 
     inserting ``receiving tenant-based assistance''; and
       (3) in paragraph (3), by striking ``assistance under the 
     certificate or voucher program'' and inserting ``tenant-based 
     assistance under section 8 of the United States Housing Act 
     of 1937''.
       (e) Grants for Community Residences and Services.--Section 
     861(b)(1)(D) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12910(b)(1)(D)) is amended by striking 
     ``certificates or vouchers'' and inserting ``assistance''.
       (f) Section 8 Certificates and Vouchers.--Section 931 of 
     the Cranston-Gonzalez National Affordable Housing Act (42 
     U.S.C. 1437c note) is amended by striking ``assistance under 
     the certificate and voucher programs under sections 8(b) and 
     (o) of such Act'' and inserting ``tenant-based assistance 
     under section 8 of the United States Housing Act of 1937''.
       (g) Assistance for Displaced Tenants.--Section 223(a) of 
     the Housing and Community Development Act of 1987 (12 U.S.C. 
     4113(a)) is amended by striking ``assistance under the 
     certificate and voucher programs under sections 8(b) and 
     8(o)'' and inserting ``tenant-based assistance under section 
     8''.
       (h) Rural Housing Preservation Grants.--Section 533(a) of 
     the Housing Act of 1949 (42 U.S.C. 1490m(a)) is amended in 
     the second sentence by striking ``assistance payments as 
     provided by section 8(o)'' and inserting ``tenant-based 
     assistance as provided under section 8''.
       (i) Repeal of Moving to Opportunities for Fair Housing 
     Demonstration.--Section 152 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 1437f note) is repealed.
       (j) Preferences for Elderly Families and Persons.--Section 
     655 of the Housing and Community Development Act of 1992 (42 
     U.S.C. 13615) is amended by striking ``the first sentence of 
     section 8(o)(3)(B)'' and inserting ``section 8(o)(6)(A)''.
       (k) Assistance for Troubled Multifamily Housing Projects.--
     Section 201(m)(2)(A) of the Housing and Community Development 
     Amendments of 1978 (12 U.S.C. 1715z-1a(m)(2)(A)) is amended 
     by striking ``section 8(b)(1)'' and inserting ``section 8''.
       (l) Management and Disposition of Multifamily Housing 
     Projects.--Section 203(g)(2) of the Housing and Community 
     Development Amendments of 1978 (12 U.S.C. 1701z-11(g)(2)), as 
     amended by section 101(b) of the Multifamily Housing Property 
     Disposition Reform Act of 1994, is amended by striking 
     ``8(o)(3)(B)'' and inserting ``8(o)(6)(A)''.

     SEC. 207. IMPLEMENTATION.

       In accordance with the negotiated rulemaking procedures set 
     forth in subchapter III of chapter 5 of title 5, United 
     States Code, the Secretary shall issue such regulations as 
     may be necessary to implement the amendments made by this 
     title after notice and opportunity for public comment.

     SEC. 208. DEFINITION.

       For the purposes of this title, public housing agency has 
     the same meaning as section 3 of the United States Housing 
     Act of 1937, except that such term shall also include any 
     other nonprofit entity serving more than one local government 
     jurisdiction that was administering the section 8 tenant-
     based assistance program pursuant to a contract with the 
     Secretary or a public housing agency prior to the date of 
     enactment of this Act.

     SEC. 209. EFFECTIVE DATE.

       (a) In General.--The amendments made by this title shall 
     become effective not later than 1 year after the date of 
     enactment of this Act.
       (b) Conversion Assistance.--
       (1) In general.--The Secretary may provide for the 
     conversion of assistance under the certificate and voucher 
     programs under subsections (b) and (o) of section 8 of the 
     United States Housing Act of 1937, as those sections existed 
     on the day before the effective date of the amendments made 
     by this title, to the voucher program established by the 
     amendments made by this title.
       (2) Continued applicability.--The Secretary may apply the 
     provisions of the United States Housing Act of 1937, or any 
     other provision of law amended by this title, as those 
     provisions existed on the day before the effective date of 
     the amendments made by this title, to assistance obligated by 
     the Secretary before that effective date for the certificate 
     or voucher program under section 8 of the United States 
     Housing Act of 1937, if the Secretary determines that such 
     action is necessary for simplification of program 
     administration, avoidance of hardship, or other good cause. 
     
[[Page S167]]

                  TITLE III--MISCELLANEOUS PROVISIONS

     SEC. 301. PUBLIC HOUSING FLEXIBILITY IN THE CHAS.

