[House Report 104-461]
[From the U.S. Government Publishing Office]



                                                                       
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-461
_______________________________________________________________________


 
                   UNITED STATES HOUSING ACT OF 1996
_______________________________________________________________________


February 1, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


   Mr. Leach, from the Committee on Banking and Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

                        [To accompany H.R. 2406]

  The Committee on Banking and Financial Services, to whom was 
referred the bill (H.R. 2406) to repeal the United States 
Housing Act of 1937, deregulate the public housing program and 
the program for rental housing assistance for low-income 
families, and increase community control over such programs, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

Sec. 1. Short title and table of contents.
Sec. 2. Declaration of policy to renew American neighborhoods.

                      TITLE I--GENERAL PROVISIONS

Sec. 101. Statement of purpose.
Sec. 102. Definitions.
Sec. 103. Organization of local housing and management authorities.
Sec. 104. Determination of adjusted income.
Sec. 105. Limitation on admission of drug or alcohol abusers to 
assisted housing.
Sec. 106. Community work and family self-sufficiency requirement.
Sec. 107. Local housing management plans.
Sec. 108. Review of plans.
Sec. 109. Pet ownership.
Sec. 110. Administrative grievance procedure.
Sec. 111. Headquarters reserve fund.
Sec. 112. Labor standards.
Sec. 113. Nondiscrimination.
Sec. 114. Effective date and regulations.

                        TITLE II--PUBLIC HOUSING

                        Subtitle A--Block Grants

Sec. 201. Block grant contracts.
Sec. 202. Block grant authority and amount.
Sec. 203. Eligible and required activities.
Sec. 204. Determination of block grant allocation.
Sec. 205. Sanctions for improper use of amounts.

           Subtitle B--Admissions and Occupancy Requirements

Sec. 221. Low-income housing requirement.
Sec. 222. Family eligibility.
Sec. 223. Preferences for occupancy.
Sec. 224. Admission procedures.
Sec. 225. Family rental payment.
Sec. 226. Lease requirements.
Sec. 227. Designated housing for elderly and disabled families.

                         Subtitle C--Management

Sec. 231. Management procedures.
Sec. 232. Housing quality requirements.
Sec. 233. Employment of residents.
Sec. 234. Resident councils and resident management corporations.
Sec. 235. Management by resident management corporation.
Sec. 236. Transfer of management of certain housing to independent 
manager at request of residents.
Sec. 237. Resident opportunity program.

                       Subtitle D--Homeownership

Sec. 251. Resident homeownership programs.

Subtitle E--Disposition, Demolition, and Revitalization of Developments

Sec. 261. Requirements for demolition and disposition of developments.
Sec. 262. Demolition, site revitalization, replacement housing, and 
choice-based assistance grants for developments.

                     Subtitle F--General Provisions

Sec. 271. Conversion to block grant assistance.
Sec. 272. Payment of non-Federal share.
Sec. 273. Definitions.
Sec. 274. Authorization of appropriations for block grants.
Sec. 275. Authorization of appropriations for operation safe home.

TITLE III--CHOICE-BASED RENTAL HOUSING AND HOMEOWNERSHIP ASSISTANCE FOR 
                          LOW-INCOME FAMILIES

                         Subtitle A--Allocation

Sec. 301. Authority to provide housing assistance amounts.
Sec. 302. Contracts with LHMA's.
Sec. 303. Eligibility of LHMA's for assistance amounts.
Sec. 304. Allocation of amounts.
Sec. 305. Administrative fees.
Sec. 306. Authorizations of appropriations.
Sec. 307. Conversion of section 8 assistance.

   Subtitle B--Choice-Based Housing Assistance for Eligible Families

Sec. 321. Eligible families and preferences for assistance.
Sec. 322. Resident contribution.
Sec. 323. Rental indicators.
Sec. 324. Lease terms.
Sec. 325. Termination of tenancy.
Sec. 326. Eligible owners.
Sec. 327. Selection of dwelling units.
Sec. 328. Eligible dwelling units.
Sec. 329. Homeownership option.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

Sec. 351. Housing assistance payments contracts.
Sec. 352. Amount of monthly assistance payment.
Sec. 353. Payment standards.
Sec. 354. Reasonable rents.
Sec. 355. Prohibition of assistance for vacant rental units.

            Subtitle D--General and Miscellaneous Provisions

Sec. 371. Definitions.
Sec. 372. Rental assistance fraud recoveries.
Sec. 373. Study regarding geographic concentration of assisted 
families.

 TITLE IV--ACCREDITATION AND OVERSIGHT OF LOCAL HOUSING AND MANAGEMENT 
                              AUTHORITIES

         Subtitle A--Housing Foundation and Accreditation Board

Sec. 401. Establishment.
Sec. 402. Membership.
Sec. 403. Functions.
Sec. 404. Initial establishment of standards and procedures for LHMA 
compliance.
Sec. 405. Powers.
Sec. 406. Fees.
Sec. 407. Reports.

    Subtitle B--Accreditation and Oversight Standards and Procedures

Sec. 431. Establishment of performance benchmarks and accreditation 
procedures.
Sec. 432. Annual financial and performance audit.
Sec. 433. Accreditation.
Sec. 434. Classification by performance category.
Sec. 435. Performance agreements for authorities at risk of becoming 
troubled.
Sec. 436. Performance agreements and CDBG sanctions for troubled 
LHMA's.
Sec. 437. Option to demand conveyance of title to or possession of 
public housing.
Sec. 438. Removal of ineffective LHMA's.
Sec. 439. Mandatory takeover of chronically troubled PHA's.
Sec. 440. Treatment of troubled PHA's.
Sec. 441. Maintenance of and access to records.
Sec. 442. Annual reports regarding troubled LHMA's.
Sec. 443. Applicability to resident management corporations.
Sec. 444. Inapplicability to Indian housing.

               TITLE V--REPEALS AND CONFORMING AMENDMENTS

Sec. 501. Repeals.
Sec. 502. Conforming and technical provisions.
Sec. 503. Amendments to Public and Assisted Housing Drug Elimination 
Act of 1990.

SEC. 2. DECLARATION OF POLICY TO RENEW AMERICAN NEIGHBORHOODS.

  The Congress hereby declares that--
          (1) the Federal Government has a responsibility to promote 
        the general welfare of the Nation--
                  (A) by using Federal resources to aid families and 
                individuals seeking affordable homes that are safe, 
                clean, and healthy and, in particular, assisting 
                responsible, deserving citizens who cannot provide 
                fully for themselves because of temporary circumstances 
                or factors beyond their control;
                  (B) by working to ensure a thriving national economy 
                and a strong private housing market; and
                  (C) by developing effective partnerships among the 
                Federal Government, State and local governments, and 
                private entities that allow government to accept 
                responsibility for fostering the development of a 
                healthy marketplace and allow families to prosper 
                without government involvement in their day-to-day 
                activities;
          (2) the Federal Government cannot through its direct action 
        or involvement provide for the housing of every American 
        citizen, or even a majority of its citizens, but it is the 
        responsibility of the Government to promote and protect the 
        independent and collective actions of private citizens to 
        develop housing and strengthen their own neighborhoods;
          (3) the Federal Government should act only where there is a 
        serious need that private citizens or groups cannot or are not 
        addressing responsibly; and
          (4) housing is a fundamental and necessary component of 
        bringing true opportunity to people and communities in need, 
        but providing physical structures to house low-income families 
        will not by itself pull generations up from poverty.

                      TITLE I--GENERAL PROVISIONS

SEC. 101. STATEMENT OF PURPOSE.

  The purpose of this Act is to promote safe, clean, and healthy 
housing that is affordable to low-income families, and thereby 
contribute to the supply of affordable housing, by--
          (1) deregulating and decontrolling public housing agencies, 
        which in this Act are referred to as ``local housing and 
        management authorities'', and thereby enable them to perform as 
        property and asset managers;
          (2) providing for more flexible use of Federal assistance to 
        local housing and management authorities, allowing the 
        authorities to leverage and combine assistance amounts with 
        amounts obtained from other sources;
          (3) facilitating mixed income communities;
          (4) increasing accountability and rewarding effective 
        management of local housing and management authorities;
          (5) creating incentives and economic opportunities for 
        residents of dwelling units assisted by local housing and 
        management authorities to work and become self-sufficient; and
          (6) recreating the existing rental assistance voucher program 
        so that the use of vouchers and relationships between landlords 
        and tenants under the program operate in a manner that more 
        closely resembles the private housing market.

SEC. 102. DEFINITIONS.

  For purposes of this Act, the following definitions shall apply:
          (1) Disabled family.--The term ``disabled family'' means a 
        family whose head (or his or her spouse), or whose sole member, 
        is a person with disabilities. Such term includes 2 or more 
        persons with disabilities living together, and 1 or more such 
        persons living with 1 or more persons determined under the 
        regulations of the Secretary to be essential to their care or 
        well-being.
          (2) Drug-related criminal activity.--The term ``drug-related 
        criminal activity'' means the illegal manufacture, sale, 
        distribution, use, or possession with intent to manufacture, 
        sell, distribute, or use, of a controlled substance (as such 
        term is defined in section 102 of the Controlled Substances 
        Act).
          (3) Elderly families and near elderly families.--The terms 
        ``elderly family'' and ``near-elderly family'' mean a family 
        whose head (or his or her spouse), or whose sole member, is an 
        elderly person or a near-elderly person, respectively. Such 
        terms include 2 or more elderly persons or near-elderly persons 
        living together, and 1 or more such persons living with 1 or 
        more persons determined under the regulations of the Secretary 
        to be essential to their care or well-being.
          (4) Elderly person.--The term ``elderly person'' means a 
        person who is at least 62 years of age.
          (5) Family.--The term ``family'' includes a family with or 
        without children, an elderly family, a near-elderly family, a 
        disabled family, and a single person.
          (6) Income.--The term ``income'' means, with respect to a 
        family, income from all sources of each member of the 
        household, as determined in accordance with criteria prescribed 
        by the applicable local housing and management authority and 
        the Secretary, except that the following amounts shall be 
        excluded:
                  (A) Any amounts not actually received by the family.
                  (B) Any amounts that would be eligible for exclusion 
                under section 1613(a)(7) of the Social Security Act.
          (7) Indian.--The term ``Indian'' means any person recognized 
        as being an Indian, Alaska Native, or Native Hawaiian by an 
        Indian tribe, the Federal Government, or any State.
          (8) Indian area.--The term ``Indian area'' means the area 
        within which an Indian housing authority is authorized to 
        provide low-income housing assistance under this Act.
          (9) Indian housing authority.--The term ``Indian housing 
        authority'' means any entity that--
                  (A) is authorized to engage in or assist in the 
                production or operation of low-income housing for 
                Indians that is assisted under this Act; 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 providing 
                        specifically for housing authorities for 
                        Indians, including regional housing authorities 
                        in the State of Alaska.
          (10) Indian tribe.--The term ``Indian tribe'' means any 
        tribe, band, pueblo, group, community, or nation of Indians, 
        Alaska Natives, or Native Hawaiians.
          (11) Local housing and management authority.--The term 
        ``local housing and management authority'' is defined in 
        section 103.
          (12) Local housing management plan.--The term ``local housing 
        management plan'' means, with respect to any fiscal year, the 
        plan under section 107 of a local housing and management 
        authority for such fiscal year.
          (13) Low-income family.--The term ``low-income family'' means 
        a family whose income does not exceed 80 percent of the median 
        income for the area, except that the Secretary may, for 
        purposes of this paragraph, establish income ceilings higher or 
        lower than 80 percent of the median for the area on the basis 
        of the authority's findings that such variations are necessary 
        because of unusually high or low family incomes.
          (14) Low-income housing.--The term ``low-income housing'' 
        means dwellings that comply with the requirements--
                  (A) under subtitle B of title II for assistance under 
                such title for the dwellings; or
                  (B) under title III for rental assistance payments 
                under such title for the dwellings.
          (15) Near-elderly person.--The term ``near-elderly person'' 
        means a person who is at least 55 years of age.
          (16) Person with disabilities.--The term ``person with 
        disabilities'' means a person who--
                  (A) has a disability as defined in section 223 of the 
                Social Security Act; or
                  (B) has a developmental disability as defined in 
                section 102 of the Developmental Disabilities 
                Assistance and Bill of Rights Act.
        Such term shall not exclude persons who have the disease of 
        acquired immunodeficiency syndrome or any conditions arising 
        from the etiologic agent for acquired immunodeficiency 
        syndrome. Notwithstanding any other provision of law, no 
        individual shall be considered a person with disabilities, for 
        purposes of eligibility for public housing under title II of 
        this Act, solely on the basis of any drug or alcohol 
        dependence. The Secretary shall consult with other appropriate 
        Federal agencies to implement the preceding sentence.
          (17) Public housing.--The term ``public housing'' means 
        housing, and all necessary appurtenances thereto, that--
                  (A) is low-income housing or low-income dwelling 
                units in mixed income housing (as provided in section 
                221(c)(2)); and
                  (B)(i) is subject to an annual block grant contract 
                under title II; or
                  (ii) was subject to an annual block grant contract 
                under title II (or an annual contributions contract 
                under the United States Housing Act of 1937) which is 
                not in effect, but for which occupancy is limited in 
                accordance with the requirements under section 222(a).
          (18) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
          (19) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, any other territory 
        or possession of the United States, and Indian tribes.
          (20) Very low-income family.--The term ``very low-income 
        family'' means a low-income family whose income does not exceed 
        50 percent of the median family income for the area, except 
        that the Secretary may, for purposes of this paragraph, 
        establish income ceilings higher or lower than 50 percent of 
        the median for the area on the basis of the authority's 
        findings that such variations are necessary because of 
        unusually high or low family incomes.

SEC. 103. ORGANIZATION OF LOCAL HOUSING AND MANAGEMENT AUTHORITIES.

  (a) Requirements.--For purposes of this Act, the terms ``local 
housing and management authority'' and ``authority'' mean any entity 
that--
          (1) is--
                  (A) a public housing agency or Indian housing 
                authority that was authorized under the United States 
                Housing Act of 1937 to engage in or assist in the 
                development or operation of low-income housing;
                  (B) authorized under this Act to engage in or assist 
                in the development or operation of low-income housing 
                by any State, county, municipality, or other 
                governmental body or public entity; or
                  (C) an entity selected by the Secretary, pursuant to 
                subtitle B of title IV, to manage housing; and
          (2) complies with the requirements under subsection (b).
  (b) Governance.--
          (1) Board of directors.--Each local housing and management 
        authority shall have a board of directors or other form of 
        governance as prescribed in State or local law. No person may 
        be barred from serving on such board or body because of such 
        person's residency in a public housing development or status as 
        an assisted family under title III.
          (2) Resident membership.--
                  (A) In general.--Except as provided in subparagraph 
                (B), in localities in which a local housing and 
                management authority is governed by a board of 
                directors or other similar body, the board or body 
                shall include not less than 1 member who is--
                          (i) a resident of a public housing dwelling 
                        unit owned or operated by the authority; or
                          (ii) a member of an assisted family under 
                        title III.
                  (B) Exceptions.--The requirement in subparagraph (A) 
                with respect to a resident member shall not apply to--
                          (i) any State or local governing body that 
                        serves as a local housing and management 
                        authority for purposes of this Act and whose 
                        responsibilities include substantial activities 
                        other than acting as the local housing and 
                        management authority, except that such 
                        requirement shall apply to any advisory 
                        committee or organization that is established 
                        by such governing body and whose 
                        responsibilities relate only to the governing 
                        body's functions as a local housing and 
                        management authority for purposes of this Act;
                          (ii) any local housing and management 
                        authority that owns or operates less than 250 
                        public housing dwelling units (including any 
                        authority that does not own or operate public 
                        housing);
                          (iii) any local housing and management 
                        authority that manages public housing 
                        consisting primarily of scattered site public 
                        housing;
                          (iv) any local housing and management 
                        authority in a State in which State law 
                        specifically precludes public housing residents 
                        or assisted families from serving on the board 
                        of directors or other similar body of an 
                        authority; or
                          (v) any local housing and management 
                        authority in a State that requires the members 
                        of the board of directors or other similar body 
                        of a local housing and management authority to 
                        be salaried and to serve on a full-time basis.
          (3) Full participation.--No local housing and management 
        authority may limit or restrict the capacity or offices in 
        which a member of such board or body may serve on such board or 
        body solely because of the member's status as a resident 
        member.
          (4) Conflicts of interest.--The Secretary shall establish 
        guidelines to prevent conflicts of interest on the part of 
        members of the board or directors or governing body of a local 
        housing and management authority.
          (5) Definition.--For purposes of this subsection, the term 
        ``resident member'' means a member of the board of directors or 
        other similar governing body of a local housing and management 
        authority who is a resident of a public housing dwelling unit 
        administered or assisted by the authority or is an assisted 
        family (as such term is defined in section 371).
  (c) Establishment of Policies.--Any rules, regulations, policies, 
standards, and procedures necessary to implement policies required 
under section 107 to be included in the local housing management plan 
for a local housing and management authority shall be approved by the 
board of directors or similar governing body of the authority and shall 
be publicly available for review upon request.

SEC. 104. DETERMINATION OF ADJUSTED INCOME.

  (a) In General.--For purposes of this Act, the term ``adjusted 
income'' means, with respect to a family, the difference between the 
income of the members of the family residing in a dwelling unit or the 
persons on a lease and the amount of any income exclusions for the 
family under subsections (b) and (c), as determined by the local 
housing and management authority.
  (b) Mandatory Exclusions From Income.--In determining adjusted 
income, a local housing and management authority shall exclude from the 
annual income of a family the following amounts:
          (1) Elderly and disabled families.--$400 for any elderly or 
        disabled family.
          (2) Medical expenses.--The amount by which 3 percent of the 
        annual family income is exceeded by the sum of--
                  (A) unreimbursed medical expenses of any elderly 
                family;
                  (B) unreimbursed medical expenses of any nonelderly 
                family, except that this subparagraph shall apply only 
                to the extent approved in appropriation Acts; and
                  (C) unreimbursed reasonable attendant care and 
                auxiliary apparatus expenses for each handicapped 
                member of the family, to the extent necessary to enable 
                any member of such family (including such handicapped 
                member) to be employed.
          (3) Child care expenses.--Any reasonable child care expenses 
        necessary to enable a member of the family to be employed or to 
        further his or her education.
          (4) Minors.--$480 for each member of the family residing in 
        the household (other than the head of the household or his or 
        her spouse) who is under 18 years of age or is attending school 
        or vocational training on a full-time basis.
          (5) Child support payments.--Any payment made by a member of 
        the family for the support and maintenance of any child who 
        does not reside in the household, except that the amount 
        excluded under this paragraph may not exceed $480 for each 
        child for whom such payment is made.
  (c) Permissive Exclusions From Income.--In determining adjusted 
income, a local housing and management authority may, in the discretion 
of the authority, establish exclusions from the annual income of a 
family. Such exclusions may include the following amounts:
          (1) Excessive travel expenses.--Excessive travel expenses in 
        an amount not to exceed $25 per family per week, for 
        employment- or education-related travel.
          (2) Earned income.--An amount of any earned income of the 
        family, established at the discretion of the local housing and 
        management authority, which may be based on--
                  (A) all earned income of the family;
                  (B) the amount earned by particular members of the 
                family;
                  (C) the amount earned by families having certain 
                characteristics; or
                  (D) the amount earned by families or members during 
                certain periods or from certain sources.
          (3) Others.--Such other amounts for other purposes, as the 
        local housing and management authority may establish.

SEC. 105. LIMITATION ON ADMISSION OF DRUG OR ALCOHOL ABUSERS TO 
                    ASSISTED HOUSING.

  (a) Authority.--Notwithstanding any other provision of law, a local 
housing and management authority may establish standards for occupancy 
in public housing dwelling units and assistance under title III, that 
prohibit admission to such units and assistance under title III by any 
person--
          (1) who currently illegally uses a controlled substance; or
          (2) whose history of illegal use of a controlled substance or 
        use of alcohol, or current use of alcohol, provides reasonable 
        cause for the authority to believe that the occupancy by such 
        individual may interfere with the health, safety, or right to 
        peaceful enjoyment of the premises by other residents.
  (b) Consideration of Rehabilitation.--In determining whether, 
pursuant to subsection (a), to deny admission or assistance to any 
person based on a history of use of a controlled substance or alcohol, 
a local housing and management authority may consider whether such 
person--
          (1) has successfully completed a supervised drug or alcohol 
        rehabilitation program (as applicable) and is no longer 
        engaging in the illegal use of a controlled substance or use of 
        alcohol (as applicable),
          (2) has otherwise been rehabilitated successfully and is no 
        longer engaging in the illegal use of a controlled substance or 
        use of alcohol (as applicable), or
          (3) is participating in a supervised drug or alcohol 
        rehabilitation program (as applicable) and is no longer 
        engaging in the illegal use of a controlled substance or use of 
        alcohol (as applicable),
and in making such a determination may obtain recommendations of social 
workers, drug and alcohol counselors, probation officers, and former 
landlords for such person.

SEC. 106. COMMUNITY WORK AND FAMILY SELF-SUFFICIENCY REQUIREMENT.

  (a) Requirement.--Except as provided in subsection (b), each local 
housing and management authority shall require, as a condition of 
occupancy of a public housing dwelling unit by a family and of 
providing housing assistance under title III on behalf of a family, 
that each adult member of the family shall--
          (1) contribute not less than 8 hours of work per month within 
        the community in which the family resides; or
          (2) participate on an ongoing basis in a program designed to 
        promote economic self-sufficiency.
  (b) Exemptions.--A local housing and management authority shall 
provide for the exemption, from the applicability of the requirement 
under subsection (a), of each individual who is--
          (1) an elderly person and unable, as determined in accordance 
        with guidelines established by the Secretary, to comply with 
        the requirement;
          (2) a person with disabilities and unable (as so determined) 
        to comply with the requirement;
          (3) working, attending school or vocational training, or 
        otherwise complying with work requirements applicable under 
        other public assistance programs, and unable (as so determined) 
        to comply with the requirement; or
          (4) otherwise physically impaired, as certified by a doctor, 
        and is therefore unable to comply with the requirement.

SEC. 107. LOCAL HOUSING MANAGEMENT PLANS.

  (a) In General.--In accordance with this section, the Secretary shall 
provide for each local housing and management authority to submit to 
the Secretary a local housing management plan under this section for 
each fiscal year that describes the mission of the local housing and 
management authority and the goals, objectives, and policies of the 
authority to meet the housing needs of low-income families in the 
jurisdiction of the authority.
  (b) Procedures.--The Secretary shall establish requirements and 
procedures for submission and review of plans and for the contents of 
such plans. Such procedures shall provide for local housing and 
management authorities to, at the option of the authority, submit plans 
under this section together with, or as part of, the comprehensive 
housing affordability strategy under section 105 of the Cranston-
Gonzalez National Affordable Housing Act (or any consolidated plan 
incorporating such strategy) for the relevant jurisdiction and for 
concomitant review of such plans.
  (c) Contents.--A local housing management plan under this section for 
a local housing and management authority shall contain the following 
information relating to the upcoming fiscal year for which the 
assistance under this Act is to be made available:
          (1) Financial resources.--An operating budget for the 
        authority that includes--
                  (A) a description of the financial resources 
                available to the authority;
                  (B) the uses to which such resources will be 
                committed, including eligible and required activities 
                under section 203 to be assisted, housing assistance to 
                be provided under title III, and administrative, 
                management, maintenance, and capital improvement 
                activities to be carried out; and
                  (C) an estimate of the market rent value of each 
                public housing development of the authority.
          (2) Population served.--A statement of the policies of the 
        authority governing eligibility, admissions, and occupancy of 
        families with respect to public housing dwelling units and 
        housing assistance under title III, including--
                  (A) the requirements for eligibility for such units 
                and assistance and the method by which eligibility will 
                be determined and verified;
                  (B) the requirements for selection and admissions of 
                eligible families for such units and assistance, 
                including any preferences established under section 223 
                or 321(c) and the criteria for selection under section 
                222(b);
                  (C) the procedures for assignment of families 
                admitted to dwelling units owned, operated, or assisted 
                by the authority;
                  (D) any standards and requirements for occupancy of 
                public housing dwelling units and units assisted under 
                title III, including conditions for continued 
                occupancy, termination of tenancy, eviction, and 
                termination of housing assistance under section 321(g);
                  (E) the criteria under subsections (d) and (f) of 
                section 321 for providing and denying housing 
                assistance under title III to families moving into the 
                jurisdiction of the authority;
                  (F) the fair housing policy of the authority; and
                  (G) the procedures for outreach efforts (including 
                efforts that are planned and that have been executed) 
                to homeless families and to entities providing 
                assistance to homeless families, in the jurisdiction of 
                the authority.
          (3) Rent determination.--A statement of the policies of the 
        authority governing rents charged for public housing dwelling 
        units and rental contributions of assisted families under title 
        III, including--
                  (A) the methods by which such rents are determined 
                under section 225 and such contributions are determined 
                under section 322;
                  (B) an analysis of how such methods affect--
                          (i) the ability of the authority to provide 
                        housing assistance for families having a broad 
                        range of incomes;
                          (ii) the affordability of housing for 
                        families having incomes that do not exceed 30 
                        percent of the median family income for the 
                        area; and
                          (iii) the availability of other financial 
                        resources to the authority.
          (4) Quality standards for maintenance and management.--A 
        statement of the standards and policies of the authority 
        governing maintenance and management of housing owned and 
        operated by the authority, and management of the local housing 
        and management authority, including--
                  (A) housing quality standards in effect pursuant to 
                sections 232 and 328 and any certifications required 
                under such sections;
                  (B) routine and preventative maintenance policies for 
                public housing;
                  (C) emergency and disaster plans for public housing;
                  (D) rent collection and security policies for public 
                housing;
                  (E) priorities and improvements for management of 
                public housing; and
                  (F) priorities and improvements for management of the 
                authority, including improvement of electronic 
                information systems to facilitate managerial capacity 
                and efficiency.
          (5) Grievance procedure.--A statement of the grievance 
        procedures of the authority under section 110.
          (6) Capital improvements.--With respect to public housing 
        developments owned or operated by the authority, a plan 
        describing--
                  (A) the capital improvements necessary to ensure 
                long-term physical and social viability of the 
                developments; and
                  (B) the priorities of the authority for capital 
                improvements based on analysis of available financial 
                resources, consultation with residents, and health and 
                safety considerations.
          (7) Demolition and disposition.--With respect to public 
        housing developments owned or operated by the authority--
                  (A) a description of any such housing to be 
                demolished or disposed of under subtitle E of title II;
                  (B) a timetable for such demolition or disposition; 
                and
                  (C) any information required under section 261(h) 
                with respect to such demolition or disposition.
          (8) Designation of housing for elderly and disabled 
        families.--With respect to public housing developments owned or 
        operated by the authority, a description of any developments 
        (or portions thereof) that the authority has designated or will 
        designate for occupancy by elderly and disabled families in 
        accordance with section 227 and any information required under 
        section 227(c) for such designated developments.
          (9) Conversion of public housing.--With respect to public 
        housing owned or operated by the authority, a description of 
        any building or buildings that the authority is required under 
        section 203(b) to convert to housing assistance under title 
        III, an analysis of such buildings showing that the buildings 
        meet the requirements under such section for such conversion, 
        and a statement of the amount of grant amounts under title II 
        to be used for rental assistance under title III.
          (10) Homeownership activities.--A description of any 
        homeownership programs of the authority under subtitle D of 
        title II or section 329 for the authority and the requirements 
        and assistance available under such programs.
          (11) Coordination with welfare agencies.--A description of 
        how the authority will coordinate with State welfare agencies 
        to ensure that public housing residents and assisted families 
        will be provided with access to resources to assist in 
        obtaining employment and achieving self-sufficiency.
          (12) Safety and crime prevention.--A description of the 
        requirements established by the authority that ensure the 
        safety of public housing residents, facilitate the authority 
        undertaking crime prevention measures (such as community 
        policing, where appropriate), allow resident input and 
        involvement, and allow for creative methods to increase public 
        housing resident safety by coordinating crime prevention 
        efforts between the authority and local law enforcement 
        officials.
  (d) 5-Year Plan.--Each local housing management plan under this 
section for a local housing and management authority shall contain, 
with respect to the 5-year period beginning with the fiscal year for 
which the plan is submitted, the following information:
          (1) Statement of mission.--A statement of the mission of the 
        authority for serving the needs of low-income families in the 
        jurisdiction of authority during such period.
          (2) Goals and objectives.--A statement of the goals and 
        objectives of the authority that will enable the authority to 
        serve the needs identified pursuant to paragraph (1) during 
        such period.
          (3) Capital improvement overview.--If the authority will 
        provide capital improvements for public housing developments 
        during such period, an overview of such improvements, the 
        rationale for such improvements, and an analysis of how such 
        improvements will enable the authority to meet its goals, 
        objectives, and mission.
  (e) Citizen Participation.--
          (1) In general.--Before submitting a plan under this section 
        or an amendment under section 108(f) to a plan, a local housing 
        and management authority shall make the plan or amendment 
        publicly available in a manner that affords affected public 
        housing residents and assisted families under title III, 
        citizens, public agencies, entities providing assistance and 
        services for homeless families, and other interested parties an 
        opportunity, for a period not shorter than 60 days and ending 
        at a time that reasonably provides for compliance with the 
        requirements of paragraph (2), to examine its content and to 
        submit comments to the authority.
          (2) Consideration of comments.--A local housing and 
        management authority shall consider any comments or views 
        provided pursuant to paragraph (1) in preparing a final plan or 
        amendment for submission to the Secretary. A summary of such 
        comments or views shall be attached to the plan, amendment, or 
        report submitted. The submitted plan, amendment, or report 
        shall be made publicly available upon submission.
  (f) Local Review.--Before submitting a plan under this section to the 
Secretary, the local housing and management authority shall submit the 
plan to any local elected official or officials responsible for 
appointing the members of the board of directors (or other similar 
governing body) of the local housing and management authority for 
review and approval.
  (g) Plans for Small LHMA's and LHMA's Administering Only Rental 
Assistance.--The Secretary shall establish requirements for submission 
of plans under this section and the information to be included in such 
plans applicable to housing and management authorities that own or 
operate less than 250 public housing dwelling units and shall establish 
requirements for such submission and information applicable to 
authorities that only administer housing assistance under title III 
(and do not own or operate public housing). Such requirements shall 
waive any requirements under this section that the Secretary determines 
are burdensome or unnecessary for such agencies.

SEC. 108. REVIEW OF PLANS.

  (a) Review and Notice.--
          (1) Review.--The Secretary shall conduct a limited review of 
        each local housing management plan submitted to the Secretary 
        to ensure that the plan is complete and complies with the 
        requirements of section 107. The Secretary shall have the 
        discretion to review a plan only to the extent that the 
        Secretary considers review is necessary.
          (2) Notice.--The Secretary shall notify each local housing 
        and management authority submitting a plan whether the plan 
        complies with such requirements not later than 75 days after 
        receiving the plan. If the Secretary does not notify the local 
        housing and management authority, as required under this 
        subsection and subsection (b), the plan shall be considered, 
        for purposes of this Act, to have been determined to comply 
        with the requirements under section 107 and the authority shall 
        be considered to have been notified of compliance upon the 
        expiration of such 75-day period.
  (b) Notice of Reasons for Determination of Noncompliance.--If the 
Secretary determines that a plan, as submitted, does not comply with 
the requirements under section 107, the Secretary shall specify in the 
notice under subsection (a) the reasons for the noncompliance and any 
modifications necessary for the plan to meet the requirements under 
section 107.
  (c) Standards for Determination of Noncompliance.--The Secretary may 
determine that a plan does not comply with the requirements under 
section 107 only if--
          (1) the plan is incomplete in significant matters required 
        under such section;
          (2) there is evidence available to the Secretary that 
        challenges, in a substantial manner, any information provided 
        in the plan; or
          (3) the Secretary determines that the plan violates the 
        purposes of this Act because it fails to provide housing that 
        will be viable on a long-term basis at a reasonable cost.
  (d) Treatment of Existing Plans.--Notwithstanding any other provision 
of this title, a local housing and management authority shall be 
considered to have submitted a plan under this section if the authority 
has submitted to the Secretary a comprehensive plan under section 14(e) 
of the United States Housing Act of 1937 (as in effect immediately 
before the enactment of this Act) or under the comprehensive 
improvement assistance program under such section 14, and the Secretary 
has approved such plan, before January 1, 1994. The Secretary shall 
provide specific procedures and requirements for such authorities to 
amend such plans by submitting only such additional information as is 
necessary to comply with the requirements of section 107.
  (e) Actions to Change Plan.--A local housing and management authority 
that has submitted a plan under section 107 may change actions or 
policies described in the plan before submission and review of the plan 
of the authority for the next fiscal year only if--
          (1) in the case of costly or nonroutine changes, the 
        authority submits to the Secretary an amendment to the plan 
        under subsection (f) which is reviewed in accordance with such 
        subsection; or
          (2) in the case of inexpensive or routine changes, the 
        authority describes such changes in such local housing 
        management plan for the next fiscal year.
  (f) Amendments to Plan.--
          (1) In general.--During the annual or 5-year period covered 
        by the plan for a local housing and management authority, the 
        authority may submit to the Secretary any amendments to the 
        plan.
          (2) Review.--The Secretary shall conduct a limited review of 
        each proposed amendment submitted under this subsection to 
        determine whether the plan, as amended by the amendment, 
        complies with the requirements of section 107 and notify each 
        local housing and management authority submitting the amendment 
        whether the plan, as amended, complies with such requirements 
        not later than 30 days after receiving the amendment. If the 
        Secretary determines that a plan, as amended, does not comply 
        with the requirements under section 107, such notice shall 
        indicate the reasons for the noncompliance and any 
        modifications necessary for the plan to meet the requirements 
        under section 107. If the Secretary does not notify the local 
        housing and management authority as required under this 
        paragraph, the plan, as amended, shall be considered, for 
        purposes of this section, to comply with the requirements under 
        section 107.
          (3) Standards for determination of noncompliance.--The 
        Secretary may determine that a plan, as amended by a proposed 
        amendment, does not comply with the requirements under section 
        107 only if--
                  (A) the plan, as amended, would be subject to a 
                determination of noncompliance in accordance with the 
                provisions of subsection (c); or
                  (B) the Secretary determines that--
                          (i) the proposed amendment is plainly 
                        inconsistent with the activities specified in 
                        the plan;
                          (ii) there is evidence that challenges, in a 
                        substantial manner, any information contained 
                        in the amendment; or
          (3) the Secretary determines that the plan, as amended, 
        violates the purposes of this Act because it fails to provide 
        housing that will be viable on a long-term basis at a 
        reasonable cost.
          (4) Amendments to extend time of performance.--
        Notwithstanding any other provision of this subsection, the 
        Secretary may not determine that any amendment to the plan of a 
        local housing and management authority that extends the time 
        for performance of activities assisted with amounts provided 
        under this title fails to comply with the requirements under 
        section 107 if the Secretary has not provided the amount of 
        assistance set forth in the plan or has not provided the 
        assistance in a timely manner.

SEC. 109. PET OWNERSHIP.

  A resident of a public housing dwelling unit or an assisted dwelling 
unit (as such term is defined in section 371) may own common household 
pets or have common household pets present in the dwelling unit of such 
resident to the extent allowed by the local housing and management 
authority or the owner of the assisted dwelling unit, respectively. 
Notwithstanding the preceding sentence, pet ownership in housing 
assisted under this Act that is federally assisted rental housing for 
the elderly or handicapped (as such term is defined in section 227 of 
the Housing and Urban-Rural Recovery Act of 1983) shall be governed by 
the provisions of section 227 of such Act.

SEC. 110. ADMINISTRATIVE GRIEVANCE PROCEDURE.

  (a) Requirements.--Each local housing and management authority 
receiving assistance under this Act shall establish and implement an 
administrative grievance procedure under which residents of public 
housing and assisted families under title III will--
          (1) be advised of the specific grounds of any proposed 
        adverse local housing and management authority action;
          (2) have an opportunity for a hearing before an impartial 
        party upon timely request within a reasonable period of time;
          (3) have an opportunity to examine any documents or records 
        or regulations related to the proposed action;
          (4) be entitled to be represented by another person of their 
        choice at any hearing;
          (5) be entitled to ask questions of witnesses and have others 
        make statements on their behalf; and
          (6) be entitled to receive a written decision by the local 
        housing and management authority on the proposed action.
  (b) Exclusion From Administrative Procedure of Grievances Concerning 
Evictions From Public Housing.--A local housing and management 
authority shall exclude from its procedure established under subsection 
(a) any grievance concerning an eviction from or termination of tenancy 
in public housing in any State which requires that, prior to eviction, 
a resident be provided a hearing in court which the Secretary 
determines provides the basic elements of due process.
  (c) Costs of Grievance Procedure.--The costs of administering a 
grievance procedure under this section (including costs of retaining 
counsel) shall be considered operating activities of a local housing 
and management authority.

SEC. 111. HEADQUARTERS RESERVE FUND.

  (a) Annual Reservation of Amounts.--Notwithstanding any other 
provision of law, the Secretary may retain not more than 3 percent of 
the amounts appropriated to carry out title II for any fiscal year to 
provide incremental housing assistance under title III in accordance 
with this section.
  (b) Use of Amounts.--Any amounts that are retained under subsection 
(a) shall be available for subsequent allocation to specific areas and 
communities, and may only be used for the Department of Housing and 
Urban Development and--
          (1) unforeseen housing needs resulting from natural and other 
        disasters;
          (2) housing needs resulting from emergencies, as certified by 
        the Secretary, other than such disasters;
          (3) housing needs related to a settlement of litigation, 
        including settlement of fair housing litigation; and
          (4) providing technical assistance, training, and electronic 
        information systems for the Department of Housing and Urban 
        Development and local housing and management authorities to 
        improve management of such authorities.

SEC. 112. LABOR STANDARDS.

  (a) In General.--Any contract for grants, sale, or lease pursuant to 
this Act relating to public housing shall contain the following 
provisions:
          (1) Operation.--A provision requiring that not less than the 
        wages prevailing in the locality, as determined or adopted 
        (subsequent to a determination under applicable State or local 
        law) by the Secretary, shall be paid to all contractors and 
        persons employed in the operation of the low-income housing 
        development involved.
          (2) Production.--A provision that not less than the wages 
        prevailing in the locality, as predetermined by the Secretary 
        of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 276a-276a-
        5), shall be paid to all laborers and mechanics employed in the 
        production of the development involved.
The Secretary shall require certification as to compliance with the 
provisions of this section before making any payment under such 
contract.
  (b) Exceptions.--Subsection (a) and the provisions relating to wages 
(pursuant to subsection (a)) in any contract for grants, sale, or lease 
pursuant to this Act relating to public housing, shall not apply to any 
of the following individuals:
          (1) Volunteers.--Any individual who--
                  (A) performs services for which the individual 
                volunteered;
                  (B)(i) does not receive compensation for such 
                services; or
                  (ii) is paid expenses, reasonable benefits, or a 
                nominal fee for such services; and
                  (C) is not otherwise employed at any time in the 
                construction work.
          (2) Residents employed by lhma.--Any resident of a public 
        housing development who is an employee of the local housing and 
        management authority for the development and performs services 
        in connection with the operation or production of a low-income 
        housing project owned or managed by such authority.

SEC. 113. NONDISCRIMINATION.

  (a) In General.--No person in the United States shall on the grounds 
of race, color, national origin, religion, or sex be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination under any program or activity funded in whole or in part 
with amounts made available under this Act. Any prohibition against 
discrimination on the basis of age under the Age Discrimination Act of 
1975 or with respect to an otherwise qualified handicapped individual 
as provided in section 504 of the Rehabilitation Act of 1973 shall also 
apply to any such program or activity.
  (b) Civil Rights Compliance.--Each local housing and management 
authority that receives grant amounts under this Act shall use such 
amounts and carry out its local housing management plan approved under 
section 108 in conformity with title VI of the Civil Rights Act of 
1964, the Fair Housing Act, section 504 of the Rehabilitation Act of 
1973, the Age Discrimination Act of 1975, and the Americans With 
Disabilities Act of 1990, and shall affirmatively further fair housing.

SEC. 114. EFFECTIVE DATE AND REGULATIONS.

  (a) Effective Date.--The provisions of this Act and the amendments 
made by this Act shall take effect and shall apply on the date of the 
enactment of this Act, unless such provisions or amendments 
specifically provide for effectiveness or applicability on another date 
certain.
  (b) Regulations.--The Secretary may issue any regulations necessary 
to carry out this Act.
  (c) Rule of Construction.--Any failure by the Secretary to issue any 
regulations authorized under subsection (b) shall not affect the 
effectiveness of any provision of this Act or any amendment made by 
this Act.

                        TITLE II--PUBLIC HOUSING

                        Subtitle A--Block Grants

SEC. 201. BLOCK GRANT CONTRACTS.

  (a) In General.--The Secretary shall enter into contracts with local 
housing and management authorities under which--
          (1) the Secretary agrees to make a block grant under this 
        title, in the amount provided under section 202(c), for 
        assistance for low-income housing to the local housing and 
        management authority for each fiscal year covered by the 
        contract; and
          (2) the authority agrees--
                  (A) to provide safe, clean, and healthy housing that 
                is affordable to low-income families and services for 
                families in such housing;
                  (B) to operate, or provide for the operation, of such 
                housing in a financially sound manner;
                  (C) to use the block grant amounts in accordance with 
                this title and the local housing management plan for 
                the authority that complies with the requirements of 
                section 107;
                  (D) to involve residents of housing assisted with 
                block grant amounts in functions and decisions relating 
                to management and the quality of life in such housing;
                  (E) that the management of the public housing of the 
                authority shall be subject to actions authorized under 
                subtitle B of title IV;
                  (F) that the Secretary may take actions under section 
                205 with respect to improper use of grant amounts 
                provided under the contract; and
                  (G) to otherwise comply with the requirements under 
                this title.
  (b) Modification.--Contracts and agreements between the Secretary and 
a local housing and management authority may not be amended in a manner 
which would--
          (1) impair the rights of--
                  (A) leaseholders for units assisted pursuant to a 
                contract or agreement; or
                  (B) the holders of any outstanding obligations of the 
                local housing and management authority involved for 
                which annual contributions have been pledged; or
          (2) provide for payment of block grant amounts under this 
        title in an amount exceeding the allocation for the authority 
        determined under section 204.
Any rule of law contrary to this subsection shall be deemed 
inapplicable.
  (c) Conditions on Renewal.--Each block grant contract under this 
section shall provide, as a condition of renewal of the contract with 
the local housing and management authority, that the authority's 
accreditation be renewed by the Housing Foundation and Accreditation 
Board pursuant to review under section 433 by such Board.

SEC. 202. BLOCK GRANT AUTHORITY AND AMOUNT.

  (a) Authority.--The Secretary shall make block grants under this 
title to eligible local housing and management authorities in 
accordance with block grant contracts under section 201.
  (b) Eligibility.--A local housing and management authority shall be 
an eligible local housing and management authority with respect to a 
fiscal year for purposes of this title only if--
          (1) the Secretary has entered into a block grant contract 
        with the authority;
          (2) the authority has submitted a local housing management 
        plan to the Secretary for such fiscal year;
          (3) the plan has been determined to comply with the 
        requirements under section 107 and the Secretary has not 
        notified the authority that the plan fails to comply with such 
        requirements;
          (4) the authority is accredited under section 433 by the 
        Housing Foundation and Accreditation Board;
          (5) the authority is exempt from local taxes, as provided 
        under subsection (d), or receives a contribution, as provided 
        under such subsection;
          (6) no member of the board of directors or other governing 
        body of the authority, or the executive director, has been 
        convicted of a felony;
          (7) the authority has entered into an agreement providing for 
        local cooperation in accordance with subsection (e); and
          (8) the authority has not been disqualified for a grant 
        pursuant to section 205(a) or subtitle B of title IV.
  (c) Amount of Grants.--The amount of the grant under this title for a 
local housing and management authority for a fiscal year shall be the 
amount of the allocation for the authority determined under section 
204, except as otherwise provided in this title and subtitle B of title 
IV.
  (d) Payments in Lieu of State and Local Taxation of Public Housing 
Developments.--
          (1) Exemption from taxation.--A local housing and management 
        authority may receive a block grant under this title only if--
                  (A)(i) the developments of the authority (exclusive 
                of any portions not assisted with amounts provided 
                under this title) are exempt from all real and personal 
                property taxes levied or imposed by the State, city, 
                county, or other political subdivision; and
                  (ii) the local housing and management authority makes 
                payments in lieu of taxes to such taxing authority 
                equal to 10 percent of the sum, for units charged in 
                the developments of the authority, of the difference 
                between the gross rent and the utility cost, or such 
                lesser amount as is--
                          (I) prescribed by State law;
                          (II) agreed to by the local governing body in 
                        its agreement under subsection (e) for local 
                        cooperation with the local housing and 
                        management authority or under a waiver by the 
                        local governing body; or
                          (III) due to failure of a local public body 
                        or bodies other than the local housing and 
                        management authority to perform any obligation 
                        under such agreement; or
                  (B) the authority complies with the requirements 
                under subparagraph (A) with respect to public housing 
                developments (including public housing units in mixed-
                income developments), but the authority agrees that the 
                units other than public housing units in any mixed-
                income developments (as such term is defined in section 
                221(c)(2)) shall not be subject to any otherwise 
                applicable real property taxes imposed by the State, 
                city, county or other political subdivision.
          (2) Effect of failure to exempt from taxation.--
        Notwithstanding paragraph (1), a local housing and management 
        authority that does not comply with the requirements under such 
        paragraph may receive a block grant under this title, but only 
        if the State, city, county, or other political subdivision in 
        which the development is situated contributes, in the form of 
        cash or tax remission, the amount by which the taxes paid with 
        respect to the development exceed 10 percent of the gross rent 
        and utility cost charged in the development.
  (e) Local Cooperation.--In recognition that there should be local 
determination of the need for low-income housing to meet needs not 
being adequately met by private enterprise, the Secretary may not make 
any grant under this title to a local housing and management authority 
unless the governing body of the locality involved has entered into an 
agreement with the authority providing for the local cooperation 
required by the Secretary pursuant to this title.
  (f) Exception.--Notwithstanding subsection (a), the Secretary may 
make a grant under this title for a local housing and management 
authority that is not an eligible local housing and management 
authority but only for the period necessary to secure, in accordance 
with this title, an alternative local housing and management authority 
for the public housing of the ineligible authority.

SEC. 203. ELIGIBLE AND REQUIRED ACTIVITIES.

  (a) Eligible Activities.--Except as provided in subsection (b), 
amounts from a grant made under this title may be used only for the 
following activities and costs:
          (1) Production.--Production of public housing developments 
        and any production costs.
          (2) Operation.--Operation of public housing developments in a 
        manner appropriate to ensure the viability of the developments 
        as low-income housing and provision of safety, security, and 
        law enforcement measures and activities necessary to protect 
        residents from crime, which shall include providing adequate 
        operating services and reserve funds.
          (3) Modernization.--Improvement of the physical condition of 
        existing public housing developments (including routine and 
        timely improvements, rehabilitation, and replacement of 
        systems, and major rehabilitation, redesign, reconstruction, 
        and redevelopment) and upgrading the management and operation 
        of such developments, to ensure that such developments continue 
        to be available for use as low-income housing.
          (4) Resident programs.--Provision of social, educational, 
        employment, self-sufficiency, and other services to the 
        residents of public housing developments, including providing 
        part of the non-Federal share required in connection with 
        activities undertaken under Federal grant-in-aid programs.
          (5) Homeownership activities.--Activities in connection with 
        a homeownership program for public housing residents under 
        subtitle D, including providing financing or assistance for 
        purchasing housing, or the provision of financial assistance to 
        resident management corporations or resident councils to obtain 
        training, technical assistance, and educational assistance to 
        promote homeownership opportunities.
          (6) Resident management activities.--Activities in connection 
        with establishing, organizing, training, and assisting resident 
        councils and resident management corporations for public 
        housing developments.
          (7) Demolition and disposition activities.--Activities in 
        connection with the disposition or demolition of public housing 
        under section 261.
          (8) Payments in lieu of taxes.--Payments in accordance with 
        the requirement under section 202(d)(1).
          (9) Emergency corrections.--Correction of conditions that 
        constitute an immediate threat to the health or safety of 
        residents of public housing developments, without regard to 
        whether the need for such correction is indicated in the local 
        housing management plan of the authority.
          (10) Preparation of local housing management plans.--
        Preparation of local housing management plans (including 
        reasonable costs that may be necessary to assist residents in 
        participating in the planning process in a meaningful way) and 
        conducting annual financial and performance audits under 
        section 432.
          (11) LHMA insurance.--Purchase of insurance by local housing 
        and management authorities (and their contractors), except 
        that--
                  (A) any such insurance so purchased shall be 
                competitively selected;
                  (B) any coverage provided under such policies, as 
                certified by the authority, shall provide reasonable 
                coverage for the risk of liability exposure, taking 
                into consideration the potential liability concerns 
                inherent in the testing and abatement of lead-based 
                paint, and the managerial and quality assurance 
                responsibilities associated with the conduct of such 
                activities; and
                  (C) notwithstanding any other provision of State or 
                Federal law, regulation or other requirement, any line 
                of insurance from a nonprofit insurance entity, owned 
                and controlled by local housing and management 
                authorities and approved by the Secretary, may be 
                purchased without regard to competitive procurement.
          (12) Payment of outstanding development bonds and notes 
        issued under 1937 act.--Payment of principal and interest 
        payable on obligations issued pursuant to section 5 of the 
        United States Housing Act of 1937 (as in effect before the date 
        of the enactment of this Act) by a local housing and management 
        authority to finance the production of public housing, except 
        that the Secretary shall retain the authority to forgive such 
        debt.
          (13) Mutual help homeownership opportunity programs for 
        indian housing authorities.--In the case of an Indian housing 
        authority, production, operation, and modernization of 
        developments under a mutual help homeownership program subject 
        to the requirements under section 202 of the United States 
        Housing Act of 1937 (as in effect immediately before the 
        enactment of this Act), except that any reference in such 
        section to assistance under such section or such Act shall be 
        construed to refer to assistance under this title and 
        subsection (b) of such section shall not apply.
  (b) Required Conversion of Assistance for Public Housing to Rental 
Housing Assistance.--
          (1) Requirement.--A local housing and management authority 
        that receives grant amounts under this title shall provide 
        assistance in the form of rental housing assistance under title 
        III or appropriate site revitalization or other appropriate 
        capital improvements approved by the Secretary, in lieu of 
        assisting the operation and modernization of any building or 
        buildings of public housing, if the authority provides 
        sufficient evidence to the Secretary that--
                  (A) the building is distressed or substantially 
                vacant;
                  (B) the estimated cost of continued operation and 
                modernization of the building exceeds the cost of 
                providing choice-based rental assistance under title 
                III; and
                  (C) there is a sufficient supply of available and 
                affordable housing to make the use of such voucher 
                assistance feasible.
          (2) Use of Other Amounts.--In addition to grant amounts under 
        this title attributable (pursuant to the formula under section 
        204) to the building or buildings identified under paragraph 
        (1), the Secretary may use amounts provided in appropriation 
        Acts for incremental choice-based housing assistance and, to 
        the extent approved in advance, for the renewal of assistance 
        under section 8 of the United States Housing Act of 1937 (as in 
        effect before the date of enactment of this Act), for 
        assistance under title III for families residing in such 
        building or buildings or for appropriate site revitalization or 
        other appropriate capital improvements approved by the 
        Secretary.
          (3) Enforcement.--The Secretary shall take appropriate action 
        to ensure conversion of any building or buildings identified 
        under paragraph (1) and any other appropriate action under this 
        subsection, if the local housing and management authority fails 
        to take appropriate action under this subsection.
          (4) Failure of LHMA's to comply with conversion 
        requirement.--If the Secretary determines that--
                  (A) a local housing and management authority has 
                failed under paragraph (1) to identify a building or 
                buildings in a timely manner,
                  (B) a local housing and management authority has 
                failed to identify one or more buildings which the 
                Secretary determines should have been identified under 
                paragraph (1), or
                  (C) one or more of the buildings identified by the 
                local housing and management authority pursuant to 
                paragraph (1) should not, in the determination of the 
                Secretary, have been identified under that paragraph,
        the Secretary may identify a building or buildings for 
        conversion and other appropriate action pursuant to this 
        subsection.
          (5) Cessation of unnecessary spending.--Notwithstanding any 
        other provision of law, if, in the determination of the 
        Secretary, a building or buildings meets or is likely to meet 
        the criteria set forth in paragraph (1), the Secretary may 
        direct the local housing and management authority to cease 
        additional spending in connection with such building or 
        buildings, except to the extent that additional spending is 
        necessary to ensure safe, clean, and healthy housing until the 
        Secretary determines or approves an appropriate course of 
        action with respect to such building or buildings under this 
        subsection.
          (6) Use of budget authority.--Notwithstanding any other 
        provision of law, if a building or buildings are identified 
        pursuant to paragraph (1), the Secretary may authorize or 
        direct the transfer, to the choice-based or tenant-based 
        assistance program of such authority or to appropriate site 
        revitalization or other capital improvements approved by the 
        Secretary, of--
                  (A) in the case of an authority receiving assistance 
                under the comprehensive improvement assistance program, 
                any amounts obligated by the Secretary for the 
                modernization of such building or buildings pursuant to 
                section 14 of the United States Housing Act of 1937, as 
                in effect immediately before the date of enactment of 
                this Act;
                  (B) in the case of an authority receiving public and 
                Indian housing modernization assistance by formula 
                pursuant to such section 14, any amounts provided to 
                the authority which are attributable pursuant to the 
                formula for allocating such assistance to such building 
                or buildings;
                  (C) in the case of an authority receiving assistance 
                for the major reconstruction of obsolete projects, any 
                amounts obligated by the Secretary for the major 
                reconstruction of such building or buildings pursuant 
                to section 5(j)(2) of the United States Housing Act of 
                1937, as in effect immediately before the date of 
                enactment of this Act; and
                  (D) in the case of an authority receiving assistance 
                pursuant to the formula under section 204, any amounts 
                provided to the authority which are attributable 
                pursuant to the formula for allocating such assistance 
                to such building or buildings.
  (c) Fungibility of Amounts.--Any amounts provided under a block grant 
under this title may be used for any eligible activity under subsection 
(a) or for conversion under subsection (b), notwithstanding whether 
such amounts are attributable to the operating allocation under section 
204(d)(1) or the capital improvements allocation for the local housing 
and management authority determined under section 204(d)(2).
  (d) Compliance With Plan.--The local housing management plan 
submitted by a local housing and management authority (including any 
amendments to the plan), unless determined under section 108 not to 
comply with the requirements under section 107, shall be binding upon 
the Secretary and the local housing and management authority and the 
authority shall use any grant amounts provided under this title for 
eligible activities under subsection (a) in accordance with the plan. 
This subsection may not be construed to preclude changes or amendments 
to the plan, as authorized under section 108(e) or any actions 
authorized by this Act to be taken without regard to a local housing 
management plan.

SEC. 204. DETERMINATION OF BLOCK GRANT ALLOCATION.

  (a) In General.--For each fiscal year, after reserving amounts under 
section 111 from the aggregate amount made available for the fiscal 
year for carrying out this title, the Secretary shall allocate any 
remaining amounts among eligible local housing and management 
authorities in accordance with this section, so that the sum of all of 
the allocations for all eligible authorities is equal to such remaining 
amount.
  (b) Allocation Amount.--The Secretary shall determine the amount of 
the allocation for each eligible local housing and management 
authority, which shall be--
          (1) for any fiscal year beginning after the enactment of a 
        law containing a formula described in subsection (c), the 
        amount determined under such formula; or
          (2) for any fiscal year beginning before the expiration of 
        such period, the sum of--
                  (A) the operating allocation determined under 
                subsection (d)(1) for the authority; and
                  (B) the capital improvement allocation determined 
                under subsection (d)(2) for the authority.
  (c) Permanent Allocation Formula.--
          (1) Formula.--A formula under this subsection shall provide 
        for allocating amounts available for a fiscal year for block 
        grants under this title for each local housing and management 
        authority. The formula should reward performance and may 
        consider factors that reflect the different characteristics and 
        sizes of local housing and management authorities, the relative 
        needs, revenues, costs, and capital improvements of 
        authorities, and the relative costs to authorities of operating 
        a well-managed authority that meets the performance targets for 
        the authority established in the local housing management plan 
        for the authority.
          (2) Development under negotiated rulemaking procedure.--The 
        formula under this subsection shall be developed according to 
        procedures for issuance of regulations under the negotiated 
        rulemaking procedure under subchapter III of chapter 5 of title 
        5, United States Code, except that the formula shall not be 
        contained in a regulation.
          (3) Report.--Not later than the expiration of the 18-month 
        period beginning upon the enactment of this Act, the Secretary 
        shall submit a report to the Congress containing the proposed 
        formula established pursuant to paragraph (2) that meets the 
        requirements of this subsection.
  (d) Interim Allocation Requirements.--
          (1) Operating allocation.--
                  (A) Applicability to 50 percent of appropriated 
                amounts.--Of any amounts available for allocation under 
                this subsection for a fiscal year, 50 percent shall be 
                used only to provide amounts for operating allocations 
                under this paragraph for eligible local housing and 
                management authorities.
                  (B) Determination.--The operating allocation under 
                this subsection for a local housing and management 
                authority for a fiscal year shall be an amount 
                determined by applying, to the amount to be allocated 
                under this paragraph, the formula used for determining 
                the distribution of operating subsidies for fiscal year 
                1995 to public housing agencies (as modified under 
                subparagraph (C)) under section 9 of this Act, as in 
                effect before the enactment of this Act.
                  (C) Treatment of chronically vacant units.--The 
                Secretary shall revise the formula referred to in 
                subparagraph (B) so that the formula does not provide 
                any amounts, other than utility costs, attributable to 
                any dwelling unit of a local housing and management 
                authority that has been vacant continuously for 6 or 
                more months. A unit shall not be considered vacant for 
                purposes of this paragraph if the unit is unoccupied 
                because of rehabilitation or renovation that is on-
                schedule.
          (2) Capital improvement allocation.--
                  (A) Applicability to 50 percent of appropriated 
                amounts.--Of any amounts available for allocation under 
                this subsection for a fiscal year, 50 percent shall be 
                used only to provide amounts for capital improvement 
                allocations under this paragraph for eligible local 
                housing and management authorities.
                  (B) Determination.--The capital improvement 
                allocation under this subsection for an eligible local 
                housing and management authority for a fiscal year 
                shall be determined by applying, to the amount to be 
                allocated under this paragraph, the formula used for 
                determining the distribution of modernization 
                assistance for fiscal year 1995 to public housing 
                agencies under section 14 of this Act, as in effect 
                before the enactment of this Act, except that Secretary 
                shall establish a method for taking into consideration 
                allocation of amounts under the comprehensive 
                improvement assistance program.

SEC. 205. SANCTIONS FOR IMPROPER USE OF AMOUNTS.

  (a) In General.--In addition to any other actions authorized under 
this title, if the Secretary finds pursuant to an annual financial and 
performance audit under section 432 that a local housing and management 
authority receiving grant amounts under this title has failed to comply 
substantially with any provision of this title, the Secretary may--
          (1) terminate payments under this title to the authority;
          (2) withhold from the authority amounts from the total 
        allocation for the authority pursuant to section 204;
          (3) reduce the amount of future grant payments under this 
        title to the authority by an amount equal to the amount of such 
        payments that were not expended in accordance with this title;
          (4) limit the availability of grant amounts provided to the 
        authority under this title to programs, projects, or activities 
        not affected by such failure to comply;
          (5) withhold from the authority amounts allocated for the 
        authority under title III; or
          (6) order other corrective action with respect to the 
        authority.
  (b) Termination of Compliance Action.--If the Secretary takes action 
under subsection (a) with respect to a local housing and management 
authority, the Secretary shall--
          (1) in the case of action under subsection (a)(1), resume 
        payments of grant amounts under this title to the authority in 
        the full amount of the total allocation under section 204 for 
        the authority at the time that the Secretary first determines 
        that the authority will comply with the provisions of this 
        title;
          (2) in the case of action under paragraph (2), (5), or (6) of 
        subsection (a), make withheld amounts available as the 
        Secretary considers appropriate to ensure that the authority 
        complies with the provisions of this title; or
          (3) in the case of action under subsection (a)(4), release 
        such restrictions at the time that the Secretary first 
        determines that the authority will comply with the provisions 
        of this title.

           Subtitle B--Admissions and Occupancy Requirements

SEC. 221. LOW-INCOME HOUSING REQUIREMENT.

  (a) Production Assistance.--Any public housing produced using amounts 
provided under a grant under this title or under the United States 
Housing Act of 1937 shall be operated as public housing for the 40-year 
period beginning upon such production.
  (b) Operating Assistance.--No portion of any public housing 
development operated with amounts from a grant under this title or 
operating assistance provided under the United States Housing Act of 
1937 may be disposed of before the expiration of the 10-year period 
beginning upon the conclusion of the fiscal year for which the grant or 
such assistance was provided, except as provided in this Act.
  (c) Capital Improvements Assistance.--Amounts may be used for 
eligible activities under section 203(a)(3) only for the following 
housing developments:
          (1) Low-income developments.--Amounts may be used for a low-
        income housing development that--
                  (A) is owned by local housing and management 
                authorities;
                  (B) is operated as low-income rental housing and 
                produced or operated with assistance provided under a 
                grant under this title; and
                  (C) is consistent with the purposes of this title.
        Any development, or portion thereof, referred to in this 
        paragraph for which activities under section 203(a)(3) are 
        conducted using amounts from a grant under this title shall be 
        maintained and used as public housing for the 20-year period 
        beginning upon the receipt of such grant. Any public housing 
        development, or portion thereof, that received the benefit of a 
        grant pursuant to section 14 of the United States Housing Act 
        of 1937 shall be maintained and used as public housing for the 
        20-year period beginning upon receipt of such amounts.
          (2) Mixed income developments.--Amounts may be used for 
        mixed-income developments, which shall be a housing development 
        that--
                  (A) contains dwelling units that are available for 
                occupancy by families other than low-income families;
                  (B) contains a number of dwelling units--
                          (i) which units are made available (by master 
                        contract or individual lease) for occupancy 
                        only by low- and very low-income families 
                        identified by the local housing and management 
                        authority;
                          (ii) which number is not less than a 
                        reasonable number of units, including related 
                        amenities, taking into account the amount of 
                        the assistance provided by the authority 
                        compared to the total investment (including 
                        costs of operation) in the development;
                          (iii) which units are subject to the 
                        statutory and regulatory requirements of the 
                        public housing program, except that the 
                        Secretary may grant appropriate waivers to such 
                        statutory and regulatory requirements if 
                        reductions in funding or other changes to the 
                        program make continued application of such 
                        requirements impracticable;
                          (iv) which units are specially designated as 
                        dwelling units under this subparagraph, except 
                        the equivalent units in the development may be 
                        substituted for designated units during the 
                        period the units are subject to the 
                        requirements of the public housing program; and
                          (v) which units shall be eligible for 
                        assistance under this title; and
                  (C) is owned by the local housing and management 
                authority, an affiliate controlled by it, or another 
                appropriate entity.
        Notwithstanding any other provision of this title, to 
        facilitate the establishment of socioeconomically mixed 
        communities, a local housing and management authority that uses 
        grant amounts under this title for a mixed income development 
        under this paragraph may, to the extent that income from such a 
        development reduces the amount of grant amounts used for 
        operating or other costs relating to public housing, use such 
        resulting savings to rent privately developed dwelling units in 
        the neighborhood of the mixed income development. Such units 
        shall be made available for occupancy only by low-income 
        families eligible for residency in public housing.

SEC. 222. FAMILY ELIGIBILITY.

  (a) In General.--Dwelling units in public housing may be rented only 
to families who are low-income families at the time of their initial 
occupancy of such units.
  (b) Income Mix Within Developments.--A local housing and management 
authority may establish and utilize income-mix criteria for the 
selection of residents for dwelling units in public housing 
developments that limit admission to a development by selecting 
applicants having incomes appropriate so that the mix of incomes of 
families occupying the development is proportional to the income mix in 
the eligible population of the jurisdiction of the authority, as 
adjusted to take into consideration the severity of housing need. Any 
criteria established under this subsection shall be subject to the 
provisions of subsection (c).
  (c) Income Mix.--Of the public housing dwelling units of a local 
housing and management authority made available for occupancy after the 
date of the enactment of this Act, not less than 25 percent shall be 
occupied by low-income families whose incomes do not exceed 30 percent 
of the area median income.
  (d) Waiver of Eligibility Requirements for Occupancy by Police 
Officers.--
          (1) Authority and waiver.--To provide occupancy in public 
        housing dwelling units to police officers and other law 
        enforcement or security personnel (who are not otherwise 
        eligible for residence in public housing) and to increase 
        security for other public housing residents in developments 
        where crime has been a problem, a local housing and management 
        authority may, with respect to such units and subject to 
        paragraph (2)--
                  (A) waive--
                          (i) the provisions of subsection (a) of this 
                        section and section 225(a);
                          (ii) the applicability of--
                                  (I) any preferences for occupancy 
                                established under section 223;
                                  (II) the minimum rental amount 
                                established pursuant to section 225(b) 
                                and any maximum monthly rental amount 
                                established pursuant to such section;
                                  (III) any criteria relating to 
                                project income mix established under 
                                subsection (b);
                                  (IV) the income mix requirements 
                                under subsection (c); and
                                  (V) any other occupancy limitations 
                                or requirements; and
                  (B) establish special rent requirements and other 
                terms and conditions of occupancy.
          (2) Conditions of waiver.--A local housing and management 
        authority may take the actions authorized in paragraph (1) only 
        if authority determines that such actions will increase 
        security in the public housing developments involved and will 
        not result in a significant reduction of units available for 
        residence by low-income families.

SEC. 223. PREFERENCES FOR OCCUPANCY.

  (a) Authority to Establish.--Any local housing and management 
authority may establish a system for making dwelling units in public 
housing available for occupancy that provides preference for such 
occupancy to families having certain characteristics.
  (b) Content.--Each system of preferences established pursuant to this 
section shall be based upon local housing needs and priorities, as 
determined by the local housing and management authority using 
generally accepted data sources. Each system of preferences established 
pursuant to this section shall be based upon local housing needs and 
priorities using generally accepted data sources, including any 
information obtained pursuant to an opportunity for public comment as 
provided under section 107(e) or under the requirements applicable to 
comprehensive housing affordability strategy for the relevant 
jurisdiction.

SEC. 224. ADMISSION PROCEDURES.

  (a) Admission Requirements.--A local housing and management authority 
shall ensure that each family residing in a public housing development 
owned or administered by the authority is admitted in accordance with 
the procedures established under this title by the authority and the 
income limits under section 222.
  (b) Availability of Criminal Records.--
          (1) Availability.--Notwithstanding any other provision of 
        Federal, State, or local law, upon the request of any local 
        housing and management authority, the National Crime 
        Information Center, police departments, and any other law 
        enforcement entities shall provide information to the authority 
        regarding the criminal convictions of applicants for, or 
        residents of, public housing for the purpose of applicant 
        screening, lease enforcement, and eviction.
          (2) Content.--The information provided under paragraph (1) 
        may not include information regarding any criminal conviction 
        of such an applicant or resident for any act (or failure to 
        act) occurring before the applicant or resident reached 18 
        years of age.
          (3) Confidentiality.--A local housing and management 
        authority receiving information under this subsection may use 
        such information only for the purposes provided in this 
        subsection and such information may not be disclosed to any 
        person who is not an officer or employee of the authority. The 
        Secretary shall, by regulation, establish procedures necessary 
        to ensure that information provided to a local housing and 
        management authority under this subsection is used, and 
        confidentiality of such information is maintained, as required 
        under this subsection.
          (4) Penalty.--Any person who knowingly and willfully requests 
        or obtains any information concerning an applicant for, or 
        resident of, public housing pursuant to the authority under 
        this subsection under false pretenses, or any person who 
        knowingly and willfully discloses any such information in any 
        manner to any individual not entitled under any law to receive 
        it, shall be guilty of a misdemeanor and fined not more than 
        $5,000. The term ``person'' as used in this paragraph shall 
        include an officer or employee of any local housing and 
        management authority.
          (5) Civil action.--Any applicant for, or resident of, public 
        housing affected by (A) a negligent or knowing disclosure of 
        information referred to in this section about such person by an 
        officer or employee of any local housing and management 
        authority, which disclosure is not authorized by this 
        subsection, or (B) any other negligent or knowing action that 
        is inconsistent with this subsection, may bring a civil action 
        for damages and such other relief as may be appropriate against 
        any officer or employee of any local housing and management 
        authority responsible for such unauthorized action. The 
        district court of the United States in the district in which 
        the affected applicant or resident resides, in which such 
        unauthorized action occurred, or in which the officer or 
        employee alleged to be responsible for any such unauthorized 
        action resides, shall have jurisdiction in such matters. 
        Appropriate relief that may be ordered by such district courts 
        shall include reasonable attorney's fees and other litigation 
        costs.
          (6) Fees.--A local housing and management authority may pay a 
        reasonable fee to obtain information under this subsection.
  (c) Notification of Application Decisions.--A local housing and 
management authority shall establish procedures designed to provide for 
notification to an applicant for admission to public housing of the 
determination with respect to such application, the basis for the 
determination, and, if the applicant is determined to be eligible for 
admission, the projected date of occupancy (to the extent such date can 
reasonably be determined). If an authority denies an applicant 
admission to public housing, the authority shall notify the applicant 
that the applicant may request an informal hearing on the denial within 
a reasonable time of such notification.
  (d) Confidentiality for Victims of Domestic Violence.--A local 
housing and management authority shall be subject to the restrictions 
regarding release of information relating to the identity and new 
residence of any family in public housing that was a victim of domestic 
violence that are applicable to shelters pursuant to the Family 
Violence Prevention and Services Act. The authority shall work with the 
United States Postal Service to establish procedures consistent with 
the confidentiality provisions in the Violence Against Women Act of 
1994.
  (e) Transfers.--A local housing and management authority may apply, 
to each public housing resident seeking to transfer from one 
development to another development owned or operated by the authority, 
the screening procedures applicable at such time to new applicants for 
public housing.

SEC. 225. FAMILY RENTAL PAYMENT.

  (a) Rental Contribution by Resident.--A family shall pay as monthly 
rent for a dwelling unit in public housing the amount that the local 
housing and management authority determines is appropriate with respect 
to the family and the unit, which shall be--
          (1) based upon factors determined by the authority, which may 
        include the adjusted income of the resident, type and size of 
        dwelling unit, operating and other expenses of the authority, 
        or any other factors that the authority considers appropriate; 
        and
          (2) an amount that is not less than the minimum monthly 
        rental amount under subsection (b)(1) nor more than any maximum 
        monthly rental amount established for the dwelling unit 
        pursuant to subsection (b)(2).
In determining the amount of the rent charged for a dwelling unit, a 
local housing and management authority shall take into consideration 
the characteristics of the population served by the authority, the 
goals of the local housing management plan for the authority, and the 
goals under the comprehensive housing affordability strategy under 
section 105 of the Cranston-Gonzalez National Affordable Housing Act 
(or any consolidated plan incorporating such strategy) for the 
applicable jurisdiction.
  (b) Allowable Rents.--
          (1) Minimum rental.--Each local housing and management 
        authority shall establish, for each dwelling unit in public 
        housing owned or administered by the authority, a minimum 
        monthly rental contribution, which--
                  (A) may not be less than $25;
                  (B) shall include any portion of the cost of 
                utilities for the unit for which the resident is 
                responsible; and
                  (C) may be increased annually by the authority, 
                except that no such annual increase may exceed 10 
                percent of the amount of the minimum monthly rental 
                contribution in effect for the preceding year.
          (2) Maximum rental.--Each local housing and management 
        authority may establish, for each dwelling unit in public 
        housing owned or administered by the authority, a maximum 
        monthly rental amount, which shall be an amount determined by 
        the authority which is based on, but does not exceed--
                  (A) the average, for dwelling units of similar size 
                in public housing developments owned and operated by 
                such authority, of operating expenses attributable to 
                such units;
                  (B) the reasonable rental value of the unit; or
                  (C) the local market rent for comparable units of 
                similar size.
  (c) Income Reviews.--If a local housing and management authority 
establishes the amount of rent paid by a family for a public housing 
dwelling unit based on the adjusted income of the family, the authority 
shall review the incomes of such family occupying dwelling units in 
public housing owned or administered by the authority not less than 
annually.
  (d) Review of Maximum and Minimum Rents.--
          (1) Rental charges.--If the Secretary determines, at any 
        time, that a significant percentage of the public housing 
        dwelling units owned or operated by a large local housing and 
        management authority are occupied by households paying more 
        than 30 percent of their adjusted incomes for rent, the 
        Secretary shall review the maximum and minimum monthly rental 
        amounts established by the authority.
          (2) Population served.--If the Secretary determines, at any 
        time, that less than 40 percent of the public housing dwelling 
        units owned or operated by a large local housing and management 
        authority are occupied by households whose incomes do not 
        exceed 30 percent of the area median income, the Secretary 
        shall review the maximum and minimum monthly rental amounts 
        established by the authority.
          (3) Modification of maximum and minimum rental amounts.--If, 
        pursuant to review under this subsection, the Secretary 
        determines that the maximum and minimum rental amounts for a 
        large local housing and management authority are not 
        appropriate to serve the needs of the low-income population of 
        the jurisdiction served by the authority (taking into 
        consideration the financial resources and costs of the 
        authority), as identified in the approved local housing 
        management plan of the authority, the Secretary may require the 
        authority to modify the maximum and minimum monthly rental 
        amounts.
          (4) Large lhma.--For purposes of this subsection, the term 
        ``large local housing and management authority'' means a local 
        housing and management authority that owns or operates 1250 or 
        more public housing dwelling units.
  (e) Phase-In of Rent Contribution Increases.--
          (1) In general.--Except as provided in paragraph (2), for any 
        family residing in a dwelling unit in public housing upon the 
        date of the enactment of this Act, if the monthly contribution 
        for rental of an assisted dwelling unit to be paid by the 
        family upon initial applicability of this title is greater than 
        the amount paid by the family under the provisions of the 
        United States Housing Act of 1937 immediately before such 
        applicability, any such resulting increase in rent contribution 
        shall be--
                  (A) phased in equally over a period of not less than 
                3 years, if such increase is 30 percent or more of such 
                contribution before initial applicability; and
                  (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
          (2) Exception.--The minimum rent contribution requirement 
        under subsection (b)(1)(A) shall apply to each family described 
        in paragraph (1) of this subsection, notwithstanding such 
        paragraph.

SEC. 226. LEASE REQUIREMENTS.

  In renting dwelling units in a public housing development, each local 
housing and management authority shall utilize leases that--
          (1) do not contain unreasonable terms and conditions;
          (2) obligate the local housing and management authority to 
        maintain the development in compliance with the housing quality 
        requirements under section 232;
          (3) require the local housing and management authority to 
        give adequate written notice of termination of the lease, which 
        shall not be less than--
                  (A) the period provided under the applicable law of 
                the jurisdiction or 14 days, whichever is less, in the 
                case of nonpayment of rent;
                  (B) a reasonable period of time, but not to exceed 14 
                days, when the health or safety of other residents or 
                local housing and management authority employees is 
                threatened; and
                  (C) the period of time provided under the applicable 
                law of the jurisdiction, in any other case;
          (4) require that the local housing and management authority 
        may not terminate the tenancy except for violation of the terms 
        or conditions of the lease, violation of applicable Federal, 
        State, or local law, or for other good cause;
          (5) provide that the local housing and management authority 
        may terminate the tenancy of a public housing resident for any 
        activity, engaged in by a public housing resident, any member 
        of the resident's household, or any guest or other person under 
        the resident's control, that--
                  (A) threatens the health or safety of, or right to 
                peaceful enjoyment of the premises by, other residents 
                or employees of the local housing and management 
                authority or other manager of the housing;
                  (B) threatens the health or safety of, or right to 
                peaceful enjoyment of their premises by, persons 
                residing in the immediate vicinity of the premises; or
                  (C) is criminal activity (including drug-related 
                criminal activity);
          (6) provide that any occupancy in violation of the provisions 
        of section 227(a)(4) shall be cause for termination of tenancy; 
        and
          (7) specify that, with respect to any notice of eviction or 
        termination, notwithstanding any State law, a public housing 
        resident shall be informed of the opportunity, prior to any 
        hearing or trial, to examine any relevant documents, records or 
        regulations directly related to the eviction or termination.

SEC. 227. DESIGNATED HOUSING FOR ELDERLY AND DISABLED FAMILIES.

  (a) Authority To Provide Designated Housing.--
          (1) In general.--Notwithstanding any other provision of law, 
        a local housing and management authority for which the 
        information required under subsection (c) is in effect may 
        provide public housing developments (or portions of 
        developments) designated for occupancy by (A) only elderly 
        families, (B) only disabled families, or (C) elderly and 
        disabled families.
          (2) Priority for occupancy.--In determining priority for 
        admission to public housing developments (or portions of 
        developments) that are designated for occupancy as provided in 
        paragraph (1), the local housing and management authority may 
        make units in such developments (or portions) available only to 
        the types of families for whom the development is designated.
          (3) Eligibility of near-elderly families.--If a local housing 
        and management authority determines that there are insufficient 
        numbers of elderly families to fill all the units in a 
        development (or portion of a development) designated under 
        paragraph (1) for occupancy by only elderly families, the 
        authority may provide that near-elderly families may occupy 
        dwelling units in the development (or portion).
          (4) Limitation on occupancy in developments for elderly 
        families.--
                  (A) In general.--Subject only to the provisions of 
                subsection (b) and notwithstanding any other provision 
                of law, a dwelling unit in a development (or portion of 
                a development) that is designated under paragraph (1) 
                for occupancy by only elderly families or by only 
                elderly and disabled families shall not be occupied by 
                any individual who is not an elderly person and--
                          (i) who currently illegally uses a controlled 
                        substance; or
                          (ii) whose history of illegal use of a 
                        controlled substance or use of alcohol, or 
                        current use of alcohol, provides reasonable 
                        cause for the local housing and management 
                        authority to believe that the occupancy by such 
                        individual may interfere with the health, 
                        safety, or right to peaceful enjoyment of the 
                        premises by other residents.
                  (B) Consideration of rehabilitation.--In determining 
                whether, pursuant to subparagraph (A), to deny 
                occupancy to any individual based on a history of use 
                of a controlled substance or alcohol, a local housing 
                and management authority may consider the factors under 
                section 105(b).
  (b) Standards Regarding Evictions.--
          (1) Limitation.--Except as provided in paragraph (2), any 
        resident who is lawfully residing in a dwelling unit in a 
        development designated for occupancy under subsection (a)(1) 
        may not be evicted or otherwise required to vacate such unit 
        because of the designation of the development (or portion of a 
        development) or because of any action taken by the Secretary or 
        any local housing and management authority to carry out this 
        section.
          (2) Requirement to evict nonelderly tenants in housing 
        designated for elderly families who have current drug or 
        alcohol abuse problems.--The local housing and management 
        authority administering a development (or portion of a 
        development) described in subsection (a)(4)(A) shall evict any 
        individual who occupies a dwelling unit in such a development 
        and who currently illegally uses a controlled substance or 
        whose current use of alcohol provides a reasonable cause for 
        the authority to believe that the occupancy by such individual 
        may interfere with the health, safety, or right to peaceful 
        enjoyment of the premises by other residents. This paragraph 
        may not be construed to require a local housing and management 
        authority to evict any other individual who occupies the same 
        dwelling unit as the individual required to be evicted.
  (c) Required Inclusions in Local Housing Management Plan.--
          (1) In general.--A local housing and management authority may 
        designate a development (or portion of a development) for 
        occupancy under subsection (a)(1) only if the authority, as 
        part of the authority's local housing management plan--
                  (A) establishes that the designation of the 
                development is necessary--
                          (i) to achieve the housing goals for the 
                        jurisdiction under the comprehensive housing 
                        affordability strategy under section 105 of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act (or any consolidated plan incorporating 
                        such strategy); and
                          (ii) to meet the housing needs of the low-
                        income population jurisdiction; and
                  (B) submits a description of--
                          (i) the development (or portion of a 
                        development) to be designated;
                          (ii) the types of residents for which the 
                        development is to be designated;
                          (iii) any services designed to meet the 
                        special needs of residents to be provided to 
                        residents of the designated development (or 
                        portion);
                          (iv) how the design and related facilities 
                        (as such term is defined in section 202(d)(8) 
                        of the Housing Act of 1959) of the development 
                        accommodate the special environmental needs of 
                        the intended occupants.
          (2) 5-year effectiveness.--The information required under 
        paragraph (1) shall be effective for purposes of designation of 
        a public housing development (or portion thereof) under this 
        section only for the 5-year period that begins upon 
        notification under section 108(a) of the local housing and 
        management authority that the information complies with the 
        requirements under section 107 and this subsection. A local 
        housing and management authority may extend the effectiveness 
        of the designation and information for an additional 2-year 
        period beginning upon the expiration of such period (or the 
        expiration of any previous extension period under this 
        sentence) by updating such information in the local housing 
        management plan for the authority.
          (3) Treatment of existing plans.--Notwithstanding any other 
        provision of this section, a local housing and management 
        authority shall be considered to have submitted the information 
        required under this subsection if the authority has submitted 
        to the Secretary an application and allocation plan under this 
        section (as in effect before the date of the enactment of this 
        Act) that have not been approved or disapproved before such 
        date of enactment.
          (4) Savings provision.--Any application and allocation plan 
        approved under section 7 of the United States Housing Act of 
        1937 (as in effect before the date of the enactment of this 
        Act) before such date of enactment shall be considered to be 
        information required under this subsection that is in effect 
        for purposes of this section for the 5-year period beginning 
        upon such approval.
  (d) Relocation Assistance.--A local housing and management authority 
that designates any existing development or building, or portion 
thereof, for occupancy as provided under subsection (a) shall provide, 
to each person and family relocated in connection with such 
designation--
          (1) notice of the designation and relocation, as soon as is 
        practicable for the authority and the person or family;
          (2) comparable housing (including appropriate services and 
        design features), which may include rental assistance under 
        title III, at a rental rate that is comparable to that 
        applicable to the unit from which the person or family has 
        vacated; and
          (3) payment of actual, reasonable moving expenses.
  (e) Inapplicability to Indian Housing.--The provisions of this 
section shall not apply with respect to low-income housing developed or 
operated pursuant to a contract between the Secretary and an Indian 
housing authority.

                         Subtitle C--Management

SEC. 231. MANAGEMENT PROCEDURES.

  (a) Sound Management.--A local housing and management authority that 
receives grant amounts under this title shall establish and comply with 
procedures and practices sufficient to ensure that the public housing 
developments owned or administered by the authority are operated in a 
sound manner.
  (b) Management by Other Entities.--Except as otherwise provided under 
this Act, a local housing and management authority may contract with 
any other entity to perform any of the management functions for public 
housing owned or operated by the local housing and management 
authority.

SEC. 232. HOUSING QUALITY REQUIREMENTS.

  (a) In General.--Each local housing and management authority that 
receives grant amounts under this Act shall maintain its public housing 
in a condition that complies--
          (1) in the case of public housing located in a jurisdiction 
        which has in effect laws, regulations, standards, or codes 
        regarding habitability of residential dwellings that provide 
        protection to residents of the dwellings that is equal to or 
        greater than the protection provided under the housing quality 
        standards established under subsection (b), with such 
        applicable laws, regulations, standards, or codes; or
          (2) in the case of public housing located in a jurisdiction 
        which does not have in effect laws, regulations, standards, or 
        codes described in subparagraph (A), with the housing quality 
        standards established under subsection (b).
  (b) Federal Housing Quality Standards.--The Secretary shall establish 
housing quality standards under this subsection that ensure that public 
housing dwelling units are safe, clean, and healthy. Such standards 
shall include requirements relating to habitability, including 
maintenance, health and sanitation factors, condition, and construction 
of dwellings, and shall, to the greatest extent practicable, be 
consistent with the standards established under section 328(b). The 
Secretary shall differentiate between major and minor violations of 
such standards.
  (c) Determinations.--Each local housing and management authority 
providing housing assistance shall identify, in the local housing 
management plan of the authority, whether the authority is utilizing 
the standard under paragraph (1) or (2) of subsection (a) and, if the 
authority utilizes the standard under paragraph (1), shall certify in 
such plan that the applicable State or local laws, regulations, 
standards, or codes comply with the requirements under such paragraph.
  (d) Annual Inspections.--Each local housing and management authority 
that owns or operates public housing shall make an annual inspection of 
each public housing development to determine whether units in the 
development are maintained in accordance with the requirements under 
subsection (a). The authority shall submit the results of such 
inspections to the Secretary and the Inspector General for the 
Department of Housing and Urban Development and such results shall be 
available to the Housing Foundation and Accreditation Board established 
under title IV and any auditor conducting an audit under section 432.

SEC. 233. EMPLOYMENT OF RESIDENTS.

  A local housing and management authority may employ public housing 
residents in any activities engaged in by the authority. The Secretary 
shall require local housing and management authorities, in using grant 
amounts provided under this title, to make their best efforts to enter 
into agreements with contractors and subcontractors of the authority to 
provide residents of public housing with employment opportunities, job 
training, and internships.

SEC. 234. RESIDENT COUNCILS AND RESIDENT MANAGEMENT CORPORATIONS.

  (a) Resident Councils.--The residents of a public housing development 
may establish a resident council for the development for purposes of 
consideration of issues relating to residents, representation of 
resident interests, and coordination and consultation with a local 
housing and management authority. A resident council shall be an 
organization or association that--
          (1) is nonprofit in character;
          (2) is representative of the residents of the eligible 
        housing;
          (3) adopts written procedures providing for the election of 
        officers on a regular basis; and
          (4) has a democratically elected governing board, which is 
        elected by the residents of the eligible housing.
  (b) Resident Management Corporations.--
          (1) Establishment.--The residents of a public housing 
        development may establish a resident management corporation for 
        the purpose of assuming the responsibility for the management 
        of the development under section 235 or purchasing a 
        development.
          (2) Requirements.--A resident management corporation shall be 
        a corporation that--
                  (A) is nonprofit in character;
                  (B) is organized under the laws of the State in which 
                the development is located;
                  (C) has as its sole voting members the residents of 
                the development; and
                  (D) is established by the resident council for the 
                development or, if there is not a resident council, by 
                a majority of the households of the development.

SEC. 235. MANAGEMENT BY RESIDENT MANAGEMENT CORPORATION.

  (a) Authority.--A local housing and management authority may enter 
into a contract under this section with a resident management 
corporation to provide for the management of public housing 
developments by the corporation.
  (b) Contract.--A contract under this section for management of public 
housing developments by a resident management corporation shall 
establish the respective management rights and responsibilities of the 
corporation and the local housing and management authority. The 
contract shall be consistent with the requirements of this Act 
applicable to public housing development and may include specific terms 
governing management personnel and compensation, access to public 
housing records, submission of and adherence to budgets, rent 
collection procedures, resident income verification, resident 
eligibility determinations, resident eviction, the acquisition of 
supplies and materials and such other matters as may be appropriate. 
The contract shall be treated as a contracting out of services.
  (c) Bonding and Insurance.--Before assuming any management 
responsibility for a public housing development, the resident 
management corporation shall provide fidelity bonding and insurance, or 
equivalent protection. Such bonding and insurance, or its equivalent, 
shall be adequate to protect the Secretary and the local housing and 
management authority against loss, theft, embezzlement, or fraudulent 
acts on the part of the resident management corporation or its 
employees.
  (d) Block Grant Assistance and Income.--A contract under this section 
shall provide for--
          (1) the local housing and management authority to provide a 
        portion of the block grant assistance under this title to the 
        resident management corporation for purposes of operating the 
        public housing development covered by the contract and 
        performing such other eligible activities with respect to the 
        development as may be provided under the contract;
          (2) the amount of income expected to be derived from the 
        development itself (from sources such as rents and charges);
          (3) the amount of income to be provided to the development 
        from the other sources of income of the local housing and 
        management authority (such as interest income, administrative 
        fees, and rents); and
          (4) any income generated by a resident management corporation 
        of a public housing development that exceeds the income 
        estimated under the contract shall be used for eligible 
        activities under section 203(a).
  (e) Calculation of Total Income.--
          (1) Maintenance of support.--Subject to paragraph (2), the 
        amount of assistance provided by a local housing and management 
        authority to a public housing development managed by a resident 
        management corporation may not be reduced during the 3-year 
        period beginning on the date on which the resident management 
        corporation is first established for the development.
          (2) Reductions and increases in support.--If the total income 
        of a local housing and management authority is reduced or 
        increased, the income provided by the local housing and 
        management authority to a public housing development managed by 
        a resident management corporation shall be reduced or increased 
        in proportion to the reduction or increase in the total income 
        of the authority, except that any reduction in block grant 
        amounts under this title to the authority that occurs as a 
        result of fraud, waste, or mismanagement by the authority shall 
        not affect the amount provided to the resident management 
        corporation.

SEC. 236. TRANSFER OF MANAGEMENT OF CERTAIN HOUSING TO INDEPENDENT 
                    MANAGER AT REQUEST OF RESIDENTS.

  (a) Authority.--The Secretary may transfer the responsibility and 
authority for management of specified housing (as such term is defined 
in subsection (h)) from a local housing and management authority to an 
eligible management entity, in accordance with the requirements of this 
section, if--
          (1) such housing is owned or operated by a local housing and 
        management authority that is--
                  (A) not accredited under section 433 by the Housing 
                Foundation and Accreditation Board; or
                  (B) is designated as a troubled authority under 
                section 431(a)(2); and
          (2) the Secretary determines that--
                  (A) such housing has deferred maintenance, physical 
                deterioration, or obsolescence of major systems and 
                other deficiencies in the physical plant of the 
                project;
                  (B) such housing is occupied predominantly by 
                families with children who are in a severe state of 
                distress, characterized by such factors as high rates 
                of unemployment, teenage pregnancy, single-parent 
                households, long-term dependency on public assistance 
                and minimal educational achievement;
                  (C) such housing is located in an area such that the 
                housing is subject to recurrent vandalism and criminal 
                activity (including drug-related criminal activity); 
                and
                  (D) the residents can demonstrate that the elements 
                of distress for such housing specified in subparagraphs 
                (A) through (C) can be remedied by an entity that has a 
                demonstrated capacity to manage, with reasonable 
                expenses for modernization.
Such a transfer may be made only as provided in this section, pursuant 
to the approval by the Secretary of a request for the transfer made by 
a majority vote of the residents for the specified housing, after 
consultation with the local housing and management authority for the 
specified housing.
  (b) Block Grant Assistance.--Pursuant to a contract under subsection 
(c), the Secretary shall require the local housing and management 
authority for specified housing to provide to the manager for the 
housing, from any block grant amounts under this title for the 
authority, fair and reasonable amounts for operating costs for the 
housing. The amount made available under this subsection to a manager 
shall be determined by the Secretary based on the share for the 
specified housing of the total block grant amounts for the local 
housing and management authority transferring the housing, taking into 
consideration the operating and capital improvement needs of the 
specified housing, the operating and capital improvement needs of the 
remaining public housing units managed by the local housing and 
management authority, and the local housing management plan of such 
authority.
  (c) Contract Between Secretary and Manager.--
          (1) Requirements.--Pursuant to the approval of a request 
        under this section for transfer of the management of specified 
        housing, the Secretary shall enter into a contract with the 
        eligible management entity.
          (2) Terms.-- A contract under this subsection shall contain 
        provisions establishing the rights and responsibilities of the 
        manager with respect to the specified housing and the Secretary 
        and shall be consistent with the requirements of this Act 
        applicable to public housing developments.
  (d) Compliance With Local Housing Management Plan.--A manager of 
specified housing under this section shall comply with the approved 
local housing management plan applicable to the housing and shall 
submit such information to the local housing and management authority 
from which management was transferred as may be necessary for such 
authority to prepare and update its local housing management plan.
  (e) Demolition and Disposition by Manager.--A manager under this 
section may demolish or dispose of specified housing only if, and in 
the manner, provided for in the local housing management plan for the 
authority transferring management of the housing.
  (f) Limitation on LHMA Liability.--A local housing and management 
authority that is not a manager for specified housing shall not be 
liable for any act or failure to act by a manager or resident council 
for the specified housing.
  (g) Treatment of Manager.--To the extent not inconsistent with this 
section and to the extent the Secretary determines not inconsistent 
with the purposes of this Act, a manager of specified housing under 
this section shall be considered to be a local housing and management 
authority for purposes of this title.
  (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Eligible management entity.--The term ``eligible 
        management entity'' means, with respect to any public housing 
        development, any of the following entities that has been 
        accredited in accordance with section 433:
                  (A) Nonprofit organization.--A public or private 
                nonprofit organization, which shall--
                          (i) include a resident management corporation 
                        or resident management organization and, as 
                        determined by the Secretary, a public or 
                        private nonprofit organization sponsored by the 
                        local housing and management authority that 
                        owns the development; and
                          (ii) not include the local housing and 
                        management authority that owns the development.
                  (B) For-profit entity.--A for-profit entity that has 
                demonstrated experience in providing low-income 
                housing.
                  (C) State or local government.--A State or local 
                government, including an agency or instrumentality 
                thereof.
                  (D) local housing and management authority.--A local 
                housing and management authority (other than the local 
                housing and management authority that owns the 
                development).
        The term does not include a resident council.
          (2) Manager.--The term ``manager'' means any eligible 
        management entity that has entered into a contract under this 
        section with the Secretary for the management of specified 
        housing.
          (3) Nonprofit.--The term ``nonprofit'' means, with respect to 
        an organization, association, corporation, or other entity, 
        that no part of the net earnings of the entity inures to the 
        benefit of any member, founder, contributor, or individual.
          (4) Private nonprofit organization.--The term ``private 
        nonprofit organization'' means any private organization 
        (including a State or locally chartered organization) that--
                  (A) is incorporated under State or local law;
                  (B) is nonprofit in character;
                  (C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  (D) has among its purposes significant activities 
                related to the provision of decent housing that is 
                affordable to low-income families.
          (5) Local housing and management authority.--The term ``local 
        housing and management authority'' has the meaning given such 
        term in section 103(a), except that it does not include Indian 
        housing authorities.
          (6) Public nonprofit organization.--The term ``public 
        nonprofit organization'' means any public entity that is 
        nonprofit in character.
          (7) Specified housing.--The term ``specified housing'' means 
        a public housing development or developments, or a portion of a 
        development or developments, for which the transfer of 
        management is requested under this section. The term includes 
        one or more contiguous buildings and an area of contiguous row 
        houses, but in the case of a single building, the building 
        shall be sufficiently separable from the remainder of the 
        development of which it is part to make transfer of the 
        management of the building feasible for purposes of this 
        section.

SEC. 237. RESIDENT OPPORTUNITY PROGRAM.

  (a) Purpose.--The purpose of this section is to encourage increased 
resident management of public housing developments, as a means of 
improving existing living conditions in public housing developments, by 
providing increased flexibility for public housing developments that 
are managed by residents by--
          (1) permitting the retention, and use for certain purposes, 
        of any revenues exceeding operating and project costs; and
          (2) providing funding, from amounts otherwise available, for 
        technical assistance to promote formation and development of 
        resident management entities.
For purposes of this section, the term ``public housing development'' 
includes one or more contiguous buildings or an area of contiguous row 
houses the elected resident councils of which approve the establishment 
of a resident management corporation and otherwise meet the 
requirements of this section.
  (b) Program Requirements.--
          (1) Resident council.--As a condition of entering into a 
        resident opportunity program, the elected resident council of a 
        public housing development shall approve the establishment of a 
        resident management corporation that complies with the 
        requirements of section 234(b)(2). When such approval is made 
        by the elected resident council of a building or row house 
        area, the resident opportunity program shall not interfere with 
        the rights of other families residing in the development or 
        harm the efficient operation of the development. The resident 
        management corporation and the resident council may be the same 
        organization, if the organization complies with the 
        requirements applicable to both the corporation and council.
          (2) Public housing management specialist.--The resident 
        council of a public housing development, in cooperation with 
        the local housing and management authority, shall select a 
        qualified public housing management specialist to assist in 
        determining the feasibility of, and to help establish, a 
        resident management corporation and to provide training and 
        other duties agreed to in the daily operations of the 
        development.
          (3) Management responsibilities.--A resident management 
        corporation that qualifies under this section, and that 
        supplies insurance and bonding or equivalent protection 
        sufficient to the Secretary and the local housing and 
        management authority, shall enter into a contract with the 
        authority establishing the respective management rights and 
        responsibilities of the corporation and the authority. The 
        contract shall be treated as a contracting out of services and 
        shall be subject to the requirements under section 234 for such 
        contracts.
          (4) Annual audit.--The books and records of a resident 
        management corporation operating a public housing development 
        shall be audited annually by a certified public accountant. A 
        written report of each such audit shall be forwarded to the 
        local housing and management authority and the Secretary.
  (c) Comprehensive Improvement Assistance.--Public housing 
developments managed by resident management corporations may be 
provided with modernization assistance from grant amounts under this 
title for purposes of renovating such developments. If such renovation 
activities (including the planning and architectural design of the 
rehabilitation) are administered by a resident management corporation, 
the local housing and management authority involved may not retain, for 
any administrative or other reason, any portion of the assistance 
provided pursuant to this subsection unless otherwise provided by 
contract.
  (d) Waiver of Federal Requirements.--
          (1) Waiver of regulatory requirements.--Upon the request of 
        any resident management corporation and local housing and 
        management authority, and after notice and an opportunity to 
        comment is afforded to the affected residents, the Secretary 
        may waive (for both the resident management corporation and the 
        local housing and management authority) any requirement 
        established by the Secretary (and not specified in any statute) 
        that the Secretary determines to unnecessarily increase the 
        costs or restrict the income of a public housing development.
          (2) Waiver to permit employment.--Upon the request of any 
        resident management corporation, the Secretary may, subject to 
        applicable collective bargaining agreements, permit residents 
        of such development to volunteer a portion of their labor.
          (3) Exceptions.--The Secretary may not waive under this 
        subsection any requirement with respect to income eligibility 
        for purposes of section 222, rental payments under section 225, 
        tenant or applicant protections, employee organizing rights, or 
        rights of employees under collective bargaining agreements.
  (e) Operating Assistance and Development Income.--
          (1) Calculation of operating subsidy.--Subject only to the 
        exception provided in paragraph (3), the amount grant amounts 
        received under this title by a local housing and management 
        authority used for operating costs under section 203(a)(2) that 
        is allocated to a public housing development managed by a 
        resident management corporation shall not be less than per unit 
        monthly amount of such assistance used by the local housing and 
        management authority in the previous year, as determined on an 
        individual development basis.
          (2) Contract requirements.--Any contract for management of a 
        public housing development entered into by a local housing and 
        management authority and a resident management corporation 
        shall specify the amount of income expected to be derived from 
        the development itself (from sources such as rents and charges) 
        and the amount of income funds to be provided to the 
        development from the other sources of income of the authority 
        (such as operating assistance under section 203(a), interest 
        income, administrative fees, and rents).
  (f) Resident Management Technical Assistance and Training.--
          (1) Financial assistance.--To the extent budget authority is 
        available under this title, the Secretary shall provide 
        financial assistance to resident management corporations or 
        resident councils that obtain, by contract or otherwise, 
        technical assistance for the development of resident management 
        entities, including the formation of such entities, the 
        development of the management capability of newly formed or 
        existing entities, the identification of the social support 
        needs of residents of public housing developments, and the 
        securing of such support.
          (2) Limitation on assistance.--The financial assistance 
        provided under this subsection with respect to any public 
        housing development may not exceed $100,000.
          (3) Prohibition.--A resident management corporation or 
        resident council may not, before the award to the corporation 
        or council of a grant amount under this subsection, enter into 
        any contract or other agreement with any entity to provide such 
        entity with amounts from the grant for providing technical 
        assistance or carrying out other activities eligible for 
        assistance with amounts under this subsection. Any such 
        agreement entered into in violation of this paragraph shall be 
        void and unenforceable.
          (4) Funding.--Of any amounts made available for financial 
        assistance under this title, the Secretary may use to carry out 
        this subsection $15,000,000 for fiscal year 1996.
          (5) Limitation regarding assistance under hope grant 
        program.--The Secretary may not provide financial assistance 
        under this subsection to any resident management corporation or 
        resident council with respect to which assistance for the 
        development or formation of such entity is provided under title 
        III of the United States Housing Act of 1937 (as in effect 
        before the date of the enactment of this Act).
  (g) Assessment and Report by Secretary.--Not later than 3 years after 
the date of the enactment of the United States Housing Act of 1996, the 
Secretary shall--
          (1) conduct an evaluation and assessment of resident 
        management, and particularly of the effect of resident 
        management on living conditions in public housing; and
          (2) submit to the Congress a report setting forth the 
        findings of the Secretary as a result of the evaluation and 
        assessment and including any recommendations the Secretary 
        determines to be appropriate.
  (h) Applicability.--Any management contract between a local housing 
and management authority and a resident management corporation that is 
entered into after the date of the enactment of the Stewart B. McKinney 
Homeless Assistance Amendments Act of 1988 shall be subject to this 
section and any regulations issued to carry out this section.

                       Subtitle D--Homeownership

SEC. 251. RESIDENT HOMEOWNERSHIP PROGRAMS.

  (a) In General.--A local housing and management authority may carry 
out a homeownership program in accordance with this section and the 
local housing management plan of the authority to make public housing 
dwelling units, public housing developments, and other housing projects 
available for purchase by low-income families.
  (b) Participating Units.--A program under this section may cover any 
existing public housing dwelling units or projects, and may include 
other dwelling units and housing owned, operated, or assisted, or 
otherwise acquired for use under such program, by the local housing and 
management authority.
  (c) Eligible Purchasers.--
          (1) Low-income requirement.--Only low-income families 
        assisted by a local housing and management authority, other 
        low-income families, and entities formed to facilitate such 
        sales shall be eligible to purchase housing under a 
        homeownership program under this section.
          (2) Other requirements.--A local housing and management 
        authority may establish other requirements or limitations for 
        families to purchase housing under a homeownership program 
        under this section, including requirements or limitations 
        regarding employment or participation in employment counseling 
        or training activities, criminal activity, participation in 
        homeownership counseling programs, evidence of regular income, 
        and other requirements.
  (d) Financing and Assistance.--A homeownership program under this 
section may provide financing for acquisition of housing by families 
purchasing under the program or by the local housing and management 
authority for sale under this program in any manner considered 
appropriate by the authority (including sale to a resident management 
corporation).
  (e) Downpayment Requirement.--
          (1) In general.--Each family purchasing housing under a 
        homeownership program under this section shall be required to 
        provide from its own resources a downpayment in connection with 
        any loan for acquisition of the housing, in an amount 
        determined by the local housing and management authority. 
        Except as provided in paragraph (2), the authority shall permit 
        the family to use grant amounts, gifts from relatives, 
        contributions from private sources, and similar amounts as 
        downpayment amounts in such purchase,
          (2) Direct family contribution.--In purchasing housing 
        pursuant to this section, each family shall contribute an 
        amount of the downpayment, from resources of the family other 
        than grants, gifts, contributions, or other similar amounts 
        referred to in paragraph (1), that is not less than 1 percent 
        of the purchase price.
  (f) Ownership Interests.--A homeownership program under this section 
may provide for sale to the purchasing family of any ownership interest 
that the local housing and management authority considers appropriate 
under the program, including ownership in fee simple, a condominium 
interest, an interest in a limited dividend cooperative, a shared 
appreciation interest with a local housing and management authority 
providing financing.
  (g) Resale.--
          (1) Authority and limitation.--A homeownership program under 
        this section shall permit the resale of a dwelling unit 
        purchased under the program by an eligible family, but shall 
        provide such limitations on resale as the authority considers 
        appropriate for the authority to recapture--
                  (A) from any economic gain derived from any such 
                resale occurring during the 5-year period beginning 
                upon purchase of the dwelling unit by the eligible 
                family, a portion of the amount of any financial 
                assistance provided under the program by the authority 
                to the eligible family; and
                  (B) after the expiration of such 5-year period, only 
                such amounts as are equivalent to the assistance 
                provided under this section by the authority to the 
                purchaser.
          (2) Considerations.--The limitations referred to in paragraph 
        (1) may provide for consideration of the aggregate amount of 
        assistance provided under the program to the family, the 
        contribution to equity provided by the purchasing eligible 
        family, the period of time elapsed between purchase under the 
        homeownership program and resale, the reason for resale, any 
        improvements to the property made by the eligible family, any 
        appreciation in the value of the property, and any other 
        factors that the authority considers appropriate.
  (h) Inapplicability of Disposition Requirements.--The provisions of 
section 261 shall not apply to disposition of public housing dwelling 
units under a homeownership program under this section, except that any 
dwelling units sold under such a program shall be treated as public 
housing dwelling units for purposes of subsections (e) and (f) of 
section 261.

Subtitle E--Disposition, Demolition, and Revitalization of Developments

SEC. 261. REQUIREMENTS FOR DEMOLITION AND DISPOSITION OF DEVELOPMENTS.

  (a) Authority and Flexibility.--A local housing and management 
authority may demolish, dispose of, or demolish and dispose of 
nonviable or nonmarketable public housing developments of the authority 
in accordance with this section.
  (b) Local Housing Management Plan Requirement.--A local housing and 
management authority may take any action to demolish or dispose of a 
public housing development (or a portion of a development) only if such 
demolition or disposition complies with the provisions of this section 
and is in accordance with the local housing management plan for the 
authority.
  (c) Purpose of Demolition or Disposition.--A local housing and 
management authority may demolish or dispose of a public housing 
development (or portion of a development) only if the authority 
provides sufficient evidence to the Secretary that--
          (1) the development (or portion thereof) is severely 
        distressed or obsolete;
          (2) the development (or portion thereof) is in a location 
        making it unsuitable for housing purposes;
          (3) the development (or portion thereof) has design or 
        construction deficiencies that make cost-effective 
        rehabilitation infeasible;
          (4) assuming that reasonable rehabilitation and management 
        intervention for the development has been completed and paid 
        for, the anticipated revenue that would be derived from 
        charging market-based rents for units in the development (or 
        portion thereof) would not cover the anticipated operating 
        costs and replacement reserves of the development (or portion) 
        at full occupancy and the development (or portion) would 
        constitute a substantial burden on the resources of the local 
        housing and management authority;
          (5) retention of the development (or portion thereof) is not 
        in the best interests of the residents of the local housing and 
        management authority because--
                  (A) developmental changes in the area surrounding the 
                development adversely affect the health or safety of 
                the residents or the feasible operation of the 
                development by the local housing and management 
                authority;
                  (B) demolition or disposition will allow the 
                acquisition, development, or rehabilitation of other 
                properties which will be more efficiently or 
                effectively operated as low-income housing; or
                  (C) other factors exist that the authority determines 
                are consistent with the best interests of the residents 
                and the authority and not inconsistent with other 
                provisions of this Act;
          (6) in the case only of demolition or disposition of a 
        portion of a development, the demolition or disposition will 
        help to ensure the remaining useful life of the remainder of 
        the development; or
          (7) in the case only of property other than dwelling units--
                  (A) the property is excess to the needs of a 
                development; or
                  (B) the demolition or disposition is incidental to, 
                or does not interfere with, continued operation of a 
                development.
  (d) Consultation.--A local housing and management authority may 
demolish or dispose of a public housing development (or portion of a 
development) only if the authority notifies and confers regarding the 
demolition or disposition with--
          (1) the residents of the development (or portion); and
          (2) appropriate local government officials.
  (e) Use of Proceeds.--Any net proceeds from the disposition of a 
public housing development (or portion of a development) shall be used 
for--
          (1) housing assistance for low-income families that is 
        consistent with the low-income housing needs of the community, 
        through acquisition, development, or rehabilitation of, or 
        homeownership programs for, other low-income housing or the 
        provision of choice-based assistance under title III for such 
        families;
          (2) supportive services relating to job training or child 
        care for residents of a development or developments; or
          (3) leveraging amounts for securing commercial enterprises, 
        on-site in public housing developments of the local housing and 
        management authority, appropriate to serve the needs of the 
        residents.
  (f) Relocation.--A local housing and management authority that 
demolishes or disposes of a public housing development (or portion of a 
development thereof) shall ensure that--
          (1) each family that is a resident of the development (or 
        portion) that is demolished or disposed of is relocated to 
        other safe, clean, healthy, and affordable housing, which is, 
        to the maximum extent practicable, housing of the family's 
        choice or is provided with choice-based assistance under title 
        III;
          (2) the local housing and management authority does not take 
        any action to dispose of any unit until any resident to be 
        displaced is relocated in accordance with paragraph (1); and
          (3) each resident family to be displaced is paid relocation 
        expenses, and the rent to be paid initially by the resident 
        following relocation does not exceed the amount permitted under 
        section 225(a).
  (g) Right of First Refusal for Resident Organizations and Resident 
Management Corporations.--
          (1) In general.--A local housing and management authority may 
        not dispose of a public housing development (or portion of a 
        development) unless the authority has, before such disposition, 
        offered to sell the property, as provided in this subsection, 
        to each resident organization and resident management 
        corporation operating at the development for continued use as 
        low-income housing, and no such organization or corporation 
        purchases the property pursuant to such offer. A resident 
        organization may act, for purposes of this subsection, through 
        an entity formed to facilitate homeownership under subtitle D.
          (2) Timing.--Disposition of a development (or portion 
        thereof) under this section may not take place--
                  (A) before the expiration of the period during which 
                any such organization or corporation may notify the 
                authority of interest in purchasing the property, which 
                shall be the 30-day period beginning on the date that 
                the authority first provides notice of the proposed 
                disposition of the property to such resident 
                organizations and resident management corporations;
                  (B) if an organization or corporation submits notice 
                of interest in accordance with subparagraph (A), before 
                the expiration of the period during which such 
                organization or corporation may obtain a commitment for 
                financing to purchase the property, which shall be the 
                60-day period beginning upon the submission to the 
                authority of the notice of interest; or
                  (C) if, during the period under subparagraph (B), an 
                organization or corporation obtains such financing 
                commitment and makes a bona fide offer to the authority 
                to purchase the property for a price equal to or 
                exceeding the applicable offer price under paragraph 
                (3).
        The authority shall sell the property pursuant to any purchase 
        offer described in subparagraph (C).
          (3) Terms of offer.--An offer by a local housing and 
        management authority to sell a property in accordance with this 
        subsection shall involve a purchase price that reflects the 
        market value of the property, the reason for the sale, the 
        impact of the sale on the surrounding community, and any other 
        factors that the authority considers appropriate.
  (h) Information for Local Housing Management Plan.--A local housing 
and management authority may demolish or dispose of a public housing 
development (or portion thereof) only if it includes in the applicable 
local housing management plan information sufficient to describe--
          (1) the housing to be demolished or disposed of;
          (2) the purpose of the demolition or disposition under 
        subsection (c) and why the demolition or disposition complies 
        with the requirements under subsection (c);
          (3) how the consultations required under subsection (d) will 
        be made;
          (4) how the net proceeds of the disposition will be used in 
        accordance with subsection (e);
          (5) how the authority will relocate residents, if necessary, 
        as required under subsection (f); and
          (6) that the authority has offered the property for 
        acquisition by resident organizations and resident management 
        corporations in accordance with subsection (g).
  (i) Site and Neighborhood Standards Exemption.--Notwithstanding any 
other provision of law, a local housing and management authority may 
provide for development of public housing dwelling units on the same 
site or in the same neighborhood as any dwelling units demolished, 
pursuant to a plan under this section, but only if such development 
provides for significantly fewer dwelling units.
  (j) Treatment of Replacement Units.--In connection with any 
demolition or disposition of public housing under this section, a local 
housing and management authority may provide for other housing 
assistance for low-income families that is consistent with the low-
income housing needs of the community, including--
          (1) the provision of choice-based assistance under title III; 
        and
          (2) the development, acquisition, or lease by the authority 
        of dwelling units, which dwelling units shall--
                  (A) be eligible to receive assistance with grant 
                amounts provided under this title; and
                  (B) be made available for occupancy, operated, and 
                managed in the manner required for public housing, and 
                subject to the other requirements applicable to public 
                housing dwelling units.
  (k) Permissible Relocation Without Plan.--If a local housing and 
management authority determines that public housing dwelling units are 
not clean, safe, and healthy or cannot be maintained cost-effectively 
in a clean, safe, and healthy condition, the local housing and 
management authority may relocate residents of such dwelling units 
before the submission of a local housing management plan providing for 
demolition or disposition of such units.
  (l) Consolidation of Occupancy Within or Among Buildings.--Nothing in 
this section may be construed to prevent a local housing and management 
authority from consolidating occupancy within or among buildings of a 
public housing development, or among developments, or with other 
housing for the purpose of improving living conditions of, or providing 
more efficient services to, residents.
  (m) De Minimis Exception to Demolition Requirements.--Notwithstanding 
any other provision of this section, in any 5-year period a local 
housing and management authority may demolish not more than the lesser 
of 5 dwelling units or 5 percent of the total dwelling units owned and 
operated by the local housing and management authority, without 
providing for such demolition in a local housing management plan, but 
only if the space occupied by the demolished unit is used for meeting 
the service or other needs of public housing residents or the 
demolished unit was beyond repair.

