[House Report 110-216]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-216

======================================================================



 
                  SECTION 8 VOUCHER REFORM ACT OF 2007

                                _______
                                

 June 28, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1851]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 1851) to reform the housing choice voucher program 
under section 8 of the United States Housing Act of 1937, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    27
Background and Need for Legislation..............................    27
Hearings.........................................................    40
Committee Consideration..........................................    41
Committee Votes..................................................    41
Committee Oversight Findings.....................................    44
Performance Goals and Objectives.................................    45
New Budget Authority, Entitlement Authority, and Tax Expenditures    45
Committee Cost Estimate..........................................    45
Congressional Budget Office Estimate.............................    45
Federal Mandates Statement.......................................    53
Advisory Committee Statement.....................................    53
Constitutional Authority Statement...............................    53
Applicability to Legislative Branch..............................    53
Earmark Identification...........................................    53
Section-by-Section Analysis of the Legislation...................    54
Changes in Existing Law Made by the Bill, as Reported............    60
Additional Views.................................................   109

                               Amendment


  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Section 8 Voucher Reform Act of 
2007''.

SEC. 2. INSPECTION OF DWELLING UNITS.

  (a) In General.--Section 8(o)(8) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(o)(8)) is amended--
          (1) by striking subparagraph (A) and inserting the following 
        new subparagraph:
                  ``(A) Initial inspection.--
                          ``(i) In general.--For each dwelling unit for 
                        which a housing assistance payment contract is 
                        established under this subsection, the public 
                        housing agency (or other entity pursuant to 
                        paragraph (11)) shall inspect the unit before 
                        any assistance payment is made to determine 
                        whether the dwelling unit meets the housing 
                        quality standards under subparagraph (B), 
                        except as provided in clause (ii) or (iii) of 
                        this subparagraph.
                          ``(ii) Correction of non-life threatening 
                        conditions.--In the case of any dwelling unit 
                        that is determined, pursuant to an inspection 
                        under clause (i), not to meet the housing 
                        quality standards under subparagraph (B), 
                        assistance payments may be made for the unit 
                        notwithstanding subparagraph (C) if failure to 
                        meet such standards is a result only of non-
                        life threatening conditions. A public housing 
                        agency making assistance payments pursuant to 
                        this clause for a dwelling unit shall, 30 days 
                        after the beginning of the period for which 
                        such payments are made, suspend any assistance 
                        payments for the unit if any deficiency 
                        resulting in noncompliance with the housing 
                        quality standards has not been corrected by 
                        such time, and may not resume such payments 
                        until each such deficiency has been corrected.
                          ``(iii) Projects receiving certain federal 
                        housing subsidies.--In the case of any property 
                        that within the previous 12 months has been 
                        determined to meet housing quality and safety 
                        standards under any Federal housing program 
                        inspection standard, including the program 
                        under section 42 of the Internal Revenue Code 
                        of 1986 or under subtitle A of title II of the 
                        Cranston Gonzalez National Affordable Housing 
                        Act of 1990, a public housing agency may 
                        authorize occupancy before the inspection under 
                        clause (i) has been completed, and may make 
                        assistance payments retroactive to the 
                        beginning of the lease term after the unit has 
                        been determined pursuant to an inspection under 
                        clause (i) to meet the housing quality 
                        standards under subparagraph (B).'';
          (2) by striking subparagraph (D) and inserting the following 
        new subparagraph:
                  ``(D) Biennial inspections.--
                          ``(i) Requirement.--Each public housing 
                        agency providing assistance under this 
                        subsection (or other entity, as provided in 
                        paragraph (11)) shall, for each assisted 
                        dwelling unit, make biennial inspections during 
                        the term of the housing assistance payments 
                        contract for the unit to determine whether the 
                        unit is maintained in accordance with the 
                        requirements under subparagraph (A). The agency 
                        (or other entity) shall retain the records of 
                        the inspection for a reasonable time and shall 
                        make the records available upon request to the 
                        Secretary, the Inspector General for the 
                        Department of Housing and Urban Development, 
                        and any auditor conducting an audit under 
                        section 5(h).
                          ``(ii) Sufficient inspection.--An inspection 
                        of a property shall be sufficient to comply 
                        with the inspection requirement under clause 
                        (i) if--
                                  ``(I) the inspection was conducted 
                                pursuant to requirements under a 
                                Federal, State, or local housing 
                                assistance program (including the HOME 
                                investment partnerships program under 
                                title II of the Cranston-Gonzalez 
                                National Affordable Housing Act (42 
                                U.S.C. 12721 et seq.)); and
                                  ``(II) pursuant to such inspection, 
                                the property was determined to meet the 
                                standards or requirements regarding 
                                housing quality or safety applicable to 
                                units assisted under such program, and, 
                                if a non-Federal standard was used, the 
                                public housing agency has certified to 
                                the Secretary that such standards or 
                                requirements provide the same 
                                protection to occupants of dwelling 
                                units meeting such standards or 
                                requirements as, or greater protection 
                                than, the housing quality standards 
                                under subparagraph (B).''; and
          (3) by adding at the end the following new subparagraph:
                  ``(F) Enforcement of housing quality standards.--
                          ``(i) Determination of noncompliance.--A 
                        dwelling unit that is covered by a housing 
                        assistance payments contract under this 
                        subsection shall be considered, for purposes of 
                        this subparagraph, to be in noncompliance with 
                        the housing quality standards under 
                        subparagraph (B) if--
                                  ``(I) the public housing agency or an 
                                inspector authorized by the State or 
                                unit of local government determines 
                                upon inspection of the unit that the 
                                unit fails to comply with such 
                                standards;
                                  ``(II) the agency or inspector 
                                notifies the owner of the unit in 
                                writing of such failure to comply; and
                                  ``(III) the failure to comply is not 
                                corrected within 90 days after receipt 
                                of such notice.
                          ``(ii) Withholding and release of assistance 
                        amounts.--The public housing agency shall 
                        withhold all of the assistance amounts under 
                        this subsection with respect to a dwelling unit 
                        that is in noncompliance with housing quality 
                        standards under subparagraph (B). Subject to 
                        clause (iii), the agency shall promptly release 
                        any withheld amounts to the owner of the 
                        dwelling unit upon completion of repairs that 
                        remedy such noncompliance.
                          ``(iii) Use of withheld assistance to pay for 
                        repairs.--The public housing agency may use 
                        such amounts withheld to make repairs to the 
                        dwelling unit or to contract to have repairs 
                        made (or to contract with an inspector referred 
                        to in clause (i)(I) to make or contract for 
                        such repairs), and shall subtract the cost of 
                        such repairs from any amounts released to the 
                        owner of the unit upon remedying such 
                        noncompliance.
                          ``(iv) Protection of tenants.--An owner of a 
                        dwelling unit may not terminate the tenancy of 
                        any tenant or refuse to renew a lease for such 
                        unit because of the withholding of assistance 
                        pursuant to this subparagraph.
                          ``(v) Termination of lease or assistance 
                        payments contract.--If assistance amounts under 
                        this section for a dwelling unit are withheld 
                        pursuant to clause (ii) and the owner does not 
                        correct the noncompliance before the expiration 
                        of the lease for the dwelling unit and such 
                        lease is not renewed, the Secretary shall 
                        recapture any such amounts from the public 
                        housing agency.
                          ``(vi) Applicability.--This subparagraph 
                        shall apply to any dwelling unit for which a 
                        housing assistance payments contract is entered 
                        into or renewed after the date of the 
                        effectiveness of the regulations implementing 
                        this subparagraph.''.
  (b) Regulations.--The Secretary of Housing and Urban Development 
shall issue any regulations necessary to carry out the amendment made 
by subsection (a)(3) not later than the expiration of the 12-month 
period beginning upon the date of the enactment of this Act. Such 
regulations shall take effect not later than the expiration of the 90-
day period beginning upon such issuance. This subsection shall take 
effect upon enactment of this Act.

SEC. 3. RENT REFORM AND INCOME REVIEWS.

  (a) Rent for Public Housing and Section 8 Programs.--Section 3 of the 
United States Housing Act of 1937 (42 U.S.C. 1437a(a)) is amended--
          (1) in subsection (a)--
                  (A) in paragraph (1) by inserting ``Low-income 
                occupancy requirement and rental payments.--'' after 
                ``(1)''; and
                  (B) by adding at the end the following new 
                paragraphs:
          ``(6) Reviews of family income.--
                  ``(A) Frequency.--Reviews of family income for 
                purposes of this section shall be made--
                          ``(i) in the case of all families, upon the 
                        initial provision of housing assistance for the 
                        family;
                          ``(ii) annually thereafter, except as 
                        provided in subparagraph (B)(i);
                          ``(iii) upon the request of the family, at 
                        any time the income or deductions (under 
                        subsection (b)(5)) of the family change by an 
                        amount that is estimated to result in a 
                        decrease of $1,500 (or such lower amount as the 
                        public housing agency may, at the option of the 
                        agency or owner, establish) or more in annual 
                        adjusted income; and
                          ``(iv) at any time the income or deductions 
                        (under subsection (b)(5)) of the family change 
                        by an amount that is estimated to result in an 
                        increase of $1,500 or more in annual adjusted 
                        income, except that any increase in the earned 
                        income of a family shall not be considered for 
                        purposes of this clause (except that earned 
                        income may be considered if the increase 
                        corresponds to previous decreases under clause 
                        (iii)), except that a public housing agency or 
                        owner may elect not to conduct such review in 
                        the last three months of a certification 
                        period.
                  ``(B) Fixed-income families.--
                          ``(i) Self certification and 3-year review.--
                        In the case of any family described in clause 
                        (ii), after the initial review of the family's 
                        income pursuant to subparagraph (A)(i), the 
                        public housing agency or owner shall not be 
                        required to conduct a review of the family's 
                        income pursuant to subparagraph (A)(ii) for any 
                        year for which such family certifies, in 
                        accordance with such requirements as the 
                        Secretary shall establish, that the income of 
                        the family meets the requirements of clause 
                        (ii) of this subparagraph, except that the 
                        public housing agency or owner shall conduct a 
                        review of each such family's income not less 
                        than once every 3 years.
                          ``(ii) Eligible families.--A family described 
                        in this clause is a family who has an income, 
                        as of the most recent review pursuant to 
                        subparagraph (A) or clause (i) of this 
                        subparagraph, of which 90 percent or more 
                        consists of fixed income, as such term is 
                        defined in clause (iii).
                          ``(iii) Fixed income.--For purposes of this 
                        subparagraph, the term `fixed income' includes 
                        income from--
                                  ``(I) the supplemental security 
                                income program under title XVI of the 
                                Social Security Act, including 
                                supplementary payments pursuant to an 
                                agreement for Federal administration 
                                under section 1616(a) of the Social 
                                Security Act and payments pursuant to 
                                an agreement entered into under section 
                                212(b) of Public Law 93-66;
                                  ``(II) Social Security payments;
                                  ``(III) Federal, State, local and 
                                private pension plans; and
                                  ``(IV) other periodic payments 
                                received from annuities, insurance 
                                policies, retirement funds, disability 
                                or death benefits, and other similar 
                                types of periodic receipts.
                  ``(C) In general.--Reviews of family income for 
                purposes of this section shall be subject to the 
                provisions of section 904 of the Stewart B. McKinney 
                Homeless Assistance Amendments Act of 1988.
          ``(7) Calculation of income.--
                  ``(A) Use of prior year's income.--Except as 
                otherwise provided in this paragraph, in determining 
                the income of a family for a year, a public housing 
                agency or owner may use the income of the family as 
                determined by the agency or owner for the preceding 
                year, taking into consideration any redetermination of 
                income during such prior year pursuant to clause (iii) 
                or (iv) of paragraph (6)(A).
                  ``(B) Earned income.--For purposes of this section, 
                the earned income of a family for a year shall be the 
                amount of earned income by the family in the prior year 
                minus an amount equal to 10 percent of the lesser of 
                such prior year's earned income or $10,000, except that 
                the income of a family for purposes of section 16 
                (relating to eligibility for assisted housing and 
                income mix) shall be determined without regard to any 
                reduction under this subparagraph.
                  ``(C) Inflationary adjustment for fixed income 
                families.--If, for any year, a public housing agency or 
                owner determines the income for any family described in 
                paragraph (6)(B)(ii), or the amount of fixed income of 
                any other family, based on the prior year's income or 
                fixed income, respectively, pursuant to subparagraph 
                (A), such prior year's income or fixed income, 
                respectively, shall be adjusted by applying an 
                inflationary factor as the Secretary shall, by 
                regulation, establish.
                  ``(D) Other income.--If, for any year, a public 
                housing agency or owner determines the income for any 
                family based on the prior year's income, with respect 
                to prior year calculations of types of income not 
                subject to subparagraph (B), a public housing agency or 
                owner may make other adjustments as it considers 
                appropriate to reflect current income.
                  ``(E) Safe harbor.--A public housing agency or owner 
                may, to the extent such information is available to the 
                public housing agency or owner, determine the family's 
                income for purposes of this section based on timely 
                income determinations made for purposes of other means-
                tested Federal public assistance programs (including 
                the program for block grants to States for temporary 
                assistance for needy families under part A of title IV 
                of the Social Security Act, a program for medicaid 
                assistance under a State plan approved under title XIX 
                of the Social Security Act, and the food stamp program 
                as defined in section 3(h) of the Food Stamp Act of 
                1977). The Secretary shall, in consultation with other 
                appropriate Federal agencies, develop procedures to 
                enable public housing agencies and owners to have 
                access to such income determinations made by other 
                Federal programs.
                  ``(F) PHA and owner compliance.--A public housing 
                agency or owner may not be considered to fail to comply 
                with this paragraph or paragraph (6) due solely to any 
                de minimus errors made by the agency or owner in 
                calculating family incomes.'';
          (2) by striking subsections (d) and (e); and
          (3) by redesignating subsection (f) as subsection (d).
  (b) Income.--Section 3(b) of the United States Housing Act of 1937 
(42 U.S.C. 1437a(b)) is amended--
          (1) by striking paragraph (4) and inserting the following new 
        paragraph:
          ``(4) Income.--The term `income' means, with respect to a 
        family, income received from all sources by each member of the 
        household who is 18 years of age or older or is the head of 
        household or spouse of the head of the household, plus unearned 
        income by or on behalf of each dependent who is less than 18 
        years of age, as determined in accordance with criteria 
        prescribed by the Secretary, in consultation with the Secretary 
        of Agriculture, subject to the following requirements:
                  ``(A) Included amounts.--Such term includes recurring 
                gifts and receipts, actual income from assets, and 
                profit or loss from a business.
                  ``(B) Excluded amounts.--Such term does not include--
                          ``(i) any imputed return on assets; and
                          ``(ii) any amounts that would be eligible for 
                        exclusion under section 1613(a)(7) of the 
                        Social Security Act (42 U.S.C. 1382b(a)(7)).
                  ``(C) Earned income of students.--Such term does not 
                include earned income of any dependent earned during 
                any period that such dependent is attending school on a 
                full-time basis or any grant-in-aid or scholarship 
                amounts related to such attendance used for the cost of 
                tuition or books.
                  ``(D) Educational savings accounts.--Income shall be 
                determined without regard to any amounts in or from, or 
                any benefits from, any Coverdell education savings 
                account under section 530 of the Internal Revenue Code 
                of 1986 or any qualified tuition program under section 
                529 of such Code.
                  ``(E) Other exclusions.--Such term shall not include 
                other exclusions from income as are established by the 
                Secretary or any amount required by Federal law to be 
                excluded from consideration as income. The Secretary 
                may not require a public housing agency or owner to 
                maintain records of any amounts excluded from income 
                pursuant to this subparagraph.''; and
          (2) by striking paragraph (5) and inserting the following new 
        paragraph:
          ``(5) Adjusted income.--The term `adjusted income' means, 
        with respect to a family, the amount (as determined by the 
        public housing agency or owner) of the income of the members of 
        the family residing in a dwelling unit or the persons on a 
        lease, after any deductions from income as follows:
                  ``(A) Elderly and disabled families.--$725 in the 
                case of any family that is an elderly family or a 
                disabled family.
                  ``(B) Dependents.--In the case of any family that 
                includes a member or members who--
                          ``(i) are less than 18 years of age or 
                        attending school or vocational training on a 
                        full-time basis; or
                          ``(ii) is a person with disabilities who is 
                        18 years of age or older and resides in the 
                        household,
                $500 for each such member.
                  ``(C) Health and medical expenses.--The amount, if 
                any, by which 10 percent of annual family income is 
                exceeded by the sum of--
                          ``(i) in the case of any elderly or disabled 
                        family, any unreimbursed health and medical 
                        care expenses; and
                          ``(ii) any 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 
                        to be employed.
                  ``(D) Permissive deductions.--Such additional 
                deductions as a public housing agency may, at its 
                discretion, establish, except that the Secretary shall 
                establish procedures to ensure that such deductions do 
                not increase Federal expenditures.
        The Secretary shall annually adjust the amounts of the 
        exclusions under subparagraphs (A) and (B), as such amounts may 
        have been previously adjusted, by applying an inflationary 
        factor as the Secretary shall, by regulation, establish. If the 
        dollar amount of any such exclusion determined for any year by 
        applying such inflationary factor is not a multiple of $25, the 
        Secretary shall round such amount to the next lowest multiple 
        of $25.''.
  (c) Housing Choice Voucher Program.--Paragraph (5) of section 8(o) of 
the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(5)) is 
amended--
          (1) in the paragraph heading, by striking ``Annual review'' 
        and inserting ``Reviews'';
          (2) in subparagraph (A)--
                  (A) by striking ``the provisions of'' and inserting 
                ``paragraphs (6) and (7) of section 3(a) and to''; and
                  (B) by striking ``and shall be conducted upon the 
                initial provision of housing assistance for the family 
                and thereafter not less than annually''; and
          (3) in subparagraph (B), by striking the second sentence.
  (d) Enhanced Voucher Program.--Section 8(t)(1)(D) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(t)(1)(D)) is amended by 
striking ``income'' each place such term appears and inserting ``annual 
adjusted income''.
  (e) Project-Based Housing.--Paragraph (3) of section 8(c) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(c)(3)) is amended by 
striking the last sentence.
  (f) Impact on Public Housing Revenues.--
          (1) Interaction with asset management rule.--If the Secretary 
        of Housing and Urban Development determines that the 
        application of the amendments made by this section results in a 
        reduction in the rental income of a public housing agency that 
        is not de minimus during the period that the operating formula 
        income is frozen at a level that does not fully reflect the 
        changes made by such amendments, the Secretary shall make 
        appropriate adjustments in the formula income of the agency.
          (2) HUD reports on public housing revenue impact.--For each 
        of fiscal years 2008 and 2009, the Secretary of Housing and 
        Urban Development shall submit a report to Congress identifying 
        and calculating the impact of changes made by the amendments 
        made by this section on the revenues and costs of operating 
        public housing units.
  (g) Effective Date and Transition.--The amendments made by this 
section shall apply with respect to fiscal year 2008 and fiscal years 
thereafter.

SEC. 4. ELIGIBILITY FOR ASSISTANCE BASED ON ASSETS AND INCOME.

  (a) Assets.--Section 16 of the United States Housing Act of 1937 (42 
U.S.C. 1437n) is amended by inserting after subsection (d) the 
following new subsection:
  ``(e) Eligibility for Assistance Based on Assets.--
          ``(1) Limitation on assets.--Subject to paragraph (3) and 
        notwithstanding any other provision of this Act, a dwelling 
        unit assisted under this Act may not be rented and assistance 
        under this Act may not be provided, either initially or at each 
        recertification of family income, to any family--
                  ``(A) whose net family assets exceed $100,000, as 
                such amount is adjusted annually by applying an 
                inflationary factor as the Secretary considers 
                appropriate; or
                  ``(B) who has a present ownership interest in, and a 
                legal right to reside in, real property that is 
                suitable for occupancy as a residence, except that the 
                prohibition under this subparagraph shall not apply 
                to--
                          ``(i) any property for which the family is 
                        receiving assistance under this Act;
                          ``(ii) any person that is a victim of 
                        domestic violence; or
                          ``(iii) any family that is making a good 
                        faith effort to sell such property.
          ``(2) Net family assets.--
                  ``(A) In general.--For purposes of this subsection, 
                the term `net family assets' means, for all members of 
                the household, the net cash value of all assets after 
                deducting reasonable costs that would be incurred in 
                disposing of real property, savings, stocks, bonds, and 
                other forms of capital investment. Such term does not 
                include interests in Indian trust land, equity accounts 
                in homeownership programs of the Department of Housing 
                and Urban Development, or Family Self Sufficiency 
                accounts.
                  ``(B) Exclusions.--Such term does not include--
                          ``(i) the value of personal property, except 
                        for items of personal property of significant 
                        value, as the public housing agency may 
                        determine;
                          ``(ii) the value of any retirement account;
                          ``(iii) any amounts recovered in any civil 
                        action or settlement based on a claim of 
                        malpractice, negligence, or other breach of 
                        duty owed to a member of the family and arising 
                        out of law, that resulted in a member of the 
                        family being disabled (under the meaning given 
                        such term in section 1614 of the Social 
                        Security Act (42 U.S.C. 1382c)); and
                          ``(iv) the value of any Coverdell education 
                        savings account under section 530 of the 
                        Internal Revenue Code of 1986 or any qualified 
                        tuition program under section 529 of such Code.
                  ``(C) Trust funds.--In cases where a trust fund has 
                been established and the trust is not revocable by, or 
                under the control of, any member of the family or 
                household, the value of the trust fund shall not be 
                considered an asset of a family if the fund continues 
                to be held in trust. Any income distributed from the 
                trust fund shall be considered income for purposes of 
                section 3(b) and any calculations of annual family 
                income, except in the case of medical expenses for a 
                minor.
                  ``(D) Self-certification.--A public housing agency or 
                owner may determine the net assets of a family, for 
                purposes of this section, based on the amounts reported 
                by the family at the time the agency or owner reviews 
                the family's income.
          ``(3) Compliance for public housing dwelling units.--When 
        recertifying family income with respect to families residing in 
        public housing dwelling units, a public housing agency may, in 
        the discretion of the agency and only pursuant to a policy that 
        is set forth in the public housing agency plan under section 5A 
        for the agency, choose not to enforce the limitation under 
        paragraph (1).
          ``(4) Authority to delay evictions.--In the case of a family 
        residing in a dwelling unit assisted under this Act who does 
        not comply with the limitation under paragraph (1), the public 
        housing agency or project owner may delay eviction or 
        termination of the family based on such noncompliance for a 
        period of not more than 6 months.''.
  (b) Income.--The United States Housing Act of 1937 is amended--
          (1) in section 3(a)(1) (42 U.S.C. 1437a(a)(1)), by striking 
        the first sentence and inserting the following: ``Dwelling 
        units assisted under this Act may be rented, and assistance 
        under this Act may be provided, whether initially or at time of 
        recertification, only to families who are low-income families 
        at the time such initial or continued assistance, respectively, 
        is provided, except that families residing in dwelling units as 
        of the date of the enactment of the Section 8 Voucher Reform 
        Act of 2007 that, under agreements in effect on such date of 
        enactment, may have incomes up to 95 percent of local area 
        median income shall continue to be eligible for assistance at 
        recertification as long as they continue to comply with such 
        income restrictions. When recertifying family income with 
        respect to families residing in public housing dwelling units, 
        a public housing agency may, in the discretion of the agency 
        and only pursuant to a policy that is set forth in the public 
        housing agency plan under section 5A for the agency, choose not 
        to enforce the prohibition under the preceding sentence. When 
        recertifying family income with respect to families residing in 
        dwelling units for which project-based assistance is provided, 
        a project owner may, in the owner's discretion and only 
        pursuant to a policy adopted by such owner, choose not to 
        enforce such prohibition. In the case of a family residing in a 
        dwelling unit assisted under this Act who does not comply with 
        the prohibition under the first sentence of this paragraph, the 
        public housing agency or project owner may delay eviction or 
        termination of the family based on such noncompliance for a 
        period of not more than 6 months.'';
          (2) in section 8(o)(4) (42 U.S.C. 1437f(o)(4)), by striking 
        the matter preceding subparagraph (A) and inserting the 
        following:
          ``(4) Eligible families.--Assistance under this subsection 
        may be provided, whether initially or at each recertification, 
        only pursuant to subsection (t) to a family eligible for 
        assistance under such subsection or to a family who at the time 
        of such initial or continued assistance, respectively, is a 
        low-income family that is--''; and
          (3) in section 8(c)(4) (42 U.S.C. 1437f(c)(4)), by striking 
        ``at the time it initially occupied such dwelling unit'' and 
        inserting ``according to the restrictions under section 
        3(a)(1)''.

SEC. 5. TARGETING ASSISTANCE TO LOW-INCOME WORKING FAMILIES.

  (a) Vouchers.--Section 16(b)(1) of the United States Housing Act of 
1937 (42 U.S.C. 1437n(b)(1)) is amended--
          (1) by inserting after ``do not exceed'' the following: ``the 
        higher of (A) the poverty line (as such term is defined in 
        section 673 of the Omnibus Budget Reconciliation Act of 1981 
        (42 U.S.C. 9902), including any revision required by such 
        section) applicable to a family of the size involved, or (B)''; 
        and
          (2) by inserting before the period at the end the following: 
        ``; and except that clause (A) of this sentence shall not apply 
        in the case of families residing in Puerto Rico or any other 
        territory or possession of the United States''.
  (b) Public Housing.--Section 16(a)(2)(A) of the United States Housing 
Act of 1937 (42 U.S.C. 1437n(a)(2)(A)) is amended--
          (1) by inserting after ``do not exceed'' the following: ``the 
        higher of (i) the poverty line (as such term is defined in 
        section 673 of the Omnibus Budget Reconciliation Act of 1981 
        (42 U.S.C. 9902), including any revision required by such 
        section) applicable to a family of the size involved, or 
        (ii)''; and
          (2) by inserting before the period at the end the following: 
        ``; and except that clause (i) of this sentence shall not apply 
        in the case of families residing in Puerto Rico or any other 
        territory or possession of the United States''.
  (c) Project-Based Section 8 Assistance.--Section 16(c)(3) of the 
United States Housing Act of 1937 (42 U.S.C. 1437n(c)(3)) is amended--
          (1) by inserting after ``do not exceed'' the following: ``the 
        higher of (A) the poverty line (as such term is defined in 
        section 673 of the Omnibus Budget Reconciliation Act of 1981 
        (42 U.S.C. 9902), including any revision required by such 
        section) applicable to a family of the size involved, or (B)''; 
        and
          (2) by inserting before the period at the end the following: 
        ``; and except that clause (A) of this sentence shall not apply 
        in the case of families residing in Puerto Rico or any other 
        territory or possession of the United States''.

SEC. 6. VOUCHER RENEWAL FUNDING.