       Section 105(b) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12705(b)) is amended--
       (1) by redesignating the second paragraph designated as 
     paragraph (17) (as added by section 681(2) of the Housing and 
     Community Development Act of 1992) as paragraph (20);
       (2) by redesignating paragraph (17) (as added by section 
     220(b)(3) of the Housing and Community Development Act of 
     1992) as paragraph (19);
       (3) by redesignating the second paragraph designated as 
     paragraph (16) (as added by section 220(c)(1) of the Housing 
     and Community Development Act of 1992) as paragraph (18);
       (4) in paragraph (16)--
       (A) by striking the period at the end and inserting a 
     semicolon; and
       (B) by striking ``(16)'' and inserting ``(17)'';
       (5) by redesignating paragraphs (11) through (15) as 
     paragraphs (12) through (16), respectively; and
       (6) by inserting after paragraph (10) the following new 
     paragraph:
       ``(11) describe the manner in which the plan of the 
     jurisdiction will help address the needs of public housing 
     and coordinate with the local public housing agency plan 
     under section 5A of the United States Housing Act of 1937;''.

     SEC. 302. REPEAL OF CERTAIN PROVISIONS.

       (a) Maximum Annual Limitation on Rent Increases Resulting 
     From Employment.--
       (1) Repeal.--Section 957 of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12714) is repealed.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be deemed to have the same effective date as section 
     957 of the Cranston-Gonzalez National Affordable Housing Act.
       (b) Economic Independence.--
       (1) Repeal.--Section 923 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 12714 note) is repealed.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be deemed to have the same effective date as section 
     923 of the Housing and Community Development Act of 1992.

     SEC. 303. DETERMINATION OF INCOME LIMITS.

       (a) In General.--Section 3(b)(2) of the United States 
     Housing Act of 1937 (42 U.S.C. 1437a(b)(2)) is amended--
       (1) in the fourth sentence--
       (A) by striking ``County,'' and inserting ``and Rockland 
     Counties''; and
       (B) by inserting ``each'' before ``such county''; and
       (2) in the fifth sentence, by striking ``County'' each 
     place that term appears and inserting ``and Rockland 
     Counties''.
       (b) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall issue regulations 
     implementing the amendments made by subsection (a).

     SEC. 304. DEMOLITION OF PUBLIC HOUSING.

       (a) Repeal.--Section 415 of the Department of Housing and 
     Urban Development--Independent Agencies Appropriations Act, 
     1988 (Public Law 100-202; 101 Stat. 1329-213) is repealed.
       (b) Funding Availability.--Notwithstanding any other 
     provision of law, beginning on the date of enactment of this 
     Act, the public housing projects described in section 415 of 
     the Department of Housing and Urban Development--Independent 
     Agencies Appropriations Act, 1988, as that section existed on 
     the day before the date of enactment of this Act, shall be 
     eligible for demolition under--
       (1) section 14 of the United States Housing Act of 1937, as 
     that section existed on the day before the date of enactment 
     of this Act; and
       (2) section 9 of the United States Housing Act of 1937, as 
     amended by this Act.

     SEC. 305. COORDINATION OF TAX CREDITS AND SECTION 8.

       Notwithstanding any other provision of law, rehabilitation 
     activities undertaken in projects using the Low-Income 
     Housing Tax Credit allocated to developments in the City of 
     New Brunswick, New Jersey, in 1991, are hereby deemed to have 
     met the requirements for rehabilitation in accordance with 
     clause (ii) of the third sentence of section 8(d)(2)(A) of 
     the United States Housing Act of 1937, as amended.

     SEC. 306. ELIGIBILITY FOR PUBLIC AND ASSISTED HOUSING.

       Section 214 of the Housing and Community Development Act of 
     1980 (42 U.S.C. 1436a) is amended--
       (1) in subsection (b), by inserting before the period at 
     the end the following: ``and includes any other assistance 
     provided under the United States Housing Act of 1937'';
       (2) by adding at the end the following new subsection:
       ``(h) Verification of Eligibility.--
       ``(1) In general.--Except in the case of an election under 
     paragraph (2)(A), no individual or family applying for 
     financial assistance may receive such financial assistance 
     prior to the affirmative establishment and verification of 
     eligibility of that individual or family under this section 
     by the Secretary or other appropriate entity.
       ``(2) Rules applicable to public housing agencies.--A 
     public housing agency (as that term is defined in section 3 
     of the United States Housing Act of 1937)--
       ``(A) may elect not to comply with this section; and
       ``(B) in complying with this section--
       ``(i) may initiate procedures to affirmatively establish or 
     verify the eligibility of an individual or family under this 
     section at any time at which the public housing agency 
     determines that such eligibility is in question, regardless 
     of whether or not that individual or family is at or near the 
     top of the waiting list of the public housing agency;
       ``(ii) may affirmatively establish or verify the 
     eligibility of an individual or family under this section in 
     accordance with the procedures set forth in section 
     274A(b)(1) of the Immigration and Nationality Act; and
       ``(iii) shall have access to any relevant information 
     contained in the SAVE system (or any successor thereto) that 
     relates to any individual or family applying for financial 
     assistance.
       ``(3) Eligibility of families.--For purposes of this 
     subsection, with respect to a family, the term `eligibility' 
     means the eligibility of each family member.''.

                          ____________________