SEC. 262. DEMOLITION, SITE REVITALIZATION, REPLACEMENT HOUSING, AND 
                    CHOICE-BASED ASSISTANCE GRANTS FOR DEVELOPMENTS.

  (a) Purposes.--The purpose of this section is to provide assistance 
to local housing and management authorities for the purposes of--
          (1) reducing the density and improving the living environment 
        for public housing residents of severely distressed public 
        housing developments through the demolition of obsolete public 
        housing developments (or portions thereof);
          (2) revitalizing sites (including remaining public housing 
        dwelling units) on which such public housing developments are 
        located and contributing to the improvement of the surrounding 
        neighborhood; and
          (3) providing housing that will avoid or decrease the 
        concentration of very low-income families; and
          (4) providing choice-based assistance in accordance with 
        title III for the purpose of providing replacement housing and 
        assisting residents to be displaced by the demolition.
  (b) Grant Authority.--The Secretary may make grants available to 
local housing and management authorities as provided in this section.
  (c) Contribution Requirement.--The Secretary may not make any grant 
under this section to any applicant unless the applicant certifies to 
the Secretary that the applicant will supplement the amount of 
assistance provided under this section with an amount of funds from 
sources other than this section equal to not less than 5 percent of the 
amount provided under this section, including amounts from other 
Federal sources, any State or local government sources, any private 
contributions, and the value of any in-kind services or administrative 
costs provided.
  (d) Eligible Activities.--Grants under this section may be used for 
activities to carry out revitalization programs for severely distressed 
public housing, including--
          (1) architectural and engineering work, including the 
        redesign, reconstruction, or redevelopment of a severely 
        distressed public housing development, including the site on 
        which the development is located;
          (2) the demolition, sale, or lease of the site, in whole or 
        in part;
          (3) covering the administrative costs of the applicant, which 
        may not exceed such portion of the assistance provided under 
        this section as the Secretary may prescribe;
          (4) payment of reasonable legal fees;
          (5) providing reasonable moving expenses for residents 
        displaced as a result of the revitalization of the development;
          (6) economic development activities that promote the economic 
        self-sufficiency of residents under the revitalization program;
          (7) necessary management improvements;
          (8) leveraging other resources, including additional housing 
        resources, retail supportive services, jobs, and other economic 
        development uses on or near the development that will benefit 
        future residents of the site;
          (9) replacement housing and housing assistance under title 
        III;
          (10) transitional security activities; and
          (11) necessary supportive services, except that not more than 
        10 percent of the amount of any grant may be used for 
        activities under this paragraph.
  (e) Application and Selection.--
          (1) Application.--An application for a grant under this 
        section shall contain such information and shall be submitted 
        at such time and in accordance with such procedures, as the 
        Secretary shall prescribe.
          (2) Selection criteria.--The Secretary shall establish 
        selection criteria for the award of grants under this section, 
        which shall include--
                  (A) the relationship of the grant to the local 
                housing management plan for the local housing and 
                management authority and how the grant will result in a 
                revitalized site that will enhance the neighborhood in 
                which the development is located;
                  (B) the capability and record of the applicant local 
                housing and management authority, or any alternative 
                management agency for the authority, for managing 
                large-scale redevelopment or modernization projects, 
                meeting construction timetables, and obligating amounts 
                in a timely manner;
                  (C) the extent to which the local housing and 
                management authority could undertake such activities 
                without a grant under this section;
                  (D) the extent of involvement of residents, State and 
                local governments, private service providers, financing 
                entities, and developers, in the development of a 
                revitalization program for the development;
                  (E) the amount of funds and other resources to be 
                leveraged by the grant; and
                  (F) whether the applicant local housing and 
                management authority has been awarded a planning grant 
                under section 24(c) of the United States Housing Act of 
                1937 (as in effect immediately before the date of the 
                enactment of this Act).
  (f) Cost Limits.--Subject to the provisions of this section, the 
Secretary--
          (1) shall establish cost limits on eligible activities under 
        this section sufficient to provide for effective revitalization 
        programs; and
          (2) may establish other cost limits on eligible activities 
        under this section.
  (h) Demolition and Replacement.--Any severely distressed public 
housing demolished or disposed of pursuant to a revitalization plan and 
any public housing produced in lieu of such severely distressed 
housing, shall be subject to the provisions of section 261.
  (i) Administration by Other Entities.--The Secretary may require a 
grantee under this section to make arrangements satisfactory to the 
Secretary for use of an entity other than the local housing and 
management authority to carry out activities assisted under the 
revitalization plan, if the Secretary determines that such action will 
help to effectuate the purposes of this section.
  (j) Withdrawal of Funding.--If a grantee under this section does not 
proceed expeditiously, in the determination of the Secretary, the 
Secretary shall withdraw any grant amounts under this section that have 
not been obligated by the local housing and management authority. The 
Secretary shall redistribute any withdrawn amounts to one or more local 
housing and management authorities eligible for assistance under this 
section.
  (k) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Applicant.--The term ``applicant'' means--
                  (A) any local housing and management authority that 
                is not designated as troubled pursuant to section 
                431(a)(2)(D);
                  (B) any local housing and management authority or 
                private housing management agent selected, or receiver 
                appointed pursuant, to section 438; and
                  (C) any local housing and management authority that 
                is designated as troubled pursuant to section 
                431(a)(2)(D) that--
                          (i) is so designated principally for reasons 
                        that will not affect the capacity of the 
                        authority to carry out a revitalization 
                        program;
                          (ii) is making substantial progress toward 
                        eliminating the deficiencies of the authority; 
                        or
                          (iii) is otherwise determined by the 
                        Secretary to be capable of carrying out a 
                        revitalization program.
          (2) Private nonprofit corporation.--The term ``private 
        nonprofit organization'' means any private nonprofit 
        organization (including a State or locally chartered nonprofit 
        organization) that--
                  (A) is incorporated under State or local law;
                  (B) has no part of its net earnings inuring to the 
                benefit of any member, founder, contributor, or 
                individual;
                  (C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  (D) has among its purposes significant activities 
                related to the provision of decent housing that is 
                affordable to very low-income families.
          (3) Severely distressed public housing.--The term ``severely 
        distressed public housing'' means a public housing development 
        (or building in a development)--
                  (A) that requires major redesign, reconstruction or 
                redevelopment, or partial or total demolition, to 
                correct serious deficiencies in the original design 
                (including inappropriately high population density), 
                deferred maintenance, physical deterioration or 
                obsolescence of major systems and other deficiencies in 
                the physical plant of the development;
                  (B) is a significant contributing factor to the 
                physical decline of and disinvestment by public and 
                private entities in the surrounding neighborhood;
                  (C)(i) is occupied predominantly by families who are 
                very low-income families with children, are unemployed, 
                and dependent on various forms of public assistance; 
                and
                  (ii) has high rates of vandalism and criminal 
                activity (including drug-related criminal activity) in 
                comparison to other housing in the area;
                  (D) cannot be revitalized through assistance under 
                other programs, such as the public housing block grant 
                program under this title, or the programs under 
                sections 9 and 14 of the United States Housing Act of 
                1937 (as in effect before the date of the enactment of 
                this Act), because of cost constraints and inadequacy 
                of available amounts; and
                  (E) in the case of individual buildings, the building 
                is, in the Secretary's determination, sufficiently 
                separable from the remainder of the development of 
                which the building is part to make use of the building 
                feasible for purposes of this section.
          (4) Supportive services.--The term ``supportive services'' 
        includes all activities that will promote upward mobility, 
        self-sufficiency, and improved quality of life for the 
        residents of the public housing development involved, including 
        literacy training, job training, day care, and economic 
        development activities.
  (l) Annual Report.--The Secretary shall submit to the Congress an 
annual report setting forth--
          (1) the number, type, and cost of public housing units 
        revitalized pursuant to this section;
          (2) the status of developments identified as severely 
        distressed public housing;
          (3) the amount and type of financial assistance provided 
        under and in conjunction with this section; and
          (4) the recommendations of the Secretary for statutory and 
        regulatory improvements to the program established by this 
        section.
  (m) Funding.--
          (1) Authorization of appropriations.--There are authorized to 
        be appropriated for grants under this section such sums as may 
        be necessary for fiscal year 1996.
          (2) Technical assistance.--Of the amount appropriated 
        pursuant to paragraph (1) for any fiscal year, the Secretary 
        may use not more than 0.50 percent for technical assistance. 
        Such assistance may be provided directly or indirectly by 
        grants, contracts, or cooperative agreements, and shall include 
        training, and the cost of necessary travel for participants in 
        such training, by or to officials of the Department of Housing 
        and Urban Development, of local housing and management 
        authorities, and of residents.
  (n) Sunset.--No assistance may be provided under this section after 
September 30, 1996.

                     Subtitle F--General Provisions

SEC. 271. CONVERSION TO BLOCK GRANT ASSISTANCE.

  (a) Savings Provisions.--Any amounts made available to a public 
housing agency for assistance for public housing pursuant to the United 
States Housing Act of 1937 (or any other provision of law relating to 
assistance for public housing) under an appropriation for fiscal year 
1996 or any previous fiscal year shall be subject to the provisions of 
such Act as in effect before the enactment of this Act, notwithstanding 
the repeals made by this Act, except to the extent the Secretary 
provides otherwise to provide for the conversion of public housing and 
public housing assistance to the system provided under this Act.
  (b) Modifications.--Notwithstanding any provision of this Act or any 
annual contributions contract or other agreement entered into by the 
Secretary and a public housing agency pursuant to the provisions of the 
United States Housing Act of 1937 (as in effect before the enactment of 
this Act), the Secretary and the agency may by mutual consent amend, 
supersede, modify any such agreement as appropriate to provide for 
assistance under this title, except that the Secretary and the agency 
may not consent to any such amendment, supersession, or modification 
that substantially alters any outstanding obligations requiring 
continued maintenance of the low-income character of any public housing 
development and any such amendment, supersession, or modification shall 
not be given effect.

SEC. 272. PAYMENT OF NON-FEDERAL SHARE.

  Rental or use-value of buildings or facilities paid for, in whole or 
in part, from production, modernization, or operation costs financed 
under this title may be used as the non-Federal share required in 
connection with activities undertaken under Federal grant-in-aid 
programs which provide social, educational, employment, and other 
services to the residents in a project assisted under this title.

SEC. 273. DEFINITIONS.

  For purposes of this title, the following definitions shall apply:
          (1) Acquisition cost.--The term ``acquisition cost'' means 
        the amount prudently expended by a local housing and management 
        authority in acquiring property for a public housing 
        development.
          (2) Development.--The terms ``public housing development'' 
        and ``development'' mean--
                  (A) public housing; and
                  (B) the improvement of any such housing.
          (3) Eligible local housing and management authority.--The 
        term ``eligible local housing and management authority'' means, 
        with respect to a fiscal year, a local housing and management 
        authority that is eligible under section 202(b) for a grant 
        under this title.
          (4) Group home and independent living facility.--The terms 
        ``group home'' and ``independent living facility'' have the 
        meanings given such terms in section 811(k) of the Cranston-
        Gonzalez National Affordable Housing Act.
          (5) Operation.--The term ``operation'' means any or all 
        undertakings appropriate for management, operation, services, 
        maintenance, security (including the cost of security 
        personnel), or financing in connection with a public housing 
        development, including the financing of resident programs and 
        services.
          (6) Production.--The term ``production'' means any or all 
        undertakings necessary for planning, land acquisition, 
        financing, demolition, construction, or equipment, in 
        connection with the construction, acquisition, or 
        rehabilitation of a property for use as a public housing 
        development, including activity in connection with a public 
        housing development that is confined to the reconstruction, 
        remodeling, or repair of existing buildings.
          (7) Production cost.--The term ``production cost'' means the 
        costs incurred by a local housing and management authority for 
        production of public housing and the necessary financing for 
        production (including the payment of carrying charges and 
        acquisition costs).
          (8) Resident council.--The term ``resident council'' means an 
        organization or association that meets the requirements of 
        section 234(a).
          (9) Resident management corporation.--The term ``resident 
        management corporation'' means a corporation that meets the 
        requirements of section 234(b).
          (10) Resident program.--The term ``resident programs and 
        services'' means programs and services for families residing in 
        public housing developments. Such term includes (A) the 
        development and maintenance of resident organizations which 
        participate in the management of public housing developments, 
        (B) the training of residents to manage and operate the public 
        housing development and the utilization of their services in 
        management and operation of the development, (C) counseling on 
        household management, housekeeping, budgeting, money 
        management, homeownership issues, child care, and similar 
        matters, (D) advice regarding resources for job training and 
        placement, education, welfare, health, and other community 
        services, (E) services that are directly related to meeting 
        resident needs and providing a wholesome living environment; 
        and (F) referral to appropriate agencies in the community when 
        necessary for the provision of such services. To the maximum 
        extent available and appropriate, existing public and private 
        agencies in the community shall be used for the provision of 
        such services.

SEC. 274. AUTHORIZATION OF APPROPRIATIONS FOR BLOCK GRANTS.

  There is authorized to be appropriated, for block grants under this 
title, $6,300,000,000 for each of fiscal years 1996, 1997, 1998, 1999, 
and 2000.

SEC. 275. AUTHORIZATION OF APPROPRIATIONS FOR OPERATION SAFE HOME.

  There is authorized to be appropriated, for assistance for relocating 
residents of public housing under the operation safe home program of 
the Department of Housing and Urban Development (including assistance 
for costs of relocation and housing assistance under title III), 
$700,000 for each of fiscal years 1996, 1997, 1998, 1999, and 2000. The 
Secretary shall provide that families who are residing in public 
housing, who have been subject to domestic violence, and for whom 
provision of assistance is likely to reduce or eliminate the threat of 
subsequent violence to the members of the family, shall be eligible for 
assistance under the operation safe home program.

TITLE III--CHOICE-BASED RENTAL HOUSING AND HOMEOWNERSHIP ASSISTANCE FOR 
                          LOW-INCOME FAMILIES

                         Subtitle A--Allocation

SEC. 301. AUTHORITY TO PROVIDE HOUSING ASSISTANCE AMOUNTS.

  To the extent that amounts to carry out this title are made 
available, the Secretary may enter into contracts with local housing 
and management authorities for each fiscal year to provide housing 
assistance under this title.

SEC. 302. CONTRACTS WITH LHMA'S.

  (a) Condition of Assistance.--The Secretary may provide amounts under 
this title to a local housing and management authority for a fiscal 
year only if the Secretary has entered into a contract under this 
section with the local housing and management authority, under which 
the Secretary shall provide such authority with amounts (in the amount 
of the allocation for the authority determined pursuant to section 304) 
for housing assistance under this title for low-income families.
  (b) Use for Housing Assistance.--A contract under this section shall 
require a local housing and management authority to use amounts 
provided under this title to provide housing assistance in any manner 
authorized under this title.
  (c) Annual Obligation of Authority.--A contract under this title 
shall provide amounts for housing assistance for 1 fiscal year covered 
by the contract.
  (d) Enforcement of Housing Quality Requirements.--Each contract under 
this section shall require the local housing and management authority 
administering assistance provided under the contract--
          (1) to ensure compliance, under each housing assistance 
        payments contract entered into pursuant to the contract under 
        this section, with the provisions of the housing assistance 
        payments contract included pursuant to section 351(c)(4); and
          (2) to establish procedures for assisted families to notify 
        the authority of any noncompliance with such provisions.

SEC. 303. ELIGIBILITY OF LHMA'S FOR ASSISTANCE AMOUNTS.

  The Secretary may provide amounts available for housing assistance 
under this title to a local housing and management authority only if--
          (1) the authority has submitted a local housing management 
        plan to the Secretary for such fiscal year and applied to the 
        Secretary for such assistance;
          (2) the plan has been determined to comply with the 
        requirements under section 107 and the Secretary has not 
        notified the authority that the plan fails to comply with such 
        requirements;
          (3) the authority is accredited under section 433 by the 
        Housing Foundation and Accreditation Board;
          (5) no member of the board of directors or other governing 
        body of the authority, or the executive director, has been 
        convicted of a felony; and
          (6) the authority has not been disqualified for assistance 
        pursuant to subtitle B of title IV.

SEC. 304. ALLOCATION OF AMOUNTS.

  (a) Formula Allocation.--
          (1) In general.--When amounts for assistance under this title 
        are first made available for reservation, after reserving 
        amounts in accordance with subsection (c) and section 109, the 
        Secretary shall allocate such amounts, only among local housing 
        and management authorities meeting the requirements under this 
        title to receive such assistance, on the basis of a formula 
        that is established in accordance with paragraph (2) and based 
        upon appropriate criteria to reflect the needs of different 
        States, areas, and communities, using the most recent data 
        available from the Bureau of the Census of the Department of 
        Commerce and the comprehensive housing affordability strategy 
        under section 105 of the Cranston-Gonzalez National Affordable 
        Housing Act (or any consolidated plan incorporating such 
        strategy) for the applicable jurisdiction. The Secretary may 
        establish a minimum allocation amount, in which case only the 
        local housing and management authorities that, pursuant to the 
        formula, are provided an amount equal to or greater than the 
        minimum allocation amount, shall receive an allocation.
          (2) Regulations.--The formula under this subsection shall be 
        established by regulation issued by the Secretary. 
        Notwithstanding sections 563(a) and 565(a) of title 5, United 
        States Code, any proposed regulation containing such formula 
        shall be issued pursuant to a negotiated rulemaking procedure 
        under subchapter of chapter 5 of such title and the Secretary 
        shall establish a negotiated rulemaking committee for 
        development of any such proposed regulations.
  (b) Allocation Considerations.--
          (1) Limitation on reallocation for another state.--Any 
        amounts allocated for a State or areas or communities within a 
        State that are not likely to be used within the fiscal year for 
        which the amounts are provided shall not be reallocated for use 
        in another State, unless the Secretary determines that other 
        areas or communities within the same State (that are eligible 
        for amounts under this title) cannot use the amounts within the 
        same fiscal year.
          (2) Effect of receipt of tenant-based assistance for disabled 
        families.--The Secretary may not consider the receipt by a 
        local housing and management authority of assistance under 
        section 811(b)(1) of the Cranston-Gonzalez National Affordable 
        Housing Act, or the amount received, in approving amounts under 
        this title for the authority or in determining the amount of 
        such assistance to be provided to the authority.
          (3) Exemption from formula allocation.--The formula 
        allocation requirements of subsection (a) shall not apply to 
        any assistance under this title that is approved in 
        appropriation Acts for uses that the Secretary determines are 
        incapable of geographic allocation, including amendments of 
        existing housing assistance payments contracts, renewal of such 
        contracts, assistance to families that would otherwise lose 
        assistance due to the decision of the project owner to prepay 
        the project mortgage or not to renew the housing assistance 
        payments contract, assistance to prevent displacement or to 
        provide replacement housing in connection with the demolition 
        or disposition of public and Indian housing, assistance for 
        relocation from public housing, assistance in connection with 
        protection of crime witnesses, assistance for conversion from 
        leased housing contracts under section 23 of the United States 
        Housing Act of 1937 (as in effect before the enactment of the 
        Housing and Community Development Act of 1974), and assistance 
        in support of the property disposition and loan management 
        functions of the Secretary.
  (c) Set-Aside for Indian Housing Assistance.--The Secretary shall 
allocate, in a manner determined by the Secretary, a portion of the 
amounts made available in each fiscal year for assistance under this 
title for assistance for Indian housing authorities.
  (d) Recapture of Amounts.--
          (1) Authority.--In each fiscal year, from any budget 
        authority made available for assistance under this title or 
        section 8 of the United States Housing Act of 1937 (as in 
        effect before the enactment of this Act) that is obligated to a 
        local housing and management authority but remains unobligated 
        by the authority upon the expiration of the 8-month period 
        beginning upon the initial availability of such amounts for 
        obligation by the authority, the Secretary may deobligate an 
        amount, as determined by the Secretary, not exceeding 50 
        percent of such unobligated amount.
          (2) Use.--The Secretary may reallocate and transfer any 
        amounts deobligated under paragraph (1) only to local housing 
        and management authorities in areas that the Secretary 
        determines have received less funding than other areas, based 
        on the relative needs of all areas.

SEC. 305. ADMINISTRATIVE FEES.

  (a) Fee for Ongoing Costs of Administration.--
          (1) In general.--The Secretary shall establish fees for the 
        costs of administering the choice-based housing assistance 
        program under this title.
          (2) Fiscal year 1996.--
                  (A) Calculation.--For fiscal year 1996, the fee for 
                each month for which a dwelling unit is covered by a 
                contract for assistance under this title shall be--
                          (i) in the case of a local housing and 
                        management authority that, on an annual basis, 
                        is administering a program for not more than 
                        600 dwelling units, 6.5 percent of the base 
                        amount; and
                          (ii) in the case of an authority that, on an 
                        annual basis, is administering a program for 
                        more than 600 dwelling units--
                                  (I) for the first 600 units, 6.5 
                                percent of the base amount; and
                                  (II) for any additional dwelling 
                                units under the program, 6.0 percent of 
                                the base amount.
                  (B) Base amount.--For purposes of this paragraph, the 
                base amount shall be the higher of--
                          (i) the fair market rental established under 
                        section 8(c) of the United States Housing Act 
                        of 1937 (as in effect immediately before the 
                        date of the enactment of this Act) for fiscal 
                        year 1993 for a 2-bedroom existing rental 
                        dwelling unit in the market area of the 
                        authority, and
                          (ii) the amount that is the lesser of (I) 
                        such fair market rental for fiscal year 1994 or 
                        (II) 103.5 percent of the amount determined 
                        under clause (i),
                adjusted based on changes in wage data or other 
                objectively measurable data that reflect the costs of 
                administering the program, as determined by the 
                Secretary. The Secretary may require that the base 
                amount be not less than a minimum amount and not more 
                than a maximum amount.
          (3) Subsequent fiscal years.--For subsequent fiscal years, 
        the Secretary shall publish a notice in the Federal Register, 
        for each geographic area, establishing the amount of the fee 
        that would apply for local housing and management authorities 
        administering the program, based on changes in wage data or 
        other objectively measurable data that reflect the costs of 
        administering the program, as determined by the Secretary.
          (4) Increase.--The Secretary may increase the fee if 
        necessary to reflect the higher costs of administering small 
        programs and programs operating over large geographic areas.
  (b) Fee for Preliminary Expenses.--The Secretary shall also establish 
reasonable fees (as determined by the Secretary) for--
          (1) the costs of preliminary expenses, in the amount of $500, 
        for a local housing and management authority, but only in the 
        first year that the authority administers a choice-based 
        housing assistance program under this title, and only if, 
        immediately before the date of the enactment of this Act, the 
        authority was not administering a tenant-based rental 
        assistance program under the United States Housing Act of 1937 
        (as in effect immediately before such date of enactment), in 
        connection with its initial increment of assistance received;
          (2) the costs incurred in assisting families who experience 
        difficulty (as determined by the Secretary) in obtaining 
        appropriate housing under the programs; and
          (3) extraordinary costs approved by the Secretary.
  (c) Transfer of Fees in Cases of Concurrent Geographical 
Jurisdiction.--
          (1) In general.--In each fiscal year, if any local housing 
        and management authority provides tenant-based rental 
        assistance under section 8 of the United States Housing Act of 
        1937 or housing assistance under this title on behalf of a 
        family who uses such assistance for a dwelling unit that is 
        located within the jurisdiction of such authority but is also 
        within the jurisdiction of another local housing and management 
        authority, the Secretary shall require the authority issuing 
        such assistance to transfer the amount provided under paragraph 
        (2) to the closest eligible authority that is approved to 
        administer the program and is not designated as a troubled 
        authority under section 431(a)(2)(D).
          (2) Administrative fee.--The amount provided under this 
        paragraph is, with respect to each such family described in 
        subsection (a)--
                  (A) in the case of assistance under section 8 of the 
                United States Housing Act of 1937, the amount received 
                under section 8(q) of such Act that is attributable to 
                the administrative fee under such section for such 
                family for the portion of the fiscal year during which 
                such family resides in the dwelling unit described in 
                paragraph (1); and
                  (B) in the case of housing assistance under this 
                title, an amount of the grant amounts received under 
                this title that is equal to the administrative fee for 
                a family established under section 305 for such fiscal 
                year, as adjusted based on the portion of the fiscal 
                year during which such family resides in the dwelling 
                unit described in paragraph (1).

SEC. 306. AUTHORIZATIONS OF APPROPRIATIONS.

  (a) In General.--There is authorized to be appropriated for providing 
local housing and management authorities with housing assistance under 
this title, $1,861,668,000 for each of fiscal years 1996, 1997, 1998, 
1999, and 2000.
  (b) Assistance for Disabled Families.--
          (1) Authorization of appropriations.--There is authorized to 
        be appropriated, for choice-based housing assistance under this 
        title to be used in accordance with paragraph (2), $50,000,000 
        for fiscal year 1997, and such sums as may be necessary for 
        each subsequent fiscal year.
          (2) Use.--The Secretary shall provide amounts made available 
        under paragraph (1) to local housing and management authorities 
        only for use to provide housing assistance under this title for 
        nonelderly disabled families (including such families 
        relocating pursuant to designation of a public housing 
        development under section 227 and other nonelderly disabled 
        families who have applied to the authority for housing 
        assistance under this title).
          (3) Allocation of amounts.--The Secretary shall allocate and 
        provide amounts made available under paragraph (1) to local 
        housing and management authorities as the Secretary determines 
        appropriate based on the relative levels of need among the 
        authorities for assistance for families described in paragraph 
        (1).

SEC. 307. CONVERSION OF SECTION 8 ASSISTANCE.

  (a) In General.--Any amounts made available to a local housing and 
management authority under a contract for annual contributions for 
assistance under section 8 of the United States Housing Act of 1937 (as 
in effect before the enactment of this Act) that have not been 
obligated for such assistance by such authority before such enactment 
shall be used to provide assistance under this title, except to the 
extent the Secretary determines such use is inconsistent with existing 
commitments.
  (b) Exception.--Subsection (a) shall not apply to any amounts made 
available under a contract for housing constructed or substantially 
rehabilitated pursuant to section 8(b)(2) of the United States Housing 
Act of 1937, as in effect before October 1, 1983.

   Subtitle B--Choice-Based Housing Assistance for Eligible Families

SEC. 321. ELIGIBLE FAMILIES AND PREFERENCES FOR ASSISTANCE.

  (a) Low-Income Requirement.--Housing assistance under this title may 
be provided only on behalf of a family that--
          (1) at the time that such assistance is initially provided on 
        behalf of the family, is determined by the local housing and 
        management authority to be a low-income family; or
          (2) qualifies to receive such assistance under any other 
        provision of Federal law.
  (b) Reviews of Family Incomes.--
          (1) In general.--Reviews of family incomes for purposes of 
        this title shall be subject to the provisions of section 904 of 
        the Stewart B. McKinney Homeless Assistance Amendments Act of 
        1988 and shall be conducted upon the initial provision of 
        housing assistance for the family and thereafter not less than 
        annually.
          (2) Procedures.--Each local housing and management authority 
        administering housing assistance under this title shall 
        establish procedures that are appropriate and necessary to 
        ensure that income data provided to the authority and owners by 
        families applying for or receiving housing assistance from the 
        authority is complete and accurate.
  (c) Preferences for Assistance.--
          (1) Authority to establish.--Any local housing and management 
        authority that receives amounts under this title may establish 
        a system for making housing assistance available on behalf of 
        eligible families that provides preference for such assistance 
        to eligible families having certain characteristics.
          (2) Content.--Each system of preferences established pursuant 
        to this subsection shall be based upon local housing needs and 
        priorities, as determined by the local housing and management 
        authority using generally accepted data sources, including any 
        information obtained pursuant to an opportunity for public 
        comment as provided under section 107(e) or under the 
        requirements applicable to comprehensive housing affordability 
        strategy for the relevant jurisdiction.
  (d) Treatment of Assisted Families Who Move Out of Jurisdiction of 
LHMA.--
          (1) In general.--A local housing and management authority 
        may, in the discretion of the agency and notwithstanding any 
        preferences under subsection (c), provide housing assistance 
        for eligible families (or a certain number of such families) 
        who have moved into the jurisdiction of the authority and on 
        whose behalf such assistance was being provided, at the time of 
        such move, by the authority for the jurisdiction from which the 
        family moved.
          (2) Assistance under 1937 act.--Notwithstanding any provision 
        of this title, a local housing and management authority who, 
        upon the date of the enactment of this Act, is providing 
        assistance under section 8 of the United States Housing Act of 
        1937 for a family pursuant to subsection (r) of such section 
        shall continue to provide such assistance (or housing 
        assistance under this title) in accordance with such section 
        until the local housing and management authority for the 
        jurisdiction to which the family moved provides housing 
        assistance on behalf of the family pursuant to paragraph (1) of 
        this subsection or otherwise or the authority terminates such 
        assistance for other reasons.
  (e) Treatment of Families on Waiting List Who Move Out of 
Jurisdiction of LHMA.--
          (1) Move to jurisdiction with open waiting list.--Except as 
        provided in paragraph (2), if an eligible family (A) applies 
        for choice-based housing assistance while residing within the 
        jurisdiction of a local housing and management authority, (B) 
        moves outside of the jurisdiction of the authority before such 
        assistance is provided on behalf of the family, and (C) applies 
        for housing assistance from the local housing and management 
        authority for the jurisdiction to which the family moves, such 
        authority shall consider the application to have been made upon 
        the date that the family applied for assistance with the 
        authority in whose jurisdiction the family previously resided.
          (2) Move to jurisdiction with closed waiting list.--If the 
        local housing and management authority for the jurisdiction to 
        which an eligible family described in paragraph (1) moves is 
        not generally accepting applications for housing assistance, 
        such jurisdiction shall accept the application of such family 
        but shall treat the application as having been made on the date 
        on which it is actually made. Notwithstanding the preceding 
        sentence, a local housing and management authority may (at the 
        discretion of the authority) provide that any application by an 
        eligible family whose move to the jurisdiction not accepting 
        applications for assistance was made because of a verifiable 
        employment opportunity shall be subject to the provisions of 
        paragraph (1).
  (f) Authority To Deny Assistance to Certain Families Who Move.--A 
local housing and management authority may establish criteria for 
denying housing assistance, and pursuant to such criteria may deny such 
assistance, to an eligible family who has moved from the jurisdiction 
of another authority, who received housing assistance from the 
authority for such other jurisdiction, and whose assistance was 
terminated by such other authority for reasons other than income 
ineligibility or the change of residence.
  (g) Loss of Assistance Upon Termination of Tenancy.--A local housing 
and management authority may, to the extent such policies are described 
in the local housing management plan of the authority and included in 
the lease for a dwelling unit, establish policies providing that an 
assisted family whose tenancy is terminated for serious violations of 
the terms or conditions of the lease shall--
          (1) lose any right to continued housing assistance; and
          (2) immediately become ineligible for housing assistance 
        under this title for a period not exceeding 3 years from the 
        date of the termination of the housing assistance.
  (h) Confidentiality for Victims of Domestic Violence.--A local 
housing and management authority shall be subject to the restrictions 
regarding release of information relating to the identity and new 
residence of any family receiving housing assistance who was a victim 
of domestic violence that are applicable to shelters pursuant to the 
Family Violence Prevention and Services Act. The authority shall work 
with the United States Postal Service to establish procedures 
consistent with the confidentiality provisions in the Violence Against 
Women Act of 1994.

SEC. 322. RESIDENT CONTRIBUTION.

  (a) In General.--An assisted family shall contribute on a monthly 
basis for the rental of an assisted dwelling unit an amount that the 
local housing and management authority determines is appropriate with 
respect to the family. The amount of the minimum monthly rental 
contribution--
          (1) shall be based upon factors including the adjusted income 
        of the family and any other factors that the authority 
        considers appropriate;
          (2) shall be not less than $25;
          (3) shall include any portion of the cost of utilities for 
        the dwelling unit for which the resident is responsible; and
          (4) may be increased annually by the authority, except that 
        no such annual increase may exceed 10 percent of the amount of 
        the minimum monthly contribution in effect for the preceding 
        year.
In any case in which the monthly rent charged for a dwelling unit 
pursuant to the housing assistance payments contract exceeds the 
payment standard (established under section 353) for the dwelling unit, 
the assisted family residing in the unit shall contribute (in addition 
to the amount of the monthly rent contribution otherwise determined 
under this subsection for such family) such entire excess rental 
amount.
  (b) Rental Contribution for Elderly and Disabled Families.--In 
establishing the amount of monthly rental contributions under this 
section for disabled families and elderly families residing in assisted 
dwelling units, a local housing and management authority shall waive 
the applicability of any provision of subsection (a) that may be 
necessary to establish such contributions that are reasonable based on 
the adjusted incomes of such families.
  (c) Treatment of Changes in Rental Contribution.--
          (1) Notification of changes.--A local housing and management 
        authority shall promptly notify the owner of an assisted 
        dwelling unit of any change in the resident contribution by the 
        assisted family residing in the unit that takes effect 
        immediately or at a later date.
          (2) Collection of retroactive changes.--In the case of any 
        change in the rental contribution of an assisted family that 
        affects rental payments previously made, the local housing and 
        management authority shall collect any additional amounts 
        required to be paid by the family under such change directly 
        from the family and shall refund any excess rental contribution 
        paid by the family directly to the family.
  (d) Phase-In of Rent Contribution Increases.--
          (1) In general.--Except as provided in paragraph (2), for any 
        family that is receiving tenant-based rental assistance under 
        section 8 of the United States Housing Act of 1937 upon the 
        initial applicability of the provisions of this title to such 
        family, if the monthly contribution for rental of an assisted 
        dwelling unit to be paid by the family upon such initial 
        applicability is greater than the amount paid by the family 
        under the provisions of the United States Housing Act of 1937 
        immediately before such applicability, any such resulting 
        increase in rent contribution shall be--
                  (A) phased in equally over a period of not less than 
                3 years, if such increase is 30 percent or more of such 
                contribution before initial applicability; and
                  (B) limited to not more than 10 percent per year if 
                such increase is more than 10 percent but less than 30 
                percent of such contribution before initial 
                applicability.
          (2) Exception.--The minimum rent contribution requirement 
        under subsection (a)(2) shall apply to each family described in 
        paragraph (1) of this subsection, notwithstanding such 
        paragraph.

SEC. 323. RENTAL INDICATORS.

  (a) In General.--The Secretary shall establish and issue rental 
indicators under this section periodically, but not less than annually, 
for existing rental dwelling units that are eligible dwelling units. 
The Secretary shall establish and issue the rental indicators by 
housing market area (as the Secretary shall establish) for various 
sizes and types of dwelling units.
  (b) Amount.--For a market area, the rental indicator established 
under subsection (a) for a dwelling unit of a particular size and type 
in the market area shall be a dollar amount that reflects the rental 
amount for a standard quality rental unit of such size and type in the 
market area that is an eligible dwelling unit.
  (c) Effective Date.--The Secretary shall cause the proposed rental 
indicators established under subsection (a) for each market area to be 
published in the Federal Register with reasonable time for public 
comment, and such rental indicators shall become effective upon the 
date of publication in final form in the Federal Register.
  (d) Annual Adjustment.--Each rental indicator in effect under this 
section shall be adjusted to be effective on October 1 of each year to 
reflect changes, based on the most recent available data trended so 
that the indicators will be current for the year to which they apply, 
in rents for existing rental dwelling units of various sizes and types 
in the market area suitable for occupancy by families assisted under 
this title.

SEC. 324. LEASE TERMS.

  Rental assistance may be provided for an eligible dwelling unit only 
if the assisted family and the owner of the dwelling unit enter into a 
lease for the unit that--
          (1) provides for a single lease term of 12 months and 
        continued tenancy after such term under a periodic tenancy on a 
        month-to-month basis;
          (2) contains terms and conditions specifying that termination 
        of tenancy during the term of a lease shall be subject to the 
        provisions set forth in section 325; and
          (3) is set forth in the standard form, which is used in the 
        local housing market area by the owner and applies generally to 
        any other tenants in the property who are not assisted 
        families, together with any addendum necessary to include the 
        many terms required under this section.
A lease may include any addenda appropriate to set forth the provisions 
under section 325.

SEC. 325. TERMINATION OF TENANCY.

  (a) General Grounds for Termination of Tenancy.--Each housing 
assistance payments contract under section 351 shall provide that the 
owner of any assisted dwelling unit assisted under the contract may, 
before expiration of a lease for a unit, terminate the tenancy of any 
tenant of the unit, but only for--
          (1) violation of the terms and conditions of the lease, 
        violation of applicable Federal, State, or local law, or other 
        good cause; or
          (2) any activity, engaged in by the tenant, any member of the 
        tenant's household, or any guest or other person under the 
        tenant's control, that--
                  (A) threatens the health or safety of, or right to 
                peaceful enjoyment of the premises by, other tenants or 
                employees of the owner or manager of the housing;
                  (B) threatens the health or safety of, or right to 
                peaceful enjoyment of their residences by, persons 
                residing in the immediate vicinity of the premises; or
                  (C) is criminal activity (including drug-related 
                criminal activity).
  (b) Manner of Termination.--Each housing assistance payments contract 
shall provide that the owner shall conduct the termination of tenancy 
of any tenant of an assisted dwelling unit under the contract in 
accordance with applicable State or local laws, including providing any 
notice of termination required under such laws.

SEC. 326. ELIGIBLE OWNERS.

  (a) Ownership Entity.--Rental assistance under this title may be 
provided for any eligible dwelling unit for which the owner is any 
public agency, private person or entity (including a cooperative), 
nonprofit organization, agency of the Federal Government, or local 
housing and management authority.
  (b) Ineligible Owners.--
          (1) In general.--Notwithstanding subsection (a), a local 
        housing and management authority may not enter into a housing 
        assistance payments contract (or renew an existing contract) 
        covering a dwelling unit that is owned by an owner who is 
        debarred, suspended, or subject to limited denial of 
        participation under part 24 of title 24, Code of Federal 
        Regulations.
          (2) Prohibition of sale to related parties.--The Secretary 
        shall establish guidelines to prevent housing assistance 
        payments for a dwelling unit that is owned by any spouse, 
        child, or other party who allows an owner described in 
        paragraph (1) to maintain control of the unit.
          (3) Rule of construction.--This subsection may not be 
        construed to prohibit, or authorize the termination or 
        suspension, of payment of housing assistance under a housing 
        assistance payments contract in effect at the time such 
        debarment, suspension, or limited denial of participation takes 
        effect.

SEC. 327. SELECTION OF DWELLING UNITS.

  (a) Family Choice.--The determination of the dwelling unit in which 
an assisted family resides and for which housing assistance is provided 
under this title shall be made solely by the assisted family, subject 
to the provisions of this title.
  (b) Deed Restrictions.--Housing assistance may not be used in any 
manner that abrogates any local deed restriction that applies to any 
housing consisting of 1 to 4 dwelling units. Nothing in this section 
may be construed to affect the provisions or applicability of the Fair 
Housing Act.

SEC. 328. ELIGIBLE DWELLING UNITS.

  (a) In General.--A dwelling unit shall be an eligible dwelling unit 
for purposes of this title only if the local housing and management 
authority to provide housing assistance for the dwelling unit 
determines that the dwelling unit--
          (1) is an existing dwelling unit that is not located within a 
        nursing home or the grounds of any penal, reformatory, medical, 
        mental, or similar public or private institution; and
          (2) complies--
                  (A) with applicable State or local laws, regulations, 
                standards, or codes regarding habitability of 
                residential dwellings that--
                          (i) are in effect for the jurisdiction in 
                        which the dwelling unit is located;
                          (ii) provide protection to residents of the 
                        dwellings that is equal to or greater than the 
                        protection provided under the housing quality 
                        standards established under subsection (b); and
                          (iii) that do not severely restrict housing 
                        choice; or
                  (B) in the case of a dwelling unit located in a 
                jurisdiction which does not have in effect laws, 
                regulations, standards, or codes described in 
                subparagraph (A), with the housing quality standards 
                established under subsection (b).
Each local housing and management authority providing housing 
assistance shall identify, in the local housing management plan for the 
authority, whether the authority is utilizing the standard under 
subparagraph (A) or (B) of paragraph (2) and, if the authority utilizes 
the standard under subparagraph (A), shall certify in such plan that 
the applicable State or local laws, regulations, standards, or codes 
comply with the requirements under such subparagraph.
  (b) Determinations.--
          (1) In general.--A local housing and management authority 
        shall make the determinations required under subsection (a) 
        pursuant to an inspection of the dwelling unit conducted before 
        any assistance payment is made for the unit.
          (2) Failure to inspect.--Notwithstanding subsection (a), if 
        the inspection and the determinations referred to in paragraph 
        (1) are not made before the expiration of the 7-day period 
        beginning upon a request by the resident or landlord to the 
        local housing and management authority--
                  (A) the dwelling unit shall be considered to be an 
                eligible dwelling unit for purposes of this title; and
                  (B) the assisted family may occupy the dwelling unit, 
                and assistance payments for the unit may be made before 
                necessary repairs are completed, if the owner agrees to 
                make such repairs within 15 days.
  (c) Federal Housing Quality Standards.--The Secretary shall establish 
housing quality standards under this subsection that ensure that 
assisted dwelling units are safe, clean, and healthy. Such standards 
shall include requirements relating to habitability, including 
maintenance, health and sanitation factors, condition, and construction 
of dwellings, and shall, to the greatest extent practicable, be 
consistent with the standards established under section 232(b). The 
Secretary shall differentiate between major and minor violations of 
such standards.
  (d) Annual Inspections.--Each local housing and management authority 
providing housing assistance shall make an annual inspection of each 
assisted dwelling unit during the term of the housing assistance 
payments contracts for the unit to determine whether the unit is 
maintained in accordance with the requirements under subsection (a)(2). 
The authority shall submit the results of such inspections to the 
Secretary and the Inspector General for the Department of Housing and 
Urban Development and such results shall be available to the Housing 
Foundation and Accreditation Board established under title IV and any 
auditor conducting an audit under section 432.
  (e) Inspection Guidelines.--The Secretary shall establish procedural 
guidelines and performance standards to facilitate inspections of 
dwelling units and conform such inspections with practices utilized in 
the private housing market. Such guidelines and standards shall take 
into consideration variations in local laws and practices of local 
housing and management authorities and shall provide flexibility to 
authorities appropriate to facilitate efficient provision of assistance 
under this title.
  (f) Rule of Construction.--This section may not be construed to 
prevent the provision of housing assistance in connection with 
supportive services for elderly or disabled families.

SEC. 329. HOMEOWNERSHIP OPTION.

  (a) In General.--A local housing and management authority providing 
housing assistance under this title may provide homeownership 
assistance to assist eligible families to purchase a dwelling unit 
(including purchase under lease-purchase homeownership plans).
  (b) Requirements.--A local housing and management authority providing 
homeownership assistance under this section shall, as a condition of an 
eligible family receiving such assistance, require the family to--
          (1) demonstrate that the family has income from employment or 
        other sources (other than public assistance), as determined in 
        accordance with requirements established by the authority; and
          (2) meet any other initial or continuing requirements 
        established by the local housing and management authority.
  (c) Downpayment Requirement.--
          (1) In general.--A local housing and management authority may 
        establish minimum downpayment requirements, if appropriate, in 
        connection with loans made for the purchase of dwelling units 
        for which homeownership assistance is provided under this 
        section. If the authority establishes a minimum downpayment 
        requirement, except as provided in paragraph (2) the authority 
        shall permit the family to use grant amounts, gifts from 
        relatives, contributions from private sources, and similar 
        amounts as downpayment amounts in such purchase.
          (2) Direct family contribution.--In purchasing housing 
        pursuant to this section subject to a downpayment requirement, 
        each family shall contribute an amount of the downpayment, from 
        resources of the family other than grants, gifts, 
        contributions, or other similar amounts referred to in 
        paragraph (1), that is not less than 1 percent of the purchase 
        price.
  (d) Ineligibility Under Other Programs.--A family may not receive 
homeownership assistance pursuant to this section during any period 
when assistance is being provided for the family under other Federal 
homeownership assistance programs, as determined by the Secretary, 
including assistance under the HOME Investment Partnerships Act, the 
Homeownership and Opportunity Through HOPE Act, title II of the Housing 
and Community Development Act of 1987, and section 502 of the Housing 
Act of 1949.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

SEC. 351. HOUSING ASSISTANCE PAYMENTS CONTRACTS.

  (a) In General.--Each local housing and management authority that 
receives amounts under a contract under section 302 may enter into 
housing assistance payments contracts with owners of existing dwelling 
units to make housing assistance payments to such owners in accordance 
with this title.
  (b) LHMA Acting As Owner.--A local housing and management authority 
may enter into a housing assistance payments contract to make housing 
assistance payments under this title to itself (or any agency or 
instrumentality thereof) as the owner of dwelling units, and the 
authority shall be subject to the same requirements that are applicable 
to other owners, except that the determinations under section 328(a) 
and 354(b) shall be made by a competent party not affiliated with the 
authority or the owner, and the authority shall be responsible for any 
expenses of such determinations.
  (c) Provisions.--Each housing assistance payments contract shall--
          (1) have a term of not more than 12 months;
          (2) require that the assisted dwelling unit may be rented 
        only pursuant to a lease that complies with the requirements of 
        section 324;
          (3) comply with the requirements of section 325 (relating to 
        termination of tenancy);
          (4) require the owner to maintain the dwelling unit in 
        accordance with the applicable standards under section 
        328(a)(2); and
          (5) provide that the screening and selection of eligible 
        families for assisted dwelling units shall be the function of 
        the owner.

SEC. 352. AMOUNT OF MONTHLY ASSISTANCE PAYMENT.

  The amount of the monthly assistance payment for housing assistance 
under this title on behalf of an assisted family shall be as follows:
          (1) Units having gross rent less than payment standard.--In 
        the case of a dwelling unit bearing a gross rent that does not 
        exceed the payment standard established under section 353 for a 
        dwelling unit of the applicable size and located in the market 
        area in which such assisted dwelling unit is located, the 
        amount by which the gross rent for the dwelling unit exceeds 
        the amount of the resident contribution determined in 
        accordance with section 322.
          (2) Units having gross rent exceeding payment standard.--In 
        the case of a dwelling unit bearing a gross rent that exceeds 
        the payment standard established under section 353 for a 
        dwelling unit of the applicable size and located in the market 
        area in which such assisted dwelling unit is located, the 
        amount by which such payment standard exceeds the amount of the 
        resident contribution determined in accordance with section 
        322.

SEC. 353. PAYMENT STANDARDS.

  (a) Establishment.--Each local housing and management authority 
providing housing assistance under this title shall establish payment 
standards under this section for various areas, and sizes and types of 
dwelling units, for use in determining the amount of monthly housing 
assistance payment to be provided on behalf of assisted families.
  (b) Use of Rental Indicators.--The payment standard for each size and 
type of housing for each market area shall be an amount that is not 
less than 80 percent, and not greater than 120 percent, of the rental 
indicator established under section 323 for such size and type for such 
area.
  (c) Review.--If the Secretary determines, at any time, that a 
significant percentage of the assisted families who are assisted by a 
large local housing and management authority and are occupying dwelling 
units of a particular size are paying more than 30 percent of their 
adjusted incomes for rent, the Secretary shall review the payment 
standard established by the authority for such size dwellings. If, 
pursuant to the review, the Secretary determines that such payment 
standard is not appropriate to serve the needs of the low-income 
population of the jurisdiction served by the authority (taking into 
consideration rental costs in the area), as identified in the approved 
community improvement plan of the authority, the Secretary may require 
the local housing and management authority to modify the payment 
standard. For purposes of this subsection, the term ``large local 
housing and management authority'' means a local housing and management 
authority that provides housing assistance on behalf of 1250 or more 
assisted families.

SEC. 354. REASONABLE RENTS.

  (a) Establishment.--The rent charged for a dwelling unit for which 
rental assistance is provided under this title shall be established 
pursuant to negotiation and agreement between the assisted family and 
the owner of the dwelling unit.
  (b) Reasonableness.--
          (1) Determination.--A local housing and management authority 
        providing rental assistance under this title for a dwelling 
        unit shall, before commencing assistance payments for a unit, 
        determine whether the rent charged for the unit exceeds the 
        rents charged for comparable units in the applicable private 
        unassisted market.
          (2) Unreasonable rents.--If the authority determines that the 
        rent charged for a dwelling unit exceeds such comparable rents, 
        the authority shall--
                  (A) inform the assisted family renting the unit that 
                such rent exceeds the rents for comparable unassisted 
                units in the market; and
                  (B) refuse to provide housing assistance payments for 
                such unit.

SEC. 355. PROHIBITION OF ASSISTANCE FOR VACANT RENTAL UNITS.

  If an assisted family vacates a dwelling unit for which rental 
assistance is provided under a housing assistance payments contract 
before the expiration of the term of the lease for the unit, rental 
assistance pursuant to such contract may not be provided for the unit 
after the month during which the unit was vacated.

            Subtitle D--General and Miscellaneous Provisions

SEC. 371. DEFINITIONS.

  For purposes of this title:
          (1) Assisted dwelling unit.--The term ``assisted dwelling 
        unit'' means a dwelling unit in which an assisted family 
        resides and for which housing assistance payments are made 
        under this title.
          (2) Assisted family.--The term ``assisted family'' means an 
        eligible family on whose behalf housing assistance payments are 
        made under this title or who has been selected and approved for 
        housing assistance.
          (3) Choice-based.--The term ``choice-based'' means, with 
        respect to housing assistance, that the assistance is not 
        attached to a dwelling unit but can be used for any eligible 
        dwelling unit selected by the eligible family.
          (4) Eligible dwelling unit.--The term ``eligible dwelling 
        unit'' means a dwelling unit that complies with the 
        requirements under section 328 for consideration as an eligible 
        dwelling unit.
          (5) Eligible family.--The term ``eligible family'' means a 
        family that meets the requirements under section 321(a) for 
        assistance under this title.
          (6) Homeownership assistance.--The term ``homeownership 
        assistance'' means housing assistance provided under section 
        329 for the ownership of a dwelling unit.
          (7) Housing assistance.--The term ``housing assistance'' 
        means assistance provided under this title on behalf of low-
        income families for the rental or ownership of an eligible 
        dwelling unit.
          (8) Housing assistance payments contract.--The term ``housing 
        assistance payments contract'' means a contract under section 
        351 between a local housing and management authority (or the 
        Secretary) and an owner to make housing assistance payments 
        under this title to the owner on behalf of an assisted family.
          (9) Local housing and management authority.--The terms 
        ``local housing and management authority'' and ``authority'' 
        have the meaning given such terms in section 103, except that 
        the terms include--
                  (A) a consortia of local housing and management 
                authorities that the Secretary determines has the 
                capacity and capability to administer a program for 
                housing assistance under this title in an efficient 
                manner;
                  (B) any other entity that, upon the date of the 
                enactment of this Act, was administering any program 
                for tenant-based rental assistance under section 8 of 
                the United States Housing Act of 1937 (as in effect 
                before the enactment of this Act), pursuant to a 
                contract with the Secretary or a public housing agency; 
                and
                  (C) with respect to any area in which no local 
                housing and management authority has been organized or 
                where the Secretary determines that a local housing and 
                management authority is unwilling or unable to 
                implement this title, or is not performing 
                effectively--
                          (i) the Secretary or another entity that by 
                        contract agrees to receive assistance amounts 
                        under this title and enter into housing 
                        assistance payments contracts with owners and 
                        perform the other functions of local housing 
                        and management authority under this title; or
                          (ii) notwithstanding any provision of State 
                        or local law, a local housing and management 
                        authority for another area that contracts with 
                        the Secretary to administer a program for 
                        housing assistance under this title, without 
                        regard to any otherwise applicable limitations 
                        on its area of operation.
          (10) Owner.--The term ``owner'' means the person or entity 
        having the legal right to lease or sublease dwelling units. 
        Such term includes any principals, general partners, primary 
        shareholders, and other similar participants in any entity 
        owning a multifamily housing project, as well as the entity 
        itself.
          (11) Rent.--The terms ``rent'' and ``rental'' include, with 
        respect to members of a cooperative, the charges under the 
        occupancy agreements between such members and the cooperative.
          (12) Rental assistance.--The term ``rental assistance'' means 
        housing assistance provided under this title for the rental of 
        a dwelling unit.

SEC. 372. RENTAL ASSISTANCE FRAUD RECOVERIES.

  (a) Authority To Retain Recovered Amounts.--The Secretary shall 
permit local housing and management authorities administering housing 
assistance under this title to retain, out of amounts obtained by the 
authorities from tenants that are due as a result of fraud and abuse, 
an amount (determined in accordance with regulations issued by the 
Secretary) equal to the greater of--
          (1) 50 percent of the amount actually collected; or
          (2) the actual, reasonable, and necessary expenses related to 
        the collection, including costs of investigation, legal fees, 
        and collection agency fees.
  (b) Use.--Amounts retained by an authority shall be made available 
for use in support of the affected program or project, in accordance 
with regulations issued by the Secretary. If the Secretary is the 
principal party initiating or sustaining an action to recover amounts 
from families or owners, the provisions of this section shall not 
apply.
  (c) Recovery.--Amounts may be recovered under this section--
          (1) by an authority through a lawsuit (including settlement 
        of the lawsuit) brought by the authority or through court-
        ordered restitution pursuant to a criminal proceeding resulting 
        from an authority's investigation where the authority seeks 
        prosecution of a family or where an authority seeks prosecution 
        of an owner;
          (2) through administrative repayment agreements with a family 
        or owner entered into as a result of an administrative 
        grievance procedure conducted by an impartial decisionmaker in 
        accordance with section 110; or
          (3) through an agreement between the parties.

SEC. 373. STUDY REGARDING GEOGRAPHIC CONCENTRATION OF ASSISTED 
                    FAMILIES.

  (a) In General.--The Secretary shall conduct a study of the 
geographic areas in the State of Illinois served by the Housing 
Authority of Cook County and the Chicago Housing Authority and submit 
to the Congress a report and a specific proposal, which addresses and 
resolves the issues of--
          (1) the adverse impact on local communities due to geographic 
        concentration of assisted households under the tenant-based 
        housing programs under section 8 of the United States Housing 
        Act of 1937 (as in effect immediately before the enactment of 
        this Act) and under this title; and
          (2) facilitating the deconcentration of such assisted 
        households by providing broader housing choices to such 
        households.
The study shall be completed, and the report shall be submitted, not 
later than 90 days after the date of the enactment of this Act.
  (b) Concentration.--For purposes of this section, the term 
``concentration'' means, with respect to any area within a census 
tract, that--
          (1) 15 percent or more of the households residing within such 
        area have incomes which do not exceed the poverty level; or
          (2) 15 percent or more of the total affordable housing stock 
        located within such area is assisted housing.

 TITLE IV--ACCREDITATION AND OVERSIGHT OF LOCAL HOUSING AND MANAGEMENT 
                              AUTHORITIES

         Subtitle A--Housing Foundation and Accreditation Board

SEC. 401. ESTABLISHMENT.

  There is established an independent agency in the executive branch of 
the Government to be known as the Housing Foundation and Accreditation 
Board (in this title referred to as the ``Board'').

SEC. 402. MEMBERSHIP.

  (a) In General.--The Board shall be composed of 12 members appointed 
by the President not later than 180 days after the date of the 
enactment of this Act, as follows:
          (1) 4 members shall be appointed from among 10 individuals 
        recommended by the Secretary of Housing and Urban Development.
          (2) 4 members shall be appointed from among 10 individuals 
        recommended by the Chairman and Ranking Minority Member of the 
        Committee on Banking, Housing, and Urban Affairs of the Senate.
          (3) 4 members appointed from among 10 individuals recommended 
        by the Chairman and Ranking Minority Member of the Committee on 
        Banking and Financial Services of the House of Representatives.
  (b) Qualifications.--
          (1) Required representation.--The Board shall at all times 
        have the following members:
                  (A) 2 members who are residents of public housing or 
                dwelling units assisted under title III of this Act or 
                the provisions of section 8 of the United States 
                Housing Act of 1937 (as in effect before the enactment 
                of this Act).
                  (B) 2 members who are executive directors of local 
                housing and management authorities.
                  (C) 1 member who is a member of the Institute of Real 
                Estate Managers.
                  (D) 1 member who is the owner of a multifamily 
                housing project assisted under a program administered 
                by the Secretary of Housing and Urban Development.
          (2) Required experience.--The Board shall at all times have 
        as members individuals with the following experience:
                  (A) At least 1 individual who has extensive 
                experience in the residential real estate finance 
                business.
                  (B) At least 1 individual who has extensive 
                experience in operating a nonprofit organization that 
                provides affordable housing.
                  (C) At least 1 individual who has extensive 
                experience in construction of multifamily housing.
                  (D) At least 1 individual who has extensive 
                experience in the management of a community development 
                corporation.
        A single member of the board with the appropriate experience 
        may satisfy the requirements of more than 1 subparagraph of 
        this paragraph. A single member of the board with the 
        appropriate qualifications and experience may satisfy the 
        requirements of a subparagraph of paragraph (1) and a 
        subparagraph of this paragraph.
  (c) Political Affiliation.--Not more than 6 members of the Board may 
be of the same political party.
  (d) Terms.--
          (1) In general.--Each member of the Board shall be appointed 
        for a term of 4 years, except as provided in paragraphs (2) and 
        (3).
          (2) Terms of initial appointees.--As designated by the 
        President at the time of appointment, of the members first 
        appointed--
                  (A) 3 shall be appointed for terms of 1 year;
                  (B) 3 shall be appointed for terms of 2 years;
                  (C) 3 shall be appointed for terms of 3 years; and
                  (D) 3 shall be appointed for terms of 4 years;
          (3) Vacancies.--Any member appointed to fill a vacancy 
        occurring before the expiration of the term for which the 
        member's predecessor was appointed shall be appointed only for 
        the remainder of that term. A member may serve after the 
        expiration of that member's term until a successor has taken 
        office. A vacancy in the Board shall be filled in the manner in 
        which the original appointment was made.
  (e) Chairperson.--The Board shall elect a chairperson from among 
members of the Board.
  (f) Quorum.--A majority of the members of the Board shall constitute 
a quorum for the transaction of business.
  (g) Voting.--Each member of the Board shall be entitled to 1 vote, 
which shall be equal to the vote of every other member of the Board.
  (h) Prohibition on Additional Pay.--Members of the Board shall serve 
without compensation, but shall be reimbursed for travel, subsistence, 
and other necessary expenses incurred in the performance of their 
duties as members of the Board.

SEC. 403. FUNCTIONS.

  The purpose of this subtitle is to establish the Board as a 
nonpolitical entity to carry out the following functions:
          (1) Evaluation of deep subsidy programs.--Measuring the 
        performance and efficiency of all ``deep subsidy'' programs for 
        housing assistance administered by the Secretary of Housing and 
        Urban Development, including the public housing program under 
        title II and the programs for tenant- and project-based rental 
        assistance under title III and section 8 of the United States 
        Housing Act of 1937 (as in effect before the enactment of this 
        Act).
          (2) Establishment of lhma performance benchmarks.--
        Establishing standards and guidelines under section 431 for use 
        by the Secretary in measuring the performance and efficiency of 
        local housing and management authorities and other owners and 
        providers of federally assisted housing in carrying out 
        operational and financial functions.
          (3) Accreditation of lhma's.--Establishing a procedure under 
        section 431(b) for accrediting local housing and management 
        authorities to receive block grants under title I for the 
        operation, maintenance, and production of public housing, 
        ensuring that financial and performance audits under such 
        section are conducted annually for each local housing and 
        management authority, and reviewing such audits for purposes of 
        accreditation.
          (4) Classification of lhma's.--Classifying local housing and 
        management authorities, under to section 434, according to the 
        performance categories under section 431(a)(2).

SEC. 404. INITIAL ESTABLISHMENT OF STANDARDS AND PROCEDURES FOR LHMA 
                    COMPLIANCE.

  (a) Deadline.--Not later than the expiration of the 12-month period 
beginning upon the completion of the appointment, under section 402, of 
the initial members of the Board, the Board shall organize its 
structure and operations, establish the standards, guidelines, and 
procedures under sections 431, and establish any fees under section 
406. Before issuing such standards, guidelines, and procedures in final 
form, the Board shall submit a copy to the Congress.
  (b) Priority of Initial Evaluations.--After organization of the Board 
and establishment of standards, guidelines, and procedures under 
sections 431, the Board shall commence evaluations under section 433(b) 
for the purpose of accrediting local housing and management authorities 
and shall give priority to conducting evaluations of local housing and 
management authorities that are designated as troubled public housing 
agencies under section 6(j) of the United States Housing Act of 1937 
(as in effect before the date of the enactment of this Act) pursuant to 
section 431(d).

SEC. 405. POWERS.

  (a) Hearings.--The Board may, for the purpose of carrying out this 
subtitle, hold such hearings and sit and act at such times and places 
as the Board determines appropriate.
  (b) Rules and Regulations.--The Board may adopt such rules and 
regulations as may be necessary to establish its procedures and to 
govern the manner of its operations, organization, and personnel.
  (c) Assistance From Federal Agencies.--
          (1) Information.--The Board may secure directly from any 
        department or agency of the Federal Government such information 
        as the Board may require for carrying out its functions, 
        including local housing management plans submitted to the 
        Secretary by local housing and management authorities under 
        title II. Upon request of the Board, any such department or 
        agency shall furnish such information. The Board may acquire 
        information directly from local housing and management 
        authorities to the same extent the Secretary may acquire such 
        information.
          (2) General services administration.--The Administrator of 
        General Services shall provide to the Board, on a reimbursable 
        basis, such administrative support services as the Board may 
        request.
          (3) Department of housing and urban development.--Upon the 
        request of the chairperson of the Board, the Secretary of 
        Housing and Urban Development shall, to the extent possible and 
        subject to the discretion of the Secretary, detail any of the 
        personnel of the Department of Housing and Urban Development, 
        on a nonreimbursable basis, to assist the Board in carrying out 
        its functions under this subtitle.
  (d) Mails.--The Board may use the United States mails in the same 
manner and under the same conditions as other Federal agencies.
  (e) Contracting.--The Board may, to such extent and in such amounts 
as are provided in appropriation Acts, enter into contracts with 
private firms, institutions, and individuals for the purpose of 
conducting research or surveys necessary to enable the Board to 
discharge its functions under this subtitle.
  (f) Staff.--
          (1) Executive director.--The Board shall appoint an executive 
        director of the Board, who shall be compensated at a rate fixed 
        by the Board, but which shall not exceed the rate established 
        for level V of the Executive Schedule under title 5, United 
        States Code.
          (2) Other personnel.--In addition to the executive director, 
        the Board may appoint and fix the compensation of such 
        personnel as the Board considers necessary, in accordance with 
        the provisions of title 5, United States Code, governing 
        appointments to the competitive service, and the provisions of 
        chapter 51 and subchapter III of chapter 53 of such title, 
        relating to classification and General Schedule pay rates. Such 
        personnel may include personnel for assessment teams under 
        section 431(b).

SEC. 406. FEES.

  (a) Accreditation Fees.--The Board may establish and charge fees for 
the accreditation of local housing and management authorities as the 
Board considers necessary to cover the costs of the operations of the 
Board relating to establishing standards, guidelines, and procedures 
for evaluating the performance of local housing and management 
authorities and performing comprehensive reviews relating to the 
accreditation of such authorities.
  (b) Fund.--Any fees collected under this section shall be deposited 
in an operations fund for the Board, which is hereby established in the 
Treasury of the United States. Amounts in such fund shall be available, 
to the extent provided in appropriation Acts, for the expenses of the 
Board in carrying out its functions under this subtitle.

SEC. 407. REPORTS.

  The Board shall submit a report to the Congress annually describing, 
for the year for which the report is made--
          (1) any modifications made by the Board to the standards, 
        guidelines, and procedures issued under section 431 by the 
        Board;
          (2) the results of the assessments, reviews, and evaluations 
        conducted by the Board under subtitle B;
          (3) the types and extent of assistance, information, and 
        products provided by the Board; and
          (4) any other activities of the Board.

    Subtitle B--Accreditation and Oversight Standards and Procedures

SEC. 431. ESTABLISHMENT OF PERFORMANCE BENCHMARKS AND ACCREDITATION 
                    PROCEDURES.

  (a) Performance Benchmarks.--
          (1) Performance areas.--The Housing Foundation and 
        Accreditation Board established under section 401 (in this 
        subtitle referred to as the ``Board'') shall establish 
        standards and guidelines, for use under section 434, to measure 
        the performance of local housing and management authorities in 
        all aspects relating to--
                  (A) operational and financial functions;
                  (B) providing, maintaining, and assisting low-income 
                housing--
                          (i) that is safe, clean, and healthy, as 
                        required under sections 232 and 328;
                          (ii) in a manner consistent with the 
                        comprehensive housing affordability strategy 
                        under section 105 of the Cranston-Gonzalez 
                        National Affordable Housing Act, if 
                        appropriate;
                          (iii) that is occupied by eligible families; 
                        and
                          (iv) that is affordable to eligible families;
                  (C) producing low-income housing and executing 
                capital projects, if applicable;
                  (D) administering the provision of housing assistance 
                under title III;
                  (E) accomplishing the goals and plans set forth in 
                the local housing management plan for the authority;
                  (F) promoting responsibility and self-sufficiency 
                among residents of public housing developments of the 
                authority and assisted families under title III; and
                  (G) complying with the other requirements of the 
                authority under block grant contracts under title II, 
                grant agreements under title III, and the provisions of 
                this Act.
          (2) Performance categories.--In establishing standards and 
        guidelines under this section, the Board shall define various 
        levels of performance, which shall include the following 
        levels:
                  (A) Exceptionally well-managed.--A minimum acceptable 
                level of performance in the areas specified in 
                paragraph (1) for classification of a local housing and 
                management authority as exceptionally well-managed, 
                which shall indicate that the authority functions 
                exceptionally.
                  (B) Well-managed.--A minimum acceptable level of 
                performance in the areas specified in paragraph (1) for 
                classification of a local housing and management 
                authority as well-managed, which shall indicate that 
                the authority functions satisfactorily.
                  (C) At risk of becoming troubled.--A minimum 
                acceptable level of performance in the areas specified 
                in paragraph (1) for classification of a local housing 
                and management authority as at risk of becoming 
                troubled, which shall indicate that there are elements 
                in the operations, management, or functioning of the 
                authority that must be addressed before they result in 
                serious and complicated deficiencies.
                  (D) Troubled.--A minimum level of performance in the 
                areas specified in paragraph (1) for classification of 
                a local housing and management authority as a troubled 
                authority, which shall indicate that the authority 
                functions unsatisfactorily with respect to certain 
                areas under paragraph (1), but such deficiencies are 
                not irreparable.
                  (E) Dysfunctional.--A maximum level of performance in 
                the areas specified in paragraph (1) for classification 
                of a local housing and management authority as 
                dysfunctional, which shall indicate that the authority 
                suffers such deficiencies that the authority should not 
                be allowed to continue to manage low-income housing or 
                administer housing assistance.
          (3) Accreditation standard.--In establishing standards and 
        guidelines under this section, the Board shall establish a 
        minimum acceptable level of performance for accrediting a local 
        housing and management authority for purposes of authorizing 
        the authority to enter into a new block grant contract under 
        title II or a new grant agreement under title III.
  (b) Accreditation Procedure.--The Accreditation Board shall establish 
procedures for--
          (1) reviewing the performance of a local housing and 
        management authority over the term of the expiring 
        accreditation, which review shall be conducted during the 12-
        month period that ends upon the conclusion of the term of the 
        expiring accreditation;
          (2) evaluating the capability of a local housing and 
        management authority that proposes to enter into an initial 
        block grant contract under title II or an initial grant 
        agreement under title III; and
          (3) determining whether the authority complies with the 
        standards and guidelines for accreditation established under 
        subsection (a)(3).
The procedures for a review or evaluation under this subsection shall 
provide for the review or evaluation to be conducted by an assessment 
team established by the Board, which shall review annual financial and 
performance audits conducted under section 432 and obtain such 
information as the Board may require.
  (c) Identification of Potential Problems.--The standards and 
guidelines under subsection (a) and the procedure under subsection (b) 
shall be established in a manner designed to identify potential 
problems in the operations, management, functioning of local housing 
and management authorities at a time before such problems result in 
serious and complicated deficiencies.
  (d) Interim Applicability of PHMAP.--Notwithstanding any other 
provision of this subtitle, during the period that begins on the date 
of the enactment of this Act and ends upon the date of the 
effectiveness of final regulations establishing the standards, 
guidelines, and procedures required under this section and section 432, 
the Secretary shall assess the management performance of local housing 
and management authorities in the same manner provided for public 
housing agencies pursuant to section 6(j) of the United States Housing 
Act of 1937 (as in effect immediately before the enactment of this Act) 
and may take actions with respect to local housing and management 
authorities that are authorized under such section with respect to 
public housing agencies.

SEC. 432. ANNUAL FINANCIAL AND PERFORMANCE AUDIT.

  (a) Requirement.--The Secretary shall require each local housing and 
management authority that receives grant amounts under this Act in a 
fiscal year to have a financial and performance audit of the authority 
conducted for the fiscal year and to submit the results of the audit to 
the Secretary and the Board. Not later than 60 days before submitting a 
financial and performance audit to the Secretary and the Board, the 
local housing and management authority shall submit the audit to any 
local elected official or officials responsible for appointing the 
members of the board of directors (or other similar governing body) of 
the local housing and management authority for review and comment. Any 
such comments shall be submitted, together with the audit, to the 
Secretary and the Board and the Secretary and the Board shall consider 
such comments in reviewing the audit.
  (b) Procedures.-- The requirements for financial and performance 
audits shall--
          (1) provide for the audit to be conducted by an independent 
        auditor selected by the authority;
          (2) authorize the auditor to obtain information from a local 
        housing and management authority, to access any books, 
        documents, papers, and records of an authority that are 
        pertinent to this Act and assistance received pursuant to this 
        Act, and to review any reports of an authority to the 
        Secretary; and
          (3) be designed to identify potential problems in the 
        operations, management, functioning of a local housing and 
        management authority at a time before such problems result in 
        serious and complicated deficiencies.
  (c) Purpose.--Audits under this section shall be designed to--
          (1) evaluate the financial performance and soundness and 
        management performance of the local housing and management 
        authority board of directors (or other similar governing body) 
        and the authority management officials and staff;
          (2) assess the compliance of an authority with all aspects of 
        the standards and guidelines established under section 
        431(a)(1); and
          (3) provide information to the Secretary and the Board 
        regarding the financial performance and management of the 
        authority and to determine whether a review under section 
        225(d) or 353(c) is required.
  (d) Single Audit Act Compliance.--An audit under this section shall 
be made in a manner so that the audit complies with the requirements 
for audits under chapter 75 of title 31, United States Code.
  (e) Withholding of Amounts for Costs of Audit.--If the Secretary 
determines that a local housing and management authority has failed to 
take the actions required to submit an audit under this section for a 
fiscal year, the Secretary may--
          (1) arrange for, and pay the costs of, the audit; and
          (2) withhold, from the total allocation for any fiscal year 
        otherwise payable to the authority under this Act, amounts 
        sufficient to pay for the reasonable costs of conducting an 
        acceptable audit, including, if appropriate, the reasonable 
        costs of accounting services necessary to place the authority's 
        books and records in condition that permits an audit.

SEC. 433. ACCREDITATION.

  (a) Review Upon Expiration of Previous Accreditation.--The 
Accreditation Board shall perform a comprehensive review of the 
performance of a local housing and management authority, in accordance 
with the procedures established under section 431(b), before the 
expiration of the term for which a previous accreditation was granted 
under this subtitle.
  (b) Initial Evaluation.--
          (1) In general.--Before entering into an initial block grant 
        contract under title II or an initial contract pursuant to 
        section 302 for assistance under title III with any local 
        housing and management authority, the Board shall conduct a 
        comprehensive evaluation of the capabilities of the local 
        housing and management authority.
          (2) Exception.--Paragraph (1) shall not apply to an initial 
        block grant contract or grant agreement entered into during the 
        period beginning upon the date of the enactment of this Act and 
        ending upon the date of the effectiveness of final regulations 
        establishing the standards, guidelines, and procedures required 
        under section 431 with any public housing agency that received 
        amounts under the United States Housing Act of 1937 during 
        fiscal year 1995.
  (c) Determination and Report.--Pursuant to a review or evaluation 
under this section, the Board shall determine whether the authority 
meets the requirements for accreditation under section 431(a)(3), shall 
accredit the authority if it meets such requirements, and shall submit 
a report on the results of the review or evaluation and such 
determination to the Secretary and the authority.
  (d) Accreditation.--An accreditation under this section shall expire 
at the end the term established by the Board in granting the 
accreditation, which may not exceed 5 years. The Board may qualify an 
accreditation placing conditions on the accreditation based on the 
future performance of the authority.

SEC. 434. CLASSIFICATION BY PERFORMANCE CATEGORY.

  Upon completing the accreditation process under section 433 with 
respect to a local housing and management authority, the Housing 
Finance and Accreditation Board shall designate the authority according 
to the performance categories under section 431(a)(2). In determining 
the classification of an authority, the Board shall consider the most 
recent financial and performance audit under section 432 of the 
authority and accreditation reports under section 433(c) for the 
authority.

SEC. 435. PERFORMANCE AGREEMENTS FOR AUTHORITIES AT RISK OF BECOMING 
                    TROUBLED.

  (a) In General.--Upon designation of a local housing and management 
authority as at risk of becoming troubled under section 431(a)(2)(C), 
the Secretary shall seek to enter into an agreement with the authority 
providing for improvement of the elements of the authority that have 
been identified. An agreement under this section shall contain such 
terms and conditions as the Secretary determines are appropriate for 
addressing the elements identified, which may include an on-site, 
independent assessment of the management of the authority.
  (b) Powers of Secretary.--If the Secretary determines that such 
action is necessary to prevent the local housing and management 
authority from becoming a troubled authority, the Secretary may--
          (1) solicit competitive proposals from other local housing 
        and management authorities and private housing management 
        agents (which may be selected by existing tenants through 
        administrative procedures established by the Secretary), to 
        prepare for any case in which such agents may be needed for 
        managing all, or part, of the housing administered by the 
        authority; or
          (2) solicit competitive proposals from other local housing 
        and management authorities and private entities with experience 
        in construction management, to prepare for any case in which 
        such authorities or firms may be needed to oversee 
        implementation of assistance made available for capital 
        improvement for public housing of the authority.

SEC. 436. PERFORMANCE AGREEMENTS AND CDBG SANCTIONS FOR TROUBLED 
                    LHMA'S.

  (a) In General.--Upon designation of a local housing and management 
authority as a troubled authority under section 431(a)(2)(D), the 
Secretary shall seek to enter into an agreement with the authority 
providing for improving the management performance of the authority.
  (b) Contents.--An agreement under this section between the Secretary 
and a local housing and management authority shall set forth--
          (1) targets for improving performance, as measured by the 
        guidelines and standards established under section 431(a)(1) 
        and other requirements within a specified period of time, which 
        shall include targets to be met upon the expiration of the 12-
        month period beginning upon entering into the agreement;
          (2) strategies for meeting such targets;
          (3) sanctions for failure to implement such strategies; and
          (4) to the extent the Secretary deems appropriate, a plan for 
        enhancing resident involvement in the management of the local 
        housing and management authority.
  (c) Local Assistance in Implementation.--The Secretary and the local 
housing and management authority shall, to the maximum extent 
practicable, seek the assistance of local public and private entities 
in carrying out an agreement under this section.
  (d) Default Under Performance Agreement.--Upon the expiration of the 
12-month period beginning upon entering into an agreement under this 
section with a local housing and management authority, the Secretary 
shall review the performance of the authority in relation to the 
performance targets and strategies under the agreement. If the 
Secretary determines that the authority has failed to comply with the 
performance targets established for the expiration of such period, the 
Secretary shall take the action authorized under section 437(b)(2).
  (e) CDBG Sanction Against Local Government Contributing to Troubled 
Status of LHMA.--If the Secretary determines that the actions or 
inaction of any unit of general local government within which any 
portion of the jurisdiction of a local housing and management authority 
is located has substantially contributed to the conditions resulting in 
the authority being designated under section 431(a)(2)(D) as a troubled 
authority, the Secretary may redirect or withhold, from such unit of 
general local government any amounts allocated for such unit under 
section 106 of such Act.

SEC. 437. OPTION TO DEMAND CONVEYANCE OF TITLE TO OR POSSESSION OF 
                    PUBLIC HOUSING.

  (a) Authority for Conveyance.--A contract under section 201 for block 
grants under title II (including contracts which amend or supersede 
contracts previously made (including contracts for contributions)) may 
provide that upon the occurrence of a substantial default with respect 
to the covenants or conditions to which the local housing and 
management authority is subject (as such substantial default shall be 
defined in such contract) or upon designation of the authority as 
dysfunctional pursuant to section 431(a)(2)(E), the local housing and 
management authority shall be obligated, at the option of the 
Secretary, to--
          (1) convey title in any case where, in the determination of 
        the Secretary (which determination shall be final and 
        conclusive), such conveyance of title is necessary to achieve 
        the purposes of this Act; or
          (2) deliver to the Secretary possession of the development, 
        as then constituted, to which such contract relates.
  (b) Obligation To Reconvey.--Any block grant contract under title II 
containing the provisions authorized in subsection (a) shall also 
provide that the Secretary shall be obligated to reconvey or redeliver 
possession of the development, as constituted at the time of 
reconveyance or redelivery, to such local housing and management 
authority or to its successor (if such local housing and management 
authority or a successor exists) upon such terms as shall be prescribed 
in such contract, and as soon as practicable after--
          (1) the Secretary is satisfied that all defaults with respect 
        to the development have been cured, and that the development 
        will, in order to fulfill the purposes of this Act, thereafter 
        be operated in accordance with the terms of such contract; or
          (2) the termination of the obligation to make annual block 
        grants to the authority, unless there are any obligations or 
        covenants of the authority to the Secretary which are then in 
        default.
Any prior conveyances and reconveyances or deliveries and redeliveries 
of possession shall not exhaust the right to require a conveyance or 
delivery of possession of the development to the Secretary pursuant to 
subsection (a) upon the subsequent occurrence of a substantial default.
  (c) Continued Grants for Repayment of Bonds and Notes Under 1937 
Act.--If--
          (1) a contract for block grants under title II for an 
        authority includes provisions that expressly state that the 
        provisions are included pursuant to this subsection, and
          (2) the portion of the block grant payable for debt service 
        requirements pursuant to the contract has been pledged by the 
        local housing and management authority as security for the 
        payment of the principal and interest on any of its 
        obligations, then--
                  (A) the Secretary shall (notwithstanding any other 
                provisions of this Act), continue to make the block 
                grant payments for the authority so long as any of such 
                obligations remain outstanding; and
                  (B) the Secretary may covenant in such a contract 
                that in any event such block grant amounts shall in 
                each year be at least equal to an amount which, 
                together with such income or other funds as are 
                actually available from the development for the purpose 
                at the time such block grant payments are made, will 
                suffice for the payment of all installments of 
                principal and interest on the obligations for which the 
                amounts provided for in the contract shall have been 
                pledged as security that fall due within the next 
                succeeding 12 months.
In no case shall such block grant amounts be in excess of the maximum 
sum specified in the contract involved, nor for longer than the 
remainder of the maximum period fixed by the contract.

SEC. 438. REMOVAL OF INEFFECTIVE LHMA'S.

  (a) Conditions of Removal.--The actions specified in subsection (b) 
may be taken only upon--
          (1) the occurrence of events or conditions that constitute a 
        substantial default by a local housing and management authority 
        with respect to (A) the covenants or conditions to which the 
        local housing and management authority is subject, or (B) an 
        agreement entered into under section 435;
          (2) designation of the authority as dysfunctional pursuant to 
        section 431(a)(2)(E);
          (3) in the case only of action under subsection (b)(1), 
        failure of a local housing and management authority to obtain 
        reaccreditation upon the expiration of the term of a previous 
        accreditation granted under this subtitle; or
          (4) submission to the Secretary of a petition by the 
        residents of the public housing owned or operated by a local 
        housing and management authority that is designated as troubled 
        or dysfunctional pursuant to section 431(a)(2).
  (b) Removal Actions.--Notwithstanding any other provision of law or 
of any block grant contract under title II or any grant agreement under 
title III, in accordance with subsection (a), the Secretary may--
          (1) solicit competitive proposals from other local housing 
        and management authorities and private housing management 
        agents (which, in the discretion of the Secretary, may be 
        selected by existing public housing residents through 
        administrative procedures established by the Secretary) and, if 
        appropriate, provide for such agents to manage all, or part, of 
        the housing administered by the local housing and management 
        authority or all or part of the other functions of the 
        authority;
          (2) take possession of the local housing and management 
        authority, including any developments or functions of the 
        authority under any section of this Act;
          (3) solicit competitive proposals from other local housing 
        and management authorities and private entities with experience 
        in construction management and, if appropriate, provide for 
        such authorities or firms to oversee implementation of 
        assistance made available for capital improvements for public 
        housing;
          (4) require the authority to make other arrangements 
        acceptable to the Secretary and in the best interests of the 
        public housing residents and assisted families under title III 
        for managing all, or part of, the public housing administered 
        by the authority or the functions of the authority; or
          (5) if the Secretary determines that reasonable opportunities 
        for remedy using the actions under paragraphs (1) through (4) 
        have failed or are not available, petition for the appointment 
        of a receiver for the local housing and management authority to 
        any district court of the United States or to any court of the 
        State in which any portion of the jurisdiction of the local 
        housing and management authority is located, that is authorized 
        to appoint a receiver for the purposes and having the powers 
        prescribed in this section.
  (c) Emergency Assistance.--The Secretary may make available to 
receivers and other entities selected or appointed pursuant to this 
section such assistance as is fair and reasonable to remedy the 
substantial deterioration of living conditions in individual public 
housing developments or other related emergencies that endanger the 
health, safety and welfare of public housing residents or assisted 
families under title III.
  (d) Powers of Secretary.--If the Secretary takes possession of an 
authority, or any developments or functions of an authority, pursuant 
to subsection (b)(2), the Secretary--
          (1) may abrogate contracts that substantially impede 
        correction of the substantial default or improvement of the 
        classification;
          (2) may demolish and dispose of assets of the authority in 
        accordance with subtitle E;
          (3) where determined appropriate by the Secretary, may 
        require the establishment of one or more new local housing and 
        management authorities;
          (4) may consolidate the authority into other well-managed 
        local housing and management authorities with the consent of 
        such well-managed authorities;
          (5) shall not be subject to any State or local laws that, in 
        the determination of the receiver, substantially impede 
        correction of the substantial default or improvement of the 
        classification; and
          (6) shall have such additional authority as a district court 
        of the United States has the authority to confer under like 
        circumstances upon a receiver to achieve the purposes of the 
        receivership.
The Secretary may appoint, on a competitive or noncompetitive basis, an 
individual or entity as an administrative receiver to assume the 
Secretary's responsibility under this paragraph for the administration 
of a local housing and management authority. The Secretary may delegate 
to the administrative receiver any or all of the powers of the 
Secretary under this subsection. Regardless of any delegation under 
this subsection, an administrative receiver may not require the 
establishment of one or more new local housing and management 
authorities pursuant to paragraph (3) unless the Secretary first 
approves such establishment. For purposes of this subsection, the term 
``local housing and management authority'' includes any developments or 
functions of a local housing and management authority under any section 
of this title.
  (e) Receivership.--
          (1) Required appointment.--In any proceeding under subsection 
        (b)(5), upon a determination that a substantial default has 
        occurred, and without regard to the availability of alternative 
        remedies, the court shall appoint a receiver to conduct the 
        affairs of the local housing and management authority in a 
        manner consistent with this Act and in accordance with such 
        further terms and conditions as the court may provide. The 
        receiver appointed may be another local housing and management 
        authority, a private management corporation, the Secretary, or 
        any other appropriate entity. The court shall have power to 
        grant appropriate temporary or preliminary relief pending final 
        disposition of the petition by the Secretary.
          (2) Powers of receiver.--If a receiver is appointed for a 
        local housing and management authority pursuant to subsection 
        (b)(5), in addition to the powers accorded by the court 
        appointing the receiver, the receiver--
                  (A) may abrogate contracts that substantially impede 
                correction of the substantial default or improvement of 
                the classification;
                  (B) may demolish and dispose of assets of the 
                authority in accordance with subtitle E;
                  (C) where determined appropriate by the Secretary, 
                may require the establishment of one or more new local 
                housing and management authorities, to the extent 
                permitted by State and local law; and
                  (D except as provided in subparagraph (C), shall not 
                be subject to any State or local laws that, in the 
                determination of the receiver, substantially impede 
                correction of the substantial default or improvement of 
                the classification.
        For purposes of this paragraph, the term ``local housing and 
        management authority'' includes any developments or functions 
        of a local housing and management authority under any section 
        of this title.
          (3) Termination.--The appointment of a receiver pursuant to 
        this subsection may be terminated, upon the petition of any 
        party, when the court determines that all defaults have been 
        cured or the local housing and management authority will be 
        able to make the same amount of progress in correcting the 
        management of the housing as the receiver.
  (f) Liability.--If the Secretary takes possession of an authority 
pursuant to subsection (b)(2) or a receiver is appointed pursuant to 
subsection (b)(5) for a local housing and management authority, the 
Secretary or the receiver shall be deemed to be acting in the capacity 
of the local housing and management authority (and not in the official 
capacity as Secretary or other official) and any liability incurred 
shall be a liability of the local housing and management authority.

SEC. 439. MANDATORY TAKEOVER OF CHRONICALLY TROUBLED PHA'S.

  (a) Removal of Agency.--Notwithstanding any other provision of this 
Act, not later than the expiration of the 180-day period beginning on 
the date of the enactment of this Act, the Secretary shall take one of 
the following actions with respect to each chronically troubled public 
housing agency:
          (1) Contracting for management.--Solicit competitive 
        proposals for the management of the agency pursuant to section 
        437(b)(1) and replace the management of the agency pursuant to 
        selection of such a proposal.
          (2) Takeover.--Take possession of the agency pursuant to 
        section 437(b)(2) of such Act.
  (b) Definition.--For purposes of this section, the term ``chronically 
troubled public housing agency'' means a public housing agency that, as 
of the date of the enactment of this Act, is designated under section 
6(j)(2) of the United States Housing Act of 1937 (as in effect 
immediately before the enactment of this Act) as a troubled public 
housing agency and has been so designated continuously for the 3-year 
period ending upon such date of enactment; except that such term does 
not include any agency that owns or operates less than 1250 public 
housing dwelling units and that the Secretary determines can, with a 
reasonable amount of effort, make such improvements or remedies as may 
be necessary to remove its designation as troubled within 12 months.

SEC. 440. TREATMENT OF TROUBLED PHA'S.

  (a) Effect of Troubled Status on CHAS.--The comprehensive housing 
affordability strategy (or any consolidated plan incorporating such 
strategy) for the first year beginning after the date of the enactment 
of this Act for the State or unit of general local government in which 
any troubled public housing agency is located shall not be considered 
to comply with the requirements under section 105 of the Cranston-
Gonzalez National Affordable Housing Act unless such plan includes a 
description of the manner in which the State or unit will assist such 
troubled agency in improving its operations to remove such designation.
  (b) Definition.--For purposes of this section, the term ``troubled 
public housing agency'' means a public housing agency that--
          (1) upon the date of the enactment of this Act, is designated 
        under section 6(j)(2) of the United States Housing Act of 1937 
        (as in effect immediately before the enactment of this Act) as 
        a troubled public housing agency; and
          (2) is not a chronically troubled public housing agency, as 
        such term is defined in section 438(b) of this Act.

SEC. 441. MAINTENANCE OF AND ACCESS TO RECORDS.

  (a) Keeping of Records.--Each local housing and management authority 
shall keep such records as may be reasonably necessary to disclose the 
amount and the disposition by the authority of the proceeds of 
assistance received pursuant to this Act and to ensure compliance with 
the requirements of this Act.
  (b) Access to Documents.--The Secretary, the Inspector General for 
the Department of Housing and Urban Development, and the Comptroller 
General of the United States shall each have access for the purpose of 
audit and examination to any books, documents, papers, and records of a 
local housing and management authority that are pertinent to this Act 
and assistance received pursuant to this Act.

SEC. 442. ANNUAL REPORTS REGARDING TROUBLED LHMA'S.

  The Secretary shall submit a report to the Congress annually, as a 
part of the report of the Secretary under section 8 of the Department 
of Housing and Urban Development Act, that--
          (1) identifies the local housing and management authorities 
        that are designated as troubled or dysfunctional under section 
        431(a)(2) and the reasons for such designation;
          (2) identifies the local housing and management authorities 
        that have lost accreditation pursuant to section 432; and
          (3) describes any actions that have been taken in accordance 
        with sections 433, 434, 435, and 436.

SEC. 443. APPLICABILITY TO RESIDENT MANAGEMENT CORPORATIONS.

  The Secretary shall apply the provisions of this subtitle to resident 
management corporations in the same manner as applied to local housing 
and management authorities.

SEC. 444. INAPPLICABILITY TO INDIAN HOUSING.

  The provisions of sections 431, 432, 433, 434, 435, 436, 438, and 442 
shall not apply to public housing developed or operated pursuant to a 
contract between the Secretary and an Indian housing authority.

               TITLE V--REPEALS AND CONFORMING AMENDMENTS

SEC. 501. REPEALS.

  (a) In General.--The following provisions of law are hereby repealed:
          (1) United states housing act of 1937.--The United States 
        Housing Act of 1937 (42 U.S.C. 1437 et seq.).
          (2) Assisted housing allocation.--Section 213 of the Housing 
        and Community Development Act of 1974 (42 U.S.C. 1439).
          (3) Public housing rent waivers for police.--Section 519 of 
        the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 1437a-1).
          (4) Occupancy preferences and income mix for new construction 
        and substantial rehabilitation projects.--Subsection (c) of 
        section 545, and section 555, of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 1437f note).
          (5) Treatment of certificate and voucher holders.--Subsection 
        (c) of section 183 of the Housing and Community Development Act 
        of 1987 (42 U.S.C. 1437f note).
          (6) Retroactive payment for annual adjustment factors.--
        Section 801 of the Department of Housing and Urban Development 
        Reform Act of 1989 (42 U.S.C. 1437f note).
          (7) Excessive rent burden data.--Subsection (b) of section 
        550 of the Cranston-Gonzalez National Affordable Housing Act 
        (42 U.S.C. 1437f note).
          (8) Section 8 disaster relief.--Sections 931 and 932 of the 
        Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
        1437c note).
          (9) Moving to opportunity for fair housing.--Section 152 of 
        the Housing and Community Development Act of 1992 (42 U.S.C. 
        1437f note).
          (10) Report regarding fair housing objectives.--Section 153 
        of the Housing and Community Development Act of 1992 (42 U.S.C. 
        1437f note).
          (11) Section 8 community investment demonstration.--Section 6 
        of the HUD Demonstration Act of 1993 (42 U.S.C. 1437f note).
          (12) Special projects for elderly or handicapped families.--
        Section 209 of the Housing and Community Development Act of 
        1974 (42 U.S.C. 1438).
          (13) Access to pha books.--Section 816 of the Housing Act of 
        1954 (42 U.S.C. 1435).
          (14) Miscellaneous provisions.--Subsections (b)(1), (c), and 
        (d) of section 326 of the Housing and Community Development 
        Amendments of 1981 (Public Law 97-35, 95 Stat. 406; 42 U.S.C. 
        1437f note).
          (15) Payment for development managers.--Section 329A of the 
        Housing and Community Development Amendments of 1981 (42 U.S.C. 
        1437j-1).
          (16) Purchase of pha obligations.--Section 329E of the 
        Housing and Community Development Amendments of 1981 (12 U.S.C. 
        2294a).
          (17) Procurement of insurance by pha's.--
                  (A) In the item relating to ``administrative 
                provisions'' under the heading ``Management and 
                Administration'' in title II of the Departments of 
                Veterans Affairs and Housing and Urban Development, and 
                Independent Agencies Appropriations Act, 1991, the 
                penultimate undesignated paragraph of such item (Public 
                Law 101-507; 104 Stat. 1369).
                  (B) In the item relating to ``administrative 
                provisions'' under the heading ``Management and 
                Administration'' in title II of the Departments of 
                Veterans Affairs and Housing and Urban Development, and 
                Independent Agencies Appropriations Act, 1992, the 19th 
                through 23d undesignated paragraphs of such item 
                (Public Law 102-139; 105 Stat. 758).
          (18) Public housing childhood development.--Section 222 of 
        the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 
        1701z-6 note).
          (19) Indian housing childhood development.--Section 518 of 
        the Cranston-Gonzalez National Affordable Housing Act (12 
        U.S.C. 1701z-6 note).
          (20) Public housing comprehensive transition demonstration.--
        Section 126 of the Housing and Community Development Act of 
        1987 (42 U.S.C. 1437f note).
          (21) Public housing one-stop perinatal services 
        demonstration.--Section 521 of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 1437t note).
          (22) Public housing mincs demonstration.--Section 522 of the 
        Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
        1437f note).
          (23) Public housing energy efficiency demonstration.--Section 
        523 of the Cranston-Gonzalez National Affordable Housing Act 
        (42 U.S.C. 1437g note).
          (24) Omaha homeownership demonstration.--Section 132 of the 
        Housing and Community Development Act of 1992 (Public Law 102-
        550; 106 stat. 3712).
          (25) Public and assisted housing youth sports programs.--
        Section 520 of the Cranston-Gonzalez National Affordable 
        Housing Act (42 U.S.C. 11903a).
  (b) Savings Provision.--The repeals made by subsection (a) shall not 
affect any legally binding obligations entered into before the date of 
the enactment of this Act. Any funds or activities subject to a 
provision of law repealed by subsection (a) shall continue to be 
governed by the provision as in effect immediately before such repeal.

SEC. 502. CONFORMING AND TECHNICAL PROVISIONS.

  (a) Allocation of Elderly Housing Amounts.--Section 202(l) of the 
Housing Act of 1959 (12 U.S.C. 1701q(l)) is amended by adding at the 
end the following new paragraph:
          ``(4) Consideration in allocating assistance.--Assistance 
        under this section shall be allocated in a manner that ensures 
        that the awards of the assistance are made for projects of 
        sufficient size to accommodate facilities for supportive 
        services appropriate to the needs of frail elderly 
        residents.''.
  (b) Eligibility for Assisted Housing.--
          (1) General.--Notwithstanding any other provision of law, for 
        purposes of determining eligibility for admission to assisted 
        housing, a person shall not be considered to have a disability 
        or a handicap solely because of the prior or current illegal 
        use of a controlled substance (as defined in section 102 of the 
        Controlled Substances Act) or solely by reason of the prior or 
        current use of alcohol.
          (2) Definition.--For purposes of this subsection, the term 
        ``assisted housing'' means housing designed primarily for 
        occupancy by elderly persons or persons with disabilities that 
        is assisted pursuant to this Act, the United States Housing Act 
        of 1937, section 221(d)(3) or 236 of the National Housing Act, 
        section 202 of the Housing Act of 1959, section 101 of the 
        Housing and Urban Development Act of 1965, or section 811 of 
        the Cranston-Gonzalez National Affordable Housing Act.
          (3) Continued occupancy.--This subsection may not be 
        construed to prohibit the continued occupancy of any person who 
        is a resident in assisted housing on the date of enactment of 
        this Act.
  (c) Amendment to Housing and Urban-Rural Recovery Act of 1983.--
Section 227(d)(2) of the Housing and Urban-Rural Recovery Act of 1983 
(12 U.S.C. 1701r-1(d)(2)) is amended by inserting ``the United States 
Housing Act of 1996,'' after ``the United States Housing Act of 
1937,''.
  (d) Review of Drug Elimination Program Contracts.--
          (1) Requirement.--Notwithstanding the repeal under section 
        501(a)(26), the Secretary of Housing and Urban Development 
        shall investigate all security contracts awarded by grantees 
        under the Public and Assisted Housing Drug Elimination Act of 
        1990 (42 U.S.C. 11901 et seq.) that are public housing agencies 
        that own or operate more than 4,500 public housing dwelling 
        units--
                  (A) to determine whether the contractors under such 
                contracts have complied with all laws and regulations 
                regarding prohibition of discrimination in hiring 
                practices;
                  (B) to determine whether such contracts were awarded 
                in accordance with the applicable laws and regulations 
                regarding the award of such contracts;
                  (C) to determine how many such contracts were awarded 
                under emergency contracting procedures;
                  (D) to evaluate the effectiveness of the contracts; 
                and
                  (E) to provide a full accounting of all expenses 
                under the contracts.
          (2) Report.--Not later than 180 days after the date of the 
        enactment of this Act, the Secretary shall complete the 
        investigation required under paragraph (1) and submit a report 
        to the Congress regarding the findings under the investigation. 
        With respect to each such contract, the report shall (A) state 
        whether the contract was made and is operating, or was not made 
        or is not operating, in full compliance with applicable laws 
        and regulations, and (B) for each contract that the Secretary 
        determines is in such compliance in a personal certification of 
        such compliance by the Secretary of Housing and Urban 
        Development.
          (3) Actions.--For each contract that is described in the 
        report under paragraph (2) as not made or not operating in full 
        compliance with applicable laws and regulation, the Secretary 
        of Housing and Urban Development shall promptly take any 
        actions available under law or regulation that are necessary--
                  (A) to bring such contract into compliance; or
                  (B) to terminate the contract.
  (e) References.--Except as provided in section 271 and 501(b), any 
reference in any other Federal law, Executive order, rule, regulation, 
or delegation of authority, or any document of or pertaining to--
          (1) public housing or housing assisted under the United 
        States Housing Act of 1937 is deemed to refer to public housing 
        assisted under title II of this Act;
          (2) to assistance under section 8 of the United States 
        Housing Act of 1937 is deemed to refer to assistance under 
        title III of this Act; and
          (3) to assistance under the United States Housing Act of 1937 
        is deemed to refer to assistance under this Act.

SEC. 503. AMENDMENTS TO PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION 
                    ACT OF 1990.

  (a) Short Title, Purposes, and Authority To Make Grants.--Chapter 2 
of subtitle C of title V of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 
11901 et seq.) is amended by striking the chapter heading and all that 
follows through section 5123 and inserting the following:

           ``CHAPTER 2--COMMUNITY PARTNERSHIPS AGAINST CRIME

``SEC. 5121. SHORT TITLE.

  ``This chapter may be cited as the `Community Partnerships Against 
Crime Act of 1996'.

``SEC. 5122. PURPOSES.

  ``The purposes of this chapter are to--
          ``(1) improve the quality of life for the vast majority of 
        law-abiding public housing residents by reducing the levels of 
        fear, violence, and crime in their communities;
          ``(2) broaden the scope of the Public and Assisted Housing 
        Drug Elimination Act of 1990 to apply to all types of crime, 
        and not simply crime that is drug-related; and
          ``(3) reduce crime and disorder in and around public housing 
        through the expansion of community-oriented policing activities 
        and problem solving.

``SEC. 5123. AUTHORITY TO MAKE GRANTS.

  ``The Secretary of Housing and Urban Development may make grants in 
accordance with the provisions of this chapter for use in eliminating 
crime in and around public housing and other federally assisted low-
income housing projects to (1) local housing and management 
authorities, and (2) private, for-profit and nonprofit owners of 
federally assisted low-income housing.''.
  (b) Eligible Activities.--
          (1) In general.--Section 5124(a) of the Anti-Drug Abuse Act 
        of 1988 (42 U.S.C. 11903(a)) is amended--
                  (A) in the matter preceding paragraph (1), by 
                inserting ``and around'' after ``used in'';
                  (B) in paragraph (3), by inserting before the 
                semicolon the following: ``, including fencing, 
                lighting, locking, and surveillance systems'';
                  (C) in paragraph (4), by striking subparagraph (A) 
                and inserting the following new subparagraph:
                  ``(A) to investigate crime; and'';
                  (D) in paragraph (6)--
                          (i) by striking ``in and around public or 
                        other federally assisted low-income housing 
                        projects''; and
                          (ii) by striking ``and'' after the semicolon; 
                        and
                  (E) by striking paragraph (7) and inserting the 
                following new paragraphs:
          ``(7) providing funding to nonprofit public housing resident 
        management corporations and resident councils to develop 
        security and crime prevention programs involving site 
        residents;
          ``(8) the employment or utilization of one or more 
        individuals, including law enforcement officers, made available 
        by contract or other cooperative arrangement with State or 
        local law enforcement agencies, to engage in community- and 
        problem-oriented policing involving interaction with members of 
        the community in proactive crime control and prevention 
        activities;
          ``(9) programs and activities for or involving youth, 
        including training, education, recreation and sports, career 
        planning, and entrepreneurship and employment activities and 
        after school and cultural programs; and
          ``(10) service programs for residents that address the 
        contributing factors of crime, including programs for job 
        training, education, drug and alcohol treatment, and other 
        appropriate social services.''.
          (2) Other lhma-owned housing.--Section 5124(b) of the Anti-
        Drug Abuse Act of 1988 (42 U.S.C. 11903(b)) is amended--
                  (A) in the matter preceding paragraph (1)--
                          (i) by striking ``drug-related crime in 
                        housing owned by public housing agencies'' and 
                        inserting ``crime in and around housing owned 
                        by local housing and management authorities''; 
                        and
                          (ii) by striking ``paragraphs (1) through 
                        (7)'' and inserting ``paragraphs (1) through 
                        (10)''; and
                  (B) in paragraph (2)--
                          (i) by striking ``public housing agency'' and 
                        inserting ``local housing and management 
                        authority''; and
                          (ii) by striking ``drug-related'' and 
                        inserting ``criminal''.
  (c) Grant Procedures.--Section 5125 of the Anti-Drug Abuse Act of 
1988 (42 U.S.C. 11904) is amended to read as follows:

``SEC. 5125. GRANT PROCEDURES.