  (a) In General.--Section 8 of the United States Housing Act of 1937 
(42 U.S.C. 1437f) is amended by striking subsection (dd) and inserting 
the following new subsection:
  ``(dd) Tenant-Based Vouchers.--
          ``(1) Authorization of appropriations.--There are authorized 
        to be appropriated, for each of fiscal years 2008 through 2012, 
        such sums as may be necessary for tenant-based assistance under 
        subsection (o) for the following purposes:
                  ``(A) To renew all expiring annual contributions 
                contracts for tenant-based rental assistance.
                  ``(B) To provide tenant-based rental assistance for--
                          ``(i) relocation and replacement of housing 
                        units that are demolished or disposed of 
                        pursuant to the Omnibus Consolidated 
                        Rescissions and Appropriations Act of 1996 
                        (Public Law 104-134);
                          ``(ii) conversion of section 23 projects to 
                        assistance under this section;
                          ``(iii) the family unification program under 
                        subsection (x) of this section;
                          ``(iv) relocation of witnesses in connection 
                        with efforts to combat crime in public and 
                        assisted housing pursuant to a request from a 
                        law enforcement or prosecution agency;
                          ``(v) enhanced vouchers authorized under 
                        subsection (t) of this section;
                          ``(vi) vouchers in connection with the HOPE 
                        VI program under section 24;
                          ``(vii) demolition or disposition of public 
                        housing units pursuant to section 18 of the 
                        United States Housing Act of 1937 (42 U.S.C. 
                        1437p);
                          ``(viii) mandatory and voluntary conversions 
                        of public housing to vouchers, pursuant to 
                        sections 33 and 22 of the United States Housing 
                        Act of 1937, respectively (42 U.S.C. 1437z-5, 
                        1437t);
                          ``(ix) vouchers necessary to comply with a 
                        consent decree or court order;
                          ``(x) vouchers to replace dwelling units that 
                        cease to receive project-based assistance under 
                        subsection (b), (c), (d), (e), or (v) of this 
                        section;
                          ``(xi) tenant protection assistance, 
                        including replacement and relocation 
                        assistance; and
                          ``(xii) emergency voucher assistance for the 
                        protection of victims of domestic violence, 
                        dating violence, sexual assault, or stalking.
                Subject only to the availability of sufficient amounts 
                provided in appropriation Acts, the Secretary shall 
                provide tenant-based rental assistance to replace all 
                dwelling units that cease to be available as assisted 
                housing as a result of clause (i), (ii), (v), (vi), 
                (vii), (viii), or (x).
          ``(2) Allocation of renewal funding among public housing 
        agencies.--
                  ``(A) From amounts appropriated for each year 
                pursuant to paragraph (1)(A), the Secretary shall 
                provide renewal funding for each public housing 
                agency--
                          ``(i) based on leasing and cost data from the 
                        preceding calendar year, as adjusted by an 
                        annual adjustment factor to be established by 
                        the Secretary, which shall be established using 
                        the smallest geographical areas for which data 
                        on changes in rental costs are annually 
                        available;
                          ``(ii) by making any adjustments necessary to 
                        provide for the first-time renewal of vouchers 
                        funded under paragraph (1)(B);
                          ``(iii) by making any adjustments necessary 
                        for full year funding of vouchers ported in the 
                        prior calendar year under subsection (r)(2); 
                        and
                          ``(iv) by making such other adjustments as 
                        the Secretary considers appropriate, including 
                        adjustments necessary to address changes in 
                        voucher utilization rates and voucher costs 
                        related to natural and other major disasters.
                  ``(B) Leasing and cost data.--For purposes of 
                subparagraph (A)(i), leasing and cost data shall be 
                calculated annually by using the average for the 
                preceding calendar year. Such leasing and cost data 
                shall be adjusted to include vouchers that were set 
                aside under a commitment to provide project-based 
                assistance under subsection (o)(13) and to exclude 
                amounts funded through advances under paragraph (3). 
                Such leasing and cost data shall not include funds not 
                appropriated for tenant-based assistance under section 
                8(o), unless the agency's funding was prorated in the 
                prior year and the agency used other funds to maintain 
                vouchers in use.
                  ``(C) Overleasing.--For the purpose of determining 
                allocations under subsection (A)(i), the leasing rate 
                calculated for the prior calendar year may exceed an 
                agency's authorized voucher level, except that such 
                calculation in 2009 shall not include amounts resulting 
                from a leasing rate in excess of 103 percent of an 
                agency's authorized vouchers in 2008 which results from 
                the use of accumulated amounts, as referred to in 
                paragraph (4)(A).
                  ``(D) Moving to work; housing innovation program.--
                Notwithstanding subparagraphs (A) and (B), each public 
                housing agency participating at any time in the moving 
                to work demonstration under section 204 of the 
                Departments of Veterans Affairs and Housing and Urban 
                Development, and Independent Agencies Appropriations 
                Act, 1996 (42 U.S.C. 1437f note) or in the housing 
                innovation program under section 36 of this Act shall 
                be funded pursuant to its agreement under such program 
                and shall be subject to any pro rata adjustment made 
                under subparagraph (E)(i).
                  ``(E) Pro rata allocation.--
                          ``(i) Insufficient funds.--To the extent that 
                        amounts made available for a fiscal year are 
                        not sufficient to provide each public housing 
                        agency with the full allocation for the agency 
                        determined pursuant to subparagraphs (A) and 
                        (D), the Secretary shall reduce such allocation 
                        for each agency on a pro rata basis, except 
                        that renewal funding of enhanced vouchers under 
                        section 8(t) shall not be subject to such 
                        proration.
                          ``(ii) Excess funds.--To the extent that 
                        amounts made available for a fiscal year exceed 
                        the amount necessary to provide each housing 
                        agency with the full allocation for the agency 
                        determined pursuant to subparagraphs (A) and 
                        (D), such excess amounts shall be used for the 
                        purposes specified in subparagraphs (B) and (C) 
                        of paragraph (4).
                  ``(F) Prompt funding allocation.--The Secretary shall 
                allocate all funds under this subsection for each year 
                before the latter of (i) February 15, or (ii) the 
                expiration of the 45-day period beginning upon the 
                enactment of the appropriations Act funding such 
                renewals.
          ``(3) Advances.--
                  ``(A) Authority.--During the last 3 months of each 
                calendar year, the Secretary shall provide amounts to 
                any public housing agency, at the request of the 
                agency, in an amount up to two percent of the 
                allocation for the agency for such calendar year, 
                subject to subparagraph (C).
                  ``(B) Use.--Amounts advanced under subparagraph (A) 
                may be used to pay for additional voucher costs, 
                including costs related to temporary overleasing.
                  ``(C) Use of prior year amounts.--During the last 3 
                months of a calendar year, if amounts previously 
                provided to a public housing agency for tenant-based 
                assistance for such year or for previous years remain 
                unobligated and available to the agency--
                          ``(i) the agency shall exhaust such amounts 
                        to cover any additional voucher costs under 
                        subparagraph (B) before amounts advanced under 
                        subparagraph (A) may be so used; and
                          ``(ii) the amount that may be advanced under 
                        subparagraph (A) to the agency shall be reduced 
                        by an amount equal to the total of such 
                        previously provided and unobligated amounts.
                  ``(D) Repayment.--Amounts advanced under subparagraph 
                (A) in a calendar year shall be repaid to the Secretary 
                in the subsequent calendar year by reducing the amounts 
                made available for such agency for such subsequent 
                calendar year pursuant to allocation under paragraph 
                (2) by an amount equal to the amount so advanced to the 
                agency.
          ``(4) Recapture.--
                  ``(A) In general.--The Secretary shall recapture, 
                from amounts provided under the annual contributions 
                contract for a public housing agency for a calendar 
                year, all accumulated amounts allocated under paragraph 
                (2) and from previous years that are unused by the 
                agency at the end of each calendar year except--
                          ``(i) with respect to the recapture under 
                        this subparagraph at the end of 2007, an amount 
                        equal to one twelfth the amount allocated to 
                        the public housing agency for such year 
                        pursuant to paragraph (2)(A); and
                          ``(ii) with respect to the recapture under 
                        this subparagraph at the end of each of 2008, 
                        2009, 2010, and 2011, an amount equal to 5 
                        percent of such amount allocated to the agency 
                        for such year. Notwithstanding any other 
                        provision of law, each public housing agency 
                        may retain all amounts not authorized to be 
                        recaptured under this subparagraph, and may use 
                        such amounts for all authorized purposes.
                  ``(B) Reallocation.--Not later than May 1 of each 
                calendar year, the Secretary shall--
                          ``(i) calculate the aggregate unused amounts 
                        for the preceding year recaptured pursuant to 
                        subparagraph (A);
                          ``(ii) set aside and make available such 
                        amounts as the Secretary considers appropriate 
                        to reimburse public housing agencies for 
                        increased costs related to portability and 
                        family self-sufficiency activities during such 
                        year; and
                          ``(iii) reallocate all remaining amounts 
                        among public housing agencies, with priority 
                        given based on the extent to which an agency 
                        has utilized the amount allocated under 
                        paragraph (2) for the agency to serve eligible 
                        families.
                  ``(C) Use.--Amounts reallocated to a public housing 
                agency pursuant to subparagraph (B)(iii) may be used 
                only to increase voucher leasing rates as provided 
                under paragraph (2)(C).''.
  (b) Absorption of Vouchers From Other Agencies.--Section 8(r)(2) of 
the United States Housing Act of 1937 (42 U.S.C. 1437f(r)(2)) is 
amended by adding after the period at the end the following: ``The 
agency shall absorb the family into its program for voucher assistance 
under this section and shall have priority to receive additional 
funding from the Secretary for the housing assistance provided for such 
family from amounts made available pursuant to subsection (dd)(4)(B).''
  (c) Vouchers for Persons With Disabilities.--The Secretary of Housing 
and Urban Development shall develop and issue, to public housing 
agencies that received voucher assistance under section 8(o) for non-
elderly disabled families pursuant to appropriations Acts for fiscal 
years 1997 through 2002, guidance to ensure that, to the maximum extent 
practicable, such vouchers continue to be provided upon turnover to 
qualified non-elderly disabled families.

SEC. 7. ADMINISTRATIVE FEES.

  (a) In General.--Section 8(q) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(q)) is amended--
          (1) in paragraph (1), by striking subparagraphs (B) and (C) 
        and inserting the following new subparagraphs:
                  ``(B) Calculation.--The fee under this subsection 
                shall--
                          ``(i) be payable to each public housing 
                        agency for each month for which a dwelling unit 
                        is covered by an assistance contract;
                          ``(ii) until superseded through subsequent 
                        rulemaking, be based on the per-unit fee 
                        payable to the agency in fiscal year 2003, 
                        updated for each subsequent year as specified 
                        in subsection (iv);
                          ``(iii) include an amount for the cost of 
                        issuing voucher to new participants;
                          ``(iv) be updated each year using an index of 
                        changes in wage data or other objectively 
                        measurable data that reflect the costs of 
                        administering the program for such assistance, 
                        as determined by the Secretary; and
                          ``(v) include an amount for the cost of 
                        family self-sufficiency coordinators, as 
                        provided in section 23(h)(1).
                  ``(C) Publication.--The Secretary shall cause to be 
                published in the Federal Register the fee rate for each 
                geographic area.''; and
          (2) in paragraph (4), by striking ``1999'' and inserting 
        ``2007''.
  (b) Administrative Fees for Family Self-Sufficiency Program Costs.--
Subsection (h) of section 23 of the United States Housing Act of 1937 
(42 U.S.C. 1437u(h)) is amended by striking paragraph (1) and inserting 
the following new paragraph:
          ``(1) Section 8 fees.--
                  ``(A) In general.--The Secretary shall establish a 
                fee under section 8(q) for the costs incurred in 
                administering the self-sufficiency program under this 
                section to assist families receiving voucher assistance 
                through section 8(o).
                  ``(B) Eligibility for fee.--The fee shall provide 
                funding for family self-sufficiency coordinators as 
                follows:
                          ``(i) Base fee.--A public housing agency 
                        serving 25 or more participants in the family 
                        self-sufficiency program under this section 
                        shall receive a fee equal to the costs of 
                        employing one full-time family self-sufficiency 
                        coordinator. An agency serving fewer than 25 
                        such participants shall receive a prorated fee.
                          ``(ii) Additional fee.--An agency that meets 
                        minimum performance standards shall receive an 
                        additional fee sufficient to cover the costs of 
                        employing a second family self-sufficiency 
                        coordinator if the agency has 75 or more 
                        participating families, and a third such 
                        coordinator if it has 125 or more participating 
                        families.
                          ``(iii) Previously funded agencies.--An 
                        agency that received funding from the 
                        Department of Housing and Urban Development for 
                        more than three such coordinators in any of 
                        fiscal years 1998 through 2007 shall receive 
                        funding for the highest number of coordinators 
                        funded in a single fiscal year during that 
                        period, provided they meet applicable size and 
                        performance standards.
                          ``(iv) Initial year.--For the first year in 
                        which a public housing agency exercises its 
                        right to develop an family self-sufficiency 
                        program for its residents, it shall be entitled 
                        to funding to cover the costs of up to one 
                        family self-sufficiency coordinator, based on 
                        the size specified in its action plan for such 
                        program.
                          ``(v) State and regional agencies.--For 
                        purposes of calculating the family self-
                        sufficiency portion of the administrative fee 
                        under this subparagraph, each administratively 
                        distinct part of a State or regional public 
                        housing agency shall be treated as a separate 
                        agency.
                          ``(vi) Determination of number of 
                        coordinators.--In determining whether a public 
                        housing agency meets a specific threshold for 
                        funding pursuant to this paragraph, the number 
                        of participants being served by the agency in 
                        its family self-sufficiency program shall be 
                        considered to be the average number of families 
                        enrolled in such agency's program during the 
                        course of the most recent fiscal year for which 
                        the Department of Housing and Urban Development 
                        has data.
                  ``(C) Proration.--If insufficient funds are available 
                in any fiscal year to fund all of the coordinators 
                authorized under this section, the first priority shall 
                be given to funding one coordinator at each agency with 
                an existing family self-sufficiency program. The 
                remaining funds shall be prorated based on the number 
                of remaining coordinators to which each agency is 
                entitled under this subparagraph.
                  ``(D) Recapture.--Any fees allocated under this 
                subparagraph by the Secretary in a fiscal year that 
                have not been spent by the end of the subsequent fiscal 
                year shall be recaptured by the Secretary and shall be 
                available for providing additional fees pursuant to 
                subparagraph (B)(ii).
                  ``(E) Performance standards.--Within six months after 
                the date of the enactment of this paragraph, the 
                Secretary shall publish a proposed rule specifying the 
                performance standards applicable to funding under 
                clauses (ii) and (iii) of subparagraph (B). Such 
                standards shall include requirements applicable to the 
                leveraging of in-kind services and other resources to 
                support the goals of the family self-sufficiency 
                program.
                  ``(F) Data collection.--Public housing agencies 
                receiving funding under this paragraph shall collect 
                and report to the Secretary, in such manner as the 
                Secretary shall require, information on the performance 
                of their family self-sufficiency programs.
                  ``(G) Evaluation.-- The Secretary shall conduct a 
                formal and scientific evaluation of the effectiveness 
                of well-run family self-sufficiency programs, using 
                random assignment of participants to the extent 
                practicable. Not later than the expiration of the 4-
                year period beginning upon the enactment of this 
                paragraph, the Secretary shall submit an interim 
                evaluation report to the Congress. Not later than the 
                expiration of the 8-year period beginning upon such 
                enactment, the Secretary shall submit a final 
                evaluation report to the Congress. There is authorized 
                to be appropriated $10,000,000 to carry out the 
                evaluation under this subparagraph.
                  ``(H) Incentives for innovation and high 
                performance.--The Secretary may reserve up to 10 
                percent of the amounts made available for 
                administrative fees under this paragraph to provide 
                support to or reward family self-sufficiency programs 
                that are particularly innovative or highly successful 
                in achieving the goals of the program.''.
  (c) Repeal.--Section 202 of the Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agencies Appropriations 
Act, 1997 (42 U.S.C. 1437f note; Public Law 104-204; 110 Stat. 2893) is 
hereby repealed.

SEC. 8. HOMEOWNERSHIP.

  (a) Section 8 Homeownership Downpayment Program.--Section 8(y)(7) of 
the United States Housing Act of 1937 (42 U.S.C. 1437f(y)(7)) is 
amended by striking subparagraphs (A) and (B) and inserting the 
following new subparagraphs:
                  ``(A) In general.--Subject to the provisions of this 
                paragraph, in the case of a family on whose behalf 
                rental assistance under section 8(o) has been provided 
                for a period of not less than 12 months prior to the 
                date of receipt of downpayment assistance under this 
                paragraph, a public housing agency may, in lieu of 
                providing monthly assistance payments under this 
                subsection on behalf of a family eligible for such 
                assistance and at the discretion of the agency, provide 
                a downpayment assistance grant in accordance with 
                subparagraph (B).
                  ``(B) Grant requirements.--A downpayment assistance 
                grant under this paragraph--
                          ``(i) shall be used by the family only as a 
                        contribution toward the downpayment and 
                        reasonable and customary closing costs required 
                        in connection with the purchase of a home;
                          ``(ii) shall be in the form of a single one-
                        time grant; and
                          ``(iii) may not exceed $10,000.
                  ``(C) No effect on obtaining outside sources for 
                downpayment assistance.--This Act may not be construed 
                to prohibit a public housing agency from providing 
                downpayment assistance to families from sources other 
                than a grant provided under this Act, or as determined 
                by the public housing agency.''.
  (b) Use of Vouchers for Manufactured Housing.--Section 8(o)(12) of 
the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(12) is 
amended--
          (1) in subparagraph (A), by striking the period at the end of 
        the first sentence and all that follows through ``of'' in the 
        second sentence and inserting ``and rents''; and
          (2) in subparagraph (B)--
                  (A) in clause (i), by striking ``the rent'' and all 
                that follows and inserting the following: ``rent shall 
                mean the sum of the monthly payments made by a family 
                assisted under this paragraph to amortize the cost of 
                purchasing the manufactured home, including any 
                required insurance and property taxes, the monthly 
                amount allowed for tenant-paid utilities, and the 
                monthly rent charged for the real property on which the 
                manufactured home is located, including monthly 
                management and maintenance charges.'';
                  (B) by striking clause (ii); and
                  (C) in clause (iii)--
                          (i) by inserting after the period at the end 
                        the following: ``If the amount of the monthly 
                        assistance payment for a family exceeds the 
                        monthly rent charged for the real property on 
                        which the manufactured home is located, 
                        including monthly management and maintenance 
                        charges, a public housing agency may pay the 
                        remainder to the family, lender or utility 
                        company, or may choose to make a single payment 
                        to the family for the entire monthly assistance 
                        amount.''; and
                          (ii) by redesignating such clause as clause 
                        (ii).

SEC. 9. PHA REPORTING OF RENT PAYMENTS TO CREDIT REPORTING AGENCIES.

  (a) In General.--Section 3 of the United States Housing Act of 1937 
(42 U.S.C. 1437a), as amended by the preceding provisions of this Act, 
is further amended by adding at the end the following new subsection:
  ``(e) PHA Reporting of Rent Payments to Credit Reporting Agencies.--
          ``(1) Authority.--To the extent that a family receiving 
        tenant-based housing choice vouchers under section 8 by a 
        public housing agency agrees in writing to reporting under this 
        subsection, the public housing agency may submit to consumer 
        reporting agencies described in section 603(p) of the Fair 
        Credit Reporting Act (15 U.S.C. 1681a) information regarding 
        the past rent payment history of the family with respect to the 
        dwelling unit for which such assistance is provided.
          ``(2) Format.--The Secretary, after consultation with 
        consumer reporting agencies referred in paragraph (1), shall 
        establish a system and format to be used by public housing 
        agencies for reporting of information under such paragraph that 
        provides such information in a format and manner that is 
        similar to other credit information submitted to such consumer 
        reporting agencies and is usable by such agencies.''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on the date of the enactment of this Act.

SEC. 10. PERFORMANCE ASSESSMENTS.

  Section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(o)) is amended by adding at the end the following new paragraph:
          ``(21) Performance assessments.--
                  ``(A) Establishment.--The Secretary shall, by 
                regulation, establish standards and procedures for 
                assessing the performance of public housing agencies in 
                carrying out the programs for tenant-based rental 
                assistance under this subsection and for homeownership 
                assistance under subsection (y).
                  ``(B) Contents.--The standards and procedures under 
                this paragraph shall provide for assessment of the 
                performance of public housing agencies in the following 
                areas:
                          ``(i) Quality of dwelling units obtained 
                        using such assistance.
                          ``(ii) Extent of utilization of assistance 
                        amounts provided to the agency and of 
                        authorized vouchers.
                          ``(iii) Timeliness and accuracy of reporting 
                        by the agency to the Secretary.
                          ``(iv) Effectiveness in carrying out policies 
                        to achieve deconcentration of poverty.
                          ``(v) Reasonableness of rent burdens, 
                        consistent with public housing agency 
                        responsibilities under section 8(o)(1)(E)(iii).
                          ``(vi) Accurate rent calculations and subsidy 
                        payments.
                          ``(vii) Effectiveness in carrying out family 
                        self-sufficiency activities.
                          ``(viii) Timeliness of actions related to 
                        landlord participation
                          ``(ix) Such other areas as the Secretary 
                        considers appropriate.
                  ``(C) Periodic assessment.--Using the standards and 
                procedures established under this paragraph, the 
                Secretary shall conduct an assessment of the 
                performance of each public housing agency carrying out 
                a program referred to in subparagraph (A) and shall 
                submit a report to the Congress regarding the results 
                of each such assessment.''.

SEC. 11. PHA PROJECT-BASED ASSISTANCE.

  Section 8(o)(13) of the United States Housing Act of 1937 (42 U.S.C. 
1437f(o)(13)) is amended--
          (1) by striking subparagraph (B) and inserting the following 
        new subparagraph:
                  ``(B) Percentage limitation.--
                          ``(i) In general.--Subject to clause (ii), 
                        not more than 25 percent of the funding 
                        available for tenant-based assistance under 
                        this section that is administered by the agency 
                        may be attached to structures pursuant to this 
                        paragraph.
                          ``(ii) Exception.--An agency may attach up to 
                        an additional 5 percent of the funding 
                        available for tenant-based assistance under 
                        this section to structures pursuant to this 
                        paragraph for dwelling units that house 
                        individuals and families that meet the 
                        definition of homeless under section 103 of the 
                        McKinney-Vento Homeless Assistance Act (42 
                        U.S.C. 11302).'';
          (2) by striking subparagraph (D) and inserting the following 
        new subparagraph:
                  ``(D) Income mixing requirement.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), not more than the greater of 25 
                        dwelling units or 25 percent of the dwelling 
                        units in any project may be assisted under a 
                        housing assistance payment contract for 
                        project-based assistance pursuant to this 
                        paragraph. For purposes of this subparagraph, 
                        the term `project' means a single building, 
                        multiple contiguous buildings, or multiple 
                        buildings on contiguous parcels of land.
                          ``(ii) Exceptions.--
                                  ``(I) Certain housing.--The 
                                limitation under clause (i) shall not 
                                apply in the case of assistance under a 
                                contract for housing consisting of 
                                single family properties, or for 
                                dwelling units that are specifically 
                                made available for households comprised 
                                of elderly families, disabled families, 
                                and families receiving supportive 
                                services. For purposes of the preceding 
                                sentence, the term `single family 
                                properties' means buildings with no 
                                more than four dwelling units.
                                  ``(II) Certain areas.--With respect 
                                to areas in which fewer than 75 percent 
                                of families issued vouchers become 
                                participants in the program, the public 
                                housing agency has established the 
                                payment standard at 110 percent of the 
                                fair market rent for all census tracts 
                                in the area for the previous six 
                                months, and the public housing agency 
                                grants an automatic extension of 90 
                                days (or longer) to families with 
                                vouchers who are attempting to find 
                                housing, clause (i) shall be applied by 
                                substituting `50 percent' for `25 
                                percent'.'';
          (3) in the first sentence of subparagraph (F), by striking 
        ``10 years'' and inserting ``15 years'';
          (4) in subparagraph (G)--
                  (A) by inserting after the period at the end of the 
                first sentence the following: ``Such contract may, at 
                the election of the public housing agency and the owner 
                of the structure, specify that such contract shall be 
                extended for renewal terms of up to 15 years each, if 
                the agency makes the determination required by this 
                subparagraph and the owner is in compliance with the 
                terms of the contract.''; and
                  (B) by adding at the end the following: ``A public 
                housing agency may agree to enter into such a contract 
                at the time it enters into the initial agreement for a 
                housing assistance payment contract or at any time 
                thereafter that is before the expiration of the housing 
                assistance payment contract.'';
          (5) in subparagraph (H), by inserting before the period at 
        the end of the first sentence the following: ``, except that in 
        the case of a contract unit that has been allocated low-income 
        housing tax credits and for which the rent limitation pursuant 
        to such section 42 is less than the amount that would otherwise 
        be permitted under this subparagraph, the rent for such unit 
        may, in the sole discretion of a public housing agency, be 
        established at the higher section 8 rent, subject only to 
        paragraph (10)(A)'';
          (6) in subparagraph (I)(i), by inserting before the semicolon 
        the following: ``, except that the contract may provide that 
        the maximum rent permitted for a dwelling unit shall not be 
        less than the initial rent for the dwelling unit under the 
        initial housing assistance payments contract covering the 
        unit'';
          (7) in subparagraph (J)--
                  (A) by striking the fifth and sixth sentences and 
                inserting the following: ``A public housing agency may 
                establish and utilize procedures for maintaining site-
                based waiting lists under which applicants may apply 
                directly at, or otherwise designate to the public 
                housing agency, the project or projects in which they 
                seek to reside, except that all applicants on the 
                waiting list of an agency for assistance under this 
                subsection shall be permitted to place their names on 
                such separate list. All such procedures shall comply 
                with title VI of the Civil Rights Act of 1964, the Fair 
                Housing Act, and other applicable civil rights laws. 
                The owner or manager of a structure assisted under this 
                paragraph shall not admit any family to a dwelling unit 
                assisted under a contract pursuant to this paragraph 
                other than a family referred by the public housing 
                agency from its waiting list, or a family on a site-
                based waiting list that complies with the requirements 
                of this subparagraph. A public housing agency shall 
                fully disclose to each applicant each option in the 
                selection of a project in which to reside that is 
                available to the applicant.''; and
                  (B) by inserting after the third sentence the 
                following new sentence: ``Any family who resides in a 
                dwelling unit proposed to be assisted under this 
                paragraph, or in a unit to be replaced by a proposed 
                unit to be assisted under this paragraph shall be given 
                an absolute preference for selection for placement in 
                the proposed unit, if the family is otherwise eligible 
                for assistance under this subsection.''; and
          (8) by adding at the end the following new subparagraphs:
                  ``(L) Use in cooperative housing and elevator 
                buildings.--A public housing agency may enter into a 
                housing assistance payments contract under this 
                paragraph with respect to--
                          ``(i) dwelling units in cooperative housing;
                          ``(ii) notwithstanding subsection (c), 
                        dwelling units in a high-rise elevator project, 
                        including such a project that is occupied by 
                        families with children, without review and 
                        approval of the contract by the Secretary.
                  ``(M) Reviews.--
                          ``(i) Subsidy layering.--A subsidy layering 
                        review in accordance with section 102(d) of the 
                        Department of Housing and Urban Development 
                        Reform Act of 1989 (42 U.S.C. 3545(d)) shall 
                        not be required for assistance under this 
                        subparagraph in the case of a housing 
                        assistance payments contract for an existing 
                        structure, or if a subsidy layering review has 
                        been conducted by the applicable State or local 
                        agency.
                          ``(ii) Environmental review.--A public 
                        housing agency shall not be required to 
                        undertake any environmental review before 
                        entering into a housing assistance payments 
                        contract under this paragraph for an existing 
                        structure, except to the extent such a review 
                        is otherwise required by law or regulation.
                  ``(N) Leases and tenancy.--Assistance provided under 
                this paragraph shall be subject to the provisions of 
                paragraph (7), except that subparagraph (A) of such 
                paragraph shall not apply.''.

SEC. 12. RENT BURDENS.

  (a) Reviews.--Section 8(o)(1) of the United States Housing Act of 
1937 (42 U.S.C. 1437f(o)(1)) is amended by striking subparagraph (E) 
and inserting the following new subparagraph:
                  ``(E) Reviews.--
                          ``(i) Rent burdens.--The Secretary shall 
                        monitor rent burdens and submit a report to the 
                        Congress annually on the percentage of families 
                        assisted under this subsection, occupying 
                        dwelling units of any size, that pay more than 
                        30 percent of their adjusted incomes for rent 
                        and such percentage that pay more than 40 
                        percent of their adjusted incomes for rent. 
                        Using information regularly reported by public 
                        housing agencies, the Secretary shall provide 
                        public housing agencies, on an annual basis, a 
                        report with the information described in the 
                        first sentence of this clause, and may require 
                        a public housing agency to modify a payment 
                        standard that results in a significant 
                        percentage of families assisted under this 
                        subsection, occupying dwelling units of any 
                        size, paying more than 30 percent of their 
                        adjusted incomes for rent.
                          ``(ii) Concentration of poverty.--The 
                        Secretary shall submit a report to the Congress 
                        annually on the degree to which families 
                        assisted under this subsection in each 
                        metropolitan area are clustered in lower rent, 
                        higher poverty areas and how, and the extent to 
                        which, greater geographic distribution of such 
                        assisted families could be achieved, including 
                        by increasing payment standards for particular 
                        communities within such metropolitan areas.
                          ``(iii) Public housing agency 
                        responsibilities.--Each public housing agency 
                        shall make publicly available the information 
                        on rent burdens provided by the Secretary 
                        pursuant to clause (i), and, for agencies 
                        located in metropolitan areas, the information 
                        on concentration provided by the Secretary 
                        pursuant to clause (ii). If the percentage of 
                        families paying more than 30 percent or 40 
                        percent of income exceeds the national average 
                        for either of such categories, as reported 
                        pursuant to clause (i), the public housing 
                        agency shall adjust the payment standard to 
                        eliminate excessive rent burdens within a 
                        reasonable time period or explain its reasons 
                        for not making such adjustment. The Secretary 
                        may not deny the request of a public housing 
                        agency to set a payment standard up to 120 
                        percent of the fair market rent to remedy rent 
                        burdens in excess of the national average or 
                        undue concentration of families assisted under 
                        this subsection in lower rent, higher poverty 
                        sections of a metropolitan area except on the 
                        basis that an agency has not demonstrated that 
                        its request meets these criteria. If a request 
                        of a public housing agency has not been denied 
                        or approved with 45 days after the request is 
                        made, the request shall be considered to have 
                        been approved.''.
  (b) Public Housing Agency Plan.--Section 5A(d)(4) of the United 
States Housing Act of 1937 (42 U.S.C. 1437c-1(d)(4)) is amended by 
inserting before the period at the end the following: ``, including the 
report with respect to the agency furnished by the Secretary pursuant 
to section 8(o)(1)(E) concerning rent burdens and, if applicable, 
geographic concentration of voucher holders, any changes in rent or 
other policies the public housing agency is making to address excessive 
rent burdens or concentration, and if the public housing agency is not 
adjusting its payment standard, its reasons for not doing so''.
  (c) Rent Burdens for Persons With Disabilities.--Subparagraph (D) of 
section 8(o)(1) is amended by inserting before the period at the end 
the following: ``, except that a public housing agency may establish a 
payment standard of not more than 120 percent of the fair market rent 
where necessary as a reasonable accommodation for a person with a 
disability, without approval of the Secretary. A public housing agency 
may seek approval of the Secretary to use a payment standard greater 
than 120 percent of the fair market rent as a reasonable accommodation 
for a person with a disability''.

SEC. 13. ESTABLISHMENT OF FAIR MARKET RENT.

  (a) In General.--Paragraph (1) of section 8(c) of the United States 
Housing Act of 1937 (42 U.S.C. 1437f(c)(1)) is amended--
          (1) by inserting ``(A)'' after the paragraph designation;
          (2) by striking the seventh, eighth, and ninth sentences; and
          (3) by adding at the end the following:
  ``(B)(i) The Secretary shall endeavor to define market areas for 
purposes of this paragraph in a manner that results in fair market 
rentals that are adequate to cover typical rental costs of units 
suitable for occupancy by persons assisted under this section in as 
wide a range of communities as is feasible, including communities with 
low poverty rates.
  ``(ii) The Secretary at a minimum shall define a separate market area 
for each--
          ``(I) metropolitan city, as such term is defined in section 
        102(a) of the Housing and Community Development Act of 1974 (42 
        U.S.C. 5302(a)), with more than 40,000 rental dwelling units; 
        and
          ``(II) urban county or portion of an urban county, as such 
        term is defined in such section 102(a), located outside the 
        boundaries of any metropolitan city specified in subclause (I).
  ``(iii) The Secretary shall, at the request of one or more public 
housing agencies, establish a separate market area for part or all of 
the area under the jurisdiction of such agencies, if--
          ``(I) the requested market area contains at least 20,000 
        rental dwelling units;
          ``(II) the areas contained in the requested market area are 
        geographically contiguous and share similar housing market 
        characteristics;
          ``(III) adequate data are available to establish a reliable 
        fair market rental for the requested market area, and for the 
        remainder of the market area in which it is currently located; 
        and
          ``(IV) establishing the requested market area would raise or 
        lower the fair market rental by 10 percent or more at the time 
        the requested market area is established.
For purposes of subclause (III), data for an area shall be considered 
adequate if they are sufficient to establish from time to time a 
reliable benchmark fair market rental based primarily on data from that 
area, whether or not those data need to be supplemented with data from 
a larger area for purposes of annual updates.
  ``(iv) The Secretary shall not reduce the fair market rental in a 
market area as a result of a change in the percentile of the 
distribution of market rents used to establish the fair market 
rental.''.
  (b) Payment Standard.--Subparagraph (B) of section 8(o)(1) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(o)(1)(B)) is amended 
by inserting before the period at the end the following: ``, except 
that no public housing agency shall be required as a result of a 
reduction in the fair market rental to reduce the payment standard 
applied to a family continuing to reside in a unit for which the family 
was receiving assistance under this section at the time the fair market 
rental was reduced''.

SEC. 14. SCREENING OF APPLICANTS.

  Subparagraph (B) of section 8(o)(6) of the United States Housing Act 
of 1937 (1437f(o)(6)(B)) is amended by inserting after the period at 
the end of the second sentence the following: ``A public housing 
agency's elective screening shall be limited to criteria that are 
directly related to an applicant's ability to fulfill the obligations 
of an assisted lease and shall consider mitigating circumstances 
related to such applicant. Any applicant or participant determined to 
be ineligible for admission or continued participation to the program 
shall be notified of the basis for such determination and provided, 
within a reasonable time after the determination, an opportunity for an 
informal hearing on such determination at which mitigating 
circumstances, including remedial conduct subsequent to the notice, 
shall be considered.''.

SEC. 15. ENHANCED VOUCHERS.

  Subparagraph (B) of section 8(t)(1) of the United States Housing Act 
of 1937 (42 U.S.C. 1437f(t)(1)(B)) is amended by inserting after 
``eligibility event for the project,'' the following: ``regardless of 
unit and family size standards normally used by the administering 
agency (except that tenants may be required to move to units of 
appropriate size if available on the premises),''.

SEC. 16. HOUSING INNOVATION PROGRAM.

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

``SEC. 36. HOUSING INNOVATION PROGRAM.

  ``(a) Purpose.--The purpose of the program under this section is to 
provide public housing agencies and the Secretary the flexibility to 
design and evaluate innovative approaches to providing housing 
assistance that--
          ``(1) increase housing opportunities for low-income families, 
        including preventing homelessness, rehabilitate or replace 
        housing at risk of physical deterioration or obsolescence, and 
        develop additional affordable housing;
          ``(2) leverage other Federal, State, and local funding 
        sources, including the low-income housing tax credit program, 
        to expand and preserve affordable housing opportunities, 
        including public housing;
          ``(3) provide financial incentives and other support 
        mechanisms to families to obtain employment and increase earned 
        income;
          ``(4) test alternative rent-setting policies to determine 
        whether rent determinations can be simplified and 
        administrative cost savings can be realized while protecting 
        extremely low- and very low-income families from increased rent 
        burdens;
          ``(5) are subject to rigorous evaluation to test the 
        effectiveness of such innovative approaches; and
          ``(6) are developed with the support of the local community 
        and with the substantial participation of affected residents.
  ``(b) Program Authority.--
          ``(1) Scope.--The Secretary shall carry out a housing 
        innovation program under this section under which the Secretary 
        may designate not more than 60 public housing agencies to 
        participate, at any one time, in the housing innovation 
        program, in accordance with subsections (c) and (d), except 
        that, in addition to such 60 agencies, the Secretary may 
        designate an additional 20 agencies to participate in the 
        program under the terms of subsection (h).
          ``(2) Duration.--The Secretary may carry out the housing 
        innovation program under this section only during the 10-year 
        period beginning on the date of the enactment of the Section 8 
        Voucher Reform Act of 2007.
  ``(c) Participation of Existing MTW Agencies.--
          ``(1) Existing mtw agencies.--Subject to the requirements of 
        paragraph (2), all existing MTW agencies shall be designated to 
        participate in the program.
          ``(2) Conditions of participation.--The Secretary shall 
        approve and transfer into the housing innovation program under 
        this section each existing MTW agency that the Secretary 
        determines is not in default under such agreement and which the 
        Secretary also determines is meeting the goals and objectives 
        of its moving to work plan. Each such agency shall, within two 
        years after the date of the enactment of the Section 8 Voucher 
        Reform Act of 2007, make changes to its policies that were 
        implemented before such date of enactment in order to comply 
        with the requirements of this section.
  ``(d) Additional Agencies.--
          ``(1) Proposals; selection process.--In addition to agencies 
        participating in the program pursuant to subsection (c), the 
        Secretary shall, within 18 months after such date of enactment, 
        select public housing agencies to participate in the program 
        pursuant to a competitive process that meets the following 
        requirements:
                  ``(A) Any public housing agency may be selected to 
                participate in the program, except that not more than 5 
                agencies that are near-troubled under the public 
                housing assessment system and/or section 8 management 
                assessment program may be selected, and except that any 
                agency for which the Secretary has hired an alternative 
                management entity for such agency or has taken 
                possession of all or any part of such agency's public 
                housing program shall not be eligible for 
                participation. Any near-troubled public housing agency 
                participating in the program shall remain subject to 
                the requirements of this Act governing tenant rent 
                contributions, eligibility, and continued 
                participation, and may not adopt policies described in 
                subsection (e)(4) (relating to rents and requirements 
                for continued occupation and participation).
                  ``(B) The process provides, to the extent possible 
                based on eligible agencies submitting applications and 
                taking into account existing MTW agencies participating 
                pursuant to subsection (c), for representation among 
                agencies selected of agencies having various 
                characteristics, including both large and small 
                agencies, agencies serving urban, suburban, and rural 
                areas, and agencies in various geographical regions 
                throughout the United States, and which may include the 
                selection of agencies that only administer the voucher 
                program under section 8(o).
                  ``(C) Any agency submitting a proposal under this 
                paragraph shall have provided notice to residents and 
                the local community, not later than 30 days before the 
                first of the two public meetings required under 
                subparagraph (D).
                  ``(D) The agency submitting a proposal shall hold two 
                public meetings to receive comments on the agency's 
                proposed application, on the implications of changes 
                under the proposal, and the possible impact on 
                residents.
                  ``(E) The process includes criteria for selection, as 
                follows:
                          ``(i) The extent to which the proposal 
                        generally identifies existing rules and 
                        regulations that impede achievement of the 
                        goals and objectives of the proposal and an 
                        explanation of why participation in the program 
                        is necessary to achieve such goals and 
                        objectives.
                          ``(ii) The extent of commitment and funding 
                        for carrying out the proposal by local 
                        government agencies and nonprofit 
                        organizations, including the provision of 
                        additional funding and other services, and the 
                        extent of support for the proposal by 
                        residents, resident advisory boards, and 
                        members of the local community.
                          ``(iii) The extent to which the agency has a 
                        successful history of implementing strategies 
                        similar to those set forth in the agency's 
                        proposal.
                          ``(iv) Whether the proposal pursues a 
                        priority strategy as specified in paragraph 
                        (2). In the case of any proposal utilizing a 
                        such a priority strategy, the proposal shall be 
                        evaluated based upon--
                                  ``(I) the extent to which the 
                                proposal is likely to achieve the 
                                objectives of developing additional 
                                housing dwelling units affordable to 
                                extremely low-, very low-, and low-
                                income families, and preserving, 
                                rehabilitating, or modernizing existing 
                                public housing dwelling units; or
                                  ``(II) the extent to which the 
                                proposal is likely to achieve the 
                                purposes of moving families toward 
                                economic self-sufficiency and 
                                increasing employment rates and wages 
                                of families without imposing a 
                                significant rent burden on the lowest 
                                income families, as well as such of the 
                                additional purposes as may be 
                                identified in the proposal, which may 
                                include expanding housing choices 
                                utilizing coordinators for the family 
                                self-sufficiency program under section 
                                23, making more effective use of 
                                program funds, and improving program 
                                management.
                          ``(v) Such other factors as the Secretary may 
                        provide, in consultation with participating 
                        agencies, program stakeholders, and any entity 
                        conducting evaluations pursuant to subsection 
                        (f).
          ``(2) Priority strategies.--For purposes of paragraph 
        (1)(E)(iv), the following are priority strategies:
                  ``(A) Development, rehabilitation, and financing.--A 
                strategy of development of additional affordable 
                housing dwelling units and/or a strategy for 
                preservation and physical rehabilitation and 
                modernization of existing public housing dwelling 
                units. Such strategies may include innovative financing 
                proposals, leveraging of non-public housing funds 
                (including the low-income housing tax credit program), 
                and combining of funds for assistance under sections 8 
                and 9. Each such proposal shall include detailed 
                information about the strategies expected to be 
                employed, an explanation of why participation in the 
                program is necessary to employ such strategies, and 
                numerical goals regarding the number of dwelling units 
                to be developed, preserved, or rehabilitated.
                  ``(B) Rent reforms.--A strategy to implement rent 
                reforms, which shall be designed to help families 
                increase their earned income through rent and other 
                work incentives, and may also test the effectiveness of 
                achieving administrative cost savings without increased 
                rent burdens for extremely low- and very low-income 
                families.
          ``(3) Contract amendment.--After selecting agencies under 
        this subsection, the Secretary shall promptly amend the 
        applicable annual contributions contracts of such agencies to 
        provide that--
                  ``(A) subject to subparagraph (B), such agencies may 
                implement any policies and activities that are not 
                inconsistent with this section without specifying such 
                policies and activities in such amendment and without 
                negotiating or entering into any other agreements with 
                the Secretary specifying such policies and activities; 
                and
                  ``(B) the activities to be implemented by an agency 
                under the program in a given year shall be described in 
                and subject to the requirements of the annual plan 
                under subsection (e)(8). Upon the enactment of this 
                section, any agency which has participated in the 
                Moving to Work demonstration may, at its option, be 
                subject to the provisions of this paragraph in lieu of 
                any other agreement required by the Secretary for 
                participation in the program.
          ``(4) Maintaining participation rate.--If, at any time after 
        the initial selection period under paragraph (1), the number of 
        public housing agencies participating in the program under this 
        section is fewer than 40, the Secretary shall promptly solicit 
        applications from and select public housing agencies to 
        participate in the program under the terms and conditions for 
        application and selection provided in this section to increase 
        the number of agencies participating in the program to 40.
  ``(e) Program Requirements.--
          ``(1) Program funds.--
                  ``(A) In general.--To carry out a housing innovation 
                program under this section, the participating agency 
                may use amounts provided to the agency from the 
                Operating Fund under section 9(e), amounts provided to 
                the agency from the Capital Fund under section 9(d), 
                and amounts provided to the agency for voucher 
                assistance under section 8(o). Such program funds may 
                be used for any activities that are authorized by 
                sections 8(o) or 9, or for other activities that are 
                not inconsistent with this section, which shall 
                include, without limitation--
                          ``(i) providing capital and operating 
                        assistance, and financing for housing 
                        previously developed or operated pursuant to a 
                        contract between the Secretary and such agency;
                          ``(ii) the acquisition, new construction, 
                        rehabilitation, financing, and provision of 
                        capital or operating assistance for low-income 
                        housing (including housing other than public 
                        housing) and related facilities, which may be 
                        for terms exceeding the term of the program 
                        under this section in order to secure other 
                        financing for such housing;
                          ``(iii) costs of site acquisition and 
                        improvement, providing utility services, 
                        demolition, planning, and administration of 
                        activities under this paragraph;
                          ``(iv) housing counseling for low-income 
                        families in connection with rental or 
                        homeownership assistance provided under the 
                        program;
                          ``(v) safety, security, law enforcement, and 
                        anticrime activities appropriate to protect and 
                        support families assisted under the program;
                          ``(vi) tenant-based rental assistance, which 
                        may include the project-basing of such 
                        assistance; and
                          ``(vii) appropriate and reasonable financial 
                        assistance that is required to preserve low-
                        income housing otherwise assisted under 
                        programs administered by the Secretary or under 
                        State or local low-income housing programs.
                  ``(B) Combining funds.--Notwithstanding any other 
                provision of law, a participating agency may combine 
                and use program funds for any activities authorized 
                under this section, except that a participating agency 
                may use funds provided for assistance under section 
                8(o) for activities other than those authorized under 
                section 8(o) only if (i) in the calendar year prior to 
                its participation in the program, the agency utilized 
                not less than 95 percent of such funds allocated for 
                that calendar year for such authorized activities or 95 
                percent of its authorized vouchers, including vouchers 
                ported in to the agency and vouchers ported out; or 
                (ii) after approval to participate in the program, the 
                agency achieves such utilization for a 12-month period. 
                This subparagraph shall not apply to participating 
                agencies approved by the Secretary to combine funds 
                from sections 8 and 9 of the Act prior to enactment of 
                this section.
          ``(2) Use of program funds.--In carrying out the housing 
        innovation program under this section, each participating 
        agency shall continue to assist--
                  ``(A) not less than substantially the same number of 
                eligible low-income families under the program as it 
                assisted in the base year for the agency; and
                  ``(B) a comparable mix of families by family size, 
                subject to adjustment to reflect changes in the 
                agency's waiting list, except that the Secretary may 
                approve exceptions to such requirements for up to 3 
                years based on modernization or redevelopment 
                activities proposed in an annual plan submitted and 
                approved in accordance with paragraph (8).
        Determinations with respect to the number of families served 
        shall be adjusted based on any allocation of additional 
        vouchers under section 8(o) and to reflect any change in the 
        percentage of program funds that a participating agency 
        receives compared to the base year.
          ``(3) Retained provisions.--Notwithstanding any other 
        provision of this section, families receiving assistance under 
        this section shall retain the same rights of judicial review of 
        agency action as they would otherwise have had if the agency 
        were not participating in the program, and each participating 
        agency shall comply with the following provisions of this Act:
                  ``(A) Subsections (a)(2)(A) and (b)(1) of section 16 
                (relating to targeting for new admissions in the public 
                housing and voucher programs).
                  ``(B) Section 2(b) (relating to tenant 
                representatives on the public housing agency board of 
                directors).
                  ``(C) Section 3(b)(2) (relating to definitions for 
                the terms `low-income families' and `very low-income 
                families').
                  ``(D) Section 5(A)(e) (relating to the formation of 
                and consultation with a resident advisory board).
                  ``(E) Sections 6(f)(1) and 8(o)(8)(B) (relating to 
                compliance of units assisted with housing quality 
                standards or other codes).
                  ``(F) Sections 6(c)(3), 6(c)(4)(i), and 8(o)(6)(B) 
                (relating to rights of public housing applicants and 
                existing procedural rights for applicants under section 
                8(o)).
                  ``(G) Section 6(k) (relating to grievance procedures 
                for public housing tenants) and comparable procedural 
                rights for families assisted under section 8(o).
                  ``(H) Section 6(l) (relating to public housing lease 
                requirements), except that for units assisted both with 
                program funds and low-income housing tax credits, the 
                initial lease term may be less than 12 months if 
                required to conform lease terms with such tax credit 
                requirements.
                  ``(I) Section 7 (relating to designation of housing 
                for elderly and disabled households), except that a 
                participating agency may make such designations(at 
                initial designation or upon renewal) for a term of up 
                to 5 years if the agency includes in its annual plan 
                under paragraph (8) an analysis of the impact of such 
                designations on affected households and such 
                designation is subject to the program evaluation. Any 
                participating agency with a designated housing plan 
                that was approved under the moving to work 
                demonstration may continue to operate under the terms 
                of such plan for a term of 5 years (with an option to 
                renew on the same terms for an additional 5 years) if 
                it includes in its annual plan an analysis of the 
                impact of such designations on affected households and 
                is subject to evaluation under subsection (f).
                  ``(J) Subparagraphs (C) through (E) of section 
                8(o)(7) (relating to lease requirements and eviction 
                protections for families assisted with tenant-based 
                assistance).
                  ``(K) Subject to paragraph (1)(B) of this subsection, 
                section 8(o)(13)(B) (relating to a percentage 
                limitation on project-based assistance), except that 
                for purposes of this subparagraph such section shall be 
                applied by substituting `50 percent' for `20 percent'.
                  ``(L) Section 8(o)(13)(E) (relating to resident 
                choice for tenants of units with project-based 
                vouchers), except with respect to--
                          ``(i) in the case of agencies participating 
                        in the moving to work demonstration, any 
                        housing assistance payment contract entered 
                        into within 2 years after the enactment of this 
                        section;
                          ``(ii) project-based vouchers that replace 
                        public housing units;
                          ``(iii) not more than 10 percent of the 
                        vouchers available to the participating agency 
                        upon entering the housing innovation program 
                        under this section; and
                          ``(iv) any project-based voucher program that 
                        is subject to evaluation under subsection (f).
                  ``(M) Section 8(r) (relating to portability of 
                voucher assistance), except that a participating agency 
                may receive funding for portability obligations under 
                section 8(dd) in the same manner as other public 
                housing agencies.
                  ``(N) Subsections (a) and (b) of section 12 (relating 
                to payment of prevailing wages).
                  ``(O) Section 18 (relating to demolition and 
                disposition of public housing).
          ``(4) Rents and requirements for continued occupancy or 
        participation.--
                  ``(A) Before policy change.--Before adopting any 
                policy pursuant to participation in the housing 
                innovation program under this section that would make a 
                material change to the requirements of this Act 
                regarding tenant rents or contributions, or conditions 
                of continued occupancy or participation, a 
                participating agency shall complete each of the 
                following actions:
                          ``(i) The agency shall conduct an impact 
                        analysis of the proposed policy on families the 
                        agency is assisting under the program under 
                        this section and on applicants on the waiting 
                        list, including analysis of the incidence and 
                        severity of rent burdens greater than 30 
                        percent of adjusted income on households of 
                        various sizes and types and in various income 
                        tiers, that would result, if any, without 
                        application of the hardship provisions. The 
                        analysis with respect to applicants on the 
                        waiting list may be limited to demographic data 
                        provided by the applicable consolidated plan, 
                        information provided by the Secretary, and 
                        other generally available information. The 
                        proposed policy, including provisions for 
                        addressing hardship cases and transition 
                        provisions that mitigate the impact of any rent 
                        increases or changes in the conditions of 
                        continued occupancy or participation, and data 
                        from this analysis shall be made available for 
                        public inspection for at least 60 days in 
                        advance of the public meeting described in 
                        clause (ii).
                          ``(ii) The agency shall hold a public meeting 
                        regarding the proposed change, including the 
                        hardship provisions, which may be combined with 
                        a public meeting on the draft annual plan under 
                        paragraph (8) or the annual report under 
                        paragraph (9).
                          ``(iii) The board of directors or other 
                        similar governing body of the agency shall 
                        approve the change in public session.
                          ``(iv) The agency shall obtain approval from 
                        the Secretary of the annual plan or plan 
                        amendment. The Secretary may approve a plan or 
                        amendment containing a material change to the 
                        requirements of this Act regarding tenant rents 
                        or contributions, or conditions of continued 
                        occupancy or participation, only if the agency 
                        agrees that such policy may be included as part 
                        of the national evaluation.
                  ``(B) After policy change.--After adopting a policy 
                described in subparagraph (A), a program agency shall 
                complete each of the following actions:
                          ``(i) The agency shall provide adequate 
                        notice to residents, which shall include a 
                        description of the changes in the public 
                        housing lease or participation agreement that 
                        may be required and of the hardship or 
                        transition protections offered.
                          ``(ii) In the case of any additional 
                        requirements for continued occupancy or 
                        participation, the agency shall execute a lease 
                        addendum or participation agreement specifying 
                        the requirements applicable to both the 
                        resident and the agency. A resident may bring a 
                        civil action to enforce commitments of the 
                        agency made through the lease addendum or 
                        participation agreement.
                          ``(iii) The agency shall reassess rent, 
                        subsidy level, and policies on program 
                        participation no less often than every two 
                        years, which shall include preparing a revised 
                        impact analysis, and make available to the 
                        public the results of such reassessment and 
                        impact analysis. The requirement under this 
                        clause may be met by sufficiently detailed 
                        interim reports, if any, by the national 
                        evaluating entity.
                          ``(iv) The agency shall include in the annual 
                        report under paragraph (8) information 
                        sufficient to describe any hardship requests, 
                        including the number and types of requests 
                        made, granted, and denied, the use of 
                        transition rules, and adverse impacts resulting 
                        from changes in rent or continued occupancy 
                        policies, including actions taken by the agency 
                        to mitigate such impacts and impacts on 
                        families no longer assisted under the program.
                  ``(C) Applicability to existing mtw agencies.--An 
                existing MTW agency that, before the date of the 
                enactment of this section, implemented material changes 
                to the requirements of this Act regarding tenant rents 
                or contributions, or conditions of continued occupancy 
                or participation, as part of the moving to work 
                demonstration shall not be subject to subparagraph (A) 
                with regard to such previously implemented changes, but 
                shall comply with the requirements of subparagraph 
                (B)(ii) and provide the evaluation and impact analysis 
                required by subparagraph (B)(iii) by the end of the 
                second agency fiscal year ending after such date of 
                enactment.
          ``(5) Prohibition against decrease in program funds.--The 
        amount of program funds a participating agency receives shall 
        not be diminished by its participation in the housing 
        innovation program under this section.
          ``(6) Submission of information.--As part of the annual 
        report required under subsection (g)(2), each participating 
        agency shall submit information annually to the Secretary 
        regarding families assisted under the program of the agency and 
        comply with any other data submissions required by the 
        Secretary for purposes of evaluation of the program under this 
        section.
          ``(7) Public and resident participation.--Each participating 
        agency shall provide opportunities for resident and public 
        participation in the annual plan under paragraph (8), as 
        follows:
                  ``(A) Notice to residents.--
                          ``(i) Notice.--Each year, the agency shall 
                        provide notice to the low-income families it 
                        serves under the programs authorized by this 
                        section as to the impact of proposed policy 
                        changes and program initiatives and of the 
                        schedule of resident advisory board and public 
                        meetings for the annual plan.
                          ``(ii) Meeting.--The agency shall hold at 
                        least one meeting with the resident advisory 
                        board (including representatives of recipients 
                        of assistance under section 8) to review the 
                        annual plan for each year.
                  ``(B) Public meeting.--With respect to each annual 
                plan, the agency shall hold at least one annual public 
                meeting to obtain comments on the plan, which may be 
                combined with a meeting to review the annual report. In 
                the case of any agency that administers, in the 
                aggregate, more than 15,000 public housing units and 
                vouchers, the agency shall hold additional meetings in 
                locations that promote attendance by residents and 
                other stakeholders.
                  ``(C) Public availability.--Before adoption of any 
                annual plan, and not less than 30 days before the 
                public meeting required under subparagraph (A)(ii) with 
                respect to the plan, the agency shall make the proposed 
                annual plan available for public inspection. The annual 
                plan shall be made available for public inspection not 
                less than 30 days before approval by the board of 
                directors (or other similar governing body) of the 
                agency and shall remain publicly available.
                  ``(D) Board approval.--Before submitting an annual 
                plan or annual report to the Secretary, the plan or 
                report, as applicable, shall be approved in a public 
                meeting by the board of directors or other governing 
                body of the agency.
          ``(8) Annual plan.--
                  ``(A) Requirement.--For each year that a 
                participating agency participates in the housing 
                innovation program under this section, the agency shall 
                submit to the Secretary, in lieu of all other planning 
                requirements, an annual plan under this paragraph.
                  ``(B) Contents.--Each annual plan shall include the 
                following information:
                          ``(i) A list and description of all program 
                        initiatives and generally applicable policy 
                        changes, including references to affected 
                        provisions of law or the implementing 
                        regulations affected.
                          ``(ii) A description and comparison of 
                        changes under the housing innovation program of 
                        the agency from the plan for such program for 
                        the preceding year.
                          ``(iii) A description of property 
                        redevelopment or portfolio repositioning 
                        strategies and proposed changes in policies or 
                        uses of funds required to implement such 
                        strategies.
                          ``(iv) Documentation of public and resident 
                        participation sufficient to comply with the 
                        requirements under paragraphs (4) and (7), 
                        including a copy of any recommendations 
                        submitted in writing by the resident advisory 
                        board of the agency and members of the public, 
                        a summary of comments, and a description of the 
                        manner in which the recommendations were 
                        addressed.
                          ``(v) Certifications by the agency that--
                                  ``(I) the annual plan will be carried 
                                out in conformity with title VI of the 
                                Civil Rights Act of 1964, the Fair 
                                Housing Act, section 504 of the 
                                Rehabilitation Act of 1973, title II of 
                                the Americans with Disabilities Act of 
                                1990, and the rules, standards, and 
                                policies in the approved plan;
                                  ``(II) the agency will affirmatively 
                                further fair housing; and
                                  ``(III) the agency has complied and 
                                will continue to comply with its 
                                obligations under the national 
                                evaluation.
                          ``(vi) A description of the agency's local 
                        asset management strategy for public housing 
                        properties, which shall be in lieu of any other 
                        asset management, project based management or 
                        accounting, or other system of allocating 
                        resources and costs to participating agency 
                        assets or cost centers that the Secretary may 
                        otherwise impose under this Act.
                  ``(C) Changes.--If the agency proposes to make 
                material changes in policies or initiatives in the plan 
                during the year covered by the plan, the agency shall 
                consult with the resident advisory board for the agency 
                established pursuant to section 5A(e) and the public 
                regarding such changes before their adoption.
                  ``(D) Approval process.--
                          ``(i) Timing.--The Secretary shall review and 
                        approve or disapprove each annual plan 
                        submitted to the Secretary within 45 days after 
                        such submission.
                          ``(ii) Standards for disapproval.--The 
                        Secretary may disapprove a plan only if--
                                  ``(I) the Secretary reasonably 
                                determines, based on information 
                                contained in the annual plan or annual 
                                report, that the agency is not in 
                                compliance with the requirements of 
                                this section;
                                  ``(II) the annual plan or most recent 
                                annual report is not consistent with 
                                other reliable information available to 
                                the Secretary; or
                                  ``(III) the annual plan or annual 
                                report or the agency's activities under 
                                the program are not otherwise in 
                                accordance with applicable law.
                          ``(iii) Failure to disapprove.--If a 
                        submitted plan is not disapproved within 45 
                        days after submission, the plan shall be 
                        considered to be approved for purposes of this 
                        section. The preceding sentence shall not 
                        preclude judicial review regarding such 
                        compliance pursuant to chapter 7 of title 5, 
                        United States Code, or an action regarding such 
                        compliance under section 1979 of the Revised 
                        Statutes of the United States (42 U.S.C. 1983).
  ``(f) Evaluation of Performance.--
          ``(1) In general.--Not later than the expiration of the one-
        year period that begins upon selection under subsection (d) of 
        at least half of the number of agencies able to participate in 
        the program under this section, the Secretary shall conduct 
        detailed evaluations of all public housing agencies 
        participating in the program under this section--
                  ``(A) to determine the level of success of each 
                public housing agency in achieving the purposes of the 
                program under subsection (a); and
                  ``(B) to identify program models that can be 
                replicated by other agencies to achieve such success.
          ``(2) Reports.--
                  ``(A) In general.--The Secretary shall submit three 
                reports to the Congress, as provided in subparagraph 
                (B), evaluating the programs of all public housing 
                agencies participating in the program under this 
                section and all agencies participating in the moving to 
                work demonstration. Each such report shall include 
                findings and recommendations for any appropriate 
                legislative action.
                  ``(B) Timing.--The reports under this paragraph shall 
                include--
                          ``(i) an initial report, which shall be 
                        submitted before the expiration of the 3-year 
                        period beginning on the date of the enactment 
                        of the Section 8 Voucher Reform Act of 2007;
                          ``(ii) an interim report, which shall be 
                        submitted before the expiration of the 5-year 
                        period beginning on such date of enactment; and
                          ``(iii) a final report, which shall be 
                        submitted before the expiration of the 10-year 
                        period beginning on such date of enactment.
          ``(3) Evaluating entity.-- The Secretary may contract out the 
        responsibilities under this paragraphs (1) and (2) to an 
        independent entity that is qualified to perform such 
        responsibilities.
          ``(4) Performance measures.--The Secretary or the evaluating 
        entity, as applicable, shall establish performance measures, 
        which may include--
                  ``(A) a baseline performance level against which 
                program activities may be evaluated; and
                  ``(B) performance measures for--
                          ``(i) increasing housing opportunities for 
                        extremely low-, very low-, and low-income 
                        families, replacing or rehabilitating housing 
                        at risk of physical deterioration or 
                        obsolescence, and developing additional 
                        affordable housing;
                          ``(ii) leveraging other Federal, State, and 
                        local funding sources, including the low-income 
                        housing tax credit program, to expand and 
                        preserve affordable housing opportunities, 
                        including public housing;
                          ``(iii) moving families to self-sufficiency 
                        and increasing employment rates and wages of 
                        families without imposing a significant rent 
                        burden on the families having the lowest 
                        incomes;
                          ``(iv) reducing administrative costs; and
                          ``(v) any other performance measures that the 
                        Secretary or evaluating entity, as applicable, 
                        may establish.
  ``(g) Recordkeeping, Reports, and Audits.--
          ``(1) Recordkeeping.--Each public housing agency 
        participating in the program under this section shall keep such 
        records as the Secretary may prescribe as reasonably necessary 
        to disclose the amounts and the disposition of amounts under 
        the program, to ensure compliance with the requirements of this 
        section, and to measure performance.
          ``(2) Reports.--In lieu of all other reporting requirements, 
        each such agency participating in the program shall submit to 
        the Secretary an annual report in a form and at a time 
        specified by the Secretary. Each annual report shall include 
        the following information:
                  ``(A) A description, including an annual consolidated 
                financial report, of the sources and uses of funds of 
                the agency under the program, which shall account 
                separately for funds made available under section 8 and 
                subsections (d) and (e) of section 9, and shall compare 
                the agency's actions under the program with its annual 
                plan for the year.
                  ``(B) An annual audit that complies with the 
                requirements of Circular A-133 of the Office of 
                Management and Budget, including the OMB Compliance 
                Supplement.
                  ``(C) A description of each hardship exception 
                requested and granted or denied, and of the use of any 
                transition rules.
                  ``(D) Documentation of public and resident 
                participation sufficient to comply with the 
                requirements under paragraph (7).
                  ``(E) A comparison of income and the sizes and types 
                of families assisted by the agency under the program 
                compared to those assisted by the agency in the base 
                year.
                  ``(F) Every two years, an evaluation of rent 
                policies, subsidy level policies, and policies on 
                program participation.
                  ``(G) A description of any ongoing local evaluations 
                and the results of any local evaluations completed 
                during the year.
          ``(3) Access to documents by secretary.--The Secretary shall 
        have access for the purpose of audit and examination to any 
        books, documents, papers, and records that are pertinent to 
        assistance in connection with, and the requirements of, this 
        section.
          ``(4) Access to documents by the comptroller general.--The 
        Comptroller General of the United States, or any of the duly 
        authorized representatives of the Comptroller General, shall 
        have access for the purpose of audit and examination to any 
        books, documents, papers, and records that are pertinent to 
        assistance in connection with, and the requirements of, this 
        section.
          ``(5) Reports regarding evaluations.--The Secretary shall 
        require each public housing agency participating in the program 
        under this section to submit to the Secretary, as part of the 
        agency's annual report under paragraph (2), such information as 
        the Secretary considers appropriate to permit the Secretary to 
        evaluate (pursuant to subsection (f)) the performance and 
        success of the agency in achieving the purposes of the 
        demonstration.
  ``(h) Additional Program Agencies.--In participating in the program 
under the terms of this subsection, the public housing agencies 
designated for such participation shall be subject to the requirements 
of this section, and the additional following requirements:
          ``(1) Applicability of certain existing provisions.--Such 
        agencies shall be subject to the provisions of--
                  ``(A) subsections (a) and (b) of section 3; and
                  ``(B) section 8(o), except for paragraph (11) and 
                except that such agencies shall not be required to 
                comply with any provision of such section 8(o) that 
                pursuant to subsection (e)(3) of this section does not 
                apply to agencies that are subject to such section 
                (e)(3).
          ``(2) No time limits.--Such agencies may not impose time 
        limits on the term of housing assistance received by families 
        under the program.
          ``(3) No employment conditions.--Such agencies may not 
        condition the receipt of housing assistance by families under 
        the program on the employment status of one of more family 
        members.
          ``(4) One-for-one replacement.--
                  ``(A) Conditions on demolition.--Such agencies may 
                not demolish or dispose of any dwelling unit of public 
                housing operated or administered by such agency 
                (including any uninhabitable unit and any unit 
                previously approved for demolition) except pursuant to 
                a plan for replacement of such units in accordance 
                with, and approved by the Secretary of Housing and 
                Urban Development pursuant to, subparagraph (B).
                  ``(B) Plan requirements.--The Secretary may not 
                approve a plan that provides for demolition or 
                disposition of any dwelling unit of public housing 
                referred to in subparagraph (A) unless--
                          ``(i) such plan provides for outreach to 
                        public housing agency residents in accordance 
                        with paragraph (5);
                          ``(ii) not later than 60 days before the date 
                        of the approval of such plan, such agency has 
                        convened and conducted a public hearing 
                        regarding the demolition or disposition 
                        proposed in the plan;
                          ``(iii) such plan provides that for each such 
                        dwelling unit demolished or disposed of, such 
                        public housing agency will provide an 
                        additional dwelling unit through--
                                  ``(I) the acquisition or development 
                                of additional public housing dwelling 
                                units; or
                                  ``(II) the acquisition, development, 
                                or contracting (including through 
                                project-based assistance) of additional 
                                dwelling units that are subject to 
                                requirements regarding eligibility for 
                                occupancy, tenant contribution toward 
                                rent, and long-term affordability 
                                restrictions which are comparable to 
                                public housing units;
                          ``(iv) such plan provides for a right, and 
                        implementation of such right, to occupancy of 
                        additional dwelling units provided in 
                        accordance with clause (iii), for households 
                        who, as of the time that dwelling units 
                        demolished or disposed of were vacated to 
                        provide for such demolition or disposition, 
                        were occupying such dwelling units;
                          ``(v) such plan provides that the proposed 
                        demolition or disposition and relocation will 
                        be carried out in a manner that affirmatively 
                        furthers fair housing, as described in 
                        subsection (e) of section 808 of the Civil 
                        Rights Act of 1968; and
                          ``(vi) to the extent that such plan provides 
                        for the provision of replacement or additional 
                        dwelling units, or redevelopment, in phases 
                        over time, such plan provides that the ratio of 
                        dwelling units described in subclauses (I) and 
                        (II) of clause (iii) that are provided in any 
                        such single phase to the total number of 
                        dwelling units provided in such phase is not 
                        less than the ratio of the aggregate number of 
                        such dwelling units provided under the plan to 
                        the total number of dwelling units provided 
                        under the plan.
                  ``(C) Inapplicable provisions.--Subparagraphs (B) and 
                (D) of section 8(o)(13) of the United States Housing 
                Act of 1937 (42 U.S.C. 1437f(o)(13)) shall not apply 
                with respect to vouchers used to comply with the 
                requirements of subparagraph (B)(iii) of this 
                paragraph.
                  ``(D) Monitoring.--The Secretary of Housing and Urban 
                Development shall provide for the appropriate field 
                offices of the Department to monitor and supervise 
                enforcement of this paragraph and plans approved under 
                this paragraph and to consult, regarding such 
                monitoring and enforcement, with resident councils of, 
                and residents of public housing operated or 
                administered by, the agency.
          ``(5) Comprehensive outreach plan.--No program funds of such 
        agencies may be use to demolish, dispose of, or eliminate any 
        public housing dwelling units except in accordance with a 
        comprehensive outreach plan for such activities, developed by 
        the agency in conjunction with the residents of the public 
        housing agency, as follows:
                  ``(A) The plan shall be developed by the agency and a 
                resident task force, which may include members of the 
                Resident Council, but may not be limited to such 
                members, and which shall represent all segments of the 
                population of residents of the agency, including single 
                parent-headed households, the elderly, young employed 
                and unemployed adults, teenage youth, and disabled 
                persons.
                  ``(B) The votes and agreements regarding the plan 
                shall involve not less than 25 and not more than 35 
                persons.
                  ``(C) The plan shall provide for and describe 
                outreach efforts to inform residents of the program 
                under this subsection, including a door-to-door 
                information program, monthly newsletters to each 
                resident household, monthly meetings dedicated solely 
                to every aspect of the proposed development, including 
                redevelopment factors, which shall include the one-for-
                one replacement requirement under paragraph (5), 
                resident rights to return, the requirements of the 
                program under this subsection, new resident support and 
                community services to be provided, opportunities for 
                participation in architectural design, and employment 
                opportunities for residents, which shall reserve at 
                least 70 percent of the jobs in demolition activities 
                and 50 percent of the jobs in construction activities 
                related to the redevelopment project, including job 
                training, apprenticeships, union membership assistance.
                  ``(D) The plan shall provide for regularly scheduled 
                monthly meeting updates and a system for filing 
                complaints about any aspect of the redevelopment 
                process.
  ``(i) Definitions.--For purposes of this section, the following 
definitions shall apply:
          ``(1) Existing mtw agency.--The term `existing MTW agency' 
        means a public housing agency that as of the date of the 
        enactment of the Section 8 Voucher Reform Act of 2007 has an 
        existing agreement with the Secretary pursuant to the moving to 
        work demonstration.
          ``(2) Base year.--The term `base year' means, with respect to 
        a participating agency, the agency fiscal year most recently 
        completed prior to selection and approval for participation in 
        the housing innovation program under this section.
          ``(3) Moving to work demonstration.--The term `moving to work 
        demonstration' means the moving to work demonstration program 
        under section 204 of the Departments of Veterans Affairs and 
        Housing and Urban Development, and Independent Agencies 
        Appropriations Act, 1996 (42 U.S.C. 1437f note).
          ``(4) Participating agencies.--The term `participating 
        agencies' means public housing agencies designated and approved 
        for participation, and participating, in the housing innovation 
        program under this section.
          ``(5) Program funds.--The term `program funds' means, with 
        respect to a participating agency, any amounts that the agency 
        is authorized, pursuant to subsection (e)(1), to use to carry 
        out the housing innovation program under this section of the 
        agency.
          ``(6) Residents.--The term `residents' means, with respect to 
        a public housing agency, tenants of public housing of the 
        agency and participants in the voucher or other housing 
        assistance programs of the agency funded under section 8(o), or 
        tenants of other units owned by the agency and assisted under 
        this section.
  ``(j) Authorization of Appropriations for Resident Technical 
Assistance.--There is authorized to be appropriated for each of fiscal 
years 2008 through 2012 $10,000,000, for providing capacity building 
and technical assistance to enhance the capabilities of low-income 
families assisted under the program under this section to participate 
in the process for establishment of annual plans under this section for 
participating agencies.
  ``(k) Authorization of Appropriations for Evaluations.--There is 
authorized to be appropriated $15,000,000 to the Department of Housing 
and Urban Development for the purpose of conducting the evaluations 
required under subsection (f)(1).''.
  (b) GAO Report.--Not later than 48 months after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit a report to the Congress on the extent to which the public 
housing agencies participating in the housing innovation program under 
section 36 of the United States Housing Act of 1937 are meeting the 
goals and purposes of such program, as identified in subsection (a) of 
such section 36.