  ``(a) LHMA's With 250 or More Units.--
          ``(1) Grants.--In each fiscal year, the Secretary shall make 
        a grant under this chapter from any amounts available under 
        section 5131(b)(1) for the fiscal year to each of the following 
        local housing and management authorities:
                  ``(A) New applicants.--Each local housing and 
                management authority that owns or operates 250 or more 
                public housing dwelling units and has--
                          ``(i) submitted an application to the 
                        Secretary for a grant for such fiscal year, 
                        which includes a 5-year crime deterrence and 
                        reduction plan under paragraph (2); and
                          ``(ii) had such application and plan approved 
                        by the Secretary.
                  ``(B) Renewals.--Each local housing and management 
                authority that owns or operates 250 or more public 
                housing dwelling units and for which--
                          ``(i) a grant was made under this chapter for 
                        the preceding Federal fiscal year;
                          ``(ii) the term of the 5-year crime 
                        deterrence and reduction plan applicable to 
                        such grant includes the fiscal year for which 
                        the grant under this subsection is to be made; 
                        and
                          ``(iii) the Secretary has determined, 
                        pursuant to a performance review under 
                        paragraph (4), that during the preceding fiscal 
                        year the agency has substantially fulfilled the 
                        requirements under subparagraphs (A) and (B) of 
                        paragraph (4).
          ``(2) 5-year crime deterrence and reduction plan.--Each 
        application for a grant under this subsection shall contain a 
        5-year crime deterrence and reduction plan. The plan shall 
        describe, for the local housing and management authority 
        submitting the plan--
                  ``(A) the nature of the crime problem in public 
                housing owned or operated by the local housing and 
                management authority;
                  ``(B) the building or buildings of the local housing 
                and management authority affected by the crime problem;
                  ``(C) the impact of the crime problem on residents of 
                such building or buildings; and
                  ``(D) the actions to be taken during the term of the 
                plan to reduce and deter such crime, which shall 
                include actions involving residents, law enforcement, 
                and service providers.
        The term of a plan shall be the period consisting of 5 
        consecutive fiscal years, which begins with the first fiscal 
        year for which funding under this chapter is provided to carry 
        out the plan.
          ``(3) Amount.--In any fiscal year, the amount of the grant 
        for a local housing and management authority receiving a grant 
        pursuant to paragraph (1) shall be the amount that bears the 
        same ratio to the total amount made available under section 
        5131(b)(1) as the total number of public dwelling units owned 
        or operated by such authority bears to the total number of 
        dwelling units owned or operated by all local housing and 
        management authorities that own or operate 250 or more public 
        housing dwelling units that are approved for such fiscal year.
          ``(4) Performance review.--For each fiscal year, the 
        Secretary shall conduct a performance review of the activities 
        carried out by each local housing and management authority 
        receiving a grant pursuant to this subsection to determine 
        whether the agency--
                  ``(A) has carried out such activities in a timely 
                manner and in accordance with its 5-year crime 
                deterrence and reduction plan; and
                  ``(B) has a continuing capacity to carry out such 
                plan in a timely manner.
          ``(5) Submission of applications.--The Secretary shall 
        establish such deadlines and requirements for submission of 
        applications under this subsection.
          ``(6) Review and determination.--The Secretary shall review 
        each application submitted under this subsection upon 
        submission and shall approve the application unless the 
        application and the 5-year crime deterrence and reduction plan 
        are inconsistent with the purposes of this chapter or any 
        requirements established by the Secretary or the information in 
        the application or plan is not substantially complete. Upon 
        approving or determining not to approve an application and plan 
        submitted under this subsection, the Secretary shall notify the 
        local housing and management authority submitting the 
        application and plan of such approval or disapproval.
          ``(7) Disapproval of applications.--If the Secretary notifies 
        an authority that the application and plan of the authority is 
        not approved, not later than the expiration of the 15-day 
        period beginning upon such notice of disapproval, the Secretary 
        shall also notify the authority, in writing, of the reasons for 
        the disapproval, the actions that the authority could take to 
        comply with the criteria for approval, and the deadlines for 
        such actions.
          ``(8) Failure to approve or disapprove.--If the Secretary 
        fails to notify an authority of approval or disapproval of an 
        application and plan submitted under this subsection before the 
        expiration of the 60-day period beginning upon the submission 
        of the plan or fails to provide notice under paragraph (7) 
        within the 15-day period under such paragraph to an authority 
        whose application has been disapproved, the application and 
        plan shall be considered to have been approved for purposes of 
        this section.
  ``(b) LHMA's With Fewer Than 250 Units and Owners of Federally 
Assisted Low-Income Housing.--
          ``(1) Applications and plans.--To be eligible to receive a 
        grant under this chapter, a local housing and management 
        authority that owns or operates fewer than 250 public housing 
        dwelling units or an owner of federally assisted low-income 
        housing shall submit an application to the Secretary at such 
        time, in such manner, and accompanied by such additional 
        information as the Secretary may require. The application shall 
        include a plan for addressing the problem of crime in and 
        around the housing for which the application is submitted, 
        describing in detail activities to be conducted during the 
        fiscal year for which the grant is requested.
          ``(2) Grants for lhma's with fewer than 250 units.--In each 
        fiscal year the Secretary may, to the extent amounts are 
        available under section 5131(b)(2), make grants under this 
        chapter to local housing and management authorities that own or 
        operate fewer than 250 public housing dwelling units and have 
        submitted applications under paragraph (1) that the Secretary 
        has approved pursuant to the criteria under paragraph (4).
          ``(3) Grants for federally assisted low-income housing.--In 
        each fiscal year the Secretary may, to the extent amounts are 
        available under section 5131(b)(3), make grants under this 
        chapter to owners of federally assisted low-income housing that 
        have submitted applications under paragraph (1) that the 
        Secretary has approved pursuant to the criteria under 
        paragraphs (4) and (5).
          ``(4) Criteria for approval of applications.--The Secretary 
        shall determine whether to approve each application under this 
        subsection on the basis of--
                  ``(A) the extent of the crime problem in and around 
                the housing for which the application is made;
                  ``(B) the quality of the plan to address the crime 
                problem in the housing for which the application is 
                made;
                  ``(C) the capability of the applicant to carry out 
                the plan; and
                  ``(D) the extent to which the tenants of the housing, 
                the local government, local community-based nonprofit 
                organizations, local tenant organizations representing 
                residents of neighboring projects that are owned or 
                assisted by the Secretary, and the local community 
                support and participate in the design and 
                implementation of the activities proposed to be funded 
                under the application.
        In each fiscal year, the Secretary may give preference to 
        applications under this subsection for housing made by 
        applicants who received a grant for such housing for the 
        preceding fiscal year under this subsection or under the 
        provisions of this chapter as in effect immediately before the 
        date of the enactment of the United States Housing Act of 1996.
          ``(5) Additional criteria for federally assisted low-income 
        housing.--In addition to the selection criteria under paragraph 
        (4), the Secretary may establish other criteria for evaluating 
        applications submitted by owners of federally assisted low-
        income housing, except that such additional criteria shall be 
        designed only to reflect--
                  ``(A) relevant differences between the financial 
                resources and other characteristics of local housing 
                and management authorities and owners of federally 
                assisted low-income housing; or
                  ``(B) relevant differences between the problem of 
                crime in public housing administered by such 
                authorities and the problem of crime in federally 
                assisted low-income housing.''.
  (d) Definitions.--Section 5126 of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11905) is amended--
          (1) by striking paragraphs (1) and (2);
          (2) in paragraph (4)(A), by striking ``section'' before 
        ``221(d)(4)'';
          (3) by redesignating paragraphs (3) and (4) (as so amended) 
        as paragraphs (1) and (2), respectively; and
          (4) by adding at the end the following new paragraph:
          ``(3) Local housing and management authority.--The term 
        `local housing and management authority' has the meaning given 
        the term in title I of the United States Housing Act of 
        1996.''.
  (e) Implementation.--Section 5127 of the Anti-Drug Abuse Act of 1988 
(42 U.S.C. 11906) is amended by striking ``Cranston-Gonzalez National 
Affordable Housing Act'' and inserting ``United States Housing Act of 
1996''.
  (f) Reports.--Section 5128 of the Anti-Drug Abuse Act of 1988 (42 
U.S.C. 11907) is amended--
          (1) by striking ``drug-related crime in'' and inserting 
        ``crime in and around''; and
          (2) by striking ``described in section 5125(a)'' and 
        inserting ``for the grantee submitted under subsection (a) or 
        (b) of section 5125, as applicable''.
  (g) Funding and Program Sunset.--Chapter 2 of subtitle C of title V 
of the Anti-Drug Abuse Act of 1988 is amended by striking section 5130 
(42 U.S.C. 11909) and inserting the following new sections:

``SEC. 5130. FUNDING.

  ``(a) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this chapter such sums as may be necessary 
for fiscal year 1996.
  ``(b) Allocation.--Of any amounts available, or that the Secretary is 
authorized to use, to carry out this chapter in any fiscal year--
          ``(1) 85 percent shall be available only for assistance 
        pursuant to section 5125(a) to local housing and management 
        authorities that own or operate 250 or more public housing 
        dwelling units;
          ``(2) 10 percent shall be available only for assistance 
        pursuant to section 5125(b)(2) to local housing and management 
        authorities that own or operate fewer than 250 public housing 
        dwelling units; and
          ``(3) 5 percent shall be available only for assistance to 
        federally assisted low-income housing pursuant to section 
        5125(b)(3).

``SEC. 5131. PROGRAM TERMINATION.

  ``The program under this chapter shall terminate at the end of 
September 30, 1996. No grants may be made under the program after such 
date.''.
  (h) Conforming Amendments.--The table of contents in section 5001 of 
the Anti-Drug Abuse Act of 1988 (Public Law 100-690; 102 Stat. 4295) is 
amended--
          (1) by striking the item relating to the heading for chapter 
        2 of subtitle C of title V and inserting the following:

          ``Chapter 2--Community Partnerships Against Crime'';

          (2) by striking the item relating to section 5122 and 
        inserting the following new item:

``Sec. 5122. Purposes.'';

          (3) by striking the item relating to section 5125 and 
        inserting the following new item:

``Sec. 5125. Grant procedures.'';

        and
          (4) by striking the item relating to section 5130 and 
        inserting the following new items:

``Sec. 5130. Funding.
``Sec. 5131. Program termination.''.

                     Explanation of the Legislation

    H.R. 2406, the United States Housing Act of 1996, 
fundamentally changes the public housing and Section 8 rental 
assistance programs, both of which are under the jurisdiction 
of the Department of Housing and Urban Development (HUD). This 
legislation represents the first step toward creating a new 
role for the federal government in supporting local communities 
and their efforts at improvement.
    The United States Housing Act of 1996 replaces the United 
States Housing Act of 1937 and returns decision-making to the 
local level. The bill deregulates and decontrols well-run 
public housing authorities (PHAs), allowing them to provide 
clean, safe, healthy and affordable housing to needy families 
in a more cost-effective and managerial-sound manner. The bill 
encourages work and self-sufficiency through job training 
programs and educational opportunities. Chronically troubled 
PHAs, whose long-standing failure have been a hallmark of 
government involvement in housing and urban development, are no 
longer tolerated. HUD is required to replace them with 
professional management entities that have the ``know-how'' and 
expertise to meet the goals of this legislation. The existing 
Section 8 certificate and voucher programs are consolidated and 
recreated so they can be operated in a manner that more closely 
resembles the private housing market.

                         Findings and Purposes

    The purpose of this legislation is to promote safe, clean, 
and healthy housing that is affordable to responsible, 
deserving low-income families who cannot provide fully for 
themselves. It ends the acquisition of power at the federal 
level and returns decision-making to local communities. To 
accomplish this goal, existing public housing programs are 
consolidated into block grants to local housing management 
authorities (LHMAs). Existing statutory requirements are 
replaced with more simple, straight-forward federal oversight.
    In return for deregulation, housing providers, renamed 
``local housing and management authorities (LHMAs)'' to reflect 
their functions, are expected to administer federally assisted 
housing programs, perform as effective property and asset 
managers and operate their housing inventory in a manner that 
serves local needs. To promote and support this role, the 
Committee bill creates an accredition board. This is 
responsible for imposing professional, nonpolitical standards 
of LHMAs that accept federal housing block grants as well as 
for judging the performance of these authorities.
    The Committee recognizes that it is impossible for the 
federal government, through its direct action or involvement, 
to provide housing for every American citizen. Despite this 
constraint, however, the federal government does not have a 
responsibility to promote and protect the independent and 
collective actions of private citizens to develop housing and 
to strengthen communities.
    To promote this philosophy, H.R. 2406 provides statutory 
parameters and significant flexibility to encourage local 
ingenuity and creativity. For example, an LHNA may decide to 
demolish a large, severely distressed public housing project 
and provide alternative housing choices to displaced residents. 
Likewise, the LHMA might choose to enter into a joint-venture 
with a private sector partner and build new affordable housing 
using tax incentives, grants and loans. In either situation, 
the legislation encourages partnerships with the private sector 
as well as local and state governments.
    The legislation recognizes that it is not enough for 
families to live in soundly built houses--the family must also 
have access to schools, churches and grocery stores. Therefore, 
H.R. 2406 provides LHMAs the ability to develop local housing 
management plans in concert with the local community's 
consolidated plan.
    Coordinating local strategies will lead to greater 
integration of federal resources, like community development 
block grant (CDBG) and HOME dollars, with affordable housing 
dollars. Such integration will foster economic growth, creating 
economic opportunity for residents of public and assisted 
housing. To this end, H.R. 2406 creates incentives for 
residents of federally-assisted housing to become self-
sufficient.
    The Committee also believes the United States Housing Act 
(USHA) of 1937, is outdated and must be replaced. This 
Depression-era legislation was written for a very different 
time. Utilizing the tools and knowledge available today, the 
United States Housing Act of 1996 builds on the foundation of 
the 1937 Act in a way that can more effectively provide for the 
housing requirements of future generations.

                 i. background and need for legislation

    Most participants in the low-income housing community agree 
that the law authorizing the public housing and Section 8 
rental assistance programs is extremely complex. In fact, the 
public housing programs is extremely complex. In fact, the 
public housing program is one of the most perplexing areas of 
HUD's federal mandate.
    Most Americans believe that public housing is a failure and 
a waste of their hard-earned taxpayer dollars. This perception 
is based largely on projects like Robert Taylor Homes in 
Chicago, Illinois, Hayes Homes in Newark, New Jersey, and Allen 
Parkway Village in Houston, Texas, all of which are in 
deplorable condition and are largely vacant. Unfortunately, the 
perception problem is bolstered by the knowledge that 
approximately 20% of the public housing budget has flowed to 
chronically troubled PHAs like Philadephia, Chicago, 
Washington, D.C., and New Orleans--PHAs that have failed to 
carry out their jobs.
    Similarly, the Section 8 rental assistance program is 
plagued by public relations problems. Most people confuse this 
privately-owned housing program with public housing--a sore 
point for many landlords and property managers. Excessive 
legislative mandates, bureaucratic micromanagment, and other 
structural deficiencies hamper an otherwise strong program, and 
may lead to a decrease in the supply of clean, healthy, and 
affordable housing.
    Fortunately, most people familiar with the programs--the 
Congress, the Administration, the industry, and the recipients 
of assistance--agree they must be reformed and basic underlying 
principles changed. Even public housing authorities that manage 
their housing inventories effectively concur that the current 
construction of the public housing and Section 8 rental 
assistance programs must change dramatically if they are to 
continue to serve low-income clients.
    Critical reform components include creating a new 
environment in which: (1) residents are encouraged to become 
self-sufficient and are provided with the vehicle to do so; (2) 
LHMAs are empowered to make management decisions about the 
viability of their stock; and (3) participants in the program 
are provided with the tools to work cooperatively, in an arena 
that insists on accountability and rewards success.
    Clearly, retaining the USHA of 1937 in its current form 
will not create the climate in which these components can 
flourish. Therefore, it is the opinion of the Committee that 
the Act must be replaced with new legislation that promotes the 
goals of the nation and utilizes state-of-the-art real estate 
practices.
    H.R. 2406 builds on the goals of the USHA of 1937 and 
renews the premise that the federal government has a role to 
play in providing safe, healthy, and affordable housing for 
families of low-income. This role, however, must be balanced 
against the fact that housing assistance is not an entitlement 
under the Constitution. Nor, for that matter, has a Chief 
Executive or a Congress moved towards making public housing and 
low income rental assistance an entitlement by funding it at 
levels necessary to meet the needs of the country's eligible 
population.
    Furthermore, the USHA of 1937 reflects the philosophy of a 
different era. Much of the language and ideas contained in the 
1937 Act are outdated. Many programs authorized by the 
legislation have not been funded or utilized for years. In 
fact, some programs have never been implemented. Updating this 
law is absolutely necessary and appropriate, especially if the 
United States is to successfully carry out its role providing 
housing assistance for families whom it can afford to help.
    When passed in 1937, the United States Housing Act 
comprised only 12 pages of the United States Statutes at Large. 
The law itself was straightforward and simple. Its stated 
objective was to stimulate the economy, to assist business and 
labor, and to create jobs by stabilizing the industrial 
activity of the United States during the Depression.\1\
    \1\ See Report No. 1545. August 13, 1937.
---------------------------------------------------------------------------
    Additionally, the legislation sought to eliminate slums and 
provide decent homes for families who had, under the 
circumstances that prevailed at the time, become dependent on 
public aid to improve their housing conditions.
    In stark contrast to current law, the original legislation 
did not provide much direction about who was to receive 
assistance or how a local authority was to make decisions 
regarding everyday matters like admissions, rent structure, 
maintenance and capital improvements. Special programmatic set-
asides did not exist nor did the legislation contemplate 
providing money for operating expenses of a home.
    As the Act has evolved, the means by which to accomplish 
the goals have changed dramatically. The original purpose of 
the program--to create jobs and stimulate the economy--has 
changed to providing subsidized housing to very poor families. 
Modern residents rarely pay the full operating costs of their 
housing, unlike the families who lived in public housing until 
1969.
    Federal micromanagement has increased substantially beyond 
what was intended by the 75th Congress. The more than 300 pages 
of law are filled with prescriptive solutions that cannot be 
tailored to the needs of individual PHAs or the families they 
serve. Unrealistic policies require obsolete housing to be 
rehabilitated for millions of dollars even if other available 
forms of housing are less expensive. Local governments are 
precluded from making even basic decisions about how to help 
their constituencies. PHAs are flooded by a steady flow of 
mandates from Washington. Often many of these mandates infringe 
on local control and, ultimately, are part of ill-conceived 
attempts to create a ``one size fits all'' policy for a 
resource that should be tailored to widely varying local 
housing needs.
    Section 2 of the USHA states ``[i]t is the policy of the 
United States to promote the general welfare of the Nation by 
employing its funds and credit . . . to remedy the unsafe and 
unsanitary housing conditions and acute shortage of decent, 
safe, and unsanitary dwellings for families of lower income.''
    As abstract ideas, these policy goals have not changed 
since 1937. According to Christine Oliver, Chairman of the 
Board of the National Housing Conference (NHC), the need for 
safe, healthy and affordable housing clearly remains. 
Approximately 14 million renter households either pay more than 
half their monthly income in rent or live in overcrowded 
conditions according to the 1990 census. Eighty-eight percent 
of these households have incomes at or below 80% of median and 
67% have incomes at or below 50% of median. Future projections 
conclude that the number of needy families will increase into 
the next century.
    The question before the Committee, therefore, is whether 
this need can be addressed by retaining the current legal 
structure of public and Section 8 housing programs. After 
reviewing substantial evidence and listening to the testimony 
of housing experts, the public housing industry and residents, 
the response to the question is no.

                        ii. purpose and summary

A. Overview

    Today, over 3,400 local entities, called public housing 
authorities (PHAs), own and operate about 13,200 public housing 
developments. The inventory includes 1.4 million dwelling 
units--high rises, garden apartments, town houses and single-
family homes. These homes are occupied by 4.3 million 
families,\2\ most of whom stay an average of seven to ten 
years. There are families, however, who live in public housing 
for generations, changing a resource from a temporary ``way-
station'' to a de facto entitlement. When this situation 
occurs, the result is `'an enormous net-work of welfare-
dependent government housing colonies, for which most working 
families are no longer even eligible.'' \3\
    \2\ About 13 million families meet the federal eligibility 
requirements for public housing. The structure of the housing programs, 
along with receipt of other federal entitlements, create significant 
disincentive to self-sufficiency. Therefore, while one family is 
housed, pays low rent, and has access to many services which have 
nothing to do with housing, another family pays 60-80 percent of its 
income to rent substandard housing with no access to services.
    \3\ ``Please Abolish My Job, Mr. Kemp: Confessions of Public 
Housing Administrator,'' Messenger, Paul H., Policy Review, Winter, 
1990, p. 46.
---------------------------------------------------------------------------
    The relationship between the Federal government and the PHA 
is contractual. PHAs own and operate public housing in their 
jurisdictions independently of local municipal governments. In 
return for Federal payment of the costs of construction, 
rehabilitation, modernization, and operating expenses, PHAs 
agree to abide by Congressional statutes and HUD regulations. 
Over the years, the rules have multiplied, tying in knots even 
well-run PHAs. Those same rules reward rather than punish 
inappropriate behavior from both PHAs and residents.
    Because of the tremendous pressure and commitment within 
both the Congress and the Administration to balance the Federal 
budget by the year 2002, many programs will come under 
increasing budgetary constraint. The Committee believes that in 
this environment of diminishing federal resources, housing 
programs must change in two significant ways: they must be 
focused through consolidation to provide the most service for 
the least cost; and they must be tailored to local needs so 
that limited Federal funding is invested where, through local 
discretion, it can achieve the greatest return.
    For several years, academic experts, state and local 
governments, and congressional committees have exhorted the 
Department of Housing and Urban Development to limit growth in 
the number of programs and focus on those programs that 
complement its mission. In 1993, the Senate Appropriations 
Committee listed 206 ongoing HUD programs and declared that 
such an insatiable demand for additional programs could not 
continue. In July 1994, under a congressional mandate, the 
National Academy of Public Administration (NAPA) completed its 
study of HUD, focusing on HUD's organization. One of NAPA's 
conclusions was the following:

          The Academy panel's first priority is a legislative 
        overhaul of HUD's programs. Absent this, other changes 
        will bring only marginal improvement in HUD operations. 
        Congress and the executive branch must work together to 
        redefine and consolidate HUD's assorted program menu 
        and determine whether some programs can be eliminated. 
        Those that remain should be organized under broad 
        mandates that permit the nation's communities to apply 
        the funds flexibly and reduce the administrative 
        burdens within HUD and among its program users.

    NAPA went on to recommend that HUD submit to the office of 
Management and Budget (OMB) and Congress a comprehensive 
proposal to reorganize HUD programs and group under them 
individual activities.
    Additionally, in late 1994 HUD's Office of Inspector 
General (OIG) reported on its review of 240 active and inactive 
HUD programs. The OIG concluded that many programs warranted 
serious consideration of elimination, consolidation, or 
restructuring.
    HUD Secretary Henry Cisneros, hearing these admonitions in 
late 1994, proposed to reinvent the way the Department works 
and how it serves its customers. A major component of that 
reinvention was consolidating dozens of HUD's programs into 
three performance-based funds.

B. Consolidating Programs and Providing Local Flexibility

    The Committee believes that too many narrowly focused 
programs with so many set-asides result in local communities 
having great difficulty allocating federal resources to respond 
to specific needs. In turn, limited federal assistance for 
housing programs is diluted among too many programs, with the 
programs that provide real housing assistance receiving too 
little attention and funding.
    The HUD Inspector General's report listed 92 programs whose 
relationships to the Department's primary mission were 
questionable. Further refinement of the Inspector General's 
analysis by GAO showed that 27 programs from the IG's list of 
92 did not provide direct housing assistance though they 
received $1 billion in federal funds during 1995. GAO further 
concluded that these programs--most of which provided useful 
but indirect services such as housing counseling, training, and 
technical assistance--could be reassessed to determine their 
continued need and relative value in achieving HUD's mission.
    In order to target federal assistance to the areas of 
greatest need and provide more flexible use of such assistance 
to LHMAs, the United States Housing Act of 1995 requires HUD to 
enter into block grant contracts with eligible housing 
management authorities. Authorities may leverage and combine 
block grant amounts with resources obtained from other state, 
local, or private sources. This increased flexibility ensures 
that another of NAPA's recommendations--to minimize Washington-
based interference in local decisions and partnerships--is 
achieved.
    The United States Housing Act of 1995 authorizes the 
Secretary of Housing and Urban Development to establish a 
formula for allocating federal funds in block grants among 
qualifying LHMAs. The Committee believes that such a formula 
should be based on needs and costs of housing authorities; 
however, the Committee also provides in Section 204 of the bill 
that the formula should reward high performance. The bill also 
requires that the formula be developed through negotiated 
rulemaking in accordance with subchapter III of chapter 5 of 
title 5 of the United States Code.
    A major concern of the Committee throughout the drafting of 
H.R. 2406 was determining how to address those public housing 
authorities that are chronically troubled or whose management 
deficiencies are so great that they simply do not have the 
capacity to manage large block grants. Allowing authorities HUD 
considers substandard unfettered flexibility to design and run 
programs with federal funds is unwise.\4\ The Committee 
believes procedures included in this Act to expedite removal or 
takeover of chronically troubled authorities reduce the 
likelihood that LHMAs will abuse the trust inherent in the 
block grant concept.
    \4\ Several large urban authorities have performed so poorly that 
they have remained on HUD's ``troubled list'' year after year. Troubled 
public housing authorities are those that can be identified because of 
serious and substantial failure to perform as measured by performance 
indicators [Sec. 6(j)(2) USHA of 1937]
---------------------------------------------------------------------------
    Moreover, the Committee has established rigorous criteria 
for establishing a housing authority's eligibility to receive a 
block grant.
    First, an eligible authority must submit a local housing 
management plan outlined in Section 107 describing most of the 
operating parameters that define how it intends to provide 
public housing services. The plan includes the financial 
resources available to the authority; the authority's policies 
governing admissions, occupancy, and rent contributions; 
necessary capital improvements; efforts to coordinate with 
local welfare agencies to ensure that residents have access to 
resources to encourage and foster employment and self-
sufficiency; and other matters germane to professional 
operation of a LHMA. The plan must be submitted to HUD for a 
limited review, but it is not the Committee's intent for HUD to 
change the priorities of the LHMA except within the narrow 
parameters provided in the legislation.
    Second, an eligible authority must be accredited under 
Section 433 by a newly created entity called the Housing 
Foundation and Accreditation Board. The role of the Board is to 
ensure that authorities are staffed and operated professionally 
according to appropriate statutory requirements, guidelines, 
and standards.
    Finally, an eligible LHMA must enter into an agreement for 
cooperation with the local governing body, a carryover 
requirement from the USHA of 1937. The Committee believes that 
pending welfare reform and budget reductions made it 
increasingly necessary for local governments, the LHMA, and 
community residents to work together using available resources 
to make public housing a viable part of the broader community.
    Historically, housing authorities have been responsible for 
carrying out federal public and assisted housing programs with 
little interaction in broader community development activities. 
This structure has prohibited the full integration of housing 
authorities into the community. Moreover, the chasm between 
housing authorities, the local government and the community has 
increased the isolation of the public housing residents 
themselves. and has sometimes hampered the ability of housing 
authorities to obtain other much-needed services for public 
housing residents. To encourage better integration of the 
public housing program into the community, the Committee bill 
provides that the LHMA may submit its local housing management 
plan as part of the Comprehensive Housing Affordable Strategy 
under section 105 of the Cranston-Gonzalez National Affordable 
Housing Act.

C. Need for Professional Management

    Today, public housing policy is shaped and controlled 
almost exclusively by the Federal Government. For example, 
housing authorities do not control the mix of tenants they 
admit because HUD regulations dictate admission preferences. 
Additionally, each year PHAs must submit volumes of data to HUD 
so that HUD can monitor their financial and management 
performance, despite the fact that the majority of PHAs are 
adequate performers.
    The Committee believes that federal decontrol and 
accountability are the keys to transforming public housing into 
a viable resource for low-income families into the next 
century. Decontrol involves letting LHMAs control their own 
situation and report to HUD only when absolutely necessary. 
Accountability requires LHMAs to manage their housing inventory 
in a manner that is fiscally prudent and that provides clean, 
safe and health homes. To promote their behavior, the Committee 
endorses a system of accreditation that will develop 
professional standards, provide an objective, non-political 
assessment of how well a LHMA meets those standards, and 
provide much needed technical assistance in meeting those 
standards and improving performance. Ultimately, the Committee 
intends that LHMA's will be judged on the quality of their 
product and their performance rather than on blind compliance 
with process-related paperwork.
    Each LHMA should be a well-run, professionally-managed real 
estate operation, accountable to the community it serves and 
recognized as such by its peers in the industry. Any LHMA that 
fails to meet this expectation will face competition from other 
organizations--nonprofits, professional real estate management 
corporation, or even other nearby LHMAs--more capable of 
delivering that community's low-income housing services. The 
current HUD oversight system, which is focused primarily on 
compliance, is replaced with an accreditation system developed 
and run by peers of those currently managing public housing, 
and whose focus is excellence, assistance and continuous 
improvement.
            Less Federal Control and Bureaucracy
    The overriding goals of the U.S. Housing Act of 1995 are to 
return as much decision making and control over public housing 
to the local level while adding a degree of professionalism and 
competition through accreditation.
    Local officials, residents, and housing practitioners will 
be responsible for: (1) determining the size, shape, and scope 
of their assisted housing program; (2) administering that 
program; and (3) holding themselves accountable to local 
decision makers and the Housing Foundation and Accreditation 
Board. This Board, which will consist of housing and real 
estate management professionals, will be responsible for 
developing standards, evaluating performance, and providing 
sound technical assistance so that all LHMAs work to improve 
their performance. HUD will set broad parameters within which 
LHMAs will operate, monitor LHMAs to see that they stay within 
those parameters, provide flexible block grants for accredited 
LHMAs, and deal aggressively with the small minority of LHMAs 
that prove to be or become dysfunctional.
    The ultimate effect of reassigning responsibilities in this 
way is to reduce the demands on HUD's bureaucracy while the 
Department is shrinking. HUD will not be required, nor will it 
have the authority, to be heavily involved in day-to-day 
details of LHMA operations. By emphasizing local development 
and management of operating policies, independent oversight in 
the form of LHMA accreditation, and consolidation of numerous 
subsidy programs into a single block grant, the bill minimizes 
the need for federal bureaucracy and its administrative 
requirements.
    The Committee envisions an administrative apparatus for 
public housing that is leaner, simpler, and more sensible. HUD 
will go from issuing subsidy or grant checks for many 
programs--operating subsidies, modernization, drug elimination, 
resident programs, demolition/disposition, development, and 
resident initiatives, and others--to issuing just one for a 
block grant. Instead of reviewing each LHMA's operating budget, 
modernization plans, and other management-related paperwork 
annually during the PHMAP process, HUD will put more focus on 
LHMAs who are found to be dysfunctional and/or whose plans do 
not adequately serve the jurisdictions low-income population. 
At the same time, LHMAs will be transformed from local entities 
administering a program shaped, funded, and regulated by the 
federal government, to locally-accountable entities acting as 
asset managers in a way that meets generally accepted 
professional standards.
            Creation of a Housing Foundation and Accreditation Board
    The Committee bill dramatically changes the way oversight 
of public housing is conducted. This legislation transforms 
federal oversight from a bureaucratic, paperwork-heavy system 
focused on compliance with HUD rules and regulations into one 
that accredits LHMAs, identifies areas where good performers 
can improve, and offers technical assistance to foster 
continuous improvement among all LHMAs.
    In 1990, the Congress enacted the Public Housing Management 
Assessment Program (PHMAP) so that HUD could measure PHA 
performance in nine basic areas of their operations. The PHMAP 
data, collected annually by HUD, was supposed to differentiate 
between those PHAs that worked well (``standard'' or ``high'' 
performers) and those that needed significant management 
improvements (``troubled'' PHAs). Those PHAs that HUD 
determined to be troubled were subjected to closer scrutiny by 
HUD, often receiving technical assistance and monitoring 
intended to raise their scores to non-troubled status. 
Developments with serious and extreme social and structural 
problems were deemed ``severely distressed'' and became 
eligible for HOPE VI grants of up to $50 million to 
rehabilitate no more than 500 housing units.
    The Committee believes the PHMAP system rewards failure 
because the most significant attention, assistance, and 
additional funding a PHA can get often comes only when its 
condition has deteriorated to the point of being troubled or 
severely distressed. For example, one PHA executive director 
testified before this Committee that when his authority was 
designated as a high performer, he received a letter of 
commendation from the HUD Secretary. At about the same time, a 
nearby, long-troubled authority received a $49 million HOPE VI 
grant to rehabilitate its most distressed properties.
    Furthermore, evidence exists that the PHMAP does not 
encourage PHAs to engage in continuous improvement (that is, 
beyond what it takes them to avoid the ``troubled'' 
designation). Finally, high performing PHAs are subjected to 
the same rules, regulations, paperwork, and other reporting 
requirements applied to standard and poor performers.
    The PHMAP has been criticized also because its indicators 
do not measure the actual quality of housing or the living 
conditions provided to residents. Furthermore, PHMAP is accused 
of being inflexible leaving PHAs feeling it is necessary to 
adapt external standards to their individual, unique operating 
conditions. Though HUD continues to attempt to revise the PHMAP 
indicators so they more closely parallel private sector real 
estate management practices, it is the fear of this Committee 
and the private sector that PHMAP will remain a tool with which 
HUD measures compliance rather than performance or improvement.
    H.R. 2406 establishes a system of accreditation, similar in 
concept to those in place for hospitals and universities, 
intended to reward performance and to improve public housing 
management as well as federal oversight of public housing in at 
least three key areas. First, accreditation both eliminates the 
specific problems with PHMAP and serves as a better tool for 
fostering and providing incentives for continuous improvement 
in public housing management. In a conversation with members of 
this Committee's staff, an official of the primary hospital 
accrediting organization noted that he believes an important 
aspect of their role is ``consultative and help[ing] to foster 
improvement,'' noting that those conducting accreditation 
surveys ``are expected to help hospitals learn how to improve 
compliance.'' That help can take a number of forms, ranging 
from informal advice during the course of an on-site 
accreditation review to formal, technical assistance services 
for which hospitals pay a fee.
    Thus, hospital accreditation is much more than a PHMAP 
``pass/fail'' system. Even when a hospital receives full 
accreditation (which most do), it typically receives 
recommendations for improvement in any number of key areas the 
accreditors noted during their review. Hospitals then have to 
address these recommendations by fixing any problems found 
within specific time frames as a condition of continuing their 
accreditation.
    Second, accreditation offers a measure of professionalism, 
recognition, and validation for the many LHMAs who now claim 
they are performing well but have been unfairly painted with 
the same brush as a few, high profile, long-troubled housing 
authorities. One key to successful accreditation is developing 
and utilizing professional standards by industry peers against 
which everyone in the industry measures themselves. The result 
is, that not only are the standards more generally accepted--
the best practitioners in the industry have helped develop 
them--but accreditation becomes a badge of honor. In the 
hospital and university systems, for example, accreditation is 
often a recruiting tool for attracting surgeons, specialists, 
or faculty members.
    Finally, accreditation assures that a LHMAs' continued 
participation in the public housing program is a privilege, not 
an entitlement, by substantially broadening HUD's authority 
when the Housing Foundation and Accreditation Board determines 
an authority has failed to meet performance standards. At HUD's 
request and with the strong concurrence of the Committee, H.R. 
2406 gives HUD the power to act before an authority becomes 
troubled by allowing certain actions when an authority is found 
to be at risk of becoming troubled.
    This authority, in comparison to that provided in the USHA 
of 1937, adds an extremely important and new dimension to HUD's 
responsibilities. In the past, HUD has simply waited too long 
to take action when a housing authority repeatedly failed to 
meet minimum performance standards and remained troubled for 
years with little sign of or hope for improvement. For example, 
in testimony before this Committee, GAO has reported that 
nearly half of the large, troubled housing authorities are 
among the lowest performers for over a decade--some since 1979 
when HUD first began designating poorly performing housing 
authorities as troubled. The most egregious example of such a 
housing authority has been Chicago's, which HUD had no choice 
but to take over earlier this year after its executive director 
and entire board of directors resigned.
    Fortunately, the Committee's bill takes direct aim at the 
sort of inaction and delay that allowed a situation such as 
Chicago's to go on for so long by (1) requiring HUD to take 
over or replace the management of chronically troubled housing 
authorities--those large authorities that have been troubled 
for three or more consecutive large authorities that have been 
troubled for three or more consecutive years; (2) substantially 
broadening the authority of the Secretary to require remedial 
or disciplinary actions against authorities that are or become 
troubled (as determined by the Accreditation Board); and (3) 
giving the Secretary authority to take action when HUD or the 
Accreditation Board determines a housing authority is at risk 
of becoming troubled.
    The Secretary has expressed concerns that the accreditation 
provisions in the Committee bill creates another oversight 
bureaucracy outside of HUD. However, the Committee bill 
eventually replaces PHMAP entirely once the accreditation board 
has been appointed, developed its standards, and begun the 
business of accrediting housing authorities (PHMAP is only 
retained in the interim period during the Accreditation Board's 
start-up). Additionally, the Board may pay for itself by 
setting up a fee structure to pay the costs of accreditation.
    Furthermore, as HUD downsizes its operations to levels 
advocated in the NAPA Report and to match its budget there 
simply will not be sufficient numbers of HUD staff--let alone 
staff with experience as real estate asset managers--to 
effectively monitor, assess, oversee, and assist 3,400 housing 
authorities. The accreditation board is, therefore an absolute 
necessity.
    Finally, accreditation of LHMAs will instill in the public 
housing industry the one element it has lacked for so long--
competition. In contrast to HUD's well-intentioned but 
otherwise meaningless certificates of merit for high PHMAP 
scores, an accreditation system will not only recognize high 
performers, it will provide low performers with an ultimatum: 
meet the standards the industry agrees are important and 
improve operations or some other group will be put in charge of 
your housing authority.

D. Rent Reform

    Another area of the law that requires serious reform and 
reconsideration is the rent structure mandated in the USHA of 
1937. According to housing professional organizations like 
Public Housing Authority Directors Association (PHADA) and the 
Georgia Association of Housing Redevelopment authorities 
(GAHRA):

          . . . [D]ysfunctional Federal rent policy decisions 
        have created powerful disincentives to employment and 
        upward mobility. The result has transformed once 
        thriving public housing neighborhoods into welfare 
        ghettos--its residents robbed of opportunity and hope 
        and its social fabric rendered inadequate to cope with 
        challenges like drugs, crime and youth gangs.

    H.R. 2406 reforms the existing rental structure 
significantly focusing on several factors: the value of the 
real estate, the ability of the family to pay, and the 
program's goal to serve low-income families. Additionally, the 
legislation scales back federal control over admissions 
policies and preferences so that localities can create rental 
systems that work in their unique circumstances.
            Reduced Funding Puts Pressure on Housing Authorities
    The Committee heard substantial testimony from HUD 
officials, public housing residents, and many from public 
housing industry associations about how desperately rent reform 
is needed to encourage work and retain work families in public 
housing. Moreover, concern was raised that current rental 
policies force PHAs to depend heavily on federal operating 
subsidies to cover their expenses--a dependence that will only 
increase. A serious problem is that average tenant incomes have 
declined dramatically. In 1981, the median income of a tenant 
in public housing was approximately 30 percent of the area 
median. Today, the median income is approximately 16 percent. 
This decline also has triggered the need for increased 
operating subsidies from HUD to cover costs not paid for 
through tenant rent contributions. According to GAO testimony 
before the House Subcommittee on Human Resources and 
Intergovernmental Relations on February 22, 1995, declining 
tenant incomes--caused in part by the rent rules and the effect 
they have concentrating poor people in public housing--have 
resulted in dramatic increases in operating subsidy needs over 
the last five to six years. Currently, the need for federal 
operating subsidies for public housing is over $3 billion per 
year and rising.
    While there has been bipartisan consensus for some time on 
the effect federal rent rules have had and the need to change 
them, the urgency to do so is much greater this year as 
Congress and the Administration work toward a balanced budget. 
Now, rent reform is a good idea not only because it will do 
more to encourage public housing residents to work but also 
because it will be critical to enable LMHAs to attract somewhat 
higher-income families, thereby decreasing dependence on 
federal subsidies. Furthermore, when surveyed by GAO in the 
summer of 1995 regarding their responses to likely funding 
cuts, changing existing rent policy was one of the most 
important changes PHAs said they needed in order to accommodate 
the reduced funding. Not only did these PHAs want flexibility 
to admit tenants with a wide range of incomes, virtually all of 
them agreed they needed to be allowed to adopt ceiling rents. 
Such a practice would enable them to retain working families 
because rent increases would stop once a family's rent is 
sufficient to cover the costs to the LHMA to operate their 
home.
            Impact of the Brooke Amendment
    Currently, resident rent contributions are largely dictated 
by federal rules. With few exceptions, residents must pay 30 
percent of their adjusted income for rent. Consequently, as a 
family's income increases, the rent it must pay increases as 
well--in contrast to the private market where rents are 
determined by market conditions and operating costs.
    Prior to 1969, PHAs were relatively financially self-
sufficient and did not receive operating subsidies from the 
federal government. Instead they charged rents, set at minimum 
and maximum levels, which allowed them to pay normal operating 
expenses. The rent levels were graduated between the minimum 
and maximum levels as appropriate for each resident.
    In 1969, Congress passed legislation (called the Brooke 
amendment for Senator Edward Brooke) prohibiting PHAs from 
charging more than 25% of a family's income for rent. The 
immediate effect upon PHAs was a dramatic loss in revenue. To 
make up for this loss, PHAs were often forced to forgo routine 
maintenance and properties fell into disrepair. The federal 
government authorized the payment of operating subsidies to 
PHAs in 1972. Three years later, in 1975, virtually all PHAs 
required assistance and subsidies were distributed nationwide.
    Hoping to curb the increasing reliance of PHAs on operating 
subsidies, in 1981, Congress amended the Brooke amendment and 
raised rental contributions to 30% of income. By itself, this 
amendment was not damaging. However, at the same time, Congress 
repealed the ability of PHAs to set maximum rent ``ceilings.'' 
These statutory changes contributed greatly to the destruction 
of the financial integrity of many PHAs.
    Although the motive behind these policies was to encourage 
everyone to pay their own way, the law had just the opposite 
effect. Because rents were raised each time a resident found a 
job or received a pay raise, residents either quit working (or 
never sought employment), or they left public housing.\5\ As 
working families left public housing, the need for operating 
subsidies to make up lost income increased. The incentive to 
work was further eroded when it became apparent that, because 
of the combination of these laws, some families paid rents that 
exceeded the value of their apartment.
    \5\ Under the Brooke amendment, assisted families were penalized 
for working because, for every additional dollar they earned, 30 cents 
would be taken away in the form of increased contributions toward rent. 
This high marginal ``tax'' on earnings, when coupled with reduction or 
loss of other income support benefits when families increase their 
earnings from work, created severe disincentives to work. Residents are 
effectively punished for leaving welfare and trying to better provide 
for themselves. It is even possible that the Brooke amendment 
encourages fraud by forcing residents to under report income if they 
want to get ahead. Even worse, in the case of a low-income family 
trying to stay together, the Brooke amendment can destroy families by 
forcing a working parent out of the house because even a low-paying 
temporary job increases family's rent contribution. Family members have 
to make the decision to either work and take the increase or leave the 
family.
---------------------------------------------------------------------------
    Under this type of rent structure, some families paid no 
rent at all because 30% of an income that is $0 is $0; in other 
words, if a family living in public housing had no income, they 
were not required to pay rent. Nevertheless, the PHA continued 
to pay the utilities of the unit, as well as other normal 
operating expenses like insurance, maintenance, and security 
which increased the need for operating subsidies. A concurrent 
problem was that PHAs did not have the ability to project their 
rental income because it fluctuated with the income levels of 
the residents. This inability made it virtually impossible for 
PHAs to estimate their future operating subsidy requirements or 
to operate and manage their assets in a businesslike fashion.
    Substantial evidence exists to show that continuing these 
rental policies will damage the public housing authority 
fiscally and its residents both socially and economically. For 
example, the Public Housing Authorities Directors Association 
(PHADA) has stated repeatedly that an AFDC recipient who heads 
a household and chooses to go to work full time at a minimum 
wage job faces are rent increase that contributes to an 
effective tax rate of anywhere from 117 to 135 percent. HUD 
Secretary Cisneros, in testimony before the House Subcommittee 
on Housing and Community Opportunity on October 13, 1995, noted 
that working families, because rent is tied to income, must pay 
higher rents than their apartments would command in the private 
market, resulting in ``residents who would provide the best 
role models--people who work and who could help others find 
jobs--often [being] the first to leave [public housing].''
            Federal Preference Rules
    Any rent reform should be coupled to eliminating federal 
housing preferences. At their discretion, local PHAs and 
project owners often adopted admissions policies that gave 
preferences to certain applicants. At first glance, it is easy 
to understand why PHAs utilized preferences, particularly in 
the cases of natural disasters or displacement resulting from 
federal actions. In 1979, however, Federal preferences were 
enacted and have expanded over the last decade to include 
applicants involuntarily displaced, living in substandard 
housing, or paying more than 50% of family income for rent. The 
result has been that certain groups of people have moved to the 
top of waiting lists, ahead of other local applicants for 
housing.
    According to HUD's PD & R 1989 report, ``Characteristics of 
HUD-Assisted Renters and Their Units in 1989'', among families 
that participated in assisted housing programs in 1989, public 
housing residents had the lowest median household income. Only 
35 percent of public housing residents reported their primary 
source of income was from wages/salaries. Meanwhile, almost 50 
percent of residents reported that they received their primary 
income from welfare, Supplemental Security Income, and/or food 
stamps.
    As part of an effort to make public housing operate more 
like private, market-oriented housing, the Committee's bill 
discontinues federal control over rental and admission 
policies. Like the current practice, LHMAs are authorized to 
house residents that are low-income (up to 80% of area median 
income) but may also create mixed income developments. The 
result will be healthier communities and families that are role 
models for welfare dependent families.
    The Committee's bill eliminates federally-mandated 
preferences in favor of authorizing LHMAs to develop locally 
based admission preferences aimed at producing a mix of tenant 
incomes. The responsibility of designing flexible rent 
schedules appropriate for each family living in public housing 
is returned to LHMAs.
    Section 222 gives LHMAs authority to create their own 
selection criteria for incoming residents in order to serve a 
mixed-income population. Section 225 allows LHMAs to adopt 
ceiling rents which will enable them to retain working 
families. The provision also requires that everyone contribute 
a minimum of at least $25 per month towards their rent 
(utilities are considered rent for this purpose).
    Imposing a minimum rent has two purposes: to promote the 
philosophy that public housing is not a hand-out or 
entitlement, it is a hand-up designed to help families during a 
period of trouble. Second, by allowing a minimum rent, LHMAs 
are able to craft an operating budget that makes sense and, 
more importantly, is predictable--a necessary component of any 
well-run business. Additional provisions mandate that LHMAs 
consider any relevant factors in setting maximum rents, 
including the size and cost of operating the units, the 
residents' adjusted income, and the cost of utilities. LHMAs do 
not, however, have unlimited discretion to raise rents on 
working families: HUD is provided the authority to intervene if 
a significant percentage of residents are paying more than 30 
percent of their income in rent.
    Although the Committee provides LHMAs with substantial 
flexibility in creating development-specific rent schedules and 
adopts the solutions LHMAs need to adjust to reductions in 
federal operating subsidies by encouraging work and retaining 
working families, the Committee does not intend that LHMAs 
serve only a higher income clientele. Therefore, to ensure that 
very low income families retain access to federally assisted 
housings, the legislation provides that 25% of an LHMA's public 
housing inventory shall be designated for families whose 
incomes do not exceed 30 percent of the area median income.
    Some may argue against reforming existing rent rules, 
raising the specter that large LHMAs will either (1) serve 
fewer low-income people by setting their minimum rent too high, 
or (2) gouge working families when the private rental market is 
expensive and overcrowded. Though the Committee understands 
these concerns, specific provisions in this legislation are 
designed to prevent them by providing HUD with sufficient 
information to alert them to abuse and allowing the department 
to intervene when appropriate.
    In addition to the 25% set-aside for extremely poor 
families, if at any time HUD determines that less than 40 
percent of a large LHMA's units are occupied by households with 
incomes at or below 30 percent of the area median, the 
Secretary may review the LHMA's minimum rent policy to 
determine if it is appropriate and is serving the needs of the 
area's low-income population. If the policy is not appropriate, 
HUD may require the LHMA to modify its minimum rent policy. 
Additionally, the Secretary may intervene if HUD determines a 
significant percentage of residents are paying more than 30 of 
their income in rent. These provisions, therefore, allow the 
Secretary to balance the need to protect extremely poor 
families who have no other alternative but to live in 
federally-assisted housing, with the need to have fiscally 
viable properties and working-class role models.

E. Creating Opportunities for Residents

            Self-Sufficiency Programs
    As ably stated by the housing expert, Anthony Downs:

          [l]iving in adequate housing is central to the well-
        being of every person and household, yet for most 
        people, housing is the most costly element of their 
        living standard. Consequently millions of households 
        with low incomes cannot afford to occupy `decent 
        quality' housing if they must rely solely on their own 
        resources.\6\

    \6\ Anthony Downs, ``HUD's Basic Missions and Some of Their Key 
Implications,'' Cityscape: A Journal of Policy Development and 
Research, HUD. Vol. 1, No. 3, Sept. 1995.
---------------------------------------------------------------------------
    Therefore, providing rental housing assistance--within 
budgetary constraints--is extremely important to aid families 
and individuals seeking affordable homes that are safe, clean, 
and healthy.
    The Committee believes housing is a fundamental component 
of bringing true opportunity to people and communities in need. 
However, as set forth in the declaration of policy, the 
Committee also recognizes that merely providing the means to 
house low-income families is not a panacea that will pull every 
family and individual up from poverty.
    For decades public housing and Section 8 housing assistance 
sought to alleviate housing problems, but these programs 
operated in a vacuum with little direct involvement assessing 
the social and economic needs of assisted families. Assisted 
families received housing assistance with little or no 
expectation that they attempt to gain the education, job 
training, and work skills needed to better themselves. This 
situation began to change in the late 1980s with two limited 
HUD demonstration programs--Project Self-Sufficiency and 
Operation Bootstrap--provided through HUD's Section 8 
certificate and voucher programs. These demonstrations provided 
housing assistance, but as a condition of receiving such 
assistance, assisted families were required to enroll in 
programs that fostered self-sufficiency and economic 
independence.
    These demonstrations were followed by the enactment of the 
Family Self-Sufficiency (FSS) program, authorized by the 
National Affordable Housing Act of 1990. The FSS program 
attempted to link housing assistance with other needed 
services--education, job training, work preparation, child care 
and transportation--assistance to promote self-sufficiency and 
economic independence for participating families. It also 
provided financial incentives, such as establishing escrow 
accounts that would be returned to participants when they 
successfully completed their programs, and for terminating 
assistance when families failed to follow through on their 
obligations.
    The FSS program, while well intentioned, was limited in 
scope: program size was limited to the cumulative number of 
incremental public housing and Section 8 certificate and 
vouchers received after enactment. It did not encompass the 
nearly 3 million families and individuals already receiving HUD 
rental housing assistance. Additionally, the program was bound 
by a plethora of rules and other guidance created by the 
underlying legislation and HUD rulemakers.
    Nevertheless, many housing authorities have chosen to 
sponsor FSS initiatives designed to provide their residents 
with access to the resources they need to leave public 
assistance. The Committee commends these authorities for their 
resourcefulness. For example, at the Omaha Housing Authority, 
full-time coordinators work to secure child care, 
transportation, vocational training, education and employment 
opportunities for participants in the self-sufficiency program. 
Staff works with families to develop a contract which guides 
their progress over time. In addition, the coordinators work 
with other agencies to secure the necessary supportive 
services. The OHA works cooperatively with the Nebraska 
Department of Social Services which provides assessment and 
case management to at least 400 AFDC and Food Stamp recipients 
who reside in public housing. After the assessment is complete, 
Case Facilitators develop a personalized plan to help those 
individuals leave the welfare rolls.
    H.R. 2406 reemphasizes the need for housing assistance to 
be provided as part of a well thought-out approach by the LHMA 
to enhance the economic and social well being of assisted 
families and, where appropriate, help break the shackles of 
poverty and dependence.\7\ In this regard, the bill makes 
several fundamental changes to the way that current housing law 
has promoted--or not promoted--self-sufficiency.
    \7\ The Committee recognizes that, for many assisted families, 
moving toward self-sufficiency and economic independence may not be 
appropriate. For example, in a report to this Committee, the GAO 
reported that over one-third of assisted families are elderly (65 years 
or more). For others especially those with little education or little 
prior attachment to the work force, the process may require long-term 
assistance. For example, GAO reported that only about half of the 
assisted households have high school diplomas and about 21 percent had 
completed 8 or fewer years of education. See HUD-Assisted Renters (GAO/
RCED-95-167R, May 18, 1995).
---------------------------------------------------------------------------
    Section 106 of the bill builds on the Omaha experience by 
requiring (with the exception of the elderly, students, persons 
who are working or in training, or who have disabilities or are 
otherwise physically impaired) each adult member in a family 
receiving assistance through public housing or through choice-
based rental housing, agree to contribute not less than 8 hours 
of work per month within the community in which the family 
resides. As an alternative, physically-able adults may agree 
contractually to participate in an ongoing basis in a program 
designed to promote economic self-sufficiency.
    Section 107(b)(11) requires that LHMAs, as part of their 
local housing management plans, describe how the authority will 
coordinate with State welfare agencies to ensure that public 
housing residents and families assisted through choice-based 
housing will be provided the access to resources to assist in 
obtaining employment and achieving self-sufficiency. Under this 
provision, LHMAs are given the latitude to develop initiatives 
and use innovative techniques to foster service delivery 
without detailed direction from Congress or HUD. Finally, 
Sections 225 and 322 allow LHMAs to set rents that encourage 
self-sufficiency for families assisted through public housing 
an choice-based housing.
            Homeownership Opportunities
    One of the Committee's continued goals is to encourage 
homeownership by as many American families as possible. The 
Committee's bill gives LHMAs the authority to create and 
implement resident homeownership programs to encourage public 
housing families and families eligible for public housing to 
become owners of their own homes by purchasing existing public 
housing units and other housing projects available for purchase 
by low-income families.
    Over the past 12 years HUD has had extensive experience 
with public housing homeownership. This provision builds on 
that experience and is designed to encourage development of a 
wide variety of approaches to the sale of public housing to 
residents. It is the Committee's belief that creative solutions 
to various issues associated with these sales can best be 
developed at the local level, by people most familiar with the 
particular local situation. Therefore, the Committee bill sets 
forth certain basic requirements which all applicants must 
meet, but leaves most issues open to local solution. In 
particular, each family is required to put down not less than 1 
percent of the purchase price from its own resources as a 
downpayment. However, a family is permitted to use grant 
amounts, gifts from relatives, contributions from private 
sources, and similar amounts as downpayment amounts. The 
provision also allows the authority to recapture funds from the 
resale of dwellings bought by a purchaser with government 
assistance. Purchasers who sell a dwelling after purchase are 
required to refund any financial gain in excess of the original 
purchase price they received from the sale of the property. 
After five years, homeowners must provide a refund for the 
assistance they received from the local authority.
            Resident Opportunity Program
    To further emphasize the goal of creating opportunities for 
residents, the Committee bill includes a Resident Opportunity 
Program. This provision builds upon the current Resident 
Management Technical Assistance and Training Program which 
funds resident councils, organizing efforts among public 
housing residents, and Resident Management Councils. As a means 
of improving existing living conditions in public housing 
developments, this program provides increased flexibility for 
developments that are managed by residents by permitting the 
retention of, and use for certain purposes, any revenues 
exceeding operating and project costs. The Committee intends 
that residents should be rewarded for their successes by 
further investing excess operating income for project purposes, 
including job creation.
    The program is intended to build the capacity of public 
housing residents to participate in their own self-sufficiency 
and economic improvement through the organization of residents 
and resident councils. And it is meant to broaden opportunities 
for public housing residents to teach job skills and widen 
employment opportunities, including their own small businesses.
    However, the Committee is concerned with the potential 
waster of scarce public housing resources on questionable 
resident training activities and travel expenditures funded 
through HUD's Tenant Opportunity Program (TOP). In particular, 
on November 9, 1995, the House Subcommittee on Human Resources 
and Intergovernmental Relations examined evidence that HUD 
approved TOP funds for a public housing tenant convention in a 
Puerto Rico resort hotel and casino billed by its sponsors as 
``a vacation that will be unforgettable.'' Evidence exists that 
several programs were clearly political in nature. The TOP 
Notice of Funding Availability clearly states in the list of 
eligible and ineligible activities that the TOP grant may not 
be used for entertainment or lobbying purposes. Accordingly, 
the Committee continues to monitor the Human Resources 
Subcommittee's ongoing investigation and will pursue its own 
inquiries into what appears to be a fundamental weakness in 
HUD's management of tenant training funds.
    Nevertheless, the Committee is aware of numerous successful 
resident-managed public housing developments throughout the 
country. Recognizing these successes, the Committee maintains 
the Resident Opportunity Program as a separate program for 
fiscal year 1996. However, it is the Committee's intent that 
after fiscal year 1996, the Resident Opportunity Program become 
integrated with the public housing block grant authorized in 
section 201. The Committee notes that Section 203 includes 
resident management activities as an eligible purpose of block 
grant funds. The program is authorized at $15 million for 
fiscal year 1996.

F. Promoting Mixed-Income Developments

    The impact of many Federal mandates has been to 
overconcentrate low-income families and individuals in public 
housing with neither role models, networks, nor adequate 
opportunities to improve their lifestyle. The initial intent of 
the public housing program was to house the working poor. Yet, 
the Committee notes that over time legislation and subsequent 
federal regulations--for example, the Brooke Amendment, 
eliminating ceiling rents and the institution of federal 
preferences--have forced public housing authorities to admit a 
larger proportion of very low-income persons. As a result, 
working poor families have been forced to move from public 
housing.\8\
    \8\ Michael Schill ``Distressed Public Housing: Where Do We Go From 
Here?'', University of Chicago Law Review (Spring 1993)
---------------------------------------------------------------------------
    Attracting higher-income families and promoting mixed-
income developments is a sound approach to saving our 
communities by providing residents with stable infrastructure 
and economic opportunities, and is a key component of H.R. 
2406. The Committee's 
bill promotes mixed-income conditions by repealing federal 
regulations that prescribe strict occupancy preferences and 
deregulating well-run public housing authorities.
    Creating mixed-income developments has two purposes: the 
first is to provide role models and a neighborhood 
infrastructure that enables residents to move into employment 
and self-sufficiency. Unemployed families in mixed-income 
developments can use working families as role models, and the 
presence of working families promotes the development of needed 
economic and community institutions--schools, stores, churches. 
The second purpose is to increase the amount of rental income 
generated by persons who live in public housing. The increased 
income is generated by admitting higher-income families that 
can afford to pay higher rents. This practice enables LHMAs to 
be less dependent on HUD and the taxpayer for expensive 
operating subsidies.
    HUD Secretary Henry Cisneros testified before the Senate 
Committee on Banking, Housing, and Urban Affairs on September 
28, 1995, that three of the key structural consequences of the 
existing public housing program are that (1) public housing 
concentrates the very poor, (2) public housing itself is 
concentrated in high poverty neighborhoods, and (3) federal 
laws penalize public housing tenants who work. The National 
Commission on Severely Distressed Public Housing stated in 1992 
that:

          Federal statute-mandated preferences, income 
        standards, and rent-to-income rations have effectively 
        excluded that `working poor' [from public housing] . . 
        . and that authorities should be allowed to admit 
        residents based on a range of eligible income levels to 
        promote a higher level of economic activity within 
        public housing communities.

    The necessity to create mixed-income environments has been 
illustrated by researcher William Julius Wilson in his widely-
noted 1987 books, The Truly Disadvantaged: The Inner City, the 
Underclass, and Public Policy in which he refers to the concept 
of mixed income as creating a ``social buffer'' which is:

          The presence of a sufficient number of working- and 
        middle-class professional families to absorb the shock 
        or cushion the effect of uneven economic growth and 
        periodic recessions on inner-city neighborhoods . . . 
        the removal of these [higher income] families made it 
        more difficult to sustain the basic institutions in the 
        inner city (including churches, stores, schools, 
        recreational facilities, etc.) in the face of prolonged 
        joblessness. And as the basic institutions declined, 
        the social organization of inner-city neighborhoods 
        (defined here to include a sense of community, positive 
        neighborhood identification, and explicit norms and 
        sanctions against aberrant behavior) likewise declined 
        . . .[.]
          It is true that the presence of stable working- and 
        middle-class families in the ghetto provides mainstream 
        role models that reinforce family structures. But, in 
        the final analysis, a far more important effect is the 
        institutional stability that these families are able to 
        provide in their neighborhoods because of their greater 
        economic and educational resources, especially during 
        periods of an economic turndown--periods in which 
        joblessness in poor urban areas tends to substantially 
        increase.

    The Committee believes these arguments clearly state the 
need to develop more mixed-income developments. H.R. 2406 has 
been fashioned to achieve the goals of building strong resident 
populations that are supported by a safe and structurally sound 
neighborhood. For example, the legislation allows housing 
authorities to rent privately-developed homes in the 
neighborhood surrounding a public housing development to public 
housing applicants if increased rental income is derived from a 
mixed-income development.
    This approach is similar to the Mixed Income New Strategy 
Communities (MINCS) program which was authorized by Section 522 
of the National Affordable Housing Act (NAHA) of 1990 (P.S. 
101-625, approved November 28, 1990). The purpose of the MINCS 
program was to test the effectiveness of promoting the 
revitalization of troubled urban communities through the 
provision of public housing in socioeconomically mixed 
settings. Under MINCS, PHAs were allowed to admit tenants who 
could pay rents high enough to fully cover average PHAs' costs 
per unit. The resulting ``savings'' in operating subsidy was to 
be used by the PHA to defer the costs of at least an equal 
number of very low-income tenants in economically mixed and 
newly built or renovated privately owned projects. Despite the 
program's promise, the Chicago Housing Authority was the only 
PHA authorized to implement the MINCs program. Consequently, 
some low-income families were admitted to Chicago's Lake Parc 
Place development and currently pay rent that covers 
substantially the costs of operating their apartments.
    At this development, new systems have created a safe 
environment and a strong resident population. Unlike every 
other Chicago public housing project, adequate storage space, 
wooden cabinets in the kitchen, vanities and showerheads in the 
bathrooms and doors on the closets are standard fare. Eligible 
public housing families that work can take advantage of ceiling 
rents that stabilize their rent contributions. A percentage of 
the units are set aside for working families and for carefully 
screened public housing residents. The development costs of the 
market rate units are supported by their rents, while the 
development costs of the low income set aside units are bought 
down through a combination of subsides such as low income 
housing tax credits, the provision of vacant land or abandoned 
buildings owned by the City and local property tax abatement. 
Ongoing management responsibility for the development rests 
with the private owner.

G. Troubled Public Housing and Severely Distressed Developments

    Troubled public housing authorities, especially large 
authorities, have persistently plagued HUD's public housing 
program. The relative handful (less than 100) of truly poor 
performing PHAs give the remaining 3,300 a bad reputation. 
Thirteen of the 100 largest housing authorities operate most of 
the distressed, dilapidated, and boarded up housing stock. And 
of these 13 troubled housing authorities, 5 have been troubled 
since 1979 when HUD began keeping track of such performance. 
Because of the excessive cost and poor housing services 
associated with troubled authorities, the Committee and the 
Administration believe it is crucial to develop a strategy to 
deal effectively with incorrigible PHAs.
    A condition that contributes significantly to a troubled 
authority's problems is a high vacancy rate. Although public 
housing vacancies nationwide average about 8 percent 
(approximately 100,000 units), the GAO reported that 27 large 
housing authorities account for about half of the vacant units. 
In other words, vacancies tend to be concentrated in relatively 
few places. Furthermore, vacancies generally are not evenly 
distributed within specific housing authorities. GAO reported 
that at 41 housing authorities managing 70 developments with 
vacancy rates exceeding 70 percent, 57 of the 70 developments 
contained almost 1200 buildings that were completely vacant.
    However, if these or other housing authorities try to 
demolish or sell off any of their vacant or uninhabitable 
buildings, by law they must replace the housing units on a one-
for-one basis with new or other viable housing or provide 
equivalent rental assistance to the tenants (although the 1995 
rescission bill established a temporary reprieve from this 
requirement). Lack of money is not the only problem. When the 
PHA plans to demolish or dispose of deteriorated public 
housing, federal regulations require HUD approval of both the 
PHAs application for demolition or disposition and its plan to 
replace the housing. Extensive documentation and plans must be 
included with any such application. The approval process is 
lengthy and in the past has sometimes taken years.
    Coupled to the one-for-one rule are site and neighborhood 
standards, designed to ensure minority and low income families 
are provided with housing opportunities outside of housing 
market areas to which they have been traditionally limited. 
According to HUD regulations, proposed sites where public 
housing developments will be constructed or rehabilitated must 
meet strict standards. These standards present huge barriers to 
provide decent housing. PHAs in cities with large proportions 
of minority groups are effectively precluded from building new 
housing. PHAs in other cities cannot build because of the high 
cost of acquiring land that meets the standards and does not 
pose undue difficulties in reaching agreements with existing 
community groups about locating assisted persons in their 
neighborhoods.
    In combination, these two provisions contribute to the 
continuation of severely distressed sites as well as to 
financial waste.
          The U.S. is losing millions of dollars by subsidizing 
        vacant units in large public housing authorities 
        because the buildings can't legally be torn down. In 
        Philadelphia, . . . the U.S. has paid $7.9 million to 
        maintain largely vacant units in a complex of eight 
        buildings. In another project in that city, the debate 
        over what to do about two vacant high-rises containing 
        448 units has lasted for 18 years. In Cleveland, the 
        U.S. has paid $47 million in the last seven years to 
        maintain vacant units, which the housing authority was 
        losing $2.4 million a year that would have come from 
        renting the units . . . \9\
    \9\ The Wall Street Journal, p. A2, March 22, 1994.
---------------------------------------------------------------------------
    Section 18 of the USHA of 1937, better known as the one-
for-one replacement rule is an underlying cause of excessive 
vacancy rates. As GAO has reported, significant problems of 
retaining nonviable public housing are excessive operating 
costs and the crime and vandalism associated with vacant public 
housing. To substantiate these findings HUD's Inspector General 
has concluded that the one-for-one requirement, along with 
national site and neighborhood standards that purports to 
protect against overconcentrations of low-income people, is 
responsible for the increase in vacancy rates from 5.8 percent 
in 1985 to today's 8 percent.
    Of even greater concern to the Committee, however, are the 
number of families that have no choice but to live under these 
deplorable conditions. It is inconceivable that the federal 
government subsidize properties that are nothing more than 
slums. However, the costs to rehabilitate these properties to a 
point where they are safe and healthy are astronomical. In 
fact, a study conducted for the National Commission on Severely 
Distressed Public Housing stated that the backlog of 
modernization needs was as high as $28 billion. Some of this 
need can be eliminated simply by demolishing and/or selling 
obsolete developments.
    Therefore, the Committee's bill eliminates the one-for-one 
replacement statute and allows LHMAs to rebuild housing on 
existing public housing sites. Consequently, federal funds are 
saved because housing authorities can begin to use scarce 
modernization dollars to maintain viable buildings and systems 
rather than propping up hundreds of obsolete buildings. And to 
the extent that high vacancies have a negative effect on the 
performance of many large urban housing authorities, these 
authorities are no longer required to maintain developments 
that are not cost-effective and, in fact, are draining the 
authorities of precious resources.
    Demolition, however, cannot be accomplished 
indiscriminately. LHMAs must prove the demolition is in 
accordance with the local housing management plan for the 
authority, discussed in Section 107 of the bill.\10\ Capricious 
demolition, demolition for purposes of gentrification, or 
demolition otherwise inconsistent with a housing authority's 
long-range goals, is unlawful.
    \10\ Section 107 requires that each management plan include a 5-
year plan describing the mission, goals, objectives, and capital 
improvements envisioned by the local authority.
---------------------------------------------------------------------------
    Second, a LHMA may demolish or dispose of public housing 
only if it satisfies one of several criteria which, if met, 
ensures that the action is necessary either to protect the 
residents' well-being and interests, conserve the housing 
authority's resources, or rid the authority of housing that is 
obsolete or cannot be rehabilitated cost-effectively.
    These changes, in conjunction with other regulatory relief, 
will enable the industry to resolve the problems of funding, 
occupancy, maintenance, and crime before they strangle the 
provision of housing assistance. Housing authorities must have 
the authority to eliminate their most costly and distressed 
stock.
    Finally, the federal government must be provided an 
effective means of identifying chronically poor performers and 
denying them funding if they cannot improve their performance. 
In its Reinvention Blueprint, HUD requested significant new 
powers to handle chronically troubled PHAs. While H.R. 2406 
authorizes these powers, the legislation also provides 
significant new sanctions that HUD can invoke against those 
authorities that are not managing their properties 
appropriately. One of the most significant of these sanctions 
is the provision of authority to withhold Community Development 
Block Grant (CDBG) funds from a city or entitlement community 
if that entity has substantially contributed to the troubled 
status of the authority.
    By the clear language of the statute, the Committee does 
not expect this sanction to be used indiscriminately nor is it 
meant to subsidize the level of an LHMAs block grant. However, 
the Committee does intend that the Secretary consider wielding, 
and in appropriate cases imposing, this sanction against those 
entities that contribute substantially to the troubled status 
of a housing authority. This provision is not intended to 
affect communities which receive CDBG funds through the county 
in which they are located if those communities have not 
contributed to the conditions at any troubled housing 
authorities in the county. The Secretary shall ensure that a 
process exists whereby communities located in a county subject 
to CDBG sanctions under this section may petition for continued 
CDBG funds.
    Obviously, the Secretary must weigh the circumstances of 
each case before levying this sanction and using it to penalize 
bad actors. For example, evidence has been presented to this 
Committee that some localities did not provide adequate city 
services to public housing developments.\11\ Other evidence 
shows that promised sites did not materialize because of 
disagreements between the city and the PHA. These actions 
exacerbate the problems of a troubled authority and are 
unacceptable.
    \11\ It is important to note for the record that housing 
authorities make in lieu of tax payments to city governments with the 
expectation that they are going to be served by adequate public 
services.
---------------------------------------------------------------------------
    Finally, H.R. 2406 mandates that HUD ``takeover'' any 
housing authority that has been troubled for three years or 
more. The Committee is pleased that recently HUD has been far 
more aggressive in beginning to overhaul those PHAs that are 
systemically troubled. Historically, however, HUD has made 
limited use of the authority it has to take action against 
troubled authorities. H.R. 2406 ensures that HUD act quickly to 
take over bad managers.
    The legislation also allows HUD to expand the use of 
private and resident managers, to break up and decentralize 
large troubled authorities, and to consolidate small, rural 
authorities. HUD may utilize competitive bidding in troubled 
PHAs to lower the costs of management and to spur an 
environment of competition. All of these tools are provided 
with the expectation that HUD use them aggressively.
    The Committee opted to retain a severely distressed public 
housing program for one year that is similar to the HOPE VI 
Urban Revitalization Demonstration (URD) program. In its 1994 
Reinvention Blueprint, HUD acknowledged that these properties 
contribute to the physical decline of and disinvestment in the 
surrounding neighborhoods and suggested major reforms to the 
URD program, including more widespread use of vouchers and 
neighborhood planning.
    Section 262 affirms this concern, and provides housing 
authorities with far more flexibility and latitude to utilize 
these grants creatively. Housing authorities are encouraged to 
identify severely distressed properties and demolish them as 
quickly as possible. Displaced families may be provided with 
voucher assistance and the authority may choose whether to 
rebuild the property by entering into new partnerships with the 
private sector and local governments. If the choice is to 
rebuild, LHMAs must show their commitment to the redevelopment 
by matching the revitalization grant from HUD with an amount of 
no less than 5%. It is the hope of this Committee, that these 
reforms to the URD program will produce a healthy urban 
landscape and promote economic opportunities.

H. Choice-Based Assistance for Displaced Tenants Rather Than Across-
        the-Board Vouchering Out

            Administration's Rationale for ``Vouchering Out'' Public 
                    Housing
    HUD's proposal to voucher out its public housing inventory 
and make it compete with privately owned housing was a major 
component of its Reinvention Blueprint. Accordingly, the 
proposal was consistent with the underlying principles 
presented in that Blueprint, including that low-income families 
should have greater power to make decisions about their lives; 
decision makers at all levels should have maximum flexibility 
to design and utilize Federal resources, consistent with 
national objectives; and HUD resources should be used to end 
the physical and social isolation of low-income people by 
linking distressed communities with regional housing and labor 
markets. If HUD's plan were implemented as proposed, federal 
assistance would flow to households as certificates rather than 
to public housing authorities. According to HUD, this shift in 
policy would result in significant savings and address 
fundamental problems with the current public housing program, 
including (1) residents' lack of choice, (2) instances of 
overconcentrations of poor people, and (3) a lack of discipline 
in the management of public housing because of its insulation 
from the marketplace.
    In the Blueprint, HUD also recognized that public housing 
authorities currently do not have the flexibility to demolish 
the worst housing stock in their portfolio. Part of HUD's 
rationale in integrating market discipline to their 
transformation proposal was that market forces would clearly 
identify properties that should be demolished. Consequently, 
under the Reinvention Blueprint, public housing authorities 
would have had much greater discretion in terms of deciding 
which properties to modernize and which to demolish.
            GAO Tested HUD's Assumptions
    To determine how HUD's proposal to voucher out the 
inventory would play out in specific public housing 
developments, the Committee asked the GAO to obtain cost and 
condition data from a number of public housing authorities. GAO 
tested HUD's calculations that the average monthly cost to 
house a low-income family using a housing voucher was about 
$440 per month compared to $481 in public housing, saving 
roughly $40 per month. Over the 1.3 million families served by 
public housing, this purported savings would run into millions 
of dollars.
    GAO pointed out, however, that on the basis of data it 
collected and analyzed, these averages do not reveal the wide 
differences in the cost of these tow options at individual 
public housing developments. For some developments, the current 
average cost to provide public housing is less than half that 
of housing vouchers. However, for those public housing 
developments in the worst physical condition, the reverse is 
true.
    As GAO noted, these wide variations in cost raise a number 
of important issues, including whether the federal government 
should pay to rehabilitate public housing developments, as 
proposed by HUD, when the properties' rental revenues could 
finance these expenses, and whether housing vouchers should be 
targeted to public housing developments that are clearly cost-
effective. Other policy issues raised by GAO's analysis were 
how to allocate initial federal subsidies to public housing 
authorities, given the wide diversity in market value of their 
existing portfolio. Also, what constraints, if any, should be 
placed on public housing authorities for revenues that could be 
generated from properties whose market value is substantially 
above their operating costs?
    GAO concluded that HUD had not done the detailed analyses 
necessary to address these and other policy issues. 
Consequently, GAO suggested that before adopting the proposal 
public housing authorities should analyze individual 
properties, taking into account their rehabilitation needs, 
operating costs, and market values, a suggestion echoed by the 
HUD Inspector General. If such an analysis were done on a 
property by property basis, as mandated in H.R. 2406, the 
merits of HUD's proposal could be better evaluated, the 
allocation of future federal subsidies to public housing 
authorities would be improved, and the necessary information 
would be available to address the other policy issues raised by 
GAO. Based on these findings, the Committee concluded it was 
premature to voucher out public housing on a wholesale basis.
    After considerable debate on this issue, the Committee has 
decided that a cost test ought to be conducted by LHMAs on 
their properties. If the costs of maintaining a conventional 
public housing development are greater than the costs of 
private sector rental units, the housing authority is required 
to convert that portion of their inventory to choice-based 
rental assistance or take appropriate improvement measures as 
approved by HUD. Not only does this mandate lead to lower 
public housing expenditures, it forces LHMAs to identify those 
properties which are drains on their limited resources. The 
Committee, HUD and others agree that the focus should be on 
distressed properties for conversion to vouchers to target the 
most serious instances of excessive PHA cost and inadequate 
resident choices.
    Neither this Committee, GAO nor others disagree with HUD's 
proposition that vouchering out public housing would provide 
residents greater choice. However, effective choice in housing 
depends on many factors, including families' inclination to 
move, the housing availability in specific markets, a 
landlord's willingness to accept tenants with housing vouchers, 
and the extent to which housing discrimination laws are 
followed and enforced. As a case in point, it is highly 
unlikely that many elderly and disabled residents, who comprise 
about one-third of the public housing tenants, will chose to 
move from their homes. Also, for vouchers to succeed, housing 
must be available, and availability is very much market 
specific. For example, the vacancy rate in markets such as New 
York City, where about 11 percent of the nation's public 
housing is located, is less than one-half the national rate. 
Providing a voucher in this area would be useless.
    Furthermore, some of the current Section 8 program 
requirements relating to admissions and terminations are 
objectionable to private landlords, and have contributed to the 
dearth of affordable private housing for low-income families. 
Finally, discrimination in the rental market is an issue that 
is difficult to quantify, but to the extent that housing 
discrimination laws are followed and enforced, residents' 
choice will be encouraged.

I. Deterring Crime in Public Housing

            Added Protection Against Drug and Alcohol Abusers
    Since the 1980s, public housing has become the ``housing of 
last resort,'' housing the nation's very poor along with the 
disenfranchised. Most residents are law-abiding citizens trying 
to live peacefully and seeking a healthy community life. 
However, increasing crime has made it extremely difficult for 
families in public housing to create a normal environment 
within which to raise their children or to live peacefully on 
fixed incomes. These residents, whether they are young families 
or elderly people, find themselves victims of crimes that are 
frequently committed by persons abusing alcohol or drugs. Crime 
persists as our nation's dominant fear, and because of the 
increase in the crime rate in public housing due to increases 
in alcohol and drug abuse, particularly crack cocaine abuse, 
the Committee's bill curtails the admission of drug and alcohol 
abusers to public housing and choice-based housing.
    While crime in the most severely distressed developments 
makes the most lurid news, no public housing development is 
immune from the problems arising from alcohol and drug abuse. 
According to a 1988 NAHRO survey, 55 percent of public housing 
authorities said that they had a drug or alcohol problem. The 
problem was especially prevalent among the largest 
authorities--77 percent reported drug and alcohol problems. 
Forty-five percent of small PHAs reported such problems. 
Although this survey has not been updated, the Committee 
believes conditions have worsened since 1988. Public housing 
residents, who themselves are in need of social and support 
services, tend to be more vulnerable to the activities of 
gangs, drug dealers, and other negative elements.
    Clearly, drug and alcohol related crime has not only a 
profound destabilizing influence on the residents, but it also 
takes a toll on public housing property. Substance abusers 
violate the rights of other persons, intimidate them, damage 
property, and create the need for costly maintenance. In turn, 
deteriorated and dilapidated property attracts substance 
abusers, who occupy the property or operate their drug business 
from it. This behavior exacts an extraordinary physical cost in 
terms of increases in permanently abandoned projects, 
additional personnel, and greatly expanded investment in 
substance abuse counseling and education. Caught within this 
web are the victims--the public housing residents.
    The cycle of substance abuse, crime, and property 
deterioration has escalated dramatically for more than a 
decade. A 1982 President's Commission on Housing Report does 
not even mention alcoholism, drug abuse, or crime in its 
chapter dealing with problems in public housing. Six years 
later in 1988, the Congress passed the Public Housing Drug 
Elimination Act as part of the Anti-Drug Abuse Act of 1988 
(P.L. 100-690). This act authorized PHAs to evict tenants 
involved, either directly or indirectly, in any drug-related 
criminal activity on or near the public housing premises. A 
year later, the Congress established the National Commission on 
Severely Distressed Public Housing. In its 1992 report, the 
National Commission recognized that one of the defining 
characteristics of severely distressed public housing was 
serious crime and the crime was more often than not accompanied 
by drug and alcohol abuse.
    The Committee is concerned that these measures, while well-
intentioned, have not been sufficient to address the crime in 
public housing. Therefore, provisions of this legislation make 
it easier for LHMAs to evict persons with drug or alcohol-
related problems. Likewise, the Committee bill allows LHMAs to 
provide services to substance abusers seeking rehabilitation. 
The intent of Section 105 is to protect the majority of public 
housing residents--those law-abiding families and individuals 
seeking affordable homes that are safe, clean, and healthy--
from being subjected to substance abusers.
    The legislation allows LHMAs to establish standards for 
occupancy in both the public housing and choice based rental 
assistance programs that prohibit admission by any person that 
is either currently illegally using a controlled substance or 
whose history of drug or alcohol abuse provides reasonable 
cause for the authority to believe that occupancy by such 
person may interfere with the health, safety, or right to 
peaceful habitation by other residents. With this provision, 
the Committee also recognizes that the successfully 
rehabilitated individual, if eligible, also has a right to 
residency and may obtain admission to public housing, given 
proof of successful participation or completion of a supervised 
drug or alcohol rehabilitation program.
    Because LHMAs are not experts in the epidemiology of 
treatment of substance abuse, the Committee recommends they 
consult with community experts, including but not limited to 
public health officials, treatment specialists, social/welfare 
workers, mental health professionals, and safety personnel in 
developing their occupancy standards. These standards form the 
basis for determining how and when individuals can be excluded 
from occupancy based on their history of abuse. It is not the 
intent of the Committee to punish individuals with successful 
treatment histories; therefore, the standards should provide 
for consideration of appropriate treatment protocols, social 
and family history as well as duration of use.
            Designated housing--balancing the need of elderly and 
                    disabled
    Section 227 of this legislation authorizes designated 
housing for elderly and disabled families. LHMAs may designate 
specific developments or portions of developments for occupancy 
by (a) elderly families only, (b) disabled families only, or 
(c) elderly and disabled families.\12\
    \12\ This provision is similar to section 3 of H.R. 117, ``Senior 
Citizens Housing Safety and Economic Relief Act of 1995.''
---------------------------------------------------------------------------
    Mixing disabled and elderly residents in the same living 
space has created numerous problems. Many elderly residents who 
anticipated a quiet, all-elderly environment are frightened and 
disturbed by younger residents who tend to have different 
lifestyles. Conversely, young disabled people in these elderly 
developments complain that their elderly neighbors treat them 
with suspicion and resentment.
    In 1992, the GAO reported that 31 percent of nonelderly 
persons with mental disabilities caused moderate or serious 
problems to their elderly neighbors, including threatening them 
and having disruptive visitors. GAO also found that alcohol 
abuse among the non-elderly disabled people living in elderly 
developments was a significant problem for 20 percent of all 
PHAs and 40 percent of all large PHAs.
    In response to these findings and other complaints, the 
Congress rewrote the laws regarding mixed populations in Title 
VI of the Housing and Community Development Act of 1992 (HCDA 
of 1992) [P.L. 102-550]. Under Title VI, PHAs and federally 
assisted apartment owners could designate certain buildings as 
``elderly only'' if the owners implemented a plan to provide 
alternative housing for those non-elderly residents who were 
eligible for federally assisted housing and met the eligibility 
requirements of the Americans With Disabilities Act. That 
legislation, however, was very clear that current non-elderly 
residents could not be evicted without cause and that neither 
PHAs nor landlords could leave units vacant for excessive 
periods of time while seeking eligible elderly tenants. Title 
VI further provided that if an elderly tenant could not be 
found for a vacant unit after a pre-determined period of time, 
then the unit must be filled with the next eligible disabled 
persons on the waiting list.
    According to the HUD Inspector General, both the statute 
and HUD's rules implementing Title VI have proven overly 
burdensome and complicated for PHAs attempting to receive 
``elderly only'' designations. In fact, only 10 plans have been 
approved by HUD since 1992.
    The Committee believes that Title VI of the HCDA of 1992 is 
flawed, and proposes that Section 227 rectify that flaw in 
several important ways. First Section 227 grants LHMAs greater 
flexibility in designating their developments ``elderly 
population to live in security and with less fear of crime or 
other dangers. Second, the provision permits LHMAs to fill 
their designated elderly-only developments with near-elderly 
families rather than younger people with disabilities, if there 
are insufficient numbers of elderly families to fill all the 
units. Finally, the statute prohibits occupancy in designated 
units by individuals who currently illegally use a controlled 
substance or who have a history of such use so that the LHMA 
would believe that the such a person may interfere with the 
health, safety, and right to peaceful enjoyment of the premises 
by other residents. In recognition of the desirability in many 
cases of providing separate housing for the elderly without 
diminishing the housing resources available to younger disabled 
people, subsection 306(b) authorizes funding for FY97 for 
housing authorities to provide housing for the disabled in 
cases where needed because the authority has designated 
buildings once available to the disabled as elderly only.
            Availability of Criminal Records
    The Committee is keenly aware of the concerns expressed by 
both PHAs and residents that public housing must provide safer 
and secure living environments. Therefore, Section 224(b) 
preempts State and local law and overrides other Federal laws 
to enable LHMAs to obtain information on the criminal records 
of applicants for, and residents of, public housing for the 
purpose of applicant screening, lease enforcement, and 
eviction. However, access to criminal records for persons under 
the age of eighteen is prohibited. In addition, another 
valuable Federal data base--the National Crime Information 
Center (NCIC)--may be accessed by LHMAs. LHMAs are authorized 
to pay a reasonable fee for this information.
    Current regulations (24 CFR Part 860) direct PHAs to avoid 
admitting families that have the potential to damage the social 
or financial stability of developments. Police departments are 
specifically cited in the regulations as sources of information 
PHAs may contact. Similarly, in 24 CFR Part 966, PHAs are 
directed to have lease provisions that make criminal activity 
grounds for eviction.
    The Department has advised the Committee that these 
requirements are difficult to carry out. The problem is that in 
some localities the police departments are either uncooperative 
or are barred by State law and local ordinances from providing 
criminal records. In the State of California, for example, the 
only persons with access to police records are police 
departments and then only for law enforcement purposes.
    The Committee is also mindful of the need to protect 
residents and applicants from the unfair actions of LHMAs; 
therefore, provisions pertaining to confidentiality, penalties, 
and civil action against the administering agency are included. 
Importantly, the provision also ensures the confidentiality of 
the identity of victims of domestic violence who reside in 
public housing.
            Operation Safe Home
    The Committee commends HUD and the Office of Inspector 
General (OIG) for the success of the Operation Safe Home 
Program in combating violent crime in public and assisted 
housing. Section 274(b) authorizes an annual appropriation of 
$700,000 for fiscal years 1996-2000 for assistance in 
relocating residents of public housing who have witnessed 
violent criminal activity and fear reprisals from criminals as 
a result of their testimony or other assistance they provided 
to law enforcement officials. Witness relocation is but one 
aspect of the Operation Safe Home Program.
    The Operation Safe Home strategy for combating crime in 
public and assisted housing entails: collaboration by the OIG 
and federal, state, and local law enforcement agencies in law 
enforcement efforts targeted at public and assisted housing; 
collaboration among the OIG, law enforcement agencies, public/
assisted housing managers, and public/assisted housing 
residents in devising methods to prevent violent crime; and HUD 
programmatic initiatives specifically geared to prevent violent 
crime in public and assisted housing.
    Under the aegis of Operation Safe Home, OIG Special Agents 
were assigned to 129 law enforcement task forces working in 
operation in public housing throughout the country as of 
September 30, 1995. Operation Safe Home was a catalyst for 
formation of 99 of the 129 task forces.
    Since the inception of Operation Safe Home in February 
1994, task force operations have resulted in 6,826 persons 
arrested for crimes involving drugs and weapons, as well as 
confiscation of 558 weapons (including 100 assault weapons and 
shotguns), $1,620,1580 in cash, and drugs having an estimated 
street value of at least $2,854,172. Additionally, over 730 
search warrants have been served.
    The HUD OIG currently coordinates a witness relocation 
program in conjunction with efforts to curb crime in public and 
assisted housing. HUD OIG has been instrumental in relocating 
168 witnesses/families who were residents of public housing or 
eligible applicants and feared reprisals from criminals as a 
result of their testimony or other assistance they provided to 
law enforcement officials. Over 100 of those families were 
relocated during the fiscal year ending September 30, 1995.
    HUD's witness relocation effort is distinct from any 
witness ``protection'' activity administered by the U.S. 
Marshal Service. The program is limited to relocating the 
witness-family from the public housing in which they were 
threatened to other, suitable HUD supported housing. Any 
physical protection of the witness remains the responsibility 
of the primary federal, state or local law enforcement agency 
investigating the case. Lastly, OIG personnel have worked with 
local HUD program staff and local housing staffs to improve the 
safety and security of persons living in public and assisted 
housing.
    Finally, the Committee bill also makes amendments to the 
Public and Assisted Housing Drug Elimination Act of 1990 by 
authorizing for FY 96 the Community Partnerships Against Crime 
Act of 1995. The Committee intends that this authorization is 
transitional allowing sufficient time for these activities to 
be integrated into the public housing block grant. The 
Committee believes that the Department, LHMAs, and assisted 
housing managers utilize the experiences from the Operation 
Safe Home Program in combating violent crime in public and 
assisted housing.

J. More Efficient Rental Assistance Program (Section 8)

            Encouraging the Private Sector To Enter the Program
    The Section 8 certificate and voucher programs are 
generally regarded as successful. A recent study \13\ conducted 
by Abt Associates for HUD concluded that 87 percent of sampled 
enrollees found housing with their Section 8 assistance. 
Despite this success, however, the program has been criticized 
for rules that unnecessarily discourage housing owners from 
participating. For example, the following facts are taken from 
a report \14\ prepared by Abt Associates for the National Multi 
Housing Council/National Apartment Association:
    \13\ Section 8 Rental Voucher and Rental Certificate Utilization 
Study: Final Report, Prepared by Abt Associates, Inc. for HUD (Oct. 
1994).
    \14\ Final Report on Recommendations on Ways to Make the Section 8 
Program More Acceptable in the Private Rental Market, Report prepared 
by Abt Associates, Inc., for the National Multi Housing Council/
National Apartment Association (March 1994).
---------------------------------------------------------------------------
          Under the ``take one, take all'' provision, owners 
        that accepted one assisted household could not refuse 
        to rent to other tenants solely because they received 
        Section 8 assistance.
          The portion of the security deposit paid by the 
        assisted family was one month's contribution toward 
        rent (30% of adjusted income) which created little 
        incentive on the part of the renter to maintain the 
        unit.\15\ In addition, cumbersome procedures for the 
        reimbursement of damages to the unit sometimes required 
        owners to hold the unit vacant for extended periods of 
        time, causing further loss of rental income.
    \15\ Under Section 8 Conforming Rule of Summer 1995, HUD now allows 
security deposits to be collected in conformance with local practice.
---------------------------------------------------------------------------
          Owners could not get rid of troublesome tenants by 
        refusing to renew their leases--an otherwise common 
        practice in the private market. Rather, owners had to 
        go through time-consuming eviction procedures.
    Accordingly, the Committee bill changes the program in 
response to the findings of the Abt Associates report:
          The ``take one, take-all'' provision is repealed.
          Section 324 requires that leases be set forth in 
        standard terms which are typically used in the local 
        housing market area by the owner and apply generally to 
        tenants who are not assisted through the Section 8 
        program.
          The ``endless'' lease provision is eliminated.
    The Committee believes that these and other revisions 
contained in H.R. 2406 will eliminate some of the most 
egregious conditions that have caused owner dissatisfaction 
with choice-based housing, while retaining needed tenant 
projection. Furthermore, these changes will encourage other 
apartment owners to participate in the program, thereby 
expanding the universe of affordable housing for low-income 
families.
            Eliminating Over-regulation
    In addition to the changes discussed above, H.R. 2406 
contains other provisions to reduce over-regulation. For 
example, the Committee's bill eliminates the requirement that 
participating housing owners notify the local housing authority 
90 days before terminating the lease of an assisted family.
    The bill also streamlines inspection procedures. Under 
current program rules, before a low-income family with Section 
8 assistance can occupy subsidized housing, the unit must be 
inspected by the local PHA to determine that it meets HUD's 
housing quality standards. If repairs are needed, the PHA must 
reinspect the unit. These inspections take time and penalize 
the low-income family and the housing owner. Under the 
Committee's bill, if the LHMA agency does not inspect the unit 
within 7 days of a request by the assisted family or the owner, 
the unit shall be considered an eligible unit and the assisted 
family may occupy a unit needing repairs before any such 
repairs are made if the owner agrees to make such repairs 
within 15 days.
    Finally, the Committee's bill merges the current 
certificate and housing voucher programs into one choice-based 
housing program. Under current law, assisted households are 
treated differently depending on the form of assistance they 
receive, and housing owners are subject to different 
requirements for two families if one family has a certificate 
and the other has a housing voucher. These differences are 
eliminated by merging the two programs. Although HUD has 
already acted to conform the requirements of the two programs 
in its July 1995 rulemaking when the differences are not 
required by statute, the provisions in the Committee bill are 
necessary to complete the reform. Previous attempts to merge 
the certificate and voucher program have enjoyed the universal 
support by this Committee, interest groups representing owners 
and housing agencies, HUD, and GAO.
            Choice, Portability, and Low-income Concentration
    Portability enables Section 8 recipients to seek housing 
wherever they wish without regard to political jurisdictional 
boundaries or PHA boundaries thereby promoting wider housing 
choice. At the same time, however, the Committee is aware of 
the bookkeeping and the administrative burdens that are the 
result of portability.
    Under current law, PHAs that lose Section 8 renters to 
another jurisdiction may have to make assistance payments to 
support that family in another jurisdiction if the receiving 
PHA chooses not to absorb the family into its own program. If 
the family has moved to a higher rent area, the initial PHAs 
must make up the difference in the rental cost at the expense 
of its own program. In addition, this billing arrangement 
generates a billing and accounting paperwork burden for both 
the losing and the receiving PHA.
    Because of reported abuses, in 1992 Congress enacted 
legislation that somewhat limits portability of assistance. At 
that time, it was reported that families were ``wait-list 
shopping;'' that is, getting on waiting lists for Section 8 
assistance in areas with short or no waiting lists and 
obtaining certificates or vouchers from a local PHA with no 
intention of living in the PHA's jurisdiction. After receiving 
assistance, the families immediately leased units in some other 
area, such as one with a long Section 8 losing PHAs and created 
unneeded administrative burdens for both the losing and the 
receiving PHAs.
    The Committee's bill provides flexibility for losing and 
gaining LHMAs to deal with port ability issues. In this regard, 
the bill allows LHMAs to assist previously-assisted families 
moving into their jurisdiction. If a wait-listed family (1) 
moves to a jurisdiction in which the authority has an open 
waiting list for choice-based housing, such family is to be 
placed in the position it would have been placed on the date it 
was placed on the original jurisdiction's waiting list or (2) 
moves to a jurisdiction in which the authority has a closed 
waiting list, the family is to be placed at the end of the 
waiting list unless the family moved because of verifiable 
employment opportunity (in which case the family will be placed 
on the waiting list as in (1) above).
    LHMAs may deny assistance to an eligible family that has 
moved from another authority's jurisdiction and whose 
eligibility was terminated by the other jurisdiction because of 
lease violations. The authority may also set policies to 
prohibit residents whose tenancy has been terminated for 
serious violations from attaining continued housing assistance. 
Confidentiality has been provided for victims of domestic 
violence.
            Portability May Not Promote Housing Choice
    The Section 8 certificate and voucher programs were enacted 
under the premise that assisted households would be able to 
obtain housing of their choice that met HUD's rent and quality 
standards. It was hoped that families would not, as is too 
often the case in public housing, be warehoused in 
deteriorating developments at risk for their lives and with 
little hope for the future. Rather, certificates and vouches 
were seen as a means for families to select safe housing, 
located in neighborhoods that provided positive role models, 
and allow increased access to jobs, education, and services.
    There is increasing concern, however, that ``Section 8 
submarkets'' are being created.\16\ That is, by the programs' 
very design, assisted households are herded into poorer areas. 
This situation may occur because, as a general rule, a Section 
8 assistance has been limited to housing that rents at a level 
in which 45 percent of an area's rental housing could be 
obtained. The problem may be exacerbated by the recent 
reduction of the fair market rent standard to the 40th 
percentile, effective October 1, 1995.
    \16\ See the previously-cited reports on (1) voucher and 
certificate utilization and (2) making the Section 8 program more 
acceptable in the private rental market, as well as another HUD report 
entitled Promoting Housing Choice in HUD's Rental Assistance Programs: 
A Report to Congress (Apr. 1995).
---------------------------------------------------------------------------
    For example, HUD's June 1995 study cited above reported 
that:

        . . . families receiving certificates and vouchers 
        obtain housing in areas that are generally less poor 
        and less segregated than the neighborhoods surround 
        conventional public housing projects. This finding, 
        offers the first quantitative evidence that, even in 
        the absence of directed counseling, HUD rental 
        assistance yields a lower concentration of urban 
        poverty than project-based forms of assistance.
          Nonetheless, the local outcomes of recipients mirror 
        the broad pattern of isolation experienced by many low-
        income and minority households in the private rental 
        market. Despite the expanded housing choice options 
        that their enhanced purchasing power would seem to 
        offer, many Section 8 families continue to live in 
        relatively segregated and economically distressed 
        neighborhoods.

    H.R. 2406 addresses this issue in two ways. First, Section 
353 of the bill provides that each LHMA establish a payment 
standard for Section 8 assistance that is between 80 percent 
and 120 percent of the ``rental indicator'' established by 
HUD\17\ (under Section 323) for the local market area. This 
provision allows the LHMA sufficient flexibility to establish a 
payment standard that reflects local conditions and is more 
conducive to providing adequate housing choice.
    \17\ Rental indicators established under H.R. 2406 take the place 
of the current system of HUD-established ``fair market rents.''
---------------------------------------------------------------------------
    Second, Section 373 of the bill requires the Secretary to 
conduct a study of the geographic areas in the State of 
Illinois served by the Housing Authority of Cook County and the 
Chicago Housing Authority. The purpose of the study is to 
address and resolve issues on the adverse impact on local 
communities due to the geographic concentration of assisted 
households and ways to deconcentrate assisted households by 
providing broader housing choice. This report must be completed 
not later than 90 days after the enactment of the Act.
    Likewise, the Committee is considering whether to have the 
GAO conduct a complementary, but longer-term study in different 
geographic areas. This study might take into account the 
Secretary's findings and any legislative or Departmental 
actions taken as a result of this study.
            Administrative Fees for Choice-based Rental Housing
    Since 1975, Congress has provided funds to HUD to reimburse 
PHAs for costs incurred administering the Section 8 tenant 
based rental housing assistance programs. This fee is made up 
of several components: (1) a one-time fee (up to $275) to cover 
the preliminary-expenses involved getting an assisted household 
into the Section 8 program (for example, to reimburse the PHA 
for costs incurred in taking applications, rent reasonableness 
negotiations with the housing owner, complaint handling, income 
recertifi- cation and unit inspections), (2) ongoing fees to 
cover costs over time (averaging about 7.6% of the fair market 
rent (FMR) for a two-bedroom unit), and (3) for other purposes, 
such as for the costs to help families that experience 
difficulty in renting appropriate housing, costs to coordinate 
services for elderly and disabled families, costs for audits, 
and costs for extraordinary costs, as determined necessary by 
HUD.
    The second component of the fee is by far the most 
significant for PHAs because of its linkage to the FMR and 
because the other two components of the fee are one-time 
payments. According to a recent HUD report in 1993, the average 
ongoing reimbursement (excluding the preliminary and certain 
other fees) equalled roughly $44 per unit per month of 
assistance, with a total national cost of $659 million per 
year.\18\
    \18\ Office of Policy Development and Research, HUD, Section 8 
Administrative Fees: A Report to Congress (June 1994).
---------------------------------------------------------------------------
    There are significant problems associated with setting 
administrative fees. PHA characteristics, which are different 
for each PHA, affect cost markedly which may lead to some PHAs 
being overcompensated and some undercompensated. For example, 
the number of certificates and vouchers administered by PHAs 
range from a handful to upwards of tens of thousands. Also some 
PHAs serve a single city or county while others serve a multi-
country or state-wide area. All these factors affect the level 
of expenses. Determining what constitutes a reasonable payment 
to the 2,600 PHAs that administer these programs and developing 
a fee schedule that fairly compensates all of them is an almost 
impossible task.
    As a first step towards making this determination, Section 
305 changes the fee schedule, setting the administrative fee 
for LHMAs at 6.5% of the base amount using FY 1993 and 1994 
FMRs for the first 600 units (for 2-bedroom units), and 6.0% of 
the base amount for all units in excess of 600. After 1996, the 
Secretary is required to establish a fee that reflects changes 
in wage data or other objectively measurable data that reflects 
costs of administering the choice-based rental housing 
assistance program. The Secretary may increase this fee to 
reflect higher costs of administering small programs and 
programs operating over larger geographic areas. The Committee 
bill also provides for an administrative fee for (1) the costs 
of assisting families that have difficulty in finding 
appropriate housing, (2) in certain circumstances, a one-time 
$500 preliminary fee, and (3) amounts to cover extraordinary 
costs as determined by the Secretary.

K. Designing Better Indicators of Market Rents

    Rental assistance provided to qualified households is 
currently limited by fair market rents (FMR) which are nothing 
more than statistically-determined indicators of appropriate, 
affordable rent levels for the are. HUD establishes FMRs on an 
annual basis for different housing market areas by type and 
size of dwelling units. HUD relies on metropolitan statistical 
areas and primary metropolitan statistical areas established by 
the Office of Management and Budget as the housing market on 
which to base FMRs because of the close correspondence that has 
typically existed between these areas and housing market areas. 
The composition of a single jurisdiction can range from a 
single community to numerous counties spread over several 
states.
    In general, the FMR for an area is the amount needed to pay 
the gross rent (shelter plus utilities) for modest, decent, 
safe, and sanitary housing. In setting the FMRs, HUD tries to 
strike a balance between permitting the assisted households a 
wide selection of units and neighborhoods, and serving as many 
households as possible. Specifically, beginning in fiscal year 
1996, FMRs are set at the 40th percentile of a defined housing 
market area's rental housing; that is, the level at which about 
40 percent of a market area's rental housing can be obtained. 
HUD establishes FMRs annually for about 2,700 market areas--
over 350 metropolitan areas and nearly 2,400 nonmetropolitan 
counties. Most recipients of Federally assisted housing reside 
in metropolitan areas.
            Problems With Rent Setting Standards
    Despite its best efforts, HUD's FMRs do not always 
accurately reflect true market rents for certain areas and 
submarkets within broadly defined areas. In fact, the 
description most often made of FMRs is that they are neither 
fair nor market. Therefore, H.R. 2406 has changed the name of 
FMRs to ``rental indicators'' in an attempt to reflect their 
actual purpose. When FMRs are inaccurate--a significant problem 
in the past--subsidies may be too high for prevailing rents in 
some submarkets and too low in others.\19\
    \19\ In 1993, over 1,200 market areas appealed HUD's FMRs with the 
result that more than 600 communities had FMRs adjusted upward to 
accurately reflect the local market rents.
---------------------------------------------------------------------------
    As a first step towards making this determination, Section 
305 changes the fee schedule, setting the administrative fee 
for LHMAs at 6.5% of the base amount using FY 1993 and 1994 
FMRs for the first 600 units (for 2-bedroom units), and 6.0% of 
the base amount for all units in excess of 600. After 1996, the 
Secretary is required to establish a fee that reflects changes 
in wage data or other objectively measurable data that reflects 
costs of administering the choice-based rental housing 
assistance program. The Secretary may increase this fee to 
reflect higher costs of administering small programs and 
programs operating over larger geographic areas. The Committee 
bill also provides for an administrative fee for (1) the costs 
of assisting families that have difficulty in finding 
appropriate housing, (2) in certain circumstances, a one-time 
$500 preliminary fee, and (3) amounts to cover extraordinary 
costs as determined by the Secretary.

K. Designing Better Indicators of Market Rents

    Rental assistance provided to qualified households is 
currently limited by fair market rents (FMR) which are nothing 
more than statistically-determined indicators of appropriate, 
affordable rent levels for the area. HUD establishes FMRs on an 
annual basis for different housing market areas by type and 
size of dwelling units. HUD relies on metropolitan statistical 
areas and primary metropolitan statistical areas established by 
the Office of Management and Budget as the housing market on 
which to base FMRs because of the close correspondence that has 
typically existed between these areas and housing market areas. 
The composition of a single jurisdiction can range from a 
single community to numerous counties spread over several 
states.
    In general, the FMR for an area is the amount needed to pay 
the gross rent (shelter plus utilities) for modest, decent, 
safe, and sanitary housing. In setting the FMRs, HUD tries to 
strike a balance between permitting the assisted households a 
wide selection of units and neighborhoods, and serving as many 
households as possible. Specifically, beginning in fiscal year 
1996, FMRs are set at the 40th percentile of a defined housing 
market area's rental housing; that is, the level at which about 
40 percent of a market area's rental housing can be obtained. 
HUD establishes FMRs annually for about 2,700 market areas--
over 350 metropolitan areas and nearly 2,400 nonmetropolitan 
counties. Most recipients of Federally assisted housing reside 
in metropolitan areas.
            Problems With Rent Setting Standards
    Despite its best efforts, HUD's FMRs do not always 
accurately reflect true market rents for certain areas and 
submarkets within broadly defined areas. In fact, the 
description most often made of FMRs is that they are neither 
fair nor market. Therefore, H.R. 2406 has changed the name of 
FMRs to ``rental indicators'' in an attempt to reflect their 
actual purpose. When FMRs are inaccurate--a significant problem 
in the past--subsidies may be too high for prevailing rents in 
some submarkets and too low in others.\19\
    \19\ In 1993, over 1,200 market areas appealed HUD's FMRs with the 
result that more than 600 communities had FMRs adjusted upward to 
accurately reflect the local market rents.
---------------------------------------------------------------------------
    For example, in areas where either situation exists, a 
metropolitan area-wide FMR makes less than 40 percent of the 
housing stock available to assisted households in more 
expensive submarkets. Conversely, in areas with rents that are 
below the metropolitan area-wide FMR, assisted households have 
access to more than 40 percent of the available housing stock 
in that area. In addition, areas where rents are high and the 
subsidy is low, assisted families become concentrated in areas 
that are at the lower end of the market--a situation that has 
occurred in the past and is inconsistent with the statutory 
objective of mobility and full access to the market.
    Further, within any market area, rents vary because of the 
units' age, quality of construction and maintenance, location, 
and differences in amenities. Unless, and perhaps even if, an 
area were defined as a few square blocks, rent variations would 
remain and could be significant. Finally, establishing an FMR 
for smaller areas could be too time-consuming and costly for 
HUD. GAO recently estimated that the cost of collecting 
additional data to establish an FMR for an individual public 
housing agency's jurisdiction could range from $5 million to 
more than $750 million a year, depending on the level of 
accuracy and reliability desired.\20\
    \20\ Rental Housing: Use of Smaller Market Areas to Set Rent 
Subsidy Levels Has Drawbacks (GAO/RCED-94-122, June 24, 1994).
---------------------------------------------------------------------------
            Establishing Variable Payment Standards
    Under the Committee's bill, HUD is responsible for 
establishing rental indicators that account for the various 
sizes and types of dwelling units within a given housing market 
area. LHMAs may establish payment standards for their locality 
between 80 to 120 percent of the rental indicator. This 
flexibility enables local authorities to set rent ranges that 
are based on factors like a unit's age, location, amenities, 
quality of construction and maintenance, and the provision of 
local public services, such as employment opportunities and 
transportation--detailed information that HUD does not have 
access to when establishing the FMR.
    Authorities with apartments located in a suburban or rural 
area may assign a lower payment standard if the comparable 
rents in the area are below the housing market area's rental 
indicator. Conversely, the authorities are able to set the 
payment standard above the rental indicator to meet the rental 
costs of a high rent market.

L. Other General Provisions

            Pet Ownership
    The Committee bill continues to recognize the benefits that 
pet ownership provides individuals and families and which has 
been substantiated by scientific studies. Local housing 
management authorities and property owners are encouraged, but 
not required, to provide guidelines for pet ownership for all 
residents of federally assisted housing. Authorities should use 
discretion to determine if ownership of particular pets in a 
facility would have a deleterious effect on the property or on 
other residents that cannot be remedied by reasonable means. 
Local housing management authorities or property managers may 
look to federal regulations governing pet ownership in housing 
for the elderly or disabled (24 CFR 243).
    If pets are permitted, property managers may charge a 
nominal monthly fee (suggested not to exceed $10) to residents 
keeping pets, as well as a deposit. Any deposit should be kept 
in an interest bearing escrow account by the local housing and 
management authority or the property manager. Deposit moneys 
only should be used to pay for the reasonable and extraordinary 
expenses related to the resident/depositor's pet. Remaining 
deposit money should be returned to the resident/depositor in a 
timely fashion once the resident/depositor has vacated the 
facility or no longer owns a pet. Local housing and management 
authorities and property managers are encouraged to consider 
the regulations and guidelines for pets in 24 CFR 243.20.
            Review of Drug Elimination Program Contracts
    Section 502(d) requires the Secretary to investigate all 
security contracts of PHAs owning and operating more than 4,500 
units and that were awarded by grantees under the Public and 
Assisted Housing Drug Elimination Act of 1990. In particular, 
the Committee is concerned with security firms affiliated with 
the Nation of Islam which have received over $20 million in 
contracts awarded by HUD. Members of this Committee are 
concerned about allegations that such firms have benefitted 
from flagrant violations of procurement procedures, engaged in 
anti-discriminatory hiring practices, and permitted their 
employees to proselytize while on duty. In spite of requests 
from Members of this Committee to the Secretary for details on 
these contracts, and of possible non-compliance with Federal 
hiring and employment requirements by some firs, HUD has failed 
to provide this information.
    In an effort to obtain information about the contractual 
relationship between Nation of Islam affiliated firms and HUD, 
the House Banking Subcommittee on General Oversight and 
Investigations held a hearing on March 2, 1995. In spite of 
HUD's repeated assurances that documents would be provided to 
the Subcommittee, HUD has failed to secure for the Subcommittee 
documentation of the hiring practices of such firms.
    The failure of HUD to uphold its oversight and enforcement 
responsibilities of the security contracts of PHAs has 
compelled the Committee to act legislatively. As a result, the 
Committee bill calls for HUD to provide a thorough accounting 
of its contractual relationship with companies, and a 
requirement that HUD either bring existing public housing 
security contracts into full compliance with appropriate 
requirements, or terminate them.
            Effect of Repeal of USHA of 1937 on PHA Payment of 
                    Outstanding Debt and Existing Contracts
    Despite the repeal of the USHA of 1937, the Committee 
realizes that the financial records of numerous LHMAs continue 
to reflect debt that is held by the Secretary, generally in the 
form of Advance Notes. The Committee does not intend that such 
debt obstruct the ability of LHMAs to seek other forms of 
financial assistance from private market sources. Therefore, 
the Secretary is encouraged to continue to forgive this debt as 
it comes due.
    Furthermore, the legislation should not affect the 
continuing obligation of the federal government to make annual 
contributions, in amounts not exceeding the sum LHMAs annually 
require to pay principal and interest on obligations incurred 
under the USHA of 1937, and issued with the full faith and 
credit of the United States. Individuals and institutions 
holding such instruments should reasonably expect that the 
United States will continue to honor its obligations.
    Section 501(b) makes clear that repealing the USHA of 1937 
does not affect any legally binding obligation entered into 
under such laws, and that any provision of law repealed by the 
new Act shall continue to govern funds or activities subject to 
the Act.

                                Hearings

    The Subcommittee on Housing and Community Opportunity held 
three hearings on the ``United States Housing Act of 1996.''
    The first hearing was held on September 29, 1995. 
Testifying before the Subcommittee were: Mr. John Hiscox, 
Executive Director of the Macon Housing Authority on behalf of 
the Public Housing Authorities Directors Association; Mr. 
Robert Armstrong, Executive Director of the Omaha Housing 
Authority on behalf of the National Association of Housing and 
Redevelopment Officials; Mr. Gregory Byrne, Executive Director 
of the Dade County Department of Housing and Urban Development 
on behalf of the Council of Large Public Housing Authorities; 
Ms. Bertha Gilkey, public housing resident and President of 
Cochran Resident Management Corporation; Ms. Christine Oliver, 
President and CEO of Chicago Dwellings Association on behalf of 
the National Housing Conference; and Ms. Jackie Johnson, 
Chairperson of the National American Indian Housing Council.
    The second hearing was held in Chicago, Illinois on October 
5, 1995. Testifying before the Subcommittee were: Mr. Arthur 
Agee Jr., public housing resident and subject of the award-
winning documentary film ``Hoop Dreams''; Ms. Susan Gaffney, 
Inspector General of the Department of Housing and Urban 
Development; Mr. Harold Lucas, Executive Director of the Newark 
Housing Authority; Ms. Rosanna Marquez, Director of Programs 
for the Mayor of Chicago; Mr. Ambrosio Mendrano, Alderman, 
Chairman of the Committee on Housing and Real Estate for the 
city of Chicago; and Mr. Joseph Shuldiner, Acting Chairman, 
Chicago Housing Authority Board of Commissioners and Assistant 
Secretary for Public and Indian Housing, Department of Housing 
and Urban Development.
    The third hearing was held on October 13, 1995. Testifying 
before the Subcommittee were: Mr. Lawrence Simons, former 
Assistant Secretary for Housing and Federal Housing 
Administration Commissioner, Department of Housing and Urban 
Development; Mr. Paul Graziano, President of the National 
Leased Housing Association and General Manager of the New York 
Housing Authority; Ms. Christina Garcia, Vice President of the 
Wildwood Management Group on behalf of the National Apartment 
Association and National Multi-Housing Council; Mr. Charles 
DiMaggio, Vice President of the Grenadier Realty Corporation on 
behalf of the National Assisted Housing Management Association 
and the Apartment and Building Owners of Greater New York; Mr. 
Charles Wilkins, senior Vice President of the National 
Corporation for Housing Partnerships; Ms. Judy England-Joseph, 
Director for Housing and Community Development Issues, General 
Accounting Office; Ms. Susan Gaffney; Inspector General of the 
Department of Housing and Urban Development; and the Honorable 
Henry Cisneros, Secretary of the Department of Housing and 
Urban Development accompanied by Mr. Kevin Marchman, Acting 
Assistant Secretary Designee for Public and Indian Housing of 
the Department of Housing and Urban Development.
    Additionally, the Subcommittee and the Committee on Banking 
and Financial Services held three hearings of related interest 
to the United States Housing Act of 1995. The Subcommittee 
staff also held a symposium on public housing reform on April 
11, 1995.
    The Subcommittee held a hearing on ``HUD'' Reinvention: 
From Blueprint to Action'' on April 6, 1995. Testifying before 
the Subcommittee were: the Honorable Henry Cisneros, Secretary 
of the Department of Housing Urban Development; Mr. Jeffrey 
Eisenach, Ph.D., President of the Progress and Freedom 
Foundation; Mr. Ronald Utt, Ph.D., Visiting Fellow with the 
Heritage Foundation; and Mr. Marvin Siflinger, former Executive 
Director of the Massachusetts Housing Finance Agency and former 
Board of Directors President of the National Council of State 
Housing Agencies.
    The Subcommittee held a hearing on ``HUD's Takeover of the 
Chicago Housing Authority'' on June 7, 1995. Testifying before 
the Subcommittee were: the Honorable Henry Cisneros, Secretary 
of the Department of Housing and Urban Development; the 
Honorable Joseph Shuldiner, Assistant Secretary for Public and 
Indian Housing, Department of Housing and Urban Development; 
Ms. Susan Gaffney, Inspector General, Department of Housing and 
Urban Development; Ms. Judy England-Joseph, Director of Housing 
and Community Development Issues, General Accounting Office; 
and Mr. Jeffrey Lines, President of TAG Associates, 
Incorporated and Receiver of the Kansas Housing Authority.
    The Committee on Banking and Financial Services held a 
hearing on the ``Senior Citizens Housing Safety and Economic 
Relief Act of 1995'' on October 12, 1995. Testifying before the 
Committee were: the Honorable Peter Blute; the Honorable 
Michael Patrick Flanagan; the Honorable James Moran; the 
Honorable Ray LaHood; Mr. John Mather, Chairman of the 
Legislative Council, Massachusetts chapter of the National 
Association of Housing Redevelopment Officials; Ms. Anneliessa 
Belcufino, a senior citizen public housing resident; and Ms. 
Marion Johnson, a social worker for Elder Home Care, Worcester, 
Massachusetts.

     Committee Consideration and Votes (rule xi, clause 2(l)(2)(b))

    The Committee met in open session to markup H.R. 2406, the 
``United States Housing Act of 1996'' on November 2, 8, and 9, 
1995. The Committee considered, as original text for purposes 
of amendments a Committee Print which incorporated the 
provisions of H.R. 2406 introduced by Mr. Lazio.
    During the markup, the Committee approved 31 amendments 
including a managers amendment by voice vote. The Committee 
also defeated one amendment by voice vote. Seven amendments 
were withdrawn, three on the promise to work towards 
incorporating acceptable language in a floor amendment. The 
Committee approved, by recorded vote, one amendment to the 
Committee Print. The Committee also defeated, by recorded vote, 
10 amendments. Pursuant to the provisions of clause 2(1)(2)(b) 
of rule XI of the House of Representatives, the results of each 
roll call vote and the motion to report, together with the 
names of those voting for and those voting against, are printed 
below:

                           rollcall number: 1

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Gutierrez.
    Description of motion: To amend the definition of ``low-
income family'' to mean a family whose income does not exceed 
60% of the area median income, and provides LHMAs the ability 
with HUD's approval to increase the threshold to 80%.
    Results: Rejected 12-25.

        Members voting yea            Members voting nay
Mr. Gonzalez                        Mr. Leach
Mr. Vento                           Mr. McCollum
Mr. Frank                           Mrs. Roukema
Ms. Waters                          Mr. Baker
Mr. Orton                           Mr. Lazio
Mr. Sanders                         Mr. Bachus
Mr. Gutierrez                       Mr. Castle
Ms. Roybal-Allard                   Mr. King
Mr. Barrett                         Mr. Royce
Ms. Velazquez                       Mr. Lucas
Mr. Watt                            Mr. Weller
Mr. Bentsen                         Mr. Hayworth
                                    Mr. Metcalf
                                    Mr. Bono
                                    Mr. Ney
                                    Mr. Ehrlich
                                    Mr. Chrysler
                                    Mr. Cremeans
                                    Mr. Fox
                                    Mr. Heineman
                                    Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly
                                    Mr. Ackerman

                           rollcall number: 2

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Watt.
    Description of motion: To provide LHMAs the option of 
imposing a public service requirement.
    Results: Rejected 16-20.

        Members voting yea            Members voting nay
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mr. McCollum
Mr. Vento                           Mr. Roth
Mr. Frank                           Mr. Baker
Mr. Kennedy                         Mr. Lazio
Mr. Flake                           Mr. Bachus
Mr. Waters                          Mr. Royce
Mr. Sanders                         Mr. Weller
Mr. Gutierrez                       Mr. Hayworth
Ms. Roybal-Allard                   Mr. Bono
Mr. Barrett                         Mr. Ney
Ms. Velazquez                       Mr. Barr
Mr. Wynn                            Mr. Chrysler
Mr. Watt                            Mr. Cremeans
Mr. Hinchey                         Mr. Fox
Mr. Ackerman                        Mr. Heineman
                                    Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly

                           rollcall number: 3

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Ms. Velazquez.
    Description of motion: To provide for a resident appeal 
procedure of the LHMP.
    Results: Rejected 13-14.

        Members voting yea            Members voting nay
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mr. Baker
Mr. Frank                           Mr. Lazio
Mr. Flake                           Mr. Bachus
Mr. Orton                           Mr. Royce
Mr. Sanders                         Mr. Weller
Mrs. Maloney                        Mr. Barr
Mr. Gutierrez                       Mr. Chrysler
Ms. Roybal-Allard                   Mr. Cremeans
Mr. Barrett                         Mr. Fox
Ms. Velazquez                       Mr. Heineman
Mr. Watt                            Mr. Stockman
Mr. Hinchey                         Mr. LoBiondo
                                    Mrs. Kelly

                           rollcall number: 4

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Gutierrez.
    Description of motion: To require that wage requirement 
standards be applied to residents of public housing employed by 
the LHMA.
    Results: Rejected 15-22.

        Members voting yea            Members voting nay
Mr. Vento                           Mr. Leach
Mr. Frank                           Mr. McCollum
Mr. Kennedy                         Mrs. Roukema
Mr. Flake                           Mr. Roth
Mr. Mfume                           Mr. Baker
Ms. Waters                          Mr. Lazio
Mr. Orton                           Mr. Bachus
Mr. Sanders                         Mr. Castle
Mr. Gutierrez                       Mr. King
Ms. Roybal-Allard                   Mr. Royce
Mr. Barrett                         Mr. Weller
Mr. Wynn                            Mr. Hayworth
Mr. Watt                            Mr. Metcalf
Mr. Ackerman                        Mr. Bono
Mr. Bentsen                         Mr. Ney
                                    Mr. Barr
                                    Mr. Chrysler
                                    Mr. Heineman
                                    Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly

                           rollcall number: 5

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Frank and Mr. Gutierrez.
    Description of motion: To provide that the amount paid by a 
family in a public or assisted housing unit shall not exceed 
30% of the family's adjusted monthly income. Families in 
assisted housing units are required to contribute 30% of the 
family's adjusted monthly income or a minimum monthly rent of 
$25, whichever is less.
    Results: Rejected 14-22.

        Members voting yea            Members voting nay
Mr. Vento                           Mr. McCollum
Mr. Schumer                         Mrs. Roukema
Mr. Frank                           Mr. Bereuter
Mr. Kennedy                         Mr. Roth
Mr. Flake                           Mr. Baker
Ms. Waters                          Mr. Lazio
Mr. Gutierrez                       Mr. King
Ms. Roybal-Allard                   Mr. Royce
Mr. Barrett                         Mr. Weller
Ms. Velazquez                       Mr. Metcalf
Mr. Wynn                            Mr. Bono
Mr. Watt                            Mr. Ney
Mr. Ackerman                        Mr. Ehrlich
Mr. Bentsen                         Mr. Barr
                                    Mr. Cremeans
                                    Mr. Fox
                                    Mr. Heineman
                                    Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly
                                    Mr. Orton

                           rollcall number: 6

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Ms. Waters.
    Description of motion: To provide applicants the 
opportunity to request an informal hearing if denied admission.
    Results: Adopted 29-7.

        Members voting yea            Members voting nay
Mrs. Roukema                        Mr. Baker
Mr. Bereuter                        Mr. Lazio
Mr. Castle                          Mr. King
Mr. Lucas                           Mr. Royce
Mr. Weller                          Mr. Bono
Mr. Metcalf                         Mr. Barr
Mr. Ney                             Mr. Cremeans
Mr. Ehrlich
Mr. Chrysler
Mr. Fox
Mr. Heineman
Mr. Stockman
Mr. LoBiondo
Mr. Watts
Mrs. Kelly
Mr. Vento
Mr. Kennedy
Mr. Flake
Ms. Waters
Mr. Orton
Mr. Sanders
Ms. Roybal-Allard
Mr. Barrett
Ms. Velazquez
Mr. Wynn
Mr. Watt
Mr. Hinchey
Mr. Ackerman
Mr. Bentsen

                           rollcall number: 7

    Date: November 8, 1995.
    Measure: The United Sates Housing Act of 1996.
    Motion by: Mr. Hinchey.
    Description of motion: To provide that no senior or 
disabled families in public or assisted housing pay more than 
30% of their adjusted monthly income towards rent.
    Results: Rejected 21-22.

        Members voting yea            Members voting nay
Mrs. Roukema                        Mr. Leach
Mr. Ney                             Mr. McCollum
Mr. Fox                             Mr. Bereuter
Mr. Heineman                        Mr. Roth
Mr. Vento                           Mr. Baker
Mr. Schumer                         Mr. Lazio
Mr. Frank                           Mr. Bachus
Mr. Kanjorski                       Mr. Castle
Mr. Kennedy                         Mr. Royce
Mr. Flake                           Mr. Weller
Ms. Waters                          Mr. Hayworth
Mr. Orton                           Mr. Metcalf
Mr. Sanders                         Mr. Bono
Mrs. Maloney                        Mr. Ehrlich
Ms. Roybal-Allard                   Mr. Barr
Mr. Barrett                         Mr. Chrysler
Ms. Velazquez                       Mr. Cremeans
Mr. Wynn                            Mr. Stockman
Mr. Watt                            Mr. LoBiondo
Mr. Hinchey                         Mr. Watts
Mr. Bentsen                         Mrs. Kelly
                                    Mr. Ackerman

                           rollcall number: 8

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Ms. Waters.
    Description of motion: To provide for an 18 month income 
disregard if a recipient's income increases.
    Results: Rejected 14-24.

        Members voting yea            Members voting nay
Mr. Frank                           Mr. Leach
Mr. Kanjorski                       Mrs. Roukema
Mr. Flake                           Mr. Bereuter
Mr. Mfume                           Mr. Roth
Ms. Waters                          Mr. Baker
Mr. Orton                           Mr. Lazio
Mr. Sanders                         Mr. Bachus
Mr. Gutierrez                       Mr. Castle
Ms. Roybal-Allard                   Mr. King
Ms. Velazquez                       Mr. Royce
Mr. Wynn                            Mr. Lucas
Mr. Watt                            Mr. Weller
Mr. Hinchey                         Mr. Hayworth
Mr. Bentsen                         Mr. Bono
                                    Mr. Barr
                                    Mr. Chrysler
                                    Mr. Cremeans
                                    Mr. Heineman
                                    Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly
                                    Mr. Vento
                                    Mr. Barrett

                           rollcall number: 9

    Date: November 8, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Watt.
    Description of motion: To extend the period for refinancing 
by resident organizations or resident management corporations 
to 120 days. Resident groups are allowed to purchase the 
property at a price enabling the group to continue operating 
the property as low-income housing.
    Results: Rejected 15-21.

        Members voting yea            Members voting nay
Mr. LaFalce                         Mr. Leach
Mr. Vento                           Mr. McCollum
Mr. Schumer                         Mrs. Roukema
Mr. Frank                           Mr. Bereuter
Mr. Kennedy                         Mr. Roth
Mr. Flake                           Mr. Baker
Ms. Waters                          Mr. Lazio
Mr. Sanders                         Mr. Bachus
Mr. Gutierrez                       Mr. Royce
Ms. Roybal-Allard                   Mr. Lucas
Mr. Barrett                         Mr. Weller
Ms. Velazquez                       Mr. Hayworth
Mr. Wynn                            Mr. Bono
Mr. Watt                            Mr. Ehrlich
Mr. Bentsen                         Mr. Barr
                                    Mr. Cremeans
                                    Mr. Heineman
                                    Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly

                          rollcall number: 10

    Date: November 9, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Kennedy.
    Description of motion: To restore targeting to choice-based 
housing.
    Results: Rejected 10-17.

        Members voting yea            Members voting nay
Mr. Vento                           Mr. Leach
Mr. Kennedy                         Mrs. Roukema
Mr. Flake                           Mr. Lazio
Ms. Waters                          Mr. Bachus
Mr. Orton                           Mr. Castle
Mr. Sanders                         Mr. King
Mr. Barrett                         Mr. Lucas
Mr. Wynn                            Mr. Weller
Mr. Watt                            Mr. Hayworth
Mr. Bentsen                         Mr. Metcalf
                                    Mr. Bono
                                    Mr. Ney
                                    Mr. Barr
                                    Mr. Fox
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly

                          rollcall number: 11

    Date: November 9, 1995.
    Measure: The United States Housing Act of 1996.
    Motion by: Mr. Vento.
    Description of motion: To strike CDBG sanctions for 
troubled LHMAs.
    Results: Rejected 19-25.

        Members voting yea            Members voting nay
Mr. Gonzalez                        Mr. Leach
Mr. LaFalce                         Mrs. Roukema
Mr. Vento                           Mr. Bereuter
Mr. Schumer                         Mr. Baker
Mr. Kennedy                         Mr. Lazio
Mr. Flake                           Mr. Bachus
Mr. Mfume                           Mr. Castle
Ms. Waters                          Mr. King
Mr. Sanders                         Mr. Royce
Mrs. Maloney                        Mr. Weller
Mr. Gutierrez                       Mr. Hayworth
Ms. Roybal-Allard                   Mr. Metcalf
Mr. Barrett                         Mr. Bono
Ms. Velazquez                       Mr. Ehrlich
Mr. Wynn                            Mr. Barr
Mr. Watt                            Mr. Chrysler
Mr. Hinchey                         Mr. Cremeans
Mr. Ackerman                        Mr. Heineman
Mr. Bentsen                         Mr. Stockman
                                    Mr. LoBiondo
                                    Mr. Watts
                                    Mrs. Kelly
                                    Mr. Frank
                                    Mr. Kanjorski
                                    Mr. Orton
    After the Committee Print was adopted as amended by voice 
vote, H.R. 2406 was called up for Committee consideration. A 
motion to strike everything after the enacting clause in H.R. 
2406 and insert in Lieu thereof the Committee Print as amended, 
was approved by voice vote.

    A motion to adopt H.R. 2406 and favorably report H.R. 2406 
as amended to the House and authorize the Chairman to make any 
technical or conforming amendments was approved 27-18 on 
November 9, 1995. Pursuant to a unanimous consent request, Mr. 
Ney and Mr. Fox asked that the record show that they were 
unavoidably detained on other official business during the vote 
on H.R. 2406. Had they been present, they would have voted to 
favorably support H.R. 2406.

        Members voting yea            Members voting nay
Mr. Leach                           Mr. Gonzalez
Mr. McCollum                        Mr. LaFalce
Mrs. Roukema                        Mr. Vento
Mr. Baker                           Mr. Frank
Mr. Lazio                           Mr. Kanjorski
Mr. Bachus                          Mr. Kennedy
Mr. Castle                          Mr. Flake
Mr. King                            Mr. Mfume
Mr. Royce                           Ms. Waters
Mr. Lucas                           Mr. Sanders
Mr. Weller                          Mrs. Maloney
Mr. Hayworth                        Mr. Gutierrez
Mr. Metcalf                         Ms. Roybal-Allard
Mr. Bono                            Mr. Barrett
Mr. Ehrlich                         Ms. Velazquez
Mr. Barr                            Mr. Wynn
Mr. Chrysler                        Mr. Wyatt
Mr. Cremeans                        Mr. Hinchey
Mr. Heineman
Mr. Stockman
Mr. LoBiondo
Mr. Watts
Mrs. Kelly
Mr. Schumer
Mr. Orton
Mr. Ackerman
Mr. Bentsen

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings and recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI and clause 4(c)(2) of rule X of 
the Rules of the House of Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of rule XI of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority for increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    The cost estimate pursuant to Clause 2(l)(3)(C) of rule XI, 
of the Rules of the House of Representatives and Section 403 of 
the Congressional Budget Act of 1974 has been requested, but 
had not been prepared as of the filing of Part I of this 
report. The estimate will be included in Part II of this report 
to be filed at a future date.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                    Congressional Accountability Act

    The reporting requirement under section 102(b)(3) of the 
Congressional Accountability Act (P.L. 104-1) is inapplicable 
because this legislation does not relate to terms and 
conditions of employment or access to public services or 
accommodations.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that H.R. 
2406 will have no significant inflationary impact on prices and 
costs in the national economy.

       Congressional Budget Office Federal Mandate Cost Estimate

    The cost estimate pursuant to Section 424 of the Unfunded 
Mandates Reform Act (P.L. 104-4) has been requested, but had 
not been prepared as of the filing of this report. The estimate 
will be filed at a future date.

                      Section-by-Section Analysis

Section 1--Short title and table of contents

    This Act may be cited as the ``United States Housing Act of 
1996.''

Section 2--Declaration of policy to renew American neighborhoods

    Declares that it is the policy of the federal government to 
promote the general welfare of the nation:
          (a) by applying federal resources to aid families and 
        individuals seeking affordable homes that are safe, 
        clean, and healthy, and in particular, assisting 
        responsible, deserving citizens who cannot provide 
        fully for themselves because of temporary circumstances 
        or factors beyond their control; and
          (b) by working to ensure a thriving national economy 
        and a strong private housing market; and
          (c) by developing effective partnerships among the 
        federal government, state and local governments, and 
        private entities that allow government to accept 
        responsibility for fostering the development of a 
        healthy marketplace, and allow families to prosper and 
        thrive without government involvement in their day-to-
        day activities.
    States that the federal government cannot through its 
direct action or involvement provide for the housing of every 
American citizen, or even a majority of its citizens, but it is 
the responsibility of government to promote and protect the 
independent and collective actions of private citizens to 
develop housing and strengthen their own neighborhoods.
    Provides that the government should act only where there is 
a serious need that private citizens or groups cannot or are 
not addressing responsibly; and merely providing physical 
structures to house the poor will not pull generations up from 
poverty, but housing is a component of bringing true 
opportunity to people and communities in need.

                      title i--general provisions

Section 101--Statement of purpose

    States that the purpose of the United States Housing Act of 
1995 is to provide affordable housing opportunities to low-
income families by:
          (1) deregulating and decontrolling public housing 
        agencies, which in this Act are referred to as ``local 
        housing and management authorities'' and asset 
        managers;
          (2) providing for more flexible use of Federal 
        assistance to local housing and management authorities, 
        allowing the authorities to leverage and combine 
        assistance amounts with amounts obtained from other 
        sources;
          (3) facilitating mixed income communities;
          (4) increasing accountability and rewarding effective 
        management of local housing and management authorities;
          (5) creating incentives for residents of dwelling 
        units assisted by local housing and management 
        authorities to work; and
          (6) recreating the existing rental assistance voucher 
        program so that the use of vouchers and relationships 
        between landlords and tenants under the program operate 
        in a manner that more closely resembles the private 
        housing market.

Section 102--Definitions

    Defines various terms for the purpose of this Act.

Section 103--Organizations of local housing and management authorities

    Defines ``local housing and management authority'' and 
``authority.'' Requires that the board of directors of a local 
housing and management authority must include at least one 
resident of public housing or one recipient of assistance under 
Title III. Exceptions are for LHMA's that: (1) governing 
bodies; (2) oversee fewer than 250 public housing dwelling 
units; (3) oversee public housing consisting primarily of 
scattered site public housing; (4) operate under State laws 
that explicitly preclude resident membership; or (5) have a 
salaried, full-time Board of Directors.

Section 104--Determination of adjusted income

    Defines ``adjusted income'' for purposes of this Act to 
mean the difference between the income of the members of the 
family residing in a dwelling unit or the person on a lease and 
the amount of any income exclusions--some of which are 
mandatory--for the family as determined by HUD. Mandatory 
exclusions are for: (1) elderly and disabled families; (2) 
reasonable medical expenses; (3) child care expenses; (4) 
minors residing in the household; and (5) certain child support 
payments. Discretionary exclusions include, but are not limited 
to, (1) dependents; (2) travel expenses; and (3) earned income.

Section 105--Limitation on admission of drug or alcohol abusers to 
        assisted housing

    Permits a local housing and management authority to 
prohibit certain individuals with a history of drug or alcohol 
abuse from admission to units where admission may interfere 
with the peaceful enjoyment of the premises by other residents.

Section 106--Community work and family self-sufficiency requirement

    Requires adult residents of public housing or residents 
receiving assistance under Title III, to contribute no less 
than 8 hours of work per month within the community in which 
the adult resides or participate on an ongoing basis in a 
program designed to promote economic self-sufficiency. 
Exceptions include working families, senior citizens, disabled 
families, persons attending school or vocational training, or 
physically impaired persons.

Section 107--Local Housing Management Plans

    Requires each local housing and management authority to 
submit to a local elected official or officials that appoint 
the authority and then to the Secretary an annual Local Housing 
Management Plan that describes the mission, goals, objectives, 
and policies of the authority with respect to meeting the 
housing needs of low-income families.
    The contents of the plan, which may be submitted as part of 
a comprehensive housing affordability strategy, also must 
include: a description of the authority's financial resources 
and how the resources will be used; the administrative, 
management, maintenance, capital improvement activities and 
capabilities of the authority; an estimate of the market rent 
value of each public housing unit; a statement describing the 
population that the authority serves, including the specific 
enumerated policies governing eligibility, admissions, and 
occupancy of families; a statement describing the rents the 
authority charges; a statement describing the authority's 
standards and policies relating to the maintenance and 
management of the housing owned, operated, or assisted, 
including specific enumerated issues; a statement describing 
the grievance procedures; a description of the planned capital 
improvements for properties owned or operated by the authority; 
a description of the properties to be demolished or otherwise 
disposed, including a timetable of such action; a description 
of the developments designated for elderly and disabled 
families, for conversion, a description of any homeownership 
programs, and a description of safety and crime prevention 
requirements.
    Each plan must include a 5-year plan that describes the 
mission, goals and objectives, and capital improvements 
envisioned by the LHMA.
    Each local housing and management authority must make its 
plan and any amendment thereto available to the public in a 
manner that affords affected public housing residents, assisted 
families, and other interested parties and opportunity to 
examine its content and to submit comments.
    Certain waivers from plan requirements are provided for 
housing and management authorities that operate less than 250 
public housing dwelling units or that only administer a rental 
assistance program under Title III.

Section 108--Review of plans

    Discusses the standards by which the Secretary may review 
Local Housing Management Plans, notice of approval or 
disapproval, treatment of existing plans, and authority of a 
local housing and management authority to amend plans.

Section 109--Pet ownership

    Authorizes Local Housing and Management Authorities and 
owners to establish policies under which recipients of 
assistance may own common household pets. Maintains the 
requirement that pets be permitted in senior-only and disabled 
persons-only housing.

Section 110--Administrative grievance procedure

    Requires the Secretary by regulation to require local 
housing and management authorities to establish a grievance 
procedure that provides due process for residents, except in 
certain circumstances.

Section 111--Headquarters reserve fund

    Authorizes the Secretary to retain 3% of funds appropriated 
under Title II and Title III for the purposes of providing 
assistance in the case of natural disasters, emergencies, 
settlement of litigation, or technical assistance, training, 
and electronic information systems.

Section 112--Labor standards

    Provides that grants or sales under the Act are subject to 
prevailing wages under Davis-Bacon, except for volunteers and 
residents employed by LHMAs.

Section 113--Nondiscrimination

    Requires local housing and management authorities and their 
contractors to comply with nondiscrimination and civil rights 
laws.

Section 114--Effective date of regulations

    Provides that the provisions of the Act take effect upon 
enactment and permits the Secretary to promulgate appropriate 
regulations.

                        title ii--public housing

                        Subtitle A--Block Grants

Section 201--Block grant contracts

    Provides general parameters for block grant contracts to be 
entered into between the Secretary and the local housing 
management authorities. The authority must agree to provide 
safe, clean, and healthy housing that is affordable in return 
for assistance. Contracts can be modified but not in any manner 
which would increase the amount of funds received in excess of 
the allocated amount or impair the rights of leaseholders or 
debt holders to which annual contributions have been pledged.
    Prescribes that contracts may not be renewed unless the 
local housing management authority has been accredited by the 
Housing Foundation and Accreditation Board pursuant to section 
434.

Section 202--Block grant authority and amount

    Requires the Secretary to make a block grant to a local 
housing and management authority provided, in part, that the 
authority has submitted a community improvement plan, the plan 
has been reviewed and complies with the necessary requirements, 
the authority is accredited, the authority is exempt form local 
taxes or receives a contribution in lieu thereof.
    Requires that, in return for receiving federal assistance, 
the LHMA to have entered into a local cooperation agreement 
with local government.
    Allows the Secretary to provide grants to ineligible local 
housing and management authorities for a period necessary to 
secure an alternative management entity.

Section 203--Eligible and required activities

    Authorizes grant uses for production, operation, 
modernization, resident programs, homeownership activities, 
resident management activities, demolition and disposition 
activities, payments in lieu of taxes, emergency corrections, 
preparation of Local Housing Management Plans, liability 
insurance, payment of obligations issued under the 1937 Act, 
and mutual help homeownership opportunity programs for Indian 
housing authorities.
    Permits local housing and management authorities, in 
accordance with the Local Housing Management plans, to move 
towards a voucher program for certain buildings after a cost-
benefit analysis of maintaining and modernizing the building as 
well as an evaluation of the available affordable housing.
    Authorizes Secretary to withdraw funding from a local 
housing and management authority for specific projects.

Section 204--Determination of block grant allocation

    Provides for interim allocations to local housing and 
management authorities pending creation of a permanent 
allocation formula using a negotiated rulemaking procedure.
    Prescribes that chronically vacant units are ineligible to 
receive subsidy except to the extent of paying utilities.

Section 205--Sanctions for improper use of amounts

    Allows the Secretary to terminate, withhold, reduce, limit 
the availability of payments under this Act if the LHMA does 
not comply with its requirements.

           Subtitle B--Admissions and Occupancy Requirements

Section 221--Low-income housing requirements

    Requires public housing produced under this Act (or the 
1937 Act) to be operated as public housing for a 40-year period 
and limits sales of housing if the property has received 
operating subsidy within the last 10 years. Permits use of 
assistance for creating mixed-income developments.

Section 222--Family eligibility

    Limits occupancy of public housing to families who, at the 
time of the initial occupancy, qualify as low-income. Local 
housing and management authorities may create a selection 
criteria for incoming residents that are aimed at creating an 
income mix that reflects the eligible population of that 
jurisdiction provided at least 25 percent of the units are 
occupied by families whose income does not exceed 30 percent of 
area median income. Certain income and eligibility restrictions 
may be waived by the LHMA that provide units to police 
officers, law enforcement, and security personnel.

Section 223--Preferences for occupancy

    Authorizes local housing and management authority to 
establish local preferences and an opportunity for comments by 
interested parties.

Section 224--Admission procedures

    Authorizes the local housing and management authority to 
ensure that each family residing in a public housing 
development owned or managed by the authority has been admitted 
in accordance with this title. Applicants who are denied 
admission must be granted a hearing.
    Requires the National Crime Information Center and other 
law enforcement entities to provide certain confidential 
information to the local housing and management authority which 
information such authority must maintain as confidential; the 
authority may pay a fee to the entity for the service. Further 
confidentiality is provided for victims of domestic violence.

Section 225--Family rental payment

    Allows the local housing and management authority to 
determine appropriate resident rental contributions based on 
any factors that the authority considers relevant including the 
adjusted income of the resident, type and size of dwelling 
unity, and expenses of the authority. The contribution, 
however, must be between a minimum monthly rent of $25, and 
less than a maximum monthly rent established for the specific 
dwelling unit by the authority. The contribution includes the 
cost of utilities.
    Monthly contribution increases, except as a result of the 
minimum contribution, greater than $15 per month that are a 
result of this Act shall be implemented in certain phases.
    The contribution paid by the family must be reviewed 
annually and may be increased by up to 10 percent. The 
Secretary must review the minimum and maximum rents for public 
housing units and if a significant percentage of the residents 
are paying more than 30 percent of their income towards their 
contribution, the Secretary may require an authority to modify 
its contribution levels. Further, the Secretary must review an 
authority's maximum and minimum rents in public housing if less 
than 40 percent of the residents are not very low income.

Section 226--Lease requirements

    Requires the local housing and management authority to 
utilize leases that require them to comply with housing quality 
requirements, to give adequate written notice of termination of 
the lease, and to terminate the lease only in cases where there 
is a violation of the terms or conditions of the lease or of 
applicable Federal, State, or local law, or for good cause.
    States that leases must include provisions that cause for 
termination of the lease includes all acts within a resident's 
unit, including criminal activities. Leases also must provide 
residents with the right to review relevant documents related 
to any termination of eviction procedures instituted against 
them.

Section 227--Designated housing for elderly and disabled families

    Permits local housing and management authority to designate 
all or part of a development as only elderly, only disabled, or 
only elderly and disabled as long as the designation is part of 
the Local Housing Management Plan. The authority must establish 
that the designation is necessary to meet certain goals and 
needs and include information regarding the supportive services 
and other assets that will be provided to serve the residents.
    Allows LHMA to admit near-elderly applicants. The authority 
may not evict a resident because of the designation of such 
unit. A resident who relocates as a result of the designation, 
however, shall receive notice as soon as practicable, 
comparable housing, and payment of actual, reasonable moving 
expenses.

                         Subtitle C--Management

Section 231--Management procedures

    Requires local housing and management authorities to ensure 
sound management and to contract with other entities to perform 
management functions.

Section 232--Housing quality requirements

    Requires local housing and management authorities to 
maintain public housing pursuant to the local jurisdiction's 
laws, regulations, standards, or codes regarding habitability 
or, if the local jurisdiction does not have such laws, 
regulations, standards, or codes, than the authority must 
follow housing standards to be set by the Secretary. The 
authority must determine whether it is following a local 
jurisdiction's provisions or the Secretary's.
    Requires annual inspections by the authority. Accompanying 
reports must be presented to the Secretary, the HUD Inspector 
General, and the Housing Foundation and Accreditation Board.

Section 233--Employment of residents

    Allows a local housing and management authority to employ 
residents in any capacity and provides that contractors and 
subcontractors must use best efforts to employ and train 
residents of public housing.

Section 234--Resident councils and resident management corporations

    Authorizes formation of resident councils by residents of a 
public housing development to consider issues relating to 
resident interests and to consult with the authority. A council 
shall be representative of the residents, shall adopt written 
procedures for the election of officers, and shall have a 
democratically elected governing board.
    Allows residents to for non-profit resident management 
corporations to assume the responsibility of managing or 
purchasing a development. The corporation must be organized 
under state law, has as its sole voting members the residents 
of the development, and has the support of its resident 
council, if one exists, or alternatively, a majority of the 
households of the development.

Section 235--Management by resident management corporation

    Allows a local housing and management authority may enter 
into a contract with a resident management corporation to 
manage one or more development. The contract must require the 
corporation to follow the relevant rules and laws of the Act 
and may include specific terms relevant to all other management 
issues. The corporation must provide the authority with bonding 
or insurance related to loss, theft, embezzlement, or 
fraudulent acts on the part of the corporation or its 
employees.
    Provides that the contract of the corporation to be funded 
with a portion of a block grant to the authority and details of 
other expected income from the development for the corporation; 
the corporation may only use any excess income for eligible 
activities.

Section 236--Transfer of management of certain housing to independent 
        manager at request of residents

    Permits the Secretary, at the request of the residents, to 
transfer the management of any portion of a development, 
including an entire development, to an independent management 
entity in certain, specified circumstances.
    Requires that transfers of management be approved by a 
majority of the resident council for the portion of the 
development and must be consulted. The authority must provide 
the independently managed development with its share of the 
block grant with adjustments determined by the Secretary based 
on various factors. The independent management must abide by 
the community improvement plan and is solely liable for its own 
acts, including acts by the resident council.

Section 237--Resident opportunity program

    Reauthorizes Resident Opportunity Program for one year for 
$15 million with a sunset of the program at the end FY96.

                       Subtitle D--Homeownership

Section 251--Resident homeownership programs

    Permits a local housing and management authority to create 
and implement a homeownership program involving its public 
housing units to low-income families. Residents may form an 
organization and hire experts to facilitate a cooperative 
purchase.

Subtitle E--Disposition, Demolition and Revitalization of Developments.

Section 261--Requirements for demolition and disposition of 
        developments

    Eliminates the requirement that for every unit a LHMA 
demolishes or disposes, it is required to replace on a one-for-
one basis.
    Provides local housing and management authorities with the 
parameters by which they may demolish or dispose of certain 
nonviable or nonmarketable developments consistent with their 
community improvement plan. Evidence justifying the disposal or 
demolition of a development include: severely distressed or 
obsolete, unsuitable location, financially infeasible for 
rehabilitation or operation, and retention of the development 
is not in the best interests of the authority. Parameters exist 
for partial disposition of demolition of a development and 
disposition of undeveloped property.
    Requires the Local Housing Management Plan to include 
details relating to most aspects of the proposal to demolish or 
dispose of certain property including the purpose of the 
action, how the proceeds will be used, and how any residents 
will be relocated. In limited circumstances authorities may 
demolish or dispose of units not included in the plan.
    Requires the LHMA to consult with local officials and 
residents of the development is required. The permitted uses of 
any proceeds from disposition include payment of project costs 
and other obligations, providing additional housing assistance, 
job training, child care, or supportive services, and inducing 
private commercial enterprises on public housing sites. The 
relocation procedures for displaced families is defined. 
Further, resident organizations and resident management 
organizations are given special notice of disposition and a 
special right to purchase the project.

Section 262--Demolition, site revitalization, replacement housing, and 
        choice-based assistance grants for developments

    Reestablishes grant program to address severely distressed 
public housing developments. Grants must have local 
contribution of no less than 5 percent
    Eligible activities include certain: architectural and 
engineering work, demolition, sale or lease costs, 
administrative costs, legal costs, moving expenses, economic 
development activities, management improvements, leveraging of 
other resources, replacement housing, security activities, 
supportive services.
    Provides minimum requirements for applications under this 
section and outlines and requires the Secretary to establish 
selection criteria.
    Provides that the Secretary must set cost limitations for 
eligible activities. Ensures that grant may be use for 
replacement housing or choice-based housing if such housing is 
available in the area. Permits contracting-out local management 
and housing authority if Secretary approves.
    Provides that the Secretary shall submit a report to 
Congress setting forth certain aspects of the program.
    No specific amount is authorized for this program. This 
program sunsets after September 30, 1996.

                     Subtitle F--General Provisions

Section 271--Conversion to block grant assistance.

    Provides that any assistance available to public housing 
agencies in connection with appropriations prior to the 
enactment of the Act under any other act are subject to the 
provisions of the other act except as provided by the 
Secretary.

Section 272--Payment of non-federal share

    Allows that the use value of public housing buildings 
developed or maintained by federal assistance may be used a 
non-federal share of federal programs requiring non-federal 
participation in programs assisting residents.

Section 273--Definitions

Section 274--Authorization of appropriations for block grants

    Authorizes $6.3 billion as the appropriation level for each 
fiscal year through 2000.

Section 275--Authorization of appropriations for operation safe home

    Authorizes $700,000 per fiscal year for relocation expenses 
of families relocated under the Witness Protection Program of 
Operation Safe Home. Clarifies that assistance may be provided 
to victims of domestic violence.

title iii--choice-based rental housing and homeownership assistance for 
                          low-income families

                         Subtitle A--Allocation

Section 301--Authority to provide housing assistance amounts

    Authorizes the Secretary to make grants to local housing 
management authorities.

Section 302--Contracts with LHMAs

    Authorizes contracts for one fiscal year. Local housing and 
management authorities are required to enforce housing quality 
standards and to establish a grievance procedure for residents 
who allege non-compliance of such quality standards.

Section 303--Eligibility of LHMAs for assistance amounts

    Provides that assistance may be allocated only to those 
LHMAs that: (1) have submitted a Local Housing Management Plan 
that has been approved by the Secretary; (2) are accredited; 
(3) that have no members that have been convicted of a felony; 
(4) that are not dysfunctional under subtitle B of Title IV.

Section 304--Allocation of amounts

    Requires the Secretary to determine a formula for 
allocating assistance based, in part, on census data, various 
needs of communities, and the comprehensive housing 
affordability strategy of a community, pursuant to a negotiated 
rulemaking process. Up to 50 percent of the funds that are 
unobligated by a local housing and management authority for a 
period of 8 months may be recaptured by the Secretary.
    Requires the Secretary to determine the set-aside for an 
Indian tenant-based program.

Section 305--Administrative Fees

    Sets administrative fee for local housing and management 
authority at 6.5 percent of grant amount for the first 600 
units at fair market rent for a two bedroom and 6.0 percent of 
the grant amount for all units in excess of 600. The Secretary 
may increase this fee in certain circumstances.
    Administrative fees for vouchers that are used outside of a 
housing authority's jurisdiction must be transferred to the 
housing authority where the voucher is used after 60 days.

Section 306--Authorizations of appropriations

    Authorizes $1,861,668,000 grant under this title as the 
appropriation level for each fiscal year through 2000, 
including $50 million for nonelderly disabled families for each 
fiscal year.

Section 307--Conversion of section 8 assistance

    Requires conversion of the amount of unused section 8 
assistance prior to be used for grants under this title unless 
the Secretary determines such conversion would be inconsistent 
with existing commitments.

   Subtitle B--Choice-based Housing Assistance for Eligible Families

Section 321--Eligible families and preferences for assistance

    Requires that assistance under this title be provided to 
families who are low-income families or otherwise qualified by 
federal law. Income reviews take place annually. Preferences 
may be determined by local management and housing authorities 
after public hearing and an opportunity for interested parties 
to comment.
    Allows LHMAs to assist previously assisted families moving 
into their jurisdiction. If a wait-listed family moves to (a) a 
jurisdiction where the authority has an open waiting list for 
choice-based housing, such family shall be placed in the 
position it would have been based on the date it was placed on 
the original jurisdiction's waiting list or (b) a jurisdiction 
where the authority has a closed waiting list, such family 
shall be placed at the end of the waiting list unless the 
family moved because of a verifiable employment opportunity in 
which case the family will be placed in the waiting list based 
on letter (a) above. An authority may deny assistance to an 
eligible family who has moved from another authority's 
jurisdiction and who's eligibility was terminated by the other 
jurisdiction for reasons other than income or change of 
residence. The authority also may set policies to prohibit 
residents whose tenancy has been terminated for a serious 
violation from attaining continued housing assistance. 
Confidentiality is provided for victims of domestic violence.

Section 322--Resident contribution

    Authorizes local housing and management authority to 
determine a resident's rental contribution based on any factors 
that the authority considers relevant including the adjusted 
income of the resident, type and size of dwelling unit, and 
expenses of the authority. The contribution may not be lower 
than $25 and must include the utility costs paid by the 
resident. If the contribution exceeds the payment standard, the 
residents must pay their contribution and the difference 
between the payment standard and the rent level. The authority 
may waive rent contribution limits it deems inappropriate for 
disabled and elderly families. The authority may raise the 
contribution of a resident by up to 10 percent annually.
    Monthly contribution increases, except as a result of the 
minimum contribution, greater than $15 per month that is a 
result of this Act shall be implemented in certain phases.

Section 323--Rental indicators

    Requires the Secretary to establish and to publish annually 
rental indicators for a market area that may vary depending on 
the size and type of the dwelling unit. The rental indicators 
shall be adjusted annually based on the most recent available 
data.

Section 324--Lease terms

    Allows the owner of property to utilize leases that are 
restricted only in accordance with section 325 and that are in 
the standard form to which other residents in the local housing 
market have agreed.

Section 325--Termination of tenancy

    Allows owners to terminate leases only in cases where the 
terms or conditions of the lease, the applicable Federal, 
State, or local law have been violated, or for good cause.
    Requires that leases include provisions that notify 
residents that ``cause'' for lease termination includes all 
acts within a resident's unit, including criminal activities. 
An owner must follow applicable State or local laws when 
terminating or evicting a resident under this title.

Section 326--Eligible owners

    Prescribes that eligible owners include individuals or 
entities that have not been debarred from participating in 
Federal programs.

Section 327--Selection of dwelling units

    Permits the assisted family to make the determination of 
which dwelling unit they will lease provided the dwelling unit 
does not violate local deed restrictions.

Section 328--Eligible dwelling units

    Limits eligible dwelling units to be those that are not 
located in a nursing home, penal, reformatory, medical, mental, 
or similar public or private institution. Each unit must be 
maintained to the extent required by the local jurisdiction's 
laws, regulations, standards, or codes regarding habitability 
or, if the local jurisdiction does not have such laws, 
regulations, standards, or codes, then the unit must be 
maintained at a standard to be set by the Secretary.
    Requires the LHMA to inspect, at least annually, each 
dwelling unity and to submit a report to the Secretary, the 
Inspector General, and the Housing Foundation and Accreditation 
Board.

Section 329--Homeownership option

    Allows local housing and management authorities to use 
funds under this title to assist low-income families towards 
homeownership. Eligible families must have an income from 
employment or sources other than public assistance, and must 
meet initial and continuing requirements established by the 
authority.

    Subtitle C--Payment of Housing Assistance on Behalf of Assisted 
                                Families

Section 351--Housing assistance payments contracts

    Allows local housing and management authorities to enter 
into contracts with owners by which owners screen residents, 
provide units for eligible families, and authorities make 
payments directly to owners on behalf of the eligible families. 
The authority may enter into a contract with itself for units 
it manages or owns. The term of the contract shall have a term 
of no less more than 12 months; a lease pursuant to such a 
contract must conform with the provisions of sections 324, 325, 
and 328(a)(2) of this title.

Section 352--Amount of monthly assistance payment

    States that the monthly payment for assistance under this 
title is (a) in the case of a unit with gross rent that is less 
than the payment standard under section 353, gross rent minus 
the renter's contribution and (b) in the case of a unit with 
gross rent that is more than the payment standard under section 
353, the renter's contribution minus the gross rent.

Section 353--Payment standards

    Permits each local housing and management authority 
providing assistance under this title to establish payment 
standards for their local market areas. The payment standards 
may vary depending on the size and type of the dwelling unit. 
The Secretary must review an authority's payment standard and 
if a significant percentage of the residents are paying more 
than 30 percent of their income towards their payment standard, 
the Secretary may require an authority to modify its payment 
standard.

Section 354--Reasonable rents

    Permits the rent to be set at levels based upon a 
negotiation between the owner and the renter. The local housing 
and management authority, however, shall determine whether the 
rent negotiated exceeds the rent charged for comparable units. 
If the authority determines that the rent negotiated exceed 
comparable rents, it shall notify the renter and may refuse to 
provide the payments for such units.

Section 355--Prohibition of assistance for vacant rental units

    Prohibits payments to units that are vacated by residents 
during the following month.

            Subtitle D--General and Miscellaneous Provisions

Section 371--Definitions

Section 372--Rental assistance fraud recoveries

    Permits local housing and management authorities to retain 
the greater of 50 percent of the amounts recaptured from 
renters who abuse the program or expenses of the collection 
effort. The authority must use the proceeds within the 
assistance program.

Section 373--Study regarding geographic concentration of assisted 
        families

    Requires Secretary to conduct a study which addresses and 
resolves the problems associated with the concentration of 
assisted families in Cook County, Illinois.

 title iv--accreditation and oversight of local housing and management 
                              authorities

         Subtitle A--Housing Foundation and Accreditation Board

Section 401--Establishment

    Establishes the Housing Foundation and Accreditation Board 
(the ``Board'').

Section 402--Membership

    Requires the President, not later than 180 days after 
enactment, to appoint 12 members to the Board: four individuals 
of 10 recommended by the Secretary; four individuals of 10 
recommended by the chairman and ranking minority member of the 
Committee on Banking, Housing, and Urban Affairs of the Senate; 
and four individuals of 10 recommended by the chairman and 
ranking minority member of the Committee on Banking and 
Financial Services of the House of Representatives.
    Establishes the membership of the Board to consist of two 
members of public or section 8 housing, two members who are 
executive directors of local housing and management 
authorities, one member who is a member of the Institute of 
Real Estate Managers, and one member who is the owner of a 
multifamily housing project which receives assistance from HUD. 
Moreover, at least one member must have extensive experience in 
residential real estate finance; operating a nonprofit that 
provides affordable housing; constructing multifamily housing; 
managing a community development corporation. No more than six 
members may be of the same political party.
    Mandates that members will serve one four year term, that 
is staggered, with the original appointees receiving terms of 
one, two, three, or four years. Standard appointment, 
resignation, election of a chairperson, and other governing 
rules are stated.
    Provides only for expenses to be reimbursed.

Section 403--Functions

    Requires the Board to evaluate deep subsidy programs, 
establish performance benchmarks for local housing and 
management authorities, establish a procedure for accrediting 
authorities (pursuant to section 431(b)), and classify 
authorities pursuant to section 434.

Section 404--Initial establishment of standards and procedures for LHMA 
        compliance

    Requires the Board to establish standards, guidelines, and 
procedures for accrediting LHMA's under section 431. Prior to 
issuing such standards, guidelines, and procedures, the Board 
shall submit a copy to the Congress. When the Board initiates 
evaluation of local housing and management authorities, it 
shall begin with the ``troubled'' public housing agencies.

Section 405--Powers

    Allows the Board to hold hearings when and where it deems 
appropriate. The Board may determine and adopt rules governing 
its operations. The Board shall have access to any information 
it needs from other federal government sources and any 
information from local housing and management authorities to 
the same extent as the Secretary. Government Services 
Administration shall provide necessary reimbursable support 
services. HUD shall provide, at the discretion of the 
Secretary, nonreimbursable personnel to the Board.
    Provides the Board with authority to contract for services 
with any entity. The staff of the Board shall include an 
executive director and other personnel.

Section 406--Fees

    Requires the Board to establish and charge fees for the 
accreditation of local housing and management authorities which 
will be used to cover the costs of the operation of the Board. 
The funds will be deposited in the U.S. Treasury and made 
available to the Board through appropriation acts.

Section 407--Reports

    Requires the Board to submit certain reports to Congress 
annually.

    Subtitle B--Accreditation and Oversight Standards and Procedures

Section 431--Establishment of performance benchmarks and accreditation 
        procedures

    Authorizes the Board to establish standards and guidelines 
for classifying local housing and management authorities 
according to their operational and financial functions; for 
providing, maintaining, and assisting low-income housing that 
is safe, clean and healthy, that is consistent with the 
comprehensive housing affordability strategy, and that is 
occupied by and affordable to eligible families; for producing 
low-income housing and executing capital projects, if 
applicable; administering assistance under title III; for 
accomplishing goals and plans set forth in the neighborhood 
improvement plan for the authority; promoting responsibility 
and self-sufficiency among the residents it is serving; and for 
complying with the other requirements under titles II and III.
    Establishes levels of performance including those LHMAs 
that are exceptionally well-managed, well-managed, at risk of 
being troubled, troubled, and dysfunctional. The Board also 
shall establish a minimum accreditation standard for purposes 
of authorizing local housing and management authorities to 
receive assistance under titles II and III.
    Authorizes the Board to establish procedures for reviewing 
the performance of and giving accreditation to each local 
housing and management authority. The review shall occur during 
the last year of accreditation for the specific authority or 
prior to the first agreement under titles II and III.
    Authorizes the Secretary in certain circumstances where a 
local housing and management authority is at risk of becoming 
troubled to (1) enter into performance agreements with the 
authority and (2) solicit proposals from other management 
entities.
    Authorizes the Secretary to continue utilizing the Public 
Housing Management Assessment Program (PHMAP) until the Board 
creates a new assessment tool.

Section 432--Annual financial and performance audit

    Requires each local housing and management authority to 
conduct an annual financial and performance audit and to submit 
the results to the Secretary, the Board, and certain locally 
elected officials. Procedures for the selection of an auditor, 
access to all relevant records, design of audit are described. 
The Secretary may withhold the amount of the cost of an audit 
from an authority that does not comply with this section.

Section 433--Accreditation

    Provides the procedures for accreditation of each local 
housing and management authority including the timing of 
review, the initial evaluation, determination of accreditation, 
and the length of the accreditation.

Section 434--Classification by performance category

    Allows the Board to classify each local housing and 
management authority by the performance categories under 
section 431(a)(2).

Section 435--Performance agreements for authorities at risk of becoming 
        troubled

    Requires a local housing and management authority that is 
classified as troubled to enter into an agreement with the 
Secretary that provides a framework for improving the 
authority's management. The agreement shall contain targets for 
improving performance during the next 12-month period, 
strategies for meeting such targets, sanction for not 
implementing the strategies, and a plan for enhancing resident 
involvement in management. The agreement should maximize the 
assistance of local public and private entities.

Section 436--Performance agreements and CDBG sanctions for troubled 
        authorities

    Requires, upon default of a LHMA, the Secretary to take 
those actions authorized under section 437(b)(2) and to 
redirect or withhold CDBG funds for the geographical 
jurisdiction of the authority.

Section 437--Option to demand conveyance of title to or possession of 
        public housing

    Provides that contracts under title II may provide that 
upon a default or a classification as dysfunctional, the local 
housing and management authority may be obligated by the 
Secretary to convey title in any case necessary to achieve the 
purposes of this Act or deliver to the Secretary possession of 
the development to which such contract relates. If the contract 
permits the preceding action, it also shall provide that the 
Secretary shall be obligated to reconvey the assist to the 
authority or its successor in interest as soon as practicable 
after the defaults have been cured and the authority will 
operate under the contract or upon the termination of the 
contract.

Section 438--Removal of ineffective LHMA's

    Authorizes the Secretary to solicit proposals from other 
entities to manage all or part of the authority's assets, (b) 
take possession of all or part of the authority's assets, (c) 
require the authority to make other arrangements to manage its 
assets, or (d) petition for the appointment of a receiver for 
the authority, upon a substantial default by a local housing 
and management authority of certain obligations. These 
obligations include an agreement pursuant to section 435, 
designation as dysfunctional pursuant to section 431(a)(2)(e), 
the failure of an authority to be accredited, or submission to 
the Secretary of a by petition of the residents. The Secretary 
may provide emergency assistance to a successor entity of an 
authority.
    Authorizes the Secretary to abrogate contracts, demolish 
and dispose of assets pursuant to this title, provide for the 
establishment of additional housing and management authorities 
to manage the assets, or consolidate the assets into other 
authorities, with the other authorities' consent. Further, the 
Secretary shall not be subject to certain state and local laws 
and shall have the maximum amount of authority as a receiver 
appointed by a federal district court.
    Permits the Secretary to appoint or delegate to an 
individual or an entity to assume the Secretary's 
responsibilities and powers under this paragraph except for 
certain powers.
    Allows an appointed receiver to abrogate contracts that 
impede correction of the default or improvement of the 
authorities classification, demolish and dispose of assets in 
accordance with this title, create new local housing and 
management authorities in consultation with the Secretary, and 
to abrogate certain state and local laws.

Section 439--Mandatory takeover of chronically troubled PHA's

    Requires the Secretary to take-over each chronically 
troubled public housing agency not later than 180 days after 
the date of the enactment. The Secretary may either solicit 
proposals and take the necessary actions to replace management 
of the agency pursuant to section 437(b)(1) or take possession 
of the agency pursuant to section 437(b)(2).

Section 440--Treatment of troubled PHA's

    Requires the locality to describe how it will assist an 
agency deemed ``troubled'' in its comprehensive housing 
affordability strategy or a consolidated plan.

Section 441--Maintenance of and access to records

    Requires each local housing and management authority to 
maintain appropriate records and the Secretary and the 
Comptroller General of the United States shall have access to 
such records.

Section 442--Annual reports regarding troubled LHMA's

    Requires the Secretary to submit a report to Congress that 
identifies troubled and dysfunctional local housing management 
authorities, those that have lost their accreditation, and any 
action taken pursuant to sections 433, 434, 435, and 436.

Section 443--Applicability to resident management corporations

    Applies this subtitle's provisions to resident management 
corporations.

Section 444--Inapplicability to Indian housing

    Removes certain sections from being applied to Indian 
housing authorities.

               title v--repeals and conforming amendments

Section 501--Repeals

Section 502--Conforming and technical provisions

Section 503--Amendments to Public and Assisted Housing Drug Elimination 
        Act of 1990

    Amends Chapter 2 of subtitle C of title V of the Anti Drug-
Abuse Act of 1988 by changing the drug elimination program into 
a block grant and including crime prevention as an eligible 
activity. The program terminates on September 30, 1996.

             Chapter 2--Community Partnership Against Crime

Section 5121--Short title

    This chapter may be cited as the ``Community Partnerships 
Against Crime Act of 1996.''

Section 5122--Purposes

    States that the purpose of the Community Partnerships 
Against Crime Act of 1996 is to improve the quality of public 
housing residents by:
          (1) reducing the levels of fear, violence, and crime;
          (2) broadening the scope of the Public and Assisted 
        Housing Drug Elimination Act of 1990 to apply to all 
        crime that is drug-related; and
          (3) reducing crime and disorder through expansion of 
        community-oriented policing activities and problem 
        solving.

Section 5123--Authority to make grants

    Authorizes the Secretary to make grants to LHMA's private 
for-profit and non-profit owners for the stated purpose of 
crime elimination in and around public housing.
    Amends Section 5124 (a)(b) of the Anti-Drug Abuse Act of 
1988 for funding to support increased crime prevention 
activities.

Section 5125--Grant procedures

    Authorizes the Secretary to make grants each fiscal year to 
approved LHMA's that own or operate 250 or more public housing 
dwelling units on condition that the LHMA submits an 
application that includes a 5-year crime deterrence and 
reduction plan that describes the (1) nature of the problem, 
(2) buildings affected by the problem, (3) impact on residents, 
and (4) the action proposed to deter such crime.
    Authorizes the Secretary to conduct yearly performance 
reviews, and to establish deadlines and regulations or 
applications.
    Authorizes the Secretary to make grants each fiscal year to 
smaller LHMA's based upon the (1) extent of the crime problem, 
(2) quality of the plan to address the problem, (3) capability 
of the applicant to carry out the plan, (4) extent of 
governmental, organizational, and community support for the 
plan.
    Amends Sections 5126, 5127, 5128, and 5130 of the Anti-Drug 
Abuse Act of 1988.

Section 5130--Funding

    Authorizes the Secretary to appropriate amounts based upon 
the following percentages: 85 percent available for LHMA's that 
own or operate 250 or more public housing dwelling units, 10 
percent available for smaller LHMA's, and 5 percent available 
for assistance to federally assisted low-income housing.

Section 5131--Project termination

    Provides that the program shall terminate at the end of 
September 30, 1996.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                   UNITED STATES HOUSING ACT OF 1937

             [TITLE I--GENERAL PROGRAM OF ASSISTED HOUSING

                              [short title

  [Section 1. This Act may be cited as the ``United States 
Housing Act of 1937''.

                         [declaration of policy

  [Sec. 2. It is the policy of the United States to promote the 
general welfare of the Nation by employing its funds and 
credit, as provided in this Act, to assist the several States 
and their political subdivisions to remedy the unsafe and 
unsanitary housing conditions and the acute shortage of decent, 
safe, and sanitary dwellings for families of lower income and, 
consistent with the objectives of this Act, to vest in local 
public housing agencies the maximum amount of responsibility in 
the administration of their housing programs. No person should 
be barred from serving on the board of directors or similar 
governing body of a local public housing agency because of his 
tenancy in a low-income housing project.

                     [rental payments; definitions

  [Sec. 3. (a)(1) Dwelling units assisted under this Act shall 
be rented only to families who are low-income families at the 
time of their initial occupancy of such units. Reviews of 
family income shall be made at least annually. Except as 
provided in paragraph (2), a family shall pay as rent for a 
dwelling unit assisted under this Act (other than a family 
assisted under section 8(o) or (y) or paying rent under section 
8(c)(3)(B)) the highest of the following amounts, rounded to 
the nearest dollar:
          [(A) 30 per centum of the family's monthly adjusted 
        income;
          [(B) 10 per centum of the family's monthly income; or
          [(C) if the family is receiving payments for welfare 
        assistance from a public agency and a part of such 
        payments, adjusted in accordance with the family's 
        actual housing costs, is specifically designated by 
        such agency to meet the family's housing costs, the 
        portion of such payments which is so designated.
  [(2)(A) Any public housing agency may provide that each 
family residing in a public housing project owned and operated 
by such agency (or in low-income housing assisted under section 
8 that contains more than 2,000 dwelling units) shall pay as 
monthly rent an amount determined by such agency to be 
appropriate that does not exceed a maximum amount that--
          [(i) is established by such agency and approved by 
        the Secretary;
          [(ii) is not more than the amount payable as rent by 
        such family under paragraph (1); and
          [(iii) is not less than the average monthly amount of 
        debt service and operating expenses attributable to 
        dwelling units of similar size in public housing 
        projects owned and operated by such agency.
  [(B) The terms of all ceiling rents established prior to the 
date of enactment of the Department of Housing and Urban 
Development Reform Act of 1989 shall be extended without time 
limitation.
  [(b) When used in this Act:
          [(1) The term ``low-income housing'' means decent, 
        safe, and sanitary dwellings assisted under this Act. 
        The term ``public housing'' means low-income housing, 
        and all necessary appurtenances thereto, assisted under 
        this Act other than under section 8. When used in 
        reference to public housing, the term ``low-income 
        housing project'' or ``project'' means (A) housing 
        developed, acquired, or assisted by a public housing 
        agency under this Act, and (B) the improvement of any 
        such housing.
          [(2) The term ``low-income families'' means those 
        families whose incomes do not exceed 80 per centum of 
        the median income for the area, as determined by the 
        Secretary with adjustments for smaller and larger 
        families, except that the Secretary may establish 
        income ceilings higher or lower than 80 per centum of 
        the median for the area on the basis of the Secretary's 
        findings that such variations are necessary because of 
        prevailing levels of construction costs or unusually 
        high or low family incomes. The term ``very low-income 
        families'' means low-income families whose incomes do 
        not exceed 50 per centum of the median family income 
        for the area, as determined by the Secretary with 
        adjustments for smaller and larger families, except 
        that the Secretary may establish income ceilings higher 
        or lower than 50 per centum of the median for the area 
        on the basis of the Secretary's findings that such 
        variations are necessary because of unusually high or 
        low family incomes. Such ceilings shall be established 
        in consultation with the Secretary of Agriculture for 
        any rural area, as defined in section 520 of the 
        Housing Act of 1949, taking into account the subsidy 
        characteristics and types of programs to which such 
        ceilings apply. In determining median incomes (of 
        persons, families, or households) for an area or 
        establishing any ceilings or limits based on income 
        under this Act, the Secretary shall determine or 
        establish area median incomes and income ceilings and 
        limits for Westchester County, in the State of New 
        York, as if such county were an area not contained 
        within the metropolitan statistical area in which it is 
        located. In determining such area median incomes or 
        establishing such income ceilings or limits for the 
        portion of such metropolitan statistical area that does 
        not include Westchester County, the Secretary shall 
        determine or establish area median incomes and income 
        ceilings and limits as if such portion included 
        Westchester County.
          [(3) Persons and families.--
                  [(A) Single persons.--The term ``families'' 
                includes families consisting of a single person 
                in the case of (i) an elderly person, (ii) a 
                disabled person, (iii) a displaced person, (iv) 
                the remaining member of a tenant family, and 
                (v) any other single persons. In no event may 
                any single person under clause (v) of the first 
                sentence be provided a housing unit assisted 
                under this Act of 2 or more bedrooms. In 
                determining priority for admission to housing 
                under this Act, the Secretary shall give 
                preference to single persons who are elderly, 
                disabled, or displaced persons before single 
                persons who are eligible under clause (v) of 
                the first sentence.
                  [(B) Families.--The term ``families'' 
                includes families with children and, in the 
                cases of elderly families, near-elderly 
                families, and disabled families, means families 
                whose heads (or their spouses), or whose sole 
                members, are elderly, near-elderly, or persons 
                with disabilities, respectively. The term 
                includes, in the cases of elderly families, 
                near-elderly families, and disabled families, 2 
                or more elderly persons, near-elderly persons, 
                or persons with disabilities living together, 
                and 1 or more such persons living with 1 or 
                more persons determined under the regulations 
                of the Secretary to be essential to their care 
                or well-being.
                  [(C) Absence of children.--The temporary 
                absence of a child from the home due to 
                placement in foster care shall not be 
                considered in determining family composition 
                and family size.
                  [(D) Elderly person.--The term ``elderly 
                person'' means a person who is at least 62 
                years of age.
                  [(E) Person with disabilities.--The term 
                ``person with disabilities'' means a person 
                who--
                          [(i) has a disability as defined in 
                        section 223 of the Social Security Act,
                          [(ii) is determined, pursuant to 
                        regulations issued by the Secretary, to 
                        have a physical, mental, or emotional 
                        impairment which (I) is expected to be 
                        of long-continued and indefinite 
                        duration, (II) substantially impedes 
                        his or her ability to live 
                        independently, and (III) is of such a 
                        nature that such ability could be 
                        improved by more suitable housing 
                        conditions, or
                          [(iii) has a developmental disability 
                        as defined in section 102 of the 
                        Developmental Disabilities Assistance 
                        and Bill of Rights Act.
        Such term shall not exclude persons who have the 
        disease of acquired immunodeficiency syndrome or any 
        conditions arising from the etiologic agent for 
        acquired immunodeficiency syndrome.
                  [(F) Displaced person.--The term ``displaced 
                person'' means a person displaced by 
                governmental action, or a person whose dwelling 
                has been extensively damaged or destroyed as a 
                result of a disaster declared or otherwise 
                formally recognized pursuant to Federal 
                disaster relief laws.
                  [(G) Near-elderly person.--The term ``near-
                elderly person'' means a person who is at least 
                50 years of age but below the age of 62.
          [(4) The term ``income'' means income from all 
        sources of each member of the household, as determined 
        in accordance with criteria prescribed by the 
        Secretary, in consultation with the Secretary of 
        Agriculture, except that any amounts not actually 
        received by the family and any amounts which would be 
        eligible for exclusion under section 1613(a)(7) of the 
        Social Security Act (42 U.S.C. 1382b(a)(7)) may not be 
        considered as income under this paragraph.
          [(5) The term ``adjusted income'' means the income 
        which remains after excluding--
                  [(A) $550 for each member of the family 
                residing in the household (other than the head 
                of the household or his spouse) who is under 18 
                years or age or who is 18 years of age or older 
                and is disabled or handicapped or a full-time 
                student;
                  [(B) $400 for any elderly or disabled family;
                  [(C) the amount by which the aggregate of the 
                following expenses of the family exceeds 3 
                percent of annual family income: (i) medical 
                expenses for any family; and (ii) reasonable 
                attendant care and auxiliary apparatus expenses 
                for each handicapped member of any family, to 
                the extent necessary to enable any member of 
                such family (including such handicapped member) 
                to be employed;
                  [(D) child care expenses to the extent 
                necessary to enable another member of the 
                family to be employed or to further his or her 
                education;
                  [(E) 10 percent of the earned income of the 
                family;
                  [(F) any payment made by a member of the 
                family for the support and maintenance of any 
                child, spouse, or former spouse who does not 
                reside in the household, except that the amount 
                excluded under this subparagraph shall not 
                exceed the lesser of (i) the amount that such 
                family member has a legal obligation to pay; or 
                (ii) $550 for each individual for whom such 
                payment is made; and
                  [(G) excessive travel expenses, not to exceed 
                $25 per family per week, for employment- or 
                education-related travel, except that this 
                subparagraph shall apply only to families 
                assisted by Indian housing authorities.
          [(6) The term ``public housing agency'' means any 
        State, county, municipality, or other governmental 
        entity or public body (or agency or instrumentality 
        thereof) which is authorized to engage in or assist in 
        the development or operation of low-income housing. The 
        term includes any Indian housing authority.
          [(7) The term ``State'' includes the several States, 
        the District of Columbia, the Commonwealth of Puerto 
        Rico, the territories and possessions of the United 
        States, the Trust Territory of the Pacific Islands, and 
        Indian tribes.
          [(8) The term ``Secretary'' means the Secretary of 
        Housing and Urban Development.
          [(9) The term ``Indian'' means any person recognized 
        as being an Indian or Alaska Native by an Indian tribe, 
        the Federal Government, or any State.
          [(10) The term ``Indian area'' means the area within 
        which an Indian housing authority is authorized to 
        provide low-income housing.
          [(11) The term ``Indian housing authority'' means any 
        entity that--
                  [(A) is authorized to engage in 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 
                        providing specifically for housing 
                        authorities for Indians, including 
                        regional housing authorities in the 
                        State of Alaska.
          [(12) The term ``Indian tribe'' means any tribe, 
        band, pueblo, group, community, or nation of Indians or 
        Alaska Natives.
  [(c) When used in reference to public housing:
          [(1) The term ``development'' means any or all 
        undertakings necessary for planning, land acquisition, 
        demolition, construction, or equipment, in connection 
        with a low-income housing project. The term 
        ``development cost'' comprises the costs incurred by a 
        public housing agency in such undertakings and their 
        necessary financing (including the payment of carrying 
        charges), and in otherwise carrying out the development 
        of such project. Construction activity in connection 
        with a low-income housing project may be confined to 
        the reconstruction, remodeling, or repair of existing 
        buildings.
          [(2) The term ``operation'' means any or all 
        undertakings appropriate for management, operation, 
        services, maintenance, security (including the cost of 
        security personnel), or financing in connection with a 
        low-income housing project. The term also means the 
        financing of tenant programs and services for families 
        residing in low-income housing projects, particularly 
        where there is maximum feasible participation of the 
        tenants in the development and operation of such tenant 
        programs and services. As used in this paragraph, the 
        term ``tenant programs and services'' includes the 
        development and maintenance of tenant organizations 
        which participate in the management of low-income 
        housing projects; the training of tenants to manage and 
        operate such projects and the utilization of their 
        services in project management and operation; 
        counseling on household management, housekeeping, 
        budgeting, money management, child care, and similar 
        matters; advice as to resources for job training and 
        placement, education, welfare, health, and other 
        community services; services which are directly related 
        to meeting tenant needs and providing a wholesome 
        living environment; and referral to appropriate 
        agencies in the community when necessary for the 
        provision of such services. To the maximum extent 
        available and appropriate, existing public and private 
        agencies in the community shall be used for the 
        provision of such services.
          [(3) The term ``acquisition cost'' means the amount 
        prudently required to be expended by a public housing 
        agency in acquiring property for a low-income housing 
        project.
  [The earnings of and benefits to any public housing resident 
resulting from participation in a program providing employment 
training and supportive services in accordance with the Family 
Support Act of 1988, section 22 of this Act, or any comparable 
Federal, State, or local law shall not be considered as income 
for the purposes of determining a limitation on the amount of 
rent paid by the resident during--
          [(1) the period that the resident participates in 
        such program; and
          [(2) the period that--
                  [(A) begins with the commencement of 
                employment of the resident in the first job 
                acquired by the person after completion of such 
                program that is not funded by assistance under 
                this Act; and
                  [(B) ends on the earlier of--
                          [(i) the date the resident ceases to 
                        continue employment without good cause 
                        as the Secretary shall determine; or
                          [(ii) the expiration of the 18-month 
                        period beginning on the date referred 
                        to in subparagraph (A).

                [loans for lower income housing projects

  [Sec. 4. (a) The Secretary may make loans or commitments to 
make loans to public housing agencies to help finance or 
refinance the development, acquisition, or operation of low-
income housing projects by such agencies. Any contract for such 
loans and any amendment to a contract for such loans shall 
provide that such loans shall bear interest at a rate specified 
by the Secretary which shall not be less than a rate determined 
by the Secretary of the Treasury taking into consideration the 
current average market yield on outstanding marketable 
obligations of the United States with remaining periods to 
maturity comparable to the average maturities of such loans, 
plus one-eighth of 1 per centum. Such loans shall be secured in 
such manner and shall be repaid within such period not 
exceeding forty years, or not exceeding forty years from the 
date of the bonds evidencing the loan, as the Secretary may 
determine. The Secretary may require loans or commitments to 
make loans under this section to be pledged as security for 
obligations issued by a public housing agency in connection 
with a low-income housing project.
  [(b) The Secretary may issue and have outstanding at any one 
time notes and other obligations for purchase by the Secretary 
of the Treasury in an amount which will not, unless authorized 
by the President, exceed $1,500,000,000. For the purpose of 
determining obligations incurred to make loans pursuant to this 
Act against any limitation otherwise applicable with respect to 
such loans, the Secretary shall estimate the maximum amount to 
be loaned at any one time pursuant to loan agreements then 
outstanding with public housing agencies. Such notes or other 
obligations shall be in such forms and denominations and shall 
be subject to such terms and conditions as may be prescribed by 
the Secretary with the approval of the Secretary of the 
Treasury. The notes or other obligations issued under this 
subsection shall have such maturities and bear such rate or 
rates of interest as shall be determined by the Secretary of 
the Treasury. The Secretary of the Treasury is authorized and 
directed to purchase any notes or other obligations of the 
Secretary issued hereunder and for such purpose is authorized 
to use as a public debt transaction the proceeds from the sale 
of any securities issued under chapter 31 of title 31, United 
States Code, and the purposes for which securities may be 
issued under such chapter are extended to include any purchases 
of such obligations. The Secretary of the Treasury may at any 
time sell any of the notes or other obligations acquired by him 
under this section. All redemptions, purchases, and sales by 
the Secretary of the Treasury of such notes or other 
obligations shall be treated as public debt transactions of the 
United States.
  [(c)(1) At such times as the Secretary may determine, and in 
accordance with such accounting and other procedures as the 
Secretary may prescribe, each loan made by the Secretary under 
subsection (a) that has any principal amount outstanding or any 
interest amount outstanding or accrued shall be forgiven; and 
the terms and conditions of any contract, or any amendment to a 
contract, for such loan with respect to any promise to repay 
such principal and interest shall be canceled. Such 
cancellation shall not affect any other terms and conditions of 
such contract, which shall remain in effect as if the 
cancellation had not occurred. This paragraph shall not apply 
to any loan the repayment of which was not to be made using 
annual contributions, or to any loan all or part of the 
proceeds of which are due a public housing agency from 
contractors or others.
  [(2)(A) On the date of the enactment of the Housing and 
Community Development Reconciliation Amendments of 1985, each 
note or other obligation issued by the Secretary to the 
Secretary of the Treasury pursuant to subsection (b), together 
with any promise to repay the principal and unpaid interest 
that has accrued on each note or obligation, shall be forgiven; 
and any other term or condition specified by each such 
obligation shall be canceled.
  [(B) On September 30, 1986, and on any subsequent September 
30, each such note or other obligation issued by the Secretary 
to the Secretary of the Treasury pursuant to subsection (b) 
during the fiscal year ending on such date, together with any 
promise to repay the principal and unpaid interest that has 
accrued on each note or obligation, shall be forgiven; and any 
other term or condition specified by each such obligation shall 
be canceled.
  [(3) Any amount of budget authority (and contract authority) 
that becomes available during any fiscal year as a result of 
the forgiveness of any loan, note, or obligation under this 
subsection shall be rescinded.

            [contributions for lower income housing projects

  [Sec. 5. (a)(1) The Secretary may make annual contributions 
to public housing agencies to assist in achieving and 
maintaining the lower income character of their projects. The 
Secretary shall embody the provisions for such annual 
contributions in a contract guaranteeing their payment. The 
contribution payable annually under this section shall in no 
case exceed a sum equal to the annual amount of principal and 
interest payable on obligations issued by the public housing 
agency to finance the development or acquisition cost of the 
lower income project involved. Annual contributions payable 
under this section shall be pledged, if the Secretary so 
requires, as security for obligations issued by a public 
housing agency to assist the development or acquisition of the 
project to which annual contributions relate and shall be paid 
over a period not to exceed 40 years.
  [(2) The Secretary may make contributions (in the form of 
grants) to public housing agencies to cover the development 
cost of public housing projects. The contract under which such 
contributions shall be made shall specify the amount of capital 
contributions required for each project to which the contract 
pertains, and that the terms and conditions of such contract 
shall remain in effect for a 40-year period.
  [(3) The amount of contributions that would be established 
for a newly constructed project by a public housing agency 
designed to accommodate a number of families of a given size 
and kind may be established under this section for a project by 
such public housing agency that would provide housing for the 
comparable number, sizes, and kinds of families through the 
acquisition and rehabilitation, or use under lease, of 
structures that are suitable for low-income housing use and 
obtained in the local market.
  [(b) The Secretary may prescribe regulations fixing the 
maximum contributions available under different circumstances, 
giving consideration to cost, location, size, rent-paying 
ability of prospective tenants, or other factors bearing upon 
the amounts and periods of assistance needed to achieve and 
maintain low rentals. Such regulations may provide for rates of 
contribution based upon development, acquisition, or operation 
costs, number of dwelling units, number of persons housed, 
interest charges, or other appropriate factors.
  [(c)(1) The Secretary may enter into contracts for annual 
contributions aggregating not more than $7,875,049,000 per 
annum, which amount shall be increased by $1,494,400,000 on 
October 1, 1980, and by $906,985,000 on October 1, 1981. The 
additional authority to enter into such contracts provided on 
or after October 1, 1980, shall be effective only in such 
amounts as may be approved in appropriation Acts. In addition, 
the aggregate amount which may be obligated over the duration 
of the contracts may not exceed $31,200,000 with respect to the 
additional authority provided on October 1, 1980, and 
$18,087,370,000 with respect to the additional authority 
provided on October 1, 1981.
  [(2) The Secretary shall enter into only such new contracts 
for preliminary loans as are consistent with the number of 
dwelling units for which contracts for annual contributions may 
be entered into.
  [(3) The full faith and credit of the United States is 
solemnly pledged to the payment of all annual contributions 
contracted for pursuant to this section, and there are hereby 
authorized to be appropriated in each fiscal year, out of any 
money in the Treasury not otherwise appropriated, the amounts 
necessary to provide for such payments.
  [(4) All payments of annual contributions pursuant to this 
section shall be made out of any funds available for purposes 
of this Act when such payments are due, except that funds 
obtained through the issuance of obligations pursuant to 
section 4(b) (including repayments or other realizations of the 
principal of loans made out of such funds) shall not be 
available for the payment of such annual contributions.
  [(5) During such period as the Secretary may prescribe for 
starting construction, the Secretary may approve the conversion 
of public housing development authority for use under section 
14 or for use for the acquisition and rehabilitation of 
property to be used in public housing, if the public housing 
agency, after consultation with the unit of local government, 
certifies that such assistance would be more effectively used 
for such purpose, and if the total number of units assisted 
will not be less than 90 per centum of the units covered by the 
original reservation.
  [(6) The aggregate amount of budget authority which may be 
obligated for contracts for annual contributions and for grants 
under section 17 is increased by $9,912,928,000 on October 1, 
1983, and by such sums as may be approved in appropriation Acts 
on October 1, 1984. The aggregate amount of budget authority 
that may be obligated for contracts for annual contributions 
for assistance under section 8, for contracts referred to in 
paragraphs (7)(A)(iv) and (7)(B)(iv), for grants for public 
housing, for comprehensive improvement assistance, and for 
amendments to existing contracts, is increased (to the extent 
approved in appropriation Acts) by $7,167,000,000 on October 1, 
1987, and by $7,300,945,000 on October 1, 1988. The aggregate 
amount of budget authority that may be obligated for assistance 
referred to in paragraph (7) is increased (to the extent 
approved in appropriation Acts) by $16,194,000,000 on October 
1, 1990, and by $14,709,400,000 on October 1, 1991. The 
aggregate amount of budget authority that may be obligated for 
assistance referred to in paragraph (7) is increased (to the 
extent approved in appropriation Acts) by $14,710,990,520 on 
October 1, 1992, and by $15,328,852,122 on October 1993.
  [(7)(A) Using the additional budget authority provided under 
paragraph (6) and the balances of budget authority that become 
available during fiscal year 1993, the Secretary shall, to the 
extent approved in appropriation Acts, reserve authority to 
enter into obligations aggregating--
          [(i) for public housing grants under subsection 
        (a)(2), not more than $830,900,800, of which amount not 
        more than $257,320,000 shall be available for Indian 
        housing;
          [(ii) for assistance under section 8, not more than 
        $1,977,662,720, of which $20,000,000 shall be available 
        for 15-year contracts for project-based assistance to 
        be used for a multicultural tenant empowerment and 
        homeownership project located in the District of 
        Columbia, except that assistance provided for such 
        project shall not be considered for purposes of the 
        percentage limitations under section 8(i)(2); except 
        that not more than 49 percent of any amounts 
        appropriated under this clause may be used for vouchers 
        under section 8(o);
          [(iii) for comprehensive improvement assistance 
        grants under section 14(k), not more than 
        $3,100,000,000;
          [(iv) for assistance under section 8 for property 
        disposition, not more than $93,032,000;
          [(v) for assistance under section 8 for loan 
        management, not more than $202,000,000;
          [(vi) for extensions of contracts expiring under 
        section 8, not more than $6,746,135,000, which shall be 
        for 5-year contracts for assistance under section 8 and 
        for loan management assistance under such section;
          [(vii) for amendments to contracts under section 8, 
        not more than $1,350,000,000;
          [(viii) for public housing lease adjustments and 
        amendments, not more than $83,055,000;
          [(ix) for conversions from leased housing contracts 
        under section 23 of this Act (as in effect immediately 
        before the enactment of the Housing and Community 
        Development Act of 1974) to assistance under section 8, 
        not more than $12,767,000; and
          [(x) for grants under section 24 for revitalization 
        of severely distressed public housing, not more than 
        $300,000,000.
  [(B) Using the additional budget authority provided under 
paragraph (6) and the balances of budget authority that become 
available during fiscal year 1994, the Secretary shall, to the 
extent approved in appropriation Acts, reserve authority to 
enter into obligations aggregating--
          [(i) for public housing grants under subsection 
        (a)(2), not more than $865,798,634, of which amount not 
        more than $268,127,440 shall be available for Indian 
        housing;
          [(ii) for assistance under section 8, not more than 
        $2,060,724,554, of which $20,000,000 shall be available 
        for 15-year contracts for project-based assistance to 
        be used for a multicultural tenant empowerment and 
        homeownership project located in the District of 
        Columbia, except that assistance provided for such 
        project shall not be considered for purposes of the 
        percentage limitations under section 8(i)(2); except 
        that not more than 49 percent of any amounts 
        appropriated under this clause may be used for vouchers 
        under section 8(o);
          [(iii) for comprehensive improvement assistance 
        grants under section 14(k), not more than 
        $3,230,200,000;
          [(iv) for assistance under section 8 for property 
        disposition, not more than $96,939,344;
          [(v) for assistance under section 8 for loan 
        management, not more than $210,484,000;
          [(vi) for extensions of contracts expiring under 
        section 8, not more than $7,029,472,670, which shall be 
        for 5-year contracts for assistance under section 8 and 
        for loan management assistance under such section;
          [(vii) for amendments to contracts under section 8, 
        not more than $1,406,700,000;
          [(viii) for public housing lease adjustments and 
        amendments, not more than $86,543,310;
          [(ix) for conversions from leased housing contracts 
        under section 23 of this Act (as in effect immediately 
        before the enactment of the Housing and Community 
        Development Act of 1974) to assistance under section 8, 
        not more than $13,303,214; and
          [(x) for grants under section 24 for revitalization 
        of severely distressed public housing, not more than 
        $312,600,000.
  [(C)(i) Any amount available for the conversion of a project 
to assistance under section 8(b)(1), if not required for such 
purpose, shall be used for assistance under section 8(b)(1).
  [(ii) Any amount available for assistance under section 8 for 
property disposition, if not required for such purpose, shall 
be used for assistance under section 8(b)(1).
  [(8) Any amount available for Indian housing under subsection 
(a) that is recaptured shall be used only for such housing.
  [(d) Any contract for loans or annual contributions, or both, 
entered into by the Secretary with a public housing agency, may 
cover one or more than one low-income housing project owned by 
such public housing agency; in the event the contract covers 
two or more projects, such projects may, for any of the 
purposes of this Act and of such contract (including, but not 
limited to, the determination of the amount of the loan, annual 
contributions, or payments in lieu of taxes, specified in such 
contract), be treated collectively as one project.
  [(e) In recognition that there should be local determination 
of the need for low-income housing to meet needs not being 
adequately met by private enterprise--
          [(1) the Secretary shall not make any contract with a 
        public housing agency for preliminary loans (all of 
        which shall be repaid out of any moneys which become 
        available to such agency for the development of the 
        projects involved) for surveys and planning in respect 
        to any low-income housing projects (i) unless the 
        governing body of the locality involved has by 
        resolution approved the application of the public 
        housing agency for such preliminary loan; and (ii) 
        unless the public housing agency has demonstrated to 
        the satisfaction of the Secretary that there is need 
        for such low-income housing which is not being met by 
        private enterprise; and
          [(2) the Secretary shall not make any contract for 
        loans (other than preliminary loans) or for 
        contributions pursuant to this Act unless the governing 
        body of the locality involved has entered into an 
        agreement with the public housing agency providing for 
        the local cooperation required by the Secretary 
        pursuant to this Act.
  [(f) Subject to the specific limitations or standards in this 
Act governing the terms of sales, rentals, leases, loans, 
contracts for annual contributions, or other agreements, the 
Secretary may, whenever he deems it necessary or desirable in 
the fulfillment of the purposes of this Act, consent to the 
modification, with respect to rate of interest, time of payment 
of any installment of principal or interest, security, amount 
of annual contribution, or any other term, of any contract or 
agreement of any kind to which the Secretary is a party. When 
the Secretary finds that it would promote economy or be in the 
financial interest of the Federal Government or is necessary to 
assure or maintain the lower income character of the project or 
projects involved, any contract heretofore or hereafter made 
for annual contributions, loans, or both, may be amended or 
superseded by a contract entered into by mutual agreement 
between the public housing agency and the Secretary. Contracts 
may not be amended or superseded in a manner which would impair 
the rights of the holders of any outstanding obligations of the 
public housing agency involved for which annual contributions 
have been pledged. Any rule of law contrary to this provision 
shall be deemed inapplicable.
  [(g) In addition to the authority of the Secretary under 
subsection (a) to pledge annual contributions as security for 
obligations issued by a public housing agency, the Secretary is 
authorized to pledge annual contributions as a guarantee of 
payment by a public housing agency of all principal and 
interest on obligations issued by it to assist the development 
or acquisition of the project to which the annual contributions 
relate, except that no obligation shall be guaranteed under 
this subsection if the income thereon is exempt from Federal 
taxation.
  [(h) Notwithstanding any other provision of law, a public 
housing agency may sell a low-income housing project to its 
lower income tenants, on such terms and conditions as the 
agency may determine, without affecting the Secretary's 
commitment to pay annual contributions with respect to that 
project, but such contributions shall not exceed the maximum 
contributions authorized under subsection (a) of this section.
  [(i) In entering into contracts for assistance with respect 
to newly constructed or substantially rehabilitated projects 
under this section (other than for projects assisted pursuant 
to section 8), the Secretary shall require the installation of 
a passive or active solar energy system in any such project 
where the Secretary determines that such installation would be 
cost effective over the estimated life of the system.
  [(j)(1) After September 30, 1987, in providing assistance 
under this Act to a public housing agency for public housing 
(other than for Indian families), the Secretary shall reserve 
funds for the development of public housing only if--
          [(A) the Secretary determines that additional amounts 
        are required to complete the development of dwelling 
        units for which amounts are obligated on or before such 
        date;
          [(B) the public housing agency certifies to the 
        Secretary that 85 percent of the public housing 
        dwelling units of the public housing agency--
                  [(i) are maintained in substantial compliance 
                with the housing quality standards established 
                by the Secretary under section 8(o)(6);
                  [(ii) will be so maintained upon completion 
                of modernization for which funding has been 
                awarded; or
                  [(iii) will be so maintained upon completion 
                of modernization for which applications are 
                pending that have been submitted in good faith 
                under section 14 (or a comparable State or 
                local government program) and that there is a 
                reasonable expectation, as determined by the 
                Secretary in writing, that the applications 
                would be approved;
          [(C) the public housing agency certifies that such 
        development--
                  [(i) will replace dwelling units that are 
                disposed of or demolished by the public housing 
                agency, including dwelling units disposed of or 
                lost through sale to tenants or through units 
                redesign; or
                  [(ii) is required to comply with court orders 
                or directions of the Secretary;
          [(D) the public housing agency certifies that it has 
        demands for family housing not satisfied by the rental 
        assistance programs established in subsection (b) or 
        (o) of section 8 for which it plans to construct or 
        acquire projects of not more than 100 units; or
          [(F) the Secretary makes such reservation under 
        paragraph (2).
          [(E) in the case of an application for development of 
        projects (or portions of projects) designated under 
        section 7(a)(1) for occupancy for elderly families, 
        only if the agency certifies to the Secretary that the 
        use of such assistance will assist in expanding the 
        housing available for eligible persons with 
        disabilities identified in the allocation plan for the 
        agency submitted under section 7(f); and
  [(2)(A) Notwithstanding any other provision of law, the 
Secretary may reserve not more than 20 percent of any amounts 
appropriated for development of public housing in each fiscal 
year for the substantial redesign, reconstruction, or 
redevelopment of existing obsolete public housing projects or 
buildings and for the costs of improving the management and 
operation of projects undergoing redesign, reconstruction, or 
redevelopment under this paragraph (to the extent that such 
improvement is necessary to maintain the physical improvements 
resulting from such redesign, reconstruction, or 
redevelopment).
  [(B) For purposes of this paragraph, the term ``obsolete 
public housing project or building'' means a public housing 
project or building (i) having design or marketability problems 
resulting in vacancy in more than 25 percent of the units, or 
(ii)(I) for which the costs for redesign, reconstruction, or 
redevelopment (including any costs for lead-based paint 
abatement activities) exceed 70 percent of the total 
development cost limits for new construction of similar units 
in the area, and (II) which has an occupancy density or a 
building height that is significantly in excess of that which 
prevails in the neighborhood in which the project is located, a 
bedroom configuration that could be altered to better serve the 
needs of families seeking occupancy to dwellings of the public 
housing agency, significant security problems in and around the 
project, or significant physical deterioration or inefficient 
energy and utility systems.
  [(C) The Secretary shall allocate amounts reserved under this 
section to public housing agencies on the basis of a 
competition among public housing agencies applying for such 
amounts. The competition shall be based on--
          [(i) the management capability of the public housing 
        agency to carry out the redesign, reconstruction, or 
        redevelopment;
          [(ii) the expected term of the useful life of the 
        project or building after redesign, reconstruction or 
        redevelopment; and
          [(iii) the likelihood of achieving full occupancy 
        within the projects or buildings of the agency that are 
        to be assisted under this paragraph.
  [(D) The Secretary shall establish limitations on the total 
costs of any project or building receiving amounts under this 
paragraph for redesign, reconstruction, and redevelopment. The 
cost limitations shall not be related to the total development 
cost system for new development or to the cost limits for 
modernization and shall recognize the higher direct costs of 
such work.
  [(E) Assistance may not be provided under this paragraph for 
any project or building assisted under section 14.
  [(F)(i) For each fiscal year for which amounts are reserved 
or appropriated for the purposes of this paragraph, the 
Secretary shall establish performance goals to evaluate the 
effectiveness of the use of such amounts. The goals shall--
          [(I) be designed to maximize the effectiveness of the 
        expenditures in a quantifiable manner; and
          [(II) describe the number of units to be redesigned, 
        redeveloped, and reconstructed with such amounts and 
        improvements in the management of projects so assisted 
        to be accomplished with such amounts.
  [(ii) Not later than 60 days after the end of each such 
fiscal year, the Secretary shall submit a report to the 
Congress, which shall describe the performance goals 
established for the fiscal year, the activities carried out 
with such amounts, and a statement of whether the performance 
goals were met. If the performance goals were not met, the 
report shall contain--
          [(I) an explanation of why the goals were not met and 
        a description of any managerial deficiencies or legal 
        problems that contributed to not meeting such goals;
          [(II) plans and a schedule for achieving the level of 
        performance under such performance goals;
          [(III) recommendations for legislative or regulatory 
        changes necessary to achieve the performance goals or 
        improve performance; and
          [(IV) a statement of whether the performance goals 
        established for the fiscal year were impractical or 
        infeasible, and, if so, the factors that contributed 
        and resulted in establishing such impractical or 
        infeasible goals and recommendations of actions to meet 
        such goals, which may include changing the goals or 
        altering or eliminating the program under this 
        paragraph for major reconstruction of projects.
  [(G)(i) In fiscal years 1993 and 1994, the Secretary shall 
commit for use under clause (ii) not less than 5 percent of any 
amounts reserved under subparagraph (A) for each such fiscal 
year.
  [(ii) The amounts referred to in clause (i) shall be 
available to public housing agencies only for use for projects 
(or portions of projects) designated for occupancy under 
section 7(a)(1) and (e) by disabled families.
  [(iii) In allocating amounts reserved under this subparagraph 
among public housing agencies, the Secretary shall consider the 
need for any such amounts as identified in the allocation plans 
submitted by agencies under section 7(f).
  [(3)(A) In fiscal years 1993 and 1994, the Secretary shall 
reserve for use under subparagraph (B) not less than 5 percent 
of any amounts approved in appropriation Acts for each such 
fiscal year for public housing grants under subsection (a)(2) 
that are not designated under such Acts for use under paragraph 
(2) of this subsection for the substantial redesign, 
reconstruction, or redevelopment of existing public housing 
projects, buildings, or units.
  [(B) Any amount reserved under subparagraph (A) shall be 
available only to public housing agencies that have designated 
projects (or portions of projects) for occupancy under section 
7(a)(1) for use only for the costs of development or 
acquisition of public housing projects or buildings designated 
for occupancy under section 7(a)(1) and (e) by disabled 
families. A building so assisted may not contain more than 25 
dwelling units, except that the Secretary may (in the 
discretion of the Secretary) waive such limitation for a 
building.
  [(C) The Secretary shall carry out a competition for budget 
authority reserved under subparagraph (A) among eligible public 
housing agencies and shall allocate such budget authority to 
public housing agencies pursuant to the competition, based on 
(i) the need of the agency for such assistance (taking into 
consideration the allocation plans submitted under section 7(f) 
by agencies), and (ii) the extent to which the public housing 
projects and buildings to be developed or assisted meet the 
requirements of section 7(e).
  [(k) After the reservation of public housing development 
funds to a public housing agency, the Secretary may not 
recapture any of the amounts included in such reservation due 
to the failure of a public housing agency to begin construction 
or rehabilitation, or to complete acquisition, during the 30-
month period following the date of such reservation. During 
such 30-month period, the public housing agency shall be 
permitted to change the site of the public housing project or 
reformulate the project, if not less than the original number 
of dwelling units are to be constructed, rehabilitated, or 
acquired. There shall be excluded from the computation of such 
30-month period any delay in the beginning of construction or 
rehabilitation of such project caused by (1) the failure of the 
Secretary to process such project within a reasonable period of 
time; (2) any environmental review requirement; (3) any legal 
action affecting such project; or (4) any other factor beyond 
the control of the public housing agency.
  [(l) The Secretary may not use as a criterion for 
distributing assistance under this section the progress made by 
an Indian public housing agency in collecting rents owed by 
tenants unless--
          [(1) such criterion is used as 1 of several criteria 
        that are weighted proportionally and is established by 
        regulations issued after public notice and opportunity 
        to comment in accordance with section 553 of title 5, 
        United States Code; or
          [(2) the Secretary determines that the Indian public 
        housing agency has demonstrated a pattern of 
        substantial noncompliance with requirements governing 
        the collection of rents.

                 [contract provisions and requirements

  [Sec. 6. (a) The Secretary may include in any contract for 
loans, contributions, sale, lease, mortgage, or any other 
agreement or instrument made pursuant to this Act, such 
covenants, conditions, or provisions as he may deem necessary 
in order to insure the lower income character of the project 
involved. Any such contract may contain a condition requiring 
the maintenance of an open space or playground in connection 
with the housing project involved if deemed necessary by the 
Secretary for the safety or health of children. Any such 
contract shall require that, except in the case of housing 
predominantly for elderly or disabled families, high-rise 
elevator projects shall not be provided for families with 
children unless the Secretary makes a determination that there 
is no practical alternative.
  [(b)(1) Each contract for loans (other than preliminary 
loans) or contributions for the development, acquisition, or 
operation of public housing and public housing for Indians and 
Alaska Natives in accordance with the Indian Housing Act of 
1988 shall provide that the total development cost of the 
project on which the computation of any annual contributions 
under this Act may be based may not exceed the amount 
determined under paragraph (2) (for the appropriate structure 
type) unless the Secretary provides otherwise, and in any case 
may not exceed 110 per centum of such amount unless the 
Secretary for good cause determines otherwise.
  [(2) For purposes of paragraph (1), the Secretary shall 
determine the total development cost by multiplying the 
construction cost guideline for the project (which shall be 
determined by averaging the current construction costs, as 
listed by not less than 2 nationally recognized residential 
construction cost indices, for publicly bid construction of a 
good and sound quality) by--
          [(A) in the case of elevator type structures, 1.6; 
        and
          [(B) in the case of nonelevator type structures, 
        1.75.
  [(c) Every contract for contributions shall provide that--
          [(1) the Secretary may require the public housing 
        agency to review and revise its maximum income limits 
        if the Secretary determines that changed conditions in 
        the locality make such revision necessary in achieving 
        the purposes of this Act;
          [(2) the public housing agency shall determine, and 
        so certify to the Secretary, that each family in the 
        project was admitted in accordance with duly adopted 
        regulations and approved income limits; and the public 
        housing agency shall review the incomes of families 
        living in the project no less frequently than annually;
          [(3) the public housing agency shall promptly notify 
        (i) any applicant determined to be ineligible for 
        admission to the project of the basis for such 
        determination and provide the applicant upon request, 
        within a reasonable time after the determination is 
        made, with an opportunity for an informal hearing on 
        such determination, and (ii) any applicant determined 
        to be eligible for admission to the project of the 
        approximate date of occupancy insofar as such date can 
        be reasonably determined;
          [(4) the public housing agency shall comply with such 
        procedures and requirements as the Secretary may 
        prescribe to assure that sound management practices 
        will be followed in the operation of the project, 
        including requirements pertaining to--
                  [(A) except for projects or portions of 
                projects designated for occupancy pursuant to 
                section 7(a) with respect to which the 
                Secretary has determined that application of 
                this subparagraph would result in excessive 
                delays in meeting the housing need of such 
                families, the establishment of tenant selection 
                criteria which--
                          [(i) for not less than 50 percent of 
                        the units that are made available for 
                        occupancy in a given fiscal year, give 
                        preference to families that occupy 
                        substandard housing (including families 
                        that are homeless or living in a 
                        shelter for homeless families), are 
                        paying more than 50 percent of family 
                        income for rent, or are involuntarily 
                        displaced (including displacement 
                        because of disposition of a multifamily 
                        housing project under section 203 of 
                        the Housing and Community Development 
                        Amendments of 1978) at the same time 
                        they are seeking assistance under this 
                        Act;
                          [(ii) for any remaining units to be 
                        made available for occupancy, give 
                        preference in accordance with a system 
                        of preferences established by the 
                        public housing agency in writing and 
                        after public hearing to respond to 
                        local housing needs and priorities, 
                        which may include (I) assisting very 
                        low-income families who either reside 
                        in transitional housing assisted under 
                        title IV of the Stewart B. McKinney 
                        Homeless Assistance Act, or participate 
                        in a program designed to provide public 
                        assistance recipients with greater 
                        access to employment and educational 
                        opportunities; (II) assisting families 
                        in accordance with subsection (u)(2); 
                        (III) assisting families identified by 
                        local public agencies involved in 
                        providing for the welfare of children 
                        as having a lack of adequate housing 
                        that is a primary factor in the 
                        imminent placement of a child in foster 
                        care, or in preventing the discharge of 
                        a child from foster care and 
                        reunification with his or her family; 
                        (IV) assisting youth, upon discharge 
                        from foster care, in cases in which 
                        return to the family or extended family 
                        or adoption is not available; (V) 
                        assisting families that include one or 
                        more adult members who are employed; 
                        and (VI) achieving other objectives of 
                        national housing policy as affirmed by 
                        Congress; subclause (V) shall be 
                        effective only during fiscal year 1995;
                          [(iii) prohibit any individual or 
                        family evicted from housing assisted 
                        under the Act by reason of drug-related 
                        criminal activity from having a 
                        preference under any provision of this 
                        subparagraph for 3 years unless the 
                        evicted tenant successfully completes a 
                        rehabilitation program approved by the 
                        agency, except that the agency may 
                        waive the application of this clause 
                        under standards established by the 
                        Secretary (which shall include waiver 
                        for any member of a family of an 
                        individual prohibited from tenancy 
                        under this clause who the agency 
                        determines clearly did not participate 
                        in and had no knowledge of such 
                        criminal activity or when circumstances 
                        leading to eviction no longer exist); 
                        and
                          [(iv) are designed to ensure that, to 
                        the maximum extent feasible, the 
                        projects of an agency will include 
                        families with a broad range of incomes 
                        and will avoid concentrations of low-
                        income and deprived families with 
                        serious social problems.
                  [(B) the establishment of satisfactory 
                procedures designed to assure the prompt 
                payment and collection of rents and the prompt 
                processing of evictions in the case of 
                nonpayment of rent;
                  [(C) the establishment of effective tenant-
                management relationships designated to assure 
                the satisfactory standards of tenant security 
                and project maintenance are formulated and that 
                the public housing agency (together with tenant 
                councils where they exist) enforces those 
                standards fully and effectively;
                  [(D) the development by local housing 
                authority managements of viable homeownership 
                opportunity programs for low-income families 
                capable of assuming the responsibilities of 
                homeownership;
                  [(E) except in the case of agencies not 
                receiving operating assistance under section 9, 
                the establishment and maintenance of a system 
                of accounting for rental collections and costs 
                (including administrative, utility, 
                maintenance, repair and other operating costs) 
                for each project or operating cost center (as 
                determined by the Secretary), which collections 
                and costs shall be made available to the 
                general public and submitted to the appropriate 
                local public official (as determined by the 
                Secretary); except that the Secretary may 
                permit agencies owning or operating less than 
                500 units to comply with the requirements of 
                this subparagraph by accounting on an agency-
                wide basis; and
                  [(F) requiring the public housing agency to 
                ensure and maintain compliance with subtitle C 
                of title VI of the Housing and Community 
                Development Act of 1992 and any regulations 
                issued under such subtitle.
  [(d) Every contract for contributions with respect to a low-
income housing project shall provide that no contributions by 
the Secretary shall be made available for such project unless 
such project (exclusive of any portion thereof which is not 
assisted by contributions under this Act) is exempt from all 
real and personal property taxes levied or imposed by the 
State, city, county, or other political subdivision; and such 
contract shall require the public housing agency to make 
payments in lieu of taxes equal to 10 per centum of the sum of 
the shelter rents charged in such project, or such lesser 
amount as (i) is prescribed by State law, or (ii) is agreed to 
by the local governing body in its agreement for local 
cooperation with the public housing agency required under 
section 5(e)(2) of this Act, or (iii) is due to failure of a 
local public body or bodies other than the public housing 
agency to perform any obligation under such agreement. If any 
such project is not exempt from all real and personal property 
taxes levied or imposed by the State, city, county, or other 
political subdivision, such contract shall provide, in lieu of 
the requirement for tax exemption and payments in lieu of 
taxes, that no contributions by the Secretary shall be made 
available for such project unless and until the State, city, 
county, or other political subdivision in which such project is 
situated shall contribute, in the form of cash or tax 
remission, the amount by which the taxes paid with respect to 
the project exceed 10 per centum of the shelter rents charged 
in such project.
  [(e) Every contract for contributions shall provide that 
whenever in any year the receipts of a public housing agency in 
connection with a low-income housing project exceed its 
expenditures (including debt service, operation, maintenance, 
establishment of reserves, and other costs and charges), an 
amount equal to such excess shall be applied, or set aside for 
application, to purposes which, in the determination of the 
Secretary, will effect a reduction in the amount of subsequent 
annual contributions.
  [(g) Every contract for contributions (including contracts 
which amend or supersede contracts previously made) may provide 
that--
          [(1) upon the occurrence of a substantial default in 
        respect to the covenants or conditions to which the 
        public housing agency is subject (as such substantial 
        default shall be defined in such contract), the public 
        housing agency shall be obligated at the option of the 
        Secretary either to convey title in any case where, in 
        the determination of the Secretary (which determination 
        shall be final and conclusive), such conveyance of 
        title is necessary to achieve the purposes of this Act, 
        or to deliver to the Secretary possession of the 
        project, as then constituted, to which such contract 
        relates; and
          [(2) the Secretary shall be obligated to reconvey or 
        redeliver possession of the project, as constituted at 
        the time of reconveyance or redelivery, to such public 
        housing agency or to its successor (if such public 
        housing agency or a successor exists) upon such terms 
        as shall be prescribed in such contract, and as soon as 
        practicable (i) after the Secretary is satisfied that 
        all defaults with respect to the project have been 
        cured, and that the project will, in order to fulfill 
        the purposes of this Act, thereafter be operated in 
        accordance with the terms of such contract; or (ii) 
        after the termination of the obligation to make annual 
        contributions available unless there are any 
        obligations or covenants of the public housing agency 
        to the Secretary which are then in default. Any prior 
        conveyances and reconveyances or deliveries and 
        redeliveries of possession shall not exhaust the right 
        to require a conveyance or delivery of possession of 
        the project to the Secretary pursuant to subparagraph 
        (1) upon the subsequent occurrence of a substantial 
        default.
Whenever such a contract for annual contributions includes 
provisions which the Secretary in such contract determines are 
in accordance with this subsection, and the portion of the 
annual contribution payable for debt service requirements 
pursuant to such contract has been pledged by the public 
housing agency as security for the payment of the principal and 
interest on any of its obligations, the Secretary 
(notwithstanding any other provisions of this Act) shall 
continue to make such annual contributions available for the 
project so long as any of such obligations remain outstanding, 
and may covenant in such contract that in any event such annual 
contributions shall in each year be at least equal to an amount 
which, together with such income or other funds as are actually 
available from the project for the purpose at the time such 
annual contribution is made, will suffice for the payment of 
all installments, falling due within the next succeeding twelve 
months, of principal and interest on the obligations for which 
the annual contributions provided for in the contract shall 
have been pledged as security. In no case shall such annual 
contributions be in excess of the maximum sum specified in the 
contract involved, nor for longer than the remainder of the 
maximum period fixed by the contract.
  [(h) On or after October 1, 1983, the Secretary may enter 
into a contract involving new construction only if the public 
housing agency demonstrates to the satisfaction of the 
Secretary that the cost of new construction in the neighborhood 
where the public housing agency determines the housing is 
needed is less than the cost of acquisition or acquisition and 
rehabilitation in such neighborhood, including any reserve fund 
under subsection (i), would be.
  [(i) The Secretary may, upon application by a public housing 
agency in connection with the acquisition of housing for use as 
public housing, establish and set aside a reserve fund in an 
amount not to exceed 30 per centum of the acquisition cost 
which shall be available for use for major repairs to such 
housing.
  [(j)(1) The Secretary shall develop and publish in the 
Federal Register indicators to assess the management 
performance of public housing agencies and resident management 
corporations. The indicators shall be established by rule under 
section 553 of title 5, United States Code. Such indicators 
shall enable the Secretary to evaluate the performance of 
public housing agencies and resident management corporations in 
all major areas of management operations. The Secretary shall, 
in particular, use the following indicators:
          [(A) The number and percentage of vacancies within an 
        agency's inventory, including the progress that an 
        agency has made within the previous 3 years to reduce 
        such vacancies.
          [(B) The amount and percentage of funds obligated to 
        the public housing agency under section 14 of this Act 
        which remain unexpended after 3 years.
          [(C) The percentage of rents uncollected.
          [(D) The energy consumption (with appropriate 
        adjustments to reflect different regions and unit 
        sizes).
          [(E) The average period of time that an agency 
        requires to repair and turn-around vacant units.
          [(F) The proportion of maintenance work orders 
        outstanding, including any progress that an agency has 
        made during the preceding 3 years to reduce the period 
        of time required to complete maintenance work orders.
          [(G) The percentage of units that an agency fails to 
        inspect to ascertain maintenance or modernization needs 
        within such period of time as the Secretary deems 
        appropriate (with appropriate adjustments, if any, for 
        large and small agencies).
          [(H) Any other factors as the Secretary deems 
        appropriate.
  [(2)(A)(i) The Secretary shall, under the rulemaking 
procedures under section 553 of title 5, United States Code, 
establish procedures for designating troubled public housing 
agencies, which procedures shall include identification of 
serious and substantial failure to perform as measured by the 
performance indicators specified under paragraph (1) and such 
other factors as the Secretary may deem to be appropriate. The 
Secretary shall also designate, by rule under section 553 of 
title 5, United States Code, agencies that are troubled with 
respect to the program under section 14.
  [(ii) The Secretary may also, in consultation with national 
organizations representing public housing agencies and public 
officials (as the Secretary determines appropriate), identify 
and commend public housing agencies that meet the performance 
standards established under paragraph (1) in an exemplary 
manner.
  [(iii) The Secretary shall establish procedures for public 
housing agencies to appeal designation as a troubled agency 
(including designation as a troubled agency for purposes of the 
program under section 14), to petition for removal of such 
designation, and to appeal any refusal to remove such 
designation.
  [(B)(i) Upon designating a public housing agency as troubled 
pursuant to subparagraph (A) and determining that an assessment 
under this subparagraph will not duplicate any review conducted 
under section 14(p), the Secretary shall provide for an on-
site, independent assessment of the management of the agency.
  [(ii) To the extent the Secretary deems appropriate (taking 
into account an agency's performance under the indicators 
specified under paragraph (1)), the assessment team shall also 
consider issues relating to the agency's resident population 
and physical inventory, including the extent to which (I) the 
agency's comprehensive plan prepared pursuant to section 14 
adequately and appropriately addresses the rehabilitation needs 
of the agency's inventory, (II) residents of the agency are 
involved in and informed of significant management decisions, 
and (III) any projects in the agency's inventory are severely 
distressed and eligible for assistance pursuant to section 24.
  [(iii) An independent assessment under this subparagraph 
shall be carried out by a team of knowledgeable individuals 
selected by the Secretary (referred to in this section as the 
``assessment team'') with expertise in public housing and real 
estate management. In conducting an assessment, the assessment 
team shall consult with the residents and with public and 
private entities in the jurisdiction in which the public 
housing is located. The assessment team shall provide to the 
Secretary and the public housing agency a written report, which 
shall contain, at a minimum, recommendations for such 
management improvements as are necessary to eliminate or 
substantially remedy existing deficiencies.
  [(C) The Secretary shall seek to enter into an agreement with 
each troubled public housing agency, after reviewing the report 
submitted pursuant to subparagraph (B) and consulting with the 
agency's assessment team.
To the extent the Secretary deems appropriate (taking into 
account an agency's performance under the indicators specified 
under paragraph (1)), such agreement shall also set forth a 
plan for enhancing resident involvement in the management of 
the public housing agency. Such agreement shall set forth--
          [(i) targets for improving performance as measured by 
        the performance indicators specified under paragraph 
        (1) and other requirements within a specified period of 
        time;
          [(ii) strategies for meeting such targets, including 
        a description of the technical assistance that the 
        Secretary will make available to the agency; and
          [(iii) incentives or sanctions for effective 
        implementation of such strategies, which may include 
        any constraints on the use of funds that the Secretary 
        determines are appropriate.
The Secretary and the public housing agency shall, to the 
maximum extent practicable, seek the assistance of local public 
and private entities in carrying out the agreement.
      [(D) The Secretary shall apply the provisions of this 
paragraph to resident management corporations as well as public 
housing agencies.
  [(3)(A) Notwithstanding any other provision of law or of any 
contract for contributions, upon the occurrence of events or 
conditions that constitute a substantial default by a public 
housing agency with respect to the covenants or conditions to 
which the public housing agency is subject or an agreement 
entered into under paragraph (2), the Secretary may--
          [(i) solicit competitive proposals from other public 
        housing agencies and private housing management agents 
        (which may be selected by existing tenants through 
        administrative procedures established by the Secretary) 
        in the eventuality that these agents may be needed for 
        managing all, or part, of the housing administered by a 
        public housing agency;
          [(ii) petition for the appointment of a receiver 
        (which may be another public housing agency or a 
        private management corporation) of the public housing 
        agency to any district court of the United States or to 
        any court of the State in which the real property of 
        the public housing agency is situated, that is 
        authorized to appoint a receiver for the purposes and 
        having the powers prescribed in this subsection;
          [(iii) solicit competitive proposals from other 
        public housing agencies and private entities with 
        experience in construction management in the 
        eventuality that such agencies or firms may be needed 
        to oversee implementation of assistance made available 
        under section 14 for the housing; and
          [(iv) require the agency to make other arrangements 
        acceptable to the Secretary and in the best interests 
        of the public housing residents for managing all, or 
        part of, such housing.
Residents of a public housing agency designated as troubled 
pursuant to paragraph (2)(A) may petition the Secretary in 
writing to take 1 or more of the actions referred to in this 
subparagraph. The Secretary shall respond to such petitions in 
a timely manner with a written description of the actions, if 
any, the Secretary plans to take and, where applicable, the 
reasons why such actions differ from the course proposed by the 
residents.
  [(B) The Secretary may make available to receivers and other 
entities selected or appointed pursuant to this paragraph such 
assistance as is necessary to remedy the substantial 
deterioration of living conditions in individual public housing 
developments or other related emergencies that endanger the 
health, safety and welfare of the residents.
  [(C) In any proceeding under subparagraph (A)(ii), upon a 
determination that a substantial default has occurred, and 
without regard to the availability of alternative remedies, the 
court shall appoint a receiver to conduct the affairs of the 
public housing agency in a manner consistent with this Act and 
in accordance with such further terms and conditions as the 
court may provide. The court shall have power to grant 
appropriate temporary or preliminary relief pending final 
disposition of the petition by the Secretary.
  [(D) The appointment of a receiver pursuant to this 
subsection may be terminated, upon the petition of any party, 
when the court determines that all defaults have been cured and 
the housing operated by the public housing agency will 
thereafter be operated in accordance with the covenants and 
conditions to which the public housing agency is subject.
  [(4) The Secretary shall submit to the Congress annually, as 
a part of the report of the Secretary under section 8 of the 
Department of Housing and Urban Development Act, a report 
that--
          [(A) identifies the public housing agencies that have 
        been designated as troubled under paragraph (2);
          [(B) describes the grounds on which such public 
        housing agencies were designated as troubled and 
        continue to be so designated;
          [(C) describes the agreements that have been entered 
        into with such agencies under such paragraph;
          [(D) describes the status of progress under such 
        agreements;
          [(E) describes any action that has been taken in 
        accordance with paragraph (3); and
          [(F) describes the status of any public housing 
        agency designated as troubled with respect to the 
        program under section 14 and specifies the amount of 
        assistance the agency received under section 14 and any 
        credits accumulated by the agency under section 
        14(k)(5)(D).
  [(k) The Secretary shall by regulation require each public 
housing agency receiving assistance under this Act to establish 
and implement an administrative grievance procedure under which 
tenants will--
          [(1) be advised of the specific grounds of any 
        proposed adverse public housing agency action;
          [(2) have an opportunity for a hearing before an 
        impartial party upon timely request within any period 
        applicable under subsection (l);
          [(3) have an opportunity to examine any documents or 
        records or regulations related to the proposed action;
          [(4) be entitled to be represented by another person 
        of their choice at any hearing;
          [(5) be entitled to ask questions of witnesses and 
        have others make statements on their behalf; and
          [(6) be entitled to receive a written decision by the 
        public housing agency on the proposed action.
For any grievance concerning an eviction or termination of 
tenancy that involves any criminal activity that threatens the 
health, safety, or right to peaceful enjoyment of the premises 
of other tenants or employees of the public housing agency or 
any drug-related criminal activity on or near such premises, 
the agency may (A) establish an expedited grievance procedure 
as the Secretary shall provide by rule under section 553 of 
title 5, United States Code, or (B) exclude from its grievance 
procedure any such grievance, in any jurisdiction which 
requires that prior to eviction, a tenant be given a hearing in 
court which the Secretary determines provides the basic 
elements of due process (which the Secretary shall establish by 
rule under section 553 of title 5, United States Code). Such 
elements of due process shall not include a requirement that 
the tenant be provided an opportunity to examine relevant 
documents within the possession of the public housing agency. 
The agency shall provide to the tenant a reasonable 
opportunity, prior to hearing or trial, to examine any relevant 
documents, records, or regulations directly related to the 
eviction or termination.
  [(l) Each public housing agency shall utilize leases which--
          [(1) do not contain unreasonable terms and 
        conditions;
          [(2) obligate the public housing agency to maintain 
        the project in a decent, safe, and sanitary condition;
          [(3) require the public housing agency to give 
        adequate written notice of termination of the lease 
        which shall not be less than--
                  [(A) a reasonable time, but not to exceed 30 
                days, when the health or safety of other 
                tenants or public housing agency employees is 
                threatened;
                  [(B) 14 days in the case of nonpayment of 
                rent; and
                  [(C) 30 days in any other case;
          [(4) require that the public housing agency may not 
        terminate the tenancy except for serious or repeated 
        violation of the terms or conditions of the lease or 
        for other good cause;
          [(5) provide that any criminal activity that 
        threatens the health, safety, or right to peaceful 
        enjoyment of the premises by other tenants or any drug-
        related criminal activity on or near such premises, 
        engaged in by a public housing tenant, any member of 
        the tenant's household, or any guest or other person 
        under the tenant's control, shall be cause for 
        termination of tenancy; and
          [(6) specify that with respect to any notice of 
        eviction or termination, notwithstanding any State law, 
        a public housing tenant shall be informed of the 
        opportunity, prior to any hearing or trial, to examine 
        any relevant documents, records or regulations directly 
        related to the eviction or termination.
For purposes of paragraph (5), the term ``drug-related criminal 
activity'' means the illegal manufacture, sale, distribution, 
use, or possession with intent to manufacture, sell, 
distribute, or use, of a controlled substance (as defined in 
section 102 of the Controlled Substances Act (21 U.S.C. 802)).
  [(m) The Secretary shall not impose any unnecessarily 
duplicative or burdensome reporting requirements on tenants or 
public housing agencies assisted under this Act.
  [(n) When a public housing agency evicts an individual or 
family from a dwelling unit for engaging in criminal activity, 
including drug-related criminal activity, the public housing 
agency shall notify the local post office serving that dwelling 
unit that such individual or family is no longer residing in 
the dwelling unit.
  [(o) Subject to the preference rules specified in subsection 
(c)(4)(A), in providing housing in low-income housing projects, 
each public housing agency may coordinate with any local public 
agencies involved in providing for the welfare of children to 
make available dwelling units to--
          [(1) families identified by the agencies as having a 
        lack of adequate housing that is a primary factor--
                  [(A) in the imminent placement of a child in 
                foster care; or
                  [(B) in preventing the discharge of a child 
                from foster care and reunification with his or 
                her family; and
          [(2) youth, upon discharge from foster care, in cases 
        in which return to the family or extended family or 
        adoption is not available.
  [(p) With respect to amounts available for obligation on or 
after October 1, 1991, the criteria established under section 
213(d)(5)(B) of the Housing and Community Development Act of 
1974 for any competition for assistance for new construction, 
acquisition, or acquisition and rehabilitation of public 
housing shall give preference to applications for housing to be 
located in a local market area that has an inadequate supply of 
housing available for use by very low-income families. The 
Secretary shall establish criteria for determining that the 
housing supply of a local market area is inadequate, which 
shall require--
          [(1)(A) information regarding housing market 
        conditions showing that the supply of rental housing 
        affordable by very low-income families is inadequate, 
        taking into account vacancy rates in such housing and 
        other market indicators; and
          [(B) evidence that significant numbers of families in 
        the local market area holding certificates and vouchers 
        under section 8 are experiencing significant difficulty 
        in leasing housing meeting program and family-size 
        requirements; or
          [(2) evidence that the proposed development would 
        provide increased housing opportunities for minorities 
        or address special housing needs.