SEC. 17. DEMONSTRATION PROGRAM WAIVER AUTHORITY.

  (a) Authority to Enter Into Agreements.--Notwithstanding any other 
provision of law, the Secretary of Housing and Urban Development may 
enter into such agreements as may be necessary with the Social Security 
Administration and the Secretary of Health and Human Services to allow 
for the participation, in any demonstration program described in 
subsection (c), by the Department of Housing and Urban Development and 
the use under such program of housing choice vouchers under section 
8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)).
  (b) Waiver of Income Requirements.--The Secretary of Housing and 
Urban Development may, to extent necessary to allow rental assistance 
under section 8(o) of the United States Housing Act of 1937 to be 
provided on behalf of persons described in subsection (c) who 
participate in a demonstration program described in such subsection, 
and to allow such persons to be placed on a waiting list for such 
assistance, partially or wholly disregard increases in earned income 
for the purpose of rent calculations under section 3 for such persons.
  (c) Demonstration Programs.--A demonstration program described in 
this subsection is a demonstration program of a State that provides for 
persons with significant disabilities to be employed and continue to 
receive benefits under programs of the Department of Health and Human 
Services and the Social Security Administration, including the program 
of supplemental security income benefits under title XVI of the Social 
Security Act, disability insurance benefits under title II of such Act, 
and the State program for medical assistance (Medicaid) under title XIX 
of such Act.

SEC. 18. AUTHORIZATION OF APPROPRIATIONS.

  There is authorized to be appropriated the amount necessary for each 
of fiscal years 2008 through 2012 to provide public housing agencies 
with incremental tenant-based assistance under section 8(o) of the 
United States Housing Act of 1937 (42 U.S.C. 1437f(o)) sufficient to 
assist 20,000 incremental dwelling units in each such fiscal year.

SEC. 19. EFFECTIVE DATE.

  Except as otherwise specifically provided in this Act, this Act and 
the amendments made by this Act, shall take effect on January 1, 2008.

                          Purpose and Summary

    The purpose of H.R. 1851, the ``Section 8 Voucher Reform 
Act of 2007,'' is to authorize a reliable funding allocation 
formula for annual renewal of Section 8 housing vouchers, to 
simplify rent calculation and inspection requirements for 
Section 8 vouchers, project-based assistance, and public 
housing, and to promote self-sufficiency on the part of 
assisted families through work incentives and homeownership 
opportunities. The bill also expands and renames the ``Moving 
to Work'' program, in which public housing agencies undertake 
innovative housing proposals, with the purpose of identifying 
models and policies that might be extended to all housing 
agencies.
    The bill is designed to accomplish these goals, while 
maintain- ing important protections for low-income families, 
and in particular the very poorest families, being assisted 
under these federal rental housing programs. Income targeting 
requirements are maintained, as are statutory rent protections 
that ensure that rents are affordable for public and assisted 
families. Housing voucher requirements that ensure that rental 
units meet federal housing quality standards are maintained. 
And tenant participation requirements, lease protections, and 
administrative grievance rights are maintained, and in the case 
of the revised Moving to Work program (renamed the ``Housing 
Innovation Program''), are enhanced.

                  Background and Need for Legislation


                   SECTION 8 VOUCHER FUNDING FORMULA

    Program administrators, owners, and other stakeholders have 
expressed growing frustration about numerous changes made over 
the last several years to the Section 8 voucher funding formula 
and program rules. These included a major revision to the basic 
funding allocation formula coupled with deepening pro rata 
funding cuts, volatile changes to the permissible levels of 
individual public housing agency (PHA) program reserves, a new 
prohibition against exceeding the number of authorized families 
(``overleasing''), a major revision of the way administrative 
costs are funded, and a HUD policy change reducing the number 
of tenant protection vouchers provided when public and assisted 
housing units are demolished or lost. Concerns have been raised 
about the loss of some 150,000 vouchers since a major funding 
formula change three years ago, in conjunction with a buildup 
of some $1.4 billion in unused voucher funds which were not 
used for the pro- gram purpose of providing voucher assistance.
    During committee hearings and roundtable discussions over 
the last several years, program stakeholders expressed strong 
support for the enactment of authorizing legislation governing 
voucher funding renewals. Adoption of a reliable, predictable 
funding policy would facilitate the ability of program 
administrators to make better short- and long-term planning 
decisions.
    The bill establishes a funding authorization formula for 
the renewal of Section 8 vouchers over the period from Fiscal 
Year 2008 through 2012. The purpose is to provide a more 
efficient funding formula that bases funding allocations more 
on need, and that creates incentives for PHAs to use their 
annually allocated funding to provide vouchers to serve more 
families. The changes would create a more efficient funding 
allocation by shifting resources from agencies not using all 
their funds to agencies willing and able to use them to serve 
more families. At the same time, agencies that would receive 
fewer funds than they would have received under the prior 
formula are protected because these are the very same PHAs that 
will have reserves, which they can use to maintain voucher 
utilization levels.
    Specifically, the bill allocates voucher renewal funds each 
year based on the leasing and cost data for each public PHA 
from the prior calendar year. Consistent with the practice in 
recent years, an annual inflation adjustment is provided--
except that the bill includes language designed to make such 
adjustments more accurate, by requiring HUD to base inflation 
adjustments on the smallest geographical areas for which data 
is annually available. Individual PHA funding allocations are 
also adjusted for tenant protection and enhanced vouchers 
received in the preceding year, for any vouchers a PHA may have 
set aside for project-based assistance, for vouchers a PHA 
absorbed during the prior year, and for such other adjustments 
as HUD considers appropriate, including making adjustments for 
natural and other major disasters.
    Unlike the voucher funding practices in place prior to the 
program changes made starting in FY 2004, the bill does not 
return to a ``cost plus'' reimbursement system, in which PHAs 
are automatically made whole for all validly incurred voucher 
costs. Instead, the bill retains the practice, started in 2004, 
of providing PHAs with a fixed amount of voucher funds for each 
calendar year, which a PHA must live within. Unlike the pre-
2004 policy, PHAs will not be reimbursed for reserves they use 
to provide voucher assistance. Finally, appropriators retain 
full control over the amount of annual renewal funds 
appropriated each year, through a provision allowing for 
proration if funding is not sufficient to meet all renewal 
needs under the formula.
    However, changes are made to make the program more 
efficient. First, in contrast with recent years in which PHAs 
have been permitted to retain all accumulated unused voucher 
funds as reserves, the bill provides that PHAs may retain a 
one-month reserve level at the end of 2007 (the transition 
year), and a 5 percent reserve level in each succeeding year. 
Language is included guaranteeing that PHAs may retain such 
reserves, so that they can plan on using all their allocated 
funds without fear that their safety net of reserves might be 
rescinded mid-year. In addition, the bill provides that a PHA 
with no or limited reserves may receive a 2 percent advance in 
the last three months of the calendar year to cover 
unanticipated overages in that year. This provision is cost 
neutral, as a PHA in effect ``repays'' this advance just a few 
months later through an offsetting downward adjustment in their 
next year's funding allocation.
    The reserve levels authorized in the bill are also intended 
as a ceiling, since the bill requires HUD to recapture excess 
reserves and reallocate them for program needs. First priority 
for reallocated funds is for mid-year portability absorption 
costs and increased family self-sufficiency costs. All 
remaining funds are to be reallocated by May 1st to agencies 
that have effectively used available funds for the purpose of 
increasing the number of voucher families they are serving. It 
is expected that HUD would establish criteria for fund 
reallocation to direct funds to agencies which meet or exceed a 
certain threshold of fund utilization, with funding provided to 
a significant number of such agencies. The reallocation process 
is an important feature both in providing incentives for PHAs 
to use their allocated funds [as opposed to building up large 
reserves], and in promoting efficiency in fund use, by 
channeling excess unused funds to agencies that will serve more 
families. Reallocation also ensures that funds that were 
originally appropriated for housing vouchers continue to be 
used for that purpose, instead of being rescinded and used for 
non-housing purposes, as has been the case periodically in the 
past.
    The bill also restores the policy in place prior to FY 2003 
which permits ``overleasing''--that is, providing vouchers to 
more families than a PHA is entitled to serve. The purpose of 
the change is to provide incentives for PHAs to use funds more 
efficiently, by permitting funds not needed to cover a PHA's 
authorized number of families to serve additional families. 
However, funding calculations in 2009 which are based on the 
first transition year (2008) limit the use of reserves in 2008 
to increase leasing up to 103 percent of a PHA's number of 
authorized families, in recognition of the higher level of 
retained reserves permitted that year. Without this limit, PHAs 
with large amounts of accumulated unused funds from prior years 
could receive an inappropriate benefit, by being able to use 
such large reserves to inflate a PHA's baseline. In practice, 
it would be appropriate to extend this limitation for any year 
in which appropriations bills might elect to permit PHA 
retained reserves to exceed 5 percent.
    The bill restores an important incentive for PHAs to 
maximize the number of voucher families they are serving, by 
re-instating the statutory requirement that voucher 
administrative fees shall be based on the number of vouchers in 
use. Specifically, the bill retains the Fiscal Year 2003 per-
unit fee as a baseline, along with subsequent annual inflation 
adjustments. It provides that voucher administrative fees also 
include an amount for the cost of issuing new vouchers.
    The bill would reverse the policy implemented by the 
Department of Housing and Urban Development in January 2006, 
which reduces the number of tenant replacement vouchers issued 
when public and assisted housing units are lost. Prior to 
January 2006, a replacement voucher was provided for every lost 
public and assisted housing unit. The 2006 policy limits such 
vouchers to only those units occupied at the time a PHA applies 
for replacement vouchers. This determination is arbitrary, as 
units may be vacant for many reasons, including anticipated 
changes in ownership or planned demolition. Moreover, the 
policy reduces the number of families which may be federally 
assisted. The bill restores the prior policy requiring tenant 
replacement vouchers for all lost units.
    The bill requires HUD to develop and issue guidance to PHAs 
receiving incremental vouchers for non-elderly disabled 
families between 1997 and 2002 to ensure that these vouchers 
continue to be provided to such families upon turnover. This 
requirement addresses concerns that such vouchers have been 
converted to general voucher use, and not reserved for disabled 
families.

            ADMINISTRATIVE SIMPLIFICATION--RENT CALCULATIONS

    The bill simplifies the rules used to establish rents and 
subsidies for the Section 8 voucher and project-based 
assistance programs and for public housing, while maintaining 
the essential and longstanding statutory provisions that keep 
rents affordable for lower income families.
    For elderly and disabled tenants, the threshold for income 
deductions for medical expenses, including handicapped 
assistance costs, is increased from 3 percent to 10 percent of 
a family's income. This higher threshold will eliminate the 
need for a significant number of families to keep and submit 
detailed medical expense information and will reduce PHAs' 
administrative burden, while maintaining deductions for 
significant and catastrophic medical costs. To offset this 
medical deduction threshold increase, the standard deduction 
for elderly and disabled families is increased from $400 to 
$725 (with indexing thereafter in $25 increments). The net 
overall effect on tenants is expected to be at most a small 
rent increase or decrease compared to current law.
    For non-elderly and non-disabled families, particularly 
families with children, calculations are also simplified, 
through the elimination of deductions for child care expenses, 
and for child and spousal support. To offset this change, rent 
calculation work incentives are provided for all families with 
earned income (as noted in the subsequent section on self-
sufficiency).
    The bill also includes a number of provisions to simplify 
the process PHAs and owners use to calculate rents, which are 
designed to result in very limited changes in the rent levels 
for public and assisted families. These include relieving PHAs 
of responsibility to maintain records of HUD-required 
miscellaneous income exclusions, use of a HUD-prescribed 
inflation adjustment for fixed income families, permitting PHA 
safe harbor reliance on other governmental income 
determinations (e.g., Medicaid, TANF), and permitting PHAs to 
make other appropriate adjustments when using prior year's 
calculations for other types of income.
    All these changes to rent calculations are designed to 
result in roughly comparable rent burdens for families as under 
current statute, and also to result in roughly comparable 
Section 8 and public housing costs. However, it is expected 
that during the transitional period, HUD, PHAs and owners will 
make a concerted effort to inform assisted families of the 
pending changes in rent rules and any potential adverse 
consequences, and in particular to work with families most 
affected by the change (such as families currently eligible for 
the child care deduction) to assist them in this transition.
    Since public housing agencies have not received full 
funding in recent years to cover their operating costs, the 
bill requires HUD to make public housing operating funding 
formula adjustments to reflect any non de minimus reductions in 
public housing rental income arising from rent reforms, during 
the period in which revenue is frozen under the asset 
management rule. The bill also requires HUD to submit to 
Congress, for both Fiscal Years 2008 and 2009, a report 
identifying and calculating the impact of rent reforms on 
public housing costs and revenues.

             ADMINISTRATIVE SIMPLIFICATION--RECERTIFICATION

    The most significant simplification provision in the bill 
is that the annual rent re-certification requirement is 
modified to permit PHAs to recertify ``fixed income'' families 
only every three years. This class of families is defined as 
any family with more than 90 percent of income from a 
combination of Social Security, SSI, governmental and private 
pensions, and similar periodic payments. Income for these 
families is fairly predictable, and use of generic CPI 
adjustments for such income in years without recertification 
should closely track actual income. This change would result in 
a two thirds reduction in the administrative burden of 
recertifying such families, which constitute an estimated more 
than one third of all public and assisted families.
    The interim recertification process is also simplified, to 
provide for such interim recertifications only if unearned 
annual income increases by $1,500, or if a family requests a 
recertification if its annual income is estimated to fall by 
$1,500 or more (or such lesser amount as the PHA may 
establish). These thresholds eliminate time consuming midyear 
recertifications which have a minimal rent impact, while 
protecting families whose income drops by meaningful amounts.

           ADMINISTRATIVE SIMPLIFICATION--VOUCHER INSPECTIONS

    The bill also makes a number of changes to the inspection 
and reinspection requirements for rental housing units that 
serve Section 8 voucher holders, while at the same time 
maintaining the essential tenant protections that tenants 
should not move into unsafe units and that such units should be 
maintained at levels which meet federal Housing Quality 
Standards (HQS).
    The bill retains the existing statutory requirement that a 
rental unit be inspected prior to occupancy, but it permits 
occupancy and payments to landlords for up to 30 days if a unit 
fails inspection as a result only of non-life threatening 
conditions. Even in this case, payments must be suspended after 
30 days if the deficiencies are not corrected. The bill also 
lets PHAs permit occupancy prior to inspection if another 
federal program inspection meeting federal Housing Quality 
Standards has been made within the preceding 12 months, and to 
make payments to the owner retroactive to the beginning of the 
lease term when an inspection is subsequently completed. The 
statutory provision requiring PHAs to inspect units within 15 
days of a landlord's request would continue to apply to 
inspections in such case. The purpose of these provisions is to 
allow tenants to move into habitable units as quickly as 
possible, and also to avoid discouraging landlords from 
accepting voucher families because of voucher rules that 
unnecessarily reduce rent revenues by delaying tenant move-ins.
    The bill changes the annual re-inspection requirement to a 
requirement that properties be re-inspected at least every two 
years. This provides for an effective 50 percent reduction in 
the number of required inspections, while requiring periodic 
inspections at reasonable intervals and maintaining a family's 
right to request an interim inspection if there are problems 
with the unit they live in.
    The bill also permits use of federal, state, or local 
inspections in lieu of a PHA voucher re-inspection, subject to 
the condition that such inspection provides comparable 
standards to those that apply to the voucher program. This 
avoids the cost and burden of redundant inspections. The 
flexibility provided to use inspections from other programs, 
such as the HOME program, in lieu of a voucher inspection is 
not intended to reduce safety or reduce the level of standards 
that units must meet. Thus, it is important that PHAs ensure 
that any inspections used under such other programs fully meet 
Federal voucher program Housing Quality Standards.

                      SELF-SUFFICIENCY INCENTIVES

    The bill includes a number of provisions designed to create 
incentives for families to obtain employment, increase earned 
income, pursue higher education, and save for retirement.
    First, the bill requires PHAs to calculate a family's 
earned income using the amount earned in the prior year. This 
should increase the accuracy of the calculation. More 
importantly, this should have an earned income disregard effect 
by delaying imposition of rent increases that would otherwise 
result from increases in earned income. The bill also prohibits 
interim recertifications of increases in earned income. These 
income disregard features reduce work disincentives that 
otherwise result when rents rise immediately as a result of 
increases in income.
    The bill also provides for an explicit disregard of 10 
percent of a family's (prior year) earned income. This creates 
an additional income disregard, and is designed to further 
mitigate the current work disincentives that are associated 
with rent increases that otherwise result from income 
increases.
    The bill also modifies existing income targeting 
requirements, to make it easier for lower income working 
families to receive a voucher in rural and other lower income 
geographic areas. The statute currently requires that 75 
percent of new families that receive voucher assistance from an 
agency each year must have incomes below 30 percent of the 
local area median income (defined as ``extremely low income 
families''). The purpose of this requirement is to target the 
limited supply of vouchers to our nation's poorest families. In 
addition, 40 percent of public housing units and Section 8 
project-based units that become available each year must be 
rented to such extremely low income families.
    One result of this locally based income calculation is that 
the dollar amount targeting income threshold is relatively 
lower in rural and other areas with lower incomes. This can 
result in limiting vouchers and other federal rental assistance 
in these areas to only the lowest of lower income working 
families (and in some areas can even exclude minimum wage 
workers). The bill addresses this impact by modifying the 
income targeting cutoff to be the higher of 30 percent of local 
area median income (the current threshold) or the national 
poverty level for a family of comparable size. This national 
poverty level threshold was set as a reasonable cutoff point 
for targeting rental assistance to our nation's poorest 
families.
    One tool that PHAs have to encourage work and self-
sufficiency is the Family Self-Sufficiency (FSS) Program. FSS 
coordinators work with families to help them pursue education, 
develop job skills, and obtain employment. FSS participants 
build savings in amounts equal to the increased rent payments 
that result from their increases in earnings. Unfortunately, 
the current process of funding FSS coordinators through an 
annual HUD competition for limited federal grant funds has 
resulted in uncertain funding for such coordinators, which has 
reduced their effectiveness and cut into other PHA resources. 
The bill provides for more reliable funding of family self-
sufficiency coordinators by including an amount for such costs 
in a PHA's voucher administrative costs. Fees are generally 
provided based on the number of coordinators employed and the 
number of families being served, with funding required for 
agencies that received funding for 3 or more self-sufficiency 
coordinators anytime from FY 1998 to FY 2007.
    In addition, to avoid disincentives for families and their 
children to pursue higher education opportunities, the bill 
exempts income of adult dependents that are full time students, 
exempts from income grant-in-aid or scholarship amounts used 
for tuition or books, and exempts income from Coverdell 
education savings accounts and Section 529 qualified tuition 
programs.
    The bill also authorizes HUD to enter into agreements with 
the Social Security Administration and the Secretary of Health 
and Human Services to allow for participation in state 
demonstration programs designed to permit persons with 
significant disabilities to be employed and continue to receive 
a range of federal benefits. HUD is authorized to permit a 
partial or complete disregard of increases in earned income for 
persons participating in any such demonstration for the purpose 
of calculating rent contributions for Section 8 housing 
vouchers.
    Finally, to ensure that public and federally assisted 
tenants get proper credit for paying their rent on time, the 
bill authorizes a PHA to submit information regarding rental 
payment history for voucher tenants to credit reporting 
agencies, providing the family agrees to such submission.

                             HOMEOWNERSHIP

    In 1998, as part of broader housing legislation, Congress 
adopted a provision permitting voucher holders, at the local 
option of each PHA, to use a voucher for a down payment on a 
home purchase. However, that bill made such use subject to 
appropriation in advance. The bill effectively lifts this 
condition, by permitting voucher funds to be used for a down 
payment for a first-time home purchase, as a one-time grant in 
an amount not exceeding $10,000, for families who have been 
receiving voucher assistance for a period of at least one year. 
Unlike the use of vouchers to finance annual mortgage payments 
(which is currently permitted at a PHA's option), use of a 
voucher for a down payment on a home purchase also frees up the 
voucher for a different family in the following year.
    The bill also facilitates the use of vouchers for the full 
cost of purchasing manufactured homes sited on leased land, by 
permitting voucher funds to be used for both the cost of 
leasing the land, and for the monthly home purchase costs, 
including property taxes, insurance, and tenant-paid utilities. 
Currently, the statute only permits a voucher to be used to pay 
the cost of leasing the land, which makes the voucher of little 
use for such purpose. This change should be particularly 
helpful in expanding affordable housing opportunities to 
voucher holders in rural areas.

                              PORTABILITY

    The bill changes the current policy regarding ``ported 
vouchers,'' that is, where a family receives a voucher from 
their local PHA and moves to an area under the jurisdiction of 
another PHA. Currently, when a family moves from one area to 
another, the sending PHA continues to fund the voucher and 
enters into a billing arrangement with the receiving PHA. This 
procedure is administratively cumbersome. It is also 
potentially costly to the sending agency whenever rents in the 
receiving PHA are higher--a factor which has resulted in many 
PHAs limiting the opportunity of voucher holders to move to 
other areas. This undermines one of the voucher program's 
central features, that of mobility.
    Therefore, the bill requires PHA receiving agencies to 
``absorb'' such ported vouchers. (However, in cases in which 
there are overlapping PHA jurisdictions or in which state law 
permits PHAs to continue to administer a voucher in another 
area, the absorption requirement need not apply).
    An essential feature of this requirement is that it not 
impose new costs on PHAs. Therefore, it is essential that all 
the provisions included in the bill which ensure full funding 
of portability costs are implemented at such time as the 
absorption requirement is implemented (along with any related 
overleasing authority for the small number of agencies that 
might need it, which the bill provides).
    Under the bill, the sending PHA is not adversely affected 
financially in the year absorption takes place since the PHA 
may reissue a new voucher immediately following such a port (in 
the same manner as if the voucher were turned back in). Also, 
the sending PHA is not adversely affected under the following 
year's baseline calculation, since that calculation would take 
into account both the ported voucher expenditure through the 
date of absorption, plus the expenditure related to the 
replacement voucher after the port.
    The receiving agency is not adversely affected financially 
in the year absorption takes place, since the bill makes 
funding of increased costs by receiving agencies a first 
priority under the reallocation process for recaptured excess 
reserves. (In practice, this could alternatively be 
accomplished through establishment of a fund at the beginning 
of the calendar year through annually appropriated funds for 
such purpose). The cost of funding such absorptions could be 
limited by doing this on a net absorption basis for each 
agency. In addition, HUD should permit PHAs to accelerate their 
pro rata monthly allocation of voucher funds, if necessary, to 
accommodate increased costs related to absorption. Regardless 
of the timing, it is essential that PHAs be funded or 
reimbursed for all increased costs related to mid-year 
absorption, so that PHAs do not otherwise reduce the number of 
local families receiving a voucher or deplete their reserves. A 
receiving agency is also protected under its funding allocation 
in the subsequent year for the cost of ported vouchers by 
language explicitly requiring HUD to make adjustments for 
portability, to reflect a partial year expenditure for the 
ported voucher in the prior year.
    There will be a one-time transitional impact, as the 
current levels of ported vouchers are absorbed under this new 
provision. HUD should take appropriate actions to protect PHAs 
from the effects of this transition. The bill's authority to 
make funding allocation adjustments for ported vouchers should 
be used to protect PHAs that are major net sending agencies to 
reflect a one-time lag relating to reissuance of what may be a 
significant number of vouchers. In addition, in performing 
voucher performance assessments for the purpose of measuring 
the factor of ``the extent of utilization of allocated funds 
and authorized vouchers,'' HUD should make allowances for any 
one-time, temporary voucher utilization decline resulting from 
this transition.

                          INCREMENTAL VOUCHERS

    The bill authorizes funding for 20,000 incremental Section 
8 vouchers each year from Fiscal Year 2008 through Fiscal Year 
2012, for a total cumulative amount of 100,000 new vouchers.