                          [designated housing

  [Sec. 7. (a) Authority To Provide Designated Housing.--
          [(1) In general.--Notwithstanding any other provision 
        of law, a public housing agency whose allocation plan 
        under subsection (f) (and any biannual update) has been 
        approved by the Secretary may, to the extent provided 
        in the allocation plan, provide public housing projects 
        (or portions of projects) designated for occupancy by 
        (A) only elderly families, (B) only disabled families 
        (subject to the provisions of subsection (e)), or (C) 
        elderly and disabled families.
          [(2) Priority for occupancy.--In determining priority 
        for admission to public housing projects (or portions 
        of projects) that are designated for occupancy as 
        provided in paragraph (1), the public housing agency 
        may make units in such projects (or portions) available 
        only to the types of families for whom the project is 
        designated. Among such types of families, preference 
        for occupancy in such projects (or portions) shall be 
        given according to the preferences for occupancy under 
        section 6(c)(4)(A).
          [(3) Eligibility of near-elderly families.--If a 
        public housing agency determines (in accordance with 
        regulations established by the Secretary) that there 
        are insufficient numbers of elderly families to fill 
        all the units in a project (or portion of a project) 
        designated under paragraph (1) for occupancy by only 
        elderly families, the agency may (pursuant to the 
        approved allocation plan under subsection (f) for the 
        agency) provide that near-elderly families who qualify 
        for preferences for occupancy under section 6(c)(4)(A) 
        may occupy dwelling units in the project (or portion).
          [(4) Vacancy.--Notwithstanding the authority under 
        paragraphs (1) and (2) to designate public housing 
        projects (or portions of projects) for occupancy by 
        only certain types of families, a public housing agency 
        shall make any dwelling unit that is ready for 
        occupancy in such a project (or portion of a project) 
        that has been vacant for more than 60 consecutive days 
        generally available for occupancy (subject to the 
        requirements of this title) without regard to such 
        designation.
    [(b) Availability of Housing.--
          [(1) Tenant choice.--The decision of any disabled 
        family not to occupy or accept occupancy in an 
        appropriate type of project or 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 projects in public housing or assistance 
        under this title.
          [(2) Discriminatory selection.--Paragraph (1) shall 
        not apply to any family who 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, sex, disability, familial 
        status, or national origin of occupants of 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 who is not of appropriate family 
        size for the dwelling unit.
  [(c) Prohibition of Evictions.--Any tenant who is lawfully 
residing in a dwelling unit in the project may not be evicted 
or otherwise required to vacate such unit because of the 
designation of the project (or portion of a project) or because 
of any action taken by the Secretary of Housing and Urban 
Development or any public housing agency pursuant to this 
section.
  [(d) Accommodation of Housing and Service Needs.--In 
designing, developing, otherwise acquiring and operating, 
designating, and providing housing and assistance under this 
title, each public housing agency shall meet, to the extent 
practicable, the housing and service needs of eligible families 
applying for assistance under this title, as provided in any 
allocation plan of the agency approved under subsection (f). To 
meet such needs, public housing agencies may, wherever 
practicable and in accordance with any allocation plan of the 
agency--
          [(1) provide housing in which supportive services are 
        provided, facilitated, or coordinated, mixed housing, 
        shared housing, family housing, group homes, congregate 
        housing, and other housing as the public housing agency 
        considers appropriate;
          [(2) carry out major reconstruction of obsolete 
        public housing projects and reconfiguration of public 
        housing dwelling units; and
          [(3) provide tenant-based assistance under section 
        811(b)(1).
  [(e) Application for Designated Housing for Disabled 
Families.--
          [(1) Requirement.--A project (or portion of a 
        project) may be designated under subsection (a)(1) for 
        occupancy by only disabled families only if the public 
        housing agency administering the project complies with 
        the other requirements of this section and the 
        Secretary approves an application under this subsection 
        for such designation. The Secretary shall establish the 
        form and procedures for submission and approval of 
        applications under this subsection.
          [(2) Contents.--An application under this subsection 
        shall contain--
                  [(i) a description of the projects (or 
                portions of projects) to be designated (which 
                may include group homes, independent living 
                facilities, units in multifamily housing 
                developments, condominium housing, cooperative 
                housing, and scattered site housing);
                  [(ii) a supportive service plan--
                          [(I) describing the needs of persons 
                        with disabilities that the housing is 
                        expected to serve;
                          [(II) providing for delivery of 
                        supportive services appropriate to meet 
                        the individual needs of persons with 
                        disabilities occupying the housing;
                          [(III) describing the experience of 
                        the applicant (or service providers) in 
                        providing such services;
                          [(IV) describing the manner in which 
                        such services will be provided to such 
                        persons; and
                          [(V) identifying any State, local, 
                        other Federal, or other funds available 
                        for providing such services; and
                  [(iii) any other information or certification 
                that the Secretary considers appropriate.
          [(3) Approval.--The Secretary may approve an 
        application under this subsection only if the Secretary 
        determines that--
                  [(i) the persons with disabilities occupying 
                the housing will receive supportive services 
                based on their individual needs;
                  [(ii) the applicant (or service providers) 
                have sufficient experience in providing 
                supportive services;
                          [(iii) residential supervision will 
                        be provided in the housing sufficient 
                        to facilitate the provision of 
                        supportive services; and
                  [(iv) the supportive services are adequately 
                designed to meet the special needs of the 
                tenants.
          [(4) Supportive services.--For purposes of this 
        subsection, the term ``supportive services'' means 
        services designed to meet the special needs of tenants, 
        and may include meal services, health-related services, 
        mental health services, services for nonmedical 
        counseling, meals, transportation, personal care, 
        bathing, toileting, housekeeping, chore assistance, 
        safety, group and socialization activities, assistance 
        with medications (in accordance with any applicable 
        State laws), case management, personal emergency 
        response, and other appropriate services.
  [(f) Allocation Plans.--
          [(1) Requirement.--A public housing agency may not 
        designate a project (or portion of a project) for 
        occupancy under subsection (a)(1) unless the agency 
        submits an allocation plan under this subsection and 
        the plan is approved under paragraph (4) of this 
        subsection.
          [(2) Contents.--An allocation plan submitted under 
        this subsection by a public housing agency shall 
        include--
                  [(A) a description of the projects (or 
                portions of projects) to be designated and the 
                types of tenants occupying such projects (or 
                portions);
                  [(B) a description of the estimated pool of 
                applicants for such housing, based on the 
                waiting lists for such housing, and any 
                information collected in the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act for the jurisdiction 
                within which the area served by the public 
                housing agency is located;
                  [(C) a statement identifying the projects or 
                portions of projects (including the buildings 
                or floors) to be designated for occupancy under 
                subsection (a)(1) for only certain types of 
                families, the types of families who will be 
                eligible for occupancy in such projects (or 
                portions), and the reasons for the designation;
                  [(D) documentation of the number of units in 
                the projects (or portions) identified under 
                subparagraph (C) which became vacant and 
                available for occupancy during the preceding 
                year;
                  [(E) an estimate of the number of units in 
                the projects (or portions) identified under 
                subparagraph (C) that will become vacant and 
                available for occupancy during the ensuing 2-
                year period;
                  [(F) a description of the occupancy policies 
                and procedures, including procedures for 
                maintaining waiting lists for eligible 
                applicants who are elderly families or disabled 
                families for occupancy in units in projects 
                administered by the agency sufficient to 
                document the number and duration of instances 
                in which housing assistance for eligible 
                applicants will be denied or delayed by the 
                agency because of a lack of appropriately 
                designated units;
                  [(G) a plan for securing sufficient 
                additional resources that the agency owns, 
                controls, or has received preliminary 
                notification that it will obtain, or for which 
                the agency plans to apply, that will be 
                sufficient to provide assistance to not less 
                than the number of nonelderly disabled families 
                that would have been housed if occupancy in 
                such units were not restricted pursuant to this 
                section; and
                  [(H) any comments of agencies, organizations, 
                or persons with whom the public housing agency 
                consults under paragraph (3).
          [(3) Development.--In preparing the initial 
        allocation plan, or updates of a plan under paragraph 
        (5), for submission under this subsection, a public 
        housing agency shall consult with the State or unit of 
        general local government in whose jurisdiction the area 
        served by the public housing agency is located, public 
        and private service providers, advocates for the 
        interest of eligible elderly families, disabled 
        families, and families with children, and other 
        interested parties.
          [(4) Approval.--
                  [(A) Criteria.--The Secretary shall approve 
                an allocation plan, or an updated plan, 
                submitted under this subsection if the 
                Secretary determines that, based on the plan 
                and comments submitted pursuant to paragraph 
                (2)(H)--
                          [(i) the information contained in the 
                        plan is complete and accurate and the 
                        projections are reasonable;
                          [(ii) implementation of the plan will 
                        not result in excessive vacancy rates 
                        in projects (or portions of projects) 
                        identified in paragraph (2)(C); and
                          [(iii) the plan under paragraph 
                        (2)(G) can reasonably be achieved.
                  [(B) Notification.--
                          [(i) In general.--The Secretary shall 
                        notify each public housing agency 
                        submitting an allocation plan under 
                        this subsection in writing of approval 
                        or disapproval of the plan.
                          [(ii) Timing.--A plan shall be 
                        considered to be approved if the 
                        Secretary does not notify the public 
                        housing agency of approval or 
                        disapproval of the initial or revised 
                        plan within (I) 90 days after the 
                        submission of any plan that contains 
                        comments pursuant to paragraph (2)(H), 
                        or (II) 45 days for any other plan.
                          [(iii) Resubmission.--If the 
                        Secretary disapproves the plan, the 
                        Secretary shall, for a period of not 
                        less than 45 days following the date of 
                        disapproval, permit amendments to, or 
                        resubmission of, the plan.
                  [(C) Rule of construction.--The approval of 
                an allocation plan or updated plan under this 
                subsection may not be construed to constitute 
                approval of any request for assistance for 
                major reconstruction of obsolete projects, 
                assistance for development or acquisition of 
                public housing, or assistance under section 
                811(b)(1) of the Cranston-Gonzalez National 
                Affordable Housing Act, that are contained in 
                the plan pursuant to subparagraph (H).
          [(5) Biannual update.--
                  [(A) In general.--Each public housing agency 
                that owns or operates a project (or portion of 
                a project) that is designated for occupancy 
                under subsection (a)(1) shall update the plan 
                of the agency under this subsection not less 
                than once every 2 years, as the Secretary shall 
                provide. The Secretary shall notify each public 
                housing agency submitting an updated plan under 
                this paragraph of approval or disapproval of 
                the updated plan as required under paragraph 
                (4)(B), and the provisions of such paragraph 
                shall apply to updated plans under this 
                paragraph.
                  [(B) Contents.--The updated plan shall 
                include--
                          [(i) a review of the data and 
                        projections contained in the allocation 
                        plan and the most recent update 
                        submitted under this subsection;
                          [(ii) an assessment of the accuracy 
                        of the projections contained in such 
                        plan and update;
                          [(iii) a statement of the number of 
                        times a vacancy was filled pursuant to 
                        subsection (a)(4);
                          [(iv) a statement of the number of 
                        times an application for housing 
                        assistance by an eligible applicant was 
                        denied or delayed because of a lack of 
                        appropriately designated units; and
                          [(v) a plan for adjusting the 
                        allocation, if necessary, in accordance 
                        with the needs identified pursuant to 
                        this subparagraph.
                  [(C) Standards for approval.--The Secretary 
                shall establish standards for preparation, 
                submission, and approval of updated plans.
  [(g) Prohibition of Coercion.--No elderly or disabled family 
residing in any public housing project may be required to 
accept services.

                    [lower income housing assistance

  [Sec. 8. (a) For the purpose of aiding lower-income families 
in obtaining a decent place to live and of promoting 
economically mixed housing, assistance payments may be made 
with respect to existing housing in accordance with the 
provisions of this section. A public housing agency may 
contract to make assistance payments to itself (or any agency 
or instrumentality thereof) as the owner of dwelling units if 
such agency is subject to the same program requirements as are 
applied to other owners. In such cases, the Secretary may 
establish initial rents within applicable limits.
  [(b) Rental Certificates and Other Existing Housing 
Programs.--The Secretary is authorized to enter into annual 
contributions contracts with public housing agenices pursuant 
to which such agencies may enter into contracts to make 
assistance payments to owners of existing dwelling units in 
accordance with this section. The Secretary shall enter into a 
separate annual contributions contract with each public housing 
agency to obligate the authority approved each year, beginning 
with the authority approved in appropriations Acts for fiscal 
year 1988 (other than amendment authority to increase 
assistance payments being made using authority approved prior 
to the appropriations Acts for fiscal year 1988), and such 
annual contributions contract (other than for annual 
contributions under subsection (o)) shall bind the Secretary to 
make such authority, and any amendments increasing such 
authority, available to the public housing agency for a 
specified period. In areas where no public housing agency has 
been organized or where the Secretary determines that a public 
housing agency is unable to implement the provisions of this 
section, the Secretary is authorized to enter into such 
contracts and to perform the other functions assigned to a 
public housing agency by this section.
  [(2) The Secretary is authorized to enter into annual 
contributions contracts with public housing agencies for the 
purpose of replacing public housing transferred in accordance 
with title III of this Act. Each contract entered into under 
this subsection shall be for a term of not more than 60 months.
  [(c)(1) An assistance contract entered into pursuant to this 
section shall establish the maximum monthly rent (including 
utilities and all maintenance and management charges) which the 
owner is entitled to receive for each dwelling unit with 
respect to which such assistance payments are to be made. The 
maximum monthly rent shall not exceed by more than 10 per 
centum the fair market rental established by the Secretary 
periodically but not less than annually for existing or newly 
constructed rental dwelling units of various sizes and types in 
the market area suitable for occupancy by persons assisted 
under this section, except that the maximum monthly rent may 
exceed the fair market rental (A) by more than 10 but not more 
than 20 per centum where the Secretary determines that special 
circumstances warrant such higher maximum rent or that such 
higher rent is necessary to the implementation of a housing 
strategy as defined in section 105 of the Cranston-Gonzalez 
National Affordable Housing Act, or (B) by such higher amount 
as may be requested by a tenant and approved by the public 
housing agency in accordance with paragraph (3)(B). In the case 
of newly constructed and substantially rehabilitated units, the 
exception in the preceding sentence shall not apply to more 
than 20 per centum of the total amount of authority to enter 
into annual contributions contracts for such units which is 
allocated to an area and obligated with respect to any fiscal 
year beginning on or after October 1, 1980. Proposed fair 
market rentals for an area shall be published in the Federal 
Register with reasonable time for public comment, and shall 
become effective upon the date of publication in final form in 
the Federal Register. Each fair market rental in effect under 
this subsection shall be adjusted to be effective on October 1 
of each year to reflect changes, based on the most recent 
available data trended so the rentals will be current for the 
year to which they apply, of rents for existing or newly 
constructed rental dwelling units, as the case may be, of 
various sizes and types in the market area suitable for 
occupancy by persons assisted under this section. 
Notwithstanding any other provision of this section, after the 
date of enactment of the Housing and Community Development Act 
of 1977, the Secretary shall prohibit high-rise elevator 
projects for families with children unless there is no 
practical alternative. The Secretary shall establish separate 
fair market rentals under this paragraph for Westchester County 
in the State of New York. The Secretary shall also establish 
separate fair market rentals under this paragraph for Monroe 
County in the Commonwealth of Pennsylvania. In establishing 
fair market rentals for the remaining portion of the market 
area in which Monroe County is located, the Secretary shall 
establish the fair market rentals as if such portion included 
Monroe County. If units assisted under this section are exempt 
from local rent control while they are so assisted or 
otherwise, the maximum monthly rent for such units shall be 
reasonable in comparison with other units in the market area 
that are exempt from local rent control.
  [(2)(A) The assistance contract shall provide for adjustment 
annually or more frequently in the maximum monthly rents for 
units covered by the contract to reflect changes in the fair 
market rentals established in the housing area for similar 
types and sizes of dwelling units or, if the Secretary 
determines, on the basis of a reasonable formula. However, 
where the maximum monthly rent, for a unit in a new 
construction, substantial rehabilitation, or moderate 
rehabilitation project, to be adjusted using an annual 
adjustment factor exceeds the fair market rental for an 
existing dwelling unit in the market area, the Secretary shall 
adjust the rent only to the extent that the owner demonstrates 
that the adjusted rent would not exceed the rent for an 
unassisted unit of similar quality, type, and age in the same 
market area, as determined by the Secretary. The immediately 
foregoing sentence shall be effective only during fiscal year 
1995. For any unit occupied by the same family at the time of 
the last annual rental adjustment, where the assistance 
contract provides for the adjustment of the maximum monthly 
rent by applying an annual adjustment factor and where the rent 
for a unit is otherwise eligible for an adjustment based on the 
full amount of the factor, 0.01 shall be subtracted from the 
amount of the factor, except that the factor shall not be 
reduced to less than 1.0. The immediately foregoing sentence 
shall be effective only during fiscal year 1995.
  [(B) The contract shall further provide for the Secretary to 
make additional adjustments in the maximum monthly rent for 
units under contract to the extent he determines such 
adjustments are necessary to reflect increases in the actual 
and necessary expenses of owning and maintaining the units 
which have resulted from substantial general increases in real 
property taxes, utility rates, or similar costs which are not 
adequately compensated for by the adjustment in the maximum 
monthly rent authorized by subparagraph (A). The Secretary 
shall make additional adjustments in the maximum monthly rent 
for units under contract (subject to the availability of 
appropriations for contract amendments) to the extent the 
Secretary determines such adjustments are necessary to reflect 
increases in the actual and necessary expenses of owning and 
maintaining the units that have resulted from the expiration of 
a real property tax exemption. Where the Secretary determines 
that a project assisted under this section is located in a 
community where drug-related criminal activity is generally 
prevalent and the project's operating, maintenance, and capital 
repair expenses have been substantially increased primarily as 
a result of the prevalence of such drug-related activity, the 
Secretary may (at the discretion of the Secretary and subject 
to the availability of appropriations for contract amendments 
for this purpose), on a project by project basis, provide 
adjustments to the maximum monthly rents, to a level no greater 
than 120 percent of the project rents, to cover the costs of 
maintenance, security, capital repairs, and reserves required 
for the owner to carry out a strategy acceptable to the 
Secretary for addressing the problem of drug-related criminal 
activity. Any rent comparability standard required under this 
paragraph may be waived by the Secretary to so implement the 
preceding sentence. The Secretary may (at the discretion of the 
Secretary and subject to the availability of appropriations for 
contract amendments), on a project by project basis for 
projects receiving project-based assistance, provide 
adjustments to the maximum monthly rents to cover the costs of 
evaluating and reducing lead-based paint hazards, as defined in 
section 1004 of the Residential Lead-Based Paint Hazard 
Reduction Act of 1992.
  [(C) Adjustments in the maximum rents under subparagraphs (A) 
and (B) shall not result in material differences between the 
rents charged for assisted units and unassisted units of 
similar quality, type, and age in the same market area, as 
determined by the Secretary. In implementing the limitation 
established under the preceding sentence, the Secretary shall 
establish regulations for conducting comparability studies for 
projects where the Secretary has reason to believe that the 
application of the formula adjustments under subparagraph (A) 
would result in such material differences. The Secretary shall 
conduct such studies upon the request of any owner of any 
project, or as the Secretary determines to be appropriate by 
establishing, to the extent practicable, a modified annual 
adjustment factor for such market area, as the Secretary shall 
designate, that is geographically smaller than the applicable 
housing area used for the establishment of the annual 
adjustment factor under subparagraph (A). The Secretary shall 
establish such modified annual adjustment factor on the basis 
of the results of a study conducted by the Secretary of the 
rents charged, and any change in such rents over the previous 
year, for assisted units and unassisted units of similar 
quality, type, and age in the smaller market area. Where the 
Secretary determines that such modified annual adjustment 
factor cannot be established or that such factor when applied 
to a particular project would result in material differences 
between the rents charged for assisted units and unassisted 
units of similar quality, type, and age in the same market 
area, the Secretary may apply an alternative methodology for 
conducting comparability studies in order to establish rents 
that are not materially different from rents charged for 
comparable unassisted units. If the Secretary or appropriate 
State agency does not complete and submit to the project owner 
a comparability study not later than 60 days before the 
anniversary date of the assistance contract under this section, 
the automatic annual adjustment factor shall be applied. The 
Secretary may not reduce the contract rents in effect on or 
after April 15, 1987, for newly constructed, substantially 
rehabilitated, or moderately rehabilitated projects assisted 
under this section (including projects assisted under this 
section as in effect prior to November 30, 1983), unless the 
project has been refinanced in a manner that reduces the 
periodic payments of the owner. Any maximum monthly rent that 
has been reduced by the Secretary after April 14, 1987, and 
prior to the enactment of this sentence shall be restored to 
the maximum monthly rent in effect on April 15, 1987. For any 
project which has had its maximum monthly rents reduced after 
April 14, 1987, the Secretary shall make assistance payments 
(from amounts reserved for the original contract) to the owner 
of such project in an amount equal to the difference between 
the maximum monthly rents in effect on April 15, 1987, and the 
reduced maximum monthly rents, multiplied by the number of 
months that the reduced maximum monthly rents were in effect.
  [(3)(A) The amount of the monthly assistance payment with 
respect to any dwelling unit shall be the difference between 
the maximum monthly rent which the contract provides that the 
owner is to receive for the unit and the rent the family is 
required to pay under section 3(a) of this Act. Reviews of 
family income shall be made no less frequently than annually.
  [(B)(i) A family receiving tenant-based rental assistance 
under subsection (b)(1) may pay a higher percentage of income 
than that specified under section 3(a) of this Act if--
          [(I) the family notifies the local public housing 
        agency of its interest in a unit renting for an amount 
        which exceeds the permissible maximum monthly rent 
        established for the market area under paragraph (1), 
        and
          [(II) such agency determines that the rent for the 
        unit and the rental payments of the family are 
        reasonable, after taking into account other family 
        expenses (including child care, unreimbursed medical 
        expenses, and other appropriate family expenses).
  [(ii) A public housing agency shall not approve such excess 
rentals for more than 10 percent of its annual allocation of 
incremental rental assistance under subsection (b)(1). A public 
housing agency that approves such excess rentals for more than 
5 percent of its annual allocation shall submit a report to the 
Secretary not later than 30 days following the end of the 
fiscal year. The report shall be submitted in such form and in 
accordance with such procedures as the Secretary shall 
establish and shall describe the public housing agency's 
reasons for making the exceptions, including any available 
evidence that the exceptions were made necessary by problems 
with the fair market rent established for the area. The 
Secretary shall ensure that each report submitted in accordance 
with this clause is readily available for public inspection for 
a period of not less than 3 years, beginning not less than 30 
days following the date on which the report is submitted to the 
Secretary.
  [(iii) The Secretary shall, not later than 3 months following 
the end of each fiscal year, submit a report to Congress that 
identifies the public housing agencies that have submitted 
reports for such fiscal year under clause (ii), summarizes and 
assesses such reports, and includes recommendations for such 
legislative or administrative actions that the Secretary deems 
appropriate to correct problems identified in such reports.
  [(4) The assistance contract shall provide that assistance 
payments may be made only with respect to a dwelling unit under 
lease for occupancy by a family determined to be a lower income 
family at the time it initially occupied such dwelling unit or 
by a family that qualifies to receive assistance under 
subsection (b) pursuant to section 223 or 226 of the Low-Income 
Housing Preservation and Resident Homeownership Act of 1990, 
except that such payments may be made with respect to 
unoccupied units for a period not exceeding sixty days (A) in 
the event that a family vacates a dwelling unit before the 
expiration date of the lease for occupancy or (B) where a good 
faith effort is being made to fill an unoccupied unit, and, 
subject to the provisions of the following sentence, such 
payments may be made, in the case of a newly constructed or 
substantially rehabilitated project, after such sixty-day 
period in an amount equal to the debt service attributable to 
such an unoccupied dwelling unit for a period not to exceed one 
year, if a good faith effort is being made to fill the unit and 
the unit provides decent, safe, and sanitary housing. No such 
payment may be made after such sixty-day period if the 
Secretary determines that the dwelling unit is in a project 
which provides the owner with revenues exceeding the costs 
incurred by such owner with respect to such project.
  [(5) Assistance payments may be made with respect to up to 
100 per centum of the dwelling units in any structure upon the 
application of the owner or prospective owner. Within the 
category of projects containing more than fifty units and 
designed for use primarily for nonelderly and nonhandicapped 
persons which are not subject to mortgages purchased under 
section 305 of the National Housing Act, the Secretary may give 
preference to applications for assistance involving not more 
than 20 per centum of the dwelling units in a project. In 
according any such preference, the Secretary shall compare 
applications received during distinct time periods not 
exceeding sixty days in duration.
  [(6) The Secretary shall take such steps as may be necessary, 
including the making of contracts for assistance payments in 
amounts in excess of the amounts required at the time of the 
initial renting of dwelling units, the reservation of annual 
contributions authority for the purpose of amending housing 
assistance contracts, or the allocation of a portion of new 
authorizations for the purpose of amending housing assistance 
contracts, to assure that assistance payments are increased on 
a timely basis to cover increases in maximum monthly rents or 
decreases in family incomes.
  [(7) To the extent authorized in contracts entered into by 
the Secretary with a public housing agency, such agency may 
purchase any structure containing one or more dwelling units 
assisted under this section for the purpose of reselling the 
structure to the tenant or tenants occupying units aggregating 
in value at least 80 per centum of the structure's total value. 
Any such resale may be made on the terms and conditions 
prescribed under section 5(h) and subject to the limitation 
contained in such section.
  [(8) Each contract under this section shall provide that the 
owner will notify tenants at least 90 days prior to the 
expiration of the contract of any rent increase which may occur 
as a result of the expiration of such contract.
  [(9) Not less than 1 year prior to terminating any contract 
under which assistance payments are received under this section 
(but not less than 90 days in the case of housing certificates 
or vouchers under subsection (b) or (o)), an owner shall 
provide written notice to the Secretary and the tenants 
involved of the proposed termination, specifying the reasons 
for the termination with sufficient detail to enable the 
Secretary to evaluate whether the termination is lawful and 
whether there are additional actions that can be taken by the 
Secretary to avoid the termination. The owner's notice shall 
include a statement that the owner and the Secretary may agree 
to a renewal of the contract, thus avoiding the termination. 
The Secretary shall review the owner's notice, shall consider 
whether there are additional actions that can be taken by the 
Secretary to avoid the termination, and shall ensure a proper 
adjustment of the contract rents for the project in conformity 
with the requirements of paragraph (2). The Secretary shall 
issue a written finding of the legality of the termination and 
the reasons for the termination, including the actions 
considered or taken to avoid the termination. Within 30 days of 
the Secretary's finding, the owner shall provide written notice 
to each tenant of the Secretary's decision. For purposes of 
this paragraph, the term ``termination'' means the expiration 
of the assistance contract or an owner's refusal to renew the 
assistance contract, and such term shall include termination of 
the contract for business reasons.
  [(10) If an owner provides notice of proposed termination 
under paragraph (9) and the contract rent is lower than the 
maximum monthly rent for units assisted under subsection 
(b)(1), the Secretary shall adjust the contract rent based on 
the maximum monthly rent for units assisted under subsection 
(b)(1) and the value of the low-income housing after 
rehabilitation.
  [(d)(1) Contracts to make assistance payments entered into by 
a public housing agency with an owner of existing housing units 
shall provide (with respect to any unit) that--
          [(A) the selection of tenants for such units shall be 
        the function of the owner, subject to the provisions of 
        the annual contributions contract between the Secretary 
        and the agency, except that the tenant selection 
        criteria used by the owner shall--
                  [(i) for not less than (I) 70 percent of the 
                families who initially receive assistance in 
                any 1-year period in the case of assistance 
                attached to a structure and (II) 90 percent of 
                such families in the case of assistance not 
                attached to a structure, give preference to 
                families that occupy substandard housing 
                (including families that are homeless or living 
                in a shelter for homeless families), are paying 
                more than 50 percent of family income for rent, 
                or are involuntarily displaced (including 
                displacement because of disposition of a 
                multifamily housing project under section 203 
                of the Housing and Community Development 
                Amendments of 1978) at the time they are 
                seeking assistance under this section; except 
                that any family otherwise eligible for 
                assistance under this section may not be denied 
                preference for assistance not attached to a 
                structure (or delayed or otherwise adversely 
                affected in the provision of such assistance) 
                solely because the family resides in public 
                housing;
                  [(ii) for any remaining assistance in any 1-
                year period, give preference to families who 
                qualify under a system of local preferences 
                established by the public housing agency in 
                writing and after public hearing to respond to 
                local housing needs and priorities, which may 
                include (I) assisting very low-income families 
                who either reside in transitional housing 
                assisted under title IV of the Stewart B. 
                McKinney Homeless Assistance Act, or 
                participate in a program designed to provide 
                public assistance recipients with greater 
                access to employment and educational 
                opportunities; (II) assisting families in 
                accordance with subsection (u)(2); (III) 
                assisting families identified by local public 
                agencies involved in providing for the welfare 
                of children as having a lack of adequate 
                housing that is a primary factor in the 
                imminent placement of a child in foster care, 
                or in preventing the discharge of a child from 
                foster care and reunification with his or her 
                family; (IV) assisting youth, upon discharge 
                from foster care, in cases in which return to 
                the family or extended family or adoption is 
                not available; (V) assisting veterans who are 
                eligible and have applied for assistance, will 
                use the assistance for a dwelling unit designed 
                for the handicapped, and, upon discharge or 
                eligibility for discharge from a hospital or 
                nursing home, have physical disability which, 
                because of the configuration of their homes, 
                prevents them from access to or use of their 
                homes; and (VI) achieving other objectives of 
                national housing policy as affirmed by 
                Congress; subclause (V) shall be effective only 
                during fiscal year 1995; and
                  [(iii) prohibit any individual or family 
                evicted from housing assisted under the Act by 
                reason of drug-related criminal activity from 
                having a preference under any provision of this 
                subparagraph for 3 years unless the evicted 
                tenant successfully completes a rehabilitation 
                program approved by the agency, except that the 
                agency may waive the application of this clause 
                under standards established by the Secretary 
                (which shall include waiver for any member of a 
                family of an individual prohibited from tenancy 
                under this clause who the agency determines 
                clearly did not participate in and had no 
                knowledge of such criminal activity or when 
                circumstances leading to eviction no longer 
                exist);
          [(B)(i) the lease between the tenant and the owner 
        shall be for at least one year or the term of such 
        contract, whichever is shorter, and shall contain other 
        terms and conditions specified by the Secretary;
          [(ii) the owner shall not terminate the tenancy 
        except for serious or repeated violation of the terms 
        and conditions of the lease, for violation of 
        applicable Federal, State, or local law, or for other 
        good cause;
          [(iii) provide that any criminal activity that 
        threatens the health, safety, or right to peaceful 
        enjoyment of the premises by other tenants, any 
        criminal activity that threatens the health, safety, or 
        right to peaceful enjoyment of their residences by 
        persons residing in the immediate vicinity of the 
        premises, or any drug-related criminal activity on or 
        near such premises, engaged in by a tenant of any unit, 
        any member of the tenant's household, or any guest or 
        other person under the tenant's control, shall be cause 
        for termination of tenancy; and
          [(iv) any termination of tenancy shall be preceded by 
        the owner's provision of written notice to the tenant 
        specifying the grounds for such action.
          [(C) maintenance and replacement (including 
        redecoration) shall be in accordance with the standard 
        practice for the building concerned as established by 
        the owner and agreed to by the agency; and
          [(D) the agency and the owner shall carry out such 
        other appropriate terms and conditions as may be 
        mutually agreed to by them.
  [(2)(A) Each contract for an existing structure entered into 
under this section shall be for a term of not less than one 
month nor more than one hundred and eighty months. The 
Secretary shall permit public housing agencies to enter into 
contracts for assistance payments of less than 12 months 
duration in order to avoid disruption in assistance to eligible 
families if the annual contributions contract is within 1 year 
of its expiration date. Where the Secretary enters into an 
annual contributions contract with a public housing agency 
pursuant to which the agency will enter into a contract for 
assistance payments with respect to an existing structure, the 
contract for assistance payments may not be attached to the 
structure unless (i) the Secretary and the public housing 
agency approve such action, and (ii) the owner agrees to 
rehabilitate the structure other than with assistance under 
this Act and otherwise complies with the requirements of this 
section, except that the Secretary shall permit the public 
housing agency to approve such attachment with respect to not 
more than 15 percent of the assistance provided by the public 
housing agency if the requirements of clause (ii) are met. 
Notwithstanding any other provision of this section, a public 
housing agency and an applicable State agency may, on a 
priority basis, attach to structures not more than an 
additional 15 percent of the assistance provided by the public 
housing agency or the applicable State agency only with respect 
to projects assisted under a State program that permits the 
owner of the projects to prepay a State assisted or subsidized 
mortgage on the structure, except that attachment of assistance 
under this sentence shall be for the purpose of (i) providing 
incentives to owners to preserve such projects for occupancy by 
lower and moderate income families (for the period that 
assistance under this sentence is available), and (ii) to 
assist lower income tenants to afford any increases in rent 
that may be required to induce the owner to maintain occupancy 
in the project by lower and moderate income tenants. Any 
assistance provided to lower income tenants under the preceding 
sentence shall not be considered for purposes of the limitation 
under paragraph (1)(A) regarding the percentage of families 
that may receive assistance under this section who do not 
qualify for preferences under such paragraph.
  [(B) The Secretary shall permit any public housing agency to 
approve the attachment of assistance under subsection (b)(1) 
with respect to any newly constructed structure if--
          [(i) the owner or prospective owner agrees to 
        construct the structure other than with assistance 
        under this Act and otherwise complies with the 
        requirements of this section; and
          [(ii) the aggregate assistance provided by the public 
        housing agency pursuant to this subparagraph and the 
        last sentence of subparagraph (A) does not exceed 15 
        percent of the assistance provided by the public 
        housing agency.
  [(C) In the case of a contract for assistance payments that 
is attached to a structure under this paragraph, a public 
housing agency shall enter into a contract with an owner, 
contingent upon the future availability of appropriations for 
the purpose of renewing expiring contracts for assistance 
payments as provided in appropriations Acts, to extend the term 
of the underlying contract for assistance payments for such 
period or periods 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 contract for assistance payments accepted by the 
owner and the owner's successors in interest. To the extent 
assistance is used as provided in the penultimate sentence of 
subparagraph (A), the contract for assistance may, at the 
option of the public housing agency, have an initial term not 
exceeding 15 years.
  [(D) Where a contract for assistance payments is attached to 
a structure, the owner shall adopt written tenant selection 
procedures that are satisfactory to the Secretary as (i) 
consistent with the purpose of improving housing opportunities 
for very low-income families; and (ii) reasonably related to 
program eligibility and an applicant's ability to perform the 
obligations of the lease. An owner shall promptly notify in 
writing any rejected applicant of the grounds for any 
rejection.
  [(E) The Secretary shall annually survey public housing 
agencies to determine which public housing agencies have, in 
providing assistance in such year, reached the 15 percent 
limitations contained in subparagraphs (A) and (B), and shall 
report to the Congress on the results of such survey.
  [(F)(i) In determining the amount of assistance provided 
under an assistance contract for project-based assistance under 
this paragraph or a contract for assistance for housing 
constructed or substantially rehabilitated pursuant to 
assistance provided under section 8(b)(2) of this Act (as such 
section existed immediately before October 1, 1983), the 
Secretary may consider and annually adjust, with respect to 
such project, for the cost of employing or otherwise retaining 
the services of one or more service coordinators under section 
661 of the Housing and Community Development Act of 1992 to 
coordinate the provision of any services within the project for 
residents of the project who are elderly or disabled families.
  [(ii) The budget authority available under section 5(c) for 
assistance under this section is authorized to be increased by 
$15,000,000 on or after October 1, 1992, and by $15,000,000 on 
or after October 1, 1993. Amounts made available under this 
subparagraph shall be used to provide additional amounts under 
annual contributions contracts for assistance under this 
section which shall be made available through assistance 
contracts only for the purpose of providing service 
coordinators under clause (i) for projects receiving project-
based assistance under this paragraph and to provide additional 
amounts under contracts for assistance for projects constructed 
or substantially rehabilitated pursuant to assistance provided 
under section 8(b)(2) of this Act (as such section existed 
immediately before October 1, 1983) only for such purpose.
      [(G) An assistance contract for project-based assistance 
under this paragraph shall provide that the owner shall ensure 
and maintain compliance with subtitle C of title VI of the 
Housing and Community Development Act of 1992 and any 
regulations issued under such subtitle.
      [(H) Notwithstanding subsection (d)(1)(A)(i), an owner of 
a covered section 8 housing project (as such term is defined in 
section 659 of the Housing and Community Development Act of 
1992) may give preference for occupancy of dwelling units in 
the project, and reserve units for occupancy, in accordance 
with subtitle D of title VI of the Housing and Community 
Development Act of 1992.
  [(3) Notwithstanding any other provision of law, with the 
approval of the Secretary the public housing agency 
administering a contract under this section with respect to 
existing housing units may exercise all management and 
maintenance responsibilities with respect to those units 
pursuant to a contract between such agency and the owner of 
such units.
  [(4) A public housing agency that serves more than one unit 
of general local government may, at the discretion of the 
agency, in allocating assistance under this section, give 
priority to disabled families that are not elderly families.
  [(e)(1) Nothing in this Act shall be deemed to prohibit an 
owner from pledging, or offering as security for any loan or 
obligation, a contract for assistance payments entered into 
pursuant to this section: Provided, That such security is in 
connection with a project constructed or rehabilitated pursuant 
to authority granted in this section, and the terms of the 
financing or any refinancing have been approved by the 
Secretary.
  [(f) As used in this section--
          [(1) the term ``owner'' means any private person or 
        entity, including a cooperative, an agency of the 
        Federal Government, or a public housing agency, having 
        the legal right to lease or sublease dwelling units;
          [(2) the terms ``rent'' or ``rental'' mean, with 
        respect to members of a cooperative, the charges under 
        the occupancy agreements between such members and the 
        cooperative;
          [(3) the term ``debt service'' means the required 
        payments for principal and interest made with respect 
        to a mortgage secured by housing assisted under this 
        Act;
          [(4) the term ``participating jurisdiction'' means a 
        State or unit of general local government designated by 
        the Secretary to be a participating jurisdiction under 
        title II of the Cranston-Gonzalez National Affordable 
        Housing Act;
          [(5) the term ``drug-related criminal activity'' 
        means the illegal manufacture, sale, distribution, use, 
        or possession with intent to manufacture, sell, 
        distribute, or use, of a controlled substance (as 
        defined in section 102 of the Controlled Substances Act 
        (21 U.S.C. 802));
          [(6) the term ``project-based assistance'' means 
        rental assistance under subsection (b) that is attached 
        to the structure pursuant to subsection (d)(2); and
          [(7) the term ``tenant-based assistance'' means 
        rental assistance under subsection (b) or (o) that is 
        not project-based assistance.
  [(g) Notwithstanding any other provision of this Act, 
assistance payments under this section may be provided, in 
accordance with regulations prescribed by the Secretary, with 
respect to some or all of the units in any project approved 
pursuant to section 202 of the Housing Act of 1959.
  [(h) Sections 5(e) and 6 and any other provisions of this Act 
which are inconsistent with the provisions of this section 
shall not apply to contracts for assistance entered into under 
this section.
  [(i) The Secretary may not consider the receipt by a public 
housing agency of assistance under section 811(b)(1) of the 
Cranston-Gonzalez National Affordable Housing Act, or the 
amount received, in approving assistance for the agency under 
this section or determining the amount of such assistance to be 
provided.
  [(j)(1) The Secretary may enter into contracts to make 
assistance payments under this subsection to assist low-income 
families by making rental assistance payments on behalf of any 
such family which utilizes a manufactured home as its principal 
place of residence. Such payments may be made with respect to 
the rental of the real property on which there is located a 
manufactured home which is owned by any such family or with 
respect to the rental by such family of a manufactured home and 
the real property on which it is located. In carrying out this 
subsection, the Secretary may--
          [(A) enter into annual contributions contracts with 
        public housing agencies pursuant to which such agencies 
        may enter into contracts to make such assistance 
        payments to the owners of such real property, or
          [(B) enter into such contracts directly with the 
        owners of such real property.
  [(2)(A) A contract entered into pursuant to this paragraph 
shall establish the maximum monthly rent (including maintenance 
and management charges) which the owner is entitled to receive 
for the space on which a manufactured home is located and with 
respect to which assistance payments are to be made. The 
maximum monthly rent shall not exceed by more than 10 per 
centum the fair market rental established by the Secretary 
periodically (but not less than annually) with respect to the 
market area for the rental of real property suitable for 
occupancy by families assisted under this paragraph.
  [(B) The amount of any monthly assistance payment with 
respect to any family which rents real property which is 
assisted under this paragraph, and on which is located a 
manufactured home which is owned by such family shall be the 
difference between the rent the family is required to pay under 
section 3(a) of this Act and the sum of--
          [(i) the monthly payment made by such family to 
        amortize the cost of purchasing the manufactured home;
          [(ii) the monthly utility payments made by such 
        family, subject to reasonable limitations prescribed by 
        the Secretary; and
          [(iii) the maximum monthly rent permitted with 
        respect to the real property which is rented by such 
        family for the purpose of locating its manufactured 
        home;
except that in no case may such assistance exceed the total 
amount of such maximum monthly rent.
  [(3)(A) Contracts entered into pursuant to this paragraph 
shall establish the maximum monthly rent permitted with respect 
to the manufactured home and the real property on which it is 
located and with respect to which assistance payments are to be 
made. The maximum monthly rent shall not exceed by more than 10 
per centum the fair market rental established by the Secretary 
periodically (but not less than annually) with respect to the 
market area for the rental of a manufactured home and the real 
property on which it is located suitable for occupancy by 
families assisted under this paragraph, except that the maximum 
monthly rent may exceed the fair market rental by more than 10 
but not more than 20 per centum where the Secretary determines 
that special circumstances warrant such higher maximum rent.
  [(B) The amount of any monthly assistance payment with 
respect to any family which rents a manufactured home and the 
real property on which it is located and which is assisted 
under this paragraph shall be the difference between the rent 
the family is required to pay under section 3(a) of this Act 
and the sum of--
          [(i) the monthly utility payments made by such 
        family, subject to reasonable limitations prescribed by 
        the Secretary; and
          [(ii) the maximum monthly rent permitted with respect 
        to the manufactured home and real property on which it 
        is located.
  [(4) The provisions of subsection (c)(2) of this section 
shall apply to the adjustments of maximum monthly rents under 
the subsection.
  [(5) Each contract entered into under the subsection shall be 
for a term of not less than one month and not more than 180 
months, except that in any case in which the manufactured home 
park is substantially rehabilitated or newly constructed, such 
term may not be less than 240 months, nor more than the maximum 
term for a manufactured home loan permitted under section 2(b) 
of the National Housing Act.
  [(6) The Secretary may carry out this subsection without 
regard to whether the manufactured home park is existing, 
substantially rehabilitated, or newly constructed.
  [(7) In the case of any substantially rehabilitated or newly 
constructed manufactured home park containing spaces with 
respect to which assistance is made under this subsection, the 
principal amount of the mortgage attributable to the rental 
spaces within the park may not exceed an amount established by 
the Secretary which is equal to or less than the limitation for 
manufactured home parks described in section 207(c)(3) of the 
National Housing Act, and the Secretary may increase such 
limitation in high cost areas in the manner described in such 
section.
  [(8) The Secretary may prescribe other terms and conditions 
which are necessary for the purpose of carrying out the 
provisions of this subsection and which are consistent with the 
purposes of this subsection.
  [(k) The Secretary shall establish procedures which are 
appropriate and necessary to assure that income data provided 
to public housing agencies and owners by families applying for 
or receiving assistance under this section is complete and 
accurate. In establishing such procedures, the Secretary shall 
randomly, regularly, and periodically select a sample of 
families to authorize the Secretary to obtain information on 
these families for the purpose of income verification, or to 
allow those families to provide such information themselves. 
Such information may include, but is not limited to, data 
concerning unemployment compensation and Federal income 
taxation and data relating to benefits made available under the 
Social Security Act, the Food Stamp Act of 1977, or title 38, 
United States Code. Any such information received pursuant to 
this subsection shall remain confidential and shall be used 
only for the purpose of verifying incomes in order to determine 
eligibility of families for benefits (and the amount of such 
benefits, if any) under this section.
  [(n) In making assistance available under subsections (b)(1) 
and (e)(2), the Secretary may provide assistance with respect 
to residential properties in which some or all of the dwelling 
units do not contain bathroom or kitchen facilities, if--
          [(1) the property is located in an area in which 
        there is a significant demand for such units, as 
        determined by the Secretary;
          [(2) the unit of general local government in which 
        the property is located and the local public housing 
        agency approve of such units being utilized for such 
        purpose; and
          [(3) in the case of assistance under subsection 
        (b)(1), the unit of general local government in which 
        the property is located and the local public housing 
        agency certify to the Secretary that the property 
        complies with local health and safety standards.
The Secretary may waive, in appropriate cases, the limitation 
and preference described in the second and third sentences of 
section 3(b)(3) with respect to the assistance made available 
under this subsection.
  [(o) Rental Vouchers.--(1) The Secretary may provide 
assistance using a payment standard in accordance with this 
subsection. The payment standard shall be used to determine the 
monthly assistance which may be paid for any family, as 
provided in paragraph (2) of this subsection, and shall be 
based on the fair market rental established under subsection 
(c).
  [(2) The monthly assistance payment for any family shall be 
the amount by which the payment standard for the area exceeds 
30 per centum of the family's monthly adjusted income, except 
that such monthly assistance payment shall not exceed the 
amount by which the rent for the dwelling unit (including the 
amount allowed for utilities in the case of a unit with 
separate utility metering) exceeds 10 per centum of the 
family's monthly income.
  [(3)(A) Assistance payments may be made only for (i) a family 
determined to be a very low-income family at the time it 
initially receives assistance, (ii) a family previously 
assisted under this Act, (iii) a family that is determined to 
be a low-income family at the time it initially receives 
assistance and that is displaced by activities under section 
17(c), (iv) 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 
(v) 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.
  [(B) In selecting families to be assisted, preference shall 
be given to families which, at the time they are seeking 
assistance, occupy substandard housing (including families that 
are homeless or living in a shelter for homeless families), are 
involuntarily displaced (including displacement because of 
disposition of a multifamily housing project under section 203 
of the Housing and Community Development Amendments of 1978), 
or are paying more than 50 per centum of family income for 
rent. A public housing agency may provide for circumstances in 
which families who do not qualify for any preference 
established in the preceding sentence are provided assistance 
under this subsection before families who do qualify for such 
preference, except that not more than 10 percent (or such 
higher percentage determined by the Secretary to be necessary 
to ensure that public housing agencies can assist families in 
accordance with subsection (u)(2) or determined by the 
Secretary to be appropriate for other good cause) of the 
families who initially receive assistance in any 1-year period 
(or such shorter period selected by the public housing agency 
before the beginning of its first full year subject to this 
sentence) may be families who do not qualify for such 
preference. The public housing agency shall in implementing the 
preceding sentence establish a system of preferences in writing 
and after public hearing to respond to local housing needs and 
priorities which may include (i) assisting very low-income 
families who either reside in transitional housing assisted 
under title IV of the Stewart B. McKinney Homeless Assistance 
Act, or participate in a program designed to provide public 
assistance recipients with greater access to employment and 
educational opportunities, (ii) assisting families in 
accordance with subsection (u)(2); (iii) assisting families 
identified by local public agencies involved in providing for 
the welfare of children as having a lack of adequate housing 
that is a primary factor in the imminent placement of a child 
in foster care, or in preventing the discharge of a child from 
foster care and reunification and his or her family; (iv) 
assisting youth, upon discharge from foster care, in cases in 
which return to the family or extended family or adoption is 
not available; (v) assisting veterans who are eligible and have 
applied for assistance, will use the assistance for a dwelling 
unit designed for the handicapped, and, upon discharge or 
eligibility for discharge from a hospital or nursing home, have 
physical disability which, because of the configuration of 
their homes, prevents them from access to or use of their 
homes; and (vi) achieving other objectives of national housing 
policy as affirmed by Congress. Any individual or family 
evicted from housing assisted under the Act by reason of drug-
related criminal activity (as defined in subsection (f)(5)) 
shall not be eligible for a preference under any provision of 
this subparagraph for 3 years unless the evicted tenant 
successfully completes a rehabilitation program approved by the 
Secretary (which shall include waiver for any member of a 
family of an individual prohibited from tenancy under this 
clause who the agency determines clearly did not participate in 
and had no knowledge of such criminal activity or when 
circumstances leading to eviction no longer exist).
  [(4) If a family vacates a dwelling unit before the 
expiration of a lease term, no assistance payment may be made 
with respect to the unit after the month during which the unit 
was vacated.
  [(5) A contract with a public housing agency for annual 
contributions under this subsection shall be for an initial 
term of sixty months. The Secretary shall require (with respect 
to any unit) that (A) the public housing agency inspect the 
unit before any assistance payment may be made to determine 
that it meets housing quality standards for decent, safe, and 
sanitary housing established by the Secretary for the purpose 
of this section, and (B) the public housing agency make annual 
or more frequent inspections during the contract term. No 
assistance payment may be made for a dwelling unit which fails 
to meet such quality standards, unless any such failure is 
promptly corrected by the owner and the correction verified by 
the public housing agency.
  [(6)(A) The amount of assistance payments under this 
subsection may, in the discretion of the public housing agency, 
be adjusted annually where necessary to assure continued 
affordability. The aggregate amount of adjustments pursuant to 
the preceding sentence may not exceed the amount of any excess 
of the annual contributions provided for in the contract over 
the amount of assistance payments actually paid (including 
amounts which otherwise become available during the contract 
period).
  [(B) For the purpose of subparagraph (A), each contract with 
a public housing agency for annual contributions under this 
subsection shall provide annual contributions equal to 115 per 
centum of the estimated aggregate amount of assistance required 
during the first year of the contract.
  [(C) Any amounts not needed for adjustments under 
subparagraph (A) may be used to provide assistance payments for 
additional families.
  [(7) A public housing agency may utilize authority available 
under this subsection to provide assistance with respect to 
cooperative or mutual housing which has a resale structure 
which maintains affordability for low-income families where the 
agency determines such action will assist in maintaining the 
affordability of such housing for such families.
  [(8) The Secretary may set aside up to 5 percent of the 
budget authority available under this subsection as an 
adjustment pool. The Secretary shall use amounts in the 
adjustment pool for adjustments pursuant to paragraph (6)(A) to 
ensure continued affordability where the Secretary determines 
additional assistance for this purpose is necessary, based on 
documentation submitted by a public housing agency.
  [(9) The Secretary is authorized to enter into contracts with 
public housing agencies to provide rental vouchers for the 
purpose of replacing public housing transferred in accordance 
with title III of this Act. Each contract entered into under 
this paragraph shall be for a term of not more than 60 months.
  [(10)(A) The rent for units assisted under this subsection 
shall be reasonable in comparison with rents charged for 
comparable units in the private unassisted market or assisted 
under section (b). A public housing agency shall, at the 
request of a family assisted under this subsection, assist such 
family in negotiating a reasonable rent with an owner. A public 
housing agency shall review all rents for units under 
consideration by families assisted under this subsection (and 
all rent increases for units under lease by families assisted 
under this subsection) to determine whether the rent (or rent 
increase) requested by an owner is reasonable. If a public 
housing agency determines that the rent (or rent increase) for 
a unit is not reasonable, the agency may disapprove a lease for 
such unit.
  [(11)(A) The Secretary may enter into contracts to make 
assistance payments under this paragraph to assist low-income 
families by making rental assistance payments on behalf of any 
such family which utilizes a manufactured home as its principal 
place of residence. Such payments may be made with respect to 
the rental of the real property on which there is located a 
manufactured home which is owned by any such family. In 
carrying out this paragraph the Secretary shall enter into 
annual contributions contracts with public housing agencies 
pursuant to which such agencies may enter into contracts to 
make such assistance payments to the owners of such real 
property.
  [(B)(i) A contract entered into pursuant to this subparagraph 
shall establish the rent (including maintenance and management 
charges) for the space on which a manufactured home is located 
and with respect to which assistance payments are to be made. 
The public housing agency shall establish a payment standard 
based on the fair market rental established by the Secretary 
periodically (but not less than annually) with respect to the 
market area for the rental of real property suitable for 
occupancy by families assisted under this subparagraph.
  [(ii) The amount of any monthly assistance payment with 
respect to any family which rents real property which is 
assisted under this subparagraph and on which is located a 
manufactured home which is owned by such family shall be the 
amount by which 30 percent of the family's monthly adjusted 
income is exceeded by the sum of--
          [(I) the monthly payment made by such family to 
        amortize the cost of purchasing the manufactured home;
          [(II) the monthly utility payments made by such 
        family, subject to reasonable limitations prescribed by 
        the Secretary; and
          [(III) the payment standard with respect to the real 
        property which is rented by such family for the purpose 
        of locating its manufactured home;
except that in no case may such assistance exceed the amount by 
which the rent for the property exceeds 10 percent of the 
family's monthly income.
  [(C) The provisions of paragraph (6)(A) shall apply to the 
adjustments of maximum monthly rents under this paragraph.
  [(D) The Secretary may carry out this paragraph without 
regard to whether the manufactured home park is existing, 
substantially rehabilitated, or newly constructed.
  [(E) In the case of any substantially rehabilitated or newly 
constructed manufactured home park containing spaces with 
respect to which assistance is made under this paragraph, the 
principal amount of the mortgage attributable to the rental 
spaces within the park may not exceed an amount established by 
the Secretary which is equal to or less than the limitation for 
manufactured home parks described in section 207(c)(3) of the 
National Housing Act, and the Secretary may increase such 
limitation in high cost areas in the manner described in such 
section.
  [(F) The Secretary may prescribe other terms and conditions 
which are necessary for the purpose of carrying out the 
provisions of this paragraph and which are consistent with the 
purposes of this paragraph.
  [(p) In order to assist elderly families (as defined in 
section 3(b)(3)) who elect to live in a shared housing 
arrangement in which they benefit as a result of sharing the 
facilities of a dwelling with others in a manner that 
effectively and efficiently meets their housing needs and 
thereby reduces their costs of housing, the Secretary shall 
permit assistance provided under the existing housing and 
moderate rehabilitation programs to be used by such families in 
such arrangements. In carrying out this subsection, the 
Secretary shall issue minimum habitability standards for the 
purpose of assuring decent, safe, and sanitary housing for such 
families while taking into account the special circumstances of 
shared housing.
  [(q)(1) The Secretary shall establish a fee for the costs 
incurred in administering the certificate and housing voucher 
programs under subsections (b) and (o). The amount of the fee 
for each month for which a dwelling unit is covered by an 
assistance contract shall be 8.2 percent of the fair market 
rental established under subsection (c)(1) for a 2-bedroom 
existing rental dwelling unit in the market area of the public 
housing agency. The Secretary may increase the fee if necessary 
to reflect the higher costs of administering small programs and 
programs operating over large geographic areas.
  [(2)(A) The Secretary shall also establish reasonable fees 
(as determined by the Secretary) for--
          [(i) the costs of preliminary expenses (not to exceed 
        $275) that the public housing agency documents it has 
        incurred in connection with new allocations of 
        assistance under the certificate and housing voucher 
        programs under subsections (b) and (o);
          [(ii) the costs incurred in assisting families who 
        experience difficulty (as determined by the Secretary) 
        in obtaining appropriate housing under the programs; 
        and
          [(iii) extraordinary costs approved by the Secretary.
  [(B) The method used to calculate fees under subparagraph (A) 
shall be the same for the certificate and housing voucher 
programs under subsections (b) and (o) and shall take into 
account local cost differences.
  [(3)(A) Fees under this subsection may be used for the costs 
of employing or otherwise retaining the services of one or more 
service coordinators under section 661 of the Housing and 
Community Development Act of 1992 to coordinate the provision 
of supportive services for elderly families and disabled 
families on whose behalf tenant-based assistance is provided 
under this section or section 811(b)(1). Such service 
coordinators shall have the same responsibilities with respect 
to such families as service coordinators of covered federally 
assisted housing projects have under section 661 of such Act 
with respect to residents of such projects.
  [(B) To the extent amounts are provided in appropriation Acts 
under subparagraph (C), the Secretary shall increase fees under 
this subsection to provide for the costs of such service 
coordinators for public housing agencies.
  [(C) The budget authority available under section 5(c) for 
assistance under this section is authorized to be increased by 
$5,000,000 on or after October 1, 1992, and by $5,000,000 on or 
after October 1, 1993. Amounts made available under this 
subparagraph shall be used to provide additional amounts under 
annual contributions contracts for increased fees under this 
subsection, which shall be used only for the purpose of 
providing service coordinators for public housing agencies 
described in subparagraph (A).
  [(4) The Secretary may establish or increase a fee in 
accordance with this subsection only to such extent or in such 
amounts as are provided in appropriation Acts.
  [(r)(1) Any family assisted under subsection (b) or (o) may 
receive such assistance to rent an eligible dwelling unit if 
the dwelling unit to which the family moves is within the same 
State, or the same or a contiguous metropolitan statistical 
area as the metropolitan statistical area within which is 
located the area of jurisdiction of the public housing agency 
approving such assistance; except that any family not living 
within the jurisdiction of a public housing agency at the time 
that such family applies for assistance from such agency shall, 
during the 12-month period beginning upon the receipt of any 
tenant-based rental assistance made available on behalf of the 
family, use such assistance to rent an eligible dwelling unit 
located within the jurisdiction served by such public housing 
agency.
  [(2) The public housing agency having authority with respect 
to the dwelling unit to which a family moves under this 
subsection shall have the responsibility of carrying out the 
provisions of this subsection with respect to the family. If no 
public housing agency has authority with respect to the 
dwelling unit to which a family moves under this subsection, 
the public housing agency approving the assistance shall have 
such responsibility.
  [(3) In providing assistance under subsection (b) or (o) for 
any fiscal year, the Secretary shall give consideration to any 
reduction in the number of resident families incurred by a 
public housing agency in the preceding fiscal year as a result 
of the provisions of this subsection.
  [(4) The provisions of this subsection may not be construed 
to restrict any authority of the Secretary under any other 
provision of law to provide for the portability of assistance 
under this section.
  [(s) In selecting families for the provision of assistance 
under this section (including subsection (o)), a public housing 
agency may not exclude or penalize a family solely because the 
family resides in a public housing project.
  [(t)(1) No owner who has entered into a contract for housing 
assistance payments under this section on behalf of any tenant 
in a multifamily housing project shall refuse--
          [(A) to lease any available dwelling unit in any 
        multifamily housing project of such owner that rents 
        for an amount not greater than the fair market rent for 
        a comparable unit, as determined by the Secretary under 
        this section, to a holder of a certificate of 
        eligibility under this section a proximate cause of 
        which is the status of such prospective tenant as a 
        holder of such certificate, and to enter into a housing 
        assistance payments contract respecting such unit; or
          [(B) to lease any available dwelling unit in any 
        multifamily housing project of such owner to a holder 
        of a voucher under subsection (o), and to enter into a 
        voucher contract respecting such unit, a proximate 
        cause of which is the status of such prospective tenant 
        as holder of such voucher.
  [(2) For purposes of this subsection, the term ``multifamily 
housing project'' means a residential building containing more 
than 4 dwelling units.
  [(u) In the case of low-income families living in rental 
projects rehabilitated under section 17 of this Act or section 
533 of the Housing Act of 1949 before rehabilitation--
          [(1) certificates or vouchers under this section 
        shall be made for families who are required to move out 
        of their units because of the physical rehabilitation 
        activities or because of overcrowding;
          [(2) at the discretion of each public housing agency 
        or other agency administering the allocation of 
        assistance, certificates or vouchers under this section 
        may be made for families who would have to pay more 
        than 30 percent of their adjusted income for rent after 
        rehabilitation whether they choose to remain in, or to 
        move from, the project; and
          [(3) the Secretary shall allocate assistance for 
        certificates or vouchers under this section to ensure 
        that sufficient resources are available to address the 
        physical or economic displacement, or potential 
        economic displacement, of existing tenants pursuant to 
        paragraphs (1) and (2).
  [(v)(1) The Secretary shall extend any expiring contract 
entered into under this section for loan management assistance 
or execute a new contract for project-based loan management 
assistance, if the owner agrees to continue providing housing 
for low-income families during the term of the contract.
  [(2)(A) The eligiblity of a multifamily residential project 
for loan management assistance under this section shall be 
determined without regard to whether the project is subsidized 
or unsubsidized.
  [(B) In allocating loan management assistance under this 
section, the Secretary may give a priority to any project only 
on the basis that the project has serious financial problems 
that are likely to result in a claim on the insurance fund in 
the near future or the project is eligible to receive 
incentives under subtitle B of the Emergency Low Income Housing 
Preservation Act of 1987.
  [(w) Renewal of Expiring Contracts.--Not later than 30 days 
after the beginning of each fiscal year, the Secretary shall 
publish in the Federal Register a plan for reducing, to the 
extent feasible, year-to-year fluctuations in the levels of 
budget authority that will be required over the succeeding 5-
year period to renew expiring rental assistance contracts 
entered into under this section since the enactment of the 
Housing and Community Development Act of 1974. To the extent 
necessary to carry out such plan and to the extent approved in 
appropriations Acts, the Secretary is authorized to enter into 
annual contributions contracts with terms of less than 60 
months.
  [(x) Family Unification.--
          [(1) Increase in budget authority.--The budget 
        authority available under section 5(c) for assistance 
        under section 8(b) is authorized to be increased by 
        $100,000,000 on or after October 1, 1992, and by 
        $104,200,000 on or after October 1, 1993.
          [(2) Use of funds.--The amounts made available under 
        this subsection shall be used only in connection with 
        housing certificate assistance under section 8 on 
        behalf of any family (A) who is otherwise eligible for 
        such assistance, and (B) who the public child welfare 
        agency for the jurisdiction has certified is a family 
        for whom the lack of adequate housing is a primary 
        factor in the imminent placement of the family's child 
        or children in out-of-home care or the delayed 
        discharge of a child or children to the family from 
        out-of-home care.
          [(3) Allocation.--The amounts made available under 
        this subsection shall be allocated by the Secretary 
        through a national competition among applicants based 
        on demonstrated need for assistance under this 
        subsection. To be considered for assistance, an 
        applicant shall submit to the Secretary a written 
        proposal containing a report from the public child 
        welfare agency serving the jurisdiction of the 
        applicant that describes how a lack of adequate housing 
        in the jurisdiction is resulting in the initial or 
        prolonged separation of children from their families, 
        and how the applicant will coordinate with the public 
        child welfare agency to identify eligible families and 
        provide the families with assistance under this 
        subsection.
          [(4) Definitions.--For purposes of this subsection:
                  [(A) Applicant.--The term ``applicant'' means 
                a public housing agency or any other agency 
                responsible for administering assistance under 
                section 8.
                  [(B) Public child welfare agency.--The term 
                ``public child welfare agency'' means the 
                public agency responsible under applicable 
                State law for determining that a child is at 
                imminent risk of placement in out-of-home care 
                or that a child in out-of-home care under the 
                supervision of the public agency may be 
                returned to his or her family.
  [(y) Homeownership Option.--
          [(1) Use of assistance for homeownership.--A family 
        receiving tenant-based assistance under this section 
        may receive assistance for occupancy of a dwelling 
        owned by one or more members of the family if the 
        family--
                  [(A) is a first-time homeowner;
                  [(B)(i) participates in the family self-
                sufficiency program under section 23 of the 
                public housing agency providing the assistance; 
                or
                  [(ii) demonstrates that the family has income 
                from employment or other sources (other than 
                public assistance), as determined in accordance 
                with requirements of the Secretary, that is not 
                less than twice the payment standard 
                established by the public housing agency (or 
                such other amount as may be established by the 
                Secretary);
                  [(C) except as provided by the Secretary, 
                demonstrates at the time the family initially 
                receives tenant-based assistance under this 
                subsection that one or more adult members of 
                the family have achieved employment for the 
                period as the Secretary shall require;
                  [(D) participates in a homeownership and 
                housing counseling program provided by the 
                agency; and
                  [(E) meets any other initial or continuing 
                requirements established by the public housing 
                agency in accordance with requirements 
                established by the Secretary.
          [(2) Monthly assistance payment.--
                  [(A) In general.--Notwithstanding any other 
                provisions of this section governing 
                determination of the amount of assistance 
                payments under this section on behalf of a 
                family, the monthly assistance payment for any 
                family assisted under this subsection shall be 
                the amount by which the fair market rental for 
                the area established under subsection (c)(1) 
                exceeds 30 percent of the family's monthly 
                adjusted income; except that the monthly 
                assistance payment shall not exceed the amount 
                by which the monthly homeownership expenses, as 
                determined in accordance with requirements 
                established by the Secretary, exceeds 10 
                percent of the family's monthly income.
                  [(B) Exclusion of equity from income.--For 
                purposes of determining the monthly assistance 
                payment for a family, the Secretary shall not 
                include in family income an amount imputed from 
                the equity of the family in a dwelling occupied 
                by the family with assistance under this 
                subsection.
          [(3) Recapture of certain amounts.--Upon sale of the 
        dwelling by the family, the Secretary shall recapture 
        from any net proceeds the amount of additional 
        assistance (as determined in accordance with 
        requirements established by the Secretary) paid to or 
        on behalf of the eligible family as a result of 
        paragraph (2)(B).
          [(4) Downpayment requirement.--Each public housing 
        agency providing assistance under this subsection shall 
        ensure that each family assisted shall provide from its 
        own resources not less than 80 percent of any 
        downpayment in connection with a loan made for the 
        purchase of a dwelling. Such resources may include 
        amounts from any escrow account for the family 
        established under section 23(d). Not more than 20 
        percent of the downpayment may be provided from other 
        sources, such as from nonprofit entities and programs 
        of States and units of general local government.
          [(5) Ineligibility under other programs.--A family 
        may not receive assistance under this subsection during 
        any period when assistance is being provided for the 
        family under other Federal homeownership assistance 
        programs, as determined by the Secretary, including 
        assistance under the HOME Investment Partnerships Act, 
        the Homeownership and Opportunity Through HOPE Act, 
        title II of the Housing and Community Development Act 
        of 1987, and section 502 of the Housing Act of 1949.
          [(6) Inapplicability of certain provisions.--
        Assistance under this subsection shall not be subject 
        to the requirements of the following provisions:
                  [(A) Subsection (c)(3)(B) of this section.
                  [(B) Subsection (d)(1)(B)(i) of this section.
                  [(C) Any other provisions of this section 
                governing maximum amounts payable to owners and 
                amounts payable by assisted families.
                  [(D) Any other provisions of this section 
                concerning contracts between public housing 
                agencies and owners.
                  [(E) Any other provisions of this Act that 
                are inconsistent with the provisions of this 
                subsection.
          [(7) Reversion to rental status.--
                  [(A) FHA-insured mortgages.--If a family 
                receiving assistance under this subsection for 
                occupancy of a dwelling defaults under a 
                mortgage for the dwelling insured by the 
                Secretary under the National Housing Act, the 
                family may not continue to receive rental 
                assistance under this section unless the family 
                (i) transfers to the Secretary marketable title 
                to the dwelling, (ii) moves from the dwelling 
                within the period established or approved by 
                the Secretary, and (iii) agrees that any 
                amounts the family is required to pay to 
                reimburse the escrow account under section 
                23(d)(3) may be deducted by the public housing 
                agency from the assistance payment otherwise 
                payable on behalf of the family.
                  [(B) Other mortgages.--If a family receiving 
                assistance under this subsection defaults under 
                a mortgage not insured under the National 
                Housing Act, the family may not continue to 
                receive rental assistance under this section 
                unless it complies with requirements 
                established by the Secretary.
                  [(C) All mortgages.--A family receiving 
                assistance under this subsection that defaults 
                under a mortgage may not receive assistance 
                under this subsection for occupancy of another 
                dwelling owned by one or more members of the 
                family.
          [(8) Definition of first-time homeowner.--For 
        purposes of this subsection, the term ``first-time 
        homeowner'' means--
                  [(A) a family, no member of which has had a 
                present ownership interest in a principal 
                residence during the 3 years preceding the date 
                on which the family initially receives 
                assistance for homeownership under this 
                subsection; and
                  [(B) any other family, as the Secretary may 
                prescribe.
  [(aa) Refinancing Incentive.--
          [(1) In general.--The Secretary may pay all or a part 
        of the up front costs of refinancing for each project 
        that--
                  [(A) is constructed, substantially 
                rehabilitated, or moderately rehabilitated 
                under this section;
                  [(B) is subject to an assistance contract 
                under this section; and
                  [(C) was subject to a mortgage that has been 
                refinanced under section 223(a)(7) or section 
                223(f) of the National Housing Act to lower the 
                periodic debt service payments of the owner.
          [(2) Share from reduced assistance payments.--The 
        Secretary may pay the up front cost of refinancing 
        only--
                  [(A) to the extent that funds accrue to the 
                Secretary from the reduced assistance payments 
                that results from the refinancing; and
                  [(B) after the application of amounts in 
                accordance with section 1012 of the Stewart B. 
                McKinney Homeless Assistance Amendments Act of 
                1988.
  [(z) Termination of Section 8 Contracts and Reuse of 
Recaptured Budget Authority.--
          [(1) General authority.--The Secretary may reuse any 
        budget authority, in whole or part, that is recaptured 
        on account of termination of a housing assistance 
        payments contract (other than a contract for tenant-
        based assistance) only for one or more of the 
        following:
                  [(A) Tenant-based assistance.--Pursuant to a 
                contract with a public housing agency, to 
                provide tenant-based assistance under this 
                section to families occupying units formerly 
                assisted under the terminated contract.
                  [(B) Project-based assistance.--Pursuant to a 
                contract with an owner, to attach assistance to 
                one or more structures under this section, for 
                relocation of families occupying units formerly 
                assisted under the terminated contract.
          [(2) Families occupying units formerly assisted under 
        terminated contract.--Pursuant to paragraph (1), the 
        Secretary shall first make available tenant- or 
        project-based assistance to families occupying units 
        formerly assisted under the terminated contract. The 
        Secretary shall provide project-based assistance in 
        instances only where the use of tenant-based assistance 
        is determined to be infeasible by the Secretary.
          [(3) Effective date.--This subsection shall be 
        effective for actions initiated by the Secretary on or 
        before September 30, 1995.

  [annual contributions for operation of lower income housing projects

  [Sec. 9. (a)(1)(A) In addition to the contributions 
authorized to be made for the purposes specified in section 5 
of this Act, the Secretary may make annual contributions to 
public housing agencies for the operation of low-income housing 
projects. The contributions payable annually under this section 
shall not exceed the amounts which the Secretary determines are 
required (i) to assure the lower income character of the 
projects involved, (ii) to achieve and maintain adequate 
operating services and reserve funds, and (iii) with respect to 
housing projects developed under the Indian and Alaskan Native 
housing program assisted under this Act, to provide funds (in 
addition to any other operating costs contributions approved by 
the Secretary under this section) as determined by the 
Secretary to be required to cover the administrative costs to 
an Indian housing authority during the development period of a 
project approved pursuant to section 5 and until such time as 
the project is occupied. The Secretary shall embody the 
provisions for such annual contributions in a contract 
guaranteeing their payment subject to the availability of 
funds, and such contract shall provide that no disposition of 
the low-income housing project, with respect to which the 
contract is entered into, shall occur during and for ten years 
after the period when contributions were made pursuant to such 
contract unless approved by the Secretary. If the Secretary 
determines that a public housing agency has failed to take the 
actions required to submit an acceptable audit on a timely 
basis in accordance with chapter 75 of title 31, United States 
Code, the Secretary may arrange for, and pay the costs of, the 
audit. In such circumstances, the Secretary may withhold, from 
assistance otherwise payable to the agency under this section, 
amounts sufficient to pay for the reasonable costs of 
conducting an acceptable audit, including, when appropriate, 
the reasonable costs of accounting services necessary to place 
the agency's books and records in auditable condition.
  [(B)(i) Annual contributions under this section to any public 
housing agency for any project with a sufficient number of 
residents who are frail elderly or persons with disabilities 
may be used, with respect to such project, for (I) the cost of 
a management staff member to coordinate the provision of any 
services within the project provided through any agency of the 
Federal Government or any other public or private department, 
agency, or organization to residents of the project who are 
frail elderly or persons with disabilities to enable such 
residents to live independently and prevent placement in 
nursing homes or institutions; and (II) expenses for the 
provision of services for such residents of the project to 
enable such residents to live independently and prevent 
placement in nursing homes or institutions, which may include 
meal services, housekeeping and chore assistance, personal 
care, laundry assistance, transportation services, and health-
related services, except that not more than 15 percent of the 
cost of the provision of such services may be provided under 
this section. For purposes of this clause, the term ``frail 
elderly'' shall have the meaning given the term under section 
202(d) of the Housing Act of 1959, except that such term does 
not include any person receiving assistance provided under the 
Congregate Housing Services Act of 1978 or section 802 of the 
Cranston-Gonzalez National Affordable Housing Act, and the term 
``persons with disabilities'' shall have the meaning given the 
term under section 811 of the Cranston-Gonzalez National 
Affordable Housing Act.
  [(ii) Annual contributions under this section to any public 
housing agency for any project may be used, with respect to 
such project, for (I) the cost of employing or otherwise 
retaining the services of one or more service coordinators 
under section 661 of the Housing and Community Development Act 
of 1992 to coordinate the provision of any supportive services 
within the project for residents of the project who are elderly 
families and disabled families, and (II) expenses for the 
provision of such services for such residents of the project. 
Not more than 15 percent of the cost of the provision of such 
services may be provided under this section. Services may not 
be provided under this clause for any person receiving 
assistance under the Congregate Housing Services Act of 1978 or 
section 802 of the Cranston-Gonzalez National Affordable 
Housing Act. The budget authority available under section 5(c) 
for assistance under this section is authorized to be increased 
by $30,000,000 on or after October 1, 1992, and by $30,000,000 
on or after October 1, 1993. Amounts made available under this 
clause shall be used to provide additional annual contributions 
to public housing agencies only for the purpose of providing 
service coordinators and services under this clause for public 
housing projects.
  [(2) The Secretary may not make assistance available under 
this section for any low-income housing project unless such 
project is one developed pursuant to a contributions contract 
authorized by section 5 but not subject to section 8, except 
that after the duration of any such contributions contract with 
respect to a low-income housing project, the Secretary may 
provide assistance under this section with respect to such 
project as long as the lower income nature of such project is 
maintained.
  [(3)(A) For purposes of making payments under this section 
(except for payments under paragraph (1)(B)), the Secretary 
shall utilize a performance funding system that is 
substantially based on the system defined in regulations and in 
effect on the date of the enactment of the Housing and 
Community Development Act of 1987 (as modified by this 
paragraph), and that establishes standards for costs of 
operation and reasonable projections of income, taking into 
account the character and location of the project and the 
characteristics of the families served, in accordance with a 
formula representing the operations of a prototype well-managed 
project. Such performance funding system shall be established 
in consultation with public housing agencies and their 
associations, be contained in a regulation promulgated by the 
Secretary prior to the start of any fiscal year to which it 
applies, and remain in effect for the duration of such fiscal 
year without change. Notwithstanding the preceding sentences, 
the Secretary shall revise the performance funding system by 
June 15, 1988, to accurately reflect the increase in insurance 
costs incurred by public housing agencies. Notwithstanding 
sections 583(a) and 585(a) of title 5, United States Code (as 
added by section 3(a) of the Negotiated Rulemaking Act of 
1990), any proposed regulation providing for amendment, 
alteration, adjustment, or other change to the performance 
funding system relating to vacant public housing units shall be 
issued pursuant to a negotiated rulemaking procedure under 
subchapter IV of chapter 5 of such title (as added by section 
3(a) of the Negotiated Rulemaking Act of 1990), and the 
Secretary shall establish a negotiated rulemaking committee for 
development of any such proposed regulations.
  [(B) Under the performance funding system established under 
this paragraph--
          [(i) in the first year that the reductions occur, any 
        public housing agency shall share equally with the 
        Secretary any cost reductions due to the differences 
        between projected and actual utility rates attributable 
        to actions taken by the agency which lead to such 
        reductions, and in subsequent years, if the energy 
        savings are cost-effective, the Secretary may continue 
        the sharing arrangement with the public housing agency 
        for a period not to exceed 6 years;
          [(ii) in the case of any public housing agency that 
        receives financing (from a person other than the 
        Secretary) or enters into a performance contract to 
        undertake energy conservation improvements in a public 
        housing project, under which payment does not exceed 
        the cost of the energy saved as a result of the 
        improvements during a negotiated contract period of not 
        more than 12 years that is approved by the Secretary--
                  [(I) the public housing agency shall retain 
                100 percent of any cost avoidance due to 
                differences between projected and actual 
                utility consumption (adjusted for heating 
                degree days) attributable to the improvements, 
                until the term of the financing agreement is 
                completed, at which time the annual utility 
                expense level 3-year rolling base procedures 
                shall be applied using--
                          [(a) in the first year following the 
                        end of the contract period, the energy 
                        use during the 2 years prior to 
                        installation of the energy conservation 
                        improvements and the last contract 
                        year;
                          [(b) in the second year following the 
                        end of the contract period, the energy 
                        use during the 1 year prior to 
                        installation of the energy conservation 
                        improvements and the 2 years following 
                        the end of the contract period; and
                          [(c) in the third year following the 
                        end of the contract period, the energy 
                        use in the 3 years following the end of 
                        the contract period; or
                  [(II) the Secretary shall provide an 
                additional operating subsidy above the current 
                allowable utility expense level equivalent to 
                the cost of the energy saved as a result of the 
                improvements and sufficient to cover payments 
                for the improvements through the term of the 
                contract or agreement;
          [(iii) there shall be a formal review process for the 
        purpose of providing such revisions (either increases 
        or reductions) to the allowable expense level of a 
        public housing agency as necessary--
                  [(I) to correct inequities and abnormalities 
                that exist in the base year expense level of 
                such public housing agency;
                  [(II) to accurately reflect changes in 
                operating circumstances since the initial 
                determination of such base year expense level; 
                and
                  [(III) to ensure that the allowable expense 
                limit accurately reflects the higher cost of 
                operating the project in an economically 
                distressed unit of local government and the 
                lower cost of operating the project in an 
                economically prosperous unit of local 
                government;
          [(iv) if a public housing agency redesigns or 
        substantially rehabilitates a public housing project so 
        that 2 or more dwelling units are combined to create a 
        single larger dwelling unit, the payments received 
        under this section shall not be reduced solely because 
        of the resulting reduction in the number of dwelling 
        units if not less than the same number of individuals 
        will reside in the new larger dwelling unit as resided 
        in the dwelling units that were combined to form such 
        larger dwelling unit; and
          [(v) if a public housing agency renovates, converts, 
        or combines one or more dwelling units in a public 
        housing project to create congregate space to 
        accommodate the provision of supportive services in 
        accordance with section 22 of this Act and section 802 
        of the Cranston-Gonzalez National Affordable Housing 
        Act, the payments received under this section shall not 
        be reduced because of the resulting reduction in the 
        number of dwelling units.
  [(4) Adjustments to a public housing agency's operating 
subsidy made by the Secretary under this section shall reflect 
actual changes in rental income collections resulting from the 
application of section 904 of the Stewart B. McKinney Homeless 
Assistance Amendments Act of 1988.
  [(b) The aggregate rentals required to be paid in any year by 
families residing in the dwelling units administered by a 
public housing agency receiving annual contributions under this 
section shall not be less than an amount equal to one-fifth of 
the sum of the incomes of all such families.
  [(c)(1) There are authorized to be appropriated for purposes 
of providing annual contributions under this section 
$2,282,436,000 for fiscal year 1993 and $2,378,298,312 for 
fiscal year 1994.
  [(2) There are also authorized to be appropriated to provide 
annual contributions under this section, in addition to amounts 
under paragraph (1), such sums as may be necessary for each of 
fiscal years 1993 and 1994, to provide each public housing 
agency with the difference between (A) the amount provided to 
the agency from amounts appropriated pursuant to paragraph (1), 
and (B) all funds for which the agency is eligible under the 
performance funding system without adjustments for estimated or 
unrealized savings.
  [(3) In addition to amounts under paragraphs (1) and (2), 
there are authorized to be appropriated for annual 
contributions under this section to provide for the costs of 
the adjustments to income and adjusted income under the 
amendments made by sections 573(b) and (c) of the Cranston-
Gonzalez National Affordable Housing Act such sums as may be 
necessary for fiscal years 1993 and 1994.
  [(d) If, in any fiscal year beginning after September 30, 
1979, any funds which have been appropriated for such year 
remain after applying the provisions of the second and fourth 
sentences of subsection (a)(1), the Secretary shall distribute 
such funds to low-income housing projects which incurred 
excessive costs which were beyond their control and the full 
extent of which was not taken into account in the original 
distribution of funds for such fiscal year.
  [(e) In the case of any public housing agency that submits 
its budget for any fiscal year of such agency to the Secretary 
in a timely manner in accordance with the regulations issued by 
the Secretary under this section, assistance to be provided to 
such agency under this section for such fiscal year shall 
commence not later than the 1st month of such fiscal year, and 
shall be paid in accordance with such payment schedule as may 
be agreed upon by the Secretary and such agency.

                          [general provisions

  [Sec. 10. (a) In the performance of, and with respect to, the 
functions, powers, and duties vested in him by this Act, the 
Secretary, notwithstanding the provisions of any other law, 
shall--
          [(1) prepare annually and submit a budget program as 
        provided for wholly owned Government corporations by 
        chapter 91 of title 31, United States Code; and
          [(2) maintain an integral set of accounts which shall 
        be audited annually by the General Accounting Office in 
        accordance with the principles and procedures 
        applicable to commercial transactions as provided by 
        chapter 91 of title 31, United States Code, and no 
        other audit shall be required.
  [(b) All receipts and assets of the Secretary under this Act 
shall be available for the purposes of this Act until expended.
  [(c) The Federal Reserve banks are authorized and directed to 
act as depositories, custodians, and fiscal agents for the 
Secretary in the general exercise of his powers under this Act, 
and the Secretary may reimburse any such bank for its services 
in such manner as may be agreed upon.

                [financing lower income housing projects

  [Sec. 11. (a) Obligations issued by a public housing agency 
in connection with low-income housing projects which (1) are 
secured (A) by a pledge of a loan under any agreement between 
such public housing agency and the Secretary, or (B) by a 
pledge of annual contributions under an annual contributions 
contract between such public housing agency and the Secretary, 
or (C) by a pledge of both annual contributions under an annual 
contributions contract and a loan under an agreement between 
such public housing agency and the Secretary, and (2) bear, or 
are accompanied by, a certificate of the Secretary that such 
obligations are so secured, shall be incontestable in the hands 
of a bearer and the full faith and credit of the United States 
is pledged to the payment of all amounts agreed to be paid by 
the Secretary as security for such obligations.
  [(b) Except as provided in section 5(g), obligations, 
including interest thereon, issued by public housing agencies 
in connection with low-income housing projects shall be exempt 
from all taxation now or hereafter imposed by the United States 
whether paid by such agencies or by the Secretary. The income 
derived by such agencies from such projects shall be exempt 
from all taxation now or hereafter imposed by the United 
States.

                            [labor standards

  [Sec. 12. (a) Any contract for loans, contributions, sale, or 
lease pursuant to this Act shall contain a provision requiring 
that not less than the wages prevailing in the locality, as 
determined or adopted (subsequent to a determination under 
applicable State or local law) by the Secretary, shall be paid 
to all architects, technical engineers, draftsmen, and 
technicians employed in the development, and all maintenance 
laborers and mechanics employed in the operation, of the low-
income housing project involved; and shall also contain a 
provision that not less than the wages prevailing in the 
locality, as predetermined by the Secretary of Labor pursuant 
to the Davis-Bacon Act (49 Stat. 1011), shall be paid to all 
laborers and mechanics employed in the development of the 
project involved (including a project with nine or more units 
assisted under section 8 of this Act, where the public housing 
agency or the Secretary and the builder or sponsor enter into 
an agreement for such use before construction or rehabilitation 
is commenced), and the Secretary shall require certification as 
to compliance with the provisions of this section prior to 
making any payment under such contract.
  [(b) Subsection (a) and the provisions relating to wages 
(pursuant to subsection (a)) in any contract for loans, annual 
contributions, sale, or lease pursuant to this Act, shall not 
apply to any individual that--
          [(1) performs services for which the individual 
        volunteered;
          [(2)(A) does not receive compensation for such 
        services; or
          [(B) is paid expenses, reasonable benefits, or a 
        nominal fee for such services; and
          [(3) is not otherwise employed at any time in the 
        construction work.

                          [energy conservation

  [Sec. 13. The Secretary shall, to the maximum extent 
practicable, require that newly constructed and substantially 
rehabilitated projects assisted under this Act with authority 
provided on or after October 1, 1979, shall be equipped with 
heating and cooling systems selected on the basis of criteria 
which include a life-cycle cost analysis of such systems.