                       HOUSING INNOVATION PROGRAM

    The bill renames the ``Moving to Work'' (MTW) program as 
the ``Housing Innovation Program'' (HIP). HUD is required to 
carry out this program, in which HUD may designate no more than 
60 agencies (including existing agencies approved for program 
continuation), and may add 20 additional agencies [so-called 
``HIP-lite'' agencies] under more stringent program 
limitations. The program is extended for a 10-year period.
    HUD is required to approve existing MTW agencies for 
continued eligibility, provided they are not in default under 
their existing MTW agreement and that HUD determines they are 
meeting their goals and objectives. Agencies approved for 
continuation must generally make changes to existing policies 
to bring them in line with new program rules within two years 
of enactment.
    No more than five agencies newly selected for program 
participation may be ``near-troubled.'' Agencies shall be 
selected to provide for diversity with respect to size, 
geography, and areas served (i.e., urban, suburban, and rural). 
Applicants must have held two public meetings on their HIP 
application proposal, preceded by 30 days prior notice to 
residents and the local community. Agencies shall be selected 
based on criteria to be established by HUD, which shall include 
the extent to which the proposal generally identifies rules and 
regulations that impede achievement of its goals and objectives 
and why program participation is necessary to achieve such 
goals and objectives; the extent of local commitment and 
funding; the extent to which the applicant has a history of 
success in pursuing similar strategies to those identified in 
the application; and whether the proposal pursues one of two 
priority strategies. The two priority strategies are (1) 
development, rehabilitation, and financing, and (2) rent 
reforms designed to increase earned income and achieve 
administrative cost savings without increased rent burdens for 
extremely-low and very-low income families.
    These more targeted critieria for PHA selection are 
intended to provide a clearer focus on what agencies plan to do 
with the deregulated rules permitted under the program, as well 
as why such deregulation is essential to carrying out goals and 
objectives. The priority strategies are intended to develop a 
focus on experimentation that can later be used as a model for 
federal policy makers in determining whether certain specific 
rules should be changed nationwide.
    Activities which can be undertaken with program funds are 
enumerated, subject to requirements that a PHA must assist not 
less than substantially the same number of low income families, 
with a comparable mix of families by family size. A number of 
existing statutory requirements are retained, including income 
targeting, Section 18 demolition and disposition rules, a 
number of tenant protections including lease requirements and 
eviction protections, portability, and other provisions. A 
number of procedural, PHA plan, and tenant participation 
requirements are spelled out for any PHA policy changes under 
the program that would make a material change to tenant rents 
or contributions or to conditions of continued occupancy or 
participation, including requirements for hardship protections 
and transition policies. The purpose of these enhanced 
protections for assisted families is to ensure greater 
involvement of affected families in the policies being 
developed, and to ensure that such families are not adversely 
affected by activities being pursued under the more relaxed 
program rules.
    Additionally, the 20 HIP-lite agencies must comply with 
statutory rent requirements, may not impose time limits, may 
not establish work requirements, must replace demolished or 
disposed of public housing units on a one for one basis, and 
must include more extensive resident participation in any plan 
which provides for demolition or disposition of public housing 
units. HIP-lite is designed for agencies that may want to 
participate in innovative finance and development activities, 
but have no interest in pursuing rent and other tenant 
policies.
    It is expected that HUD will fund Housing Innovation 
Program agencies under a funding agreement, as has been the 
case with Moving to Work Agencies, and further that HUD will 
continue to offer such agencies the alternative option of 
receiving funding according to the amounts they would otherwise 
receive under voucher and public housing rules.
    HUD must perform evaluations of agencies participating in 
the program or may contract out such responsibility to an 
independent entity qualified to perform such task. It is 
expected and HUD is encouraged to use its authority to contract 
out the evaluating function to an independent entity. Such 
evaluations must use performance measures and identify models 
that can be replicated by other agencies to achieve success. 
HUD is required to submit evaluation reports at 3-, 5-, and 10-
year periods. The purpose of this more structured evaluation 
process is to improve the methodology used to evaluate the 
successes and problems of the program than has existed for the 
MTW program.
    $10 million is authorized in each of the years FY 2008 
through FY 2012 for capacity building and technical assistance 
to enhance the capabilities of low income families assisted 
under the program to participate effectively in local policy 
deliberations. $15 million is authorized for HUD to conduct the 
required evaluations.

                       PROJECT-BASING OF VOUCHERS

    An important feature of housing vouchers is the flexibility 
voucher families have to decide where to live, including the 
opportunity to move to areas where there are job and 
educational opportunities. However, another important option 
under the voucher program is the ability of PHAs to project 
base vouchers. This option is particularly important for PHAs 
located in areas with tight rental markets and rising rents, 
and for PHAs seeking to provide supportive housing for persons 
with disabilities and for formerly homeless individuals and 
families. Under project basing, a PHA and an owner reach 
agreement under which the landlord agrees to attach a tenant-
based voucher to a certain number of units within a rental 
development.
    The bill includes a number of provisions to make the 
project basing of vouchers more flexible and effective. The 
bill extends the maximum voucher contract term from 10 to 15 
years, which should make it easier for owners to obtain 
financing and thus enhance affordability, including for 
projects funded with low income housing tax credits. The bill 
also reverses an October, 2005 HUD action to reduce Section 8 
rents in projects used with low income housing tax credits--by 
specifically providing that Section 8 rent assistance levels be 
maintained for such projects.
    The bill also increases the percentage of vouchers a PHA 
can project-base from 20 percent to 25 percent, with authority 
to go 5 percent higher to serve homeless persons. It permits 
income mixing at the project level, instead of the building 
level, and it sets the percentage of vouchers that can be 
project-based in a project at the greater of 25 units or 25 
percent of the units in any project, with authority to go up to 
50 percent in areas where it is hard for voucher holders to 
find rental units. The bill permits project-based vouchers to 
be used in cooperative housing and in high rise elevator 
projects occupied by families with children. The bill 
eliminates redundant and unnecessary subsidy layering review 
and environmental review requirements. The bill clarifies that 
lease and tenancy provisions pertaining to Section 8 vouchers 
shall apply to project-basing of vouchers, except that the one 
year minimum lease term shall not apply. And, the bill permits 
owners using project-based vouchers to maintain site-based 
waiting lists, subject to PHA oversight. The bill also provides 
an absolute preference for families that reside in dwelling 
units proposed to receive project-based assistance who are 
otherwise eligible for such assistance.

   ASSET/INCOME TESTS AND PROHIBITION AGAINST OWNERSHIP OF RESIDENCE

    In recognition of long housing voucher and public housing 
waiting lists, the bill strengthens income eligibility 
restrictions, establishes a new asset limitation, and bars 
families from receiving federal rental housing assistance if 
they own a residence. The purpose is to free up vouchers or 
public or assisted housing units for families more in need 
financially.
    The bill for the first time creates a new asset limitation 
for both initial and ongoing rental assistance eligibility, by 
prohibiting any family from having more than $100,000 in net 
assets. To encourage self-sufficiency, the bill excludes from 
this asset calculation homeownership equity accounts and family 
self-sufficiency accounts, and retirement and education savings 
accounts. Personal property that is not of significant value is 
also excluded. To limit the administrative burden of this new 
limitation, the bill permits PHAs to rely on self-certification 
of assets by the assisted family.
    The bill for the first time prohibits families from 
receiving federal assistance if they own a residence suitable 
for occupancy. Exempted from this prohibition are homes paid 
for by federal rental housing assistance, victims of domestic 
violence, and families making a good faith effort to sell a 
property (to protect, for example, a tenant who inherits a 
property with limited equity).
    The bill also extends the eligibility requirement that 
families be ``low income'' [i.e., below 80 percent of local 
area median income] to apply also at the time of each annual 
recertification. However, the bill retains existing income 
limitations for enhanced vouchers (where the owner leaves 
certain federally assisted housing programs) and protects 
families in properties initially permitted to have incomes up 
to 95 percent of median income by letting them to continue to 
live in such housing as long as they comply with this income 
limitation.
    PHAs may elect not to enforce asset and income limits for 
public housing residents at recertification, and owners may 
elect not to enforce income limits at recertification. PHAs and 
owners may also delay eviction or termination of families not 
meeting the asset, residence or income limitations for a period 
of up to six months, in order to give tenants an opportunity to 
find another place to live, and to address situations where a 
family's assets or income briefly exceed the limit, but fall 
back shortly thereafter to permitted eligibility levels.

                           TENANT PROTECTIONS

    The bill includes a number of provisions to protect 
families receiving public and assisted housing assistance. The 
bill requires HUD to monitor voucher rent burdens and submit an 
annual report to Congress on the percentage of families 
nationwide paying more than 30 percent and 40 percent, 
respectively, of their net income for rent, as well as 
information on the degree to which voucher families are 
clustered in lower rent, higher poverty areas, and the extent 
to which greater geographic distribution of families could be 
achieved, including by raising payment standards.
    The bill also requires PHAs to make public information on 
local rent burdens, and, if the local percentage of voucher 
families paying more than 30 percent or 40 percent of income 
for rent exceeds the national average, the PHA must either 
raise the payment standard or explain its reasons for not doing 
so. It is expected that PHAs would make this decision taking 
into account a wide range of factors affecting rent burdens, 
and would also take into account other factors, including the 
availability of funds and other program goals such as serving 
additional voucher families. It is expected that numerical 
percentage calculations of rent burden under this section would 
not count families paying a minimum rent, as rents paid by such 
families are unrelated to the payment standard.
    HUD is required to approve requests of agencies to raise 
payment standards in such circumstances, up to 120 percent of 
the Fair Market Rent (FMR). (HUD's existing statutory authority 
to approve higher payment standards is not affected). In 
addition, PHAs are permitted (without HUD approval) to increase 
payment standards up to 120 percent of the FMR, and HUD may 
approve higher requests, as a reasonable accommodation for a 
person with a disability.
    To provide for more accurate rent setting, the bill 
requires HUD to establish FMR areas in the smallest areas for 
which reliable data is available. This is possible because of 
the availability of better local rent data under the American 
Community Survey, which should make it feasible for HUD to 
implement this new requirement no later than Fiscal year 2009. 
Setting smaller FMR areas should create more accurate rent 
levels, thus avoiding rent levels that are too high in the 
lower cost areas of a larger area and avoiding rent levels that 
are too low in the higher cost areas. Areas are protected 
against FMR reductions resulting from this provision that 
result from a change in the percentile of distribution of rents 
used to establish the FMR, and tenants are protected against 
reductions in payment standards resulting from these changes.
    The bill protects tenants from unfairly being denied 
federal rental housing assistance, by limiting a PHA's elective 
screening of voucher program applicants to an applicant's 
ability to fulfill the obligations of the lease, including a 
consideration of any mitigating circumstances. Applicants are 
required to be notified of the basis of any determination of 
ineligibility, and are to be given an informal hearing to 
present mitigating circumstances in such case. The bill also 
incorporates into statute current regulatory requirements for 
informal hearings when a PHA proposes to terminate voucher 
assistance.
    The bill protects voucher tenants living rental units in 
need of repair by requiring PHAs to withhold assistance to any 
property assisting a voucher holder that fails an inspection 
and which is not corrected within 90 days, by permitting PHAs 
to use such withheld assistance to make repairs of such 
properties, and by prohibiting voucher holders from being 
evicted because of any such withholding of assistance. This 
provision is not intended in any way to reduce the obligation 
of owners to maintain properties and to fix life-threatening 
defects within 24 hours, but merely to augment options for 
ensuring that units are properly maintained.
    The bill protects families who receive enhanced vouchers in 
the case of a property prepayment or opt-out who have had their 
family size reduced, by preventing their eviction when their 
units are larger than program rules permit for their family 
size. However, to increase housing opportunities for larger 
families, the bill provides that such tenants may be forced to 
move to units of appropriate size located on the premises.

                  PHA VOUCHER PERFORMANCE ASSESSMENTS

    Currently HUD, by administrative action, assesses PHAs on 
their performance in administering the housing voucher program. 
The bill creates a statutory requirement for HUD to assess such 
PHA voucher administrative performance--and establishes the 
following factors to measure such performance: the quality of 
units assisted; the extent of utilization of allocated funds 
and authorized vouchers; the timeliness and accuracy of 
reporting to HUD; effectiveness in carrying out policies to 
achieve deconcentration of poverty; the reasonableness of rent 
burdens; accurate rent calculations and subsidy payments; 
effectiveness in carrying out family self-sufficiency 
activities; timeliness of actions related to landlord 
participation; and such other factors as the HUD Secretary 
considers appropriate.
    As with current Section 8 voucher performance assessments 
under SEMAP, it is expected that the assessments required under 
the bill would be made annually.

                                Hearings

    The Subcommittee on Housing and Community Opportunity held 
a hearing on March 9, 2007, on ``The Section 8 Voucher Reform 
Act''. The following witnesses testified:

                               PANEL ONE

           The Honorable Orlando J. Cabrera, Assistant 
        Secretary, Public and Indian Housing, U.S. Department 
        of Housing and Urban Development

                               PANEL TWO

           Mr. Saul N. Ramirez, Executive Director, 
        National Association of Housing and Redevelopment 
        Officials
           Mr. Curt Hiebert, Executive Director, Keene, 
        New Hampshire, Authority, on behalf of Public Housing 
        Authorities Directors Association
           Ms. Sunia Zaterman, Executive Director, 
        Council of Large Public Housing Authorities
           Mr. John E. Day, President DuPage Housing 
        Authority
           Mr. Richard Godfrey, Executive Director, 
        Rhode Island Housing

                              PANEL THREE

           Ms. Sheila Crowley, President, National Low 
        Income Housing Coalition
           Ms. Barbara Sard, Director of Housing 
        Policy, Center on Budget and Policy Priorities
           Ms. Janet Charlton, President, Triton 
        Advisors, on behalf of National Leased Housing 
        Association and National Multi Housing Council
           Mr. Andrew Sperling, Director of Government 
        Relations, National Association for the Mentally Ill 
        Consortium of Citizens with Disabilities
           Mr. Phil Tegeler, Poverty & Race Research 
        Action Council

                        Committee Consideration

    The Committee on Financial Services met in open session on 
May 23, 2007, and on May 24, 2007, ordered H.R. 1851, the 
Section 8 Voucher Reform Act of 2007, as amended, favorably 
reported to the House by a record vote of 52 yeas and 9 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Frank to report the bill, as amended, to the 
House with a favorable recommendation was agreed to by a record 
vote of 52 yeas and 9 nays (Record vote no. FC-51). The names 
of Members voting for and against follow:

                                              RECORD VOTE NO. FC-51
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........   Mr. Bachus......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........  ........  ........  .........
Ms. Waters.....................        X   ........  .........   Ms. Pryce (OH)..        X   ........  .........
Mrs. Maloney...................        X   ........  .........   Mr. Castle......        X   ........  .........
Mr. Gutierrez..................  ........  ........  .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................        X   ........  .........   Mr. Royce.......  ........        X   .........
Mr. Watt.......................        X   ........  .........   Mr. Lucas.......        X   ........  .........
Mr. Ackerman...................        X   ........  .........   Mr. Paul........  ........        X   .........
Ms. Carson.....................        X   ........  .........   Mr. Gillmor.....        X   ........  .........
Mr. Sherman....................        X   ........  .........   Mr. LaTourette..        X   ........  .........
Mr. Meeks......................        X   ........  .........   Mr. Manzullo....  ........        X   .........
Mr. Moore (KS).................        X   ........  .........   Mr. Jones.......        X   ........  .........
Mr. Capuano....................  ........  ........  .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................        X   ........  .........   Mr. Shays.......        X   ........  .........
Mr. Clay.......................        X   ........  .........   Mr. Miller (CA).        X   ........  .........
Mrs. McCarthy..................        X   ........  .........   Mrs. Capito.....        X   ........  .........
Mr. Baca.......................        X   ........  .........   Mr. Feeney......  ........        X   .........
Mr. Lynch......................        X   ........  .........   Mr. Hensarling..  ........        X   .........
Mr. Miller (NC)................        X   ........  .........   Mr. Garrett (NJ)  ........        X   .........
Mr. Scott......................        X   ........  .........   Ms. Brown-Waite)        X   ........  .........
Mr. Green......................  ........  ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Cleaver....................        X   ........  .........   Mr. Gerlach.....        X   ........  .........
Ms. Bean.......................  ........  ........  .........  Mr. Pearce.......        X   ........  .........
Ms. Moore (WI).................        X   ........  .........   Mr. Neugebauer..        X   ........  .........
Mr. Davis (TN).................        X   ........  .........   Mr. Price (GA)..  ........  ........  .........
Mr. Sires......................        X   ........  .........   Mr. Davis (KY)..        X   ........  .........
Mr. Hodes......................        X   ........  .........   Mr. McHenry.....  ........  ........  .........
Mr. Ellison....................  ........  ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Klein......................        X   ........  .........   Mr. Putnam......  ........        X   .........
Mr. Mahoney (FL)...............        X   ........  .........   Mrs. Bachmann...        X   ........  .........
Mr. Wilson.....................        X   ........  .........   Mr. Roskam......        X   ........  .........
Mr. Perlmutter.................        X   ........  .........   Mr. Marchant....        X   ........  .........
Mr. Murphy.....................        X   ........  .........   Mr. McCotter....        X   ........  .........
Mr. Donnelly...................        X   ........  .........
Mr. Wexler.....................        X   ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    The following amendments were disposed of by record votes. 
The names of Members voting for and against follow:
    An amendment by Mr. Royce, No. 4, limiting authority to 
require documents in languages other than English, was not 
agreed to by a record vote of 27 yeas and 34 nays (Record vote 
FC-48):

                                              RECORD VOTE NO. FC-48
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...  ........  ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Capuano....................  ........  ........  .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......  ........  ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Sires......................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........  ........  .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Price (GA), No. 6, regarding the 
requirement of offsets, was not agreed to by a record vote of 
28 yeas and 35 nays (Record vote FC-49):

                                              RECORD VOTE NO. FC-49
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Capuano....................  ........  ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Sires......................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......  ........  ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 9, imposing work 
requirements, was not agreed to by a record vote of 28 yeas and 
35 nays (Record vote FC-50):

                                              RECORD VOTE NO. FC-50
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........  ........        X   .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Capuano....................  ........  ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......  ........  ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Sires......................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    The following other amendments were also considered by the 
Committee:
    An amendment by Ms. Waters, No. 1, manager's amendment, was 
agreed to by a voice vote.
    An amendment by Mr. Murphy, No. 2, regarding educational 
savings accounts, was agreed to by a voice vote.
    An amendment by Mr. Green, No. 3, authorizing 
appropriations, was agreed to, as amended, by a voice vote.
    An amendment by Mr. Bachus to the amendment by Mr. Green, 
No. 3a, a second degree amendment regarding incremental housing 
units, was agreed to, as modified by unanimous consent, by a 
voice vote.
    An amendment by Mr. Capuano, No. 5, on enhanced vouchers, 
was agreed to by a voice vote.
    An amendment by Mr. Lynch, No. 7, regarding rent burdens, 
was agreed to by a voice vote.
    An amendment by Mr. Watt, No. 8, on screening of 
applicants, was agreed to by a voice vote.
    An amendment by Ms. Moore (WI), No. 10, on demonstration 
program waiver authority, was agreed to by a voice vote.
    An amendment by Mr. Green, No. 11, on contract extension, 
was agreed to by a voice vote.
    An amendment by Mr. Lynch, No. 12, protecting tenants with 
95 percent of median income, was agreed to by a voice vote.
    An amendment by Mr. Miller (CA), No. 13, on rent reform, 
was offered and withdrawn.
    An amendment by Mr. Miller (CA), No. 14, on time limitation 
on assistance, was not agreed to by a voice vote.
    An amendment by Ms. Waters, No. 15, on enforcement of 
housing quality standards, was agreed to by a voice vote.
    An amendment by Ms. Waters, No. 16, regarding the housing 
innovation program, was agreed to, as amended, by a voice vote.
    An amendment by Mr. Miller (CA), to the amendment by Ms. 
Waters, No. 16a, a second degree amendment increasing the 
number of public housing agencies, was agreed to by a voice 
vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The purpose of H.R. 1851, the ``Section 8 Voucher Reform 
Act of 2007,'' is to authorize a reliable funding allocation 
formula for annual renewal of Section 8 housing vouchers, to 
simplify rent calculation and inspection requirements for 
Section 8 vouchers, project-based assistance, and public 
housing, and to promote self-sufficiency on the part of 
assisted families through work incentives and homeownership 
opportunities. The bill also expands and renames the ``Moving 
to Work'' program, in which public housing agencies undertake 
innovative housing proposals, with the purpose of identifying 
models and policies that might be extended to all housing 
agencies.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 22, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1851, the Section 
8 Voucher Reform Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Chad Chirico.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure.

H.R. 1851--Section 8 Voucher Reform Act of 2007

    Summary: H.R. 1851 would amend the United States Housing 
Act of 1937 to change certain aspects of the Department of 
Housing and Urban Development's (HUD's) rental assistance 
programs.
    The bill would alter calculations of income, tenant rent, 
and public housing authority (PHA) funding, change requirements 
for the inspection of housing units, and adjust requirements 
for the targeting of housing assistance.
    CBO estimates that implementing this legislation would have 
a net cost of $2.4 billion over the 2008-2012 period, assuming 
appropriation of the necessary amounts.
    H.R. 1851 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would benefit state, local, and tribal governments and 
any costs they incur would result from complying with 
conditions of federal assistance.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1851 is shown in the following table. 
The costs of this legislation fall within budget function 600 
(income security).

                                     ESTIMATED BUDGETARY IMPACT OF H.R. 1851
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2008     2009     2010     2011     2012
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Income Determination Changes:
    Earned Income Disregard:
        Estimated Authorization Level..............................      329      331      334      336      338
        Estimated Outlays..........................................      197      330      333      335      337
    Eliminate Imputed Return on Assets:
        Estimated Authorization Level..............................       15       15       16       16       16
        Estimated Outlays..........................................        9       15       16       16       16
Changes to Allowances:
    Eliminate Child Care Allowance:
        Estimated Authorization Level..............................     -194     -199     -204     -209     -214
        Estimated Outlays..........................................     -117     -197     -202     -207     -212
    Increase Dependent Allowance:
        Estimated Authorization Level..............................       24       24       24       54       54
        Estimated Outlays..........................................       14       24       24       42       54
    Decrease Medical Expense Allowance:
        Estimated Authorization Level..............................     -192     -203     -213     -225     -236
        Estimated Outlays..........................................     -115     -198     -209     -220     -231
    Increase Elderly and Disabled Allowance:
        Estimated Authorization Level..............................      223      223      241      241      258
        Estimated Outlays..........................................      134      223      234      241      251
Eligibility and Targeting Changes:
    Income Eligibility:
        Estimated Authorization Level..............................        9       17       18       19       19
        Estimated Outlays..........................................        5       14       18       18       19
    Asset Eligibility:
        Estimated Authorization Level..............................        2        4        4        4        5
        Estimated Outlays..........................................        1        3        4        4        5
    Targeting:
        Estimated Authorization Level..............................      -91     -187     -289     -298     -307
        Estimated Outlays..........................................      -54     -148     -248     -294     -303
Other Provisions:
    Tenant Protection Vouchers:
        Estimated Authorization Level..............................        9        9       10       10       10
        Estimated Outlays..........................................        5        9       10       10       10
    Program Evaluations:
        Estimated Authorization Level..............................       25        0        0        0        0
        Estimated Outlays..........................................        2       10        1        1        1
    Rent Burdens:
        Estimated Authorization Level..............................        0       41       46       50       55
        Estimated Outlays..........................................        0       12       42       47       51
    Resident Technical Assistance:
        Estimated Authorization Level..............................       10       10       10       10       10
        Estimated Outlays..........................................        2       10       10       10       10
    Incremental Vouchers:
        Estimated Authorization Level..............................      139      286      439      601      770
        Estimated Outlays..........................................      122      267      420      580      749
Interactions Among Provisions:
    Estimated Authorization Level..................................       -4       -4       -4       -4       -4
    Estimated Outlays..............................................       -2       -4       -4       -4       -4
        Total Changes:.............................................
            Estimated Authorization Level..........................      304      369      430      604      773
            Estimated Outlays......................................      204      371      448      579      752
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: Implementing H.R. 1851 would lead to a 
net increase in discretionary spending for housing assistance, 
primarily by increasing the number of tenant-based vouchers 
eligible for federal assistance, reducing the amount of income 
that is counted in determining eligibility for such assistance, 
and increasing allowable deductions for the elderly and 
disabled. The increase in costs for those provisions (along 
with other smaller increases) would be partially offset by 
savings for other program changes, leading to an estimated net 
increase in cost of $2.4 billion over the 2008-2012 period. All 
such changes would be subject to appropriation actions.

Background

    Over 4.5 million households receive assistance through 
HUD's various rental assistance programs, including the Section 
8 Housing Choice Voucher program, public housing, and other 
project-based subsidy programs. To be eligible for assistance, 
family income must be below either 50 percent or 80 percent of 
the area median income, depending on the program. Targeting 
requirements in each of the programs establish a minimum 
percentage of assisted families who must be below 30 percent of 
the area median income. Assisted tenants generally pay 30 
percent of their adjusted monthly income towards rent. Funding 
from HUD covers the difference between what the tenant pays and 
the full rent for the unit (up to certain limits). In the case 
of public housing, HUD provides PHAs with operating and capital 
funding that allows them to subsidize rents.
    Families participating in HUD's rental assistance programs 
have their incomes certified when they enter the program and at 
least annually thereafter. Current law allows various 
adjustments to income prior to calculating a family's rent 
payment. Families may deduct any medical expenses over 3 
percent of income and all child care expenses. In addition, 
households may deduct $400 from gross income if they include an 
elderly or disabled member, and all households may deduct $480 
for each dependent. As a result of these various deductions, 
the average adjusted income is approximately 10 percent lower 
than the average gross income. In 2006, the average family rent 
payment was about $260 per month and the average subsidy 
payment was about $530 per month.
    For this estimate, CBO assumes the bill will be enacted 
near the end of fiscal year 2007. In cases where the tenant 
rent contribution changes, CBO assumes that appropriations will 
be adjusted to reflect the costs of the changes. In addition, 
CBO assumes that these changes would not affect the funding 
requirements for about 300,000 public housing or voucher units 
covered by Moving-to-Work agreements because those PHAs are 
funded pursuant to their agreements.

Income determination changes

    Earned Income Disregard. Section 3 of the bill would define 
earned income as the amount of income earned by a family in the 
prior year less 10 percent of the lower of earnings in the 
prior year or $10,000. Currently, certain tenants in assisted 
housing may disregard any income earned in the first year of a 
new job, and half of the income earned in the second year. 
Based on information published by HUD, CBO estimates that over 
$10 million in income is disregarded in this manner each year. 
Approximately 30 percent of tenants in RUD's rental assistance 
programs report earned income. The total earned income for 
those 4 families is about $20 billion each year. Changing the 
amount disregarded to 10 percent of the first $10,000 of earned 
income would reduce income (that is counted for purposes of 
determining housing assistance) by about $1 billion, and would 
lower tenant rent contributions by about than $330 million each 
year. Assuming appropriation of the necessary amounts, CBO 
estimates that this provision would cost $197 million in 2008 
and $1.5 billion over the 2008-2012 period. About half of this 
cost is from the Housing Choice Voucher Program, with the other 
half split roughly evenly between the public housing and 
project based subsidy programs.
    Imputed Return on Assets. Under current law, housing 
authorities and property owners calculate a tenant's imputed 
rate of return on any assets over $5,000 by using an interest 
rate determined by HUD. If the imputed return on assets is 
greater than actual income from assets, the imputed return is 
included in the family's income total. Section 3 would 
eliminate the calculation of imputed returns. Based on data 
provided by HUD, CBO estimates that about 6 percent of families 
(about 260,000) have income from assets, half of which include 
an imputed return on assets. Under the bill, asset income 
counted for determining housing assistance would decrease by 
about $48 million per year. Assuming appropriation of the 
necessary amounts, CBO estimates that excluding the imputed 
return on assets would cost about $9 million in 2008 and $72 
million over the 2008-2012 period.

Changes to allowances

    Child Care Allowance. Families now living in assisted 
housing may deduct any child care expenses necessary to enable 
a member of the family to be employed or attend school. Section 
3 would eliminate this deduction. Based on data provided by 
HUD, CBO estimates that about 5 percent of assisted families 
(about 200,000) claim child care allowances of about $3,000 
each. Assuming that appropriations are reduced accordingly, CBO 
estimates that eliminating the child care allowance would 
reduce outlays by $117 million in 2008 and $935 million over 
the 2008-2012 period.
    Dependent Allowance. Section 3 also would increase the 
amount that can be deducted for dependents from $480 to $500, 
and would inflate that amount each year, rounded down to the 
nearest multiple of $25. Based on HUD data, CBO estimates that 
this allowance is currently claimed for about 4 million 
dependents. About 8 percent of families claiming the allowance 
would not see any additional benefit from the increase because 
their adjusted incomes are already at zero. Assuming 
appropriation of the necessary amounts, CBO estimates that 
increasing the dependent allowance would cost $14 million in 
2008 and $158 million over the 2008-2012 period.
    Medical Expense Allowance. Elderly and disabled families 
currently deduct the amount by which unreimbursed medical 
expenses exceed 3 percent of the family's income. Based on HUD 
data for 2005, adjusted to account for the participation of 
elderly tenants in the Medicare prescription drug program 
(elderly medical expenses were reduced by one-third), CBO 
estimates that approximately 20 percent of families claim an 
average allowance of $1,500 each (for a total of over $1 
billion). The bill would decrease the amount of medical 
expenses that can be deducted to the amount that exceeds 10 
percent of the family's income. CBO estimates that this would 
cut the number of families claiming medical expenses and the 
total amount claimed in half. Assuming that appropriations are 
adjusted accordingly, CBO estimates that implementing this 
provision would save $115 million in 2008 and $974 million over 
the 2008-2012 period.
    Elderly and Disabled Allowance. Section 3 would increase 
the amount that can be deducted by elderly and disabled 
households from $400 to $725, and would inflate that amount 
each year, rounded down to the nearest multiple of$25. Based on 
data provided by HUD, CBO estimates that this deduction is 
claimed by about half of assisted households. One percent of 
families claiming the allowance would not see any additional 
benefit from the increase because their adjusted incomes are 
already at zero. Assuming appropriation of the necessary 
amounts, CBO estimates that increasing the dependent allowance 
would cost $134 million in 2008 and $1 billion over the 2008-
2012 period.

Eligibility and targeting changes

    Income Eligibility. Under current law, families with income 
over 80 percent of the area median income at their initial 
certification are not eligible for assistance. Eligibility 
tests are not done after the initial certification (incomes are 
certified each year to determine tenant rent contribution); 
therefore, a family may have their income rise above 80 percent 
of the area median and continue to receive assistance. Section 
4 would require families to be below 80 percent of the median 
at any annual income certification, but would make enforcement 
of this provision discretionary for families living in public 
housing or project-based units.
    Based on data provided by HUD, CBO estimates that 
approximately 3,000 families currently receiving assistance 
(primarily in the tenant-based program) would lose their 
subsidy. Because there is unmet demand for participation in 
HUD's rental assistance programs, CBO expects that families 
made ineligible would be replaced by families on housing 
authority or property owner waiting lists. Replacing ineligible 
families with average families would cost the government an 
additional $5,400 each (or $450 per month). Assuming 
appropriation of the necessary amounts, CBO estimates that this 
provision would cost $5 million in 2008 and $74 million over 
the 2008-2012 period.
    Asset Eligibility. Section 4 also would make any family 
with over $100,000 in assets ineligible for assistance, but 
would leave the enforcement of this provision up to the 
discretion of the PHAs for families living in public housing. 
Based on HUD data, CBO estimates that about 5,000 families 
would become ineligible for assistance. Replacing these 
families with average families would cost the government about 
$800 each. Assuming appropriation of the necessary amounts, CBO 
estimates that this provision would cost $1 million in 2008 and 
$18 million over the 2008-2012 period.
    Targeting. Currently, at least 75 percent of families 
initially provided tenant-based assistance must have incomes 
that do not exceed 30 percent of the area median income. 
Section 5 would change this targeting requirement so that at 
least 75 percent of families initially provided assistance must 
have incomes that are below the higher of the poverty line or 
30 percent of the area median income. Approximately 76 percent 
of the tenant-based population have incomes below 30 percent of 
the area median. Adjusting the targeting limit to include the 
poverty line would increase the number of tenants below the 
limit to 81 percent. Assuming that housing authorities would 
issue vouchers in a manner that gradually would move the 
percent of families under the new targeting limit back to the 
current level (i.e., near 75 percent), CBO estimates that 
approximately 84,000 tenants with incomes over the new 
targeting limit would replace tenants below the limit as 
vouchers turn over. The subsidy for each new family would be 
about $3,000 lower than the families being replaced. Assuming 
that appropriations are reduced accordingly, CBO estimates that 
the change in voucher targeting would save $54 million in 2008 
and $1 billion over the 2008-2012 period.
    Section 5 would make a similar change to the targeting 
requirements for public housing and project-based vouchers. 
Currently, at least 40 percent of families initially provided 
assistance through these programs must have incomes that do not 
exceed 30 percent of the area median income. The bill would 
change this targeting requirement so that at least 40 percent 
of families initially provided assistance must have incomes 
that are below the higher of the poverty line or 30 percent of 
the area median income. About 75 percent of families in these 
programs have incomes below 30 percent of the area median. CBO 
does not anticipate any savings from the change as housing 
authorities and property owners could currently increase the 
number of tenants with incomes above 30 percent of the area 
median and still meet the targeting requirements.