                [public and indian housing modernization

  [Sec. 14. (a) It is the purpose of this section to provide 
assistance--
          [(1) to improve the physical condition of existing 
        public housing projects; and
          [(2) to upgrade the management and operation of such 
        projects;
in order to assure that such projects continue to be available 
to serve low-income families.
  [(b)(1) The Secretary may make available and contract to make 
available financial assistance (in such amounts as are 
authorized pursuant to section 5(c) and as may be approved in 
appropriations Acts) to public housing agencies for the purpose 
of improving the physical condition of existing low-rent public 
housing projects and for upgrading the management and operation 
of such projects to the extent necessary to maintain such 
physical improvements.
  [(2) The Secretary may make contributions (in the form of 
grants) to public housing agencies under this section. The 
contract under which the contributions shall be made shall 
specify that the terms and conditions of the contract shall 
remain in effect for a 20-year period for any project receiving 
the benefit of a grant under the contract.
  [(c) Assistance under subsection (b) may be made available 
only for buildings of low-rent housing projects--
          [(1) which projects are owned by public housing 
        agencies;
          [(2) which projects are operated as rental housing 
        projects and assisted under section 5 or section 9 of 
        this Act;
          [(3) which projects are not assisted under section 8 
        of this Act;
          [(4) which buildings are not assisted under section 
        5(j)(2); and
          [(5) which projects meet such other requirements 
        consistent with the purposes of this section as the 
        Secretary may prescribe.
  [(d) Except as provided in subsection (f)(4), no assistance 
may be made available under subsection (b) to a public housing 
agency that owns or operates less than 250 public housing 
dwelling units unless the Secretary has approved an application 
from the public housing agency which has been developed in 
consultation with appropriate local officials and with tenants 
of the housing projects for which assistance is requested. Such 
application shall contain at least--
          [(1) a comprehensive assessment of (A) the current 
        physical condition of each project for which assistance 
        is requested, and (B) the physical improvements 
        necessary for each such project to meet the standards 
        established by the Secretary pursuant to subsection 
        (j);
          [(2) a comprehensive assessment of the improvements 
        needed to upgrade the management and operation of each 
        such project so that decent, safe, and sanitary living 
        conditions will be provided in such projects; such 
        assessment shall include at least an identification of 
        needs related to--
                  [(A) the management, financial, and 
                accounting control systems of the public 
                housing agency which are related to each 
                project eligible for assistance under this 
                section;
                  [(B) the adequacy and qualifications of 
                personnel employed by such public housing 
                agency (in the management and operation of such 
                projects) for each category of employment; and
                  [(C) the adequacy and efficacy of--
                          [(i) tenant programs and services in 
                        such projects;
                          [(ii) the security of each such 
                        project and its tenants;
                          [(iii) policies and procedures of the 
                        public housing agency for the selection 
                        and eviction of tenants in such 
                        projects; and
                          [(iv) other policies and procedures 
                        of such agency relating to such 
                        projects, as specified by the 
                        Secretary; and
          [(3) a plan for making the improvements and for 
        meeting the needs, described in paragraphs (1) and (2); 
        such plan shall include at least--
                  [(A) a schedule of those actions which are to 
                be completed, over a period of not greater than 
                5 years from the date of approval of such 
                application by the Secretary, within each 12-
                month period covered by such plan and which are 
                necessary--
                          [(i) to make the improvements, 
                        described in paragraph (1)(B), for each 
                        project for which assistance is 
                        requested, and
                          [(ii) to upgrade the management and 
                        operation of such projects as described 
                        in paragraph (3); and
                  [(B) the estimated cost of each of the 
                actions described in subparagraph (A).
  [(e)(1) No financial assistance may be made available under 
this section to a public housing agency that owns or operates 
250 or more public housing dwelling units unless the Secretary 
approves (or has approved before the effective date of this 
subsection) a 5-year comprehensive plan submitted by the public 
housing agency, except that the Secretary may provide such 
assistance if it is necessary to correct conditions that 
constitute an immediate threat to the health or safety of 
tenants. The comprehensive plan shall contain--
          [(A) a comprehensive assessment of--
                  [(i) the current physical condition of each 
                public housing project owned or operated by the 
                public housing agency;
                  [(ii) the physical improvements necessary for 
                each such project to permit the project--
                          [(I) to be rehabilitated to a level 
                        at least equal to the modernization 
                        standards specified in the 
                        Modernization Handbook of the 
                        Department of Housing and Urban 
                        Development in effect on the date of 
                        the enactment of the Housing and 
                        Community Development Act of 1987, as 
                        well as the modernization standards 
                        established by the Secretary and in 
                        effect at the time of the preparation 
                        of the comprehensive plan; and
                          [(II) to comply with life-cycle cost-
                        effective energy conservation 
                        performance standards established by 
                        the Secretary to reduce operating costs 
                        over the estimated life of the 
                        building; and
                  [(iii) the replacement needs of equipment 
                systems and structural elements that will be 
                required to be met (assuming routine and timely 
                maintenance is performed) during the 5-year 
                period covered by the comprehensive plan;
          [(B) a comprehensive assessment of the improvements 
        needed to upgrade the management and operation of the 
        public housing agency and of each such project so that 
        decent, safe, and sanitary living conditions will be 
        provided such projects, which assessment shall include 
        at least an identification of needs related to--
                  [(i) the management, financial, and 
                accounting control systems of the public 
                housing agency that are related to such 
                projects;
                  [(ii) the adequacy and qualifications of 
                personnel appropriate to be employed by the 
                public housing agency (in the management and 
                operation of such projects) for each 
                significant category of employment; and
                  [(iii) the improvement of the efficacy of--
                          [(I) tenant programs and services in 
                        such projects;
                          [(II) the security of each such 
                        project and its tenants;
                          [(III) policies and procedures of the 
                        public housing agency for the selection 
                        and eviction of tenants in such 
                        projects; and
                          [(IV) other policies and procedures 
                        of the public housing agency relating 
                        to such projects, as specified by the 
                        Secretary;
          [(C) an analysis, made on a project-by-project basis 
        in accordance with standards and criteria prescribed by 
        the Secretary, demonstrating that completion of the 
        improvements and replacements identified under 
        subparagraphs (A) and (B) will reasonably ensure the 
        long-term physical and social viability of each such 
        project at a reasonable cost;
          [(D) an action plan for making the improvements and 
        replacements identified under subparagraphs (A) and (B) 
        that are determined under the analysis described in 
        subparagraph (C) to reasonably ensure long-term 
        viability of each such project at a reasonable cost, 
        which action plan shall include at least a schedule, in 
        order of priority established by the public housing 
        agency, of the actions that are to be completed over a 
        period of 5 years from the date of approval of the 
        comprehensive plan by the Secretary (or any longer 
        period reasonably needed to make the improvements and 
        replacements, considering the scope of the improvements 
        and replacements and the amount of funding provided) 
        and that are necessary--
                  [(i) to make the improvements and 
                replacements identified under subparagraph (A) 
                for each project expected to receive capital 
                improvements or replacements (with priority to 
                improvements and replacements required to 
                correct any life threatening condition); and
                  [(ii) to upgrade the management and operation 
                of the public housing agency and its public 
                housing projects as described in subparagraph 
                (B);
          [(E) a statement, to be signed by the chief local 
        government official (or Indian tribal official, if 
        appropriate), certifying that--
                  [(i) the comprehensive plan was developed by 
                the public housing agency in consultation with 
                appropriate local government officials (or 
                Indian tribal officials) and with tenants of 
                the housing projects (or tenants of the Indian 
                housing projects) eligible for assistance under 
                this section, which shall include at least one 
                public hearing that shall be held prior to the 
                initial adoption of any plan by the public 
                housing agency for use of such assistance, and 
                afford tenants and interested parties an 
                opportunity to summarize their priorities and 
                concerns, to ensure their due consideration in 
                the planning process of the public housing 
                agency; and
                  [(ii) the comprehensive plan is consistent 
                with the assessment of the community of its 
                low-income housing needs and that the unit of 
                general local government (or Indian tribe) will 
                cooperate in the provision of tenant programs 
                and services (as defined in section 3(c)(2));
          [(F) a statement, to be signed by the chief public 
        housing official, certifying that the public housing 
        agency will carry out the comprehensive plan in 
        conformity with title VI of the Civil Rights Act of 
        1964, title VIII of the Act of April 11, 1968 (commonly 
        known as the Civil Rights Act of 1968), and section 504 
        of the Rehabilitation Act of 1973;
          [(G) a preliminary estimate of the total cost of the 
        items identified in subparagraphs (A) and (B), 
        including a preliminary estimate of the funds that will 
        be required during each year covered by the 
        comprehensive plan to accomplish the work pursuant to 
        the action plan; and
          [(H) such other information as the Secretary may 
        require.
  [(2)(A) The Secretary shall approve a comprehensive plan 
unless--
          [(i) the comprehensive plan is incomplete in 
        significant matters;
          [(ii) on the basis of available significant facts and 
        data pertaining to the physical and operational 
        condition of the public housing projects of the public 
        housing agency or the management and operations of the 
        public housing agency, the Secretary determines that 
        the identification by the public housing agency of 
        needs is plainly inconsistent with such facts and data;
          [(iii) on the basis of the comprehensive plan, the 
        Secretary determines that the action plan described in 
        paragraph (1)(D) is plainly inappropriate to meeting 
        the needs identified in the comprehensive plan, or that 
        the public housing agency has failed to demonstrate 
        that completion of improvements and replacements 
        identified under subparagraphs (A) and (B) of paragraph 
        (1) will reasonably ensure long-term viability of one 
        or more public housing projects to which they relate at 
        a reasonable cost; or
          [(iv) there is evidence available to the Secretary 
        that tends to challenge in a substantial manner any 
        certification contained in the comprehensive plan.
  [(B) The comprehensive plan shall be considered to be 
approved, unless the Secretary notifies the public housing 
agency in writing within 75 calendar days of submission that 
the Secretary has disapproved the comprehensive plan as 
submitted, indicating the reasons for disapproval and 
modifications required to make the comprehensive plan 
approvable.
  [(3)(A) Each public housing agency that owns or operates 250 
or more public housing dwelling units shall, after being 
advised by the Secretary of the estimated assistance it will 
receive under this section in any fiscal year, submit to the 
Secretary, at a date determined by the Secretary, an annual 
statement of the activities and expenditures projected to be 
undertaken, in whole or in part, by such assistance during the 
12-month period immediately following the execution of the 
contract for such assistance. As long as the activities and 
expenditures are consistent with the approved plan, the public 
housing agency shall have total discretion in expending 
assistance for any activity or work set forth in the plan. The 
annual statement shall include a certification by the public 
housing agency that the proposed activities and expenditures 
are consistent with the approved comprehensive plan of the 
public housing agency. The annual statement also shall include 
a certification that the public housing agency has provided the 
tenants of the public housing affected by the planned 
activities the opportunity to review the annual statement and 
comment on it, and that such comments have been taken into 
account in formulating the annual statement as submitted to the 
Secretary.
  [(B) A public housing agency may propose an amendment to its 
comprehensive plan under paragraph (1) in any annual statement. 
Any such proposed amendment shall be reviewed in accordance 
with paragraph (2), and shall include a certification that (i) 
the proposed amendment has been made publicly available for 
comment prior to its submission; (ii) affected tenants have 
been given sufficient time to review and comment on it; and 
(iii) such comments have been taken into consideration in the 
preparation and submission of the amendment. A public housing 
agency shall have a right to amend its comprehensive plan and 
related statements to extend the time for performance whenever 
the Secretary has not provided the amount of assistance set 
forth in the plan or has not provided the assistance in a 
timely manner.
  [(C) The Secretary shall approve the annual statement and any 
amendment to it or the comprehensive plan unless the Secretary 
determines that the statement or amendment is plainly 
inconsistent with the activities specified in the comprehensive 
plan. The statement or amendment shall be considered to be 
approved, unless the Secretary notifies the public housing 
agency in writing before the expiration of the 75-day period 
following its submission that the Secretary has disapproved it 
as submitted, indicating the reasons for disapproval and the 
modifications required to make it approvable.
  [(4)(A) Each public housing agency that owns or operates 250 
or more public housing dwelling units shall submit to the 
Secretary, on a date determined by the Secretary, a performance 
and evaluation report concerning the use of funds made 
available under this section. The report of the public housing 
agency shall include an assessment by the public housing agency 
of the relationship of such use of funds made available under 
this section, as well as the use of other funds, to the needs 
identified in the comprehensive plan of the public housing 
agency and to the purposes of this section. The public housing 
agency shall certify that the report has been made available 
for review and comment by affected tenants prior to its 
submission to the Secretary.
  [(B) The Secretary shall, at least on an annual basis, make 
such reviews as may be necessary or appropriate to determine 
whether each public housing agency receiving assistance under 
this section--
          [(i) has carried out its activities under this 
        section in a timely manner and in accordance with its 
        comprehensive plan;
          [(ii) has a continuing capacity to carry out its 
        comprehensive plan in a timely manner;
          [(iii) has satisfied, or has made reasonable progress 
        towards satisfying, such performance standards as shall 
        be prescribed by the Secretary, and has made reasonable 
        progress in carrying out modernization projects 
        approved under this section.
  [(C) Each public housing agency that owns or operates 250 or 
more public housing dwelling units and receives assistance 
under this section shall have an audit made in accordance with 
chapter 75 of title 31, United States Code. The Secretary, the 
Inspector General of the Department of Housing and Urban 
Development, and the Comptroller General of the United States 
shall have access to all books, documents, papers, or other 
records that are pertinent to the activities carried out under 
this section in order to make audit examinations, excerpts, and 
transcripts.
  [(D) The comprehensive plan, any amendments to the 
comprehensive plan, and the annual statement shall, once 
approved by the Secretary, be binding upon the Secretary and 
the public housing agency. The Secretary may order corrective 
action only if the public housing agency does not comply with 
subparagraph (A) or (B) or if an audit under subparagraph (C) 
reveals findings that the Secretary reasonably believes require 
such corrective action. The Secretary may withhold funds under 
this section only if the public housing agency fails to take 
such corrective action after notice and a reasonable 
opportunity to do so. In administering this section, the 
Secretary shall, to the greatest extent possible, respect the 
professional judgment of the administrators of the public 
housing agency.
  [(f)(1) The amount of financial assistance made available 
under subsection (b) to any public housing agency that owns or 
operates less than 250 public housing dwelling units with 
respect to any year may not exceed the sum of--
          [(A) an amount determined by the Secretary to be 
        necessary to undertake the actions specified for such 
        year in the schedule submitted pursuant to subsection 
        (d)(3)(A);
          [(B) the amount determined necessary by the Secretary 
        to reimburse the public housing agency for the cost of 
        developing the plan described pursuant to subsection 
        (d)(3), less any amount which has been provided such 
        public housing agency with respect to such year under 
        paragraph (4); and
          [(C) in the case of a public housing agency which 
        meets such criteria of financial distress as are 
        established by the Secretary and which has submitted 
        the information described in paragraphs (1) and (2) of 
        subsection (d), the amount determined necessary by the 
        Secretary to enable such agency to develop the plan 
        described pursuant to subsection (d)(3);
except that not more than 5 per centum of the total amount 
utilized for contributions contracts under subsection (b) in 
any year shall be made available for the purposes described in 
paragraphs (3) and (4).
  [(2) A public housing agency that owns or operates 250 or 
more public housing dwelling units may use financial assistance 
received under subsection (b) only--
          [(A) to undertake activities described in its 
        approved comprehensive plan under subsection (e)(1) or 
        its annual statement under subsection (e)(3);
          [(B) to correct conditions that constitute an 
        immediate threat to the health or safety of tenants, 
        whether or not the need for such correction is 
        indicated in its comprehensive plan or annual 
        statement; and
          [(C) to prepare a comprehensive plan under subsection 
        (e)(1), including reasonable costs that may be 
        necessary to assist tenants in participating in the 
        planning process in a meaningful way, an annual 
        statement under subsection (e)(3), an annual 
        performance and evaluation report under subsection 
        (e)(4)(A), and an audit under subsection (e)(4)(C).
  [(g) No assistance shall be made available to a public 
housing agency pursuant to subsection (b) for any year 
subsequent to the first year for which such assistance is made 
available to such agency unless the Secretary has determined 
that such agency has made substantial efforts to meet the 
objectives for the preceding year under the plan described in 
subsection (d)(3) or (e) and approved by the Secretary.
  [(h) In making assistance available under subsection (b) to a 
public housing agency that owns or operates fewer than 250 
public housing dwelling units, the Secretary shall give 
preference to public housing agencies--
          [(1) which request assistance for projects (A) having 
        conditions which threaten the health or safety of the 
        tenants, or (B) having a significant number of vacant, 
        substandard units; and
          [(2) which have demonstrated a capability of carrying 
        out the activities proposed in the plan submitted by 
        the agency pursuant to subsection (d)(3) and approved 
        by the Secretary.
  [(i)(1) In addition to assistance made available under 
subsection (b) to a public housing agency that owns or operates 
fewer than 250 public housing dwelling units, the Secretary 
may, without regard to the requirements of subsection (c), (d), 
(f), (g), or (h), make available and contract to make available 
financial assistance (in such amounts as are authorized 
pursuant to section 5(c) and as approved in appropriation Acts) 
to any public housing agency in an amount which the Secretary 
determines is necessary to meet emergency or special purpose 
needs, especially emergency and special purpose needs which 
relate to fire safety standards. Such needs shall be limited 
to--
          [(A) correcting conditions which threaten the health 
        or safety of the tenants of any project (i) which is 
        described in subsection (c), and (ii) with respect to 
        which an application for assistance pursuant to 
        subsection (d) has not been approved by the Secretary;
          [(B) correcting conditions (i) which threaten the 
        health or safety of the tenants of any project with 
        respect to which an application for assistance pursuant 
        to subsection (d) has been approved, and (ii) which 
        were unanticipated at the time of the development of 
        such application;
          [(C) correcting conditions which threaten the health 
        or safety of the occupants of any low-income housing 
        project not described in subsection (c) and not 
        assisted pursuant to section 8;
          [(D)(i) physical improvements needs which (I) would 
        not otherwise be eligible for assistance under this 
        section, and (II) pertain to any low-income housing 
        project other than a project assisted under section 8; 
        and
          [(ii) physical improvement needs eligible under this 
        subparagraph shall include replacing or repairing major 
        equipment systems or structural elements, upgrading 
        security, increasing accessibility for elderly and 
        disabled families (as such terms are defined in section 
        3(b)(3)), reducing the number of vacant substandard 
        units, and increasing the energy efficiency of the 
        units, except that the Secretary may make financial 
        assistance available under this clause only if the 
        Secretary determines that the physical improvements are 
        necessary and sufficient to extend substantially the 
        useful life of the project; or
          [(E) management improvement needs which (i) would not 
        otherwise be eligible for assistance under this 
        section, and (ii) pertain to any low-income housing 
        project other than a project assisted under section 8.
  [(2) The Secretary may issue such rules and regulations as 
may be necessary to carry out this subsection.
  [(j)(1) The Secretary may issue such rules and regulations as 
may be necessary to carry out the provisions and purposes of 
this section.
  [(2) The Secretary shall issue rules and regulations 
establishing standards which provide for decent, safe, and 
sanitary living conditions in low-rent public housing projects 
and for energy conserving improvements in such projects and 
which, to the extent practicable, are consistent with the 
Minimum Property Standards for Multi-Family Housing as they 
reasonably would be applied to existing housing, except that 
the Secretary may establish higher standards on a project-by-
project basis in such cases where the Secretary deems such 
higher standards appropriate for furthering the purposes of 
this section.
  [(k)(1) From amounts approved in appropriation Acts for 
grants under this section for fiscal year 1992 and each fiscal 
year thereafter, and to the extent provided by such Acts, the 
Secretary shall reserve not more than $75,000,000 (including 
unused amounts reserved during previous fiscal years), which 
shall be available for modernization needs resulting from 
natural and other disasters and from emergencies. Amounts 
provided for emergencies shall be repaid by public housing 
agencies from future allocations of assistance under paragraph 
(2), where available.
  [(2)(A) After determining the amounts to be reserved under 
paragraphs (1) and (5)(D)(iv), the Secretary shall allocate the 
amount remaining pursuant to a formula contained in a 
regulation prescribed by the Secretary, which shall be designed 
to measure the relative needs of public housing agencies. The 
formula shall take into account amounts previously made 
available by the Secretary for modernization under this section 
and for major reconstruction of obsolete  projects,  to  the  
extent  determined  appropriate  by  the Secretary.
  [(B) The Secretary shall allocate half of the amount 
allocated under this paragraph based on the relative backlog 
needs of public housing agencies, determined--
          [(i) for individual public housing agencies with 250 
        or more units and for the aggregate of agencies with 
        fewer than 250 units, where the data are statistically 
        reliable, on the basis of the most recently available, 
        statistically reliable data regarding the (I) backlog 
        of needed repairs and replacements of existing physical 
        systems in public housing projects, (II) items that 
        must be added to projects to meet the modernization 
        standards of the Secretary (referred to in subsection 
        (e)(1)(A)(ii)(I)) and State and local codes, and (III) 
        items that are necessary or highly desirable for the 
        long-term viability of a project; or
          [(ii) for individual public housing agencies with 250 
        or more units, where such data are not statistically 
        reliable, on the basis of estimates of the categories 
        of backlog specified in clause (i) using the most 
        recently available data on the backlog, and objectively 
        measurable data on public housing agency, community, 
        and project characteristics regarding--
                  [(I) the average number of bedrooms in the 
                units in a project;
                  [(II) the proportion of units in a project 
                available for occupancy by very large families;
                  [(III) the extent to which units for families 
                are in high-rise elevator projects;
                  [(IV) the age of the projects;
                  [(V) in the case of a large agency, as 
                determined by the Secretary, the number of 
                units with 2 or more bedrooms;
                  [(VI) the cost of rehabilitating property in 
                the area;
                  [(VII) for family projects, the extent of 
                population decline in the unit of general local 
                government determined on the basis of the 1970 
                and 1980 censuses; and
                  [(VIII) any other factors the Secretary 
                determines are appropriate.
        The Secretary may not establish or amend any criteria 
        regarding the backlog needs of public housing agencies 
        under this subparagraph, except by rule as provided 
        under section 553 of title 5, United States Code.
  [(C) The Secretary shall allocate the other half of the 
amount allocated under this paragraph based on the relative 
accrued needs of public housing agencies for the categories of 
need specified in subparagraphs (B)(i) (I) and (II), 
determined--
          [(i) for individual public housing agencies with 250 
        or more units and for the aggregate of agencies with 
        fewer than 250 units, where the data are statistically 
        reliable, on the basis of the needs that are estimated 
        to have accrued since the date of the last objective 
        measurement of backlog needs under subparagraph (B); or
          [(ii) for individual public housing agencies with 250 
        or more units, where the estimates under clause (i) are 
        not statistically reliable, on the basis of estimates 
        of accrued need using the most recently available data 
        on the backlog, and objectively measurable data on 
        public housing agency, community, and project 
        characteristics regarding--
                  [(I) the average number of bedrooms of the 
                units in a project;
                  [(II) the proportion of units in a project 
                available for occupancy by very large families;
                  [(III) the age of the projects;
                  [(IV) the extent to which the buildings in 
                projects of an agency average fewer than 5 
                units;
                  [(V) the cost of rehabilitating property in 
                the area;
                  [(VI) the total number of units of each 
                agency that owns or operates 250 or more units; 
                and
                  [(VII) any other factors the Secretary 
                determines are appropriate.
        The Secretary may not establish or amend any criteria 
        regarding the accrual needs of public housing agencies 
        under this subparagraph, except by rule as provided 
        under section 553 of title 5, United States Code.
  [(D)(i) In determining how many units an agency owns or 
operates and the relative modernization needs of agencies, the 
Secretary shall, except as otherwise agreed by the Secretary 
and the agency, count each existing unit under the annual 
contributions contract, except that an existing unit under the 
turnkey III and the mutual help programs may be counted as less 
than one unit, to take into account the responsibility of 
families for the costs of certain maintenance and repair. For 
purposes of this section, an agency that qualifies to receive a 
formula grant under paragraph (4) may elect to continue to 
qualify to receive a formula grant if it owns or operates at 
least 200 public housing units.
  [(ii) Where an existing unit under a contract is demolished 
or disposed of, the Secretary shall not adjust the amount the 
agency receives under the formula unless more than one percent 
of the units are affected on a cumulative basis. Where more 
than one percent of the units are demolished or disposed of, 
the Secretary shall reduce the formula amount for the agency 
over a 3-year period to reflect removal of the units from the 
contract.
  [(iii) The Secretary shall determine whether the data under 
subparagraphs (B) and (C) are statistically reliable.
  [(3) The amount determined under the formula for agencies 
with fewer than 250 units shall be allocated in accordance with 
subsection (d).
  [(4) The amount determined under the formula for each agency 
that owns or operates 250 or more units shall be allocated to 
each qualifying agency in accordance with subsection (e).
  [(5)(A) With respect to any agency that is designated as a 
troubled agency with respect to the program under this section 
upon the initial designation of such troubled agencies under 
section 6(j)(2)(A)(i), the Secretary shall limit the total 
amount of funding under this section for the agency for fiscal 
year 1992 and any fiscal year thereafter, if the agency remains 
designated as a troubled agency, to the sum of--
          [(i) the average of the amount that the troubled 
        agency received for modernization activities under this 
        section and for major reconstruction of obsolete 
        projects for each of fiscal years 1989, 1990, and 1991, 
        which average shall be adjusted to take into account 
        changes in the cost of rehabilitating property; plus
          [(ii) 25 percent of the difference between the amount 
        determined under clause (i) and the amount that would 
        be allocated to the agency in such fiscal year if the 
        agency were not designated as a troubled agency.
  [(B) In any fiscal year the Secretary may, pursuant to the 
request of a troubled agency, increase the amount allocated to 
the agency under subparagraph (A) to an amount not exceeding 
the amount that would be allocated to the agency in such fiscal 
year if the agency were not a troubled agency. An increase 
under this subparagraph shall be based on the agency's progress 
toward meeting the performance indicators under section 
6(j)(1). The Secretary shall render a decision in writing on 
each such request not later than 75 days after receipt of the 
request and any necessary supporting documentation.
  [(C) For any fiscal year, any amounts that would have been 
allocated to an agency under the formula under paragraph (2) 
that are not allocated to the agency because the agency 
receives the amount provided under subparagraph (A) of this 
paragraph, shall be allocated in such year pursuant to the 
formula to other agencies with 500 or more units.
  [(D) The Secretary shall carry out a credit system under this 
subparagraph to provide agencies that receive allocations under 
subparagraph (A) with additional assistance under this section 
after the agency is determined not to be a troubled agency, to 
compensate for  amounts  not  received  because  of  the  
troubled  agency  designation. The credit system shall be 
subject to the following requirements:
          [(i) Any agency that receives assistance pursuant to 
        subparagraph (A) for any fiscal year shall receive 
        credits for the difference between the amount that the 
        agency would have been allocated in such year if it 
        were not designated a troubled agency and the amount 
        allocated for the agency for such year under 
        subparagraph (A).
          [(ii) An agency may not receive credits under this 
        subparagraph for more than 3 consecutive fiscal years.
          [(iii) After a 3-year period during which an agency 
        has accrued credits, the credits accrued by the agency 
        shall be--
                  [(I) decreased by 10 percent of the total 
                credits accumulated if the designation as a 
                troubled agency is not removed before  the  
                conclusion  of  the  first  fiscal  year  after 
                 such 3-year period of accrual of credits;
                  [(II) decreased by an additional 20 percent 
                of the original total accumulated credits if 
                the designation as a troubled agency is not 
                removed before the conclusion of the second 
                fiscal year after such 3-year accrual period;
                  [(III) decreased by an additional 30 percent 
                of the original total accumulated credits if 
                the designation as a troubled agency is not 
                removed before the conclusion of the third 
                fiscal year after such 3-year accrual period; 
                and
                  [(IV) eliminated if the designation as a 
                troubled agency is not removed before the 
                conclusion of the fourth fiscal year after such 
                3-year accrual period.
          [(iv) After a determination by the Secretary that an 
        agency is not a troubled agency, the Secretary shall 
        provide the agency with amounts made available under 
        this clause in accordance with the amount of credits 
        accumulated by the agency (subject to the reductions 
        under clause (iii)). Such amounts shall be provided in 
        addition to the amounts allocated to the agency 
        pursuant to the formula under paragraph (2). In each 
        fiscal year, the Secretary shall reserve from amounts 
        available for allocation under paragraph (2)(A) the 
        amount necessary to provide assistance pursuant to such 
        credits, except that the reserved amount may not exceed 
        5 percent of the total amount available for allocation 
        under such paragraph.
          [(v) In making payments for accrued credits in 
        accordance with clause (iv), the Secretary may take 
        into account the ability of the agency to expeditiously 
        expend amounts received for credits.
    [(E) The Secretary shall, by regulation, establish special 
rules for limiting the amount of assistance provided under this 
section to agencies that become troubled after the date of the 
initial designation of troubled agencies under section 
6(j)(2)(A)(i). The rules may provide for a credit system based 
on the system established under this paragraph.
  [(6) Any amounts (A) allocated under paragraph (4) that 
become available for reallocation because an agency does not 
qualify to receive all or a part of its formula allocation due 
to failure to comply with the requirements of this section 
(other than because of designation as a troubled agency), and 
(B) recaptured by the Secretary for good cause, shall (subject 
to approval in appropriations Acts) be reallocated by the 
Secretary in the next fiscal year to other housing agencies 
that own or operate 250 or more units, based on their relative 
needs. The relative needs of agencies shall be measured by the 
formula established pursuant to paragraph (2)(A).
  [(7) A public housing agency may appeal the amount of its 
allocation determined under the formula on the basis of unique 
circumstances or on the basis that the objectively measurable 
data regarding the agency, community, and project 
characteristics used for determining the formula amount were 
not correct.
  [(8) Amounts allocated to a public housing agency under 
paragraph (3) or (4) may be used for any eligible activity in 
accordance with this section, notwithstanding that the 
allocation amount is determined by allocating half based on 
relative backlog needs and half based on relative accrued needs 
of agencies.
  [(l) The Secretary shall include in the annual report under 
section 8 of the Department of Housing and Urban Development 
Act--
          [(1) a description of the allocation, distribution, 
        and use of assistance under this section on a regional 
        basis and on the basis of public housing agency size; 
        and
          [(2) a national compilation of the total funds 
        requested in comprehensive plans for all public housing 
        agencies owning or operating 250 or more public housing 
        dwelling units.
  [(m) Subject to subsection (k)(1), the Secretary may issue 
any regulations that are necessary to carry out this section.
  [(n) Limitation.--The Secretary shall not make assistance 
under this section available with respect to a property 
transferred under title III.
  [(o) Any amount that the Secretary has obligated to a public 
housing agency under this section other than pursuant to the 
program established under subsection (e), shall be used for the 
purposes for which such amount was provided, or for purposes 
consistent with an action plan submitted by the agency under 
subsection (e) and approved by the Secretary, as the agency 
determines to be appropriate.
  [(p)(1) The Secretary shall require any public housing agency 
that has a vacancy rate among dwelling units owned or operated 
by the agency that exceeds twice the average vacancy rate among 
all agencies, that is designated as a troubled agency under 
section 6(j), or for which a receiver has been appointed 
pursuant to section 6(j)(3), to participate in the vacancy 
reduction program under this subsection.
  [(2) Each public housing agency participating in the program 
under this subsection shall develop and submit to the Secretary 
a vacancy  reduction  plan  regarding  vacancies  in  units  
owned  or operated by the agency. The plan shall include 
statements (A) identifying vacant dwelling units administered 
by the agency and explaining the reasons for the vacancies, (B) 
describing the actions to be taken by the agency during the 
following 5 years to eliminate the vacancies, (C) identifying 
any impediments that will prevent elimination of the vacancies 
within the 5-year period, (D) identifying any vacant units 
subject to comprehensive modernization, major reconstruction, 
demolition, and disposition activities that have been funded or 
approved, (E) identifying any vacant dwelling units that are 
eligible for comprehensive modernization, major reconstruction, 
demolition, or disposition but have not been funded or approved 
for such activities and are not likely to be funded or approved 
for at least 3 years and estimating the amount of assistance 
necessary to complete the comprehensive modernization, major 
reconstruction, demolition, or disposition of such units, (F) 
identifying any vacant units not identified under subparagraphs 
(E) and (F) and describing any appropriate activities relating 
to elimination of the vacancies in such units and estimating 
the amount of assistance necessary to carry out the activities, 
and (G) setting forth an agenda for implementation of 
management improvements (including, as appropriate, 
improvements recommended by the assessment team pursuant to 
paragraph (3)(C)) during the first fiscal year beginning after 
submission of the plan and including an estimate of the amount 
of assistance necessary to implement the improvements.
  [(3)(A) Upon the expiration of the 24-month period beginning 
upon the receipt of assistance under paragraph (5) by a public 
housing agency, the Secretary shall, after reviewing the 
progress made in complying with the plan, reserve from the 
annual contribution attributable to each unit vacant for the 
24-month period an amount determined by the Secretary but not 
exceeding 80 percent of such contribution. The Secretary may 
not reserve any amounts under this subparagraph for any vacant 
dwelling unit that is vacant because of modernization, 
reconstruction, or lead-based paint reduction activities.
  [(B) The Secretary shall deposit any amounts reserved under 
subparagraph (A) in a separate account established on behalf of 
the public housing agency, and such amounts shall be available 
to the agency only for the purpose of carrying out activities 
in compliance with the vacancy reduction plan of the agency.
  [(C) If, after the expiration of the 24-month period 
beginning upon the reservation under subparagraph (A) of 
amounts for a public housing agency, the Secretary determines 
that the agency has not made significant progress to comply 
with the provisions of the vacancy reduction plan of the 
agency, the amount remaining in the account for the agency 
established under subparagraph (B) shall be recaptured by the 
Secretary.
  [(4)(A) In cooperation with each agency participating in the 
program under this subsection, the Secretary shall provide for 
onsite assessment of the vacancy situation of the agency by a 
team of knowledgeable observers. The assessment team shall 
include representatives of the Department of Housing and Urban 
Development, an equal number of independent experts 
knowledgeable with respect to vacancy problems and management 
issues relating to public housing, and officials of the public 
housing agency, all of whom shall be selected by the Secretary. 
The assessment team shall assess the vacancy situation of the 
agency to determine the causes of the vacancies, including any 
management deficiencies or modernization activities.
  [(B) The assessment team shall also examine indicators of the 
management performance of the agency relating to vacancy, which 
shall include consideration of the performance of the agency as 
measured by the indicators under subparagraphs (A) and (E) of 
section 6(j)(1).
  [(C) The assessment team shall submit to the agency and the 
Secretary written recommendations for management improvements 
to eliminate or alleviate management deficiencies, and may 
assist the agency in preparing the vacancy reduction plan under 
paragraph (2), including determining appropriate actions to 
eliminate vacancies.
  [(D) The Secretary may use amounts made available under 
paragraph (6) for any travel and administrative expenses of 
assessment teams under this paragraph.
  [(5) The Secretary shall, subject to the availability of 
amounts under paragraph (6), provide assistance under this 
subsection to public housing agencies submitting vacancy 
reduction plans for reasonable costs of--
          [(A) implementing management improvements;
          [(B) rehabilitating vacant dwelling units identified 
        in the statement under paragraph (2), except that the 
        Secretary may provide assistance to a public housing 
        agency designated as a troubled agency for the purposes 
        under this subparagraph only if the Secretary 
        determines that the agency is making substantial 
        progress in remedying management deficiencies, if any, 
        or that the agency has provided reasonable assurances 
        that such progress will be made; and
          [(C) carrying out vacancy reduction activities 
        described in the statement under paragraph (2).
  [(6)(A) Of any amounts available under this section in each 
of fiscal years 1993 and 1994 (after amounts are reserved 
pursuant to subsection (k)(1)), an amount equal to 4 percent of 
such remaining funds shall be available in each such fiscal 
year for the purposes under subparagraph (B).
  [(B) Of such amounts available under subparagraph (A) in each 
such fiscal year--
          [(i) 20 percent shall be available only for carrying 
        out activities under section 6(j); and
          [(ii) 80 percent shall be available for carrying out 
        this subsection.
  [(q)(1) Notwithstanding any other provision of law, a public 
housing agency may use modernization assistance provided under 
section 14 for any eligible activity related to public housing 
which is currently authorized by this Act or applicable 
appropriations Acts for a public housing agency, including the 
demolition of existing units, for replacement housing, 
modernization activities related to the public housing portion 
of housing developments held in partnership, or cooperation 
with non-public housing entities, and for temporary relocation 
assistance, provided that the assistance provided to the public 
housing agency under section 14 is principally used for the 
physical improvement or replacement of public housing and for 
associated management improvements, except as otherwise 
approved by the Secretary, and provided the public housing 
agency consults with the appropriate local government officials 
(or Indian tribal officials) and with tenants of the public 
housing developments. The public housing agency shall establish 
procedures for consultation with local government officials and 
tenants, and shall follow applicable regulatory procedures as 
determined by the Secretary.
  [(2) The authorization provided under this subsection shall 
not extend to the use of public housing modernization 
assistance for public housing operating assistance.

                      [payment of nonfederal share

  [Sec. 15. Any of the following may be used as the non-Federal 
share required in connection with activities undertaken under 
Federal grant-in-aid programs which provide social, 
educational, employment, and other services to the tenants in a 
project assisted under this Act, other than under section 8:
          [(1) annual contributions under this Act for 
        operation of the project; or
          [(2) rental or use-value of buildings or facilities 
        paid for, in whole or in part, from development, 
        modernization, or operation cost financed under this 
        Act.

                [income eligibility for assisted housing

  [Sec. 16. (a) Not more than 25 per centum of the dwelling 
units which were available for occupancy under public housing 
annual contributions contracts and section 8 housing assistance 
payments contracts under this Act before the effective date of 
the Housing and Community Development Amendments of 1981, and 
which will be leased on or after such effective date shall be 
available for leasing by low-income families other than very 
low-income families.
  [(b)(1) Not more than 15 percent of the dwelling units which 
become available for occupancy under public housing 
contributions contracts and section 8 housing assistance 
payments contracts under this Act on or after the effective 
date of the Housing and Community Development Amendments of 
1981\1\ shall be available for leasing by low-income families 
other than very low-income families.
  [(2) Not more than 25 percent of the dwelling units in any 
project of any agency shall be available for occupancy by low-
income families other than very low-income families. The 
limitation shall not apply in the case of any project in which, 
before the date of the enactment of the Cranston-Gonzalez 
National Affordable Housing Act, such low-income families 
occupy more than 25 percent of the dwelling units.
  [(c) In developing admission procedures implementing 
subsection (b), the Secretary may not totally prohibit 
admission of low-income families other than very low-income 
families and shall establish an appropriate specific percentage 
of low-income families other than very-low-income families that 
may be assisted in each assisted housing program that, when 
aggregated, will achieve the overall percentage limitation 
contained in subsection (b). In developing such admission 
procedures, the Secretary shall prohibit project owners from 
selecting families for residence in an order different from the 
order on the waiting list for the purpose of selecting 
relatively higher income families for residence; except that 
such prohibition shall not apply with respect to families 
selected for occupancy in public housing under the system of 
preferences established by the agency pursuant to section 
6(c)(4)(A)(ii). The Secretary shall issue regulations to carry 
out this subsection not later than 60 days after the date of 
the enactment of the Housing and Community Development Act of 
1987.
  [(d)(1) The limitations established in subsection (b) shall 
not apply to dwelling units made available under section 8 
housing assistance contracts for the purpose of preventing 
displacement, or ameliorating the effects of displacement, 
including displacement caused by rents exceeding 30 percent of 
monthly adjusted family income, of low-income families from 
projects being rehabilitated with assistance from 
rehabilitation grants under section 17 and the Secretary shall 
not otherwise unduly restrict the use of payments under section 
8 housing assistance contracts for this purpose.
  [(2) The limitations established in subsections (a) and (b) 
shall not apply to dwelling units assisted by Indian public 
housing agencies, to scattered site public housing dwelling 
units sold or intended to be sold to public housing tenants 
under section 5(h) of this title.

             [demolition and disposition of public housing

  [Sec. 18. (a) The Secretary may not approve an application by 
a public housing agency for permission, with or without 
financial assistance under this Act, to demolish or dispose of 
a public housing project or a portion of a public housing 
project unless the Secretary has determined that--
          [(1) in the case of an application proposing 
        demolition of a public housing project or a portion of 
        a public housing project, the project or portion of the 
        project is obsolete as to physical condition, location, 
        or other factors, making it unusable for housing 
        purposes, and no reasonable program of modifications is 
        feasible to return the project or portion of the 
        project to useful life; or in the case of an 
        application proposing the demolition of only a portion 
        of a project, the demolition will help to assure the 
        useful life of the remaining portion of the project;
          [(2) in the case of an application proposing 
        disposition of real property of a public housing agency 
        by sale or other transfer--
                  [(A)(i) the property's retention is not in 
                the best interests of the tenants or the public 
                housing agency because developmental changes in 
                the area surrounding the project adversely 
                affect the health or safety of the tenants or 
                the feasible operation of the project by the 
                public housing agency, because disposition 
                allows the acquisition, development, or 
                rehabilitation of other properties which will 
                be more efficiently or effectively operated as 
                low-income housing projects and which will 
                preserve the total amount of low-income housing 
                stock available in the community, or because of 
                other factors which the Secretary determines 
                are consistent with the best interests of the 
                tenants and public housing agency and which are 
                not inconsistent with other provisions of this 
                Act; and
                  [(ii) for property other than dwelling units, 
                the property is excess to the needs of a 
                project or the disposition is incidental to, or 
                does not interfere with, continued operation of 
                a project; and
                  [(B) the net proceeds of the disposition will 
                be used for (i) the payment of development cost 
                for the project and for the retirement of 
                outstanding obligations issued to finance 
                original development or modernization of the 
                project, which, in the case of scattered-site 
                housing of a public housing agency, shall be in 
                an amount that bears the same ratio to the 
                total of such costs and obligations as the 
                number of units disposed of bears to the total 
                number of units of the project at the time of 
                disposition, and (ii) to the extent that any 
                proceeds remain after the application of 
                proceeds in accordance with clause (i), the 
                provision of housing assistance for low-income 
                families through such measures as modernization 
                of low-income housing, or the acquisition, 
                development, or rehabilitation of other 
                properties to operate as low-income housing; or
          [(3) in the case of an application proposing 
        demolition or disposition of any portion of a public 
        housing project, assisted at any time under section 
        5(j)(2)--
                  [(A) such assistance has not been provided 
                for the portion of the project to be demolished 
                or disposed within the 10-year period ending 
                upon submission of the application; or
                  [(B) the property's retention is not in the 
                best interest of the tenants or the public 
                housing agency because of extraordinary changes 
                in the area surrounding the project or other 
                extraordinary circumstances of the project.
  [(b) The Secretary may not approve an application or furnish 
assistance under this section or under this Act unless--
          [(1) the application from the public housing agency 
        has been developed in consultation with tenants and 
        tenant councils, if any, who will be affected by the 
        demolition or disposition, and the tenant councils, 
        resident management corporation, and tenant cooperative 
        of the project or portion of the project covered by the 
        application, if any, have been given appropriate 
        opportunities to purchase the project or portion of the 
        project covered by the application, and contains a 
        certification by appropriate local government officials 
        that the proposed activity is consistent with the 
        applicable housing assistance plan; and
          [(2) all tenants to be displaced as a result of the 
        demolition or disposition will be given assistance by 
        the public housing agency and are relocated to other 
        decent, safe, sanitary, and affordable housing, which 
        is, to the maximum extent practicable, housing of their 
        choice, including housing assisted under section 8 of 
        this Act, and the public housing agency provides for 
        the payment of the relocation expenses of each tenant 
        to be displaced, ensures that the rent paid by the 
        tenant following relocation will not exceed the amount 
        permitted under this Act and shall not commence 
        demolition or disposition of any unit until the tenant 
        of the unit is relocated.
  [(c) Notwithstanding any other provision of law, the 
Secretary is authorized to make available financial assistance 
for applications approved under this section using available 
contributions authorized under section 5.
  [(d) A public housing agency shall not take any action to 
demolish or dispose of a public housing project or a portion of 
a public housing project without obtaining the approval of the 
Secretary and satisfying the conditions specified in 
subsections (a) and (b): Provided, That nothing in this section 
shall prevent a public housing agency from consolidating 
occupancy within or among buildings of a public housing 
project, or among projects, or with other housing for the 
purpose of improving the living conditions of or providing more 
efficient services to its tenants.
  [(e)(1) In each of fiscal years 1993 and 1994, the Secretary 
may reserve from any budget authority appropriated for such 
year for assistance under section 8 that is available for 
families not currently receiving such assistance not more than 
10 percent of such budget authority for providing replacement 
housing under subsection (b)(3)(A) for units demolished or 
disposed of pursuant to this section.
  [(2) In each of fiscal years 1993 and 1994, the Secretary may 
reserve from any budget authority appropriated for such year 
for development of public housing under section 5(a)(2) not 
more than the lesser of 30 percent of such budget authorization 
or $150,000,000, for providing replacement housing under 
subsection (b)(3)(A) for units demolished or disposed of 
pursuant to this section.
  [(f) Notwithstanding any other provision of law, replacement 
housing units for public housing units demolished may be built 
on the original public housing site or in the same neighborhood 
if the number of such replacement units is significantly fewer 
than the number of units demolished.
  [(g) The provisions of this section shall not apply to the 
disposition of a public housing project in accordance with an 
approved homeownership program under title III of this Act.

                         [financing limitations

  [Sec. 19. On and after October 1, 1983, the Secretary--
          [(1) may only enter into contracts for annual 
        contributions regarding obligations financing public 
        housing projects authorized by section 5(c) if such 
        obligations are exempt from taxation under section 
        11(b), or if such obligations are issued under section 
        4 and such obligations are exempt from taxation; and
          [(2) may not enter into contracts for periodic 
        payments to the Federal Financing Bank to offset the 
        costs to the Bank of purchasing obligations (as 
        described in the first sentence of section 16(b) of the 
        Federal Financing Bank Act of 1973) issued by local 
        public housing agencies for purposes of financing 
        public housing projects authorized by section 5(c) of 
        this Act.

                  [public housing resident management

  [Sec. 20. (a) Purpose.--The purpose of this section is to 
encourage increased resident management of public housing 
projects, as a means of improving existing living conditions in 
public housing projects, by providing increased flexibility for 
public housing projects that are managed by residents by--
          [(1) permitting the retention, and use for certain 
        purposes, of any revenues exceeding operating and 
        project costs; and
          [(2) providing funding, from amounts otherwise 
        available, for technical assistance to promote 
        formation and development of resident management 
        entities.
For purposes of this section, the term ``public housing 
project'' includes one or more contiguous buildings or an area 
of contiguous row houses the elected resident councils of which 
approve the establishment of a resident management corporation 
and otherwise meet the requirements of this section.
  [(b) Program Requirements.--
          [(1) Resident council.--As a condition of entering 
        into a resident management program, the elected 
        resident council of a public housing project shall 
        approve the establishment of a resident management 
        corporation. When such approval is made by the elected 
        resident council of a building or row house area, the 
        resident management program shall not interfere with 
        the rights of other families residing in the project or 
        harm the efficient operation of the project. The 
        resident management corporation and the resident 
        council may be the same organization, if the 
        organization complies with the requirements applicable 
        to both the corporation and council. The corporation 
        shall be a nonprofit corporation organized under the 
        laws of the State in which the project is located, and 
        the tenants of the project shall be the sole voting 
        members of the corporation. If there is no elected 
        resident council, a majority of the households of the 
        public housing project shall approve the establishment 
        of a resident council to determine the feasibility of 
        establishing a resident management corporation to 
        manage the project.
          [(2) Public housing management specialist.--The 
        resident council of a public housing project, in 
        cooperation with the public housing agency, shall 
        select a qualified public housing management specialist 
        to assist in determining the feasibility of, and to 
        help establish, a resident management corporation and 
        to provide training and other duties agreed to in the 
        daily operations of the project.
          [(3) Bonding and insurance.--Before assuming any 
        management responsibility for a public housing project, 
        the resident management corporation shall provide 
        fidelity bonding and insurance, or equivalent 
        protection, in accordance with regulations and 
        requirements of the Secretary and the public housing 
        agency. Such bonding and insurance, or its equivalent, 
        shall be adequate to protect the Secretary and the 
        public housing agency against loss, theft, 
        embezzlement, or fraudulent acts on the part of the 
        resident management corporation or its employees.
          [(4) Management responsibilities.--A resident 
        management corporation that qualifies under this 
        section, and that supplies insurance and bonding or 
        equivalent protection sufficient to the Secretary and 
        the public housing agency, shall enter into a contract 
        with the public housing agency establishing the 
        respective management rights and responsibilities of 
        the corporation and the public housing agency. Such 
        contract shall be consistent with the requirements of 
        this Act applicable to public housing projects and may 
        include specific terms governing management personnel 
        and compensation, access to public housing project 
        records, submission of and adherence to budgets, rent 
        collection procedures, tenant income verification, 
        tenant eligibility determinations, tenant eviction, the 
        acquisition of supplies and materials and such other 
        matters as may be appropriate. The contract shall be 
        treated as a contracting out of services and shall be 
        subject to any provision of a collective bargaining 
        agreement regarding contracting out to which the public 
        housing agency is subject.
          [(5) Annual audit.--The books and records of a 
        resident management corporation operating a public 
        housing project shall be audited annually by a 
        certified public accountant. A written report of each 
        audit shall be forwarded to the public housing agency 
        and the Secretary.
  [(c) Comprehensive Improvement Assistance.--Public housing 
projects managed by resident management corporations may be 
provided with comprehensive improvement assistance under 
section 14 for purposes of renovating such projects in 
accordance with such section. If such renovation activities 
(including the planning and architectural design of the 
rehabilitation) are administered by a resident management 
corporation, the public housing agency involved may not retain, 
for any administrative or other reason, any portion of the 
assistance provided pursuant to this subsection unless 
otherwise provided by contract.
  [(d) Waiver of Federal Requirements.--
          [(1) Waiver of regulatory requirements.--Upon the 
        request of any resident management corporation and 
        public housing agency, and after notice and an 
        opportunity to comment is afforded to the affected 
        tenants, the Secretary may waive (for both the resident 
        management corporation and the public housing agency) 
        any requirement established by the Secretary (and not 
        specified in any statute) that the Secretary determines 
        to unnecessarily increase the costs or restrict the 
        income of a public housing project.
          [(2) Waiver to permit employment.--Upon the request 
        of any resident management corporation, the Secretary 
        may, subject to applicable collective bargaining 
        agreements, permit residents of such project to 
        volunteer a portion of their labor.
          [(3) Report on additional waivers.--Not later than 6 
        months after the date of the enactment of the Housing 
        and Community Development Act of 1987, the Secretary 
        shall submit to the Congress a report setting forth any 
        additional waivers of Federal law that the Secretary 
        determines are necessary or appropriate to carry out 
        the provisions of this section. In preparing the 
        report, the Secretary shall consult with resident 
        management corporations and public housing agencies.
          [(4) Exceptions.--The Secretary may not waive under 
        this subsection any requirement with respect to income 
        eligibility for purposes of section 16, rental payments 
        under section 3(a), tenant or applicant protections, 
        employee organizing rights, or rights of employees 
        under collective bargaining agreements.
  [(e) Operating Subsidy and Project Income.--
          [(1) Calculation of operating subsidy.--
        Notwithstanding any provision of section 9 or any 
        regulation under such section, and subject to the 
        exception provided in paragraph (3), the portion of the 
        operating subsidy received by a public housing agency 
        under section 9 that is allocated to a public housing 
        project managed by a resident management corporation 
        shall not be less than the public housing agency per 
        unit monthly amount provided in the previous year as 
        determined on an individual project basis.
          [(2) Contract requirements.--Any contract for 
        management of a public housing project entered into by 
        a public housing agency and a resident management 
        corporation shall specify the amount of income expected 
        to be derived from the project itself (from sources 
        such as rents and charges) and the amount of income 
        funds to be provided to the project from the other 
        sources of income of the public housing agency (such as 
        operating subsidy under section 9, interest income, 
        administrative fees, and rents).
          [(3) Calculation of total income.--
                  [(A) Subject to subparagraph (B), the amount 
                of funds provided by a public housing agency to 
                a public housing project managed by a resident 
                management corporation may not be reduced 
                during the 3-year period beginning on the date 
                of enactment of the Housing and Community 
                Development Act of 1987 or on any later date on 
                which a resident management corporation is 
                first established for the project.
                  [(B) If the total income of a public housing 
                agency (including the operating subsidy 
                provided to the public housing agency under 
                section 9) is reduced or increased, the income 
                provided by the public housing agency to a 
                public housing project managed by a resident 
                management corporation shall be reduced or 
                increased in proportion to the reduction or 
                increase in the total income of the public 
                housing agency, except that any reduction in 
                operating subsidy that occurs as a result of 
                fraud, waste, or mismanagement by the public 
                housing agency shall not affect the funds 
                provided to the resident management 
                corporation.
          [(4) Retention of excess revenues.--
                  [(A) Any income generated by a resident 
                management corporation of a public housing 
                project that exceeds the income estimated for 
                purposes of this subsection shall be excluded 
                in subsequent years in calculating (i) the 
                operating subsidies provided to the public 
                housing agency under section 9; and (ii) the 
                funds provided by the public housing agency to 
                the resident management corporation.
                  [(B) Any revenues retained by a resident 
                management corporation under subparagraph (A) 
                shall be used for purposes of improving the 
                maintenance and operation of the public housing 
                project, for establishing business enterprises 
                that employ residents of public housing, or for 
                acquiring additional dwelling units for low-
                income families.
  [(f) Resident Management Technical Assistance and Training.--
          [(1) Financial assistance.--To the extent budget 
        authority is available for section 14, the Secretary 
        shall provide financial assistance to resident 
        management corporations or resident councils that 
        obtain, by contract or otherwise, technical assistance 
        for the development of resident management entities, 
        including the formation of such entities, the 
        development of the management capability of newly 
        formed or existing entities, the identification of the 
        social support needs of residents of public housing 
        projects, and the securing of such support.
          [(2) Limitation on assistance.--The financial 
        assistance provided under this subsection with respect 
        to any public housing project may not exceed $100,000.
          [(3) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $4,750,000 for fiscal year 1993 and 
        $4,949,500 for fiscal year 1994.
          [(4) Limitation regarding assistance under hope grant 
        program.--The Secretary may not provide financial 
        assistance under this subsection to any resident 
        management corporation or resident council with respect 
        to which assistance for the development or formation of 
        such entity is provided under title III.
  [(g) Assessment and Report by the Secretary.--Not later than 
3 years after the date of the enactment of the Housing and 
Community Development Act of 1987, the Secretary shall--
          [(1) conduct an evaluation and assessment of resident 
        management, and particularly of the effect of resident 
        management on living conditions in public housing; and
          [(2) submit to the Congress a report setting forth 
        the findings of the Secretary as a result of the 
        evaluation and assessment and including any 
        recommendations the Secretary determines to be 
        appropriate.
  [(h) Applicability.--Any management contract between a public 
housing agency and a resident management corporation that is 
entered into after the date of the enactment of the Stewart B. 
McKinney Homeless Assistance Amendments Act of 1988 shall be 
subject to this section and the regulations issued to carry out 
this section.

       [public housing homeownership and management opportunities

  [Sec. 21. (a) Homeownership Opportunities in General.--Lower 
income families residing in a public housing project shall be 
provided with the opportunity to purchase the dwelling units in 
the project through a qualifying resident management 
corporation as follows:
          [(1) Formation of resident management corporation.--
        As a condition for public housing homeownership--
                  [(A) the adult residents of a public housing 
                project shall have formed a resident management 
                corporation in accordance with regulations and 
                requirements of the Secretary prescribed under 
                this section and section 20;
                  [(B) the resident management corporation 
                shall have entered into a contract with the 
                public housing agency establishing the 
                respective management rights and 
                responsibilities of the resident management 
                corporation and the public housing agency; and
                  [(C) the resident management corporation 
                shall have demonstrated its ability to manage 
                public housing effectively and efficiently for 
                a period of not less than 3 years.
          [(2) Homeownership assistance.--
                  [(A) The Secretary may provide comprehensive 
                improvement assistance under section 14 to a 
                public housing project in which homeownership 
                activities under this section are conducted.
                  [(B) The Secretary may provide financial 
                assistance to public housing agencies, resident 
                management corporations, or resident councils 
                that obtain, by contract or otherwise, 
                training, technical assistance, and educational 
                assistance as the Secretary determines to be 
                necessary to promote homeownership 
                opportunities under this section.
                  [(C) This paragraph shall not have effect 
                after February 4, 1991. The Secretary may not 
                provide financial assistance under subparagraph 
                (B), after such date, unless the Secretary 
                determines that such assistance is necessary 
                for the development of a homeownership program 
                that was initiated, as determined by the 
                Secretary, before the date of the enactment of 
                the Cranston-Gonzalez National Affordable 
                Housing Act.
          [(3) Conditions of purchase by a resident management 
        corporation.--
                  [(A) A resident management corporation may 
                purchase from a public housing agency one or 
                more multifamily buildings in a public housing 
                project following a determination by the 
                Secretary that--
                          [(i) the resident management 
                        corporation has met the conditions of 
                        paragraph (1);
                          [(ii) the resident management 
                        corporation has applied for and is 
                        prepared to undertake the ownership, 
                        management, and maintenance of the 
                        building or buildings with continued 
                        assistance from the Secretary;
                          [(iii) the public housing agency has 
                        held one or more public hearings to 
                        obtain the views of citizens regarding 
                        the proposed purchase and, in 
                        consultation with the Secretary, has 
                        certified that the purchase will not 
                        interfere with the rights of other 
                        families residing in public housing, 
                        will not harm the efficient operation 
                        of other public housing, and is in the 
                        interest of the community;
                          [(iv) the public housing agency has 
                        certified that it has and will 
                        implement a plan to replace public 
                        housing units sold under this section 
                        within 30 months of the sale, which 
                        plan shall provide for replacement of 
                        100 percent of the units sold under 
                        this section by--
                                  [(I) production, acquisition, 
                                or rehabilitation of vacant 
                                public housing units by the 
                                public housing agency; and
                                  [(II) acquisition by the 
                                resident management corporation 
                                of nonpublicly owned, decent, 
                                and affordable housing units, 
                                which the resident management 
                                corporation shall operate as 
                                rental housing subject to 
                                tenant income and rent 
                                limitations comparable to the 
                                limitations applicable to 
                                public housing; and
                          [(v) the building or buildings meet 
                        the minimum safety and livability 
                        standards applicable under section 14, 
                        and the physical condition, management, 
                        and operation of the building or 
                        buildings are sufficient to permit 
                        affordable homeownership by the 
                        families residing in the project.
                  [(B) The price of a building purchased under 
                the preceding sentence shall be approved by the 
                Secretary, in consultation with the public 
                housing agency and resident management 
                corporation, taking into account the fair 
                market value of the property, the ability of 
                resident families to afford and maintain the 
                property, and such other factors as the 
                Secretary determines to be consistent with 
                increasing the supply of dwelling units 
                affordable to very low income families.
                  [(C) This paragraph shall not have effect 
                after February 4, 1991. The authority for a 
                resident management corporation to purchase 1 
                or more multifamily buildings in a public 
                housing project from a public housing agency 
                shall terminate after such date, unless the 
                Secretary determines that such purchase is 
                necessary for the development of a 
                homeownership program that was initiated, as 
                determined by the Secretary, before the date of 
                the enactment of the Cranston-Gonzalez National 
                Affordable Housing Act.
          [(4) Conditions of resale.--
                  [(A)(i) A resident management corporation may 
                sell a dwelling unit or ownership rights in a 
                dwelling unit only to a lower income family 
                residing in, or eligible to reside in, public 
                housing and only if the Secretary determines 
                that the purchase will not interfere with the 
                rights of other families residing in the 
                housing project or harm the efficient operation 
                of the project, and the family will be able to 
                purchase and maintain the property.
                  [(ii) The sale of dwelling units or ownership 
                rights in dwelling units under clause (i) shall 
                be made to families in the following order of 
                priority:
                          [(I) a lower income family residing 
                        in the public housing project in which 
                        the dwelling unit is located;
                          [(II) a lower income family residing 
                        in any public housing project within 
                        the jurisdiction of the public housing 
                        agency having jurisdiction with respect 
                        to the project in which the dwelling 
                        unit is located;
                          [(III) a lower income family 
                        receiving Federal housing assistance 
                        and residing in the jurisdiction of 
                        such public housing agency; and
                          [(IV) a lower income family on the 
                        waiting list of such public housing 
                        agency for public housing or assistance 
                        under section 8, with priority given in 
                        the order in which the family appears 
                        on the waiting list.
                  [(iii) Each resident management corporation 
                shall provide each family described in clause 
                (ii) with a notice of the eligibility of the 
                family to purchase a dwelling unit under this 
                paragraph.
                  [(B) A purchase under subparagraph (A) may be 
                made under any of the following arrangements:
                          [(i) Limited dividend cooperative 
                        ownership.
                          [(ii) Condominium ownership.
                          [(iii) Fee simple ownership.
                          [(iv) Shared appreciation with a 
                        public housing agency providing 
                        financing under paragraph (6).
                          [(v) Any other arrangement determined 
                        by the Secretary to be appropriate.
                  [(C) Property purchased under this section 
                shall be resold only to the resident management 
                corporation, a lower income family residing in 
                or eligible to reside in public housing or 
                housing assisted under section 8, or to the 
                public housing agency.
                  [(D) In no case may the owner receive 
                consideration for his or her interest in the 
                property that exceeds the total of--
                          [(i) the contribution to equity paid 
                        by the owner;
                          [(ii) the value, as determined by 
                        such means as the Secretary shall 
                        determine through regulation, of any 
                        improvements installed at the expense 
                        of the owner during the owner's tenure 
                        as owner; and
                          [(iii) the appreciated value 
                        determined by an inflation allowance at 
                        a rate which may be based on a cost of 
                        living index, an income index, or 
                        market index as determined by the 
                        Secretary through regulation and agreed 
                        to by the purchaser and the resident 
                        management corporation or the public 
                        housing agency, whichever is 
                        appropriate, at the time of initial 
                        sale, and applied against the 
                        contribution to equity; the resident 
                        management corporation or the public 
                        housing agency may, at the time of 
                        initial sale, enter into an agreement 
                        with the owner to set a maximum amount 
                        which this appreciation may not exceed.
                  [(E) Upon sale, the resident management 
                corporation or the public housing agency, 
                whichever is appropriate, shall ensure that 
                subsequent owners are bound by the same 
                limitations on resale and further restrictions 
                on equity appreciation.
          [(5) Use of proceeds.--Notwithstanding any other 
        provision of this Act or other law to the contrary, 
        proceeds from the sale of a building or buildings under 
        paragraph (3) and amounts recaptured under paragraph 
        (4) shall be paid to the public housing agency and 
        shall be retained and used by the public housing agency 
        only to increase the number of public housing units 
        available for occupancy. The resident management 
        corporation shall keep and make available to the public 
        housing agency and the Secretary all records necessary 
        to calculate accurately payments due the local housing 
        agency under this section. The Secretary shall not 
        reduce or delay payments under other provisions of law 
        as a result of amounts made available to the local 
        housing agency under this section.
          [(6) Financing.--When financing for the purchase of 
        the property is not otherwise available for purposes of 
        assisting any purchase by a family or resident 
        management corporation under this section, the public 
        housing agency involved may make a loan on the security 
        of the property involved to the family or resident 
        management corporation at a rate of interest that shall 
        not be lower than 70 percent of the market interest 
        rate for conventional mortgages on the date on which 
        the loan is made.
          [(7) Annual contributions.--Notwithstanding the 
        purchase of a building in a public housing project 
        under this section, the Secretary shall continue to pay 
        annual contributions with respect to the project. Such 
        contributions may not exceed the maximum contributions 
        authorized in section 5(a).
          [(8) Operating subsidies.--Operating subsidies shall 
        not be available with respect to a building after the 
        date of its sale by the public housing agency.
  [(b) Protection of Nonpurchasing Families.--
          [(1) Eviction prohibition.--No family residing in a 
        dwelling unit in a public housing project may be 
        evicted by reason of the sale of the project to a 
        resident management corporation under this section.
          [(2) Tenants' rights.--Families renting a dwelling 
        unit purchased by a resident management corporation 
        shall have all rights provided to tenants of public 
        housing under this Act.
          [(3) Rental assistance.--If any family resides in a 
        dwelling unit in a building purchased by a resident 
        management corporation, and the family decides not to 
        purchase the dwelling unit, the Secretary shall offer 
        to provide to the family (at the option of the family) 
        a certificate under section 8(b)(1) or a housing 
        voucher under section 8(o) for as long as the family 
        continues to reside in the building. The Secretary may 
        adjust the fair market rent for such certificate to 
        take into account conditions under which the building 
        was purchased.
          [(4) Rental and relocation assistance.--If any family 
        resides in a dwelling unit in a public housing project 
        in which other dwelling units are purchased under this 
        section, and the family decides not to purchase the 
        dwelling unit, the Secretary shall offer (to be 
        selected by the family, at its option)--
                  [(A) to assist the family in relocating to a 
                comparable appropriate sized dwelling unit in 
                another public housing project, and to 
                reimburse the family for their cost of 
                relocation; and
                  [(B) to provide to the family the financial 
                assistance necessary to permit the family to 
                stay in the dwelling unit or to move to another 
                comparable dwelling unit and to pay no more for 
                rent than required under subparagraph (A), (B), 
                or (C) of section 3(a)(1).
  [(c) Financial Assistance for Public Housing Agencies.--The 
Secretary shall provide to public housing agencies such 
financial assistance as is necessary to permit such agencies to 
carry out the provisions of this section.
  [(d) Additional Homeownership and Management Opportunities.--
This section shall not apply to the turnkey III, the mutual 
help, or any other homeownership program established under 
section 5(h) or section 6(c)(4)(D) and in existence before the 
date of the enactment of the Housing and Community Development 
Act of 1987.
  [(e) Regulations.--The Secretary shall issue such regulations 
as may be necessary to carry out the provisions of this 
section. Such regulations may establish any additional terms 
and conditions for homeownership or resident management under 
this section that are determined by the Secretary to be 
appropriate.
  [(f) Annual Report.--The Secretary shall annually submit to 
the Congress a report setting forth--
          [(1) the number, type, and cost of units sold;
          [(2) the income, race, gender, children, and other 
        characteristics of families purchasing or moving and 
        not purchasing;
          [(3) the amount and type of financial assistance 
        provided;
          [(4) the need for subsidy to ensure continued 
        affordability and meet future maintenance and repair 
        costs;
          [(5) any need for the development of additional 
        public housing dwelling units as a result of the sale 
        of public housing dwelling units under this section;
          [(6) recommendations of the Secretary for additional 
        budget authority to carry out such development;
          [(7) recommendations of the Secretary to ensure 
        decent homes and decent neighborhoods for low-income 
        families; and
          [(8) the recommendations of the Secretary for 
        statutory and regulatory improvements to the program.
  [(g) Limitation.--Any authority of the Secretary under this 
section to provide financial assistance, or to enter into 
contracts to provide financial assistance, shall be effective 
only to such extent or in such amounts as are or have been 
provided in advance in an appropriation Act.

                       [family investment centers

  [Sec. 22. (a) Purpose.--The purpose of this section is to 
provide families living in public housing with better access to 
educational and employment opportunities to achieve self-
sufficiency and independence by--
          [(1) developing facilities in or near public housing 
        for training and support services;
          [(2) mobilizing public and private resources to 
        expand and improve the delivery of such services;
          [(3) providing funding for such essential training 
        and support services that cannot otherwise be funded; 
        and
          [(4) improving the capacity of management to assess 
        the training and service needs of families with 
        children, coordinate the provision of training and 
        services that meet such needs, and ensure the long-term 
        provision of such training and services.
  [(b) Grant Authority.--
          [(1) In general.--The Secretary may make grants to 
        public housing agencies to adapt public housing to help 
        families living in the public housing gain better 
        access to educational and job opportunities to achieve 
        self-sufficiency and independence. Assistance under 
        this section may be made available only to public 
        housing agencies that demonstrate to the satisfaction 
        of the Secretary that supportive services (as such term 
        is defined under subsection (j)) will be made 
        available. Facilities assisted under this section shall 
        be in or near the premises of public housing.
          [(2) Supplemental grant set-aside.--The Secretary may 
        reserve not more than 5 percent of the amounts 
        available in each fiscal year under this section to 
        supplement grants awarded to public housing agencies 
        under this section when, in the determination of the 
        Secretary, such supplemental adjustments are required 
        to maintain adequate levels of services to eligible 
        residents.
  [(c) Use of Amounts.--Amounts received from a grant under 
this section may only be used for--
          [(1) the renovation, conversion, or combination of 
        vacant dwelling units in a public housing project to 
        create common areas to accommodate the provision of 
        supportive services;
          [(2) the renovation of existing common areas in a 
        public housing project to accommodate the provision of 
        supportive services;
          [(3) the renovation of facilities located near the 
        premises of 1 or more public housing projects to 
        accommodate the provision of supportive services;
          [(4) the provision of not more than 15 percent of the 
        cost of any supportive services (which may be provided 
        directly to eligible residents by the public housing 
        agency or by contract or lease through other 
        appropriate agencies or providers) only if the public 
        housing agency demonstrates to the satisfaction of the 
        Secretary that--
                  [(A) the supportive services are appropriate 
                to improve the access of eligible residents to 
                employment and educational opportunities; and
                  [(B) the public housing agency has made 
                diligent efforts to use or obtain other 
                available resources to fund or provide such 
                services; and
          [(5) the employment of service coordinators subject 
        to such minimum qualifications and standards that the 
        Secretary may establish to ensure sound management, who 
        may be responsible for--
                  [(A) assessing the training and service needs 
                of eligible residents;
                  [(B) working with service providers to 
                coordinate the provision of services and tailor 
                such services to the needs and characteristics 
                of eligible residents;
                  [(C) mobilizing public and private resources 
                to ensure that the supportive services 
                identified pursuant to subsection (e)(1) can be 
                funded over the time period identified under 
                such subsection;
                  [(B) monitoring and evaluating the impact and 
                effectiveness of any supportive service program 
                receiving capital or operating assistance under 
                this section; and
                  [(V) performing such other duties and 
                functions that the Secretary determines are 
                appropriate to provide families living in 
                public housing with better access to 
                educational and employment opportunities.
  [(d) Allocation of Grant Amounts.--Assistance under this 
section shall be allocated by the Secretary among approvable 
applications submitted by public housing agencies.
  [(e) Applications.--Applications for assistance under this 
section shall be submitted in such form and in accordance with 
such procedures as the Secretary shall establish. Each 
application for assistance shall contain--
          [(1) a description of the supportive services that 
        are to be provided over a 5-year period (or such longer 
        period that the Secretary determines to be appropriate 
        if assistance is provided for activities under 
        subsection (c) that involve substantial 
        rehabilitation);
          [(2) a firm commitment of assistance from 1 or more 
        sources ensuring that the supportive services will be 
        provided for not less than 1 year following the 
        completion of activities assisted under subsection (c);
          [(3) a description of public or private sources of 
        assistance that can reasonably be expected to fund or 
        provide supportive services for the entire period 
        specified under paragraph (1), including evidence of 
        any intention to provide assistance expressed by State 
        and local governments, private foundations, and other 
        organizations (including profit and nonprofit 
        organizations);
          [(4) certification from the appropriate State or 
        local agency (as determined by the Secretary) that--
                  [(A) the provision of supportive services 
                described in paragraph (1) is well designed to 
                provide resident families better access to 
                educational and employment opportunities; and
                  [(B) there is a reasonable likelihood that 
                such services will be funded or provided for 
                the entire period specified in paragraph (1);
          [(5) a description of assistance for which the public 
        housing agency is applying under this section; and
          [(6) any other information or certifications that the 
        Secretary determines are necessary or appropriate to 
        achieve the purposes of this section.
  [(f) Selection.--The Secretary shall establish selection 
criteria for grants under this section, which shall take into 
account--
          [(1) the ability of the public housing agency or a 
        designated service provider to provide the supportive 
        services identified under subsection (e)(1);
          [(2) the need for such services in the public housing 
        project;
          [(3) the extent to which the envisioned renovation, 
        conversion, and combination activities are appropriate 
        to facilitate the provision of such services;
          [(4) the extent to which the public housing agency 
        has demonstrated that such services will be provided 
        for the period identified under subsection (e)(1);
          [(5) the extent to which the public housing agency 
        has a good record of maintaining and operating public 
        housing; and
          [(6) any other factors that the Secretary determines 
        to be appropriate to ensure that amounts made available 
        under this section are used effectively.
  [(g) Reports.--
          [(1) To secretary.--Each public housing agency 
        receiving a grant under this section shall submit to 
        the Secretary, in such form and at such time as the 
        Secretary shall prescribe, an annual progress report 
        describing and evaluating the use of grant amounts 
        received under this section.
          [(2) To congress.--The Secretary shall submit to the 
        Congress annually, as a part of the report of the 
        Secretary under section 8 of the Department of Housing 
        and Urban Development Act, an evaluation of the 
        effectiveness of activities carried out with grants 
        under this section in such fiscal year. Such report 
        shall summarize the progress reports submitted pursuant 
        to paragraph (1).
  [(h) Employment of Public Housing Residents.--Each public 
housing agency shall, to the maximum extent practicable, employ 
public housing residents to provide the services assisted under 
this section or from other sources. Such persons shall be paid 
at a rate not less than the highest of--
          [(1) the minimum wage that would be applicable to the 
        employee under the Fair Labor Standards Act of 1938, if 
        section 6(a)(1) of such Act applied to the resident and 
        if the resident were not exempt under section 13 of 
        such Act;
          [(2) the State or local minimum wage for the most 
        nearly comparable covered employment; or
          [(3) the prevailing rates of pay for persons employed 
        in similar public occupations by the same employer.
  [(i) Treatment of Income.--No service provided to a public 
housing resident under this section may be treated as income 
for the purpose of any other program or provision of State or 
Federal law.
  [(j) Definition of Supportive Services.--For purpose of this 
section, the term ``supportive services'' means new or 
significantly expanded services that the Secretary determines 
are essential to providing families living with children in 
public housing with better access to educational and employment 
opportunities. Such services may include--
          [(1) child care;
          [(2) employment training and counseling;
          [(3) literacy training;
          [(4) computer skills training;
          [(5) assistance in the attainment of certificates of 
        high school equivalency; and
          [(6) other appropriate services.
  [(k) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $25,000,000 for 
fiscal year 1993 and $26,050,000 for fiscal year 1994.

[SEC. 23. FAMILY SELF-SUFFICIENCY PROGRAM.

  [(a) Purpose.--The purpose of the Family Self-Sufficiency 
program established under this section is to promote the 
development of local strategies to coordinate use of public 
housing and assistance under the certificate and voucher 
programs under section 8 with public and private resources, to 
enable eligible families to achieve economic independence and 
self-sufficiency.
  [(b) Establishment of Program.--
          [(1) Required programs.--Except as provided in 
        paragraph (2), the Secretary shall carry out a program 
        under which each public housing agency that administers 
        assistance under subsection (b) or (o) of section 8 or 
        makes available new public housing dwelling units--
                  [(A) may, during fiscal years 1991 and 1992, 
                carry out a local Family Self-Sufficiency 
                program under this section; and
                  [(B) effective on October 1, 1992, the 
                Secretary shall require each such agency to 
                carry out a local Family Self-Sufficiency 
                program under this section.
        Each local program shall, subject to availability of 
        supportive services, include an action plan under 
        subsection (g) and shall provide comprehensive 
        supportive services for families electing to 
        participate in the program. In carrying out the self-
        sufficiency program under this section, the Secretary 
        shall consult with the heads of other appropriate 
        Federal agencies and provide for cooperative actions 
        and funding agreements with such agencies. Each public 
        housing agency administering an approved local program 
        may employ a service coordinator to administer the 
        local program.
          [(2) Exception.--The Secretary shall not require a 
        public housing agency to carry out a local program 
        under subsection (a) if the public housing agency 
        provides certification (as such term is defined under 
        title I of the Cranston-Gonzalez National Affordable 
        Housing Act) to the Secretary, that the establishment 
        and operation of the program is not feasible because of 
        local circumstances, which may include--
                  [(A) lack of supportive services accessible 
                to eligible families, which shall include 
                insufficient availability of resources for 
                programs under the Job Training Partnerships 
                Act or the Job Opportunities and Basic Skills 
                Training Program under part F of title IV of 
                the Social Security Act;
                  [(B) lack of funding for reasonable 
                administrative costs;
                  [(C) lack of cooperation by other units of 
                State or local government; or
                  [(D) any other circumstances that the 
                Secretary may consider appropriate.
        In allocating assistance available for reservation 
        under this Act, the Secretary may not refuse to provide 
        assistance or decrease the amount of assistance that 
        would otherwise be provided to any public housing 
        agency because the agency has provided a certification 
        under this paragraph or because, pursuant to a 
        certification, the agency has failed to carry out a 
        self-sufficiency program.
          [(3) Scope.--Each public housing agency required to 
        carry out a local program under this section shall make 
        the following housing assistance available under the 
        program in each fiscal year:
                  [(A) Certificate and voucher assistance under 
                section 8(b) and (o), in an amount equivalent 
                to the increase for such year in the number of 
                families so assisted by the agency (as compared 
                to the preceding year).
                  [(B) Public housing dwelling units, in the 
                number equal to the increase for such year in 
                units made available by the agency (as compared 
                to the preceding year).
          [Each such public housing agency shall continue to 
        operate a local program for the number of families 
        determined under this paragraph subject only to the 
        availability under appropriations Acts of sufficient 
        amounts for assistance.
          [(4) Nonparticipation.--Assistance under the 
        certificate or voucher programs under section 8 for a 
        family that elects not to participate in a local 
        program shall not be delayed by reason of such 
        election.
  [(c) Contract of Participation.--
          [(1) In general.--Each public housing agency carrying 
        out a local program under this section shall enter into 
        a contract with each leaseholder receiving assistance 
        under the certificate and voucher programs of the 
        public housing agency under section 8 or residing in 
        public housing administered by the agency, that elects 
        to participate in the self-sufficiency program under 
        this section. The contract shall set forth the 
        provisions of the local program, shall establish 
        specific interim and final goals by which compliance 
        with and performance of the contract may be measured, 
        and shall specify the resources and supportive services 
        to be made available to the participating family 
        pursuant to paragraph (2) and the responsibilities of 
        the participating family. The contract shall provide 
        that the public housing agency may terminate or 
        withhold assistance under section 8 and services under 
        paragraph (2) of this subsection if the public housing 
        agency determines, through an administrative grievance 
        procedure in accordance with the requirements of 
        section 6(k), that the family has failed to comply with 
        the requirements of the contract without good cause 
        (which may include a loss or reduction in access to 
        supportive services, or a change in circumstances that 
        makes the family or individual unsuitable for 
        participation).
          [(2) Supportive services.--A local program under this 
        section shall provide appropriate supportive services 
        under this paragraph to each participating family 
        entering into a contract of participation under 
        paragraph (1). The supportive services shall be 
        provided during the period the family is receiving 
        assistance under section 8 or residing in public 
        housing, and may include--
                  [(A) child care;
                  [(B) transportation necessary to receive 
                services;
                  [(C) remedial education;
                  [(D) education for completion of high school;
                  [(E) job training and preparation;
                  [(F) substance abuse treatment and 
                counseling;
                  [(G) training in homemaking and parenting 
                skills;
                  [(H) training in money management;
                  [(I) training in household management; and
                  [(J) any other services and resources 
                appropriate to assist eligible families to 
                achieve economic independence and self-
                sufficiency.
          [(3) Term and extension.--Each family participating 
        in a local program shall be required to fulfill its 
        obligations under the contract of participation not 
        later than 5 years after entering into the contract. 
        The public housing agency shall extend the term of the 
        contract for any family that requests an extension, 
        upon a finding of the agency of good cause.
          [(4) Employment and counseling.--The contract of 
        participation shall require the head of the 
        participating family to seek suitable employment during 
        the term of the contract. The public housing agency 
        may, during such period, provide counseling for the 
        family with respect to affordable rental and 
        homeownership opportunities in the private housing 
        market and money management counseling.
  [(d) Incentives for Participation.--
          [(1) Maximum rents.--During the term of the contract 
        of participation, the amount of rent paid by any 
        participating family whose monthly adjusted income does 
        not exceed 50 percent of the area median income for 
        occupancy in the public housing unit or dwelling unit 
        assisted under section 8 may not be increased on the 
        basis of any increase in the earned income of the 
        family, unless the increase results in an income 
        exceeding 50 percent of the area median income. The 
        Secretary shall provide for increased rents for 
        participating families whose incomes are between 50 and 
        80 percent of the area median income, so that any 
        family whose income increases to 80 percent or more of 
        the area median income pays 30 percent of the family's 
        monthly adjusted income for rent. Upon completion of 
        the contract of participation, if the participating 
        family continues to qualify for and reside in a 
        dwelling unit in public housing or housing assisted 
        under section 8, the rent charged the participating 
        family shall be increased (if applicable) to 30 percent 
        of the monthly adjusted income of the family.
          [(2) Escrow savings accounts.--For each participating 
        family whose monthly adjusted income is less than 50 
        percent of the area median income, the difference 
        between 30 percent of the adjusted income of the 
        participating family and the amount of rent paid by a 
        participating family shall be placed in an interest-
        bearing escrow account established by the public 
        housing agency on behalf of the participating family. 
        For families with incomes between 50 and 80 percent of 
        the area median income, the Secretary shall provide for 
        escrow of the difference between 30 percent of the 
        family income and the amount paid by the family for 
        rent as determined by the Secretary under paragraph 
        (1). The Secretary shall not escrow any amounts for any 
        family whose adjusted income exceeds 80 percent of the 
        area median income. Amounts in the escrow account may 
        be withdrawn by the participating family after the 
        family ceases to receive income assistance under 
        Federal or State welfare programs, upon successful 
        performance of the obligations of the family under the 
        contract of participation entered into by the family 
        under subsection (c), as determined according to the 
        specific goals and terms included in the contract, and 
        under other circumstances in which the Secretary 
        determines an exception for good cause is warranted. A 
        public housing agency establishing such escrow accounts 
        may make certain amounts in the accounts available to 
        the participating families before full performance of 
        the contract obligations based on compliance with, and 
        completion of, specific interim goals included in the 
        contract; except that any such amounts shall be used by 
        the participating families for purposes consistent with 
        the contracts of participation, as determined by the 
        public housing agency.
          [(3) Plan.--Each public housing agency carrying out a 
        local program under this section shall establish a plan 
        to offer incentives to families to encourage families 
        to participate in the program. The plan shall require 
        the establishment of escrow savings accounts under 
        paragraph (2) and may include any other incentives 
        designed by the public housing agency.
          [(3) Use of escrow savings accounts for section 8 
        homeownership.--Notwithstanding paragraph (3), a family 
        that uses assistance under section 8(y) to purchase a 
        dwelling may use up to 50 percent of the amount in its 
        escrow account established under paragraph (3) for a 
        downpayment on the dwelling. In addition, after the 
        family purchases the dwelling, the family may use any 
        amounts remaining in the escrow account to cover the 
        costs of major repair and replacement needs of the 
        dwelling. If a family defaults in connection with the 
        loan to purchase a dwelling and the mortgage is 
        foreclosed, the remaining amounts in the escrow account 
        shall be recaptured by the Secretary.
  [(e) Effect of Increases in Family Income.--Any increase in 
the earned income of a family during the participation of the 
family in a local program established under this section may 
not be considered as income or a resource for purposes of 
eligibility of the family for other benefits, or amount of 
benefits payable to the family, under any program administered 
by the Secretary, unless the income of the family equals or 
exceeds 80 percent of the median income of the area (as 
determined by the Secretary with adjustments for smaller and 
larger families).
  [(f) Program Coordinating Committee.--
          [(1) Functions.--Each public housing agency shall, in 
        consultation with the chief executive officer of the 
        unit of general local government, develop an action 
        plan under subsection (g), carry out activities under 
        the local program, and secure commitments of public and 
        private resources through a program coordinating 
        committee established by the public housing agency 
        under this subsection.
          [(2) Membership.--The program coordinating committee 
        may consist of representatives of the public housing 
        agency, the unit of general local government, the local 
        agencies (if any) responsible for carrying out programs 
        under the Job Training Partnership Act and the Job 
        Opportunities and Basic Skills Training Program under 
        part F of title IV of the Social Security Act, and 
        other organizations, such as other State and local 
        welfare and employment agencies, public and private 
        education or training institutions, nonprofit service 
        providers, and private businesses. The public housing 
        agency may, in consultation with the chief executive 
        officer of the unit of general local government, 
        utilize an existing entity as the program coordinating 
        committee if it meets the requirements of this 
        subsection.
  [(g) Action Plan.--
          [(1) Required submission.--The Secretary shall 
        require each public housing agency participating in the 
        self-sufficiency program under this section to submit 
        to the Secretary, for approval by the Secretary, an 
        action plan under this subsection in such form and in 
        accordance with such procedures as the Secretary shall 
        require.
          [(2) Development of plan.--In developing the plan, 
        the public housing agency shall consult with the chief 
        executive officer of the applicable unit of general 
        local government, the program coordinating committee 
        established under subsection (f), representatives of 
        residents of the public housing, any local agencies 
        responsible for programs under the Job Training 
        Partnership Act and the Job Opportunities and Basic 
        Skills Training Program under part F of title IV of the 
        Social Security Act, other appropriate organizations 
        (such as other State and local welfare and employment 
        or training institutions, child care providers, 
        nonprofit service providers, and private businesses), 
        and any other public and private service providers 
        affected by the operation of the local program.
          [(3) Contents of plan.--The Secretary shall require 
        that the action plan contain at a minimum--
                  [(A) a description of the size, 
                characteristics, and needs of the population of 
                the families expected to participate in the 
                local self-sufficiency program;
                  [(B) a description of the number of eligible 
                participating families who can reasonably be 
                expected to receive supportive services under 
                the program, based on available and anticipated 
                Federal, State, local, and private resources;
                  [(C) a description of the services and 
                activities under subsection (c)(2) to be 
                provided to families receiving assistance under 
                this section through the section 8 and public 
                housing programs, which shall be provided by 
                both public and private resources;
                  [(D) a description of the incentives pursuant 
                to subsection (d) offered by the public housing 
                agency to families to encourage participation 
                in the program;
                  [(E) a description of how the local program 
                will deliver services and activities according 
                to the needs of the families participating in 
                the program;
                  [(F) a description of both the public and 
                private resources that are expected to be made 
                available to provide the activities and 
                services under the local program;
                  [(G) a timetable for implementation of the 
                local program;
                  [(H) assurances satisfactory to the Secretary 
                that development of the services and activities 
                under the local program has been coordinated 
                with the Job Opportunities and Basic Skills 
                Training Program under part F of title IV of 
                the Social Security Act and program under the 
                Job Training Partnership Act and any other 
                relevant employment, child care, 
                transportation, training, and education 
                programs in the applicable area, and that 
                implementation will continue to be coordinated, 
                in order to avoid duplication of services and 
                activities; and
                  [(I) assurances satisfactory to the Secretary 
                that nonparticipating families will retain 
                their rights to public housing or section 8 
                assistance notwithstanding the provisions of 
                this section.
  [(h) Allowable Public Housing Agency Administrative Fees and 
Costs.--
          [(1) Section 8 fees.--The Secretary shall establish a 
        fee under section 8(q) for the costs incurred in 
        administering the provision of certificate and voucher 
        assistance under section 8 through the self-sufficiency 
        program under this section. The fee shall be the fee in 
        effect under such section on June 1, 1990, except that 
        for purposes of the fee under this paragraph the 
        applicable dollar amount for preliminary expenses under 
        section 8(q)(2)(A)(i) shall, subject to approval in 
        appropriations Acts, be $300. Upon the submission by 
        the Comptroller General of the United States of the 
        report required under section 554(b) of the Cranston-
        Gonzalez National Affordable Housing Act, the Secretary 
        shall revise the fee under this paragraph, taking into 
        consideration the report of the Comptroller General.
          [(2) Performance funding system.--Notwithstanding any 
        provision of section 9, the Secretary shall provide for 
        inclusion under the performance funding system under 
        section 9 of reasonable and eligible administrative 
        costs (including the costs of employing a full-time 
        service coordinator) incurred by public housing 
        agencies carrying out local programs under this 
        section. The Secretary shall include an estimate of the 
        administrative costs likely to be incurred by 
        participating public housing agencies in the annual 
        budget request for the Department of Housing and Urban 
        Development for public housing operating assistance 
        under section 9 and shall include a request for such 
        amounts in the budget request. Of any amounts 
        appropriated under section 9(c) for fiscal year 1993, 
        $25,000,000 is authorized to be used for costs under 
        this paragraph, and of any amounts appropriated under 
        such section for fiscal year 1994, $25,900,000 is 
        authorized to be used for costs under this paragraph.
  [(i) Public Housing Agency Incentive Award Allocation.--
          [(1) In general.--The Secretary shall carry out a 
        competition for budget authority for certificate and 
        voucher assistance under section 8 and public housing 
        development assistance under section 5(a)(2) reserved 
        under paragraph (4) and shall allocate such budget 
        authority to public housing agencies pursuant to the 
        competition.
          [(2) Criteria.--The competition shall be based on 
        successful and outstanding implementation by public 
        housing agencies of a local self-sufficiency program 
        under this section. The Secretary shall establish 
        performance criteria for public housing agencies 
        carrying out such local programs and the Secretary 
        shall cause such criteria to be published in the 
        Federal Register.
          [(3) Use.--Each public housing agency that receives 
        an allocation of budget authority under this subsection 
        shall use such authority to provide assistance under 
        the local self-sufficiency program established by the 
        public housing agency under this section.
          [(4) Reservation of budget authority.--
        Notwithstanding section 213(d) of the Housing and 
        Community Development Act of 1974, the Secretary shall 
        reserve for allocation under this subsection not less 
        than 10 percent of the portion of budget authority 
        appropriated in each of fiscal years 1991 and 1992 for 
        section 8 that is available for purposes of providing 
        assistance under the existing housing certificate and 
        housing voucher programs for families not currently 
        receiving assistance, and not less than 10 percent of 
        the public housing development assistance available in 
        such fiscal years for the purpose under section 5(a)(2) 
        (excluding amounts for major reconstruction of obsolete 
        projects).
  [(j) On-Site Facilities.--Each public housing agency carrying 
out a local program may, subject to the approval of the 
Secretary, make available and utilize common areas or 
unoccupied public housing units in public housing projects 
administered by the agency for the provision of supportive 
services under the local program. The use of the facilities of 
a public housing agency under this subsection shall not affect 
the amount of assistance provided to the agency under section 
9.
  [(k) Flexibility.--In establishing and carrying out the self-
sufficiency program under this section, the Secretary shall 
allow public housing agencies, units of general local 
government, and other organizations discretion and flexibility, 
to the extent practicable, in developing and carrying out local 
programs.
  [(l) Reports.--
          [(1) To secretary.--Each public housing agency that 
        carries out a local self-sufficiency program approved 
        by the Secretary under this section shall submit to the 
        Secretary, not less than annually a report regarding 
        the program. The report shall include--
                  [(A) a description of the activities carried 
                out under the program;
                  [(B) a description of the effectiveness of 
                the program in assisting families to achieve 
                economic independence and self-sufficiency;
                  [(C) a description of the effectiveness of 
                the program in coordinating resources of 
                communities to assist families to achieve 
                economic independence and self-sufficiency; and
                  [(D) any recommendations of the public 
                housing agency or the appropriate local program 
                coordinating committee for legislative or 
                administrative action that would improve the 
                self-sufficiency program carried out by the 
                Secretary and ensure the effectiveness of the 
                program.
          [(2) HUD annual report.--The Secretary shall submit 
        to the Congress annually, as a part of the report of 
        the Secretary under section 8 of the Department of 
        Housing and Urban Development Act, a report summarizing 
        the information submitted by public housing agencies 
        under paragraph (1). The report under this paragraph 
        shall also include any recommendations of the Secretary 
        for improving the effectiveness of the self-sufficiency 
        program under this section.
  [(m) GAO Report.--
          [(1) In general.--The Comptroller General of the 
        United States shall submit to the Congress reports 
        under this subsection evaluating and describing the 
        Family Self-Sufficiency program carried out by the 
        Secretary under this section.
          [(2) Timing.--The Comptroller General shall submit 
        the following reports under this subsection:
                  [(A) An interim report, not later than the 
                expiration of the 2-year period beginning on 
                the date of the enactment of the Cranston-
                Gonzalez National Affordable Housing Act.
                  [(B) A final report, not later than the 
                expiration of the 5-year period beginning on 
                the date of the enactment of the Cranston-
                Gonzalez National Affordable Housing Act.
  [(n) Definitions.--As used in this section:
          [(1) The term ``contract of participation'' means a 
        contract under subsection (c) entered into by a public 
        housing agency carrying out a local program under this 
        section and a participating family.
          [(2) The term ``earned income'' means income from 
        wages, tips, salaries, and other employee compensation, 
        and any earnings from self-employment. The term does 
        not include any pension or annuity, transfer payments, 
        or any cash or in-kind benefits.
          [(3) The term ``eligible family'' means a family 
        whose head of household is not elderly, disabled, 
        pregnant, a primary caregiver for children under the 
        age of 3, or for whom the family self-sufficiency 
        program would otherwise be unsuitable. Notwithstanding 
        the preceding sentence, a public housing agency may 
        enroll such families if they choose to participate in 
        the program.
          [(4) The term ``local program'' means a program for 
        providing supportive services to participating families 
        carried out by a public housing agency within the 
        jurisdiction of the public housing agency.
          [(5) The term ``participating family'' means a family 
        that resides in public housing or housing assisted 
        under section 8 and elects to participate in a local 
        self-sufficiency program under this section.
          [(6) The term ``vacant unit'' means a dwelling unit 
        that has been vacant for not less than 9 consecutive 
        months.
  [(o) Effective Date and Regulations.--
          [(1) Regulations.--Not later than the expiration of 
        the 180-day period beginning on the date of the 
        enactment of the Cranston-Gonzalez National Affordable 
        Housing Act,\1\ the Secretary shall by notice establish 
        any requirements necessary to carry out this section. 
        Such requirements shall be subject to section 553 of 
        title 5, United States Code. The Secretary shall issue 
        final regulations based on the notice not later than 
        the expiration of the 8-month period beginning on the 
        date of the notice. Such regulations shall become 
        effective upon the expiration of the 1-year period 
        beginning on the date of the publication of the final 
        regulations.
          [(2) Applicability to indian public housing 
        authorities.--Notwithstanding any other provision of 
        law, the provisions of this section shall be optional 
        for Indian housing authorities.

[SEC. 24. REVITALIZATION OF SEVERELY DISTRESSED PUBLIC HOUSING.

  [(a) Program Authority.--The Secretary may make--
          [(1) planning grants under subsection (c) to enable 
        applicants to develop revitalization programs for 
        severely distressed public housing in accordance with 
        this section; and
          [(2) implementation grants under subsection (d) to 
        carry out revitalization programs for severely 
        distressed public housing in accordance with this 
        section.
  [(b) Designation of Eligible Projects.--
          [(1) Identification.--Not later than 90 days after 
        the date of enactment of the Housing and Community 
        Development Act of 1992, public housing agencies shall 
        identify, in such form and manner as the Secretary may 
        prescribe, any public housing projects that they 
        consider to be severely distressed public housing for 
        purposes of receiving assistance under this section.
          [(2) Review by secretary.--The Secretary shall review 
        the projects identified pursuant to paragraph (1) to 
        ascertain whether the projects are severely distressed 
        housing (as such item is defined in subsection (h)). 
        Not later than 180 days after the date of enactment of 
        this section, the Secretary shall publish a list of 
        those projects that the Secretary determines are 
        severely distressed public housing.
          [(3) Appeal of secretary's determination.--The 
        Secretary shall establish procedures for public housing 
        agencies to appeal the Secretary's determination that a 
        project identified by a public housing agency is not 
        severely distressed.
  [(c) Planning Grants.--
          [(1) In general.--The Secretary may make planning 
        grants under this subsection to applicants for the 
        purpose of developing revitalization programs for 
        severely distressed public housing under this section.
          [(2) Amount.--The amount of a planning grant under 
        this subsection may not exceed $200,000 per project, 
        except that the Secretary may for good cause approve a 
        grant in a higher amount.
          [(3) Eligible activities.--A planning grant may be 
        used for activities to develop revitalization programs 
        for severely distressed public housing, including--
                  [(A) studies of the different options for 
                revitalization, including the feasibility, 
                costs and neighborhood impact of such options;
                  [(B) providing technical or organizational 
                support to ensure resident involvement in all 
                phases of the planning and implementation 
                processes;
                  [(C) improvements to stabilize the 
                development, including security investments;
                  [(D) conducting workshops to ascertain the 
                attitudes and concerns of the neighboring 
                community;
                  [(E) preliminary architectural and 
                engineering work;
                  [(F) planning for economic development, job 
                training and self-sufficiency activities that 
                promote the economic self-sufficiency of 
                residents under the revitalization program;
                  [(G) designing a suitable replacement housing 
                plan, in situations where partial or total 
                demolition is considered;
                  [(H) planning for necessary management 
                improvements; and
                  [(I) preparation of an application for an 
                implementation grant under this section.
          [(4) Applications.--An application for a planning 
        grant shall be submitted in such form and in accordance 
        with such procedures as the Secretary shall establish. 
        The Secretary shall require that an application contain 
        at a minimum--
                  [(A) a request for a planning grant, 
                specifying the activities proposed, the 
                schedule for completing the activities, the 
                personnel necessary to complete the activities 
                and the amount of the grant requested;
                  [(B) a description of the applicant and a 
                statement of its qualifications;
                  [(C) identification and description of the 
                project involved, and a description of the 
                composition of the tenants, including family 
                size and income;
                  [(D) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located; and
                  [(E) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
          [(5) Selection criteria.--The Secretary shall, by 
        regulation, establish selection criteria for a national 
        competition for assistance under this subsection, which 
        shall include--
                  [(A) the qualities or potential capabilities 
                of the applicant;
                  [(B) the extent of resident interest and 
                involvement in the development of a 
                revitalization program for the project;
                  [(C) the extent of involvement of local 
                public and private entities in the development 
                of a revitalization program for the project and 
                in the provision of supportive services to 
                project residents;
                  [(D) the potential of the applicant for 
                developing a successful and affordable 
                revitalization program and the suitability of 
                the project for such a program;
                  [(E) national geographic diversity among 
                housing for which applicants are selected to 
                receive assistance;
                  [(F) the extent of the need for and potential 
                impact of the revitalization program; and
                  [(G) such other factors that the Secretary 
                determines are appropriate for purposes of 
                carrying out the program established by this 
                section in an effective and efficient manner.
          [(6) Notification.--The Secretary shall notify each 
        applicant, not later than 6 months after the date of 
        the submission of the application, whether the 
        application is approved or disapproved.
  [(d) Implementation Grants.--
          [(1) In general.--The Secretary may make 
        implementation grants under this subsection to 
        applicants for the purpose of carrying out 
        revitalization programs for severely distressed public 
        housing under this section.
          [(2) Eligible activities.--Implementation grants may 
        be used for activities to carry out revitalization 
        programs for severely distressed public housing, 
        including--
                  [(A) architectural and engineering work;
                  [(B) the redesign, reconstruction, or 
                redevelopment of the severely distressed public 
                housing development, including the site on 
                which the development is located;
                  [(C) covering the administrative costs of the 
                applicant, which may not exceed such portion of 
                the assistance provided under this subsection 
                as the Secretary may prescribe;
                  [(D) any necessary temporary relocation of 
                tenants during the activity specified under 
                subparagraph (B);
                  [(E) payment of legal fees;
                  [(F) economic development activities that 
                promote the economic self-sufficiency of 
                residents under the revitalization program;
                  [(G) necessary management improvements;
                  [(H) transitional security activities; and
                  [(I) any necessary support services, except 
                that not more than 15 percent of any grant 
                under this subsection may be used for such 
                purpose.
          [(3) Application.--An application for a 
        implementation grant shall be submitted by an applicant 
        in such form and in accordance with such procedures as 
        the Secretary shall establish. The Secretary shall 
        require that an application contain at a minimum--
                  [(A) a request for an implementation grant, 
                specifying the amount of the grant requested 
                and its proposed uses;
                  [(B) a description of the applicant and a 
                statement of its qualifications;
                  [(C) identification and description of the 
                project involved, and a description of the 
                composition of the tenants, including family 
                size and income;
                  [(D) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located; and
                  [(E) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
          [(4) Selection criteria.--The Secretary shall, by 
        regulation, establish selection criteria for a national 
        competition for assistance under this subsection, which 
        shall include--
                  [(A) the qualities or potential capabilities 
                of the applicant;
                  [(B) the extent of resident involvement in 
                the development of a revitalization program for 
                the project;
                  [(C) the extent of involvement of local 
                public and private entities in the development 
                of a revitalization program for the project and 
                in the provision of supportive services to 
                project residents;
                  [(D) the potential of the applicant for 
                developing a successful and affordable 
                revitalization program and the suitability of 
                the project for such a program;
                  [(E) national geographic diversity among 
                housing for which applicants are selected to 
                receive assistance;
                  [(F) the extent of the need for and potential 
                impact of the revitalization program; and
                  [(G) such other factors that the Secretary 
                determines are appropriate for purposes of 
                carrying out the program established by this 
                subtitle in an effective and efficient manner.
          [(5) Notification.--The Secretary shall notify each 
        applicant, not later than 6 months after the date of 
        the submission of the application, whether the 
        application is approved or disapproved.
  [(e) Exceptions to General Program Requirements.--
          [(1) Long-term viability.--The Secretary may waive or 
        revise rules established under this title governing 
        rents, income eligibility, and other areas of public 
        housing management, to permit a public housing agency 
        to undertake measures that enhance the long-term 
        viability of a severely distressed public housing 
        project revitalized under this section.
          [(2) Selection of tenants.--For projects revitalized 
        under this section, a public housing agency may select 
        tenants pursuant to a local system of preferences, in 
        lieu of selecting tenants pursuant to the preferences 
        specified under section 6(c)(4)(A)(i). Such local 
        system shall be established in writing and shall 
        respond to local housing needs and priorities as 
        determined by the public housing agency. The public 
        housing agency shall hold 1 or more public hearings to 
        obtain the views of low-income tenants and other 
        interested parties on the housing needs and priorities 
        of the agency's jurisdiction.
  [(f) Other Program Requirements.--
          [(1) Cost limitations.--Subject to the provisions of 
        this section, the Secretary--
                  [(A) shall establish cost limitations on 
                eligible activities under this section 
                sufficient to provide for effective 
                revitalization programs; and
                  [(B) may establish other cost limitations on 
                eligible activities under this section.
          [(2) Economic development.--Not more than an 
        aggregate of $250,000 from amounts made available under 
        subsections (c) and (d) may be used for economic 
        development activities under subsections (c) and (d) 
        for any project, except that the Secretary may for good 
        cause waive the applicability of this paragraph for a 
        project.
  [(g) Administration.--For the purpose of carrying out the 
revitalization of severely distressed public housing in 
accordance with this section, the Secretary shall establish 
within the Department of Housing and Urban Development an 
Office of Severely Distressed Public Housing Revitalization.
  [(h) Definitions.--For the purposes of this section:
          [(1) Applicant.--The term ``applicant'' means--
                  [(A) any public housing agency that is not 
                designated as troubled pursuant to section 
                6(j)(2);
                  [(B) any public housing agency or private 
                housing management agent selected, or receiver 
                appointed pursuant, to section 6(j)(3);
                  [(C) any public housing agency that is 
                designated as troubled pursuant to section 
                6(j)(2), if such agency acts in concert with a 
                private nonprofit organization, another public 
                housing agency that is not designated as a 
                troubled agency, resident management 
                corporation or other entity approved by the 
                Secretary; and
                  [(D) any public housing agency that is 
                designated as troubled pursuant to section 
                6(j)(2) that--
                          [(i) is so designated principally for 
                        reasons that will not affect the 
                        capacity of the agency to carry out a 
                        revitalization program;
                          [(ii) is making substantial progress 
                        toward eliminating the deficiencies of 
                        the agency; or
                          [(iii) is otherwise determined by the 
                        Secretary to be capable of carrying out 
                        a revitalization program.
          [(2) Private nonprofit corporation.--The term 
        ``private nonprofit organization'' means any private 
        nonprofit organization (including a State or locally 
        chartered nonprofit organization) that--
                  [(A) is incorporated under State or local 
                law;
                  [(B) has no part of its net earnings inuring 
                to the benefit of any member, founder, 
                contributor, or individual;
                  [(C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  [(D) has among its purposes significant 
                activities related to the provision of decent 
                housing that is affordable to very low-income 
                families.
          [(3) Public housing agency.--The term ``public 
        housing agency'' has the meaning given the term in 
        section 3(b), except that it does not include any 
        Indian housing authority.
          [(4) Resident management corporation.--The term 
        ``resident management corporation'' means a resident 
        management corporation established in accordance with 
        the requirements of the Secretary under section 20.
          [(5) Severely distressed public housing.--The term 
        ``severely distressed public housing'' means a public 
        housing project--
                  [(A) that--
                          [(i) requires major redesign, 
                        reconstruction or redevelopment, or 
                        partial or total demolition, to correct 
                        serious deficiencies in the original 
                        design (including appropriately high 
                        population density), deferred 
                        maintenance, physical deterioration or 
                        obsolescence of major systems and other 
                        deficiencies in the physical plant of 
                        the project;
                          [(ii) is occupied predominantly by 
                        families with children who are in a 
                        severe state of distress, characterized 
                        by such factors as high rates of 
                        unemployment, teenage pregnancy, 
                        single-parent households, long-term 
                        dependency on public assistance and 
                        minimal educational achievement;
                          [(iii) is in a location for recurrent 
                        vandalism and criminal activity 
                        (including drug-related criminal 
                        activity); and
                          [(iv) cannot remedy the elements of 
                        distress specified in clauses (i) 
                        through (iii) through assistance under 
                        other programs, such as the programs 
                        under section 9 or 14, or through other 
                        administrative means; or
                  [(B) that--
                          [(i) is owned by a public housing 
                        agency designated as troubled pursuant 
                        to section 6(j)(2);
                          [(ii) has a vacancy rate, as 
                        determined by the Secretary, of 50 
                        percent or more, unless the project or 
                        building is vacant because it is 
                        awaiting rehabilitation under a 
                        modernization program under section 14 
                        that--
                                  [(I) has been approved and 
                                funded; and
                                  [(II) as determined by the 
                                Secretary, is on schedule and 
                                is expected to result in full 
                                occupancy of the project or 
                                building upon completion of the 
                                program; and
                          [(iii) in the case of individual 
                        buildings, the building is, in the 
                        Secretary's determination, sufficiently 
                        separable from the remainder of the 
                        project to make use of the building 
                        feasible for purposes of this subtitle.
  [(i) Annual Report.--The Secretary shall submit to the 
Congress an annual report setting forth--
          [(1) the number, type, and cost of public housing 
        units revitalized pursuant to this section;
          [(2) the status of projects identified as severely 
        distressed public housing pursuant to subsection (b);
          [(3) the amount and type of financial assistance 
        provided under and in conjunction with this section; 
        and
          [(4) the recommendations of the Secretary for 
        statutory and regulatory improvements to the program 
        established by this section.

[SEC. 25. CHOICE IN PUBLIC HOUSING MANAGEMENT.

  [(a) Short Title.--This section may be cited as the ``Choice 
in Public Housing Management Act of 1992''.
  [(b) Funding.--
          [(1) Rehabilitation and redevelopment grants.--From 
        amounts reserved under section 14(k)(2) for each of 
        fiscal years 1993 and 1994, the Secretary may reserve 
        not more than $50,000,000 in each such fiscal year for 
        activities under this section (which may include 
        funding operating reserves for eligible housing 
        transferred under this section). The Secretary may make 
        grants to managers and ownership entities to 
        rehabilitate eligible housing in accordance with this 
        section, as appropriate.
          [(2) Technical assistance.--The Secretary may use up 
        to 5 percent of the total amount reserved under 
        paragraph (1) for any fiscal year to provide, by 
        contract, technical assistance to residents of public 
        housing and resident councils to help such residents 
        and councils make informed choices about options for 
        alternative management under this section.
  [(c) Program Authority.--
          [(1) Transfer of management.--
                  [(A) In general.--The Secretary may approve 
                not more than 25 applications submitted for 
                fiscal years 1993 and 1994 by resident councils 
                for the transfer of the management of 
                distressed public housing projects, or one or 
                more buildings within projects, that are owned 
                or operated by troubled public housing 
                agencies, from public housing agencies to 
                alternative managers.
                  [(B) Required votes.--An application for such 
                transfer may be submitted and approved only if 
                a majority of the members of the board of the 
                resident council has voted in favor of the 
                proposed transfer of management 
                responsibilities, and a majority of the 
                residents has also voted in favor of the 
                transfer in an election supervised by a 
                disinterested third party.
                  [(C) Assistance of management specialist.--
                Any resident council seeking to transfer 
                management of distressed public housing under 
                this section shall, in cooperation with the 
                public housing agency for such housing, select 
                a qualified public housing management 
                specialist to assist in identifying and 
                acquiring a capable manager for the housing.
          [(2) Rehabilitation and capital improvements.--The 
        Secretary may make rehabilitation grants and provide 
        capital improvement funding under subsection (e) in 
        connection with the transfer of eligible housing to a 
        manager under this section.
  [(d) Operating Subsidies.--
          [(1) Authority to provide.--The Secretary may make 
        operating subsidies under section 9 available to 
        managers under this section.
          [(2) Amount of subsidy.--The Secretary shall 
        establish the amount of the operating subsidies made 
        available to a manager based on the share for the 
        housing under section 9 as determined by the Secretary.
          [(3) Effect on pha grant.--Operating subsidies for 
        any public housing agency transferring management under 
        this section shall be reduced in accordance with the 
        requirements of section 9.
  [(e) Rehabilitation Grants and Capital Improvement Funding.--
          [(1) Rehabilitation grants.--An application under 
        subsection (f) may request approval of amounts set 
        aside under subsection (b) for the rehabilitation of 
        eligible housing. The manager and the Secretary shall 
        enter into a contract governing the use of any such 
        assistance provided.
          [(2) Annual capital improvement funding.--
                  [(A) Authority to provide.--The Secretary may 
                make funding for capital improvements available 
                annually from amounts under section 14 to 
                managers of eligible housing. In accordance 
                with the contract entered into pursuant to 
                subsection (h), each manager receiving such 
                funding shall establish a capital improvements 
                reserve account and deposit in the account each 
                year an amount not less than the annual amount 
                of comprehensive grant funds it receives. 
                Amounts in the reserve account may be used only 
                for capital improvements and replacements.
                  [(B) Amount of subsidy.--The Secretary shall 
                establish the amount made available to a 
                manager under paragraph (1) for capital 
                improvements based on the share for the housing 
                under the comprehensive grant formula and, to 
                the extent practicable, the public housing 
                agency's comprehensive grant plan, in 
                accordance with section 14, as determined by 
                the Secretary.
                  [(C) Limitation in the case of recent 
                rehabilitation.--Where eligible housing has 
                received rehabilitation funding under paragraph 
                (1) or has otherwise been comprehensively 
                modernized within 3 years before the effective 
                date of the contract between the Secretary and 
                the manager for management of the eligible 
                housing, only the accrual portion of the 
                comprehensive grant formula amount shall be 
                available for payment to the manager.
                  [(D) Effect on pha grant.--The formula amount 
                of a comprehensive grant for a public housing 
                agency transferring the housing under this 
                section shall be reduced in accordance with the 
                requirements of section 14.
          [(3) Relationship to section 14.--The provisions of 
        section 14 shall apply with respect to rehabilitation 
        grants under paragraph (1) or capital improvement 
        funding under paragraph (2); except that the Secretary 
        may waive the applicability of any of the provisions of 
        such section where such provisions are not appropriate 
        to the assistance under this subsection.
  [(f) Application.--
          [(1) Form and procedures.--
                  [(A) In general.--To be eligible for approval 
                for transfer of management from a public 
                housing agency to a manager and for a grant 
                under subsection (e), a resident council shall 
                submit an application to the Secretary in such 
                form and in accordance with such procedures as 
                the Secretary shall establish.
                  [(B) PHA comment on application.--A resident 
                council submitting an application shall provide 
                the public housing agency that owns or operates 
                the housing involved a reasonable opportunity 
                to comment on the application, as the Secretary 
                shall prescribe.
                  [(C) PHA proposal.--The public housing agency 
                may present to the resident council a proposal 
                for the continued management of the housing by 
                the agency, and the resident council shall give 
                reasonable consideration to any such proposal.
          [(2) Minimum requirements.--The Secretary shall 
        require that an application contain--
                  [(A) a description of the resident council 
                and documentation of its authority;
                  [(B) documentation of the votes required 
                under subsection (c)(1)(B);
                  [(C) a description of the proposed manager 
                selected by the applicant (in accordance with 
                procedures established or approved by the 
                Secretary) and documentation of its capacity to 
                manage the eligible housing;
                  [(D) a plan for carrying out the manager's 
                responsibilities for managing the eligible 
                housing;
                  [(E) documentation that the project (or 
                building or buildings) for which management 
                transfer is proposed is eligible housing;
                  [(F) documentation that each of the 
                requirements under paragraph (1)(B) have been 
                fulfilled;
                  [(G)(i) if the application includes a request 
                for a rehabilitation grant under subsection (e) 
                (which shall be included in any application 
                involving eligible housing that is 50 percent 
                or more vacant), the basis for the estimate of 
                the amount requested, including--
                          [(I) the estimate of the eligible 
                        housing's need under the public housing 
                        agency's comprehensive plan (under 
                        section 14(e)(1)); and
                          [(II) an explanation, where 
                        appropriate, if an amount higher than 
                        the amount planned by the agency is 
                        being requested; or
                  [(ii) if the application does not include a 
                request for a rehabilitation grant under 
                subsection (e), a demonstration that needs for 
                capital improvements and replacement for the 
                housing can reasonably be expected to be funded 
                from funding for capital improvements under 
                subsection (e);
                  [(H) if the manager proposes to administer a 
                program to enable residents to achieve economic 
                independence and self-sufficiency, a 
                description of the program and evidence of 
                commitment of resources to the program;
                  [(I) an analysis showing that the planned 
                rehabilitation will result in the long-term 
                viability of the housing at a reasonable cost;
                  [(J) a certification that the manager will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing; and
                  [(K) such other information that the 
                Secretary considers appropriate.
  [(g) Review and Approval by the Secretary.--
          [(1) Applications not requesting rehabilitation 
        assistance.--In the case of applications for the 
        transfer of management of public housing that do not 
        include a request for rehabilitation assistance under 
        subsection (e), the Secretary may approve an 
        application that meets the requirements of subsection 
        (f)(2) and this section.
          [(2) Applications requesting rehabilitation grants.--
        In the case of applications that include a request for 
        rehabilitation assistance under subsection (e), the 
        Secretary shall select applicants for approval based on 
        a national competition. The Secretary shall, by 
        regulation, establish selection criteria for the 
        competition which provide for separate rating of 
        applicants under this paragraph and of applicants under 
        this section, and for selections from a single list of 
        all applicants. The criteria shall include--
                  [(A) the quality of the plan for 
                rehabilitating the eligible housing;
                  [(B) the extent of the capacity or potential 
                capacity of the proposed manager to manage the 
                housing and to carry out the rehabilitation 
                program;
                  [(C) the extent to which a program is 
                proposed to enable residents to achieve 
                economic independence and self-sufficiency;
                  [(D) the extent to which the planned 
                rehabilitation will result in the long-term 
                viability of the housing at a reasonable cost; 
                and
                  [(E) such other criteria as the Secretary may 
                require.
  [(h) Contract Between Secretary and Manager.--
          [(1) Terms.--After the Secretary approves an 
        application, the Secretary shall enter into a contract 
        with the manager for transfer of management of the 
        eligible housing. In addition to other contract 
        provisions required under this section, the contract 
        shall--
                  [(A) give the manager the right to receive 
                operating subsidies under subsection (d) and 
                capital improvement funding under subsection 
                (e);
                  [(B) require the manager to carry out all 
                management responsibilities for the eligible 
                housing, as provided in or required by the 
                contract;
                  [(C) require the manager to carry out, for 
                the eligible housing, all management 
                responsibilities applicable to public housing 
                agencies owning or operating public housing 
                projects, including (i) maintaining the units 
                in decent, safe, and sanitary condition in 
                accordance with any standards for public 
                housing established or adopted by the 
                Secretary, (ii) determining eligibility of 
                applicants for occupancy of units subject to 
                the requirements of this Act, (iii) terminating 
                tenancy in accordance with the procedures 
                applicable to the section 8 new construction 
                program, and (iv) determining the amount of 
                rent paid for units in accordance with this 
                Act; and
                  [(D) permit, but not require, the manager to 
                select applicants from the public housing 
                waiting list maintained by the public housing 
                agency.
          [(2) Extension, expiration, and termination.--
                  [(A) In general.--The Secretary shall provide 
                for a resident council that has entered into a 
                contract under this subsection to--
                          [(i) approve the renewal of the 
                        contract between the Secretary and the 
                        manager; or
                          [(ii) disapprove renewal and submit 
                        an application to the Secretary, in 
                        accordance with subsection (f), 
                        proposing another manager, which may be 
                        the public housing agency.
                  [(B) Default.--If the Secretary determines 
                that a manager is in default of its 
                responsibilities under the contract, the 
                Secretary may require the resident council to 
                submit another application proposing a 
                different manager, which may be the public 
                housing agency.
  [(i) Other Program Requirements.--
          [(1) Cost limitations.--The Secretary may establish 
        cost limitations on activities under this section. The 
        amount of rehabilitation funds under subsection (e)(1) 
        that may be approved may not exceed the per unit cost 
        limit applicable to the comprehensive grant program 
        under section 14.
          [(2) Demolition and disposition not permitted.--A 
        manager may not demolish or dispose of eligible housing 
        under this section.
          [(3) Capability of resident management 
        corporations.--To be eligible to become a manager under 
        this section, a resident management corporation--
                  [(A) shall demonstrate to the Secretary its 
                ability to manage public housing effectively 
                and efficiently, as determined by the 
                Secretary, which shall include evidence of its 
                most recent financial audit; or
                  [(B) shall arrange for operation of the 
                housing by a qualified management entity.
          [(4) Limitations on pha liability.--A public housing 
        agency shall not be liable for any act or failure to 
        act by the manager or resident council.
          [(5) Bonding and insurance.--Before assuming any 
        management responsibility for eligible housing, a 
        manager shall obtain fidelity bonding and insurance, or 
        equivalent protection, in accordance with regulations 
        and requirements established by the Secretary. Such 
        bonding and insurance, or its equivalent, shall be 
        adequate to protect the Secretary and the public 
        housing agency against loss, theft, embezzlement, or 
        fraudulent acts on the part of the manager or its 
        employees.
          [(6) Restriction on displacement before transfer.--A 
        public housing agency may not involuntarily displace, 
        as determined by the Secretary, any resident of 
        eligible housing during the period beginning on the 
        date that an application under subsection (f) is 
        submitted by a resident council, and ending upon 
        transfer of management of the housing or, if the 
        application is disapproved, the date of the 
        disapproval.
  [(j) Performance Review and Compliance.--
          [(1) Monitoring.--The Secretary shall monitor the 
        performance of managers under this section and shall 
        assess their management performance using the 
        performance indicators established under section 
        6(j)(1).
          [(2) Records, reports, and audits of managers.--
                  [(A) Keeping of records.--Each manager and 
                resident council under this subtitle shall keep 
                such records as may be reasonably necessary to 
                disclose the amount and the disposition by the 
                manager of the proceeds of assistance received 
                under this section and to ensure compliance 
                with the requirements of this section.
                  [(B) Access to documents.--
                          [(i) Secretary.--The Secretary shall 
                        have access for the purpose of audit 
                        and examination to any books, 
                        documents, papers, and records of a 
                        manager, resident council, and public 
                        housing agency that are pertinent to 
                        assistance received under, and to the 
                        requirements of, this section.
                          [(ii) GAO.--The Comptroller General 
                        of the United States, and any duly 
                        authorized representatives of the 
                        Comptroller General, shall have access 
                        for the purpose of audit and 
                        examination to any books, documents, 
                        papers, and records of a manager and 
                        resident council that are pertinent to 
                        assistance received under, and to the 
                        requirements of, this section.
                  [(C) Reporting requirements.--Each manager 
                shall submit to the Secretary such reports as 
                the Secretary determines appropriate to carry 
                out the Secretary's responsibilities under this 
                section, including an annual financial audit.
                  [(D) Annual report.--The Secretary shall 
                submit an annual report to the Congress 
                evaluating management transfers under this 
                section compared to other methods of dealing 
                with severely distressed public housing.
  [(k) Nondiscrimination.--No person in the United States 
shall, on the grounds of race, color, national origin, 
religion, or sex, be excluded from participation in, be denied 
the benefits of, or be subjected to discrimination under, any 
program or activity funded in whole or in part with funds made 
available under this section. Any prohibition against 
discrimination on the basis of age under the Age Discrimination 
Act of 1975 or with respect to an otherwise qualified 
handicapped individual as provided in section 504 of the 
Rehabilitation Act of 1973 shall also apply to any such program 
or activity.
  [(l) Relationship to Other Programs.--
          [(1) Homeownership.--After a transfer of management 
        in accordance with this section, the eligible housing 
        shall remain eligible for assistance under title III 
        and for sale under section 5(h). Participation in a 
        homeownership program shall be consistent with a 
        contract between the Secretary and a manager.
          [(2) Self-sufficiency.--Where an application under 
        subsection (f) proposes a program to enable residents 
        to achieve economic independence and self-sufficiency, 
        consistent with the objectives of the program under 
        section 23, and demonstrates that the manager has the 
        capacity to carry out a self-sufficiency program, the 
        Secretary may approve such a program. Where such a 
        program is approved, the Secretary shall authorize the 
        manager to adopt policies consistent with section 23(d) 
        (relating to maximum rents and escrow savings accounts) 
        and section 23(e) (relating to effect of increases in 
        family income).
  [(m) Definitions.--For purposes of this section:
          [(1) The term ``eligible housing'' means a public 
        housing project, or one or more buildings within a 
        project, that--
                  [(A) is owned or operated by a troubled 
                public housing agency; and
                  [(B) has been identified as severely 
                distressed under section 24 of this Act.
        In the case of an individual building, the building 
        shall, in the determination of the Secretary, be 
        sufficiently separable from the remainder of the 
        project to make use of the building feasible for 
        purposes of this section.
          [(2) The term ``manager'' means one of the following 
        entities that has entered into a contract with the 
        Secretary for the management of eligible housing under 
        this section:
                  [(A) A public or private nonprofit 
                organization (including, as determined by the 
                Secretary, such an organization sponsored by 
                the public housing agency).
                  [(B) A for-profit entity, if it has (i) 
                demonstrated experience in providing low-income 
                housing, and (ii) is participating in joint 
                venture with an organization described in 
                paragraph (3).
                  [(C) A State or local government, including 
                an agency or instrumentality thereof.
                  [(D) A public housing agency (other than the 
                public housing agency that owns the project).
        The term does not include a resident council.
          [(3) The term ``private nonprofit organization'' 
        means any private nonprofit organization (including a 
        State or locally chartered nonprofit organization) 
        that--
                  [(A) is incorporated under State or local 
                law;
                  [(B) has no part of its net earnings inuring 
                to the benefit of any member, founder, 
                contributor, or individual;
                  [(C) complies with standards of financial 
                accountability acceptable to the Secretary; and
                  [(D) has among its purposes significant 
                activities related to the provision of decent 
                housing that is affordable to low-income 
                families.
        The term includes resident management corporations.
          [(4) The term ``public housing agency'' has the 
        meaning given such term in section 3(b), except that it 
        does not include Indian housing authorities.
          [(5) The term ``public nonprofit organization'' means 
        any public nonprofit entity, except the public housing 
        agency that owns the eligible housing.
          [(6) The term ``resident council'' means any 
        nonprofit organization or association that--
                  [(A) is representative of the residents of 
                the eligible housing;
                  [(B) adopts written procedures providing for 
                the election of officers on a regular basis; 
                and
                  [(C) has a democratically elected governing 
                board, elected by the residents of the eligible 
                housing.
          [(7) The term ``resident management corporation'' 
        means a resident management corporation established in 
        accordance with the requirements of the Secretary under 
        section 20.
          [(8) The term ``troubled public housing agency'' 
        means a public housing agency with 250 or more units 
        that--
                  [(A) has been designated as a troubled public 
                housing agency for the current Federal fiscal 
                year, and for the 2 preceding Federal fiscal 
                years--
                          [(i) under section 6(j)(2)(A)(i); or
                          [(ii) before the implementation of 
                        such authority, under any other 
                        procedure for designating troubled 
                        public housing agencies that was used 
                        by the Secretary and is determined by 
                        the Secretary to be appropriate for 
                        purposes of this section; and
                  [(B) has not met targets for improved 
                performance under section 6(j)(2)(C).