Other provisions

    Tenant Protection Vouchers. Section 6 would require HUD, 
subject to the availability of appropriations, to issue tenant-
protection vouchers to replace dwelling units that cease to be 
available as assisted housing. Currently, HUD only issues 
tenant-protection vouchers for occupied units. Over the past 
five years, HUD has issued an average of 26,000 tenant-
protection vouchers each year. Based on information provided by 
HUD, CBO estimates that about 1,300 additional vouchers would 
be issued each year (assuming a 95 percent occupancy rate for 
properties losing assistance) at an average cost of $6,700. 
Assuming appropriation of the necessary amounts, CBO estimates 
that this provision would cost $5 million in 2008 and $44 
million over the 2008-2012 period.
    Program Evaluations. Sections 7 and 16 would authorize the 
appropriation of a total of $25 million to conduct evaluations 
of the Family-Self-Sufficiency (FSS) and Housing Innovation 
programs. Reports to Congress on the FSS program would be due 
after four and eight years. Reports on the Housing Innovation 
Program, which would be the successor to the Moving-to-Work 
program, would be due one year after half of the program's 
participants have been selected. Assuming appropriation of the 
authorized amounts, CBO estimates that conducting the program 
evaluations would cost $16 million over the 2008-2012 period, 
with additional amounts spent in later years.
    Rent Burdens. Section 12 would direct HUD to monitor rent 
burdens in the Housing Choice Voucher program and report each 
year on the percentage of families who pay more than 30 percent 
and 40 percent of their adjusted incomes for rent. A family may 
pay more than 30 percent of adjusted income if the rent for 
their unit is greater than the voucher's payment standard. In 
those instances, the PHA will pay the difference between 30 
percent of the family's adjusted income and the payment 
standard, and the family will pay the difference between the 
payment standard and the rent (in addition to 30 percent of 
their adjusted monthly income). PHAs that are above the 
national average in either category would be required to 
increase their payment standard or explain their reasons for 
not making an adjustment. Under current law, PHAs can set 
payment standards between 90 and 110 percent of the Fair Market 
Rent (FMR) without HUD approval and can set their payment 
standards higher or lower with HUD approval. The FMR typically 
represents the 40th percentile rent in a PHA's local market. 
Under this provision, PHAs with above-average rent burdens 
could set payment standards up to 120 percent of the FMR 
without approval from HUD.
    Based on HUD data, CBO estimates that nearly one-half of 
families in the voucher program pay more than 30 percent of 
their adjusted income for rent and about one in five pay more 
than 40 percent. Approximately 60 percent of PHAs 
(administering about 60 percent of vouchers) have rent burden 
averages above the national average in at least one category 
and would be required to increase payment standards or provide 
an explanation for not doing so. About 17 percent of the 
vouchers at PHAs with above average rent burdens have payment 
standards at 110 percent of FMR, the current maximum possible 
without HUD approval. CBO assumes that some PHAs with above 
average rent burdens would increase the payment standard beyond 
110 percent to reduce rent burdens and improve the rate at 
which families who are issued vouchers succeed in finding units 
to rent and some will decide to not increase the payment 
standard in order to stretch available funding to cover more 
families. CBO estimates that, assuming appropriation of the 
necessary amounts, this provision would increase the payment 
standard for those vouchers at the current maximum by an 
average of 5 percentage points.
    Increasing the payment standard by 5 percentage points for 
vouchers at the national limit at PHAs with rent burdens above 
the national average would increase the Housing Assistance 
Payment (HAP) for 47 percent of those units (or about 5 percent 
of total vouchers) by an average of $470 per year. The 
remaining 53 percent of the units at those PHAs would not have 
a HAP change because the rent is below the existing payment 
standard. Because PHAs may currently set payment standards up 
to 110 percent without HUD approval, CBO does not estimate a 
change in authorization levels for vouchers that have payment 
standards below that maximum.
    The estimated changes to payment standards and increases in 
HAP would lower the percent of the program's families paying 
more than 30 percent of adjusted income for rent by about 1 
percentage point (down to 45 percent). In the following years, 
the majority of PHAs that are currently above the national rent 
burden average would remain above average. CBO estimates that 
about 2 percent of PHAs, administering about 2 percent of 
vouchers, would have rent burdens above the national average 
for the first time in the year following the initial payment 
standard changes. CBO estimates that the payment standards and 
HAPs for those vouchers would change in a manner similar to 
those that changed in the first year. Thereafter, CBO estimates 
that this provision will not significantly change the national 
average of families paying more than 30 percent of income in 
rent as few PHAs will be newly above average each year.
    In addition to increasing the HAP for some existing 
vouchers, CBO estimates that increasing the payment standard 
above 110 percent of FMR will also increase the average HAP for 
the 10 percent of vouchers that turn over each year. The 
current average payment standard for the units estimated to 
have a payment standard increase is about $860 and the average 
HAP is $535. After increasing the payment standard by an 
average of 5 percentage points of FMR the new average would be 
about $900. Assuming a similar ratio between payment standard 
and HAP, CBO estimates that the average HAP for turnover 
vouchers would be about $560, an increase of about $25 per 
month.
    In total, CBO estimates that, assuming appropriation of the 
necessary amounts, the rent burden provision would cost $12 
million in 2009 and $153 million over the 2009-2012 period.
    Resident Technical Assistance. Section 16 would authorize 
the appropriation of $10 million for each of fiscal years 2008 
through 2012 to provide technical assistance to low-income 
families assisted under the Housing Innovation Program. Such 
assistance is intended to help families participate in a 
housing authority's process of developing an annual plan. 
Assuming appropriation of the authorized amounts, CBO estimates 
that providing resident technical assistance would cost $42 
million over the 2009-2012 period.
    Incremental Vouchers. Section 18 would authorize the 
appropriation of such sums as are necessary to assist 20,000 
new tenant-based vouchers per year for each of fiscal years 
2008 through 2012. Based on HUD data, CBO estimates that the 
average annual cost of a tenant-based voucher is currently 
about $6,700. Assuming appropriation of the necessary amounts 
and adjusting for projected changes in rents and tenant 
incomes, CBO estimates that increasing the total number of 
vouchers by 100,000 by 2012 would cost $2.1 billion over the 
2008-2012 period.

Interactions among provisions

    The overall increase in estimated costs of H.R. 1851 is 
slightly less than the sum of the individual provisions because 
some of those provisions interact. For example, making families 
with assets over $100,000 ineligible would reduce the number of 
families with incomes that include an imputed return on assets. 
On balance, the interactions among the provisions of H.R. 1851 
would reduce outlays by $18 million over the 2008-2012 period, 
assuming appropriation actions consistent with the bill's 
provisions.
    Intergovernmental and private-sector impact: H.R. 1851 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. State, local, and tribal governments would 
benefit from housing assistance activities authorized in the 
bill. Any costs those governments incur to comply with grant 
requirements would result from conditions of federal 
assistance.
    Estimate prepared by: Federal Costs: Chad Chirico; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Page Shevlin.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 1851 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    Short title identifying the bill as the ``Section 8 Voucher 
Reform Act of 2007.''

Section 2. Inspection of dwelling units

    Makes a number of changes to the inspection and re-
inspection requirements for rental housing units that serve 
Section 8 voucher holders. Retains the initial inspection 
requirement, except permits occupancy and payments to be made 
for up to 30 days if a unit fails inspection as a result only 
of non-life threatening conditions. In such case, payments must 
be suspended after 30 days if the deficiencies are not 
corrected. Also allows a PHA to permit occupancy prior to 
inspection if another federal program inspection meeting 
federal Housing Quality Standards (HQS) has been made within 
the preceding 12 months, and to make payments to the owner 
retroactive to the beginning of the lease term when an 
inspection is subsequently completed.
    Changes the annual re-inspection requirement to a 
requirement that properties be re-inspected at least every two 
years. Permits use of inspections under a federal, state, or 
local housing assistance program in lieu of a public housing 
agency (PHA) voucher re-inspection, providing the PHA certifies 
such inspection provides comparable standards to federal HQS. 
Requires PHAs to withhold assistance to any property assisting 
a voucher holder that fails an inspection and which is not 
corrected within 90 days, permits PHAs to use such withheld 
assistance to make repairs of such properties, and prohibits 
voucher holders from being evicted because of any such 
withholding of assistance.

Section 3. Rent reform and income reviews

    Recertification. Modifies annual certification requirement 
for the Section 8 voucher program and project-based assistance 
and for public housing to permit PHAs to recertify ``fixed 
income'' families (those with more than 90 percent of income 
from a combination of Social Security, SSI, governmental and 
private pensions, and similar periodic payments) only every 
three years. Provides for interim recertifications only if 
unearned annual income increases by $1,500 or if a family 
requests a recertification if its income falls by $1,500 or 
more (or such lesser amount as the PHA may establish).
    Simplification. Includes a number of provisions to simplify 
the rent calculation process for the Section 8 voucher program 
and project-based assistance and for public housing. Raises the 
standard deduction for elderly and disabled families from $400 
to $725 a year, raises the standard deduction for dependents 
from $480 to $500 a year, and indexes both amounts in 
subsequent years for inflation, in $25 increments. Eliminates 
income deductions for child care expenses, and child and 
spousal support. Raises the threshold for calculating medical 
and handicapped assistance expense deductions from counting 
such expenses over 3 percent to counting such expenses over 10 
percent of net income.
    Contains administrative simplification provisions--
including relieving PHAs of responsibility to maintain records 
of HUD-required miscellaneous income exclusions, use of a HUD-
prescribed inflation adjustment for fixed income families, 
permitting PHA safe harbor reliance on other governmental 
income determinations (e.g., Medicaid, TANF), and permitting 
PHAs to make other appropriate adjustments when using prior 
year's calculations of other types of income.
    Work and Education Incentives: Requires use of a family's 
prior year's earned income. Also exempts 10 percent of the 
first $10,000 of such earned income. Exempts income of minors 
(except for heads of households or their spouses) and of adult 
dependents that are full time students, and exempts grant-in-
aid or scholarship amounts used for tuition or books. Exempts 
income from Coverdell education accounts and Section 529 
qualified tuition programs.
    Impact on Public Housing Revenues. Requires HUD to make 
public housing operating funding formula adjustments to reflect 
non de minimus reductions in individual PHA's rental income 
arising from rent reforms, during the period that revenue is 
frozen under the asset management rule. Also requires HUD to 
submit to Congress, for both Fiscal Years 2008 and 2009, a 
report identifying and calculating the impact of rent reforms 
on public housing costs and revenues.

Section 4. Eligibility for assistance based on assets and income

    Creates a new asset limit and residency ownership 
prohibition, for both initial eligibility and for ongoing 
annual recertification, for voucher, public housing, and 
Section 8 project-based assistance. The provision prohibits any 
family from having either (a) more than $100,000 in net assets 
or (b) an ownership in a residence suitable for occupancy. 
Excludes from this asset limit homeownership equity accounts 
and family self-sufficiency accounts, personal property (except 
for items of significant value), retirement and education 
savings account assets, and amounts from certain disability 
lawsuits. Permits a PHA or owner to rely on self-certification 
of assets by the assisted family. Excludes from the residence 
provision homes paid for by assistance under the 1937 Housing 
Act, victims of domestic violence, and families making a good 
faith effort to sell a property. PHAs may elect not to enforce 
limits for public housing residents at recertification, and 
PHAs and project-based owners may delay eviction or termination 
of families not meeting asset and residence restrictions for up 
to six months.
    Extends the 80 percent of local median income limitation 
that applies to initial occupancy to an annual recertification 
for continued program eligibility (except that income rules for 
enhanced vouchers are maintained and families initially 
permitted to have incomes up to 95 percent of median income 
that stay below that income level may continue to be assisted). 
PHAs and owners may elect not to enforce this income limitation 
for residents of public housing or project-based Section 8 
units, and PHAs and owners may delay eviction or termination 
for up to six months.

Section 5. Targeting vouchers to low income working families

    Modifies basic income targeting threshold of 30 percent of 
local area median income for Section 8 vouchers, public 
housing, and project-based Section 8 [under which 75 percent of 
new vouchers and 40 percent of new public housing and project-
based residents must have adjusted incomes below this 
threshold]. The threshold is modified to be the higher of this 
30 percent of local area median income calculation or the 
national poverty level for the appropriate family size. This 
change does not apply to Puerto Rico and other federal 
territories.

Section 6. Voucher funding renewal

    Authorizes such sums as may be necessary for the period of 
Fiscal Year 2008 through 2012 for the renewal of expiring 
Section 8 vouchers, and for new tenant protection, enhanced 
vouchers, and other special purpose vouchers. Requires HUD to 
issue tenant protection vouchers [including enhanced vouchers 
under Section 8(t)] for all public and assisted housing units 
that are lost (not just those occupied at time of application 
for such tenant replacement vouchers).
    Provides that the pro rata voucher funding allocation for 
PHAs is recalculated each year, based on a PHA's leasing and 
cost data from the prior calendar year. Such calculation is 
adjusted for an annual inflation adjustment (based on the 
smallest geographical areas for which data is annually 
available), and is also adjusted for the first time renewal of 
tenant protection and enhanced vouchers, for vouchers set aside 
for project-based assistance, for vouchers ported in the prior 
year, and for such other adjustments as HUD considers 
appropriate, including adjustments for natural and other major 
disasters. Funding is authorized for ``overleasing'' (i.e., 
serving more than a PHA's number of authorized voucher 
families), by including such overleasing costs in a subsequent 
year's funding allocation--except that funding calculations for 
2009 may not include vouchers in 2008 that were funded by 
reserves and which exceed 103 percent of that PHA's authorized 
voucher level. Provides for proration if overall funding is 
insufficient to meet nationwide costs. HUD is required to 
allocate all funds by the later of February 15th or 45 days 
after enactment of the appropriations bill funding the 
renewals.
    PHAs are entitled to retain unobligated carryover voucher 
funds equal to one twelfth (8.33 percent) of their annual 
allocation at the end of 2007 and 5 percent in each succeeding 
year, to be maintained as voucher reserves. If a PHA has 
reserves of less than 2 percent, it can receive an advance of 
up to 2 percent in the last three months of a year to cover 
overages, which it ``repays'' through an offsetting funding 
reduction in the next year's funding allocation. At the end of 
each year, HUD is required to recapture amounts in excess of 
each PHA's reserve limit. HUD is required to make available all 
such recaptured funds no later than May 1st, first for 
reimbursement for increased costs related to portability and 
family self-sufficiency escrow accounts, and next for 
reallocation to PHAs for increased voucher leasing, with 
priority given to PHAs based on the extent they have used their 
funding allocations to serve eligible families.
    PHAs are required to absorb ported vouchers from other 
PHAs, with priority to receive funds from the annual 
reallocation of recaptured excess funds.
    HUD is required to develop and issue guidance to PHAs that 
received incremental vouchers for non-elderly disabled families 
between 1997 and 2002 to ensure that such vouchers continue to 
be provided to such families upon voucher turnover.

Section 7. Administrative fees

    Re-states the statutory requirement that voucher 
administrative fees shall be based on the number of vouchers in 
use. Retains the Fiscal Year 2003 per unit fee as a baseline, 
along with subsequent annual inflation adjustments using an 
index of wage data changes or other measurable data that 
reflect such costs of administration. Provides that voucher 
administrative fees also include an amount for the cost of 
issuing new vouchers.
    Provides that voucher administrative fees include an amount 
for Family Self Sufficiency costs, as authorized by Section 23. 
Fees are generally provided based on the number of coordinators 
employed and the number of families being served. Funding shall 
be provided for agencies that received funding for 3 or more 
self-sufficiency coordinators anytime from FY 1998 to FY 2007. 
Provides for proration if insufficient funds are appropriated 
to meet all costs under this provision.

Section 8. Homeownership downpayment program

    Permits voucher funds to be used for a down payment for a 
first-time home purchase, as a one-time grant in an amount not 
exceeding $10,000, for families who have been receiving voucher 
assistance for a period of at least one year.
    Facilitates use of vouchers for the full cost of purchasing 
manufactured homes sited on leased land, by permitting voucher 
funds to be used for both the cost of leasing the land, plus 
monthly home purchase costs, including property taxes, 
insurance, and tenant-paid utilities.

Section 9. PHA reporting of rent payments to credit reporting agencies

    Authorizes a PHA to submit information regarding rental 
payment history for voucher tenants to credit reporting 
agencies, providing the family agrees to such submission.

Section 10. Performance assessments

    Provides statutory authority and requirements for HUD to 
assess the performance of PHAs in administering their local 
voucher programs, measuring the following factors: quality of 
units assisted, extent of utilization of allocated funds and 
authorized vouchers, timeliness and accuracy of reporting to 
HUD, effectiveness in carrying out policies to achieve 
deconcentration of poverty, reasonableness of rent burdens, 
accurate rent calculations and subsidy payments, effectiveness 
in carrying out family self-sufficiency activities, timeliness 
of actions related to landlord participation, and such other 
factors as the HUD Secretary considers appropriate.

Section 11. PHA Project-based assistance

    Provides that Section 8 rents shall not be reduced by 
virtue of being used in conjunction with low income housing tax 
credits. Increases the percentage of vouchers a PHA can project 
base from 20 percent to 25 percent, with authority to go 5 
percent higher to serve homeless persons. Increases the 
percentage of vouchers that can be project-based in any project 
to the greater of 25 dwelling units or 25 percent of the units 
in a project, with authority to go up to 50 percent in areas 
where vouchers are hard to use. Permits project-based vouchers 
to be used in cooperative housing, and in high rise elevator 
projects occupied by families with children. Increases the 
maximum voucher contract term from 10 to 15 years. Eliminates 
requirement for subsidy layering review by HUD for the project-
basing of vouchers in existing buildings, and whenever a review 
has already been conducted by an applicable state or local 
agency. Eliminates an environmental review for project-basing 
of vouchers, unless otherwise required by statute or 
regulation. Clarifies that lease and tenancy provisions 
pertaining to Section 8 vouchers shall apply to project-basing 
of vouchers, except for requirements concerning the minimum 
lease term. Permits owners using project-based vouchers to 
maintain site-based waiting lists, subject to PHA oversight.

Section 12. Rent burdens

    Requires HUD to monitor voucher rent burdens and submit an 
annual report to Congress on the percentage of families 
nationwide paying more than 30 percent and 40 percent, 
respectively, of their adjusted income for rent. Requires HUD 
to submit an annual report to Congress on the degree to which 
voucher families are clustered in lower rent, higher poverty 
areas, and the extent to which greater geographic distribution 
of families could be achieved, including raising payment 
standards.
    Requires PHAs to make public information on local rent 
burdens, and, if the local percentage of voucher families 
paying more than 30 percent or 40 percent of income for rent 
exceeds the national average, the PHA must either raise the 
payment standard or explain its reasons for not doing so. HUD 
is required to approve requests of agencies to raise payment 
standards in such circumstances, up to 120 percent of FMR. HUD 
is also required to approve requests by PHAs to increase 
payment standards up to 120 percent of the Fair Market Rent, 
and HUD may approve higher requests, as a reasonable 
accommodation for a person with a disability.

Section 13. Establishment of fair market rent

    Generally requires HUD to set geographical areas for the 
purpose of establishing Fair Market Rents (FMR) in as wide a 
range of communities as is feasible, including requiring 
separate areas for each urban county and metropolitan city with 
over 40,000 rental units. HUD is required to approve requests 
for contiguous areas with similar housing market 
characteristics with as few as 20,000 rental units if adequate 
data exists to establish reliable FMRs. Areas are protected 
against FMR reductions resulting from a change in the 
percentile of distribution of rents used to establish the FMR, 
and tenants are protected against reductions in payment 
standards resulting from these provisions.

Section 14. Screening of applicants

    Limits a PHA's elective screening of applicants to an 
applicant's ability to fulfill the obligations of the lease, 
including a consideration of any mitigating circumstances. 
Applicants and current participants are required to be notified 
of the basis of any determination of ineligibility, and are to 
be given an informal hearing to present mitigating 
circumstances in such case.

Section 15. Enhanced vouchers

    Provides that families may receive enhanced vouchers in the 
case of a property prepayment or opt out even if they reside in 
oversized units except that such tenants may be forced to move 
to units of appropriate size located on the premises.

Section 16. Housing innovation program

    Renames the ``Moving to Work'' (MTW) program as the 
``Housing Innovation Program'' (HIP). HUD is required to carry 
out this revised program, under which HUD may designate not 
more than 60 PHAs (including all existing MTW agencies approved 
for continuation). HUD is authorized to designate an additional 
20 PHAs [so-called ``HIP-lite'' agencies] under additional 
program limitations. The program is extended for a 10-year 
period.
    HUD is required to approve existing MTW agencies [of which 
there are 25] for continued eligibility, provided they are not 
in default under their agreement and provided HUD determines 
they are meeting their goals and objectives. Such agencies must 
make changes to existing policies to bring them in line with 
the program's new rules within 2 years of enactment.
    Regarding newly selected agencies for program 
participation: no more than five may be ``near-troubled 
agencies,'' and agencies shall be selected to provide for 
diversity with respect to size, geography, and areas served 
(urban, suburban, and rural). Applicants must have held two 
public meetings on their HIP proposal, preceded by 30 days 
prior notice to residents and the local community. Agencies 
shall be selected based on criteria to be established by HUD 
which include the extent to which the proposal generally 
identifies rules and regulations to be waived and why 
participation is necessary to achieve its goals and objectives, 
the extent of local commitment and funding, the extent to which 
the applicant has a history of success in pursuing similar 
strategies, and whether the proposal pursues one of two stated 
priorities strategies--which are (1) development, 
rehabilitation, and financing, and (2) rent reforms.
    Identifies a list of activities which can by undertaken 
using HIP funds. Requires that a PHA must assist not less than 
substantially the same number of low income families, with a 
comparable mix of families by family size. A number of existing 
statutory requirements are retained, including income 
targeting, Section 18 demolition and disposition rules, a 
number of tenant protections including lease requirements and 
eviction protections, and other provisions. A number of 
procedural, PHA plan, and tenant participation requirements are 
spelled out for any PHA policy changes under the program that 
would make a material change to tenant rents or contributions 
or to conditions of continued occupancy or participation.
    Additionally, the 20 HIP-lite agencies must comply with 
statutory rent requirements, may not impose time limits or work 
requirements, are subject to a one for one replacement 
requirement, and must include more extensive resident 
participation in any plan which provides for demolition or 
disposition of public housing units.
    HUD must perform evaluations of agencies participating in 
the program (or may contract out such responsibility to an 
independent entity qualified to perform such task). Such 
evaluations must use perform ance measures and identify models 
that can be replicated by other agencies to achieve success. 
HUD is required to submit evaluation reports at 3-, 5-, and 10-
year periods.
    $10 million is authorized in each of the years FY 2008 
through FY 2012 for capacity building and technical assistance 
to enhance capabilities of low income families assisted under 
the program. $15 million is authorized for HUD to conduct the 
required evaluations.

Section 17. Demonstration program waiver authority

    HUD is authorized to enter into agreements with the Social 
Security Administration and the Secretary of Health and Human 
Services to allow for participation in state demonstration 
programs designed to permit persons with significant 
disabilities to be employed and continue to receive a range of 
federal benefits. HUD is authorized to permit a partial or 
complete disregard of increases in earned income for persons 
participating in any such demonstration for the purpose of 
calculating rent contributions in Section 8 housing.

Section 18. Authorization of Appropriations

    Authorizes to be appropriated the amount necessary in each 
of Fiscal Year 2008 through 2012 to provide incremental 
vouchers for 20,000 families each year.

Section 19. Effective date

    Provides that provisions of bill take effect on January 1, 
2008, except where otherwise noted.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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

           *       *       *       *       *       *       *


                      rental payments; definitions

  Sec. 3. (a)(1) Low-income occupancy requirement and rental 
payments.--[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.] Dwelling units 
assisted under this Act may be rented, and assistance under 
this Act may be provided, whether initially or at time of 
recertification, only to families who are low-income families 
at the time such initial or continued assistance, respectively, 
is provided, except that families residing in dwelling units as 
of the date of the enactment of the Section 8 Voucher Reform 
Act of 2007 that, under agreements in effect on such date of 
enactment, may have incomes up to 95 percent of local area 
median income shall continue to be eligible for assistance at 
recertification as long as they continue to comply with such 
income restrictions. When recertifying family income with 
respect to families residing in public housing dwelling units, 
a public housing agency may, in the discretion of the agency 
and only pursuant to a policy that is set forth in the public 
housing agency plan under section 5A for the agency, choose not 
to enforce the prohibition under the preceding sentence. When 
recertifying family income with respect to families residing in 
dwelling units for which project-based assistance is provided, 
a project owner may, in the owner's discretion and only 
pursuant to a policy adopted by such owner, choose not to 
enforce such prohibition. In the case of a family residing in a 
dwelling unit assisted under this Act who does not comply with 
the prohibition under the first sentence of this paragraph, the 
public housing agency or project owner may delay eviction or 
termination of the family based on such noncompliance for a 
period of not more than 6 months. Reviews of family income 
shall be made at least annually. Except as provided in 
paragraph (2) and subject to the requirement under paragraph 
(3), 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:

           *       *       *       *       *       *       *

          (6) Reviews of family income.--
                  (A) Frequency.--Reviews of family income for 
                purposes of this section shall be made--
                          (i) in the case of all families, upon 
                        the initial provision of housing 
                        assistance for the family;
                          (ii) annually thereafter, except as 
                        provided in subparagraph (B)(i);
                          (iii) upon the request of the family, 
                        at any time the income or deductions 
                        (under subsection (b)(5)) of the family 
                        change by an amount that is estimated 
                        to result in a decrease of $1,500 (or 
                        such lower amount as the public housing 
                        agency may, at the option of the agency 
                        or owner, establish) or more in annual 
                        adjusted income; and
                          (iv) at any time the income or 
                        deductions (under subsection (b)(5)) of 
                        the family change by an amount that is 
                        estimated to result in an increase of 
                        $1,500 or more in annual adjusted 
                        income, except that any increase in the 
                        earned income of a family shall not be 
                        considered for purposes of this clause 
                        (except that earned income may be 
                        considered if the increase corresponds 
                        to previous decreases under clause 
                        (iii)), except that a public housing 
                        agency or owner may elect not to 
                        conduct such review in the last three 
                        months of a certification period.
                  (B) Fixed-income families.--
                          (i) Self certification and 3-year 
                        review.--In the case of any family 
                        described in clause (ii), after the 
                        initial review of the family's income 
                        pursuant to subparagraph (A)(i), the 
                        public housing agency or owner shall 
                        not be required to conduct a review of 
                        the family's income pursuant to 
                        subparagraph (A)(ii) for any year for 
                        which such family certifies, in 
                        accordance with such requirements as 
                        the Secretary shall establish, that the 
                        income of the family meets the 
                        requirements of clause (ii) of this 
                        subparagraph, except that the public 
                        housing agency or owner shall conduct a 
                        review of each such family's income not 
                        less than once every 3 years.
                          (ii) Eligible families.--A family 
                        described in this clause is a family 
                        who has an income, as of the most 
                        recent review pursuant to subparagraph 
                        (A) or clause (i) of this subparagraph, 
                        of which 90 percent or more consists of 
                        fixed income, as such term is defined 
                        in clause (iii).
                          (iii) Fixed income.--For purposes of 
                        this subparagraph, the term ``fixed 
                        income'' includes income from--
                                  (I) the supplemental security 
                                income program under title XVI 
                                of the Social Security Act, 
                                including supplementary 
                                payments pursuant to an 
                                agreement for Federal 
                                administration under section 
                                1616(a) of the Social Security 
                                Act and payments pursuant to an 
                                agreement entered into under 
                                section 212(b) of Public Law 
                                93-66;
                                  (II) Social Security 
                                payments;
                                  (III) Federal, State, local 
                                and private pension plans; and
                                  (IV) other periodic payments 
                                received from annuities, 
                                insurance policies, retirement 
                                funds, disability or death 
                                benefits, and other similar 
                                types of periodic receipts.
                  (C) In general.--Reviews of family income for 
                purposes of this section shall be subject to 
                the provisions of section 904 of the Stewart B. 
                McKinney Homeless Assistance Amendments Act of 
                1988.
          (7) Calculation of income.--
                  (A) Use of prior year's income.--Except as 
                otherwise provided in this paragraph, in 
                determining the income of a family for a year, 
                a public housing agency or owner may use the 
                income of the family as determined by the 
                agency or owner for the preceding year, taking 
                into consideration any redetermination of 
                income during such prior year pursuant to 
                clause (iii) or (iv) of paragraph (6)(A).
                  (B) Earned income.--For purposes of this 
                section, the earned income of a family for a 
                year shall be the amount of earned income by 
                the family in the prior year minus an amount 
                equal to 10 percent of the lesser of such prior 
                year's earned income or $10,000, except that 
                the income of a family for purposes of section 
                16 (relating to eligibility for assisted 
                housing and income mix) shall be determined 
                without regard to any reduction under this 
                subparagraph.
                  (C) Inflationary adjustment for fixed income 
                families.--If, for any year, a public housing 
                agency or owner determines the income for any 
                family described in paragraph (6)(B)(ii), or 
                the amount of fixed income of any other family, 
                based on the prior year's income or fixed 
                income, respectively, pursuant to subparagraph 
                (A), such prior year's income or fixed income, 
                respectively, shall be adjusted by applying an 
                inflationary factor as the Secretary shall, by 
                regulation, establish.
                  (D) Other income.--If, for any year, a public 
                housing agency or owner determines the income 
                for any family based on the prior year's 
                income, with respect to prior year calculations 
                of types of income not subject to subparagraph 
                (B), a public housing agency or owner may make 
                other adjustments as it considers appropriate 
                to reflect current income.
                  (E) Safe harbor.--A public housing agency or 
                owner may, to the extent such information is 
                available to the public housing agency or 
                owner, determine the family's income for 
                purposes of this section based on timely income 
                determinations made for purposes of other 
                means-tested Federal public assistance programs 
                (including the program for block grants to 
                States for temporary assistance for needy 
                families under part A of title IV of the Social 
                Security Act, a program for medicaid assistance 
                under a State plan approved under title XIX of 
                the Social Security Act, and the food stamp 
                program as defined in section 3(h) of the Food 
                Stamp Act of 1977). The Secretary shall, in 
                consultation with other appropriate Federal 
                agencies, develop procedures to enable public 
                housing agencies and owners to have access to 
                such income determinations made by other 
                Federal programs.
                  (F) PHA and owner compliance.--A public 
                housing agency or owner may not be considered 
                to fail to comply with this paragraph or 
                paragraph (6) due solely to any de minimus 
                errors made by the agency or owner in 
                calculating family incomes.
  (b) When used in this Act:
  (1) * * *

           *       *       *       *       *       *       *

  [(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) Adjusted income.--The term ``adjusted income'' means, 
with respect to a family, the amount (as determined by the 
public housing agency) of the income of the members of the 
family residing in a dwelling unit or the persons on a lease, 
after any income exclusions as follows:
          [(A) Mandatory exclusions.--In determining adjusted 
        income, a public housing agency shall exclude from the 
        annual income of a family the following amounts:
                  [(i) Elderly and disabled families.--$400 for 
                any elderly or disabled family.
                  [(ii) Medical expenses.--The amount by which 
                3 percent of the annual family income is 
                exceeded by the sum of--
                          [(I) unreimbursed medical expenses of 
                        any elderly family or disabled family;
                          [(II) unreimbursed medical expenses 
                        of any family that is not covered under 
                        subclause (I), except that this 
                        subclause shall apply only to the 
                        extent approved in appropriation Acts; 
                        and
                          [(III) 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.
                  [(iii) 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.
                  [(iv) Minors, students, and persons with 
                disabilities.--$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 less than 18 years of age or is 
                attending school or vocational training on a 
                full-time basis, or who is 18 years of age or 
                older and is a person with disabilities.
                  [(v) 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 clause may not exceed $480 
                for each child for whom such payment is made; 
                except that this clause shall apply only to the 
                extent approved in appropriations Acts.
                  [(vi) Spousal support expenses.--Any payment 
                made by a member of the family for the support 
                and maintenance of any spouse or former spouse 
                who does not reside in the household, except 
                that the amount excluded under this clause 
                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; except that this 
                clause shall apply only to the extent approved 
                in appropriations Acts.
                  [(vii) Earned income of minors.--The amount 
                of any earned income of a member of the family 
                who is not--
                          [(I) 18 years of age or older; and
                          [(II) the head of the household (or 
                        the spouse of the head of the 
                        household).
          [(B) Permissive exclusions for public housing.--In 
        determining adjusted income, a public housing agency 
        may, in the discretion of the agency, establish 
        exclusions from the annual income of a family residing 
        in a public housing dwelling unit. Such exclusions may 
        include the following amounts:
                  [(i) Excessive travel expenses.--Excessive 
                travel expenses in an amount not to exceed $25 
                per family per week, for employment- or 
                education-related travel.
                  [(ii) Earned income.--An amount of any earned 
                income of the family, established at the 
                discretion of the public housing agency, which 
                may be based on--
                          [(I) all earned income of the family,
                          [(II) the amount earned by particular 
                        members of the family;
                          [(III) the amount earned by families 
                        having certain characteristics; or
                          [(IV) the amount earned by families 
                        or members during certain periods or 
                        from certain sources.
                  [(iii) Others.--Such other amounts for other 
                purposes, as the public housing agency may 
                establish.]
          (4) Income.--The term ``income'' means, with respect 
        to a family, income received from all sources by each 
        member of the household who is 18 years of age or older 
        or is the head of household or spouse of the head of 
        the household, plus unearned income by or on behalf of 
        each dependent who is less than 18 years of age, as 
        determined in accordance with criteria prescribed by 
        the Secretary, in consultation with the Secretary of 
        Agriculture, subject to the following requirements:
                  (A) Included amounts.--Such term includes 
                recurring gifts and receipts, actual income 
                from assets, and profit or loss from a 
                business.
                  (B) Excluded amounts.--Such term does not 
                include--
                          (i) any imputed return on assets; and
                          (ii) any amounts that would be 
                        eligible for exclusion under section 
                        1613(a)(7) of the Social Security Act 
                        (42 U.S.C. 1382b(a)(7)).
                  (C) Earned income of students.--Such term 
                does not include earned income of any dependent 
                earned during any period that such dependent is 
                attending school on a full-time basis or any 
                grant-in-aid or scholarship amounts related to 
                such attendance used for the cost of tuition or 
                books.
                  (D) Educational savings accounts.--Income 
                shall be determined without regard to any 
                amounts in or from, or any benefits from, any 
                Coverdell education savings account under 
                section 530 of the Internal Revenue Code of 
                1986 or any qualified tuition program under 
                section 529 of such Code.
                  (E) Other exclusions.--Such term shall not 
                include other exclusions from income as are 
                established by the Secretary or any amount 
                required by Federal law to be excluded from 
                consideration as income. The Secretary may not 
                require a public housing agency or owner to 
                maintain records of any amounts excluded from 
                income pursuant to this subparagraph.
          (5) Adjusted income.--The term ``adjusted income'' 
        means, with respect to a family, the amount (as 
        determined by the public housing agency or owner) of 
        the income of the members of the family residing in a 
        dwelling unit or the persons on a lease, after any 
        deductions from income as follows:
                  (A) Elderly and disabled families.--$725 in 
                the case of any family that is an elderly 
                family or a disabled family.
                  (B) Dependents.--In the case of any family 
                that includes a member or members who--
                          (i) are less than 18 years of age or 
                        attending school or vocational training 
                        on a full-time basis; or
                          (ii) is a person with disabilities 
                        who is 18 years of age or older and 
                        resides in the household,
                $500 for each such member.
                  (C) Health and medical expenses.--The amount, 
                if any, by which 10 percent of annual family 
                income is exceeded by the sum of--
                          (i) in the case of any elderly or 
                        disabled family, any unreimbursed 
                        health and medical care expenses; and
                          (ii) any 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 to be 
                        employed.
                  (D) Permissive deductions.--Such additional 
                deductions as a public housing agency may, at 
                its discretion, establish, except that the 
                Secretary shall establish procedures to ensure 
                that such deductions do not increase Federal 
                expenditures.
        The Secretary shall annually adjust the amounts of the 
        exclusions under subparagraphs (A) and (B), as such 
        amounts may have been previously adjusted, by applying 
        an inflationary factor as the Secretary shall, by 
        regulation, establish. If the dollar amount of any such 
        exclusion determined for any year by applying such 
        inflationary factor is not a multiple of $25, the 
        Secretary shall round such amount to the next lowest 
        multiple of $25.

           *       *       *       *       *       *       *

  [(d) Disallowance of Earned Income From Rent 
Determinations.--
          [(1) In general.--Notwithstanding any other provision 
        of law, the rent payable under subsection (a) by a 
        family described in paragraph (3) of this subsection 
        may not be increased as a result of the increased 
        income due to such employment during the 12-month 
        period beginning on the date on which the employment is 
        commenced.
          [(2) Phase-in of rent increases.--Upon the expiration 
        of the 12-month period referred to in paragraph (1), 
        the rent payable by a family described in paragraph (3) 
        may be increased due to the continued employment of the 
        family member described in paragraph (3)(B), except 
        that during the 12-month period beginning upon such 
        expiration the amount of the increase may not be 
        greater than 50 percent of the amount of the total rent 
        increase that would be applicable but for this 
        paragraph.
          [(3) Eligible families.--A family described in this 
        paragraph is a family--
                  [(A) that--
                          [(i) occupies a dwelling unit in a 
                        public housing project; or
                          [(ii) receives assistance under 
                        section 8; and
                  [(B)(i) whose income increases as a result of 
                employment of a member of the family who was 
                previously unemployed for 1 or more years;
                  [(ii) whose earned income increases during 
                the participation of a family member in any 
                family self-sufficiency or other job training 
                program; or
                  [(iii) who is or was, within 6 months, 
                assisted under any State program for temporary 
                assistance for needy families funded under part 
                A of title IV of the Social Security Act and 
                whose earned income increases.
          [(4) Applicability.--This subsection and subsection 
        (e) shall apply beginning upon October 1, 1999, except 
        that this subsection and subsection (e) shall apply 
        with respect to any family described in paragraph 
        3(A)(ii) only to the extent provided in advance in 
        appropriations Acts.
  [(e) Individual Savings Accounts.--
          [(1) In general.--In lieu of a disallowance of earned 
        income under subsection (d), upon the request of a 
        family that qualifies under subsection (d), a public 
        housing agency may establish an individual savings 
        account in accordance with this subsection for that 
        family.
          [(2) Deposits to account.--The public housing agency 
        shall deposit in any savings account established under 
        this subsection an amount equal to the total amount 
        that otherwise would be applied to the family's rent 
        payment under subsection (a) as a result of employment.
          [(3) Withdrawal from account.--Amounts deposited in a 
        savings account established under this subsection may 
        only be withdrawn by the family for the purpose of--
                  [(A) purchasing a home;
                  [(B) paying education costs of family 
                members;
                  [(C) moving out of public or assisted 
                housing; or
                  [(D) paying any other expense authorized by 
                the public housing agency for the purpose of 
                promoting the economic self-sufficiency of 
                residents of public and assisted housing.]
  [(f)] (d) Availability of Income Matching Information.--
          (1) * * *

           *       *       *       *       *       *       *

  (e) PHA Reporting of Rent Payments to Credit Reporting 
Agencies.--
          (1) Authority.--To the extent that a family receiving 
        tenant-based housing choice vouchers under section 8 by 
        a public housing agency agrees in writing to reporting 
        under this subsection, the public housing agency may 
        submit to consumer reporting agencies described in 
        section 603(p) of the Fair Credit Reporting Act (15 
        U.S.C. 1681a) information regarding the past rent 
        payment history of the family with respect to the 
        dwelling unit for which such assistance is provided.
          (2) Format.--The Secretary, after consultation with 
        consumer reporting agencies referred in paragraph (1), 
        shall establish a system and format to be used by 
        public housing agencies for reporting of information 
        under such paragraph that provides such information in 
        a format and manner that is similar to other credit 
        information submitted to such consumer reporting 
        agencies and is usable by such agencies.

           *       *       *       *       *       *       *


SEC. 5A. PUBLIC HOUSING AGENCY PLANS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Contents.--An annual public housing agency plan under 
subsection (b) for a public housing agency shall contain the 
following information relating to the upcoming fiscal year for 
which the assistance under this Act is to be made available:
          (1) * * *

           *       *       *       *       *       *       *

          (4) Rent determination.--A statement of the policies 
        of the public housing agency governing rents charged 
        for public housing dwelling units and rental 
        contributions of families assisted under section 8(o), 
        including the report with respect to the agency 
        furnished by the Secretary pursuant to section 
        8(o)(1)(E) concerning rent burdens and, if applicable, 
        geographic concentration of voucher holders, any 
        changes in rent or other policies the public housing 
        agency is making to address excessive rent burdens or 
        concentration, and if the public housing agency is not 
        adjusting its payment standard, its reasons for not 
        doing so.

           *       *       *       *       *       *       *


                    lower income housing assistance

  Sec. 8. (a) * * *

           *       *       *       *       *       *       *

  (c)(1)(A) 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.
  (B)(i) The Secretary shall endeavor to define market areas 
for purposes of this paragraph in a manner that results in fair 
market rentals that are adequate to cover typical rental costs 
of units suitable for occupancy by persons assisted under this 
section in as wide a range of communities as is feasible, 
including communities with low poverty rates.
  (ii) The Secretary at a minimum shall define a separate 
market area for each--
          (I) metropolitan city, as such term is defined in 
        section 102(a) of the Housing and Community Development 
        Act of 1974 (42 U.S.C. 5302(a)), with more than 40,000 
        rental dwelling units; and
          (II) urban county or portion of an urban county, as 
        such term is defined in such section 102(a), located 
        outside the boundaries of any metropolitan city 
        specified in subclause (I).
  (iii) The Secretary shall, at the request of one or more 
public housing agencies, establish a separate market area for 
part or all of the area under the jurisdiction of such 
agencies, if--
          (I) the requested market area contains at least 
        20,000 rental dwelling units;
          (II) the areas contained in the requested market area 
        are geographically contiguous and share similar housing 
        market characteristics;
          (III) adequate data are available to establish a 
        reliable fair market rental for the requested market 
        area, and for the remainder of the market area in which 
        it is currently located; and
          (IV) establishing the requested market area would 
        raise or lower the fair market rental by 10 percent or 
        more at the time the requested market area is 
        established.
For purposes of subclause (III), data for an area shall be 
considered adequate if they are sufficient to establish from 
time to time a reliable benchmark fair market rental based 
primarily on data from that area, whether or not those data 
need to be supplemented with data from a larger area for 
purposes of annual updates.
  (iv) The Secretary shall not reduce the fair market rental in 
a market area as a result of a change in the percentile of the 
distribution of market rents used to establish the fair market 
rental.

           *       *       *       *       *       *       *

  (3) 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.]
  (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] 
according to the restrictions under section 3(a)(1), 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.

           *       *       *       *       *       *       *

  (o) Voucher Program.--
          (1) Authority.--
                  (A) * * *
                  (B) Establishment of payment standard.--
                Except as provided under subparagraph (D), the 
                payment standard for each size of dwelling unit 
                in a market area shall not exceed 110 percent 
                of the fair market rental established under 
                subsection (c) for the same size of dwelling 
                unit in the same market area and shall be not 
                less than 90 percent of that fair market 
                rental, except that no public housing agency 
                shall be required as a result of a reduction in 
                the fair market rental to reduce the payment 
                standard applied to a family continuing to 
                reside in a unit for which the family was 
                receiving assistance under this section at the 
                time the fair market rental was reduced.

           *       *       *       *       *       *       *

                  (D) Approval.--The Secretary may require a 
                public housing agency to submit the payment 
                standard of the public housing agency to the 
                Secretary for approval, if the payment standard 
                is less than 90 percent of the fair market 
                rental or exceeds 110 percent of the fair 
                market rental, except that a public housing 
                agency may establish a payment standard of not 
                more than 120 percent of the fair market rent 
                where necessary as a reasonable accommodation 
                for a person with a disability, without 
                approval of the Secretary. A public housing 
                agency may seek approval of the Secretary to 
                use a payment standard greater than 120 percent 
                of the fair market rent as a reasonable 
                accommodation for a person with a disability.
                  [(E) Review.--The Secretary--
                          [(i) shall monitor rent burdens and 
                        review any payment standard that 
                        results in a significant percentage of 
                        the families occupying units of any 
                        size paying more than 30 percent of 
                        adjusted income for rent; and
                          [(ii) may require a public housing 
                        agency to modify the payment standard 
                        of the public housing agency based on 
                        the results of that review.]
                  (E) Reviews.--
                          (i) Rent burdens.--The Secretary 
                        shall monitor rent burdens and submit a 
                        report to the Congress annually on the 
                        percentage of families assisted under 
                        this subsection, occupying dwelling 
                        units of any size, that pay more than 
                        30 percent of their adjusted incomes 
                        for rent and such percentage that pay 
                        more than 40 percent of their adjusted 
                        incomes for rent. Using information 
                        regularly reported by public housing 
                        agencies, the Secretary shall provide 
                        public housing agencies, on an annual 
                        basis, a report with the information 
                        described in the first sentence of this 
                        clause, and may require a public 
                        housing agency to modify a payment 
                        standard that results in a significant 
                        percentage of families assisted under 
                        this subsection, occupying dwelling 
                        units of any size, paying more than 30 
                        percent of their adjusted incomes for 
                        rent.
                          (ii) Concentration of poverty.--The 
                        Secretary shall submit a report to the 
                        Congress annually on the degree to 
                        which families assisted under this 
                        subsection in each metropolitan area 
                        are clustered in lower rent, higher 
                        poverty areas and how, and the extent 
                        to which, greater geographic 
                        distribution of such assisted families 
                        could be achieved, including by 
                        increasing payment standards for 
                        particular communities within such 
                        metropolitan areas.
                          (iii) Public housing agency 
                        responsibilities.--Each public housing 
                        agency shall make publicly available 
                        the information on rent burdens 
                        provided by the Secretary pursuant to 
                        clause (i), and, for agencies located 
                        in metropolitan areas, the information 
                        on concentration provided by the 
                        Secretary pursuant to clause (ii). If 
                        the percentage of families paying more 
                        than 30 percent or 40 percent of income 
                        exceeds the national average for either 
                        of such categories, as reported 
                        pursuant to clause (i), the public 
                        housing agency shall adjust the payment 
                        standard to eliminate excessive rent 
                        burdens within a reasonable time period 
                        or explain its reasons for not making 
                        such adjustment. The Secretary may not 
                        deny the request of a public housing 
                        agency to set a payment standard up to 
                        120 percent of the fair market rent to 
                        remedy rent burdens in excess of the 
                        national average or undue concentration 
                        of families assisted under this 
                        subsection in lower rent, higher 
                        poverty sections of a metropolitan area 
                        except on the basis that an agency has 
                        not demonstrated that its request meets 
                        these criteria. If a request of a 
                        public housing agency has not been 
                        denied or approved within 45 days after 
                        the request is made, the request shall 
                        be considered to have been approved.

           *       *       *       *       *       *       *

          [(4) Eligible families.--To be eligible to receive 
        assistance under this subsection, a family shall, at 
        the time a family initially receives assistance under 
        this subsection, be a low-income family that is--]
          (4) Eligible families.--Assistance under this 
        subsection may be provided, whether initially or at 
        each recertification, only pursuant to subsection (t) 
        to a family eligible for assistance under such 
        subsection or to a family who at the time of such 
        initial or continued assistance, respectively, is a 
        low-income family that is--
                  (A) * * *

           *       *       *       *       *       *       *

          (5) [Annual review] Reviews of family income.--
                  (A) In general.--Reviews of family incomes 
                for purposes of this section shall be subject 
                to [the provisions of] paragraphs (6) and (7) 
                of section 3(a) and to 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].
                  (B) Procedures.--Each public housing agency 
                administering assistance under this subsection 
                shall establish procedures that are appropriate 
                and necessary to ensure that income data 
                provided to the agency and owners by families 
                applying for or receiving assistance from the 
                agency is complete and accurate. [Each public 
                housing agency shall, not less frequently than 
                annually, conduct a review of the family income 
                of each family receiving assistance under this 
                subsection.]
          (6) Selection of families and disapproval of 
        owners.--
                  (A) * * *
                  (B) Selection of tenants.--Each housing 
                assistance payment contract entered into by the 
                public housing agency and the owner of a 
                dwelling unit) shall provide that the screening 
                and selection of families for those units shall 
                be the function of the owner. In addition, the 
                public housing agency may elect to screen 
                applicants for the program in accordance with 
                such requirements as the Secretary may 
                establish. A public housing agency's elective 
                screening shall be limited to criteria that are 
                directly related to an applicant's ability to 
                fulfill the obligations of an assisted lease 
                and shall consider mitigating circumstances 
                related to such applicant. Any applicant or 
                participant determined to be ineligible for 
                admission or continued participation to the 
                program shall be notified of the basis for such 
                determination and provided, within a reasonable 
                time after the determination, an opportunity 
                for an informal hearing on such determination 
                at which mitigating circumstances, including 
                remedial conduct subsequent to the notice, 
                shall be considered. That an applicant or 
                participant is or has been a victim of domestic 
                violence, dating violence, or stalking is not 
                an appropriate basis for denial of program 
                assistance by or for denial of admission if the 
                applicant otherwise qualifies for assistance 
                for admission, and that nothing in this section 
                shall be construed to supersede any provision 
                of any Federal, State, or local law that 
                provides greater protection than this section 
                for victims of domestic violence, dating 
                violence, or stalking.

           *       *       *       *       *       *       *

          (8) Inspection of units by pha's.--
                  [(A) In general.--Except as provided in 
                paragraph (11), for each dwelling unit for 
                which a housing assistance payment contract is 
                established under this subsection, the public 
                housing agency shall inspect the unit before 
                any assistance payment is made to determine 
                whether the dwelling unit meets the housing 
                quality standards under subparagraph (B).]
                  (A) Initial inspection.--
                          (i) In general.--For each dwelling 
                        unit for which a housing assistance 
                        payment contract is established under 
                        this subsection, the public housing 
                        agency (or other entity pursuant to 
                        paragraph (11)) shall inspect the unit 
                        before any assistance payment is made 
                        to determine whether the dwelling unit 
                        meets the housing quality standards 
                        under subparagraph (B), except as 
                        provided in clause (ii) or (iii) of 
                        this subparagraph.
                          (ii) Correction of non-life 
                        threatening conditions.--In the case of 
                        any dwelling unit that is determined, 
                        pursuant to an inspection under clause 
                        (i), not to meet the housing quality 
                        standards under subparagraph (B), 
                        assistance payments may be made for the 
                        unit notwithstanding subparagraph (C) 
                        if failure to meet such standards is a 
                        result only of non-life threatening 
                        conditions. A public housing agency 
                        making assistance payments pursuant to 
                        this clause for a dwelling unit shall, 
                        30 days after the beginning of the 
                        period for which such payments are 
                        made, suspend any assistance payments 
                        for the unit if any deficiency 
                        resulting in noncompliance with the 
                        housing quality standards has not been 
                        corrected by such time, and may not 
                        resume such payments until each such 
                        deficiency has been corrected.
                          (iii) Projects receiving certain 
                        federal housing subsidies.--In the case 
                        of any property that within the 
                        previous 12 months has been determined 
                        to meet housing quality and safety 
                        standards under any Federal housing 
                        program inspection standard, including 
                        the program under section 42 of the 
                        Internal Revenue Code of 1986 or under 
                        subtitle A of title II of the Cranston 
                        Gonzalez National Affordable Housing 
                        Act of 1990, a public housing agency 
                        may authorize occupancy before the 
                        inspection under clause (i) has been 
                        completed, and may make assistance 
                        payments retroactive to the beginning 
                        of the lease term after the unit has 
                        been determined pursuant to an 
                        inspection under clause (i) to meet the 
                        housing quality standards under 
                        subparagraph (B).

           *       *       *       *       *       *       *

                  [(D) Annual inspections.--Each public housing 
                agency providing assistance under this 
                subsection (or other entity, as provided in 
                paragraph (11)) shall make an annual inspection 
                of each assisted dwelling unit during the term 
                of the housing assistance payments contract for 
                the unit to determine whether the unit is 
                maintained in accordance with the requirements 
                under subparagraph (A). The agency (or other 
                entity) shall retain the records of the 
                inspection for a reasonable time and shall make 
                the records available upon request to the 
                Secretary, the Inspector General for the 
                Department of Housing and Urban Development, 
                and any auditor conducting an audit under 
                section 5(h).]
                  (D) Biennial inspections.--
                          (i) Requirement.--Each public housing 
                        agency providing assistance under this 
                        subsection (or other entity, as 
                        provided in paragraph (11)) shall, for 
                        each assisted dwelling unit, make 
                        biennial inspections during the term of 
                        the housing assistance payments 
                        contract for the unit to determine 
                        whether the unit is maintained in 
                        accordance with the requirements under 
                        subparagraph (A). The agency (or other 
                        entity) shall retain the records of the 
                        inspection for a reasonable time and 
                        shall make the records available upon 
                        request to the Secretary, the Inspector 
                        General for the Department of Housing 
                        and Urban Development, and any auditor 
                        conducting an audit under section 5(h).
                          (ii) Sufficient inspection.--An 
                        inspection of a property shall be 
                        sufficient to comply with the 
                        inspection requirement under clause (i) 
                        if--
                                  (I) the inspection was 
                                conducted pursuant to 
                                requirements under a Federal, 
                                State, or local housing 
                                assistance program (including 
                                the HOME investment 
                                partnerships program under 
                                title II of the Cranston-
                                Gonzalez National Affordable 
                                Housing Act (42 U.S.C. 12721 et 
                                seq.)); and
                                  (II) pursuant to such 
                                inspection, the property was 
                                determined to meet the 
                                standards or requirements 
                                regarding housing quality or 
                                safety applicable to units 
                                assisted under such program, 
                                and, if a non-Federal standard 
                                was used, the public housing 
                                agency has certified to the 
                                Secretary that such standards 
                                or requirements provide the 
                                same protection to occupants of 
                                dwelling units meeting such 
                                standards or requirements as, 
                                or greater protection than, the 
                                housing quality standards under 
                                subparagraph (B).

           *       *       *       *       *       *       *

                  (F) Enforcement of housing quality 
                standards.--
                          (i) Determination of noncompliance.--
                        A dwelling unit that is covered by a 
                        housing assistance payments contract 
                        under this subsection shall be 
                        considered, for purposes of this 
                        subparagraph, to be in noncompliance 
                        with the housing quality standards 
                        under subparagraph (B) if--
                                  (I) the public housing agency 
                                or an inspector authorized by 
                                the State or unit of local 
                                government determines upon 
                                inspection of the unit that the 
                                unit fails to comply with such 
                                standards;
                                  (II) the agency or inspector 
                                notifies the owner of the unit 
                                in writing of such failure to 
                                comply; and
                                  (III) the failure to comply 
                                is not corrected within 90 days 
                                after receipt of such notice.
                          (ii) Withholding and release of 
                        assistance amounts.--The public housing 
                        agency shall withhold all of the 
                        assistance amounts under this 
                        subsection with respect to a dwelling 
                        unit that is in noncompliance with 
                        housing quality standards under 
                        subparagraph (B). Subject to clause 
                        (iii), the agency shall promptly 
                        release any withheld amounts to the 
                        owner of the dwelling unit upon 
                        completion of repairs that remedy such 
                        noncompliance.
                          (iii) Use of withheld assistance to 
                        pay for repairs.--The public housing 
                        agency may use such amounts withheld to 
                        make repairs to the dwelling unit or to 
                        contract to have repairs made (or to 
                        contract with an inspector referred to 
                        in clause (i)(I) to make or contract 
                        for such repairs), and shall subtract 
                        the cost of such repairs from any 
                        amounts released to the owner of the 
                        unit upon remedying such noncompliance.
                          (iv) Protection of tenants.--An owner 
                        of a dwelling unit may not terminate 
                        the tenancy of any tenant or refuse to 
                        renew a lease for such unit because of 
                        the withholding of assistance pursuant 
                        to this subparagraph.
                          (v) Termination of lease or 
                        assistance payments contract.--If 
                        assistance amounts under this section 
                        for a dwelling unit are withheld 
                        pursuant to clause (ii) and the owner 
                        does not correct the noncompliance 
                        before the expiration of the lease for 
                        the dwelling unit and such lease is not 
                        renewed, the Secretary shall recapture 
                        any such amounts from the public 
                        housing agency.
                          (vi) Applicability.--This 
                        subparagraph shall apply to any 
                        dwelling unit for which a housing 
                        assistance payments contract is entered 
                        into or renewed after the date of the 
                        effectiveness of the regulations 
                        implementing this subparagraph.

           *       *       *       *       *       *       *

          (12) Assistance for rental of manufactured 
        housing.--
                  (A) In general.--A public housing agency may 
                make assistance payments in accordance with 
                this subsection on behalf of a family that 
                utilizes a manufactured home as a principal 
                place of residence[. Such payments may be made 
                only for the rental of] and rents the real 
                property on which the manufactured home owned 
                by any such family is located.
                  (B) Rent calculation.--
                          (i) Charges included.--For assistance 
                        pursuant to this paragraph, [the rent 
                        for the space on which a manufactured 
                        home is located and with respect to 
                        which assistance payments are to be 
                        made shall include maintenance and 
                        management charges and tenant-paid 
                        utilities.] rent shall mean the sum of 
                        the monthly payments made by a family 
                        assisted under this paragraph to 
                        amortize the cost of purchasing the 
                        manufactured home, including any 
                        required insurance and property taxes, 
                        the monthly amount allowed for tenant-
                        paid utilities, and the monthly rent 
                        charged for the real property on which 
                        the manufactured home is located, 
                        including monthly management and 
                        maintenance charges.
                          [(ii) Payment standard.--The public 
                        housing agency shall establish a 
                        payment standard for the purpose of 
                        determining the monthly assistance that 
                        may be paid for any family under this 
                        paragraph. The payment standard may not 
                        exceed an amount approved or 
                        established by the Secretary.]
                          [(iii)] (ii) Monthly assistance 
                        payment.--The monthly assistance 
                        payment for a family assisted under 
                        this paragraph shall be determined in 
                        accordance with paragraph (2). If the 
                        amount of the monthly assistance 
                        payment for a family exceeds the 
                        monthly rent charged for the real 
                        property on which the manufactured home 
                        is located, including monthly 
                        management and maintenance charges, a 
                        public housing agency may pay the 
                        remainder to the family, lender or 
                        utility company, or may choose to make 
                        a single payment to the family for the 
                        entire monthly assistance amount.
          (13) PHA project-based assistance.--
                  (A) * * *
                  [(B) Percentage limitation.--Not more than 20 
                percent of the funding available for tenant-
                based assistance under this section that is 
                administered by the agency may be attached to 
                structures pursuant to this paragraph.]
                  (B) Percentage limitation.--
                          (i) In general.--Subject to clause 
                        (ii), not more than 25 percent of the 
                        funding available for tenant-based 
                        assistance under this section that is 
                        administered by the agency may be 
                        attached to structures pursuant to this 
                        paragraph.
                          (ii) Exception.--An agency may attach 
                        up to an additional 5 percent of the 
                        funding available for tenant-based 
                        assistance under this section to 
                        structures pursuant to this paragraph 
                        for dwelling units that house 
                        individuals and families that meet the 
                        definition of homeless under section 
                        103 of the McKinney-Vento Homeless 
                        Assistance Act (42 U.S.C. 11302).

           *       *       *       *       *       *       *

                  [(D) Income mixing requirement.--
                          [(i) In general.--Not more than 25 
                        percent of the dwelling units in any 
                        building may be assisted under a 
                        housing assistance payment contract for 
                        project-based assistance pursuant to 
                        this paragraph.
                          [(ii) Exceptions.--The limitation 
                        under clause (i) shall not apply in the 
                        case of assistance under a contract for 
                        housing consisting of single family 
                        properties or for dwelling units that 
                        are specifically made available for 
                        households comprised of elderly 
                        families, disabled families, and 
                        families receiving supportive 
                        services.]
                  (D) Income mixing requirement.--
                          (i) In general.--Except as provided 
                        in clause (ii), not more than the 
                        greater of 25 dwelling units or 25 
                        percent of the dwelling units in any 
                        project may be assisted under a housing 
                        assistance payment contract for 
                        project-based assistance pursuant to 
                        this paragraph. For purposes of this 
                        subparagraph, the term ``project'' 
                        means a single building, multiple 
                        contiguous buildings, or multiple 
                        buildings on contiguous parcels of 
                        land.
                          (ii) Exceptions.--
                                  (I) Certain housing.--The 
                                limitation under clause (i) 
                                shall not apply in the case of 
                                assistance under a contract for 
                                housing consisting of single 
                                family properties, or for 
                                dwelling units that are 
                                specifically made available for 
                                households comprised of elderly 
                                families, disabled families, 
                                and families receiving 
                                supportive services. For 
                                purposes of the preceding 
                                sentence, the term ``single 
                                family properties'' means 
                                buildings with no more than 
                                four dwelling units.
                                  (II) Certain areas.--With 
                                respect to areas in which fewer 
                                than 75 percent of families 
                                issued vouchers become 
                                participants in the program, 
                                the public housing agency has 
                                established the payment 
                                standard at 110 percent of the 
                                fair market rent for all census 
                                tracts in the area for the 
                                previous six months, and the 
                                public housing agency grants an 
                                automatic extension of 90 days 
                                (or longer) to families with 
                                vouchers who are attempting to 
                                find housing, clause (i) shall 
                                be applied by substituting ``50 
                                percent'' for ``25 percent''.