[SEC. 26. ENVIRONMENTAL REVIEWS.

  [(a) In General.--
          [(1) Release of funds.--In order to assure that the 
        policies of the National Environmental Policy Act of 
        1969 and other provisions of law which further the 
        purposes of such Act (as specified in regulations 
        issued by the Secretary) are most effectively 
        implemented in connection with the expenditure of funds 
        under this title, and to assure to the public 
        undiminished protection of the environment, the 
        Secretary may, under such regulations, in lieu of the 
        environmental protection procedures otherwise 
        applicable, provide for the release of funds for 
        projects or activities under this title, as specified 
        by the Secretary upon the request of a public housing 
        agency (including an Indian housing authority) under 
        this section, if the State or unit of general local 
        government, as designated by the Secretary in 
        accordance with regulations, assumes all of the 
        responsibilities for environmental review, 
        decisionmaking, and action pursuant to such Act, and 
        such other provisions of law as the regulations of the 
        Secretary may specify, which would otherwise apply to 
        the Secretary with respect to the release of funds.
          [(2) Implementation.--The Secretary, after 
        consultation with the Council on Environmental Quality, 
        shall issue such regulations as may be necessary to 
        carry out this section. Such regulations shall specify 
        the programs to be covered.
  [(b) Procedure.--The Secretary shall approve the release of 
funds subject to the procedures authorized by this section only 
if, not less than 15 days prior to such approval and prior to 
any commitment of funds to such projects or activities, the 
public housing agency (including an Indian housing authority) 
has submitted to the Secretary a request for such release 
accompanied by a certification of the State or unit of general 
local government which meets the requirements of subsection 
(c). The Secretary's approval of any such certification shall 
be deemed to satisfy the Secretary's responsibilities under the 
National Environmental Policy Act of 1969 and such other 
provisions of law as the regulations of the Secretary specify 
insofar as those responsibilities relate to the release of 
funds which are covered by such certification.
  [(c) Certification.--A certification under the procedures 
authorized by this section shall--
          [(1) be in a form acceptable to the Secretary;
          [(2) be executed by the chief executive officer or 
        other officer of the State or unit of general local 
        government who qualifies under regulations of the 
        Secretary;
          [(3) specify that the State or unit of general local 
        government under this section has fully carried out its 
        responsibilities as described under subsection (a); and
          [(4) specify that the certifying officer--
                  [(A) consents to assume the status of a 
                responsible Federal official under the National 
                Environmental Policy Act of 1969 and each 
                provision of law specified in regulations 
                issued by the Secretary insofar as the 
                provisions of such Act or other such provision 
                of law apply pursuant to subsection (a); and
                  [(B) is authorized and consents on behalf of 
                the State or unit of general local government 
                and himself or herself to accept the 
                jurisdiction of the Federal courts for the 
                purpose of enforcement of his or her 
                responsibilities as such an official.
  [(d) Approval by States.--In cases in which a unit of general 
local government carries out the responsibilities described in 
subsection (c), the Secretary may permit the State to perform 
those actions of the Secretary described in subsection (b) and 
the performance of such actions by the State, where permitted 
by the Secretary, shall be deemed to satisfy the Secretary's 
responsibilities referred to in the second sentence of 
subsection (b).

       [TITLE II--ASSISTED HOUSING FOR INDIANS AND ALASKA NATIVES

[SEC. 201. ESTABLISHMENT OF SEPARATE PROGRAM OF ASSISTED HOUSING FOR 
                    INDIANS AND ALASKA NATIVES.

  [(a) General Authority.--The Secretary shall carry out 
programs to provide low-income housing on Indian reservations 
and other Indian areas in accordance with the provisions of 
this title.
  [(b) Applicability of Title I.--
          [(1) In general.--Except as otherwise provided in 
        this title, the provisions of title I shall apply to 
        low-income housing developed or operated pursuant to a 
        contract between the Secretary and an Indian housing 
        authority.
          [(2) Public housing.--No provision of title I (or of 
        any other law specifically modifying the public housing 
        program under title I) that is enacted after the date 
        of the enactment of the Indian Housing Act of 1988 
        shall apply to public housing developed or operated 
        pursuant to a contract between the Secretary and an 
        Indian housing authority, unless the provision 
        explicitly provides for such applicability.
  [(c) Inapplicability of Certain Requirements.--Lower income 
housing developed or operated pursuant to a contract between 
the Secretary and an Indian housing authority shall not be 
subject to section 227 of the Housing and Urban-Rural Recovery 
Act of 1983 (relating to pet ownership in assisted housing for 
the elderly or handicapped) or section 6(h) of the United 
States Housing Act of 1937 (relating to a limitation on 
contracts involving new construction).

[SEC. 202. MUTUAL HELP HOMEOWNERSHIP OPPORTUNITY PROGRAM.

  [(a) Establishment.--The Secretary shall carry out a mutual 
help homeownership opportunity program for Indian families in 
accordance with this section. The program shall be designed to 
meet the homeownership needs of Indian families on Indian 
reservations and other Indian areas, including Indian families 
whose incomes exceed the levels established for low-income 
families.
  [(b) Financial Assistance.--
          [(1) In general.--The Secretary may, to the extent 
        provided in appropriation Acts, enter into contracts 
        with Indian housing authorities under title I to 
        provide financial assistance for the development, 
        acquisition, operation, and improvement of housing 
        projects under this section.
          [(2) Eligibility for ciap.--Notwithstanding the 
        provisions of section 14(c), the Secretary may provide 
        assistance provided for comprehensive modernization 
        under section 14 for the housing projects under this 
        section for the purposes under section 14. Any 
        assistance shall be provided under this paragraph only 
        in the form of a grant for each housing project (or 
        unit within a project) selected for such assistance.
  [(c) Eligible Projects.--
          [(1) Project types.--Projects for which assistance 
        may be provided under this section may include single-
        family detached dwellings and other single-family 
        dwellings (including row houses).
          [(2) Forms of ownership.--In addition to fee simple 
        ownership and other forms of ownership, the Secretary 
        may permit and facilitate cooperative ownership for any 
        project assisted under this section, if the Indian 
        housing authority requests cooperative ownership and 
        the Secretary determines such ownership to be 
        appropriate for the project.
          [(3) Property standards.--Property standards for 
        projects assisted under this section shall be 
        established by regulation, in accordance with section 
        205. The standards shall--
                  [(A) provide sufficient flexibility to permit 
                the use of different designs and materials; and
                  [(B) include cost-effective energy 
                conservation performance standards designed to 
                ensure the lowest total construction and 
                operating costs.
  [(d) Eligible Families.--
          [(1) In general.--Except as provided in paragraph 
        (2), assistance under this section shall be limited to 
        Indian low-income families on Indian reservations and 
        other Indian areas.
          [(2) Exception.--
                  [(A) Demonstrated need.--An Indian housing 
                authority may provide assistance under this 
                section to families on Indian reservations and 
                other Indian areas whose incomes exceed the 
                levels established for low-income families, if 
                the Indian housing authority demonstrates to 
                the satisfaction of the Secretary that there is 
                a need for housing for such families that 
                cannot reasonably be met without such 
                assistance. An Indian housing authority may 
                provide assistance under this section to any 
                non-Indian family on an Indian reservation or 
                other Indian area if the Indian housing 
                authority determines that the presence of the 
                family on the Indian reservation or other 
                Indian area is essential to the well-being of 
                Indian families and the need for housing for 
                the family cannot reasonably be met without 
                such assistance.
                  [(B) Limitation on number of units.--The 
                number of dwelling units in any project 
                assisted under this section that may be 
                occupied by or reserved for families on Indian 
                reservations and other Indian areas whose 
                incomes exceed the levels established for low-
                income families may not exceed whichever of the 
                following is higher:
                          [(i) 10 percent.--10 percent of the 
                        dwelling units in the project.
                          [(ii) 5 units.--5 dwelling units.
  [(e) Mutual Help and Occupancy Agreement.--Each Indian 
housing authority operating a program under this section shall 
require each family selected for housing under this section to 
enter into a mutual help and occupancy agreement. The agreement 
shall provide the following:
          [(1) Family contribution.--
                  [(A) General requirement.--The family shall 
                agree to contribute toward the development cost 
                of a project in the form of land, labor, cash, 
                or materials or equipment. The value of the 
                contribution of each family shall not be less 
                than $1,500.
                  [(B) Contribution by indian tribe.--
                Contributions other than labor may be made by 
                an Indian tribe on behalf of a family.
          [(2) Monthly payment.--
                  [(A) Calculation.--The family shall agree to 
                make a monthly payment to the Indian housing 
                authority that is equal to whichever of the 
                following is higher:
                          [(i) Percentage of adjusted income.--
                        An amount computed by--
                                  [(I) multiplying the monthly 
                                adjusted income of the family 
                                by a percentage that is not 
                                less than 15 percent and not 
                                more than 30 percent, as 
                                determined by the Indian 
                                housing authority to be 
                                appropriate; and
                                  [(II) subtracting the 
                                estimated monthly payments of 
                                the family for the reasonable 
                                use of utilities (excluding 
                                telephone service).
                          [(ii) Administration charge.--The 
                        amount budgeted by the Indian housing 
                        authority for monthly operating 
                        expenses on the dwelling of the family, 
                        excluding any operating cost for which 
                        operating assistance is provided by the 
                        Secretary under section 9.
                  [(B) Other applicable law.--Monthly payments 
                under this section shall be subject to section 
                203 of the Housing and Community Development 
                Act of 1974.
          [(3) Maintenance and utilities.--The family shall be 
        responsible for the maintenance and monthly utility 
        expenses of the dwelling. The Indian housing authority 
        shall have in effect procedures determined by the 
        Secretary to be sufficient for ensuring the timely 
        periodic maintenance of the dwelling by the family.
          [(4) Homeownership opportunities.--The Indian housing 
        authority shall afford the family an opportunity to 
        purchase the dwelling under a lease-purchase, mortgage, 
        or loan agreement with the Indian housing authority or 
        any other qualified entity, if the Indian housing 
        authority determines (in accordance with objective 
        standards and procedures established by the Secretary 
        after consultation with Indian housing authorities) 
        that the family is able to meet the obligations of 
        homeownership.
  [(f) Self-Help Housing Program.--
          [(1) Establishment.--The Secretary shall establish a 
        self-help housing program for projects assisted under 
        this section.
          [(2) Requirements.--In the case of any project 
        approved by the Secretary for participation in the 
        self-help housing program--
                  [(A) each family shall make a contribution 
                under subsection (e)(1) in the form of labor in 
                accordance with labor contribution requirements 
                similar to the requirements applicable under 
                the mutual self-help housing program 
                established in section 523 of the Housing Act 
                of 1949; and
                  [(B) the Secretary shall provide each family 
                with technical and supervisory assistance 
                similar to the assistance available under the 
                mutual self-help housing program established in 
                section 523 of the Housing Act of 1949.
          [(3) Applications.--Any Indian housing authority may 
        submit an application to the Secretary for inclusion of 
        a project assisted under this section in the self-help 
        housing program.

[SEC. 203. ADDITIONAL PROVISIONS.

  [(a) Public Housing Maximum Contributions.--In determining 
the maximum contributions that may be made by the Secretary to 
an Indian housing authority for development of a public housing 
project (including a mutual help homeownership opportunity 
project under this title), the Secretary shall consider all 
relevant factors, including--
          [(1) the logistical problems associated with projects 
        of remote location, low density, or scattered sites; 
        and
          [(2) the availability of skilled labor and acceptable 
        materials.
  [(b) Related Facilities and Services.--The Secretary shall 
take such actions as may be necessary to ensure the timely and 
efficient provision, through the Interdepartmental Agreement on 
Indian Housing, of any roads, water supply and sewage 
facilities, and electrical and fuel distribution systems that 
are required for completion and occupancy of public housing 
projects assisted under this title (including mutual help 
homeownership opportunity projects). Notwithstanding any other 
provision of this Act, the Secretary shall make annual payments 
from funds appropriated under section 9(c) to municipalities 
providing such roads, facilities, and systems in a amount equal 
to--
          [(1) 10 percent of the applicable shelter rent, minus 
        the utility allowance; or
          [(2) $150,
whichever is greater, for each rental housing unit covered by 
this subsection.
  [(c) Accessibility to Physically Handicapped Persons.--The 
Secretary shall, in accordance with Public Law 90-480 (42 
U.S.C. 4151 et seq.; commonly known as the Architectural 
Barriers Act of 1968) and other applicable law, require each 
Indian housing authority to give proper consideration to the 
needs of physically handicapped persons for ready access to, 
and use of, low-income housing assisted under this title.

[SEC. 204. ANNUAL REPORT.

  [The Secretary shall include in the annual report under 
section 8 of the Department of Housing and Urban Development 
Act--
          [(1) a description of the actions taken to carry out 
        the provisions of the Housing and Community Development 
        Act of 1987 that relate to Indian housing;
          [(2) an evaluation of the status of the program of 
        single-family mortgage insurance for Indians and Alaska 
        Natives under section 248 of the National Housing Act;
          [(3) an assessment of the housing needs of native 
        Hawaiians and an evaluation of current Federal programs 
        designed to meet the needs, including programs of 
        housing assistance for low-income families and the 
        program of single-family mortgage insurance for native 
        Hawaiians under section 247 of the National Housing 
        Act;
          [(4) recommendations for resolving concerns relating 
        to Indian housing authorities that are authorized to 
        serve both Indians and non-Indians; and
          [(5) a description of actions taken to ensure the 
        timely and efficient provision, through the 
        Interdepartmental Agreement on Indian Housing, of any 
        roads, water supply and sewage facilities, and 
        electrical and fuel distribution systems that are 
        required for completion and occupancy of public housing 
        projects assisted under this title (including mutual 
        help homeownership opportunity projects).

[SEC. 205. REGULATIONS.

  [(a) Issuance.--The Secretary shall issue regulations to 
carry out this title and the amendments made by the Indian 
Housing Act of 1988. The regulations shall be issued in 
accordance with subsections (b) through (e) of section 553 of 
title 5, United States Code.
  [(b) Consultation With Indian Housing Authorities.--In 
formulating proposed regulations under this section, the 
Secretary shall consult with Indian housing authorities.
  [(c) Effective Date.--The Secretary shall issue regulations 
under this section to become effective before the expiration of 
the 90-day period beginning on the date of the enactment of the 
Indian Housing Act of 1988.

      [TITLE III--HOPE FOR PUBLIC AND INDIAN HOUSING HOMEOWNERSHIP

[SEC. 301. PROGRAM AUTHORITY.

  [(a) In General.--The Secretary is authorized to make--
          [(1) planning grants to help applicants to develop 
        homeownership programs in accordance with this title; 
        and
          [(2) implementation grants to carry out homeownership 
        programs in accordance with this title.
  [(b) Authority To Reserve Housing Assistance.--In connection 
with a grant under this title, the Secretary may reserve 
authority to provide assistance under section 8 of this Act to 
the extent necessary to provide replacement housing and rental 
assistance for a nonpurchasing tenant who resides in the 
project on the date the Secretary approves the application for 
an implementation grant, for use by the tenant in another 
project.

[SEC. 302. PLANNING GRANTS.

  [(a) Grants.--The Secretary is authorized to make planning 
grants to applicants for the purpose of developing 
homeownership programs under this title. The amount of a 
planning grant under this section may not exceed $200,000, 
except that the Secretary may for good cause approve a grant in 
a higher amount.
  [(b) Eligible Activities.--Planning grants may be used for 
activities to develop homeownership programs (which may include 
programs for cooperative ownership), including--
          [(1) development of resident management corporations 
        and resident councils;
          [(2) training and technical assistance for applicants 
        related to development of a specific homeownership 
        program;
          [(3) studies of the feasibility of a homeownership 
        program;
          [(4) inspection for lead-based paint hazards, as 
        required by section 302(a) of the Lead-Based Paint 
        Poisoning Prevention Act;
          [(5) preliminary architectural and engineering work;
          [(6) tenant and homebuyer counseling and training;
          [(7) planning for economic development, job training, 
        and self-sufficiency activities that promote economic 
        self-sufficiency of homebuyers and homeowners under the 
        homeownership program;
          [(8) development of security plans; and
          [(9) preparation of an application for an 
        implementation grant under this title.
  [(c) Application.--
          [(1) Form and procedures.--An application for a 
        planning grant shall be submitted by an applicant in 
        such form and in accordance  with  such  procedures  as 
         the  Secretary  shall establish.
          [(2) Minimum requirements.--The Secretary shall 
        require that an application contain at a minimum--
                  [(A) a request for a planning grant, 
                specifying the activities proposed to be 
                carried out, the schedule for completing the 
                activities, the personnel necessary to complete 
                the activities, and the amount of the grant 
                requested;
                  [(B) a description of the applicant and a 
                statement of its qualifications;
                  [(C) identification and description of the 
                public housing project or projects involved, 
                and a description of the composition of the 
                tenants, including family size and income;
                  [(D) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located (or, during the first 12 
                months after enactment of the Cranston-Gonzalez 
                National Affordable Housing Act, that the 
                application is consistent with such other 
                existing State or local housing plan or 
                strategy that the Secretary shall determine to 
                be appropriate); and
                  [(E) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
  [(d) Selection Criteria.--The Secretary shall, by regulation, 
establish selection criteria for a national competition for 
assistance under this section, which shall include--
          [(1)  the  qualifications  or  potential  
        capabilities  of  the  applicant;
          [(2) the extent of tenant interest in the development 
        of a homeownership program for the project;
          [(3) the potential of the applicant for developing a 
        successful and affordable homeownership program and the 
        suitability of the project for homeownership;
          [(4) national geographic diversity among projects for 
        which applicants are selected to receive assistance; 
        and
          [(5) such other factors that the Secretary shall 
        require that (in the determination of the Secretary) 
        are appropriate for purposes of carrying out the 
        program established by this title in an effective and 
        efficient manner.

[SEC. 303. IMPLEMENTATION GRANTS.

  [(a) Grants.--The Secretary is authorized to make 
implementation grants to applicants for the purpose of carrying 
out homeownership programs approved under this title.
  [(b) Eligible Activities.--Implementation grants may be used 
for activities to carry out homeownership programs (including 
programs for cooperative ownership) that meet the requirements 
under this subtitle, including the following activities:
          [(1) Architectural and engineering work.
          [(2) Implementation of the homeownership program, 
        including acquisition of the public housing project 
        from a public housing agency for the purpose of 
        transferring ownership to eligible families in 
        accordance with a homeownership program that meets the 
        requirements under this title.
          [(3) Rehabilitation of any public housing project 
        covered by the homeownership program, in accordance 
        with standards established by the Secretary.
          [(4) Abatement of lead-based paint hazards, as 
        required by section 302(a) of the Lead-Based Paint 
        Poisoning Prevention Act.
          [(5) Administrative costs of the applicant, which may 
        not exceed 15 percent of the amount of assistance 
        provided under this section.
          [(6) Development of resident management corporations 
        and resident management councils, but only if the 
        applicant has not received assistance under section 302 
        for such activities.
          [(7) Counseling and training of homebuyers and 
        homeowners under the homeownership program.
          [(8) Relocation of tenants who elect to move.
          [(9) Any necessary temporary relocation of tenants 
        during rehabilitation.
          [(10) Funding of operating expenses and replacement 
        reserves of the project covered by the homeownership 
        program, except that the amount of assistance for 
        operating expenses shall not exceed the amount the 
        project would have received if it had continued to 
        receive such assistance under section 9, with 
        adjustments comparable to those that would have been 
        made under section 9.
          [(11) Implementation of a replacement housing plan.
          [(12) Legal fees.
          [(13) Defraying costs for the ongoing training needs 
        of the recipient that are related to developing and 
        carrying out the homeownership program.
          [(14) Economic development activities that promote 
        economic self-sufficiency of homebuyers, residents, and 
        homeowners under the homeownership program.
  [(c) Matching Funding.--
          [(1) In general.--Each recipient shall assure that 
        contributions equal to not less than 25 percent of the 
        grant amount made available under this section, 
        excluding any amounts provided for post-sale operating 
        expenses and replacement housing, shall be provided 
        from non-Federal sources to carry out the homeownership 
        program.
          [(2) Form.--Such contributions may be in the form 
        of--
                  [(A) cash contributions from non-Federal 
                resources, which may not include Federal tax 
                expenditures or funds from a grant made under 
                section 106(b) or section 106(d) of the Housing 
                and Community Development Act of 1974;
                  [(B) payment of administrative expenses, as 
                defined by the Secretary, from non-Federal 
                resources, including funds from a grant made 
                under section 106(b) or section 106(d) of the 
                Housing and Community Development Act of 1974;
                  [(C) the value of taxes, fees, or other 
                charges that are normally and customarily 
                imposed but are waived, foregone, or deferred 
                in a manner that facilitates the implementation 
                of a homeownership program assisted under this 
                subtitle;
                  [(D) the value of land or other real property 
                as appraised according to procedures acceptable 
                to the Secretary;
                  [(E) the value of investment in on-site and 
                off-site infrastructure required for a 
                homeownership program assisted under this 
                subtitle; or
                  [(F) such other in-kind contributions as the 
                Secretary may approve.
        Contributions for administrative expenses shall be 
        recognized only up to an amount equal to 7 percent of 
        the total amount of grants made available under this 
        section.
          [(3) Reduction of requirement.--The Secretary shall 
        reduce the matching requirement for homeownership 
        programs carried out under this section in accordance 
        with the formula established under section 220(d) of 
        the Cranston-Gonzalez National Affordable Housing Act.
  [(d) Application.--
          [(1) Form and procedure.--An application for an 
        implementation grant shall be submitted by an applicant 
        in such form and in accordance with such procedures as 
        the Secretary shall establish.
          [(2) Minimum requirements.--The Secretary shall 
        require that an application contain at a minimum--
                  [(A) a request for an implementation grant, 
                specifying the amount of the grant requested 
                and its proposed uses;
                  [(B) if applicable, an application for 
                assistance under section 8 of this Act, which 
                shall specify the proposed uses of such 
                assistance and the period during which the 
                assistance will be needed;
                  [(C) a description of the qualifications and 
                experience of the applicant in providing 
                housing for low-income families;
                  [(D) a description of the proposed 
                homeownership program, consistent with section 
                304 and the other requirements of this title, 
                which shall specify the activities proposed to 
                be carried out and their estimated costs, 
                identifying reasonable schedules for carrying 
                it out, and demonstrating that the program will 
                comply with the affordability requirements 
                under section 304(b);
                  [(E) identification and description of the 
                public housing project or projects involved, 
                and a description of the composition of the 
                tenants, including family size and income;
                  [(F) a description of and commitment for the 
                resources that are expected to be made 
                available to provide the matching funding 
                required under subsection (c) and of other 
                resources that are expected to be made 
                available in support of the homeownership 
                program;
                  [(G) identification and description of the 
                financing proposed for any (i) rehabilitation 
                and (ii) acquisition (I) of the property, where 
                applicable, by a resident council or other 
                entity for transfer to eligible families, and 
                (II) by eligible families of ownership 
                interests in, or shares representing, units in 
                the project;
                  [(H) if the applicant is not a public housing 
                agency, the proposed sales price, if any, the 
                basis for such price determination, and terms 
                to the applicant;
                  [(I) the estimated sales prices, if any, and 
                terms to eligible families;
                  [(J) any proposed restrictions on the resale 
                of units under a homeownership program;
                  [(K) identification and description of the 
                entity that will operate and manage the 
                property;
                  [(L) a certification by the public official 
                responsible for submitting the comprehensive 
                housing affordability strategy under section 
                105 of the Cranston-Gonzalez National 
                Affordable Housing Act that the proposed 
                activities are consistent with the approved 
                housing strategy of the State or unit of 
                general local government within which the 
                project is located (or, during the first 12 
                months after enactment of the Cranston-Gonzalez 
                National Affordable Housing Act, that the 
                application is consistent with such other 
                existing State or local housing plan or 
                strategy that the Secretary shall determine to 
                be appropriate); and
                  [(M) a certification that the applicant will 
                comply with the requirements of the Fair 
                Housing Act, title VI of the Civil Rights Act 
                of 1964, section 504 of the Rehabilitation Act 
                of 1973, and the Age Discrimination Act of 
                1975, and will affirmatively further fair 
                housing.
  [(e) Selection Criteria.--The Secretary shall establish 
selection criteria for a national competition for assistance 
under this section, which shall include--
          [(1) the ability of the applicant to develop and 
        carry out the proposed homeownership program, taking 
        into account the quality of any related ongoing program 
        of the applicant, and the extent of tenant interest in 
        the development of a homeownership program and 
        community support;
          [(2) the feasibility of the homeownership program;
          [(3) the extent to which current tenants and other 
        eligible families will be able to afford the purchase;
          [(4) the quality and viability of the proposed 
        homeownership program, including the viability of the 
        economic self-sufficiency plan;
          [(5) the extent to which funds for activities that do 
        not qualify as eligible activities will be provided in 
        support of the homeownership program;
          [(6) whether the approved comprehensive housing 
        affordability strategy for the jurisdiction within 
        which the public housing project is located includes 
        the proposed homeownership program as one of the 
        general priorities identified pursuant to section 
        105(b)(7) of the Cranston-Gonzalez National Affordable 
        Housing Act;
          [(7) national geographic diversity among housing for 
        which applicants are selected to receive assistance; 
        and
          [(8) the extent to which a sufficient supply of 
        affordable rental housing exists in the locality, so 
        that the implementation of the homeownership program 
        will not reduce the number of such rental units 
        available to residents currently residing in such units 
        or eligible for residency in such units.
  [(f) Location Within Participating Jurisdictions.--The 
Secretary  may  approve  applications  for  grants  under  this 
 title only  for public housing projects located within the 
boundaries of jurisdictions--
          [(1) which are participating jurisdictions under 
        title III of the Cranston-Gonzalez National Affordable 
        Housing Act; or
          [(2) on behalf of which the agency responsible for 
        affordable housing has submitted a housing strategy or 
        plan.
  [(g) Approval.--The Secretary shall notify each applicant, 
not later than 6 months after the date of the submission of the 
application, whether the application is approved or not 
approved. The Secretary may approve the application for an 
implementation grant with a statement that the application for 
the section 8 assistance for replacement housing and for 
residents of the project not purchasing units is conditionally 
approved, subject to the availability of appropriations in 
subsequent fiscal years.

[SEC. 304. HOMEOWNERSHIP PROGRAM REQUIREMENTS.

  [(a) In General.--A homeownership program under this title 
shall provide for acquisition by eligible families of ownership 
interests in, or shares representing, at least one-half of the 
units in a public housing project under any arrangement 
determined by the Secretary to be appropriate, such as 
cooperative ownership (including limited equity cooperative 
ownership) and fee simple ownership (including condominium 
ownership), for occupancy by the eligible families.
  [(b) Affordability.--A homeownership program under this title 
shall provide for the establishment of sales prices (including 
principal, insurance, taxes, and interest and closing costs) 
for initial acquisition of the property from the public housing 
agency if the applicant is not a public housing agency, and for 
sales to eligible families, such that an eligible family shall 
not be required to expend more than 30 percent of the adjusted 
income of the family per month to complete a sale under the 
homeownership program.
  [(c) Plan.--A homeownership program under this title shall 
provide, and include a plan, for--
          [(1) identifying and selecting eligible families to 
        participate in the homeownership program;
          [(2) providing relocation assistance to families who 
        elect to move;
          [(3) ensuring continued affordability by tenants, 
        homebuyers, and homeowners in the project;
          [(4) providing ongoing training and counseling for 
        homebuyers and homeowners; and
          [(5) replacing units in eligible projects covered by 
        a homeownership program.
  [(d) Acquisition and Rehabilitation Limitations.--Acquisition 
or rehabilitation of public housing projects under a 
homeownership program under this title may not consist of 
acquisition or rehabilitation of less than the whole public 
housing project in a project consisting of more than 1 
building. The provisions of this subsection may be waived upon 
a finding by the Secretary that the sale of less than all the 
buildings in a project is feasible and will not result in a 
hardship to any tenants of the project who are not included in 
the homeownership program.
  [(e) Financing.--
          [(1) In general.--The application shall identify and 
        describe the proposed financing for (A) any 
        rehabilitation, and (B) acquisition (i) of the project, 
        where applicable, by an entity other than the public 
        housing agency for transfer to eligible families, and 
        (ii) by eligible families of ownership interests in, or 
        shares representing, units in the project. Financing 
        may include use of the implementation grant, sale for 
        cash, or other sources of financing (subject to 
        applicable requirements), including conventional 
        mortgage loans and mortgage loans insured under title 
        II of the National Housing Act.
          [(2) Prohibition against pledges.--Property 
        transferred under this title shall not be pledged as 
        collateral for debt or otherwise encumbered except when 
        the Secretary determines that--
                  [(A) such encumbrance will not threaten the 
                long-term availability of the property for 
                occupancy by low-income families;
                  [(B) neither the Federal Government nor the 
                public housing agency will be exposed to undue 
                risks related to action that may have to be 
                taken pursuant to paragraph (3);
                  [(C) any debt obligation can be serviced from 
                project income, including operating assistance; 
                and
                  [(D) the proceeds of such encumbrance will be 
                used only to meet housing standards in 
                accordance with subsection (f) or to make such 
                additional capital improvements as the 
                Secretary determines to be consistent with the 
                purposes of this title.
          [(3) Opportunity to cure.--Any lender that provides 
        financing in connection with a homeownership program 
        under this subtitle shall give the public housing 
        agency, resident management corporation, individual 
        owner, or other appropriate entity a reasonable 
        opportunity to cure a financial default before 
        foreclosing on the property, or taking other action as 
        a result of the default.
  [(f) Housing Quality Standards.--The application shall 
include a plan ensuring that the unit--
          [(1) will be free from any defects that pose a danger 
        to health or safety before transfer of an ownership 
        interest in, or shares representing, a unit to an 
        eligible family; and
          [(2) will, not later than 2 years after the transfer 
        to an eligible family, meet minimum housing standards 
        established by the Secretary for the purposes of this 
        title.
  [(h) Protection of Non-Purchasing Families.--
          [(1) In general.--No tenant residing in a dwelling 
        unit in a public housing project on the date the 
        Secretary approves an application for an implementation 
        grant may be evicted by reason of a homeownership 
        program approved under this title.
          [(2) Replacement assistance.--If the tenant decides 
        not to purchase a unit, or is not qualified to do so, 
        the recipient shall, during the term of any operating 
        assistance under the implementation grant, permit each 
        otherwise qualified tenant to continue to reside in the 
        project at rents that do not exceed levels consistent 
        with section 3(a) of this Act or, if an otherwise 
        qualified tenant chooses to move (at any time during 
        the term of such operating assistance contract), the 
        public housing agency shall, to the extent approved in 
        appropriations Acts, offer such tenant (A) a unit in 
        another public housing project, or (B) section 8 
        assistance for use in other housing.
          [(3) Relocation assistance.--The recipient shall also 
        inform each such tenant that if the tenant chooses to 
        move, the recipient will pay relocation assistance in 
        accordance with the approved homeownership program.
          [(4) Other rights.--Tenants renting a unit in a 
        project transferred under this title shall have all 
        rights provided to tenants of public housing under this 
        Act.

[SEC. 305. OTHER PROGRAM REQUIREMENTS.

  [(a) Sale by Public Housing Agency To Applicant or Other 
Entity Required.--Where the Secretary approves an application 
providing for the transfer of the eligible project from the 
public housing agency to another applicant, the public housing 
agency shall transfer the project to such other applicant, in 
accordance with the approved homeownership program.
  [(b) Preferences.--In selecting eligible families for 
homeownership, the recipient shall give a first preference to 
otherwise qualified current tenants and a second preference to 
otherwise qualified eligible families who have completed 
participation in an economic self-sufficiency program specified 
by the Secretary.
  [(c) Cost Limitations.--The Secretary may establish cost 
limitations on eligible activities under this title, subject to 
the provisions of this title.
  [(d) Annual Contributions.--Notwithstanding the purchase of a 
public housing project under this section, or the purchase of a 
unit in a public housing project by an eligible family, the 
Secretary shall continue to pay annual contributions with 
respect to the project. Such contributions may not exceed the 
maximum contributions authorized in section 5(a).
  [(e) Operating Subsidies.--Operating subsidies under section 
9 of this Act shall not be available with respect to a public 
housing project after the date of its sale by the public 
housing agency.
  [(f) Use of Proceeds From Sales to Eligible Families.--The 
entity that transfers ownership interests in, or shares 
representing, units to eligible families, or another entity 
specified in the approved application, shall use the proceeds, 
if any, from the initial sale for costs of the homeownership 
program, including operating expenses, improvements to the 
project, business opportunities for low-income families, 
supportive services related to the homeownership program, 
additional homeownership opportunities, and other activities 
approved by the Secretary.
  [(g) Restrictions on Resale by Homeowners.--
          [(1) In general.--
                  [(A) Transfer permitted.--A homeowner under a 
                homeownership program may transfer the 
                homeowner's ownership interest in, or shares 
                representing, the unit, except that a 
                homeownership program may establish 
                restrictions on the resale of units under the 
                program.
                  [(B) Right to purchase.--Where a resident 
                management corporation, resident council, or 
                cooperative has jurisdiction over the unit, the 
                corporation, council, or cooperative shall have 
                the right to purchase the ownership interest 
                in, or shares representing, the unit from the 
                homeowner for the amount specified in a firm 
                contract between the homeowner and a 
                prospective buyer. If such an entity does not 
                have jurisdiction over the unit or elects not 
                to purchase and if the prospective buyer is not 
                a low-income family, the public housing agency 
                or the implementation grant recipient shall 
                have the right to purchase the ownership 
                interest in, or shares representing, the unit 
                for the same amount.
                  [(C) Promissory note required.--The homeowner 
                shall execute a promissory note equal to the 
                difference between the market value and the 
                purchase price, payable to the public housing 
                agency or other entity designated in the 
                homeownership plan, together with a mortgage 
                securing the obligation of the note.
          [(2) 6 years or less.--In the case of a transfer 
        within 6 years of the acquisition under the program, 
        the homeownership program shall provide for appropriate 
        restrictions to assure that an eligible family may not 
        receive any undue profit. The plan shall provide for 
        limiting the family's consideration for its interest in 
        the property to the total of--
                  [(A) the contribution to equity paid by the 
                family;
                  [(B) the value, as determined by such means 
                as the Secretary shall determine through 
                regulation, of any improvements installed at 
                the expense of the family during the family's 
                tenure as owner; and
                  [(C) the appreciated value determined by an 
                inflation allowance at a rate which may be 
                based on a cost-of-living index, an income 
                index, or market index as determined by the 
                Secretary through regulation and agreed to by 
                the purchaser and the entity that transfers 
                ownership interests in, or shares representing, 
                units to eligible families (or another entity 
                specified in the approved application), at the 
                time of initial sale, and applied against the 
                contribution to equity.
        Such an entity may, at the time of initial sale, enter 
        into an agreement with the family to set a maximum 
        amount which this appreciation may not exceed.
          [(3) 6-20 years.--In the case of a transfer during 
        the period beginning 6 years after the acquisition and 
        ending 20 years after the acquisition, the 
        homeownership program shall provide for the recapture 
        by the Secretary or the program of an amount equal to 
        the amount of the declining balance on the note 
        described in paragraph (1)(C).
          [(4) Use of recaptured funds.--Fifty percent of any 
        portion of the net sales proceeds that may not be 
        retained by the homeowner under the plan approved 
        pursuant to this subsection shall be paid to the entity 
        that transferred ownership interests in, or shares 
        representing, units to eligible families, or another 
        entity specified in the approved application, for use 
        for improvements to the project, business opportunities 
        for low-income families, supportive services related to 
        the homeownership program, additional homeownership 
        opportunities, and other activities approved by the 
        Secretary. The remaining 50 percent shall be returned 
        to the Secretary for use under this subtitle, subject 
        to limitations contained in appropriations Acts. Such 
        entity shall keep and make available to the Secretary 
        all records necessary to calculate accurately payments 
        due the Secretary under this subsection.
  [(h) Third Party Rights.--The requirements under this title 
regarding quality standards, resale, or transfer of the 
ownership interest of a homeowner shall be judicially 
enforceable against the grant recipient with respect to actions 
involving rehabilitation, and against purchasers of property 
under this subsection or their successors in interest with 
respect to other actions by affected low-income families, 
resident management corporations, resident councils, public 
housing agencies, and any agency, corporation, or authority of 
the United States Government. The parties specified in the 
preceding sentence shall be entitled to reasonable attorney 
fees upon prevailing in any such judicial action.
  [(i) Dollar Limitation on Economic Development Activities.--
Not more than an aggregate of $250,000 from amounts made 
available under sections 302 and 303 may be used for economic 
development activities under sections 302(b)(6) and 303(b)(9) 
for any project.
  [(j) Timely Homeownership.--Recipients shall transfer 
ownership of the property to tenants within a specified period 
of time that the Secretary determines to be reasonable. During 
the interim period when the property continues to be operated 
and managed as rental housing, the recipient shall utilize 
written tenant selection policies and criteria that are 
consistent with the public housing program and that are 
approved by the Secretary as consistent with the purpose of 
improving housing opportunities for low-income families. The 
recipient shall promptly notify in writing any rejected 
applicant of the grounds for any rejection.
  [(k) Capability of Resident Management Corporations and 
Resident Councils.--To be eligible to receive a grant under 
section 303, a resident management corporation or resident 
council shall demonstrate to the Secretary its ability to 
manage public housing by having done so effectively and 
efficiently for a period of not less than 3 years or by 
arranging for management by a qualified management entity.
  [(l) Records and Audit of Recipients of Assistance.--
          [(1) In general.--Each recipient shall keep such 
        records as may be reasonably necessary to fully 
        disclose the amount and the disposition by such 
        recipient of the proceeds of assistance received under 
        this title (and any proceeds from financing obtained in 
        accordance with subsection (b) or sales under 
        subsections (f) and (g)(4)), the total cost of the 
        homeownership program in connection with which such 
        assistance is given or used, and the amount and nature 
        of that portion of the program supplied by other 
        sources, and such other sources as will facilitate an 
        effective audit.
          [(2) Access by the secretary.--The Secretary shall 
        have access for the purpose of audit and examination to 
        any books, documents, papers, and records of the 
        recipient that are pertinent to assistance received 
        under this title.
          [(3) Access by the comptroller general.--The 
        Comptroller General of the United States, or any of the 
        duly authorized representatives of the Comptroller 
        General, shall also have access for the purpose of 
        audit and examination to any books, documents, papers, 
        and records of the recipient that are pertinent to 
        assistance received under this title.

[SEC. 306. DEFINITIONS.

  [For purposes of this title:
          [(1) The term ``applicant'' means the following 
        entities that may represent the tenants of the project:
                  [(A) A public housing agency (including an 
                Indian housing authority).
                  [(B) A resident management corporation, 
                established in accordance with requirements of 
                the Secretary under section 20.
                  [(C) A resident council.
                  [(D) A cooperative association.
                  [(E) A public or private nonprofit 
                organization.
                  [(F) A public body, including an agency or 
                instrumentality thereof.
          [(2) The term ``eligible family'' means--
                  [(A) a family or individual who is a tenant 
                in the public or Indian housing project on the 
                date the Secretary approves an implementation 
                grant;
                  [(B) a low-income family; or
                  [(C) a family or individual who is assisted 
                under a housing program administered by the 
                Secretary or the Secretary of Agriculture (not 
                including any non-low income families assisted 
                under any mortgage insurance program 
                administered by either Secretary).
          [(3) The term ``homeownership program'' means a 
        program for homeownership meeting the requirements 
        under this title.
          [(4) The term ``recipient'' means an applicant 
        approved to receive a grant under this title or such 
        other entity specified in the approved application that 
        will assume the obligations of the recipient under this 
        title.
          [(5) The term ``resident council'' means any 
        incorporated nonprofit organization or association 
        that--
                  [(A) is representative of the tenants of the 
                housing;
                  [(B) adopts written procedures providing for 
                the election of officers on a regular basis; 
                and
                  [(C) has a democratically elected governing 
                board, elected by the tenants of the housing.

[SEC. 307. RELATIONSHIP TO OTHER HOMEOWNERSHIP OPPORTUNITIES.

  [The program authorized under this title shall be in addition 
to any other public housing homeownership and management 
opportunities, including opportunities under section 5(h) and 
title II of this Act.

[SEC. 308. LIMITATION ON SELECTION CRITERIA.

  [In establishing criteria for selecting applicants to receive 
assistance under this title, the Secretary may not establish 
any selection criterion or criteria that grant or deny such 
assistance to an applicant (or have the effect of granting or 
denying assistance) based on the implementation, continuation, 
or discontinuation of any public policy, regulation, or law of 
any jurisdiction in which the applicant or project is located.

[SEC. 309. ANNUAL REPORT.

  [The Secretary shall annually submit to the Congress a report 
setting forth--
          [(1) the number, type, and cost of public housing 
        units sold pursuant to this title;
          [(2) the income, race, gender, children, and other 
        characteristics of families participating (or not 
        participating) in homeownership programs funded under 
        this title;
          [(3) the amount and type of financial assistance 
        provided under and in conjunction with this title;
          [(4) the amount of financial assistance provided 
        under this title that was needed to ensure continued 
        affordability and meet future maintenance and repair 
        costs; and
          [(5) the recommendations of the Secretary for 
        statutory and regulatory improvements to the program.]
                              ----------                              


             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974

          * * * * * * *

                       TITLE II--ASSISTED HOUSING

          * * * * * * *

           [low-income housing for the elderly or handicapped

  [Sec. 209. The Secretary shall consult the Secretary of 
Health and Human Services to insure that special projects for 
elderly or disabled families authorized pursuant to United 
States Housing Act of 1937 shall meet acceptable standards of 
design and shall provide quality services and management 
consistent with the needs of the occupants. Such projects shall 
be specifically designed and equipped with such ``related 
facilities'' (as defined in section 202(d)(8) of the Housing 
Act of 1959) as may be necessary to accommodate the special 
environmental needs of the intended occupants and shall be in 
support of and supported by the applicable State plans for 
comprehensive services pursuant to section 134 of the Mental 
Retardation Facilities and Community Mental Health Center 
Construction Act of 1963 or State and area plans pursuant to 
title III of the Older Americans Act of 1965.]
          * * * * * * *

      [local housing assistance plans; allocation of housing funds

  [Sec. 213. (a)(1) The Secretary of Housing and Urban 
Development, upon receiving an application for housing 
assistance under the United States Housing Act of 1937, section 
101 of the Housing and Urban Development Act of 1965, or if the 
unit of general local government in which the proposed 
assistance is to be provided has an approved housing assistance 
plan, shall--
          [(A) not later than ten days after receipt of the 
        application, notify the chief executive officer of such 
        unit of general local government that such application 
        is under consideration; and
          [(B) afford such unit of general local government, 
        the opportunity, during the thirty-day period beginning 
        on the date of such notification, to object to the 
        approval of the application on the grounds that the 
        application is inconsistent with its housing assistance 
        plan.
Upon receiving an application for such housing assistance, the 
Secretary shall assure that funds made available under this 
section shall be utilized to the maximum extent practicable to 
meet the needs and goals identified in the unit of local 
government's housing assistance plan.
  [(2) If the unit of general local government objects to the 
application on the grounds that it is inconsistent with its 
housing assistance plan, the Secretary may not approve the 
application unless he determines that the application is 
consistent with such housing assistance plan. If the Secretary 
determines, that such application is consistent with the 
housing assistance plan, he shall notify the chief executive 
officer of the unit of general local government of his 
determination and the reasons therefor in writing. If the 
Secretary concurs with the objection of the unit of local 
government, he shall notify the applicant stating the reason 
therefor in writing.
  [(3) If the Secretary does not receive an objection by the 
close of the period referred to in paragraph (1)(B), he may 
approve the application unless he finds it inconsistent with 
the housing assistance plan. If the Secretary determines that 
an application is inconsistent with a housing assistance plan, 
he shall notify the applicant stating the reasons therefor in 
writing.
  [(4) The Secretary shall make the determinations referred to 
in paragraphs (2) and (3) within thirty days after he receives 
an objection pursuant to paragraph (1)(B) or within thirty days 
after the close of the period referred to in paragraph (1)(B), 
whichever is earlier.
  [(5) As used in this section, the term ``housing assistance 
plan'' means a housing assistance plan submitted and approved 
under section 104 of this Act or, in the case of a unit of 
general local government not participating under title I of 
this Act, a housing plan approved by the Secretary as meeting 
the requirements of this section. In developing a housing 
assistance plan under this paragraph a unit of general local 
government shall consult with local public agencies involved in 
providing for the welfare of children to determine the housing 
needs of (A) families identified by the agencies as having a 
lack of adequate housing that is a primary factor in the 
imminent placement of a child in foster care or in preventing 
the discharge of a child from foster care and reunification 
with his or her family; and (B) children who, upon discharge of 
the child from foster care, cannot return to their family or 
extended family and for which adoption is not available. The 
unit of general local government shall include in the housing 
assistance plan needs and goals with respect to such families 
and children.
  [(b) The provisions of subsection (a) shall not apply to--
          [(1) applications for assistance involving 12 or 
        fewer units in a single project or development;
          [(2) applications for assistance with respect to 
        housing in new community developments approved under 
        title IV of the Housing and Urban Development Act of 
        1968 or title VII of the Housing and Urban Development 
        Act of 1970 which the Secretary determines are 
        necessary to meet the housing requirements under such 
        title; or
          [(3) applications for assistance with respect to 
        housing financed by loans or loan guarantees from a 
        State or agency thereof, except that the provisions of 
        subsection (a) shall apply where the unit of general 
        local government in which the assistance is to be 
        provided objects in its housing assistance plan to the 
        exemption provided by this paragraph.
  [(c) For areas in which an approved local housing assistance 
plan is not applicable, the Secretary shall not approve an 
application for housing assistance unless he determines that 
there is a need for such assistance, taking into consideration 
any applicable State housing plans, and that there is or will 
be available in the area public facilities and services 
adequate to serve the housing proposed to be assisted. The 
Secretary shall afford the unit of general local government in 
which the assistance is to be provided an opportunity, during a 
30-day period following receipt of an application by him, to 
provide comments or information relevant to the determination 
required to be made by the Secretary under this subsection.
  [(d)(1)(A)(i) Except as provided by subparagraph (B), the 
Secretary shall allocate assistance referred to in subsection 
(a)(1) the first time it is available for reservation on the 
basis of a formula that is contained in a regulation prescribed 
by the Secretary, and that is based on the relative needs of 
different States, areas, and communities, as reflected in data 
as to population, poverty, housing overcrowding, housing 
vacancies, amount of substandard housing, and other objectively 
measurable conditions specified in the regulation. The 
Secretary may allocate assistance under the preceding sentence 
in such a manner that each State shall receive not less than 
one-half of one percent of the amount of funds available for 
each program referred to in subsection (a)(1) in each fiscal 
year. In allocating assistance under this paragraph for each 
program of housing assistance under subsection (a)(1), the 
Secretary shall apply the formula, to the extent practicable, 
in a manner so that the assistance under the program is 
allocated according to the particular relative needs under the 
preceding sentence that are characteristic of and related to 
the particular type of assistance provided under the program. 
Assistance under section 202 of the Housing Act of 1959 shall 
be allocated in a manner that ensures that awards of the 
assistance under such section are made for projects of 
sufficient size to accommodate facilities for supportive 
services appropriate to the needs of frail elderly residents.
  [(ii) Assistance under section 8(b)(1) of the United States 
Housing Act of 1937 shall be allocated in a manner that enables 
participating jurisdictions to carry out, to the maximum extent 
practicable, comprehensive housing affordability strategies 
approved in accordance with section 105 of the Cranston-
Gonzalez National Affordable Housing Act. Such jurisdictions 
shall submit recommendations for allocating assistance under 
such section 8(b)(1) to the Secretary in accordance with 
procedures that the Secretary determines to be appropriate to 
permit allocations of such assistance to be made on the basis 
of timely and complete information. This clause may not be 
construed to prevent, alter, or otherwise affect the 
application of the formula established pursuant to clause (i) 
for purposes of allocating such assistance. For purposes of 
this clause, the term ``participating jurisdiction'' means a 
State or unit of general local government designated by the 
Secretary to be a participating jurisdiction under title II of 
the Cranston-Gonzalez National Affordable Housing Act. The 
preceding sentence shall not apply to projects acquired from 
the Resolution Trust Corporation under section 21A(c) of the 
Federal Home Loan Bank Act.
  [(B) The formula allocation requirements of subparagraph (A) 
shall not apply to--
          [(i) assistance that is approved in appropriation 
        Acts for use under sections 9 or 14, or the rental 
        rehabilitation grant program under section 17, of the 
        United States Housing Act of 1937, except that the 
        Secretary shall comply with section 102 of the 
        Department of Housing and Urban Development Reform Act 
        of 1989 with respect to such assistance; or
          [(ii) other assistance referred to in subsection (a) 
        that is approved in appropriation Acts for uses that 
        the Secretary determines are incapable of geographic 
        allocation, including amendments of existing contracts, 
        renewal of assistance contracts, assistance to families 
        that would otherwise lose assistance due to the 
        decision of the project owner to prepay the project 
        mortgage or not to renew the assistance contract, 
        assistance to prevent displacement or to provide 
        replacement housing in connection with the demolition 
        or disposition of public and Indian housing, and 
        assistance in support of the property disposition and 
        loan management functions of the Secretary.
  [(C) Any allocation of assistance under subparagraph (A) 
shall, as determined by the Secretary, be made to the smallest 
practicable area, consistent with the delivery of assistance 
through a meaningful competitive process designed to serve 
areas with greater needs.
  [(D) Any amounts allocated to a State or areas or communities 
within a State that are not likely to be used within a fiscal 
year shall not be reallocated for use in another State, unless 
the Secretary determines that other areas or communities (that 
are eligible for assistance under the program) within the same 
State cannot use the amounts within that same fiscal year.
  [(2) Not later than sixty days after approval in an 
appropriation Act, the Secretary shall allocate from the 
amounts available for use in nonmetropolitan areas an amount of 
authority for assistance under section 8(d) of the United 
States Housing Act of 1937 determined in consultation with the 
Secretary of Agriculture for use in connection with section 533 
of the Housing Act of 1949 during the fiscal year for which 
such authority is approved. The amount of assistance allocated 
to nonmetropolitan areas pursuant to this section in any fiscal 
year shall not be less than 20 nor more than 25 per centum of 
the total amount of the assistance that is subject to 
allocation under paragraph (1)(A).
  [(3) The Secretary may reserve such housing assistance funds 
as he deems appropriate for use by a State or agency thereof.
  [(4)(A) Notwithstanding any other provision of law, with 
respect to fiscal years beginning after September 30, 1990, the 
Secretary may retain not more than 5 percent of the financial 
assistance that becomes available under programs described in 
subsection (a)(1) during any fiscal year. Any such financial 
assistance that is retained shall be available for subsequent 
allocation to specific areas and communities, and may only be 
used for--
          [(i) unforeseen housing needs resulting from natural 
        and other disasters;
          [(ii) housing needs resulting from emergencies, as 
        certified by the Secretary, other than such disasters;
          [(iii) housing needs resulting from the settlement of 
        litigation; and
          [(iv) housing in support of desegregation efforts.
  [(B) Any amounts retained in any fiscal year under 
subparagraph (A) that are unexpended at the end of such fiscal 
year shall remain available for the following fiscal year under 
the program under subsection (a)(1) from which the amount was 
retained. Such amounts shall be allocated on the basis of the 
formula under subsection (d)(1).
  [(5)(A) The Secretary shall not reserve or obligate 
assistance subject to allocation under paragraph (1)(A) to 
specific recipients, unless the assistance is first allocated 
on the basis of the formula contained in that paragraph and 
then is reserved and obligated pursuant to a competition.
  [(B) Any competition referred to in subparagraph (A) shall be 
conducted pursuant to specific criteria; for the selection of 
recipients of assistance. The criteria shall be contained in--
          [(i) a regulation promulgated by the Secretary after 
        notice and public comment; or
          [(ii) to the extent authorized by law, a notice 
        published in the Federal Register.
  [(C) Subject to the times at which appropriations for 
assistance subject to paragraph (1)(A) may become available for 
reservation in any fiscal year, the Secretary shall take such 
steps as the Secretary deems appropriate to ensure that, to the 
maximum extent practicable, the process referred to in 
subparagraph (A) is carried out with similar frequency and at 
similar times for each fiscal year.
  [(D) This paragraph shall not apply to assistance referred to 
in paragraph (4).
  [(e) From budget authority made available in appropriation 
Acts for fiscal year 1988, the Secretary shall enter into an 
annual contributions contract for a term of 180 months to 
obligate sufficient funds to provide assistance payments 
pursuant to section 8(b)(1) of the United States Housing Act of 
1937 on behalf of 500 lower income families from budget 
authority made available for fiscal year 1988, so long as such 
families occupy properties in the Park Central New Community 
Project or in adjacent areas that are recognized by the unit of 
general local government in which such Project is located as 
being included within the Park Central New Town In Town 
Project. If a lower income family receiving assistance payments 
pursuant to this subsection ceases to qualify for assistance 
payments pursuant to the provisions of section 8 of such Act or 
of this subsection during the 180-month term of the annual 
contributions contract, assistance payments shall be made on 
behalf of another lower income family who occupies a unit 
identified in the previous sentence.]
          * * * * * * *
                              ----------                              


           CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT

          * * * * * * *

                      TITLE V--HOUSING ASSISTANCE

                 Subtitle A--Public and Indian Housing

          * * * * * * *

[SEC. 518. INDIAN PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT 
                    DEMONSTRATION PROGRAM.

  [(a) Funding.--To the extent provided in appropriation Acts, 
of any amounts appropriated under section 5(c) of the United 
States Housing Act of 1937 for fiscal year 1993 for public 
housing grants for Indian housing, $5,200,000 may be used to 
carry out the demonstration program under this section. To the 
extent provided in appropriation Acts, of any amounts 
appropriated under section 5(c) of the United States Housing 
Act of 1937 for fiscal year 1994 for public housing grants for 
Indian housing, $5,418,400 may be used to carry out the 
demonstration program under this section. Under the 
demonstration, the Secretary shall make grants to nonprofit 
organizations, Indian housing authorities, and Indian tribes to 
assist such organizations, housing authorities, and tribes in 
providing early childhood development services in or near low-
income housing developed or operated pursuant to a contract 
between the Secretary of Housing and Urban Development and an 
Indian housing authority for low-income families who reside in 
such Indian public housing.
  [(b) Operation of Demonstration.--Except as provided in this 
section, the Secretary of Housing and Urban Development shall 
carry out the demonstration program under this section in low-
income housing developed or operated pursuant to a contract 
between the Secretary and an Indian housing authority in the 
same manner as the demonstration program under section 222 of 
the Housing and Urban-Rural Recovery Act of 1983 is carried 
out. For purposes of this section, any reference to ``public 
housing'' or a ``low income housing project'' in section 222 of 
such Act is deemed to refer to low-income housing developed or 
operated pursuant to a contract between the Secretary and an 
Indian housing authority.
  [(c) Limitations.--
          [(1) Tribal diversity.--The Secretary of Housing and 
        Urban Development shall provide that the demonstration 
        program under this section is carried out in not more 
        than 1 Indian public housing project for any single 
        Indian tribe.
          [(2) Geographic diversity.--The Secretary of Housing 
        and Urban Development shall carry out the demonstration 
        program under this section through various Indian 
        housing authorities and provide for geographic 
        distribution among such housing authorities.
  [(d) Report.--
          [(1) In general.--Not later than the expiration of 
        the 3-year period beginning on the date of the 
        enactment of this Act, the Secretary of Housing and 
        Urban Development shall prepare and submit to the 
        Congress a detailed report setting forth the findings 
        and conclusions of the Secretary as a result of 
        carrying out the demonstration program established in 
        this section. Such report shall include any 
        recommendations of the Secretary with respect to the 
        establishment of a permanent program of assisting early 
        childhood development services in or near low-income 
        housing developed or operated pursuant to a contract 
        between the Secretary and an Indian housing authority.
          [(2) Conforming provision.--Notwithstanding 
        subsection (b) of this section, section 222(e) of the 
        Housing and Urban-Rural Recovery Act of 1983 (regarding 
        submission of a report) shall not apply to this section 
        and the demonstration program carried out under this 
        section.

[SEC. 519. PUBLIC HOUSING RENT WAIVER FOR POLICE OFFICERS.

  [(a) Authority.--Notwithstanding any other provision of law, 
the Secretary of Housing and Urban Development may permit 
public housing agencies to allow police officers and other 
security personnel (who are not otherwise eligible for 
residence in public housing) to reside in public housing 
dwelling units in accordance with this section.
  [(b) Plan.--To be eligible to utilize dwelling units as 
provided under this section, a public housing agency shall 
submit to the Secretary a plan identifying the projects in 
which the police officers or security personnel will reside and 
describing the anticipated benefits from such residence.
  [(c) Approval.--The Secretary may approve a plan and 
authorize the use of dwelling units under this section only if 
the Secretary determines that such use will--
          [(1) increase security for other public housing 
        residents;
          [(2) result in a limited loss of income to the public 
        housing agency; and
          [(3) not result in a significant reduction of units 
        available for residence by families eligible for such 
        residence under the provisions of the United States 
        Housing Act of 1937.
The Secretary shall notify each public housing agency 
submitting a plan under subsection (b) of approval or 
disapproval of the plan not later than 30 days after the 
Secretary receives the plan.
    [(d) Terms.--Upon approving a plan under subsection (b), 
the Secretary shall waive the applicability of any occupancy 
requirements with respect to the officers or other personnel, 
and may permit the public housing agency submitting the plan to 
establish such special rent requirements and other terms and 
conditions of occupancy that the Secretary considers 
appropriate.

[SEC. 520. PUBLIC AND ASSISTED HOUSING YOUTH SPORTS PROGRAMS.

  [(a) Public Housing Youth Sports Program Grants.--From 
amounts provided for public and assisted housing drug 
elimination grants under section 5130(a) of the Anti-Drug Abuse 
Act of 1988, the Secretary of Housing and Urban Development may 
make grants to qualified entities under subsection (b) to carry 
out youth sports programs for residents of projects of public 
housing agencies with substantial drug problems.
  [(b) Entities Qualified To Receive Grants.--Grants under this 
section may be made only to--
          [(1) States;
          [(2) units of general local government;
          [(3) local park and recreation districts and 
        agencies;
          [(4) public housing agencies;
          [(5) nonprofit organizations and institutions of 
        higher learning providing youth sports services 
        programs;
          [(6) Indian tribes;
          [(7) Indian housing authorities; and
          [(8) institutions of higher learning that have never 
        participated in a youth sports program assisted under 
        this section.
  [(c) Use of Grants.--
          [(1) Public housing sites with substantial drug 
        problems.--Grants under this section shall be used for 
        youth sports programs only with respect to public 
        housing sites that the Secretary determines have a 
        substantial problem regarding the use or sale of 
        illegal drugs.
          [(2) Youth sports program eligibility.--To be 
        eligible to receive assistance from a grant under this 
        section, a youth sports program shall be designed and 
        organized as follows:
                  [(A) The sports program shall serve primarily 
                youths from the public housing project in which 
                the program assisted by the grant is operated.
                  [(B) The sports program shall provide 
                positive sports activities or positive 
                cultural, recreational, or other activities, 
                designed to appeal to youths as alternatives to 
                the drug environment in the public housing 
                project.
                  [(C) The sports program shall be operated as, 
                in conjunction with, or in furtherance of, an 
                organized program or plan designed to eliminate 
                drugs and drug-related problems in the public 
                housing project or projects within the public 
                housing agency.
          [(3) Midnight basketball league programs.--
        Notwithstanding any other provision of this subsection 
        and subsection (d), a grant under this section may be 
        used to carry out any youth sports program that meets 
        the requirements of a midnight basketball league 
        program under subsection (l)(4) (not including 
        subparagraph (B) of such subsection) if the program 
        serves primarily youths and young adults from the 
        public housing project in which the program assisted by 
        the grant is operated.
  [(d) Eligible Activities.--Any qualified entity that receives 
a grant under this section may use amounts from the grant to 
assist in carrying  out  a  youth  sports  program  in  any  of 
 the  following manners:
          [(1) Acquisition, construction, or rehabilitation of 
        community centers, parks, or playgrounds.
          [(2) Redesigning or modifying public spaces in public 
        housing projects to provide increased utilization of 
        the areas by youth sports programs.
          [(3) Provision of public services, including salaries 
        and expenses for staff of youth sports programs, 
        cultural activities, transportation costs, educational 
        programs relating to drug abuse, and sports and 
        recreation equipment.
          [(4) In the case only of an eligible entity described 
        in subsection (b)(8), any transportation costs in 
        connection with the program.
  [(e) Grant Amount Limitations.--
          [(1) Matching amount.--The Secretary may not make a 
        grant to any qualified entity that applies for a grant 
        under subsection (f) unless the applicant entity 
        certifies to the Secretary, as the Secretary shall 
        require, that the applicant will supplement the amount 
        provided by the grant with an amount of funds from non-
        Federal sources equal to or greater than 50 percent of 
        the amount provided by the grant.
          [(2) Non-federal funds.--For purposes of this 
        subsection, the term ``funds from non-Federal sources'' 
        includes funds from States, units of general local 
        governments, or agencies of such governments, Indian 
        tribes, private contributions, any salary paid to staff 
        to carry out the youth sports program of the recipient, 
        the value of the time and services contributed by 
        volunteers to carry out the program of the recipient at 
        a rate determined by the Secretary, the value of any 
        donated material, equipment, or building, and the value 
        of any lease on a building.
          [(3) Prohibition of substitution of funds.--Neither 
        amounts received from grants under this section nor any 
        State or local government funds used to supplement such 
        amounts may be used to replace other public funds 
        previously used, or designated for use, for the 
        purposes under this Act.
          [(4) Maximum annual grant amount.--For any single 
        fiscal year, the Secretary may not award grants under 
        this section for carrying out a youth sports program 
        with respect to any single public housing project in an 
        amount exceeding $125,000.
  [(f) Applications.--To be eligible to receive a grant under 
this section, a qualified entity under subsection (b) shall 
submit to the Secretary an application as the Secretary may 
require, which shall include the following:
          [(1) A description of the organization of the youth 
        sports program.
          [(2) A description of the nature of services provided 
        by the youth sports program.
          [(3) An estimate of the number of youth involved.
          [(4) A description of the extent of involvement of 
        local sports organizations or sports figures.
          [(5) A description of the facilities used.
          [(6) A description of plans to continue the youth 
        sports program in the future.
          [(7) A statement regarding the extent to which the 
        youth sports program meets the criteria for selection 
        under subsection (g).
          [(8) A description of the planned schedule and 
        activities of the youth sports program and the 
        financial and other resources committed to each 
        activity and service of the program.
          [(9) A budget describing the share of the costs of 
        the youth sports program provided by the grant under 
        this section and other sources of funds, including 
        funds required under subsection (e)(1).
          [(10) Any other information that the Secretary may 
        require.
  [(g) Selection Criteria.--The Secretary shall select 
qualified entities that have applied under subsection (f) to 
receive grants under this section pursuant to a competition 
based on the following criteria:
          [(1) The extent to which the youth sports program to 
        be assisted with the grant addresses the particular 
        needs of the area to be served by the program and 
        employs methods, approaches, or ideas in the design or 
        implementation of the program particularly suited to 
        fulfilling such needs (whether such methods are 
        conventional or unique and innovative).
          [(2) The technical merit of the application of the 
        qualified entity.
          [(3) The qualifications, capabilities, and experience 
        of the personnel and staff of the sports program who 
        are critical to achieving the objectives of the program 
        as described in the application.
          [(4) The capabilities, related experience, 
        facilities, techniques of the applicant for carrying 
        out the youth sports program and achieving the 
        objectives of the program as described in the 
        application and the potential of the applicant for 
        continuing the youth sports program.
          [(5) The severity of the drug problem at the local 
        public housing site for the youth sports program and 
        the extent of any planned or actual efforts to rid the 
        site of the problem.
          [(6) The extent to which local sports organizations 
        or sports figures are involved.
          [(7) The extent of the support of the public housing 
        agency for the program, coordination of proposed 
        activities with local resident management groups or 
        associations (where such groups exist) and coordination 
        of proposed activities with ongoing programs of the 
        applicant that further the purposes of this section.
          [(8) The extent of non-Federal contributions that 
        exceed the amount of such funds required under 
        subsection (e)(1).
          [(9) In the case of a qualified entity under 
        paragraph (3) or (4) of subsection (b), the extent to 
        which the applicant has demonstrated local government 
        support for the program.
  [(h) Report.--Each qualified entity that receives a grant 
under this section shall submit to the Secretary, not later 
than the expiration of the 90-day period beginning on the date 
on which the grant amounts provided under this section are 
fully expended, a report describing the activities carried out 
with the grant.
  [(i) Definitions.--For purposes of this section:
          [(1) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given such term in section 102(a)(17) of the 
        Housing and Community Development Act of 1974.
          [(2) Public housing agency.--The term ``public 
        housing agency'' has the meaning given the term in 
        section 3(b) of the United States Housing Act of 1937 
        (42 U.S.C. 1437a(b)).
          [(3) Public housing project.--The terms ``project'' 
        and ``public housing'' have the meanings given the 
        terms in section 3(6) of the United States Housing Act 
        of 1937 (42 U.S.C. 1437a(b)).
          [(4) Qualified entity.--The term ``qualified entity'' 
        means an entity eligible under subsection (b) to apply 
        for and receive a grant under this section.
          [(5) State.--The term ``State'' means the States of 
        the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Commonwealth of the 
        Northern Mariana Islands, Guam, the Virgin Islands, 
        American Samoa, the Trust Territory of the Pacific 
        Islands, and any other territory or possession of the 
        United States.
          [(6) Unit of general local government.--The term 
        ``unit of general local government'' means any city, 
        town, township, county, parish, village, or other 
        general purpose political subdivision of a State.
          [(7) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.
  [(j) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this section.
  [(k) Authorization of Appropriations.--Section 5129 of the 
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11908), as amended by 
the preceding provisions of this Act, is further amended by 
inserting after the first sentence the following new sentence:  
* * *
  [(l) Midnight Basketball League Training and Partnership 
Programs.--
          [(1) Authority.--The Secretary shall make grants, to 
        the extent that amounts are approved in appropriations 
        Acts under paragraph (13), to--
                  [(A) eligible entities to assist such 
                entities in carrying out midnight basketball 
                league programs meeting the requirements of 
                paragraph (4); and
                  [(B) eligible advisory entities to provide 
                technical assistance to eligible entities in 
                establishing and operating such midnight 
                basketball league programs.
          [(2) Eligible entities.--
                  [(A) In general.--Subject to subparagraph 
                (B), grants under paragraph (1)(A) may be made 
                only to the following eligible entities:
                          [(i) Entities eligible under 
                        subsection (b) for a grant under 
                        subsection (a).
                          [(ii) Nonprofit organizations 
                        providing employment counseling, job 
                        training, or other educational 
                        services.
                          [(iii) Nonprofit organizations 
                        providing federally assisted low-income 
                        housing.
                  [(B) Prohibition on second grants.--A grant 
                under paragraph (1)(A) may not be made to an 
                eligible entity if the entity has previously 
                received a grant under such paragraph, except 
                that the Secretary may exempt an eligible 
                advisory entity from the prohibition under this 
                subparagraph in extraordinary circumstances.
          [(3) Use of grant amounts.--Any eligible entity that 
        receives a grant under paragraph (1)(A) may use such 
        amounts only--
                  [(A) to establish or carry out a midnight 
                basketball league program under paragraph (4);
                  [(B) for salaries for administrators and 
                staff of the program;
                  [(C) for other administrative costs of the 
                program, except that not more than 5 percent of 
                the grant amount may be used for such 
                administrative costs; and
                  [(D) for costs of training and assistance 
                provided under paragraph (4)(I).
          [(4) Program requirements.--Each eligible entity 
        receiving a grant under paragraph (1)(A) shall 
        establish a midnight basketball league program as 
        follows:
                  [(A) The program shall establish a basketball 
                league of not less than 8 teams having 10 
                players each.
                  [(B) Not less than 50 percent of the players 
                in the basketball league shall be residents of 
                federally assisted low-income housing or 
                members of low-income families (as such term is 
                defined in section 3(b) of the United States 
                Housing Act of 1937).
                  [(C) The program shall be designed to serve 
                primarily youths and young adults from a 
                neighborhood or community whose population has 
                not less than 2 of the following 
                characteristics (in comparison with national 
                averages):
                          [(i) A substantial problem regarding 
                        use or sale of illegal drugs.
                          [(ii) A high incidence of crimes 
                        committed by youths or young adults.
                          [(iii) A high incidence of persons 
                        infected with the human 
                        immunodeficiency virus or sexually 
                        transmitted diseases.
                          [(iv) A high incidence of pregnancy 
                        or a high birth rate, among 
                        adolescents.
                          [(v) A high unemployment rate for 
                        youths and young adults.
                          [(vi) A high rate of high school 
                        drop-outs.
                  [(D) The program shall require each player in 
                the league to attend employment counseling, job 
                training, and other educational classes 
                provided under the program, which shall be held 
                immediately following the conclusion of league 
                basketball games at or near the site of the 
                games and at other specified times.
                  [(E) The program shall serve only youths and 
                young adults who demonstrate a need for such 
                counseling, training, and education provided by 
                the program, in accordance with criteria for 
                demonstrating need, which shall be established 
                by the Secretary, in consultation with the 
                Advisory Committee.
                  [(F) The majority of the basketball games of 
                the league shall be held between the hours of 
                10:00 p.m. and 2:00 a.m. at a location in the 
                neighborhood or community served by the 
                program.
                  [(G) The program shall obtain sponsors for 
                each team in the basketball league. Sponsors 
                shall be private individuals or businesses in 
                the neighborhood or community served by the 
                program who make financial contributions to the 
                program and participate in or supplement the 
                employment, job training, and educational 
                services provided to the players under the 
                program with additional training or educational 
                opportunities.
                  [(H) The program shall comply with any 
                criteria established by the Secretary, in 
                consultation with the Advisory Committee 
                established under paragraph (9).
                  [(I) Administrators or organizers of the 
                program shall receive training and technical 
                assistance provided by eligible advisory 
                entities receiving grants under paragraph (8).
          [(5) Grant amount limitations.--
                  [(A) Private contributions.--The Secretary 
                may not make a grant under paragraph (1)(A) to 
                an eligible entity that applies for a grant 
                under paragraph (6) unless the applicant entity 
                certifies to the Secretary that the entity will 
                supplement the grant amounts with amounts of 
                funds from non-Federal sources, as follows:
                          [(i) In each of the first 2 years 
                        that amounts from the grant are 
                        disbursed (under subparagraph (E)), an 
                        amount sufficient to provide not less 
                        than 35 percent of the cost of carrying 
                        out the midnight basketball league 
                        program.
                          [(ii) In each of the last 3 years 
                        that amounts from the grant are 
                        disbursed, an amount sufficient to 
                        provide not less than 50 percent of the 
                        cost of carrying out the midnight 
                        basketball league program.
                  [(B) Non-federal funds.--For purposes of this 
                paragraph, the term ``funds from non-Federal 
                sources'' includes amounts from nonprofit 
                organizations, public housing agencies, States, 
                units of general local government, and Indian 
                housing authorities, private contributions, any 
                salary paid to staff (other than from grant 
                amounts under paragraph (1)(A)) to carry out 
                the program of the eligible entity, in-kind 
                contributions to carry out the program (as 
                determined by the Secretary after consultation 
                with the Advisory Committee), the value of any 
                donated material, equipment, or building, the 
                value of any lease on a building, the value of 
                any utilities provided, and the value of any 
                time and services contributed by volunteers to 
                carry out the program of the eligible entity.
                  [(C) Prohibition on substitution of funds.--
                Grant amounts under paragraph (1)(A) and 
                amounts provided by States and units of general 
                local government to supplement grant amounts 
                may not be used to replace other public funds 
                previously used, or designated for use, under 
                this section.
                  [(D) Maximum and minimum grant amounts.--
                          [(i) In general.--The Secretary may 
                        not make a grant under paragraph (1)(A) 
                        to any single eligible entity in an 
                        amount less than $55,000 or exceeding 
                        $130,000, except as provided in clause 
                        (ii).
                          [(ii) Exception for large leagues.--
                        In the case of a league having more 
                        than 80 players, a grant under 
                        paragraph (1)(A) may exceed $130,000, 
                        but may not exceed the amount equal to 
                        35 percent of the cost of carrying out 
                        the midnight basketball league program.
                  [(E) Disbursement.--Amounts provided under a 
                grant under paragraph (1)(A) shall be disbursed 
                to the eligible entity receiving the grant over 
                the 5-year period beginning on the date that 
                the entity is selected to receive the grant, as 
                follows:
                          [(i) In each of the first 2 years of 
                        such 5-year period, 23 percent of the 
                        total grant amount shall be disbursed 
                        to the entity.
                          [(ii) In each of the last 3 years of 
                        such 5-year period, 18 percent of the 
                        total grant amount shall be disbursed 
                        to the entity.
          [(6) Applications.--To be eligible to receive a grant 
        under paragraph (1)(A), an eligible entity shall submit 
        to the Secretary an application in the form and manner 
        required by the Secretary (after consultation with the 
        Advisory Committee), which shall include--
                  [(A) a description of the midnight basketball 
                league program to be carried out by the entity, 
                including a description of the employment 
                counseling, job training, and other educational 
                services to be provided;
                  [(B) letters of agreement from service 
                providers to provide training and counseling 
                services required under paragraph (4) and a 
                description of such service providers;
                  [(C) letters of agreement providing for 
                facilities for basketball games and counseling, 
                training, and educational services required 
                under paragraph (4) and a description of the 
                facilities;
                  [(D) a list of persons and businesses from 
                the community served by the program who have 
                expressed interest in sponsoring, or have made 
                commitments to sponsor, a team in the midnight 
                basketball league; and
                  [(E) evidence that the neighborhood or 
                community served by the program meets the 
                requirements of paragraph (4)(C).
          [(7) Selection.--The Secretary, in consultation with 
        the Advisory Committee, shall select eligible entities 
        that have submitted applications under paragraph (6) to 
        receive grants under paragraph (1)(A). The Secretary, 
        in consultation with the Advisory Committee, shall 
        establish criteria for selection of applicants to 
        receive such grants. The criteria shall include a 
        preference for selection of eligible entities carrying 
        out midnight basketball league programs in suburban and 
        rural areas.
          [(8) Technical assistance grants.--Technical 
        assistance grants under paragraph (1)(B) shall be made 
        as follows:
                  [(A) Eligible advisory entities.--Technical 
                assistance grants may be made only to entities 
                that--
                          [(i) are experienced and have 
                        expertise in establishing, operating, 
                        or administering successful and 
                        effective programs for midnight 
                        basketball and employment, job 
                        training, and educational services 
                        similar to the programs under paragraph 
                        (4); and
                          [(ii) have provided technical 
                        assistance to other entities regarding 
                        establishment and operation of such 
                        programs.
                  [(B) Use.--Amounts received under technical 
                assistance grants shall be used to establish 
                centers for providing technical assistance to 
                entities receiving grants under paragraph 
                (1)(A) of this subsection and subsection (a) 
                regarding establishment, operation, and 
                administration of effective and successful 
                midnight basketball league programs under this 
                subsection and subsection (c)(3).
                  [(C) Number and amount.--To the extent that 
                amounts are provided in appropriations Acts 
                under paragraph (13)(B) in each fiscal year, 
                the Secretary shall make technical assistance 
                grants under paragraph (1)(B). In each fiscal 
                year that such amounts are available the 
                Secretary shall make 4 such grants, as follows:
                          [(i) 2 grants shall be made to 
                        eligible advisory entities for 
                        development of midnight basketball 
                        league programs in public housing 
                        projects.
                          [(ii) 2 grants shall be made to 
                        eligible advisory entities for 
                        development of midnight basketball 
                        league programs in suburban or rural 
                        areas.
                          [(iii) Each grant shall be in an 
                        amount not exceeding $25,000.
          [(9) Advisory committee.--The Secretary of Housing 
        and Urban Development shall appoint an Advisory 
        Committee to assist the Secretary in providing grants 
        under this subsection. The Advisory Committee shall be 
        composed of not more than 7 members, as follows:
                  [(A) Not less than 2 individuals who are 
                involved in managing or administering midnight 
                basketball programs that the Secretary 
                determines have been successful and effective. 
                Such individuals may not be involved in a 
                program assisted under this subsection or a 
                member or employee of an eligible advisory 
                entity that receives a technical assistance 
                grant under paragraph (1)(B).
                  [(B) A representative of the Center for 
                Substance Abuse Prevention of the Public Health 
                Service, Department of Health and Human 
                Services, who is involved in administering the 
                grant program for prevention, treatment, and 
                rehabilitation model projects for high risk 
                youth under section 509A of the Public Health 
                Service Act (42 U.S.C. 290aa-8), who shall be 
                selected by the Secretary of Health and Human 
                Services.
                  [(C) A representative of the Department of 
                Education, who shall be selected by the 
                Secretary of Education.
                  [(D) A representative of the Department of 
                Health and Human Services, who shall be 
                selected by the Secretary of Health and Human 
                Services from among officers and employees of 
                such Department involved in issues relating to 
                high-risk youth.
          [(10) Reports.--The Secretary shall require each 
        eligible entity receiving a grant under paragraph 
        (1)(A) and each eligible advisory entity receiving a 
        grant under paragraph (1)(B) to submit to the 
        Secretary, for each year in which grant amounts are 
        received by the entity, a report describing the 
        activities carried out with such amounts.
          [(11) Study.--To the extent amounts are provided 
        under appropriation Acts pursuant to paragraph (13)(C), 
        the Secretary shall make a grant to one entity 
        qualified to carry out a study under this paragraph. 
        The entity shall use such grant amounts to carry out a 
        scientific study of the effectiveness of midnight 
        basketball league programs under paragraph (4) of 
        eligible entities receiving grants under paragraph 
        (1)(A). The Secretary shall require such entity to 
        submit a report describing the study and any 
        conclusions and recommendations resulting from the 
        study to the Congress and the Secretary not later than 
        the expiration of the 2-year period beginning on the 
        date that the grant under this paragraph is made.
          [(12) Definitions.--For purposes of this subsection:
                  [(A) The term ``Advisory Committee'' means 
                the Advisory Committee established under 
                paragraph (9).
                  [(B) The term ``eligible advisory entity'' 
                means an entity meeting the requirements under 
                paragraph (8)(A).
                  [(C) The term ``eligible entity'' means an 
                entity described under paragraph (2)(A).
                  [(D) The term ``federally assisted low-income 
                housing'' has the meaning given the term in 
                section 5126 of the Public and Assisted Housing 
                Drug Elimination Act of 1990.
                  [(E) The term ``Secretary'' unless otherwise 
                specified, means the Secretary of Housing and 
                Urban Development.
          [(13) Authorization of appropriations.--There are 
        authorized to be appropriated--
                  [(A) for grants under paragraph (1)(A), 
                $2,650,000 in each of fiscal years 1994 and 
                1995;
                  [(B) for technical assistance grants under 
                paragraph (1)(B), $100,000 in each of fiscal 
                years 1994 and 1995; and
                  [(C) for a study grant under paragraph (11), 
                $250,000 in fiscal year 1994.

[SEC. 521. PUBLIC HOUSING ONE-STOP PERINATAL SERVICES DEMONSTRATION.

  [(a) Establishment of Demonstration Program.--
          [(1) In general.--The Secretary of Housing and Urban 
        Development, in consultation with the Secretary of 
        Health and Human Services, shall carry out a program to 
        demonstrate the effectiveness of providing grants to 
        public housing agencies to assist such agencies in 
        providing facilities for making one-stop perinatal 
        services programs (as defined in subsection (e)(1)) 
        available for pregnant women who reside in public 
        housing. Under the demonstration program, the Secretary 
        shall make grants to not more than 10 public housing 
        agencies.
          [(2) Consultation requirements.--In carrying out the 
        demonstration program under this section, the Secretary 
        shall consult with the heads of other appropriate 
        Federal agencies.
  [(b) Allocation of Assistance.--
          [(1) Preferences.--In selecting public housing 
        agencies for grants under this section, the Secretary 
        shall give preference to the following public housing 
        agencies:
                  [(A) Areas with high infant mortality 
                rates.--Public housing agencies serving areas 
                with high infant mortality rates.
                  [(B) Secure facilities.--Public housing 
                agencies that demonstrate, to the satisfaction 
                of the Secretary, that security will be 
                provided so that women are safe when 
                participating in the one-stop perinatal 
                services program carried out at the facilities 
                provided or assisted under this section.
          [(2) Limitation on grant amount.--The aggregate 
        amount provided under this section for any public 
        housing project may not exceed $15,000.
  [(c) Demonstration Program Requirements.--
          [(1) Applications.--Applications for grants under 
        this section shall be made by public housing agencies 
        in accordance with procedures established by the 
        Secretary and shall include a description of the one-
        stop perinatal services program to be provided in the 
        facilities provided or assisted under this section.
          [(2) Use of grants.--Any public housing agency 
        receiving a grant under this section may use the grant 
        only for the costs of providing facilities and minor 
        renovations of facilities necessary to make one-stop 
        perinatal services programs available to pregnant women 
        who reside in public housing.
          [(3) Reports to secretary.--Each public housing 
        agency receiving a grant under this section for any 
        fiscal year shall submit to the Secretary, not later 
        than 3 months after the end of such fiscal year, a 
        report describing the facilities provided by the public 
        housing agency under this section and the one-stop 
        perinatal services program carried out in such 
        facilities. The report shall include data on the size 
        of the facilities, the costs and extent of any 
        renovations, the previous use of the facilities, the 
        number of women assisted by the program, the trimester 
        of the pregnancy of the women at the time of initial 
        assistance, infant birthweight, infant mortality rate, 
        and other relevant information.
          [(4) Applicable standards.--No provision of this 
        section may be construed to authorize the Secretary to 
        establish any health, safety, or other standards with 
        respect to the services provided by the one-stop 
        perinatal services program or facilities provided or 
        assisted with grants received under this section. Such 
        services and facilities shall comply with all 
        applicable State and local laws, regulations, and 
        ordinances, and all requirements established by the 
        Secretary of Health and Human Services for such 
        services and facilities.
  [(d) Report to Congress.--Not later than 1 year after the 
date that amounts to carry out this section are first made 
available under appropriations Acts, the Secretary shall 
prepare and submit to the Congress a comprehensive report 
setting forth the findings and conclusions of the Secretary as 
a result of carrying out the demonstration program under this 
section. The report shall include any recommendations of the 
Secretary with respect to the establishment of a permanent 
program of providing facilities in public housing for making 
perinatal services available to pregnant women who reside in 
the public housing.
  [(e) Definitions.--For purposes of this section:
          [(1) One-stop perinatal services program.--The term 
        ``one-stop perinatal services program'' means a program 
        to provide a wide range of services for pregnant and 
        new mothers in a coordinated manner at a drop-in 
        center, which may include any of the following:
                  [(A) Information and education.--Information 
                and education for pregnant women regarding 
                perinatal care services, and related services 
                and resources, necessary to decrease infant 
                mortality and disability.
                  [(B) Health care services.--Basic health care 
                services that can be provided without a 
                physician present.
                  [(C) Referral.--Basic health screening of 
                pregnant women and referrals for health care 
                services.
                  [(D) Followup.--Followup assessment of women 
                and infants (including measurement of weight) 
                and referrals for health care services and 
                related services and resources.
                  [(E) Social worker.--Information and 
                assistance regarding Federal and State social 
                services provided by a social worker.
                  [(F) Other.--Any other services to assist 
                pregnant or new mothers.
          [(2) Public housing.--The terms ``public housing'' 
        and ``public housing agency'' have the meanings given 
        such terms in section 3(b) of the United States Housing 
        Act of 1937 (42 U.S.C. 1437a(b)).
          [(3) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.
  [(f) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this section.
  [(g) Authorization of Appropriations.--There are authorized 
to be appropriated for carrying out the demonstration program 
under this section $200,000 for fiscal year 1993 and $208,400 
for fiscal year 1994.

[SEC. 522. PUBLIC HOUSING MIXED INCOME NEW COMMUNITIES STRATEGY 
                    DEMONSTRATION.

  [(a) Establishment of Demonstration Program.--
          [(1) In general.--The Secretary of Housing and Urban 
        Development shall carry out a program to demonstrate 
        the effectiveness of promoting the revitalization of 
        troubled urban communities through the provision of 
        public housing in socio-economically mixed settings 
        combined with the innovative use of public housing 
        operating subsidies to stimulate the development of new 
        affordable housing in such communities.
          [(2) Comprehensive services.--Housing units provided 
        under the demonstration program under this section 
        shall be made available in connection with a 
        comprehensive program of services and incentives under 
        subsections (h) and (i), in order to prepare 
        participating families for successful transition to the 
        private rental housing market and homeownership within 
        a reasonable period of time.
  [(b) Coordinating Committee.--
          [(1) Establishment.--For a public housing agency to 
        be eligible for designation or selection under 
        subsection (d) for participation in the demonstration 
        program, the chief executive officer of each unit of 
        general local government in which the public housing 
        agency is located shall appoint a coordinating 
        committee under this paragraph. The coordinating 
        committee shall participate in developing a plan for 
        implementing the demonstration program, review, 
        monitor, and make recommendations for improvements in 
        activities under the demonstration program, and ensure 
        the coordination and delivery of services under 
        subsection (h).
          [(2) Membership.--Each coordinating committee shall 
        be composed of 12 members, who shall include, but may 
        not be limited to, the following individuals:
                  [(A) A representative of the chief executive 
                officer of the applicable unit of general local 
                government.
                  [(B) A representative of the applicable 
                public housing agency.
                  [(C) A representative of the regional 
                administrator of the Department of Housing and 
                Urban Development.
                  [(D) A representative of a local resident 
                management corporation.
                  [(E) Not less than 1 individual affiliated 
                with a local agency that administers programs 
                in 1 of the following areas: health, human 
                services, substance abuse, education, economic 
                and business development, law enforcement, and 
                housing.
                  [(F) A representative from among local 
                businesses engaged in housing and real estate.
                  [(G) A representative from among business 
                engaged in real estate financing.
          [(3) Social service committees.--Each coordinating 
        committee established under this subsection shall 
        establish a subcommittee on social services, which 
        shall, before any action is taken under subsection 
        (e)(1) (with respect to the demonstration program as 
        carried out by the applicable public housing agency), 
        identify the specific services that are required to 
        successfully carry out the demonstration program.
  [(c) Interagency Cooperation.--The Secretary shall coordinate 
with the appropriate heads of other Federal agencies as 
necessary to coordinate the implementation of the demonstration 
program and endeavor to ensure the delivery of supportive 
services required under subsection (h).
  [(d) Scope of Demonstration Program.--
          [(1) Participating public housing agencies.--The 
        Secretary shall carry out the demonstration program 
        with respect to public housing for families 
        administered by the Housing Authority of the City of 
        Chicago, in the State of Illinois. The Secretary may 
        also carry out the demonstration program with respect 
        to public housing administered by not more than 3 other 
        public housing agencies.
          [(2) Participating public housing units.--Over the 
        term of the demonstration, the demonstration may be 
        applied to not more than 15 percent of the total number 
        of public housing units for families administered by 
        each participating public housing agency.
          [(3) Nondisplacement.--No person who is a tenant of 
        public housing during the term of the demonstration 
        program may be involuntarily relocated or displaced 
        under the demonstration program.
  [(e) Housing Development.--
          [(1) Use of public housing operating subsidies.--For 
        the purpose of providing reasonable and necessary 
        operating costs in connection with the development of 
        additional affordable housing, under the demonstration 
        program the Secretary shall amend the annual 
        contributions contract between the Secretary and each 
        participating public housing agency as the Secretary 
        determines appropriate to permit the public housing 
        agency to utilize operating subsidy amounts allocated 
        to the agency under section 9 of the United States 
        Housing Act of 1937 with respect to newly constructed 
        or rehabilitated housing units that are privately 
        developed and owned. Such units shall be reserved for 
        use under the demonstration program for occupancy by 
        very low-income families as provided under this 
        subsection and subsection (g).
          [(2) Lease terms.--Operating subsidy amounts shall be 
        provided for the operation of housing under paragraph 
        (1) pursuant to a lease contract between the owner of 
        the housing and the public housing agency, which shall 
        specify--
                  [(A) the number of units to be leased 
                exclusively to the public housing agency for 
                the term of the demonstration program, subject 
                only to the availability of amounts under 
                paragraph (1) or other funds for such purposes; 
                and
                  [(B) the requirements under subsection 
                (f)(6).
          [(3) Transfer of amounts.--Operating subsidy amounts 
        may be provided for a unit of housing under paragraph 
        (1) only after the execution of a lease under 
        subsection (f)(5) for 1 corresponding public housing 
        unit.
          [(4) Rental terms.--Units leased by a participating 
        public housing agency under this subsection shall be 
        available only to very low-income families that reside, 
        or have been offered a unit, in public housing 
        administered by the public housing agency and that 
        enter into a voluntary contract under subsection 
        (g)(1). The rental charge for each unit shall be the 
        amount equal to 30 percent of the adjusted income of 
        the resident family (as determined under section 3(b) 
        of the United States Housing Act of 1937), except that 
        the rental charge may not exceed a ceiling rent 
        determined by the public housing agency in the manner 
        that monthly rent is determined under section 
        3(a)(2)(A) of such Act.
          [(5) Income mix.--Not more than 25 percent of the 
        units in each privately developed housing project under 
        the demonstration program may be leased by a public 
        housing agency pursuant to a lease contract under 
        paragraph (2). The number of units under each such 
        lease may not be less than the number of public housing 
        units that, notwithstanding the demonstration program, 
        would have been assisted with the operating subsidy 
        amounts made available under such contract, to ensure 
        that there shall be no loss of public housing units.
          [(6) Coordination with other entities for development 
        of housing.--A participating public housing agency may 
        seek the cooperation and receive assistance from State, 
        county, and local governments and the private sector to 
        develop housing for use under this subsection. Such 
        assistance may include, but is not limited to--
                  [(A) donations of land and write-downs and 
                discounts on land by local governments;
                  [(B) abatement of real estate taxes for 
                specified periods by local, county, or State 
                governments;
                  [(C) assignment of community development 
                block grant funds and loan guarantees made 
                available under title I of the Housing and 
                Community Development Act of 1974;
                  [(D) low interest rate financing through 
                Federal Home Loan Bank programs, State or 
                Federal programs, and private lenders;
                  [(E) low-income housing tax credits from 
                State and local governments; and
                  [(F) mortgage revenue bonds from State or 
                local governments.
          [(7) Determination of location and number of units.--
                  [(A) In general.--A participating public 
                housing agency and the applicable unit of 
                general local government shall jointly 
                determine the location of any newly constructed 
                or rehabilitated housing to be utilized under 
                the demonstration program carried out by the 
                public housing agency and the number of units 
                to be developed annually, with approval of the 
                legislative body of the local government.
                  [(B) Limitation on number of units.--The 
                total number of newly constructed or 
                rehabilitated units that may be used under this 
                subsection in the demonstration program may not 
                exceed--
                          [(i) for any participating public 
                        housing agency with not more than 5,000 
                        public housing units, 15 percent of the 
                        number of units administered by the 
                        agency;
                          [(ii) for any participating agency 
                        with more than 5,000 but not more than 
                        25,000 units, 10 percent of the number 
                        of units administered by the agency; 
                        and
                          [(iii) for any participating agency 
                        with more than 25,000 units, 4 percent 
                        of the number of units administered by 
                        the agency.
  [(f) Existing Public Housing.--
          [(1) In general.--To facilitate the establishment of 
        socioeconomically mixed communities within existing 
        public housing developments, under the demonstration 
        program the Secretary shall authorize participating 
        public housing agencies to lease units in existing 
        public housing projects, as provided in this 
        subsection, to low-income families who are not very 
        low-income families, notwithstanding the provisions of 
        section 16(b) of the United States Housing Act of 1937.
          [(2) Limitations on public housing residents.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), not more than 25 percent of 
                the units in each public housing project in 
                which units are utilized under the 
                demonstration program may be occupied by low-
                income families who are not very low-income 
                families. Not less than 75 percent of the units 
                in each such public housing project shall be 
                occupied by very low-income families.
                  [(B) Exception.--Upon determining that a 
                public housing agency has a special need, the 
                Secretary may provide for not more than 50 
                percent of the units in a public housing 
                project utilized under the demonstration 
                program to be occupied by low-income families 
                who are not very low-income families, and the 
                remainder of the units to be occupied by very 
                low-income families. Such special need may 
                include the need to ensure the successful 
                revitalization of troubled public housing 
                through establishing a socioeconomically mixed 
                resident population.
          [(3) Number of units.--The number of such units made 
        available under this subsection by a public housing 
        agency may not exceed the number of units provided 
        under subsection (e) to participating families.
          [(4) Rental terms.--The rent charged any family 
        occupying a unit made available under this subsection 
        may not, at any time during the demonstration period, 
        exceed the ceiling rent level determined by the public 
        housing agency in the manner that monthly rent is 
        determined under section 3(a)(2)(A) of the United 
        States Housing Act of 1937.
          [(5) Lease.--A participating public housing agency 
        shall enter into a lease with each family occupying a 
        public housing unit made available under this 
        subsection. The term of each lease shall be 1 year. 
        Each lease shall be renewable upon expiration for a 
        period not to exceed 7 years. A public housing agency 
        may extend the period as provided under subsection 
        (j)(1).
          [(6) Vacancy.--If, at any time, a participating 
        public housing agency is unable to rent a unit made 
        available under this subsection and the unit has been 
        vacant for a period of 6 months, the agency may--
                  [(A) cancel a lease for 1 unit of housing 
                provided under subsection (e) and recapture any 
                operating subsidy amounts associated with the 
                unit for use with respect to the vacant public 
                housing unit, upon which such public housing 
                unit shall be removed from participation in the 
                demonstration program and made generally 
                available for occupancy as provided under the 
                United States Housing Act of 1937; and
                  [(B) provide the family residing in the 
                housing unit provided under subsection (e) 
                (from which operating subsidy amounts have been 
                recaptured) with assistance under section 8(b) 
                of such Act, subject to the availability of 
                such assistance pursuant to appropriations Acts 
                and notwithstanding any preferences for such 
                assistance under section 8(d)(1)(A)(i) of such 
                Act, and permit the family to remain in the 
                unit.
  [(g) Contracts With Participating Families.--
          [(1) In general.--Under the demonstration program, a 
        participating public housing agency shall enter into a 
        contract with each family that will reside in a unit of 
        privately developed housing leased to the agency under 
        subsection (e). Such family shall voluntarily enter 
        into the contract and shall meet the criteria 
        established under paragraph (2). The contract shall be 
        made part of the lease executed between the family and 
        the public housing agency for such unit, shall set 
        forth the provisions of the demonstration program, and 
        shall specify the resources to be made available to the 
        participating family and the responsibilities of the 
        participating family under the program. The lease shall 
        be for a term of 1 year and shall be renewable upon 
        expiration for a period not to exceed 7 years, except 
        as provided under subsection (j)(1).
          [(2) Establishment of criteria.--Each public housing 
        agency shall establish criteria for participation of 
        families in the demonstration program. The criteria 
        shall be based on factors that may reasonably be 
        expected to predict the family's ability to 
        successfully complete the requirements of the 
        demonstration program. The criteria shall include--
                  [(A)  the  status  and  history  of  
                employment  of  family members;
                  [(B) enrollment of the children in the family 
                in an educational program;
                  [(C) maintenance by the family of the 
                family's previous dwelling;
                  [(D) ability of adult family members to 
                complete training for long-term employment;
                  [(E) the existence and seriousness of any 
                criminal records of family members; and
                  [(F) the status and history of substance 
                abuse of family members.
          [(3) Continued residence.--Continued residency of 
        families in housing provided under subsection (e) shall 
        be contingent upon compliance with standards 
        established by the participating public housing agency, 
        which shall include--
                  [(A) all members of the family remaining 
                drug-free;
                  [(B) no member of the family engaging in any 
                criminal activity;
                  [(C) each child in the family remaining in an 
                educational program until receipt of a high 
                school diploma or the equivalent thereof; and
                  [(D) family members participating in the 
                support services and counseling under 
                subsection (h).
  [(h) Provision of Supportive Services.--For the entire term 
of residency of a participating family in housing provided 
under subsection (e), the public housing agency shall ensure 
the availability of supportive services and counseling to the 
family in accordance with the terms and conditions of the 
contract of participation under subsection (g)(1). The public 
housing agency shall provide for such services and counseling 
through its own resources and through coordination with 
Federal, State, and local agencies, community-based 
organizations, and private individuals and entities. Services 
shall include the following:
          [(1) Remedial education.
          [(2) Education for completion of high school.
          [(3) Job training and preparation.
          [(4) Child care.
          [(5) Substance abuse treatment and counseling.
          [(6) Training in homemaking skills and parenting.
          [(7) Family counseling.
          [(8) Financial counseling services emphasizing 
        planning for homeownership, provided by local financial 
        institutions under the Community Reinvestment Act of 
        1977, provided under section 106 of the Housing and 
        Urban Development Act of 1968, or otherwise provided.
  [(i) Economic Advancement of Participating Families.--
          [(1) Employment.--Under the demonstration program, 
        for the entire term of residency of each participating 
        family in housing provided under subsection (e)--
                  [(A) the head of the family shall be required 
                to be employed on a full-time basis, except 
                that if the head of the family becomes 
                unemployed, the public housing agency shall 
                review the individual case to determine if 
                mitigating factors, such as involuntary loss of 
                employment, warrant continuing the family's 
                participation in the demonstration program; and
                  [(B) the public housing agency shall ensure 
                the provision of counseling to assist family 
                members in gaining, advancing in, and retaining 
                employment.
          [(2) Rent increases.--During the 1-year period 
        beginning upon the residency of a participating family 
        in housing provided under subsection (e), the amount of 
        rent charged the participating family may not be 
        increased on the basis of any increase in the earned 
        income of the family, until such earned income exceeds 
        80 percent of the median family income for the area.
          [(3) Escrow savings accounts.--
                  [(A) Purpose and establishment.--To ensure 
                that participating families acquire the 
                financial resources necessary to complete a 
                successful transition from assisted rental 
                housing to homeownership or other private 
                housing, under the demonstration program each 
                participating public housing agency shall 
                establish for each participating family an 
                interest-bearing escrow savings account held by 
                the agency in the family's name.
                  [(B) Periodic deposits.--For the entire term 
                of a participating family's residency in 
                housing provided under subsection (e) the 
                public housing agency shall deposit in the 
                account established for the family under 
                subparagraph (A) a percentage of the monthly 
                rent charged the family, which percentage shall 
                be established in the contract of participation 
                under subsection (g)(1). Any rent increases 
                charged because of increases in the earned 
                income of the family shall also be deposited 
                into the escrow account.
                  [(C) Access to amounts.--A participating 
                family may withdraw amounts in the family's 
                escrow account only upon successful completion 
                of participation in the demonstration program, 
                for purchase of a home, for contribution toward 
                college tuition, or other good cause determined 
                by the participating public housing agency. A 
                participating family that has committed 
                violations referred to under subsection 
                (j)(2)(B) shall forfeit access to such amounts.
          [(4) Treatment of increased income.--Any increase in 
        the earned income of a participating family during 
        residency in housing provided under subsection (e) may 
        not be considered as income or a resource for the 
        purpose of the family for benefits, or amount of 
        benefits payable to the family, under any other Federal 
        law, unless the income of the family equals or exceeds 
        80 percent of the median income of the area (as 
        determined by the Secretary with adjustments for 
        smaller and larger families).
  [(j) Conclusion of Participation.--
          [(1) 7-year term.--Each family residing in housing 
        provided under subsection (e) or (f) shall terminate 
        residency in housing not later than the expiration of 
        the 7-year period beginning on the commencement of such 
        residency. Notwithstanding the preceding sentence, a 
        public housing agency shall extend the period for any 
        family that requests extension of the period--
                  [(A) because the family is not prepared to 
                enter a program for homeownership or to secure 
                any other form of private housing; or
                  [(B) for other good cause.
          [(2) Incompletion.--
                  [(A) In general.--Except as provided in 
                subparagraph (B), if a participating family is 
                unable to successfully fulfill the requirements 
                under the demonstration program, the public 
                housing agency shall offer the family a 
                comparable public housing unit in a project 
                administered by the agency (notwithstanding any 
                preference for residency in public housing 
                under section 6(c)(4)(A)(i) of the United 
                States Housing Act of 1937), or assistance 
                under section 8 of such Act (subject to 
                availability of amounts provided under 
                appropriations Acts and notwithstanding any 
                preference for such assistance under section 
                8(d)(1)(A)(i) of such Act).
                  [(B) Exception.--Subparagraph (A) shall not 
                apply to any participating family that has 
                committed serious or repeated violations of the 
                terms and conditions of the lease, violations 
                of applicable Federal, State, or local law or 
                that has been exempted from such requirement by 
                the public housing agency for other good cause.
  [(k) Reports to Congress.--
          [(1) Interim report.--Upon the expiration of each 2-
        year period during the term of the demonstration, the 
        first such period beginning on the date of the 
        enactment of this Act, the Secretary shall submit to 
        the Congress a report evaluating the effectiveness of 
        the demonstration program under this section.
          [(2) Final report.--Not later than the expiration of 
        the 60-day period beginning on the date of the 
        termination of the demonstration program under 
        subsection (n), the Secretary shall submit to the 
        Congress a final report evaluating the effectiveness of 
        the demonstration program under this section. The 
        report shall also include findings and recommendations 
        for any legislative action appropriate to establish a 
        permanent program based on the demonstration program.
  [(l) Definitions.--For purposes of this section:
          [(1) The term ``coordinating committee'' means a 
        local coordinating committee established under 
        subsection (b)(1).
          [(2) The term ``demonstration program'' means the 
        program established by the Secretary under this 
        section.
          [(3) The term ``low-income family'' means a family 
        whose income does not exceed 80 percent of the median 
        income for the area, as determined by the Secretary 
        with adjustments for smaller and larger families, 
        except that the Secretary may establish income ceilings 
        higher or lower than 80 percent of the median for the 
        area on the basis of findings by the Secretary that 
        such variations are necessary because of prevailing 
        levels of construction costs or unusually high or low 
        family incomes.
          [(4) The term ``operating subsidy amounts'' means 
        assistance for public housing provided through the 
        performance funding system under section 9 of the 
        United States Housing Act of 1937.
          [(5) The term ``participating family'' means a family 
        that is residing in a housing unit provided under 
        subsection (e).
          [(6) The term ``participating public housing agency'' 
        means a public housing agency with respect to which the 
        Secretary carries out the demonstration program under 
        this section.
          [(7) The terms ``public housing agency'', ``public 
        housing'', and ``project'' have the meanings given such 
        terms under section 3(b) of the United States Housing 
        Act of 1937.
          [(8) The term ``Secretary'' means the Secretary of 
        Housing and Urban Development.
          [(9) The term ``unit of general local government'' 
        means any city, town, township, county, parish, 
        village, or other general purpose political subdivision 
        of a State.
  [(m) Regulations.--The Secretary shall issue any regulations 
necessary to carry out this section not later than the 
expiration of the 90-day period beginning on the date of the 
enactment of this Act.
  [(n) Termination of Demonstration Program.--The demonstration 
program under this section shall terminate upon the expiration 
of the 10-year period beginning on the date of the enactment of 
this Act.

[SEC. 523. ENERGY EFFICIENCY DEMONSTRATION.

  [(a) Establishment.--The Secretary of Housing and Urban 
Development shall carry out a demonstration program to 
encourage the use of private energy service companies in 
accordance with section 118(a) of the Housing and Community 
Development Act of 1987. The Secretary shall provide technical 
assistance to 5 public housing agencies to demonstrate the 
opportunities for energy cost reduction in 5 public housing 
projects through energy services contracts. Not later than 90 
days after the date of the enactment of this Act, the Secretary 
shall establish such selection criteria for this demonstration 
as the Secretary deems appropriate after consultation with 
representatives of public housing agencies and energy 
efficiency organizations.
  [(b) Report.--As soon as practicable after the expiration of 
the 1-year period beginning on the date of the enactment of 
this Act, the Secretary of Housing and Urban Development shall 
submit to the Congress a report setting forth the findings and 
recommendations of the Secretary as a result of the 
demonstration under this section. The Secretary shall 
disseminate such report, to the extent practicable, to other 
public housing agencies.]
          * * * * * * *

                Subtitle B--Low-Income Rental Assistance

          * * * * * * *

SEC. 545. PREFERENCE RULES.

  (a) * * *
          * * * * * * *
  [(c) Section 8 New Construction.--With respect to housing 
constructed or substantially rehabilitated pursuant to 
assistance provided under section 8(b)(2) of the United States 
Housing Act of 1937, as such section existed before October 1, 
1983, and projects financed under section 202 of the Housing 
Act of 1959, notwithstanding any tenant selection criteria 
under a contract between the Secretary of Housing and Urban 
Development and an owner of such housing pursuant to the first 
sentence of such section--
          [(1) for not less than 70 percent of units that 
        become available in the housing, the tenant selection 
        criteria for such housing shall give preference to 
        families which occupy substandard housing (including 
        families that are homeless or living in a shelter for 
        homeless families), are paying more than 50 percent of 
        family income for rent, or are involuntarily displaced 
        at the time they are seeking assistance under such 
        section; and
          [(2) the system of local preferences established 
        under section 8(d)(1)(A)(ii) by the public housing 
        agency for the jurisdiction within which the housing is 
        located the tenant shall apply to any remaining units 
        that become available in the housing, to the extent 
        that such preferences are applicable with respect to 
        any tenant eligibility limitations for the housing.]
          * * * * * * *

SEC. 550. REVISIONS TO VOUCHER PROGRAM

  (a) * * *
          * * * * * * *
  [(b) Documentation of Excessive Rent Burdens.--
          [(1) Data.--The Secretary of Housing and Urban 
        Development shall collect and maintain, in an automated 
        system, data describing the characteristics of families 
        assisted under the certificate and voucher programs 
        established under section 8 of the United States 
        Housing Act of 1937, which data shall include the share 
        of family income paid toward rent.
          [(2) Report.--Not less than annually, the Secretary 
        shall submit a report to the Congress setting forth, 
        for each of the certificate program and the voucher 
        program, the percentage of families participating in 
        the program who are paying for rent more than the 
        amount determined under section 3(a)(1) of such Act. 
        The report shall set forth data in appropriate 
        categories, such as various areas of the country, types 
        and sizes of public housing agencies, types of 
        families, and types of markets. The data shall identify 
        the jurisdictions in which more than 10 percent of the 
        families assisted under section 8 of such Act pay for 
        rent more than the amount determined under section 
        3(a)(1) of such Act and the report shall include an 
        examination of whether the fair market rent for such 
        areas is appropriate. The report shall also include any 
        recommendations of the Secretary for legislative and 
        administrative actions appropriate as a result of 
        analysis of the data.
          [(3) Availability of data.--The Secretary shall make 
        available to each public housing agency administering 
        assistance under the certificate or voucher program any 
        data maintained under this subsection that relates to 
        the public housing agency.]
          * * * * * * *

[SEC. 555. INCOME ELIGIBILITY FOR TENANCY IN NEW CONSTRUCTION UNITS.

  [Any dwelling units in any housing constructed or 
substantially rehabilitated pursuant to assistance provided 
under section 8(b)(2) of the United States Housing Act of 1937, 
as such section existed before October 1, 1983, and with a 
contract for assistance under such section, shall be reserved 
for occupancy by low-income families and very low-income 
families.]
          * * * * * * *

       TITLE IX--COMMUNITY DEVELOPMENT AND MISCELLANEOUS PROGRAMS

          * * * * * * *

                      Subtitle B-- Disaster Relief

[SEC. 931. SECTION 8 CERTIFICATES AND VOUCHERS.

  [The budget authority available under section 5(c) of the 
United States Housing Act of 1937 (42 U.S.C. 1437c(c)) for 
assistance under the certificate and voucher programs under 
sections 8 (b) and (o) of such Act is authorized to be 
increased in any fiscal year in which a major disaster is 
declared by the President under the Robert T. Stafford Disaster 
Relief and Emergency Asssistance Act in such amounts as may be 
necessary to provide assistance under such programs for 
individuals and families whose housing has been damaged or 
destroyed as a result of such disaster, except that in 
implementing this section, the Secretary shall evaluate the 
natural hazards to which any permanent replacement housing is 
exposed and shall take appropriate action to mitigate such 
hazards.

[SEC. 932. MODERATE REHABILITATION.

  [The budget authority available under section 5(c) of the 
United States Housing Act of 1937 (42 U.S.C. 1437c(c)) for 
assistance under the moderate rehabilitation program under 
section 8(e)(2) of such Act is authorized to be increased in 
any fiscal year in which a major disaster is declared by the 
President under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act in such amount as may be necessary to 
provide assistance under such program for individuals and 
families whose housing has been damaged or destroyed as a 
result of such disaster, except that in implementing this 
section, the Secretary shall evaluate the natural hazards to 
which any permanent replacement housing is exposed and shall 
take appropriate action to mitigate such hazards.]
          * * * * * * *
                              ----------                              


             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1987

                      TITLE I--HOUSING ASSISTANCE

      Subtitle A--Programs Under United States Housing Act of 1937

          * * * * * * *

                         PART 2--PUBLIC HOUSING

          * * * * * * *

[SEC. 126. PUBLIC HOUSING COMPREHENSIVE TRANSITION DEMONSTRATION.

  [(a) Establishment of Demonstration Program.--The Secretary 
of Housing and Urban Development (in this section referred to 
as the ``Secretary'') shall carry out a program to demonstrate 
the effectiveness of providing a comprehensive program of 
services to participating public housing residents in order to 
ensure the successful transition of such residents to private 
housing. In carrying out the demonstration program, the 
Secretary shall consult with the heads of other appropriate 
Federal agencies to design and implement procedures to carry 
out the transition from public housing.
  [(b) Scope of Demonstration Program.--The Secretary shall 
carry out the demonstration program with respect to public 
housing administered by the Housing Authority of the City of 
Charlotte, in the State of North Carolina. The Secretary may 
also carry out the demonstration program with respect to public 
housing administered by not more than 10 additional public 
housing agencies.
  [(c) Requirements of Demonstration Program.--The 
demonstration program shall consist of the following 
requirements:
          [(1) Contract of participation.--Each participating 
        public housing agency may enter into a voluntary 
        contract with any family that is to commence residence 
        in a public housing project administered by the public 
        housing agency. The contract shall be made part of the 
        lease, shall set forth the provisions of the 
        demonstration program, and shall specify the resources 
        to be made available to the participating family and 
        the responsibilities of the participating family.
          [(2) Remediation phase.--
                  [(A) During not to exceed the first 2 years 
                of residence of a participating family in 
                public housing, the public housing agency shall 
                ensure the provisions of remediation services 
                to the family in accordance with the terms and 
                conditions of the contract of participation, 
                which may include--
                          [(i) remedial education;
                          [(ii) completion of high school;
                          [(iii) job training and preparation;
                          [(iv) substance abuse treatment and 
                        counseling;
                          [(v) training in homemaking skills 
                        and parenting; and
                          [(vi) training in money management.
                  [(B) During the remediation phase, the amount 
                of rent charged the family may not be increased 
                on the basis of any increase in earned income 
                of the family.
          [(3) Transition phase.--
                  [(A) During not to exceed a 5-year period 
                following completion of the remediation stage--
                          [(i) the head of the family shall be 
                        required to have full-time employment; 
                        and
                          [(ii) the public housing agency shall 
                        ensure the provision of counseling for 
                        the family with respect to 
                        homeownership, money management, and 
                        problem solving.
                  [(B) During the transition phase, the amount 
                of rent charged the family--
                          [(i) may be increased on the basis of 
                        any increase in family income; and
                          [(ii) may not be decreased on the 
                        basis of any decrease in earned income 
                        due to voluntary termination of 
                        employment.
          [(4) Encouragement of savings.--The public housing 
        agency shall take appropriate actions (including the 
        establishment of an escrow savings account) to 
        encourage each participating family to save funds 
        during the remediation and transition phases.
          [(5) Effect of increases in family income.--
                  [(A) Any increase in the earned income of a 
                family during participation in the 
                demonstration program under this section may 
                not be considered as income or a resource for 
                the purpose of denying the eligibility of, or 
                reducing the amount of benefits payable to, the 
                family under any other Federal law, unless the 
                income of the family increases at any time to 
                not less than 50 percent of the median income 
                of the area (as determined by the Secretary 
                with adjustments for small and larger 
                families).
                  [(B) If at any time during the participation 
                of a family in the demonstration program the 
                income of the family increases to not less than 
                80 percent of the median income of the area (as 
                determined by the Secretary with adjustments 
                for smaller and larger families), the 
                participation of the family in the 
                demonstration program shall terminate.
          [(6) Completion of transition.--Each family 
        participating in the demonstration program shall be 
        required to complete the transition out of public 
        housing during a period of not more than 7 years. The 
        public housing agency shall extend the period for any 
        family that requests an extension for good cause.
  [(d) Reports to Congress--
          [(1) Interim report.--Not later than 2 years after 
        the date of the enactment of this Act, the Secretary 
        shall submit to the Congress an interim report 
        evaluating the effectiveness of the demonstration 
        program under this section.
          [(2) Final report.--Not later than 60 days after the 
        termination of the demonstration program under 
        subsection (f), the Secretary shall submit to the 
        Congress a final report evaluating the effectiveness of 
        the demonstration program under this section.
  [(e) Regulations.--The Secretary shall issue such regulations 
as may be necessary to carry out this section.
  [(f) Termination of Demonstration Program.--The demonstration 
program under this section shall terminate upon the expiration 
of the 7-year period beginning on the date of the enactment of 
this Act.]
          * * * * * * *

      Subtitle C--Multifamily Housing Management and Preservation

          * * * * * * *

SEC. 183. TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS.

  (a) * * *
          * * * * * * *
  [(c) Nondiscrimination Against Section 8 Certificate Holders 
and Voucher Holders.--No owner of a subsidized project (as 
defined in section 203(i)(2) of the Housing and Community 
Development Amendments of 1978, as amended by section 181(h) of 
this Act) shall refuse--
          [(1) to lease any available dwelling unit in any such 
        project of such owner that rents for an amount not 
        greater than the fair market rent for a comparable 
        unit, as determined by the Secretary under section 8 of 
        the United States Housing Act of 1937, to a holder of a 
        certificate of eligibility under such section, a 
        proximate cause of which is the status of such 
        prospective tenant as a holder of such certificate, and 
        to enter into a housing assistance payments contract 
        respecting such unit; or
          [(2) to lease any available dwelling unit in any such 
        project of such owner to a holder of a voucher under 
        section 8(o) of such Act, and to enter into a voucher 
        contract respecting such unit, a proximate cause of 
        which is the status of such prospective tenant as 
        holder of such voucher.]
          * * * * * * *
                              ----------                              


 SECTION 801 OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT REFORM 
                              ACT OF 1989

[SEC. 801. ANNUAL ADJUSTMENT FACTORS FOR SECTION 8 RENTS.

  [(a) Effect of Prior Comparability Studies.--
          [(1) In general.--In any case in which, in 
        implementing section 8(c)(2) of the United States 
        Housing Act of 1937--
                  [(A) the use of comparability studies by the 
                Secretary of Housing and Urban Development or 
                the appropriate State agency as an independent 
                limitation on the amount of rental adjustments 
                resulting from the application of an annual 
                adjustment factor under such section has 
                resulted in the reduction of the maximum 
                monthly rent for units covered by the contract 
                or the failure to increase such contract rent 
                to the full amount otherwise permitted under 
                the annual adjustment factor, or
                  [(B) an assistance contract requires a 
                project owner to make a request before becoming 
                eligible for a rent adjustment under the annual 
                adjustment factor and the project owner 
                certifies that such a request was not made 
                because of anticipated negative adjustment to 
                the project rents,
        for fiscal year 1980, and annually thereafter until 
        regulations implementing this section take effect, 
        rental adjustments shall be calculated as an amount 
        equal to the annual adjustment factor multiplied by a 
        figure equal to the contract rent minus the amount of 
        contract rent attributable to debt service. Upon the 
        request of the project owner, the Secretary shall pay 
        to the project owner the amount, if any, by which the 
        total rental adjustment calculated under the preceding 
        sentence exceeds the total adjustments the Secretary or 
        appropriate State agency actually approved, except that 
        solely for purposes of calculating retroactive payments 
        under this subsection, in no event shall any project 
        owner be paid an amount less than 30 percent of a 
        figure equal to the aggregate of the annual adjustment 
        factor multiplied by the full contract rent for each 
        year on or after fiscal year 1980, minus the sum of the 
        rental payments the Secretary or appropriate State 
        agency actually approved for those years. The method 
        provided by this subsection shall be the exclusive 
        method by which retroactive payments, whether or not 
        requested, may be made for projects subject to this 
        subsection for the period from fiscal year 1980 until 
        the regulations issued under subsection (e) take 
        effect. For purposes of this paragraph, ``debt 
        service'' shall include interest, principal, and 
        mortgage insurance premium if any.
          [(2) Applicability.--
                  [(A) In general.--Subsection (a) shall apply 
                with respect to any use of comparability 
                studies referred to in such subsection 
                occurring before the effective date of the 
                regulations issued under subsection (e).
                  [(B) Final litigation.--Subsection (a) shall 
                not apply to any project with respect to which 
                litigation regarding the authority of the 
                Secretary to use comparability studies to limit 
                rental adjustments under section 8(c)(2) of the 
                United State Housing Act of 1937 has resulted 
                in a judgment before the effective date of this 
                Act that is final and not appealable (including 
                any settlement agreement).
  [(b) 3-Year Payments.--The Secretary shall provide the 
amounts under subsection (a) over the 3-year period beginning 
on the effective date of the regulations issued under 
subsection (e). The Secretary shall provide the payments 
authorized under subsection (a) only to the extent approved in 
subsequent appropriations Acts. There are authorized to be 
appropriated such sums as may be necessary for this purpose.
  [(c) Comparability Studies.--Section 8(c)(2)(C) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(C)) is 
amended by inserting after the period at the end of the first 
sentence the following: ``In implementing the limitation 
established under the preceding sentence, the Secretary shall 
establish regulations for conducting comparability studies for 
projects where the Secretary has reason to believe that the 
application of the formula adjustments under subparagraph (A) 
would result in such material differences. The Secretary shall 
conduct such studies upon the request of any owner of any 
project, or as the Secretary determines to be appropriate by 
establishing, to the extent practicable, a modified annual 
adjustment factor for such market area, as the Secretary shall 
designate, that is geographically smaller than the applicable 
housing area used for the establishment of the annual 
adjustment factor under subparagraph (A). The Secretary shall 
establish such modified annual adjustment factor on the basis 
of the results of a study conducted by the Secretary of the 
rents charged, and any change in such rents over the previous 
year, for assisted units and unassisted units of similar 
quality, type, and age in the smaller market area. Where the 
Secretary determines that such modified annual adjustment 
factor cannot be established or that such factor when applied 
to a particular project would result in material differences 
between the rents charged for assisted units and unassisted 
units of similar quality, type, and age in the same market 
area, the Secretary may apply an alternative methodology for 
conducting comparability studies in order to establish rents 
that are not materially different from rents charged for 
comparable unassisted units.''.
  [(d) Determination of Contract Rent.--(1) The Secretary shall 
upon the request of the project owner, make a one-time 
determination of the contract rent for each project owner 
referred to in subsection (a). The contract rent shall be the 
greater of the contract rent--
          [(A) currently approved by the Secretary under 
        section 8(c)(2) of the United States Housing Act of 
        1937, or
          [(B) calculated in accordance with the first sentence 
        of subsection (a)(1).
  [(2) All adjustments in contract rents under section 8(c)(2) 
of the United States Housing Act of 1937, including adjustments 
involving projects referred to in subsection (a), that occur 
beginning with the first anniversary date of the contract after 
the regulations issued under subsection (e) take effect shall 
be made in accordance with the annual adjustment and 
comparability provisions of sections (8)(c)(2)(A) and 
8(c)(2)(C) of such Act, respectively, using the one-time 
contract rent determination under paragraph (1).
  [(e) Regulations.--The Secretary shall issue regulations to 
carry out this section and the amendments made by this section, 
including the amendments made by subsection (c) with regard to 
annual adjustment factors and comparability studies. The 
Secretary shall issue such regulations not later than the 
expiration of the 180-day period beginning on the date of the 
enactment of this Act.
  [(f) Report.--Not later than March 1, 1990, the Secretary 
shall report to the Congress on the feasibility and 
desirability, and the budgetary, legal, and administrative 
aspects, of adjusting contract rents under section 8(c)(2)(C) 
of the United States Housing Act of 1937 on the basis of any 
alternative methodologies that are simpler in application than 
individual project comparability studies.
  [(g) Technical Amendment.--The first sentence of section 
8(c)(2)(C) of the United States Housing Act of 1937 is amended 
by inserting ``, type,'' after ``quality''.]
                              ----------                              


             HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992

          * * * * * * *

                      TITLE I--HOUSING ASSISTANCE

          * * * * * * *

                 Subtitle B--Public and Indian Housing

          * * * * * * *

[SEC. 132. HOMEOWNERSHIP DEMONSTRATION PROGRAM IN OMAHA, NEBRASKA.

  [(a) Establishment.--The Secretary shall carry out a program 
to facilitate self-sufficiency and homeownership of single-
family homes administered by the Housing Authority of the city 
of Omaha, in the State of Nebraska (in this section referred to 
as the ``Housing Authority''), to demonstrate the effectiveness 
of promoting homeownership and providing support services.
  [(b) Participating Public Housing Units.--For purposes of the 
demonstration program, the Secretary shall authorize the 
Housing Authority to designate single-family housing units for 
eventual homeownership. Over the term of the demonstration, the 
demonstration program may be applied to not more than 20 
percent of the total number of public housing units 
administered by the Housing Authority. In conducting the 
demonstration, the Housing Authority shall affirmatively 
further fair housing objectives.
  [(c) Nondisplacement.--No person who is a tenant of public 
housing may be involuntarily relocated or displaced as a result 
of the demonstration program.
  [(d) Economic Self-Sufficiency.--
          [(1) Establishment of participation criteria.--The 
        Housing Authority shall establish criteria for the 
        participation of families in the demonstration program. 
        Such criteria shall be based on factors that may 
        reasonably be expected to predict a family's ability to 
        succeed in the homeownership program established by 
        this section.
          [(2) Contents of participation criteria.--The 
        criteria referred to in paragraph (1) shall include 
        evidence of interest by the family in homeownership, 
        the employment status and history of employment of 
        family members, and maintenance by the family of the 
        family's previous dwelling.
  [(e) Provision of Supportive Services.--The Housing Authority 
shall ensure the availability of supportive services to each 
family participating in the demonstration program through its 
own resources and through coordination with Federal, State, and 
local agencies and private entities. Supportive services 
available under the demonstration program may include 
counseling, remedial education, education for completion of 
high school, job training and preparation, financial counseling 
emphasizing planning for homeownership, and any other 
appropriate services.
  [(f) Reports to Congress.--
          [(1) Biennial report.--Upon the expiration of the 2-
        year period beginning on the date of enactment of this 
        Act, and each 2-year period thereafter, the Secretary 
        of Housing and Urban Development shall submit to the 
        Congress a report evaluating the effectiveness of the 
        demonstration program established under this section.
          [(2) Final report.--Not later than 60 days after 
        termination of the demonstration program pursuant to 
        subsection (h), the Secretary shall submit to the 
        Congress a final report evaluating the effectiveness of 
        the demonstration program.
  [(g) Regulations.--Not later than the expiration of the 90-
day period beginning on the date of the enactment of this Act 
\1\, the Secretary shall issue interim regulations to carry out 
this section, which shall take effect upon issuance. The 
Secretary shall issue final regulations to carry out this 
subtitle after notice and opportunity for public comment 
regarding the interim regulations, pursuant to the provisions 
of section 553 of title 5, United States Code (notwithstanding 
subsections (a)(2), (b)(B), and (d)(3) of such section). The 
duration of the period for public comment shall not be less 
than 60 days, and the final regulations shall be issued not 
later than the expiration of the 60-day period beginning upon 
the conclusion of the comment period and shall take effect upon 
issuance.
  [(h) Termination.--The demonstration program established 
under this section shall terminate 10 years after the date of 
the enactment of this Act.]
          * * * * * * *

                    Subtitle C--Section 8 Assistance

          * * * * * * *

[SEC. 152. MOVING TO OPPORTUNITY FOR FAIR HOUSING.

  [(a) Authority.--Using any amounts available under subsection 
(e), the Secretary of Housing and Urban Development shall carry 
out a demonstration program to provide tenant-based assistance 
under section 8 of the United States Housing Act of 1937 to 
assist very low-income families with children who reside in 
public housing or housing receiving project-based assistance 
under section 8 of the United States Housing Act of 1937 to 
move out of areas with high concentrations of persons living in 
poverty to areas with low concentrations of such persons. The 
demonstration program carried out under this section shall 
compare and contrast the costs associated with implementing 
such a program (including the costs of counseling, supportive 
services, housing assistance payments and other relevant 
program elements) with the costs associated with the routine 
implementation of the section 8 tenant-based rental assistance 
programs. The Secretary shall enter into annual contributions 
contracts with public housing agencies to administer housing 
assistance payments contracts under the demonstration.
  [(b) Eligible Cities.--
          [(1) In general.--The Secretary shall carry out the 
        demonstration only in cities with populations exceeding 
        350,000 that are located in consolidated metropolitan 
        statistical areas (as designated by the Director of the 
        Office of Management and Budget) having populations 
        exceeding 1,500,000.
          [(2) 1993.--Notwithstanding paragraph (1), in fiscal 
        year 1993, only the 5 cities selected for the 
        demonstration under the item relating to ``Housing 
        Programs--annual contributions for assisted housing 
        (including rescission of funds)'' of title II of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development, and Independent Agencies Appropriations 
        Act, 1992 (105 Stat. 745), and the City of Los Angeles, 
        California, shall be eligible for the demonstration 
        under this section.
  [(c) Services.--The Secretary shall enter into contracts with 
nonprofit organizations to provide counseling and services in 
connection with the demonstration.
  [(d) Reports.--
          [(1) Biennial.--Not later than the expiration of the 
        2-year period beginning on the date of the enactment of 
        this Act (and biennially thereafter), the Secretary 
        shall submit interim reports to the Congress evaluating 
        the effectiveness of the demonstration program under 
        this section. The interim reports shall include a 
        statement of the number of persons served, the level of 
        counseling and the types of services provided, the cost 
        of providing such counseling and services, updates on 
        the employment record of families assisted under the 
        program, and any other information the Secretary 
        considers appropriate in evaluating the demonstration.
          [(2) Final.--Not later than September 30, 2004, the 
        Secretary shall submit a final report to the Congress 
        describing the long-term housing, employment, and 
        educational achievements of the families assisted under 
        the demonstration program. Such report shall also 
        contain an assessment of such achievements for a 
        comparable population of section 8 recipients who have 
        not received assistance under the demonstration 
        program.
  [(e) Funding.--The budget authority available under section 
5(c) of the United States Housing Act of 1937 for tenant-based 
assistance under section 8 of such Act is authorized to be 
increased by $50,000,000, on or after October 1, 1992, and by 
$165,000,000, on or after October 1, 1993, to carry out the 
demonstration under this section. Any amounts made available 
under this paragraph shall be used in connection with the 
demonstration under this section.
  [(f) Implementation.--The Secretary may, by notice published 
in the Federal Register, establish any requirements necessary 
to carry out the demonstration under this section and the 
amendment made by this section. The Secretary shall publish 
such notice not later than the expiration of the 90-day period 
beginning on the date of the enactment of this Act and shall 
submit a copy of such notice to the Congress not less than 15 
days before publication.

[SEC. 153. DIRECTIVE TO FURTHER FAIR HOUSING OBJECTIVES UNDER 
                    CERTIFICATE AND VOUCHER PROGRAMS.

  [Not later than 2 years after the date of the enactment of 
this Act, the Secretary of Housing and Urban Development, in 
consultation with individuals representing fair housing 
organizations, low-income tenants, public housing agencies, and 
other interested parties, shall--
          [(1) review and comment upon the study prepared by 
        the Comptroller General of the United States pursuant 
        to section 558(3) of the Cranston-Gonzalez National 
        Affordable Housing Act;
          [(2) evaluate the implementation and effects of 
        existing demonstration and judicially mandated programs 
        that help minority families receiving section 8 
        certificates and vouchers move out of areas with high 
        concentrations of minority persons living in poverty to 
        areas with low concentrations, including how such 
        programs differ from the routine implementation of the 
        section 8 certificate and voucher programs;
          [(3) independently assess factors (including the 
        adequacy of section 8 fair market rentals, the level of 
        counseling provided by public housing agencies, the 
        existence of racial and ethnic discrimination by 
        landlords) that may impede the geographic dispersion of 
        families receiving section 8 certificates and vouchers;
          [(4) identify and implement any administrative 
        revisions that would enhance geographic dispersion and 
        tenant choice and incorporate the positive elements of 
        various demonstration and judicially mandated mobility 
        programs; and
          [(5) submit to the Congress a report describing its 
        findings under paragraphs (1), (2), and (3), the 
        actions taken under paragraph (4), and any 
        recommendations for additional demonstration, research, 
        or legislative action.]
          * * * * * * *
                              ----------                              


               SECTION 6 OF HUD DEMONSTRATION ACT OF 1993

[SEC. 6. SECTION 8 COMMUNITY INVESTMENT DEMONSTRATION PROGRAM.

  [(a) Demonstration Program.--The Secretary shall carry out a 
demonstration program to attract pension fund investment in 
affordable housing through the use of project-based rental 
assistance under section 8 of the United States Housing Act of 
1937.
  [(b) Funding Requirements.--In carrying out this section, the 
Secretary shall ensure that not less than 50 percent of the 
funds appropriated for the demonstration program each year are 
used in conjunction with the disposition of either--
          [(1) multifamily properties owned by the Department; 
        or
          [(2) multifamily properties securing mortgages held 
        by the Department.
  [(c) Contract Terms.--
          [(1) In general.--Project-based assistance under this 
        section shall be provided pursuant to a contract 
        entered into by the Secretary and the owner of the 
        eligible housing that--
                  [(A) provides assistance for a term of not 
                less than 60 months and not greater than 180 
                months; and
                  [(B) provides for contract rents, to be 
                determined by the Secretary, which shall not 
                exceed contract rents permitted under section 8 
                of the United States Housing Act of 1937, 
                taking into consideration any costs for the 
                construction, rehabilitation, or acquisition of 
                the housing.
          [(2) Amendment to section 203.--Section 203 of the 
        Housing and Community Development Amendments of 1978 
        (12 U.S.C. 1701z-11) is amended by adding at the end 
        the following new subsection:
  [``(l) Project-based assistance in connection with the 
disposition of a multifamily housing project may be provided 
for a contract term of less than 15 years if such assistance is 
provided--
          [``(1) under a contract authorized under section 6 of 
        the HUD Demonstration Act of 1993; and
          [``(2) pursuant to a disposition plan under this 
        section for a project that is determined by the 
        Secretary to be otherwise in compliance with this 
        section.''.
  [(d) Limitation.--(1) The Secretary may not provide (or make 
a commitment to provide) more than 50 percent of the funding 
for housing financed by any single pension fund, except that 
this limitation shall not apply if the Secretary, after the end 
of the 6-month period beginning on the date notice is issued 
under subsection (e)--
          [(A) determines that--
                  [(i) there are no expressions of interest 
                that are likely to result in approvable 
                applications in the reasonably foreseeable 
                future; or
                  [(ii) any such expressions of interest are 
                not likely to use all funding under this 
                section; and
          [(B) so informs the Committee on Banking, Finance and 
        Urban Affairs of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate.
  [(2) If the Secretary determines that there are expressions 
of interest referred to in paragraph (1)(A)(ii), the Secretary 
may reserve funding sufficient in the Secretary's determination 
to fund such applications and may use any remaining funding for 
other pension funds in accordance with this section.
  [(e) Implementation.--The Secretary shall by notice establish 
such requirements as may be necessary to carry out the 
provisions of this section. The notice shall take effect upon 
issuance.
  [(f) Applicability of ERISA.--Notwithstanding section 514(d) 
of the Employee Retirement Income Security Act of 1974, nothing 
in this section shall be construed to authorize any action or 
failure to act that would constitute a violation of such Act.
  [(g) Report.--Not later than 3 months after the last day of 
each fiscal year, the Secretary shall submit to the Committee 
on Banking, Finance and Urban Affairs of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate a report summarizing the activities 
carried out under this section during that fiscal year.
  [(h) Establishment of Standards.--Mortgages secured by 
housing assisted under this demonstration shall meet such 
standards regarding financing and securitization as the 
Secretary may establish.
  [(i) GAO Study.--The Comptroller General of the United States 
shall conduct a study evaluating the demonstration authorized 
under this section and shall report its findings to the 
Committee on Banking, Finance and Urban Affairs of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate not later than 3 months after the 
conclusion of the demonstration.
  [(j) Authorization of Appropriations.--There are authorized 
to be appropriated $100,000,000 for fiscal year 1994 to carry 
out this section.
  [(k) Termination Date.--The Secretary shall not enter into 
any new commitment to provide assistance under this section 
after September 30, 1998.]
                              ----------                              


                 SECTION 816 OF THE HOUSING ACT OF 1954

     [audits under public housing act of 1937; comptroller general

  [Sec. 816. Every contract for loans or annual contributions 
under the United States Housing Act of 1937, as amended, shall 
provide that the Secretary of Housing and Urban Development and 
the Comptroller General of the United States, or any of their 
duly authorized representatives, shall, for the purpose of 
audit and examination, have access to any books, documents, 
papers, and records of the public housing agency entering into 
such contract that are pertinent to its operations with respect 
to financial assistance under the United States Housing Act of 
1937, as amended.]
                              ----------                              


          HOUSING AND COMMUNITY DEVELOPMENT AMENDMENTS OF 1981

          * * * * * * *

           TITLE III--BANKING, HOUSING, AND RELATED PROGRAMS

             Subtitle A--Housing and Community Development

          * * * * * * *

                  PART 2--HOUSING ASSISTANCE PROGRAMS

          * * * * * * *

              miscellaneous housing assistance provisions

  Sec. 326. (a) * * *
          * * * * * * *
  [(b)(1) Within one year after the date of enactment of this 
Act, the Secretary of Housing and Urban Development shall 
conduct a survey to determine the number of projects which are 
assisted under section 8 of the United States Housing Act of 
1937 and are owned by developers or sponsors with five-year 
annual contributions contracts who plan to withdraw from the 
section 8 program when their contracts expire and who will 
increase rents in those projects to levels that the current 
residents of those projects will not be able to afford. Where 
such survey indicates that an owner intends to withdraw from 
the program, the Secretary shall notify affected residents of 
possible rent increases.]
          * * * * * * *
  [(c) The Secretary of Housing and Urban Development, after 
consultation with the Attorney General, shall develop 
regulations to prevent possible conflicts of interest on the 
part of Federal, State, and local government officials with 
regard to participation in projects assisted under section 8 of 
the United States Housing Act of 1937, and shall make such 
regulations effective not later than 180 days after the date of 
enactment of this Act.
  [(d) Rental Assistance Fraud Recoveries.--
          [(1) Authority to retain recovered amounts.--The 
        Secretary of Housing and Urban Development shall permit 
        public housing agencies administering the housing 
        assistance payments program under section 8 of the 
        United States Housing Act of 1937 to retain, out of 
        amounts obtained by the agencies from tenants that are 
        due as a result of fraud and abuse, an amount 
        (determined in accordance with regulations issued by 
        the Secretary) equal to the greater of--
                  [(A) 50 percent of the amount actually 
                collected, or
                  [(B) the actual, reasonable, and necessary 
                expenses related to the collection, including 
                costs of investigation, legal fees, and 
                collection agency fees.
          [(2) Use.--Amounts retained by an agency shall be 
        made available for use in support of the affected 
        program or project, in accordance with regulations 
        issued by the Secretary. Where the Secretary is the 
        principal party initiating or sustaining an action to 
        recover amounts from families or owners, the provisions 
        of this section shall not apply.
          [(3) Recovery.--Amounts may be recovered under this 
        paragraph--
                  [(A) by an agency through a lawsuit 
                (including settlement of the lawsuit) brought 
                by the agency or through court-ordered 
                restitution pursuant to a criminal proceeding 
                resulting from an agency's investigation where 
                the agency seeks prosecution of a family or 
                where an agency seeks prosecution of an owner; 
                or
                  [(B) through administrative repayment 
                agreements with a family or owner entered into 
                as a result of an administrative grievance 
                procedure conducted by an impartial 
                decisionmaker in accordance with section 6(k) 
                of the United States Housing Act of 1937.]
          * * * * * * *

                   [payment for development managers

  [Sec. 329A. The Secretary of Housing and Urban Development 
shall develop and implement a revised fee schedule for 
development managers of lower income housing projects assisted 
under the United States Housing Act of 1937 so that the 
percentage limitation applicable to fees chargeable in 
connection with smaller projects is increased to a minimum 
level which is practicable.]
          * * * * * * *

                      [purchase of pha obligations

  [Sec. 329E. In addition to any authority provided before 
October 1, 1981, the Secretary of Housing and Urban Development 
may, on and after October 1, 1981, enter into contracts for 
periodic payments to the Federal Financing Bank to offset the 
costs to the Bank of purchasing obligations (as described in 
the first sentence of section 16(b) of the Federal Financing 
Bank Act of 1973) issued by local public housing agencies for 
purposes of financing public housing projects authorized by 
section 5(c) of the United States Housing Act of 1937. 
Notwithstanding any other provision of law, such contracts may 
be entered into only to the extent approved in appropriation 
Acts, and the aggregate amount which may be obligated over the 
duration of such contracts may not exceed $400,000,000. There 
are hereby authorized to be appropriated any amounts necessary 
to provide for such payments. The authority to enter into 
contracts under this subsection shall be in lieu of any 
authority (except for authority provided specifically to the 
Secretary before October 1, 1981) of the Secretary to enter 
into contracts for such purposes under section 16(b) of the 
Federal Financing Bank Act of 1973.]
                              ----------                              


DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1991

          * * * * * * *

                                TITLE II

                    DEPARTMENT OF HOUSING AND URBAN

                              DEVELOPMENT

          * * * * * * *

                     Management and Administration

          * * * * * * *

                       administrative provisions

          * * * * * * *
  [Notwithstanding any other provision of law, regulation or 
other requirement, the Secretary shall not require any public 
housing agency or Indian housing authority to seek competitive 
bids for the procurement of any line of insurance when such 
public housing agency or Indian housing authority purchases 
such line of insurance from a nonprofit insurance entity, owned 
and controlled by public housing agencies or Indian housing 
authorities, and approved by the Secretary. In establishing 
standards for approval of such nonprofit insurance entities, 
the Secretary shall be assured that such entities have 
sufficient surplus capital to meet reasonably expected losses, 
reliable accounting systems, sound actuarial projections, and 
employees experienced in the insurance industry. The Secretary 
shall not place restrictions on the investment of funds of any 
such entity that is regulated by the insurance department of 
any State that describes the types of investments insurance 
companies licensed in such State may make. With regard to such 
entities that are not so regulated, the Secretary may establish 
investment guidelines that are comparable to State law 
regulating the investments of insurance companies.]
          * * * * * * *
                              ----------                              


DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1992

                                TITLE II

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

          * * * * * * *

                     Management and Administration

          * * * * * * *

                       administrative provisions

          * * * * * * *
  [Hereafter, notwithstanding any other provision of State or 
Federal law, regulation or other requirement, any public 
housing agency or Indian housing authority that purchases any 
line of insurance from a nonprofit insurance entity, owned and 
controlled by public housing agencies or Indian housing 
authorities, and approved by the Secretary, may purchase such 
insurance without regard to competitive procurement.
  [Hereafter, the Secretary shall establish standards as set 
forth herein, by regulation, adopted after notice and comment 
rulemaking pursuant to the Administrative Procedures Act, which 
will become effective not later than one year from the 
effective date of this Act.
  [Hereafter, in establishing standards for approval of such 
nonprofit insurance entities, the Secretary shall be assured 
that such entities have sufficient surplus capital to meet 
reasonably expected losses, reliable accounting systems, sound 
actuarial projections, and employees experienced in the 
insurance industry. The Secretary shall not place restrictions 
on the investment of funds of any such entity that is regulated 
by the insurance department of any State that describes the 
types of investments insurance companies licensed in such State 
may make. With regard to such entities that are not so 
regulated, the Secretary shall establish investment guidelines 
that are comparable to State law regulating the investments of 
insurance companies.
  [Hereafter, the Secretary shall not approve additional 
nonprofit insurance entities until such standards have become 
final, nor shall the Secretary revoke the approval of any 
nonprofit insurance entity previously approved by the 
Department unless for cause and after a due process hearing.
  [Hereafter, until the Department of Housing and Urban 
Development has adopted regulations specifying the nature and 
quality of insurance covering the potential personal injury 
liability exposure of public housing authorities and Indian 
housing authorities (and their contractors, including 
architectural and engineering services) as a result of testing 
and abatement of lead-based paint in federally subsidized 
public and Indian housing units, said authorities shall be 
permitted to purchase insurance for such risk, as an allowable 
expense against amounts available for capital improvements 
(modernization): Provided, That such insurance is competitively 
selected and that coverage provided under such policies, as 
certified by the authority, provides reasonable coverage for 
the risk of liability exposure, taking into consideration the 
potential liability concerns inherent in the testing and 
abatement of lead-based paint, and the managerial and quality 
assurance responsibilities associated with the conduct of such 
activities.]
          * * * * * * *
                              ----------                              


              HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983

          * * * * * * *

                 TITLE II--HOUSING ASSISTANCE PROGRAMS

          * * * * * * *

          [PUBLIC HOUSING EARLY CHILDHOOD DEVELOPMENT PROGRAM

  [Sec. 222. (a) Program Authority.--
          [(1) The Secretary of Housing and Urban Development 
        shall, to the extent approved in appropriation Acts, 
        carry out a demonstration program of making grants to 
        nonprofit organizations to assist such organizations in 
        providing early childhood development services in or 
        near lower income housing projects for lower income 
        families who reside in public housing.
          [(2) The Secretary shall design the program described 
        in paragraph (1) to determine the extent to which the 
        availability of early childhood development services in 
        or near lower income housing projects facilitates the 
        employability of the parents or guardians of children 
        residing in public housing.
  [(b) Eligibility for Assistance.--The Secretary may make a 
grant to a nonprofit organization for early childhood 
development services in or near a lower income housing project 
only if--
          [(1) prior to receipt of assistance under this 
        section, an early childhood development program is not 
        in operation for the project;
          [(2) the public housing agency agrees to provide 
        suitable facilities in or near the project for the 
        provision of early childhood development services;
          [(3) the early childhood development program for the 
        project will serve preschool children during the day, 
        school children after school, or both, in order to 
        permit the parents or guardians of such children to 
        obtain, retain, or train for employment;
          [(4) the early childhood development program for the 
        project is designed, to the extent practicable, to 
        involve the participation of the parents of children 
        benefiting from such program;
          [(5) the early childhood development program for the 
        project is designed, to the extent practicable, to 
        employ in part-time positions elderly individuals who 
        reside in the lower income housing project involved; 
        and
          [(6) the early childhood development program for the 
        project complies with all applicable State and local 
        laws, regulations, and ordinances.
  [(c) Allocation of Assistance.--In providing grants under 
this section, the Secretary shall--
          [(1) give priority to nonprofit organizations 
        providing early childhood development services in or 
        near lower income housing projects in which reside the 
        largest number of preschool and school children of 
        lower income families;
          [(2) seek to ensure a reasonable distribution of such 
        grants between urban and rural areas and among 
        nonprofit organizations providing early childhood 
        development services in or near lower income housing 
        projects of varying sizes; and
          [(3) seek to provide such grants to the largest 
        number of nonprofit organizations practicable, 
        considering the amount of funds available under this 
        section and the financial requirements of the 
        particular early childhood development programs to be 
        established for the lower income housing projects for 
        which applications are submitted under this section.
  [(d) Administrative Provisions.--
          [(1) Applications for grants under this section shall 
        be made by nonprofit organizations (in consultation 
        with public housing agencies) in such form, and 
        according to such procedures, as the Secretary may 
        prescribe.
          [(2) Any nonprofit organization receiving a grant 
        under this section may use such grant only for 
        operating expenses and minor renovations of facilities 
        necessary to the provision of early childhood 
        development services under this section.
          [(3) The Secretary shall conduct periodic evaluations 
        of each early childhood development program assisted 
        under this section for purposes of--
                  [(A) determining the effectiveness of such 
                program in providing early childhood 
                development services and permitting the parents 
                or guardians of children residing in public 
                housing to obtain, retain, or train for 
                employment; and
                  [(B) ensuring compliance with the provisions 
                of this section.
          [(4) No provision of this section may be construed to 
        authorize the Secretary to establish any health, 
        safety, educational, or other standards with respect to 
        early childhood development services or facilities 
        assisted with grants received under this section. Such 
        services and facilities shall comply with all 
        applicable State and local laws, regulations, and 
        ordinances, and all requirements established by the 
        Secretary of Health and Human Services for early 
        childhood development services and facilities.
  [(e) Report to Congress.--Not later than the expiration of 
the 3-year period following the date of the enactment of the 
Housing and Community Development Act of 1987, the Secretary 
shall prepare and submit to the Congress a detailed report 
setting forth the findings and conclusions of the Secretary as 
a result of carrying out the demonstration program established 
in this section. Such report shall include any recommendations 
of the Secretary with respect to the establishment of a 
permanent program of assisting early childhood development 
services in or near lower income housing projects.
  [(f) Definitions.--For purposes of this section:
          [(1) The term ``lower income families'' has the 
        meaning given such term in section 3(b)(2) of the 
        United States Housing Act of 1937.
          [(2) The terms ``lower income housing project'' and 
        ``public housing'' have the meanings given such terms 
        in section 3(b)(1) of the United States Housing Act of 
        1937.
          [(3) The term ``public housing agency'' has the 
        meaning given such term in section 3(b)(6) of the 
        United States Housing Act of 1937.
          [(4) The term ``Secretary'' means the Secretary of 
        Housing and Urban Development.
  [(g) Authorization of Appropriations.--To the extent provided 
in appropriation Acts, of any amounts appropriated for fiscal 
year 1993 under section 103 of the Housing and Community 
Development Act of 1974, $5,000,000 shall be available to carry 
out this section. To the extent approved in appropriation Acts, 
of any amounts appropriated for fiscal year 1994 under section 
5(c) of the United States Housing Act of 1937 for grants for 
the development of public housing, $5,210,000 shall be 
available to carry out this section. Any such amounts shall 
remain available until expended.]
          * * * * * * *

pet ownership in assisted rental housing for the elderly or handicapped

      Sec. 227. (a) * * *
          * * * * * * *
    (d) For purposes of this section, the term ``federally 
assisted rental housing for the elderly or handicapped'' means 
any rental housing project that--
          (1) is assisted under section 202 of the Housing Act 
        of 1959; or
          (2) is assisted under the United States Housing Act 
        of 1937, the United States Housing Act of 1996, the 
        National Housing Act, or title V of the Housing Act of 
        1949, and is designated for occupancy by elderly or 
        handicapped families, as such term is defined in 
        section 202(d)(4) of the Housing Act of 1959.
          * * * * * * *
                              ----------                              


                 SECTION 202 OF THE HOUSING ACT OF 1959

 H4  deg.SEC. 202. SUPPORTIVE HOUSING FOR THE ELDERLY.

    (a) * * *
          * * * * * * *
    (l) Allocation of Funds.--
          (1) * * *
          * * * * * * *
          (4) Consideration in allocating assistance.--
        Assistance under this section shall be allocated in a 
        manner that ensures that the awards of the assistance 
        are made for projects of sufficient size to accommodate 
        facilities for supportive services appropriate to the 
        needs of frail elderly residents.
          * * * * * * *
                              ----------                              


                      ANTI-DRUG ABUSE ACT OF 1988

          * * * * * * *

                      TITLE V--USER ACCOUNTABILITY

SEC. 5001. TABLE OF CONTENTS.

  The table of contents for this title is as follows:

                      TITLE V--USER ACCOUNTABILITY

Sec. 5001. Table of contents.

       Subtitle A--Opposition to Legalization and Public Awareness

     * * * * * * *

           Subtitle C--Preventing Drug Abuse in Public Housing

            Chapter 1--Regulatory and Enforcement Provisions

     * * * * * * *

        [Chapter 2--Public and Assisted Housing Drug Elimination]

             Chapter 2--Community Partnerships Against Crime

Sec. 5121. Short title.
[Sec. 5122. Congressional findings.]
Sec. 5122. Purposes.
     * * * * * * *
[Sec. 5125. Applications.]
Sec. 5125. Grant procedures.
     * * * * * * *
[Sec. 5130. Authorization of appropriations.]
Sec. 5130. Funding.
Sec. 5131. Program termination.
     * * * * * * *

          Subtitle C--Preventing Drug Abuse in Public Housing

          * * * * * * *

        [CHAPTER 2--PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION

[SEC. 5121. SHORT TITLE.

  [This chapter may be cited as the ``Public and Assisted 
Housing Drug Elimination Act of 1990''.

[SEC. 5122. CONGRESSIONAL FINDINGS.

  [The Congress finds that--
          [(1) the Federal Government has a duty to provide 
        public and other federally assisted low-income housing 
        that is decent, safe, and free from illegal drugs;
          [(2) public and other federally assisted low-income 
        housing in many areas suffers from rampant drug-related 
        crime;
          [(3) drug dealers are increasingly imposing a reign 
        of terror on public and other federally assisted low-
        income housing tenants;
          [(4) the increase in drug-related crime not only 
        leads to murders, muggings, and other forms of violence 
        against tenants, but also to a deterioration of the 
        physical environment that requires substantial 
        government expenditures; and
          [(5) local law enforcement authorities often lack the 
        resources to deal with the drug problem in public and 
        other federally assisted low-income housing, 
        particularly in light of the recent reductions in 
        Federal aid to cities.

[SEC. 5123. AUTHORITY TO MAKE GRANTS.

  [The Secretary of Housing and Urban Development, in 
accordance with the provisions of this chapter, may make grants 
to public housing agencies (including Indian Housing 
Authorities), public housing resident management corporations 
that are principally managing, as determined by the Secretary, 
public housing projects owned by public housing agencies, and 
private, for-profit and nonprofit owners of federally assisted 
low-income housing for use in eliminating drug-related crime.]

            CHAPTER 2--COMMUNITY PARTNERSHIPS AGAINST CRIME

SEC. 5121. SHORT TITLE.

  This chapter may be cited as the ``Community Partnerships 
Against Crime Act of 1996''.

SEC. 5122. PURPOSES.

  The purposes of this chapter are to--
          (1) improve the quality of life for the vast majority 
        of law-abiding public housing residents by reducing the 
        levels of fear, violence, and crime in their 
        communities;
          (2) broaden the scope of the Public and Assisted 
        Housing Drug Elimination Act of 1990 to apply to all 
        types of crime, and not simply crime that is drug-
        related; and
          (3) reduce crime and disorder in and around public 
        housing through the expansion of community-oriented 
        policing activities and problem solving.

SEC. 5123. AUTHORITY TO MAKE GRANTS.

  The Secretary of Housing and Urban Development may make 
grants in accordance with the provisions of this chapter for 
use in eliminating crime in and around public housing and other 
federally assisted low-income housing projects to (1) local 
housing and management authorities, and (2) private, for-profit 
and nonprofit owners of federally assisted low-income housing.

SEC. 5124. ELIGIBLE ACTIVITIES.

  (a) Public and Assisted Housing.--Grants under this chapter 
may be used in and around public housing or other federally 
assisted low-income housing projects for--
          (1) the employment of security personnel;
          (2) reimbursement of local law enforcement agencies 
        for additional security and protective services;
          (3) physical improvements which are specifically 
        designed to enhance security, including fencing, 
        lighting, locking, and surveillance systems;
          (4) the employment of one or more individuals--
                  [(A) to investigate drug-related crime on or 
                about the real property comprising any public 
                or other federally assisted low-income housing 
                project; and]
                  (A) to investigate crime; and
                  (B) to provide evidence relating to such 
                crime in any administrative or judicial 
                proceeding;
          (5) the provision of training, communications 
        equipment, and other related equipment for use by 
        voluntary tenant patrols acting in cooperation with 
        local law enforcement officials;
          (6) programs designed to reduce use of drugs [in and 
        around public or other federally assisted low-income 
        housing projects], including drug-abuse prevention, 
        intervention, referral, and treatment programs; [and]
          [(7) where a public housing agency receives a grant, 
        providing funding to nonprofit public housing resident 
        management corporations and resident councils to 
        develop security and drug abuse prevention programs 
        involving site residents.]
          (7) providing funding to nonprofit public housing 
        resident management corporations and resident councils 
        to develop security and crime prevention programs 
        involving site residents;
          (8) the employment or utilization of one or more 
        individuals, including law enforcement officers, made 
        available by contract or other cooperative arrangement 
        with State or local law enforcement agencies, to engage 
        in community- and problem-oriented policing involving 
        interaction with members of the community in proactive 
        crime control and prevention activities;
          (9) programs and activities for or involving youth, 
        including training, education, recreation and sports, 
        career planning, and entrepreneurship and employment 
        activities and after school and cultural programs; and
          (10) service programs for residents that address the 
        contributing factors of crime, including programs for 
        job training, education, drug and alcohol treatment, 
        and other appropriate social services.
  (b) Other PHA-Owned Housing.--Notwithstanding any other 
provision of this chapter, grants under this chapter may be 
used to eliminate [drug-related crime in housing owned by 
public housing agencies] crime in and around housing owned by 
local housing and management authorities that is not public 
housing assisted under the United States Housing Act of 1937 
and is not otherwise federally assisted, for the activities 
described in paragraphs (1) through [(7)] 10 of subsection (a), 
but only if--
          (1) the housing is located in a high intensity drug 
        trafficking area designated pursuant to section 1005 of 
        this Act; and
          (2) the [public housing agency] local housing and 
        management authority owning the housing demonstrates, 
        to the satisfaction of the Secretary, that [drug-
        related] criminal activity at the housing has a 
        detrimental effect on or about the real property 
        comprising any public or other federally assisted low-
        income housing.

[SEC. 5125. APPLICATIONS.

  [(a) In General.--To receive a grant under this chapter, a 
public housing agency, a public housing resident management 
corporation, or an owner of federally assisted low-income 
housing shall submit an application to the Secretary, at such 
time, in such manner, and accompanied by such additional 
information as the Secretary may reasonably require. Such 
application shall include a plan for addressing the problem of 
drug-related crime on the premises of the housing administered 
or owned by the applicant for which the application is being 
submitted.
  [(b) Criteria.--Except as provided by subsections (c) and (d) 
the Secretary shall approve applications under this chapter 
based exclusively on--
          [(1) the extent of the drug-related crime problem in 
        the public or federally assisted low-income housing 
        project or projects proposed for assistance;
          [(2) the quality of the plan to address the crime 
        problem in the public or federally assisted low-income 
        housing project or projects proposed for assistance, 
        including the extent to which the plan includes 
        initiatives that can be sustained over a period of 
        several years;
          [(3) the capability of the applicant to carry out the 
        plan; and
          [(4) the extent to which tenants, the local 
        government and the local community support and 
        participate in the design and implementation of the 
        activities proposed to be funded under the application.
  [(c) Federally Assisted Low-Income Housing.--In addition to 
the selection criteria specified in subsection (b), the 
Secretary may establish other criteria for the evaluation of 
applications submitted by owners of federally assisted low-
income housing, except that such additional criteria shall be 
designed only to reflect--
          [(1) relevant differences between the financial 
        resources and other characteristics of public housing 
        authorities and owners of federally assisted low-income 
        housing, or
          [(2) relevant differences between the problem of 
        drug-related crime in public housing and the problem of 
        drug-related crime in federally assisted low-income 
        housing.
  [(d) High Intensity Drug Trafficking Areas.--In evaluating 
the extent of the drug-related crime problem pursuant to 
subsection (b), the Secretary may consider whether housing 
projects proposed for assistance are located in a high 
intensity drug trafficking area designated pursuant to section 
1005 of the Anti-Drug Abuse Act of 1988.]

SEC. 5125. GRANT PROCEDURES.

  (a) LHMA's With 250 or More Units.--
          (1) Grants.--In each fiscal year, the Secretary shall 
        make a grant under this chapter from any amounts 
        available under section 5131(b)(1) for the fiscal year 
        to each of the following local housing and management 
        authorities:
                  (A) New applicants.--Each local housing and 
                management authority that owns or operates 250 
                or more public housing dwelling units and has--
                          (i) submitted an application to the 
                        Secretary for a grant for such fiscal 
                        year, which includes a 5-year crime 
                        deterrence and reduction plan under 
                        paragraph (2); and
                          (ii) had such application and plan 
                        approved by the Secretary.
                  (B) Renewals.--Each local housing and 
                management authority that owns or operates 250 
                or more public housing dwelling units and for 
                which--
                          (i) a grant was made under this 
                        chapter for the preceding Federal 
                        fiscal year;
                          (ii) the term of the 5-year crime 
                        deterrence and reduction plan 
                        applicable to such grant includes the 
                        fiscal year for which the grant under 
                        this subsection is to be made; and
                          (iii) the Secretary has determined, 
                        pursuant to a performance review under 
                        paragraph (4), that during the 
                        preceding fiscal year the agency has 
                        substantially fulfilled the 
                        requirements under subparagraphs (A) 
                        and (B) of paragraph (4).
          (2) 5-year crime deterrence and reduction plan.--Each 
        application for a grant under this subsection shall 
        contain a 5-year crime deterrence and reduction plan. 
        The plan shall describe, for the local housing and 
        management authority submitting the plan--
                  (A) the nature of the crime problem in public 
                housing owned or operated by the local housing 
                and management authority;
                  (B) the building or buildings of the local 
                housing and management authority affected by 
                the crime problem;
                  (C) the impact of the crime problem on 
                residents of such building or buildings; and
                  (D) the actions to be taken during the term 
                of the plan to reduce and deter such crime, 
                which shall include actions involving 
                residents, law enforcement, and service 
                providers.
        The term of a plan shall be the period consisting of 5 
        consecutive fiscal years, which begins with the first 
        fiscal year for which funding under this chapter is 
        provided to carry out the plan.
          (3) Amount.--In any fiscal year, the amount of the 
        grant for a local housing and management authority 
        receiving a grant pursuant to paragraph (1) shall be 
        the amount that bears the same ratio to the total 
        amount made available under section 5131(b)(1) as the 
        total number of public dwelling units owned or operated 
        by such authority bears to the total number of dwelling 
        units owned or operated by all local housing and 
        management authorities that own or operate 250 or more 
        public housing dwelling units that are approved for 
        such fiscal year.
          (4) Performance review.--For each fiscal year, the 
        Secretary shall conduct a performance review of the 
        activities carried out by each local housing and 
        management authority receiving a grant pursuant to this 
        subsection to determine whether the agency--
                  (A) has carried out such activities in a 
                timely manner and in accordance with its 5-year 
                crime deterrence and reduction plan; and
                  (B) has a continuing capacity to carry out 
                such plan in a timely manner.
          (5) Submission of applications.--The Secretary shall 
        establish such deadlines and requirements for 
        submission of applications under this subsection.
          (6) Review and determination.--The Secretary shall 
        review each application submitted under this subsection 
        upon submission and shall approve the application 
        unless the application and the 5-year crime deterrence 
        and reduction plan are inconsistent with the purposes 
        of this chapter or any requirements established by the 
        Secretary or the information in the application or plan 
        is not substantially complete. Upon approving or 
        determining not to approve an application and plan 
        submitted under this subsection, the Secretary shall 
        notify the local housing and management authority 
        submitting the application and plan of such approval or 
        disapproval.
          (7) Disapproval of applications.--If the Secretary 
        notifies an authority that the application and plan of 
        the authority is not approved, not later than the 
        expiration of the 15-day period beginning upon such 
        notice of disapproval, the Secretary shall also notify 
        the authority, in writing, of the reasons for the 
        disapproval, the actions that the authority could take 
        to comply with the criteria for approval, and the 
        deadlines for such actions.
          (8) Failure to approve or disapprove.--If the 
        Secretary fails to notify an authority of approval or 
        disapproval of an application and plan submitted under 
        this subsection before the expiration of the 60-day 
        period beginning upon the submission of the plan or 
        fails to provide notice under paragraph (7) within the 
        15-day period under such paragraph to an authority 
        whose application has been disapproved, the application 
        and plan shall be considered to have been approved for 
        purposes of this section.
  (b) LHMA's With Fewer Than 250 Units and Owners of Federally 
Assisted Low-Income Housing.--
          (1) Applications and plans.--To be eligible to 
        receive a grant under this chapter, a local housing and 
        management authority that owns or operates fewer than 
        250 public housing dwelling units or an owner of 
        federally assisted low-income housing shall submit an 
        application to the Secretary at such time, in such 
        manner, and accompanied by such additional information 
        as the Secretary may require. The application shall 
        include a plan for addressing the problem of crime in 
        and around the housing for which the application is 
        submitted, describing in detail activities to be 
        conducted during the fiscal year for which the grant is 
        requested.
          (2) Grants for lhma's with fewer than 250 units.--In 
        each fiscal year the Secretary may, to the extent 
        amounts are available under section 5131(b)(2), make 
        grants under this chapter to local housing and 
        management authorities that own or operate fewer than 
        250 public housing dwelling units and have submitted 
        applications under paragraph (1) that the Secretary has 
        approved pursuant to the criteria under paragraph (4).
          (3) Grants for federally assisted low-income 
        housing.--In each fiscal year the Secretary may, to the 
        extent amounts are available under section 5131(b)(3), 
        make grants under this chapter to owners of federally 
        assisted low-income housing that have submitted 
        applications under paragraph (1) that the Secretary has 
        approved pursuant to the criteria under paragraphs (4) 
        and (5).
          (4) Criteria for approval of applications.--The 
        Secretary shall determine whether to approve each 
        application under this subsection on the basis of--
                  (A) the extent of the crime problem in and 
                around the housing for which the application is 
                made;
                  (B) the quality of the plan to address the 
                crime problem in the housing for which the 
                application is made;
                  (C) the capability of the applicant to carry 
                out the plan; and
                  (D) the extent to which the tenants of the 
                housing, the local government, local community-
                based nonprofit organizations, local tenant 
                organizations representing residents of 
                neighboring projects that are owned or assisted 
                by the Secretary, and the local community 
                support and participate in the design and 
                implementation of the activities proposed to be 
                funded under the application.
        In each fiscal year, the Secretary may give preference 
        to applications under this subsection for housing made 
        by applicants who received a grant for such housing for 
        the preceding fiscal year under this subsection or 
        under the provisions of this chapter as in effect 
        immediately before the date of the enactment of the 
        United States Housing Act of 1996.
          (5) Additional criteria for federally assisted low-
        income housing.--In addition to the selection criteria 
        under paragraph (4), the Secretary may establish other 
        criteria for evaluating applications submitted by 
        owners of federally assisted low-income housing, except 
        that such additional criteria shall be designed only to 
        reflect--
                  (A) relevant differences between the 
                financial resources and other characteristics 
                of local housing and management authorities and 
                owners of federally assisted low-income 
                housing; or
                  (B) relevant differences between the problem 
                of crime in public housing administered by such 
                authorities and the problem of crime in 
                federally assisted low-income housing.

SEC. 5126. DEFINITIONS.

  For the purposes of this chapter:
          [(1) Controlled substance.--The term ``controlled 
        substance'' has the meaning given such term in section 
        102 of the Controlled Substance Act (21 U.S.C. 802).
          [(2) Drug-related crime.--The term ``drug-related 
        crime'' means the illegal manufacture, sale, 
        distribution, use, or possession with intent to 
        manufacture, sell, distribute, or use a controlled 
        substance.]
          [(3)] (1) Secretary.--The term ``Secretary'' means 
        the Secretary of Housing and Urban Development.
          [(4)] (2) Federally assisted low-income housing.--The 
        term ``federally assisted low-income housing'' means 
        housing assisted under--
                  (A) section 221(d)(3), [section] 221(d)(4), 
                or 236 of the National Housing Act;
                  (B) section 101 of the Housing and Urban 
                Development Act of 1965; or
                  (C) section 8 of the United States Housing 
                Act of 1937.
          (3) Local housing and management authority.--The term 
        ``local housing and management authority'' has the 
        meaning given the term in title I of the United States 
        Housing Act of 1996.

SEC. 5127. IMPLEMENTATION.

  The Secretary shall issue regulations to implement this 
chapter within 180 days after the date of enactment of the 
[Cranston-Gonzalez National Affordable Housing Act] United 
States Housing Act of 1996.

SEC. 5128. REPORTS.

  The Secretary shall require grantees to provide periodic 
reports that include the obligation and expenditure of grant 
funds, the progress made by the grantee in implementing the 
plan [described in section 5125(a)] for the grantee submitted 
under subsection (a) or (b) of section 5125, as applicable, and 
any change in the incidence of [drug-related crime in] crime in 
and around projects assisted under this chapter.
          * * * * * * *

[SEC. 5130. AUTHORIZATION OF APPROPRIATIONS.

  [(a) In General.--There are authorized to be appropriated to 
carry out this chapter $175,000,000 for fiscal year 1993 and 
$182,350,000 for fiscal year 1994. Any amount appropriated 
under this section shall remain available until expended.
  [(b) Set-Asides.--Of any amount made available in any fiscal 
year to carry out this chapter, not more than 6.25 percent of 
such amount shall be available for grants for federally 
assisted, low-income housing. Notwithstanding any other 
provision of law, of any amounts appropriated for drug 
elimination grants under this chapter for fiscal years 1993 and 
1994, not more than 6.25 percent shall be available for grants 
for federally assisted low-income housing and 5.0 percent shall 
be available for public housing youth sports program grants 
under section 520 of the Cranston-Gonzalez National Affordable 
Housing Act.
  [(c) Set-Aside for Youth Sports Programs.--Of any amount made 
available in any fiscal year to carry out this chapter, 5 
percent of such amount shall be available for public housing 
youth sports program grants under section 520 of the Cranston-
Gonzalez National Affordable Housing Act for such fiscal year.]

SEC. 5130. FUNDING.

  (a) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this chapter such sums as may be 
necessary for fiscal year 1996.
  (b) Allocation.--Of any amounts available, or that the 
Secretary is authorized to use, to carry out this chapter in 
any fiscal year--
          (1) 85 percent shall be available only for assistance 
        pursuant to section 5125(a) to local housing and 
        management authorities that own or operate 250 or more 
        public housing dwelling units;
          (2) 10 percent shall be available only for assistance 
        pursuant to section 5125(b)(2) to local housing and 
        management authorities that own or operate fewer than 
        250 public housing dwelling units; and
          (3) 5 percent shall be available only for assistance 
        to federally assisted low-income housing pursuant to 
        section 5125(b)(3).

SEC. 5131. PROGRAM TERMINATION.

  The program under this chapter shall terminate at the end of 
September 30, 1996. No grants may be made under the program 
after such date.
          * * * * * * *
           ADDITIONAL VIEWS OF THE HONORABLE RICHARD H. BAKER

    The ``United States Housing Act of 1995'' is a well-thought 
plan to rectify the serious problems with public housing in 
this country. Chairman Rick Lazio (R-NY) has compiled a bold 
and comprehensive bill that I believe will serve to improve the 
housing condition of our most unfortunate Americans, yet 
provide a market-based incentive to build and maintain housing 
at the lowest public cost.
    My concern about public housing centers on the residents in 
my state who live in these properties. As is the case in most 
states, I presume, most of the public housing authorities in 
Louisiana maintain public housing exceedingly well. In fact, 
they quietly provide decent housing at a time when demand is 
great and resources are limited.
    Like most states, the particular irony of public housing in 
Louisiana is that the overwhelming perception of housing 
assistance is a mismanaged, overly bureaucratic, and 
excessively expensive system. In Louisiana, that perception is 
largely due to two large public housing authorities--the 
Lafayette Housing Authority (LHA) and the Housing Authority of 
New Orleans (HANO). Both are among the lowest performing 
housing authorities in the country, and together with a very 
few mismanaged housing authorities, they define the nationwide 
perception of most Americans that our federal housing policies 
have failed.
    While much of the public housing in Louisiana is decent and 
liveable, housing conditions in the City of New Orleans--which 
I have personally witnessed--are deplorable for many of HANO's 
residents. Significant amounts of federal grants and subsidies 
are not being expended efficiently or effectively, and the 
Department of Housing and Urban Development has failed to 
exercise adequate oversight of HANO for most of the last 
decade.
    The scope of this problem is broad and I believe that it 
warrants immediate attention. HANO is the seventh largest 
housing authority in the nation, receiving over $30 million in 
operating subsidies and managing nearly 14,000 public housing 
units. HANO currently has over 700 vacant units at a time when 
over 4,000 families are on the waiting list for public housing. 
Moreover, many of the occupied units are in dire need of repair 
and maintenance. During my tour of Desire--one of HANO's most 
notorious developments--I found that residents were living in 
and next to buildings that were literally falling apart. They 
had deteriorated walls and caved in roofs.
    However, I also found that HANO does not lack the funds to 
improve the resident's housing conditions. For instances, over 
95 percent of the $170 million that Congress has appropriated 
for modernization and development in HANO remains unspent by 
the housing authority. These conditions must be remedied, their 
causes determined, and potential solutions identified.
    One bold effort to solve these problems and remedy these 
conditions is H.R. 2406, ``The United States Housing Act of 
1995,'' a responsible and progressive effort to reform public 
housing. This bill will benefit the tenants of public housing 
as much as it will serve the taxpayers. The bill takes a 
comprehensive and progressive approach by repealing the Housing 
Act of 1937. The legislation completely rethinks how best to 
allocate our limited resources to the most effective delivery 
of housing for our most needy citizens. Particular to my 
interest are the provisions which impose a ``death-penalty'' on 
the worst public housing authorities and restores local control 
to local communities. In addition, I strongly favor the 
language which requires residents to work and cracks down on 
drug and alcohol abuse in public housing.
    The bill affirms what is true in my state: most public 
housing authorities are effective managers and should be given 
more flexibility to maintain their properties. Giving the 
authorities the ability to develop mixed-income communities and 
the flexibility to better manage local housing stock without 
the limitation of the one-for-one replacement mandate are two 
positions which I have long advocated for.
    I commend Chairman Lazio for his bold plan to reform public 
housing. With his efforts, together with my colleagues on the 
Housing Subcommittee and the Full Banking Committee, we have 
advanced a bill that will substantially improve the housing and 
quality of life of our most needy citizens. We have ended the 
cycle of dependency on the federal government and demands for 
more money. With ``The United States Housing Act of 1995,'' we 
have reaffirmed that people locally can and will address the 
fundamental needs of its communities.

                                                  Richard H. Baker.
            ADDITIONAL VIEWS OF THE HONORABLE PETER T. KING

    On November 9, 1995, the Committee approved the U.S. 
Housing Act, HR 2406. I would like to commend Housing 
Subcommittee Chairman Lazio for the work he has done to 
streamline public housing policy. His comprehensive review of 
these programs has resulted in legislation which will provide 
for greater flexibility, increased accountability and better 
living conditions for residents in public housing.
    The King Amendment which is included in HR 2406 requires 
HUD Secretary Henry Cisneros to provide full account of HUD's 
contractual relationship with Nation of Islam leader Louis 
Farrakhan's security companies. I am very appreciative of 
Chairman Lazio's willingness to incorporate my amendment into 
the Manager's Amendment which he offered for the Committee's 
approval on November 2.
    Over the past two years, I have uncovered information that 
shows that HUD has had over $20 million in contracts with 
Nation of Islam security companies in cities all across the 
country.
    Since 1994, I have requested Secretary Cisneros to provide 
detailed information on the number, duration and cost of 
contracts that HUD has entered into with security companies 
affiliated with Nation of Islam leader Louis Farrakhan, a 
renowned racist and anti-Semite. In a March 1995 hearing into 
this situation, the Subcommittee on General Oversight and 
Investigations heard testimony from Secretary Cisneros where he 
not only defended HUD's contractual relationship with Farrakhan 
but compared the Nation of Islam to organizations like Catholic 
Charities, the Salvation Army and B'nai B'rith. It is simply 
outrageous to compare the good works of these organizations 
with the Nation of Islam whose leaders spew a most vile message 
of bigotry, hate and intolerance.
    In 1994, HUD's own Inspector General issued a report 
outlining HUD's failure to follow proper procurement practices 
in Baltimore. This investigation revealed that HUD did not 
follow procurement regulations in requiring full and open 
competition when it awarded over $4.1 million in security 
contracts to firms who did not submit the lowest reasonable 
bid.
    In addition the Inspector General's report uncovered that 
unlicensed employees of the Nation of Islam Security Agency 
were performing security functions. A review of Maryland State 
Police licensing records indicated that only 72 employees were 
state certified; 60 had pending applications; and 29 employees 
were disapproved for prior felony convictions. On November 8, 
1995, HUD finally ordered the Housing Authority of Baltimore 
City to terminate its contract with the Nation of Islam 
Security Agency.
    Continued pressure from myself and Senator Dole resulted in 
a cursory review of Farrakhan-controlled contracts in January 
of 1995. Although woefully inadequate and incomplete, HUD's so-
called review provided information on at least 15 contracts in 
12 cities totaling millions of dollars. Since that time, 
Secretary Cisneros has continued to stonewall Congress by 
refusing to provide additional information on these contracts 
and to investigate the alleged anti-discriminatory hiring 
practices of these Farrakhan-controlled companies.
    The King Amendment will end the preferential treatment the 
Nation of Islam has been receiving and ensure that HUD will 
fulfill its enforcement responsibilities. It is my hope that 
once the details of these contracts are exposed, HUD will end 
Farrakhan's federal hate subsidy.
    I am pleased that several prominent organizations and 
individuals such as the Jewish War Veterans, the American 
Jewish Congress, the Catholic League for Peace and Justice, the 
American Jewish Committee and former New York City Mayor Ed 
Koch have endorsed my amendment.

                                                     Peter T. King.
                                ------                                

                     The American Jewish Committee,
                              The Jacob Blaustein Building,
                                   New York, NY, November 15, 1995.
Hon. Peter King,
U.S. House of Representatives,
Washington, DC.
    Dear Congressman King: The American Jewish Committee 
commends you for your efforts which led to inclusion of the 
``King Amendment'' in the U.S. Housing Act of 1995 (H.R. 2406). 
This provision will require the Department of Housing and Urban 
Development to investigate when complaints indicate that 
federally funded security contractors in public housing 
projects may have engaged in discriminatory hiring practices or 
if there are indications that there may have been bidding 
irregularities in the issuance of their contracts. If contracts 
are not in compliance, the King Amendment directs that HUD take 
steps to bring those contracts into full compliance or 
terminate them.
    We have for some time been greatly concerned by the problem 
of Nation of Islam-affiliated organizations that receive 
government contracts, including but not limited to the use of 
NOI security services in federally funded public housing. As 
were you, we were troubled by last March's Congressional 
hearing, at which HUD Secretary Henry Cisneros compared the 
Nation of Islam with community service organizations such as 
the Salvation Army, Catholic Charities and B'nai B'rith and 
suggested that, in any event, it was not within HUD's 
jurisdiction to deal with claims that federally funded NOI 
security firms had engaged in discrimination.
    The Nation of Islam and its primary spokespeople promote 
racism, hatred and violence. If the NOI security affiliates 
are, as we believe likely, reflective of the ideology, practice 
and personnel of the Nation of Islam, these agencies may be 
operating in violation of laws enjoining discriminatory 
employment practices. Certainly, where complaints so warrant, 
the government should review contracts with NOI affiliates and 
void them if violations of law are uncovered that cannot be 
remedied.
    We are indebted to you for the seriousness with which you 
have addressed the problem of NOI-affiliated organizations that 
receive government contracts, including your introduction last 
year of legislation directed at federally funded contracts with 
hate groups, your leadership role in bringing about last 
March's Congressional oversight hearing, and, now, your work in 
including the King Amendment in H.R. 2406.
    You may recall that in correspondence last year we 
suggested revisions to your earlier bill in order to address 
First Amendment concerns. We are gratified that the King 
Amendment, in requiring investigation of complaints of 
discrimination and other irregularities, and setting forth next 
steps in the event of noncompliance with applicable law, is 
consistent with those suggested revisions.
    In recent days the Department of Urban and Housing 
Development has, at long last, ordered that the Baltimore 
Housing Authority cancel a security contract with an NOI 
affiliated company because of contract bidding irregularities. 
Notwithstanding this laudable step, we believe that the King 
Amendment remains an appropriate addition to the law. We will 
be pleased to support the King Amendment's continued inclusion 
in the Housing Act as the bill moves forward.
            Sincerely yours,
                                           David A. Harris,
                                                Executive Director.
                                ------                                

                                   Catholic League,
                            For Religious and Civil Rights,
                                                  October 23, 1995.
Hon. Peter King,
House of Representatives,
Washington, DC.
    Dear Congressman King: The Catholic League for Religious 
and Civil Rights strongly supports the amendment that you have 
proposed to the U.S. Housing Act of 1995, HR 2406. It is due to 
the delinquency of the Department of Housing and Urban 
Development that security contracts have not been adequately 
screened, allowing, perversely, for public funding of hate 
groups.
    The Nation of Islam has a long track record of anti-
Catholic and anti-Semitic bigotry, and that is why the Catholic 
League vehemently objects to the federal government extending 
contracts to the organization. HUD has an obligation to 
investigate how and why the National of Islam qualifies for 
public funding, and since it won't do so voluntarily, it makes 
it imperative that your amendment succeed.
    As president of the nation's largest Catholic civil rights 
organization, I can say without equivocation that nothing is 
more disturbing than to find instances of taxpayer-funded 
bigotry. Your amendment addresses this issue and has therefore 
merited the support of the Catholic League.
            Sincerely,
                                        William A. Donohue,
                                                         President.
                                ------                                

            Robinson Silverman Pearce Aronsohn     
                                      & Berman LLP,
                               1290 Avenue of the Americas,
                                   New York, NY, November 13, 1995.
Hon. Peter T. King,
House of Representatives,
Washington, DC.
    Dear Peter: Thanks for your letter of November 7th.
    Congratulations on your success, which I have already 
reported on, with respect to preventing HUD from using 
companies linked to Louis Farrakhan to provide security at 
public housing projects. You have done a terrific job in 
exposing the Nation of Islam and its bigotry.
    All the best.
            Sincerely,
                                                    Edward I. Koch.
          ADDITIONAL VIEWS OF THE HONORABLE MAURICE D. HINCHEY

    I generally support some of the broad goals of H.R. 2406, 
and applaud the efforts to reform the federal public housing 
programs. This legislation takes some constructive steps in 
relieving local housing authorities of burdensome federal 
requirements and providing for a better income mix in public 
housing. These are a few important steps that are needed to 
address the housing crisis in this nation.
    One of my primary concerns about the U.S. Housing Act, 
however, is the specific provision that would eliminate the 
Brooke amendment. This is an unwise policy choice for this 
nation because it will force hundreds of thousands of low- and 
middle-income families to pay substantially more toward rent 
during a time of declining wages and living standards. 
Eliminating rent ceilings would further widen the growing gap 
between the rich and the poor, which is a trend that we can ill 
afford to facilitate.
    As amended in the early 1980's, the Brooke amendment 
ensures that residents in public or assisted housing pay no 
more than 30% of their monthly income in rent. This rent 
ceiling protects working people, seniors, and the disabled from 
exorbitant housing costs at a time of decreasing economic 
opportunities, higher costs of living, and rising health care 
expenses.
    During the mark up of H.R. 2406, the Committee rejected the 
amendment of Congressman Barney Frank to preserve rent ceilings 
for all residents in public and assisted housing. An amendment 
I subsequently offered would have preserved the ceiling more 
narrowly for seniors and the disabled, who are the most 
vulnerable members of our society. My amendment was not adopted 
in one of the closest votes by our Committee in recent memory.
    There are currently more than 350,000 senior citizens 
receiving Section 8 assistance, and over 400,000 seniors 
resident in public housing nationwide. Under the bill, all of 
these residents will be potentially subject to large increases 
in rent. In the state of New York, senior or disabled citizens 
reside in about one in two federally-assisted housing 
households. In my Congressional District, that number is even 
higher.
    It is unfair to compel low- and middle-income elderly 
residents to pay more for their housing. Under other 
legislation that has passed Congress, seniors are asked to pay 
more for their Medicare premiums and copayments. They are being 
told to pay more than $50 billion more for their health care 
coverage and pay more for food and other basic items due to 
broad cuts in food stamps and other essential programs. The 
bill in its current form would require many elderly households 
to pay an estimated $150 to $400 more in rent next year as 
well. I am concerned that many families would be forced to 
choose between housing or health care, rent or medicine, and 
many may end up on the streets.
    I believe that the U.S. Housing Act would be vastly 
improved by preserving the current rent ceiling named for a 
former Republican Senator from Massachusetts. If it cannot be 
preserved for everyone, then it should at least be preserved 
for senior citizens and the disabled.
                                                Maurice D. Hinchey.
                   ADDITIONAL VIEWS OF MR. GUTIERREZ

    I am strongly opposed to H.R. 2406 as passed by the 
Committee on Banking and Financial Services on November 9, 
1995. I believe this bill is filled with provisions and 
initiatives that will prove to be detrimental to the families 
who currently live in public housing. At the Committee mark-up, 
I offered three amendments that would have helped to ensure 
that public housing would be available and affordable to those 
families who need it most and that public housing residents 
would be given the same opportunities available to those who by 
virtue of a higher income live in private housing. All three 
amendments were rejected by the majority members of the 
Committee.
    The bill introduced by Chairman Lazio permitted families of 
up to 80 percent of median income to be eligible for public 
housing. I believe this is too high. Currently, 95 percent of 
the households served by public housing are below 50 percent of 
median income. If housing authorities were given the authority 
to include families up to 80 percent of median income, I 
believe the most needy would be excluded.
    Due to recent and future budget cuts, the ability of LHMA's 
to increase the supply of public housing will be greatly 
diminished. As families with higher incomes move into public 
housing over time, those least able to afford housing will be 
forced to find alternate housing, which in many cases will mean 
overcrowded housing, homeless shelters or the streets. The 
amendment I offered sought to prevent this from happening. In 
Chicago, 80 percent of median income is more than $40,000. In 
Illinois' 4th Congressional District, $40,000 is 173 percent of 
median income. I believe that LHMA's will concentrate on moving 
families at 80 percent of median income into public housing and 
moving families from my district out. I believe we must work to 
prevent this from happening.
    Secretary Cisneros, in a letter to Chairman Lazio, stated 
that it is possible to increase the median income of public 
housing from 17 percent of area median income, as is the case 
in public housing today, to about 30 percent by placing the 
upper limit at 60 percent of area median. This is what my 
amendment proposed to do. The language I suggested would have 
required eligible families to have incomes at or below 60 
percent of median, but would have given LHMA's the authority to 
increase this to 80 percent if HUD determined an increase would 
be beneficial to the community and its low-income citizens. 
Unfortunately, the Committee failed to adopt this amendment. 
However, after several hours of persuasive debate, Chairman 
Lazio did agree to target 25 percent of available public 
housing units to families at or below 30 percent of median 
income.
    Tenants will also be negatively affected by provisions 
contained in H.R. 2406 that repeal the Brooke amendment. Repeal 
of the Brooke amendment, in conjunction with other provisions 
in this bill and cuts in child care and child nutrition 
programs and Medicaid and elimination of the Earned Income Tax 
Credit, all passed by this House in 1995, will have a 
devastating effect on the ability of very low-income citizens 
to secure housing. This bill's repeal of the Brooke amendment, 
along with giving LHMA's the authority to set minimum and 
maximum rents, lack of income targeting, elimination of federal 
preferences and designating earned income as a permissible, 
rather than mandatory exclusion from adjusted income will mean 
that the poorest people can no longer afford even public 
housing.
    Congressman Barney Frank and I offered an amendment to 
ensure that tenants do not pay more than 30 percent of their 
incomes for rent. Over and over, Congress has considered 
legislation designed to encourage savings. Yet this bill again 
treats poor people differently. LHMA's will be desperate for 
dollars. To make up for lost Federal subsidies, LHMA's will be 
forced to require tenants to pay more of their incomes for 
rent. By allowing LHMA's to charge tenants more than 30 percent 
of their incomes for rent, we are ensuring that very low-income 
families will stay exactly where they are--they will have a 
very difficult time putting any money in savings and in turn, a 
difficult time moving out of public housing. Again, the 
majority members of the Banking Committee failed to support the 
families across this nation who are struggling every day to 
make ends meet.
    In addition, I believe this bill contains provisions that 
decay public housing residents fairness in the workplace. The 
amendment I proposed struck the language from the bill that 
allows public housing residents to be paid non-Davis-Bacon 
wages for the same work as non-public housing residents, who 
are required to be paid Davis-Bacon rates. I, as well as many 
of my colleagues, believe that if residents are doing the same 
job, working the same hours, and are expected to produce the 
same quality, they should be paid the same wages. If qualified 
individuals living in an LHMA's jurisdiction want to work, it 
would greatly benefit the LHMA to hire residents instead of 
outside workers. By hiring qualified residents and paying them 
livable, decent wages, the LHMA is making an investment in the 
future. I do not believe that this Congress should be a force 
that encourages people to work for unfair wages and render them 
unable to leave public housing.
    By including the Davis-Bacon exemption, this bill creates 
an unacceptable double standard. The bill, as it currently is 
written, tells low-income Americans living in public housing 
that fairness and decency is for other people. That a fair 
day's pay for a fair day's work is for other people. The 
amendment, rejected by my Republican colleagues, was a chance 
for our committee to say that fairness and decency are for 
every American--not just some Americans.
    H.R. 2406 forgets why we have public housing. Low-income 
residents, if they are able to afford public housing, will be 
trapped in public housing--forced to accept lower wages and pay 
more of their income for rent. I was extremely disappointed 
that the Republicans failed to adopt any of the amendments I 
offered. I believe these three amendments would have ensured 
equality, opportunity, and housing availability for low-income 
residents across our nation. I did not support passage of this 
bill at the Committee and for these same reasons will continue 
to oppose its passage if it reaches the House floor.
                                                 Luis V. Gutierrez.
MINORITY VIEWS TO ACCOMPANY H.R. 2406, THE UNITED STATES HOUSING ACT OF 
                                  1995

    While there are many provisions and policy changes included 
in H.R. 2406 which are to be applauded, 17 Democratic members 
and one Independent member voted against reporting the United 
States Housing Act of 1995 from the Committee on Banking and 
Financial Services. H.R. 2406 represents a dramatic 
restructuring of the public and tenant based section 8 housing 
programs that will have consequences, perhaps unintended, 
detrimental to the very families the programs were intended to 
serve, the nation's most vulnerable.
    Indeed, although symbolic, H.R. 2406 repeals the basic 
underpinnings of housing law, the U.S. Housing Act of 1937. The 
bill establishes an entirely new statutory framework for the 
public housing and tenant based rental assistance programs in 
ways which mirror much of the Republican driven legislation in 
the 104th session of Congress--block grants with few federal 
standards at a time of declining resources, inevitably leading 
to poorer services. In many ways, we agree with the majority's 
assessment that the public and section 8 housing programs need 
major and significant reforms. In fact, in the 103rd Congress, 
the House passed similar reforms by a broad bipartisan vote--
deregulation demonstrations for high performing public housing 
agencies, rent reforms, reforms of the drug elimination grant 
program, reform of the one for one replacement requirements, 
streamlining the section 8 requirements modeled after the 
conventional real estate market, and the merger of the section 
8 certificate and voucher programs.
    While H.R. 2406 includes those reforms, the Committee bill 
simply goes too far. The two policy shifts that Democrats 
believe will have the most adverse impacts are greater rent 
burdens for low income residents by repealing the Brooke 
amendment and the relaxed targeting of housing assistance. 
These changes will harm the public housing program, the new 
choice based rental housing program, which replaces the section 
8 program, current residents and those who have waited 
sometimes for years for assisted housing.

                   rent setting and brooke amendment

    From its enactment in 1969, the Brooke amendment named 
after former Senator Edward Brooke (R-MA.), its sponsor, was 
intended to protect the most vulnerable residents of public 
housing and later those with section 8 assistance from paying 
too high a percentage of their incomes for rent. The rent to 
income ratio of first 25 percent and then 30 percent was 
thought to be a reasonable contribution in relation to the 
limited incomes of eligible residents. Under current law, 
federal preference for housing assistance is given to families 
who pay more than 50 percent of income for rent, among other 
reasons, and the 50 percent figure is used by HUD and 
academicians to determine the number of poor families with 
worst case scenarios.
    We are concerned that H.R. 2406 gives housing authorities 
broad authority to set rents within a minimum and maximum 
without the protection of the Brooke amendment. Although 
demographics of the residents are to be considered in adopting 
the new rent schedules, the primary consideration in 
determining rent schedules will be public housing operating 
costs and the market, not the fixed or limited incomes of 
residents. With cuts in public housing operating subsidies, we 
are concerned that many local housing management agencies 
(LHMA), in the new lexicon of this bill, will be compelled to 
raise rents to make up funding shortfalls, making public 
housing unaffordable to many current residents.
    We would urge local housing management agencies not to 
devise rent schedules that would have the effect of driving 
current residents from their homes because they are unable to 
pay the rent and other necessities, such as food, clothing, 
medicine, and child care. Although Committee Democrats agree 
with the desirability of mixed income communities, we would 
urge LHMAs not to seek only families with higher incomes and 
greater rent paying ability, shutting out those on the waiting 
lists who are very low income until just the right income mix 
is achieved to generate sufficient operating income.
    For many families rent increases will force families to 
choose between shelter and food or clothing, or food and 
medicine. We are aware that 75 percent of the families in 
public housing have incomes below 30 percent of median income. 
The median income of a public housing resident is a meager 
$6400. The median income for families with children is $6200, 
for the elderly, $7000 and for persons with disabilities, a 
mere $5700. The average rent is $169 monthly for all public 
housing residents; $163 for families with children, $178 for 
the elderly and $152 for persons with disabilities. These rents 
generally reflect 30 percent of a family's income because of 
the Brooke amendment's protection.
    The income levels of the section 8 rental assistance 
program are similar. The median income of a section 8 
certificate holder is $6900 and a voucher holder $7270. For 
families with children median income is $7100 for a certificate 
holder and $7500 for a voucher holder, for the elderly 
certificate holder, $7800 and the elderly voucher holder, it's 
$8200; for persons with disabilities with a certificate, a mere 
$7000 and with a voucher, nearly $7100. The average rent is 
$172 monthly for all certificate holders and $185 for voucher 
holders.
    We take note that the FY 1996 House HUD-VA appropriations 
bill included raising section 8 rents from 30 percent of income 
to 32 percent of income to save renewal costs and outlays. That 
very small increase would have meant an increase on average of 
$140 yearly per family. The Committee bill includes no limit on 
the percentage increase for resident rental payments. We are 
deeply concerned that the current assisted residents are some 
of the most vulnerable families, those who may become homeless 
if rents are raised. We recognize that the public housing 
program and the rental assistance program were designed for 
those families that could not obtain housing in the private 
market without federal assistance. That was the case in 1937 
and in subsequent years as the 1937 Act was amended and that 
remains the case today. In repealing the Brooke amendment, 
failing to replace it with alternative resident protections 
from rents they cannot afford, and acquiescing to decimated 
federal subsidies, H.R. 2406 fundamentally alters the essential 
role that the federal government should play in providing 
housing assistance to our most vulnerable citizens.
    Representatives Frank and Gutierrez offered an amendment to 
H.R. 2406 during the mark-up which would have capped a family's 
rental contribution at 30 percent of income. Unlike the Brooke 
amendment, it did not mandate a flat rent of 30 percent of 
income. Adopting a flexible rent to income ratio capped at 30 
percent would have permitted very low income families to pay 
less than 30 percent of their limited incomes for rent. Those 
families would include many native American Indians whom Ms. 
Jacqueline Johnson, President of the Native American Indian 
Housing Council, eloquently described. Along with other 
provisions included in the Committee bill, it would have 
permitted ceiling rents or maximum rents to be charged as well. 
Families would not have been penalized by paying higher rents 
when earning higher incomes; and it would have fostered mixed 
income communities which we all support. That amendment was 
defeated on a straight party line vote.
    Representative Hinchey offered an amendment that would have 
capped rents at 30 percent of income for the elderly and 
disabled. The amendment would have at least protected nearly 30 
percent or 1.2 million of the 4 million families in the public 
and section 8 programs from possible rent gouging in the face 
of reduced federal subsidies. In a hotly contested vote, the 
amendment failed.
    We believe that most LHMAs will not raise rents 
intentionally and unconscionably because they want to drive 
very low income families out of the programs, but that LHMAs 
may be forced to raise rents and establish rent schedules 
harmful to very low income families because of reductions in 
federal assistance. Unfortunately during the legislative 
process preceding the Committee mark-up, we were provided no 
data and no projections from housing authorities as to how 
LHMAs would implement their new rent setting authority. We, 
therefore, had little comfort that repeal of the Brooke 
amendment would not be harmful to tenants and in the worst case 
scenarios may indeed lead to an increase in homelessness. 
Fortunately, the Committee adopted two amendments offered by 
Representative Vento that would ensure at least the impact of 
new LHMA policies and procedures on homelessness would be 
considered in the LHMAs' required Neighborhood Improvement 
Plan, the new document which will set the future course of 
LHMAs and provide benchmark for evaluating LHMAs' performances.
    Nonetheless, the disappointing rejection of many Democratic 
amendments is but one more example of the Republican strategy 
of divining policy by the numbers without considering the 
impact on very low income families. We would urge the majority 
to reconsider its position against the outright repeal of 
Brooke amendment or some similar protection against exorbitant 
rents as the legislative process continuous.
    We are pleased that several Democratic amendments to the 
bill have been adopted that will mitigate the more harmful 
effects of the repeal of the Brooke amendment on very low 
income families. Because of an amendment offered by 
Representative Gonzalez, the minimum rent contribution was 
reduced to $25 from $50. According to HUD, a minimum rent of 
$50 would impact upon 132,000 public housing families, an 
automatic rent increase of $346 per year; for some 10,000 
elderly families the annual rent increase would approach $452 
per year with a minimum rent of $50. Therefore requiring a $25 
minimum rent, including utilities, is a significant 
improvement.
    Further the bill also includes an amendment, offered by 
Representative Gonzalez, which would phase-in rent increases 
above the minimum rent for those families whose rents would 
increase as a result of the repeal of the Brooke amendment. 
Finally an amendment offered by Representative Roybal-Allard 
requires each LHMA to provide an analysis of the impacts of 
their new rent schedules on residents of public housing. If a 
significant percentage of families are paying in excess of 30 
percent of their income for rent; then the Secretary may 
require the LHMA to revise its rent schedule to lower family 
rental contributions. We expect that revised rent schedules 
will not be implemented after too many families have been 
adversely effected; and that those families who have been 
harmed will have some recourse. (The Committee bill also 
includes another amendment offered by Representative Roybal-
Allard to analyze the impacts of the new targeting rules, as 
described below.)
    We are also pleased that the Committee bill included 
provisions for ceiling rents or maximum rents, another of the 
provisions from last Congress's House passed housing bill. Like 
the majority, we believe that ceiling rents are critical to 
rent reform and to attracting and keeping families, especially 
the ``working poor'', in public housing. We are aware that more 
than 25 percent of the residents of public housing have earned 
income.
    We believe it makes no sense to penalize families who earn 
more by charging them higher rents. Indeed, we understand in 
certain high cost areas like New York City, without ceiling 
rents it would often be less expensive to move out of public 
housing into private housing of a higher quality. Ceiling rents 
will encourage mixed income communities which will help break 
the destructive concentration of very poor families in public 
housing. On this issue, we agree wholeheartedly with the 
majority and H.R. 2406. However, we do not agree with the 
majority about the complete shift of incomes among residents in 
assisted housing that is part of the design of H.R. 2406 as 
reported.

                        targeting of assistance

    To that end, we support increased targeting of assistance 
to families with incomes below 30 percent of the area median 
income. The Committee print established income eligibility at 
below 80 percent of median with no targeting to very low income 
families. We are pleased that a compromise position between 
Representative Kennedy and the majority on targeting of 
assistance has been adopted; but we fear that the targeting 
remains too lax and is much less than originally envisioned by 
the Kennedy amendment. Targeting 25 percent of the federal 
assistance to families below 30 percent of median income is 
insufficient.
    Current law requires that between 75 percent and 85 percent 
of the families admitted to public and section 8 housing have 
incomes below 50 percent of median. Further, current law 
requires the housing agencies to admit mostly families with 
federal preferences. This statutory requirement has had the 
effect of housing mostly families who are among the ``poorest 
of the poor.''
    While we support the repeal of federal preferences, we 
believe that this must be accompanied by deeper targeting then 
is the case in H.R. 2406. We understand that the majority's 
objective is to give LHMAs complete control of their operations 
and to change the income mix of the residents of assisted 
housing, but as Secretary Cisneros pointed out in his letter 
expressing the Administration's grave reservations about H.R. 
2406:
          We fear that over time this unnecessary relaxation of 
        important rules will alter the fundamental mission of 
        public housing: to serve low income Americans unable to 
        find decent and safe shelter in the private market.
    The original Kennedy amendment would have targeted 40 
percent of public housing units to households with incomes with 
30 percent of area median income or below, and would have 
allowed no more than 15 percent of the units to be made 
available to households with incomes between 60 percent and 80 
percent of median. We understand that the Administration would 
have targeted assistance as follows: 40 percent below 30 
percent of median and the remainder below 60 percent of median 
income. We are disappointed that an amendment offered by 
Representative Gutierrez which would have limited overall 
eligibility for public and assisted housing to those families 
below 60 percent of median was not adopted.
    HUD's statistics and economic modelling suggest that the 
rental income earned by targeting assistance at or below 80 
percent of median and providing assistance to families earning 
between 60 percent and 80 percent of median would be negligible 
with the authority to set ceiling rents. HUD's data suggests 
that ceiling rents generally kick in when incomes are around 55 
percent of an area's median. However, there would be other 
benefits to public housing communities by allowing broader 
participation in the program.
    Targeting assistance so loosely, like the repeal of the 
Brooke amendment protection, we fear will fundamentally shift 
the focus of federal assistance too far from very low income 
families, all in the name of mixed income developments, reform, 
local control, and to make up the shortfall from the loss of 
federal subsidies. Currently, the median income for public 
housing residents is 17 percent of area median income. We are 
concerned that the 25 percent target will become a maximum for 
new admittants to public housing so that the median income can 
increase more quickly.
    HUD estimates that if LHMAs could simply raise the median 
income to 30 percent as it had been in the early 1980s, 
operating subsidies could be reduced by around $800 million, 
nearly one-third. Moreover, LHMAs could easily meet the goal of 
making public housing available to working people and creating 
mixed-income communities with the targeting in the Kennedy or 
Gutierrez amendments. Specifically, full time workers earning 
the minimum wage still make under 30 percent of area median 
income in all of the top 50 metropolitan areas in the country. 
Hence, the deeper targeting of the Democratic amendments is 
wholly consistent with the goal of encouraging work.
    We believe that the increases in income can occur even if 
the targeting of assistance is deeper. Even with some loosening 
of targeting of current law, but greater than that in the 
Committee bill, and the retention of the Brooke amendment or 
some similar protection, income to the property from rents will 
increase. Higher income residents will pay higher rents to 
offset the lower rents from lower income families.
    The targeting issue with respect to the rental assistance 
program is very different. The intent of the rental assistance 
program is to integrate and disperse low and very low income 
families into neighborhoods and the conventional real estate 
market where incomes are generally higher--the same mixed 
income goal as in public housing, but the opposite problem.
    We also recognize that the families with the most serious 
housing needs are those with the lowest incomes. HUD data 
indicates that of unassisted families with incomes below 20 
percent of median more than 71 percent have severe housing 
problems. These are the precise families who could be helped by 
the rental assistance program that would integrate them into 
mixed income neighborhoods.
    Because tenant-based assistance is not tied to particular 
housing projects, there is no inherent concentration of very 
poor households. In fact, well run tenant-based assistance 
programs ensure broader economic integration. Under these 
circumstances, there is simply no justification for refusing to 
target the maximum number of rental vouchers to those earning 
under 30 percent of area median income. Yet, the Kennedy 
amendment to require 75 percent of such assistance to this 
population was defeated.
    Therefore, we strongly believe that the targeting for the 
rental assistance program should be considerably deeper than 
the 25 percent included in the Committee bill, and deeper than 
the targeting to very low income families for the public 
housing program.
    We also believe that the targeting in H.R. 2406 will 
exacerbate the problem of the lack of affordable housing, 
particularly for very low income families. The Center for 
Budget and Policy Priorities study, In Short Supply: The 
Growing Affordable Housing Gap, determined that the number of 
low income renters exceeded the number of affordable rental 
units by 4.7 million low income renters. According to the 
study, the nation has lost 43 percent of its affordable housing 
supply, some 2.2 million housing units, over the last two 
decades. Among renter households, at least 13 percent in every 
state spent 50 percent or more of their income to cover the 
rent. More than 5.6 million families today pay more than 50 
percent of their incomes for rent, or live in substandard 
housing.
    Loose targeting with real protection against onerous rents 
may not be so harmful to very low income families. Similarly, 
tight targeting without the iron clad protection of rent caps 
may not be so harmful. But in combination, we believe the 
Committee bill may aggravate homelessness and harm the most 
vulnerable residents. Families unable to pay increased rents 
may become homeless and the very low income families waiting 
for public housing or rental assistance may simply be too poor 
for LHMAs to assist and they, too, may become homeless. It is 
ironic that public housing is criticized for warehousing and 
concentrating the poor, often in deplorable conditions while 
the policies in the Committee bill may relegate those too poor 
for public housing and rental assistance to homeless shelters, 
which are often no more than barracks, dormitories, or 
warehouses.

                     Block grant in public housing

    The Committee bill establishes one block grant to be 
provided by formula to LHMAs so that federal control and 
regulation can be streamlined or ended and authority for their 
own actions ``devolved'' to LHMAs. We believe that establishing 
one block grant with few federal controls or guidelines will 
not provide sufficient funding or standards to ensure the sound 
management and operations of the more than 3400 housing 
authorities. Currently LHMAs receive at least two streams of 
funding, operating subsidies and modernization funds. They may 
also compete for additional funding for development, 
revitalization of severely distressed public housing and drug 
elimination grants.
    We are concerned that no one formula can adequately reflect 
operating and modernization needs. They are entirely different 
expenses. A formula that needs to take into account rental 
income is far different from a formula that must consider 
backlog or accrued modernization needs. If the categories of 
expenses are kept separate in the formula; then why establish 
only one block grant?
    We fear that the one formula is simply an effort to reduce 
funds available to housing authorities. If the few additional 
programs that are available under current law for housing 
authorities, in addition to operating subsidies and 
modernization, are expected to be funded from the one block 
grant , the costs would eat up the fund. Further it may lead to 
one or the other activity--operations or modernization--being 
neglected, one type of expense driving out the other.
    We are pleased that the Committee adopted amendments that 
provide for at least for one year of separate funding for an 
enhanced drug elimination grant program and a reformed severely 
distressed housing program. We believe that both separate funds 
are essential if the public housing program is to be reformed 
and revitalized, and if housing authorities are to have 
sufficient funds available to them.

COMPAC

    An amendment offered by Representative Vento reinstated and 
broadened the drug elimination grant program. The new program, 
the Community Partnerships against Crime (COMPAC), would be 
available to cover the costs of addressing all crime 
deterrence, not just those related to drugs. The provision is 
substantially similar to the COMPAC program adopted by the 
House during the last session of Congress. It provides formula 
allocation of crime reduction funds to large and medium sized 
LHMAs while continuing a competitive program for smaller LHMAs 
and other federally assisted housing.
    We believe the COMPAC can and should be continued to 
provide a guaranteed resource for local authorities to enlist 
and retain allied law enforcement, provide drug prevention and 
treatment, engage in anti-gang activities, provide youth 
recreational opportunities, and to hire security personnel.

Severely distressed public housing

    Representatives Kennedy and Flake offered an amendment, 
which was accepted with some modifications, to restore the 
severely distressed public housing program. While the original 
amendment authorized $500 million for each of the next 5 years 
to be distributed on a competitive basis, the version that was 
adopted extended the program for one year only and authorized 
such sums as are appropriated. Like the COMPAC program, we 
believe that this separate program should be authorized and 
funded on a long term basis. The purpose of this program is to 
take the worst public housing in America and revitalize it by 
reducing the density, integrating the projects with the 
surrounding neighborhoods, providing important services that 
help tenants achieve self-sufficiency, and providing for 
economic development.
    The amendment streamlines and reforms the existing program 
in a number of important ways. It emphasizes the use of funds 
to leverage other funds and resources. It eliminates the 
current ceiling on the amount of the grant that can be used for 
economic development. Most importantly, it allows the Secretary 
to recapture any grant funds from LHMAs that don't move these 
projects forward in a timely fashion. We believe that this 
important innovation will prevent hundreds of millions of 
dollars from getting stuck in some pipeline. Finally, this 
amendment allows the Secretary to use a private sector entity 
to implement the revitalization plan, an innovation that will 
give the Secretary increased flexibility in getting these 
projects completed.

                       Security in public housing

    We are also concerned that H.R. 2406 does not adequately 
ensure the safety of public housing residents. Representatives 
Velazquez and Waters offered amendments to the housing 
authority's planning requirements to ensure that the authority 
would adopt safety and crime prevention measures, especially 
those involving the residents, the community, and the local law 
enforcement. We believe that community policing is an effort 
that has proven successful in a variety of authorities and 
should be encouraged; however, in many urban areas we 
understand community policing is not always enough. The local 
law enforcement must not neglect the duty to protect the safety 
and rights of public housing residents, and in this vein we 
encourage them to join hands with the residents and LHMAs in 
reducing crime in public housing.

               Housing foundation and accreditation board

    The Committee bill includes a detailed provision to 
establish a housing foundation and accreditation board. 
Intended to provide an outside independent review of LHMAs' 
operations, this new entity will accredit LHMAs or put them out 
of business for poor management. This foundation and board will 
also have the capacity to provide technical assistance to poor 
performing housing authorities. While we acknowledge the 
critical need for more accountability of LHMAs and their 
performance, we have concerns about establishing this board 
with such vast powers.
    We believe that this new entity is duplicative of HUD and 
its responsibilities. There seems to be no sense of where HUD's 
responsibilities end and the board's begin to review and 
monitor LHMAs' performance. We find it somewhat ironic that 
this board must be created, in part according to the majority, 
because HUD is losing its staff and its capacity to monitor 
housing authorities adequately.
    Congress enacted the Public Housing Management Assessment 
Program (PHMAP) in 1992 precisely to monitor public housing 
agency performance. While its measurement scales are 
quantitative and objective, HUD staff can and does review PHMAP 
scores to provide assistance to housing authorities which 
receive low and failing scores. We believe it generally is a 
system that works; yet the new board will use PHMAP only in 
transition.
    The majority touts the new board for its critical role in 
placing ``death penalties'' on poor performing housing 
authorities. Yet, if such a penalty is imposed, HUD must impose 
it. The entity responsible for making decisions about the 
status of LHMAs will be disassociated from those who are 
responsible or implementing those decisions.
    Finally, although the board will be responsible for 
granting accreditation to LHMAs, as the board's chief 
responsibility seems to be punitive--recommending LHMAs for 
sanctions that HUD will administer. We particularly are 
concerned about one sanction--holding back Community 
Development Block Grant (CDBG) funds if the city has 
substantial responsibility for the poor performance of the 
LHMA. We are concerned that the very cities sanctioned by loss 
of CDBG are the cities with the greatest housing and CDBG 
needs. The only ones who will lose are the low income families. 
Therefore we would urge HUD to impose this sanction sparingly.
    Notwithstanding the favorable outcome of creating a board 
for professional standards that will likely yield status to 
public housing, the new accreditation board bureaucracy will 
simply add another layer of politics and confusion. The intent 
of board and the model, the hospital accreditation board, are 
sound; but once again, the Committee bill goes too far.

                       public housing substitute

    Because of our concerns about the dramatic restructuring of 
public housing as provided in the Committee bill, 
Representative Kennedy, Ranking Democrat of the Housing 
Subcommittee, offered for discussion a substitute for the 
public housing title of H.R. 2406,. The amendment was intended 
to apply proven techniques of real estate management used in 
the private sector to public housing by replacing the present 
system of centralized public housing management with project-
by-project asset evaluation and management over a transition 
period of 3 years. Small public housing authorities, defined as 
those with under 250 units, would have been exempt from this 
provision.
    Under the substitute, public housing authorities would be 
required to develop asset evaluation and asset management plans 
for each project. This process would be overseen and reviewed 
by designees of the Secretary, such as state housing finance 
agencies, for-profit or non-profit real estate companies, or 
any other group with a proven record of successful management 
of real estate.
    In the Asset Evaluation Plan, the PHA assesses the physical 
condition of its projects and the improvements necessary to 
make them viable for the long term; it requires that the 
demographic characteristics of the projects be assessed along 
with the marketability of the project. It would also require 
the PHA to determine which projects should be demolished 
because they are not viable or do not meet a serious need for 
housing in the community.
    The Asset Management Plans would require the PHA to decide 
how it intends to use each project--what population it should 
serve, such as elderly, family, disabled, and, on that basis, 
determine the projects operating budget, the estimated rental 
receipts, tenant and income mix, vacancy allowances, costs for 
ongoing maintenance, including a reserve for replacement, 
security needs, services needed, and so on. A PHA would be 
encouraged to seek other sources of funds to meet some of the 
demands for services. For example, a family project with a lot 
of children might mean a project manager wants to offer 
tutoring services, or day care. That manager would be 
encouraged to seek outside funding to meet this demand.
    These plans would have to be consistent with the 
Comprehensive Housing Affordability Plan of the area, as 
required by the Cranston-Gonzalez National Affordable Housing 
Act. This will help ensure that PHAs use public housing as part 
of the community's overall strategy for addressing a 
community's housing needs.

Annual Updates and Review

    The Secretary's designee conducts an annual review of the 
PHA and the projects to measure performance against the 
management plans and for the overall management of the agency. 
The review must include a final audit of individual projects, 
new construction, and the overall financial operations of the 
agency. It includes a review and analysis of tenant-management 
issues to ensure ongoing cooperation, and it includes any other 
information the Secretary deems necessary to get a through 
understanding of the operations of the authority and its 
projects. PHAs must also make annual updates to their 
management plans to reflect the most current information.
    Public housing projects would then be funded on a project-
basis. PHAs would be compensated for the management of their 
properties through per-project asset management fees, similar 
to the way private real estate managers are compensated. If, 
according to the Secretary's designee, the PHA fails to perform 
according to the management plan, HUD would take away thy 
management from the PHA and contract out with another entity to 
manage the property. The new management would then get the 
management fee.
    This substitute would also retain a cap on the rent to 
income ratio, like the Brook Amendment; it would establish 
ceiling rents so that families going to work are not punished; 
and it would retain the severely distressed housing program and 
COMPAC. Finally, it would target 40 percent of a PHAs units to 
people with incomes up to 30 percent of area median income, and 
limit to 15 percent the units that could go to households with 
incomes between 60 percent and 80 percent of area median.
    Rather than eviscerate the pubic housing program and repeal 
the 1937 Housing Act, the substitute would reform the operators 
and requirements of the program. We believe that the policy put 
forth in the substitute will retain the mission of public 
housing, continue to serve the most vulnerable families in 
decent, safe, and sanitary housing while making the reforms 
necessary to put the public housing program on a sound footing.

                      choice based rental housing

    Generally, we support many of the changes in the rental 
assistance program. The provisions essentially merge the 
section 8 certificate and voucher programs into one new 
program, much as the House adopted in the 103rd Congress. The 
new program includes requirements which bring the rental 
assistance program more closely in line with the conventional 
real estate market--reformed lease equipments, repeal of ``take 
one, take all'', repeal of the ``endless lease'', and others. 
We believe that the program streamlining and merger will make 
it more attractive to a broader range of landlords and rental 
properties. However, the new program also includes a number of 
provisions with which we strongly disagree.
    The new rental assistance program provides for a minimum 
rental share, rather than a capped family contribution; and 
retains the concept of fair market rent, how called a rental 
indicator, and a payment standard as under the current section 
8 voucher program. It also relaxes targeting and repeals 
federal preferences. As discussed above, we believe that 
retaining a cap of the resident's share of rent is critical as 
is deeper targeting of assistance to very low income families.

Portability

    The Committee bill also repeals and does not replace the 
portability of rental assistance. We believe that the hallmark 
of the rental assistance program should be that it provide low 
income families choice about where they live within certain 
cost parameters, not within geographic boundaries. Portability 
of assistance is the means to provide the clearest choice to 
those families. The Committee bill makes portability of 
assistance to a matter to be determined not by the eligible 
family with a rental certificate, but by the LHMA.
    At the same time, the HUD-VA appropriations conference 
report sets fair market rents or rental indicators at the 40th 
percentile of area median rents. This also severely limits a 
family's choice of housing and the combination of the 
provisions in H.R. 2406 and the appropriations bill are 
devastating.
    We are sensitive to the growing loss of rental assistance 
from one jurisdiction to another from portability and to the 
administrative burden that portability entails. However, the 
provisions on portability in the Committee bill which specify 
waiting list placement and give the LHMA the total discretion 
to refuse a moving family' certificate do not answer the 
criticisms of portability.
    Rather we believe that the portability provisions included 
in the Committee bill are intended to hamper portability not 
reform portability. We are all painfully aware of the politics 
that have surrounded portability and programs like Moving to 
Opportunity. We welcomed Chairman Lazio's invitation to work on 
real reforms to this important aspect of the rental assistance 
program; for portability of assistance is the best change to 
provide wider choice of housing and economic integration to 
very low income families.

Administrative fees

    The Committee bill establishes a new method of setting 
administrative fees for housing authorities and sets an 
arbitrary percentage for compensation. While we agree with the 
new method of calculating the fee, we cannot agree with the 
somewhat capricious reduction of the percentage to 6.5 percent 
of the two bedroom rent for the first 600 units and 6.0 percent 
for units over 600. (The HUD-VA appropriations bill sets the 
fees at 7.65 percent and 7 percent.) We understand that New 
York City will lose more than $20 million in funding which 
would be used to administer their rental assistance program.
    Further, we know that smaller LHMAs' administrative 
operations for the rental assistance program will be 
devastated. Simply enforcing the new housing quality standards, 
which we agree are necessary, included in the committee bill 
will add to LHMAs' administrative burden. There may be some 
LHMAs that have misused the administrative fees and are 
becoming ``wealthy and indolent'' on federal funds; however we 
can not agree with using their bad example to reduce in some 
cases drastically, fees available to the majority of the 
housing authorities. We would urge the majority to reevaluate 
its position and get the facts about administrative fees before 
setting the fees in law.

                          legislative process

    The Committee bill represents a major restructuring of the 
two housing programs that serve our nation's low income 
families. It repeals the United States Housing Act of 1937, 
which has stood with amendment through the years, as the basic 
law governing the public housing program and the rental 
assistance program since its enactment. However, this 
Committee, in less than two months and with only three hearings 
before the Subcommittee in Washington, marked up and reported 
H.R. 2406. The Subcommittee on Housing and Community 
Opportunity was by-passed in favor of mark-up at the full 
Committee on Banking. We believe an opportunity to air all the 
issues and make important technical and policy refinements was 
lost.
    Further, while the witnesses represented important 
interests with respect to public housing and the rental 
assistance program, including the major associations and the 
Administration, the witnesses were one sided. The interests of 
the advocacy groups, tenant groups, and tenants were not heard. 
We are concerned that all sides and nuances of the important 
bill were not fully explored.
    We believe that such fundamental change demanded a more 
thorough legislative process. The bill makes wholesale changes 
in public policy, to current law, and to HUD programs. Such 
changes are certain to have broad impacts on current and future 
residents of public and assisted housing, on local authorities, 
on private landlords, on housing markets, and on HUD. By 
trampling on the legislative process, we believe we are 
reporting a bill with unintended, unknown, and adverse 
consequences.

                                                 Henry B. Gonzalez.
                                                       Joe Kennedy.
                                                    Bruce F. Vento.
                                                      Barney Frank.
                                                 Paul E. Kanjorski.
                                                   John J. LaFalce.
                                                     Maxine Waters.
                                             Lucille Roxbal-Allard.
                                                    Albert R. Wynn.
                                                 Luis V. Gutierrez.
                                                       Cleo Fields.
                                                Nydia M. Velazquez.
                                                    Melvin L. Watt.
                                                    Floyd H. Flake.
                                                       Tom Barrett.
                                                   Maurice Hinchey.
                                                Carolyn B. Maloney.
                                                      Kweisi Mfume.