           *       *       *       *       *       *       *

                  (F) Contract term.--A housing assistance 
                payment contract pursuant to this paragraph 
                between a public housing agency and the owner 
                of a structure may have a term of up to [10 
                years] 15 years, subject to the availability of 
                sufficient appropriated funds for the purpose 
                of renewing expiring contracts for assistance 
                payments, as provided in appropriations Acts 
                and in the agency's annual contributions 
                contract with the Secretary, and to annual 
                compliance with the inspection requirements 
                under paragraph (8), except that the agency 
                shall not be required to make annual 
                inspections of each assisted unit in the 
                development. The contract may specify 
                additional conditions for its continuation. If 
                the units covered by the contract are owned by 
                the agency, the term of the contract shall be 
                agreed upon by the agency and the unit of 
                general local government or other entity 
                approved by the Secretary in the manner 
                provided under paragraph (11).
                  (G) Extension of contract term.--A public 
                housing agency may enter into a contract with 
                the owner of a structure assisted under a 
                housing assistance payment contract pursuant to 
                this paragraph to extend the term of the 
                underlying housing assistance payment contract 
                for such period as the agency determines to be 
                appropriate to achieve long-term affordability 
                of the housing or to expand housing 
                opportunities. Such contract may, at the 
                election of the public housing agency and the 
                owner of the structure, specify that such 
                contract shall be extended for renewal terms of 
                up to 15 years each, if the agency makes the 
                determination required by this subparagraph and 
                the owner is in compliance with the terms of 
                the contract. Such a contract shall provide 
                that the extension of such term shall be 
                contingent upon the future availability of 
                appropriated funds for the purpose of renewing 
                expiring contracts for assistance payments, as 
                provided in appropriations Acts, and may 
                obligate the owner to have such extensions of 
                the underlying housing assistance payment 
                contract accepted by the owner and the 
                successors in interest of the owner. A public 
                housing agency may agree to enter into such a 
                contract at the time it enters into the initial 
                agreement for a housing assistance payment 
                contract or at any time thereafter that is 
                before the expiration of the housing assistance 
                payment contract.
                  (H) Rent calculation.--A housing assistance 
                payment contract pursuant to this paragraph 
                shall establish rents for each unit assisted in 
                an amount that does not exceed 110 percent of 
                the applicable fair market rental (or any 
                exception payment standard approved by the 
                Secretary pursuant to paragraph (1)(D)), except 
                that if a contract covers a dwelling unit that 
                has been allocated low-income housing tax 
                credits pursuant to section 42 of the Internal 
                Revenue Code of 1986 (26 U.S.C. 42) and is not 
                located in a qualified census tract (as such 
                term is defined in subsection (d) of such 
                section 42), the rent for such unit may be 
                established at any level that does not exceed 
                the rent charged for comparable units in the 
                building that also receive the low-income 
                housing tax credit but do not have additional 
                rental assistance, except that in the case of a 
                contract unit that has been allocated low-
                income housing tax credits and for which the 
                rent limitation pursuant to such section 42 is 
                less than the amount that would otherwise be 
                permitted under this subparagraph, the rent for 
                such unit may, in the sole discretion of a 
                public housing agency, be established at the 
                higher section 8 rent, subject only to 
                paragraph (10)(A). The rents established by 
                housing assistance payment contracts pursuant 
                to this paragraph may vary from the payment 
                standards established by the public housing 
                agency pursuant to paragraph (1)(B), but shall 
                be subject to paragraph (10)(A).
                  (I) Rent adjustments.--A housing assistance 
                payments contract pursuant to this paragraph 
                shall provide for rent adjustments, except 
                that--
                          (i) the adjusted rent for any unit 
                        assisted shall be reasonable in 
                        comparison with rents charged for 
                        comparable dwelling units in the 
                        private, unassisted, local market and 
                        may not exceed the maximum rent 
                        permitted under subparagraph (H), 
                        except that the contract may provide 
                        that the maximum rent permitted for a 
                        dwelling unit shall not be less than 
                        the initial rent for the dwelling unit 
                        under the initial housing assistance 
                        payments contract covering the unit; 
                        and

           *       *       *       *       *       *       *

                  (J) Tenant selection.--A public housing 
                agency shall select families to receive 
                project-based assistance pursuant to this 
                paragraph from its waiting list for assistance 
                under this subsection. Eligibility for such 
                project-based assistance shall be subject to 
                the provisions of section 16(b) that apply to 
                tenant-based assistance. The agency may 
                establish preferences or criteria for selection 
                for a unit assisted under this paragraph that 
                are consistent with the public housing agency 
                plan for the agency approved under section 5A. 
                Any family who resides in a dwelling unit 
                proposed to be assisted under this paragraph, 
                or in a unit to be replaced by a proposed unit 
                to be assisted under this paragraph shall be 
                given an absolute preference for selection for 
                placement in the proposed unit, if the family 
                is otherwise eligible for assistance under this 
                subsection. Any family that rejects an offer of 
                project-based assistance under this paragraph 
                or that is rejected for admission to a 
                structure by the owner or manager of a 
                structure assisted under this paragraph shall 
                retain its place on the waiting list as if the 
                offer had not been made. [The owner or manager 
                of a structure assisted under this paragraph 
                shall not admit any family to a dwelling unit 
                assisted under a contract pursuant to this 
                paragraph other than a family referred by the 
                public housing agency from its waiting list. 
                Subject to its waiting list policies and 
                selection preferences, a public housing agency 
                may place on its waiting list a family referred 
                by the owner or manager of a structure and may 
                maintain a separate waiting list for assistance 
                under this paragraph, but only if all families 
                on the agency's waiting list for assistance 
                under this subsection are permitted to place 
                their names on the separate list.] A public 
                housing agency may establish and utilize 
                procedures for maintaining site-based waiting 
                lists under which applicants may apply directly 
                at, or otherwise designate to the public 
                housing agency, the project or projects in 
                which they seek to reside, except that all 
                applicants on the waiting list of an agency for 
                assistance under this subsection shall be 
                permitted to place their names on such separate 
                list. All such procedures shall comply with 
                title VI of the Civil Rights Act of 1964, the 
                Fair Housing Act, and other applicable civil 
                rights laws. The owner or manager of a 
                structure assisted under this paragraph shall 
                not admit any family to a dwelling unit 
                assisted under a contract pursuant to this 
                paragraph other than a family referred by the 
                public housing agency from its waiting list, or 
                a family on a site-based waiting list that 
                complies with the requirements of this 
                subparagraph. A public housing agency shall 
                fully disclose to each applicant each option in 
                the selection of a project in which to reside 
                that is available to the applicant.

           *       *       *       *       *       *       *

                  (L) Use in cooperative housing and elevator 
                buildings.--A public housing agency may enter 
                into a housing assistance payments contract 
                under this paragraph with respect to--
                          (i) dwelling units in cooperative 
                        housing;
                          (ii) notwithstanding subsection (c), 
                        dwelling units in a high-rise elevator 
                        project, including such a project that 
                        is occupied by families with children, 
                        without review and approval of the 
                        contract by the Secretary.
                  (M) Reviews.--
                          (i) Subsidy layering.--A subsidy 
                        layering review in accordance with 
                        section 102(d) of the Department of 
                        Housing and Urban Development Reform 
                        Act of 1989 (42 U.S.C. 3545(d)) shall 
                        not be required for assistance under 
                        this subparagraph in the case of a 
                        housing assistance payments contract 
                        for an existing structure, or if a 
                        subsidy layering review has been 
                        conducted by the applicable State or 
                        local agency.
                          (ii) Environmental review.--A public 
                        housing agency shall not be required to 
                        undertake any environmental review 
                        before entering into a housing 
                        assistance payments contract under this 
                        paragraph for an existing structure, 
                        except to the extent such a review is 
                        otherwise required by law or 
                        regulation.
                  (N) Leases and tenancy.--Assistance provided 
                under this paragraph shall be subject to the 
                provisions of paragraph (7), except that 
                subparagraph (A) of such paragraph shall not 
                apply.

           *       *       *       *       *       *       *

          (21) Performance assessments.--
                  (A) Establishment.--The Secretary shall, by 
                regulation, establish standards and procedures 
                for assessing the performance of public housing 
                agencies in carrying out the programs for 
                tenant-based rental assistance under this 
                subsection and for homeownership assistance 
                under subsection (y).
                  (B) Contents.--The standards and procedures 
                under this paragraph shall provide for 
                assessment of the performance of public housing 
                agencies in the following areas:
                          (i) Quality of dwelling units 
                        obtained using such assistance.
                          (ii) Extent of utilization of 
                        assistance amounts provided to the 
                        agency and of authorized vouchers.
                          (iii) Timeliness and accuracy of 
                        reporting by the agency to the 
                        Secretary.
                          (iv) Effectiveness in carrying out 
                        policies to achieve deconcentration of 
                        poverty.
                          (v) Reasonableness of rent burdens, 
                        consistent with public housing agency 
                        responsibilities under section 
                        8(o)(1)(E)(iii).
                          (vi) Accurate rent calculations and 
                        subsidy payments.
                          (vii) Effectiveness in carrying out 
                        family self-sufficiency activities.
                          (viii) Timeliness of actions related 
                        to landlord participation
                          (ix) Such other areas as the 
                        Secretary considers appropriate.
                  (C) Periodic assessment.--Using the standards 
                and procedures established under this 
                paragraph, the Secretary shall conduct an 
                assessment of the performance of each public 
                housing agency carrying out a program referred 
                to in subparagraph (A) and shall submit a 
                report to the Congress regarding the results of 
                each such assessment.
  (q) Administrative Fees.--
          (1) Fee for ongoing costs of administration.--
                  (A) * * *
                  [(B) Fiscal year 1999.--
                          [(i) Calculation.--For fiscal year 
                        1999, the fee for each month for which 
                        a dwelling unit is covered by an 
                        assistance contract shall be--
                                  [(I) in the case of a public 
                                housing agency that, on an 
                                annual basis, is administering 
                                a program for not more than 600 
                                dwelling units, 7.65 percent of 
                                the base amount; and
                                  [(II) in the case of an 
                                agency that, on an annual 
                                basis, is administering a 
                                program for more than 600 
                                dwelling units (aa) for the 
                                first 600 units, 7.65 percent 
                                of the base amount, and (bb) 
                                for any additional dwelling 
                                units under the program, 7.0 
                                percent of the base amount.
                          [(ii) Base amount.--For purposes of 
                        this subparagraph, the base amount 
                        shall be the higher of--
                                  [(I) the fair market rental 
                                established under section 8(c) 
                                of this Act (as in effect 
                                immediately before the 
                                effective date under section 
                                503(a) of the Quality Housing 
                                and Work Responsibility Act of 
                                1998) for fiscal year 1993 for 
                                a 2-bedroom existing rental 
                                dwelling unit in the market 
                                area of the agency, and
                                  [(II) the amount that is the 
                                lesser of (aa) such fair market 
                                rental for fiscal year 1994, or 
                                (bb) 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.
                  [(C) 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 public housing 
                agencies 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.]
                  (B) Calculation.--The fee under this 
                subsection shall--
                          (i) be payable to each public housing 
                        agency for each month for which a 
                        dwelling unit is covered by an 
                        assistance contract;
                          (ii) until superseded through 
                        subsequent rulemaking, be based on the 
                        per-unit fee payable to the agency in 
                        fiscal year 2003, updated for each 
                        subsequent year as specified in 
                        subsection (iv);
                          (iii) include an amount for the cost 
                        of issuing voucher to new participants;
                          (iv) be updated each year using an 
                        index of changes in wage data or other 
                        objectively measurable data that 
                        reflect the costs of administering the 
                        program for such assistance, as 
                        determined by the Secretary; and
                          (v) include an amount for the cost of 
                        family self-sufficiency coordinators, 
                        as provided in section 23(h)(1).
                  (C) Publication.--The Secretary shall cause 
                to be published in the Federal Register the fee 
                rate for each geographic area.

           *       *       *       *       *       *       *

          (4) Applicability.--This subsection shall apply to 
        fiscal year [1999] 2007 and fiscal years thereafter.
  (r) Portability.--(1) * * *
  (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. The 
agency shall absorb the family into its program for voucher 
assistance under this section and shall have priority to 
receive additional funding from the Secretary for the housing 
assistance provided for such family from amounts made available 
pursuant to subsection (dd)(4)(B).

           *       *       *       *       *       *       *

  (t) Enhanced Vouchers.--
          (1) In general.--Enhanced voucher assistance under 
        this subsection for a family shall be voucher 
        assistance under subsection (o), except that under such 
        enhanced voucher assistance--
                  (A) * * *
                  (B) the assisted family may elect to remain 
                in the same project in which the family was 
                residing on the date of the eligibility event 
                for the project, regardless of unit and family 
                size standards normally used by the 
                administering agency (except that tenants may 
                be required to move to units of appropriate 
                size if available on the premises), and if, 
                during any period the family makes such an 
                election and continues to so reside, the rent 
                for the dwelling unit of the family in such 
                project exceeds the applicable payment standard 
                established pursuant to subsection (o) for the 
                unit, the amount of rental assistance provided 
                on behalf of the family shall be determined 
                using a payment standard that is equal to the 
                rent for the dwelling unit (as such rent may be 
                increased from time-to-time), subject to 
                paragraph (10)(A) of subsection (o) and any 
                other reasonable limit prescribed by the 
                Secretary, except that a limit shall not be 
                considered reasonable for purposes of this 
                subparagraph if it adversely affects such 
                assisted families;

           *       *       *       *       *       *       *

                  (D) if the [income] annual adjusted income of 
                the assisted family declines to a significant 
                extent, the percentage of [income] annual 
                adjusted income paid by the family for rent 
                shall not exceed the greater of 30 percent or 
                the percentage of [income] annual adjusted 
                income paid at the time of the eligibility 
                event for the project.

           *       *       *       *       *       *       *

  (y) Homeownership Option.--
          (1) * * *

           *       *       *       *       *       *       *

          (7) Downpayment assistance.--
                  [(A) Authority.--A public housing agency may, 
                in lieu of providing monthly assistance 
                payments under this subsection on behalf of a 
                family eligible for such assistance and at the 
                discretion of the public housing agency, 
                provide assistance for the family in the form 
                of a single grant to be used only as a 
                contribution toward the downpayment required in 
                connection with the purchase of a dwelling for 
                fiscal year 2000 and each fiscal year 
                thereafter to the extent provided in advance in 
                appropriations Acts.
                  [(B) Amount.--The amount of a downpayment 
                grant on behalf of an assisted family may not 
                exceed the amount that is equal to the sum of 
                the assistance payments that would be made 
                during the first year of assistance on behalf 
                of the family, based upon the income of the 
                family at the time the grant is to be made.]
                  (A) In general.--Subject to the provisions of 
                this paragraph, in the case of a family on 
                whose behalf rental assistance under section 
                8(o) has been provided for a period of not less 
                than 12 months prior to the date of receipt of 
                downpayment assistance under this paragraph, a 
                public housing agency may, in lieu of providing 
                monthly assistance payments under this 
                subsection on behalf of a family eligible for 
                such assistance and at the discretion of the 
                agency, provide a downpayment assistance grant 
                in accordance with subparagraph (B).
                  (B) Grant requirements.--A downpayment 
                assistance grant under this paragraph--
                          (i) shall be used by the family only 
                        as a contribution toward the 
                        downpayment and reasonable and 
                        customary closing costs required in 
                        connection with the purchase of a home;
                          (ii) shall be in the form of a single 
                        one-time grant; and
                          (iii) may not exceed $10,000.
                  (C) No effect on obtaining outside sources 
                for downpayment assistance.--This Act may not 
                be construed to prohibit a public housing 
                agency from providing downpayment assistance to 
                families from sources other than a grant 
                provided under this Act, or as determined by 
                the public housing agency.

           *       *       *       *       *       *       *

  [(dd) Tenant-Based Contract Renewals.--Subject to amounts 
provided in appropriation Acts, starting in fiscal year 1999, 
the Secretary shall renew all expiring tenant-based annual 
contribution contracts under this section by applying an 
inflation factor based on local or regional factors to an 
allocation baseline. The allocation baseline shall be 
calculated by including, at a minimum, amounts sufficient to 
ensure continued assistance for the actual number of families 
assisted as of October 1, 1997, with appropriate upward 
adjustments for incremental assistance and additional families 
authorized subsequent to that date.]
  (dd) Tenant-Based Vouchers.--
          (1) Authorization of appropriations.--There are 
        authorized to be appropriated, for each of fiscal years 
        2008 through 2012, such sums as may be necessary for 
        tenant-based assistance under subsection (o) for the 
        following purposes:
                  (A) To renew all expiring annual 
                contributions contracts for tenant-based rental 
                assistance.
                  (B) To provide tenant-based rental assistance 
                for--
                          (i) relocation and replacement of 
                        housing units that are demolished or 
                        disposed of pursuant to the Omnibus 
                        Consolidated Rescissions and 
                        Appropriations Act of 1996 (Public Law 
                        104-134);
                          (ii) conversion of section 23 
                        projects to assistance under this 
                        section;
                          (iii) the family unification program 
                        under subsection (x) of this section;
                          (iv) relocation of witnesses in 
                        connection with efforts to combat crime 
                        in public and assisted housing pursuant 
                        to a request from a law enforcement or 
                        prosecution agency;
                          (v) enhanced vouchers authorized 
                        under subsection (t) of this section;
                          (vi) vouchers in connection with the 
                        HOPE VI program under section 24;
                          (vii) demolition or disposition of 
                        public housing units pursuant to 
                        section 18 of the United States Housing 
                        Act of 1937 (42 U.S.C. 1437p);
                          (viii) mandatory and voluntary 
                        conversions of public housing to 
                        vouchers, pursuant to sections 33 and 
                        22 of the United States Housing Act of 
                        1937, respectively (42 U.S.C. 1437z-5, 
                        1437t);
                          (ix) vouchers necessary to comply 
                        with a consent decree or court order;
                          (x) vouchers to replace dwelling 
                        units that cease to receive project-
                        based assistance under subsection (b), 
                        (c), (d), (e), or (v) of this section;
                          (xi) tenant protection assistance, 
                        including replacement and relocation 
                        assistance; and
                          (xii) emergency voucher assistance 
                        for the protection of victims of 
                        domestic violence, dating violence, 
                        sexual assault, or stalking.
                Subject only to the availability of sufficient 
                amounts provided in appropriation Acts, the 
                Secretary shall provide tenant-based rental 
                assistance to replace all dwelling units that 
                cease to be available as assisted housing as a 
                result of clause (i), (ii), (v), (vi), (vii), 
                (viii), or (x).
          (2) Allocation of renewal funding among public 
        housing agencies.--
                  (A) From amounts appropriated for each year 
                pursuant to paragraph (1)(A), the Secretary 
                shall provide renewal funding for each public 
                housing agency--
                          (i) based on leasing and cost data 
                        from the preceding calendar year, as 
                        adjusted by an annual adjustment factor 
                        to be established by the Secretary, 
                        which shall be established using the 
                        smallest geographical areas for which 
                        data on changes in rental costs are 
                        annually available;
                          (ii) by making any adjustments 
                        necessary to provide for the first-time 
                        renewal of vouchers funded under 
                        paragraph (1)(B);
                          (iii) by making any adjustments 
                        necessary for full year funding of 
                        vouchers ported in the prior calendar 
                        year under subsection (r)(2); and
                          (iv) by making such other adjustments 
                        as the Secretary considers appropriate, 
                        including adjustments necessary to 
                        address changes in voucher utilization 
                        rates and voucher costs related to 
                        natural and other major disasters.
                  (B) Leasing and cost data.--For purposes of 
                subparagraph (A)(i), leasing and cost data 
                shall be calculated annually by using the 
                average for the preceding calendar year. Such 
                leasing and cost data shall be adjusted to 
                include vouchers that were set aside under a 
                commitment to provide project-based assistance 
                under subsection (o)(13) and to exclude amounts 
                funded through advances under paragraph (3). 
                Such leasing and cost data shall not include 
                funds not appropriated for tenant-based 
                assistance under section 8(o), unless the 
                agency's funding was prorated in the prior year 
                and the agency used other funds to maintain 
                vouchers in use.
                  (C) Overleasing.--For the purpose of 
                determining allocations under subsection 
                (A)(i), the leasing rate calculated for the 
                prior calendar year may exceed an agency's 
                authorized voucher level, except that such 
                calculation in 2009 shall not include amounts 
                resulting from a leasing rate in excess of 103 
                percent of an agency's authorized vouchers in 
                2008 which results from the use of accumulated 
                amounts, as referred to in paragraph (4)(A).
                  (D) Moving to work; housing innovation 
                program.--Notwithstanding subparagraphs (A) and 
                (B), each public housing agency participating 
                at any time in the moving to work demonstration 
                under section 204 of the Departments of 
                Veterans Affairs and Housing and Urban 
                Development, and Independent Agencies 
                Appropriations Act, 1996 (42 U.S.C. 1437f note) 
                or in the housing innovation program under 
                section 36 of this Act shall be funded pursuant 
                to its agreement under such program and shall 
                be subject to any pro rata adjustment made 
                under subparagraph (E)(i).
                  (E) Pro rata allocation.--
                          (i) Insufficient funds.--To the 
                        extent that amounts made available for 
                        a fiscal year are not sufficient to 
                        provide each public housing agency with 
                        the full allocation for the agency 
                        determined pursuant to subparagraphs 
                        (A) and (D), the Secretary shall reduce 
                        such allocation for each agency on a 
                        pro rata basis, except that renewal 
                        funding of enhanced vouchers under 
                        section 8(t) shall not be subject to 
                        such proration.
                          (ii) Excess funds.--To the extent 
                        that amounts made available for a 
                        fiscal year exceed the amount necessary 
                        to provide each housing agency with the 
                        full allocation for the agency 
                        determined pursuant to subparagraphs 
                        (A) and (D), such excess amounts shall 
                        be used for the purposes specified in 
                        subparagraphs (B) and (C) of paragraph 
                        (4).
                  (F) Prompt funding allocation.--The Secretary 
                shall allocate all funds under this subsection 
                for each year before the latter of (i) February 
                15, or (ii) the expiration of the 45-day period 
                beginning upon the enactment of the 
                appropriations Act funding such renewals.
          (3) Advances.--
                  (A) Authority.--During the last 3 months of 
                each calendar year, the Secretary shall provide 
                amounts to any public housing agency, at the 
                request of the agency, in an amount up to two 
                percent of the allocation for the agency for 
                such calendar year, subject to subparagraph 
                (C).
                  (B) Use.--Amounts advanced under subparagraph 
                (A) may be used to pay for additional voucher 
                costs, including costs related to temporary 
                overleasing.
                  (C) Use of prior year amounts.--During the 
                last 3 months of a calendar year, if amounts 
                previously provided to a public housing agency 
                for tenant-based assistance for such year or 
                for previous years remain unobligated and 
                available to the agency--
                          (i) the agency shall exhaust such 
                        amounts to cover any additional voucher 
                        costs under subparagraph (B) before 
                        amounts advanced under subparagraph (A) 
                        may be so used; and
                          (ii) the amount that may be advanced 
                        under subparagraph (A) to the agency 
                        shall be reduced by an amount equal to 
                        the total of such previously provided 
                        and unobligated amounts.
                  (D) Repayment.--Amounts advanced under 
                subparagraph (A) in a calendar year shall be 
                repaid to the Secretary in the subsequent 
                calendar year by reducing the amounts made 
                available for such agency for such subsequent 
                calendar year pursuant to allocation under 
                paragraph (2) by an amount equal to the amount 
                so advanced to the agency.
          (4) Recapture.--
                  (A) In general.--The Secretary shall 
                recapture, from amounts provided under the 
                annual contributions contract for a public 
                housing agency for a calendar year, all 
                accumulated amounts allocated under paragraph 
                (2) and from previous years that are unused by 
                the agency at the end of each calendar year 
                except--
                          (i) with respect to the recapture 
                        under this subparagraph at the end of 
                        2007, an amount equal to one twelfth 
                        the amount allocated to the public 
                        housing agency for such year pursuant 
                        to paragraph (2)(A); and
                          (ii) with respect to the recapture 
                        under this subparagraph at the end of 
                        each of 2008, 2009, 2010, and 2011, an 
                        amount equal to 5 percent of such 
                        amount allocated to the agency for such 
                        year. Notwithstanding any other 
                        provision of law, each public housing 
                        agency may retain all amounts not 
                        authorized to be recaptured under this 
                        subparagraph, and may use such amounts 
                        for all authorized purposes.
                  (B) Reallocation.--Not later than May 1 of 
                each calendar year, the Secretary shall--
                          (i) calculate the aggregate unused 
                        amounts for the preceding year 
                        recaptured pursuant to subparagraph 
                        (A);
                          (ii) set aside and make available 
                        such amounts as the Secretary considers 
                        appropriate to reimburse public housing 
                        agencies for increased costs related to 
                        portability and family self-sufficiency 
                        activities during such year; and
                          (iii) reallocate all remaining 
                        amounts among public housing agencies, 
                        with priority given based on the extent 
                        to which an agency has utilized the 
                        amount allocated under paragraph (2) 
                        for the agency to serve eligible 
                        families.
                  (C) Use.--Amounts reallocated to a public 
                housing agency pursuant to subparagraph 
                (B)(iii) may be used only to increase voucher 
                leasing rates as provided under paragraph 
                (2)(C).

           *       *       *       *       *       *       *


                    eligibility for assisted housing

  Sec. 16. (a) Income Eligibility for Public Housing.--
          (1) * * *
          (2) PHA income mix.--
                  (A) Targeting.--Except as provided in 
                paragraph (4), of the public housing dwelling 
                units of a public housing agency made available 
                for occupancy in any fiscal year by eligible 
                families, not less than 40 percent shall be 
                occupied by families whose incomes at the time 
                of commencement of occupancy do not exceed the 
                higher of (i) the poverty line (as such term is 
                defined in section 673 of the Omnibus Budget 
                Reconciliation Act of 1981 (42 U.S.C. 9902), 
                including any revision required by such 
                section) applicable to a family of the size 
                involved, or (ii) 30 percent of the area median 
                income, as determined by the Secretary with 
                adjustments for smaller and larger families; 
                except that the Secretary may establish income 
                ceilings higher or lower than 30 percent of the 
                area median income on the basis of the 
                Secretary's findings that such variations are 
                necessary because of unusually high or low 
                family incomes; and except that clause (i) of 
                this sentence shall not apply in the case of 
                families residing in Puerto Rico or any other 
                territory or possession of the United States.

           *       *       *       *       *       *       *

  (b) Income Eligibility for Tenant-Based Section 8 
Assistance.--
          (1) In general.--Of the families initially provided 
        tenant-based assistance under section 8 by a public 
        housing agency in any fiscal year, not less than 75 
        percent shall be families whose incomes do not exceed 
        the higher of (A) the poverty line (as such term is 
        defined in section 673 of the Omnibus Budget 
        Reconciliation Act of 1981 (42 U.S.C. 9902), including 
        any revision required by such section) applicable to a 
        family of the size involved, or (B) 30 percent of the 
        area median income, as determined by the Secretary with 
        adjustments for smaller and larger families; except 
        that the Secretary may establish income ceilings higher 
        or lower than 30 percent of the area median income on 
        the basis of the Secretary's findings that such 
        variations are necessary because of unusually high or 
        low family incomes; and except that clause (A) of this 
        sentence shall not apply in the case of families 
        residing in Puerto Rico or any other territory or 
        possession of the United States.

           *       *       *       *       *       *       *

  (c) Income Eligibility for Project-Based Section 8 
Assistance.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Targeting.--For each project assisted under a 
        contract for project-based assistance, of the dwelling 
        units that become available for occupancy in any fiscal 
        year that are assisted under the contract, not less 
        than 40 percent shall be available for leasing only by 
        families whose incomes at the time of commencement of 
        occupancy do not exceed the higher of (A) the poverty 
        line (as such term is defined in section 673 of the 
        Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 
        9902), including any revision required by such section) 
        applicable to a family of the size involved, or (B) 30 
        percent of the area median income, as determined by the 
        Secretary with adjustments for smaller and larger 
        families; except that the Secretary may establish 
        income ceilings higher or lower than 30 percent of the 
        area median income on the basis of the Secretary's 
        findings that such variations are necessary because of 
        unusually high or low family incomes; and except that 
        clause (A) of this sentence shall not apply in the case 
        of families residing in Puerto Rico or any other 
        territory or possession of the United States.

           *       *       *       *       *       *       *

  (e) Eligibility for Assistance Based on Assets.--
          (1) Limitation on assets.--Subject to paragraph (3) 
        and notwithstanding any other provision of this Act, a 
        dwelling unit assisted under this Act may not be rented 
        and assistance under this Act may not be provided, 
        either initially or at each recertification of family 
        income, to any family--
                  (A) whose net family assets exceed $100,000, 
                as such amount is adjusted annually by applying 
                an inflationary factor as the Secretary 
                considers appropriate; or
                  (B) who has a present ownership interest in, 
                and a legal right to reside in, real property 
                that is suitable for occupancy as a residence, 
                except that the prohibition under this 
                subparagraph shall not apply to--
                          (i) any property for which the family 
                        is receiving assistance under this Act;
                          (ii) any person that is a victim of 
                        domestic violence; or
                          (iii) any family that is making a 
                        good faith effort to sell such 
                        property.
          (2) Net family assets.--
                  (A) In general.--For purposes of this 
                subsection, the term ``net family assets'' 
                means, for all members of the household, the 
                net cash value of all assets after deducting 
                reasonable costs that would be incurred in 
                disposing of real property, savings, stocks, 
                bonds, and other forms of capital investment. 
                Such term does not include interests in Indian 
                trust land, equity accounts in homeownership 
                programs of the Department of Housing and Urban 
                Development, or Family Self Sufficiency 
                accounts.
                  (B) Exclusions.--Such term does not include--
                          (i) the value of personal property, 
                        except for items of personal property 
                        of significant value, as the public 
                        housing agency may determine;
                          (ii) the value of any retirement 
                        account;
                          (iii) any amounts recovered in any 
                        civil action or settlement based on a 
                        claim of malpractice, negligence, or 
                        other breach of duty owed to a member 
                        of the family and arising out of law, 
                        that resulted in a member of the family 
                        being disabled (under the meaning given 
                        such term in section 1614 of the Social 
                        Security Act (42 U.S.C. 1382c)); and
                          (iv) the value of any Coverdell 
                        education savings account under section 
                        530 of the Internal Revenue Code of 
                        1986 or any qualified tuition program 
                        under section 529 of such Code.
                  (C) Trust funds.--In cases where a trust fund 
                has been established and the trust is not 
                revocable by, or under the control of, any 
                member of the family or household, the value of 
                the trust fund shall not be considered an asset 
                of a family if the fund continues to be held in 
                trust. Any income distributed from the trust 
                fund shall be considered income for purposes of 
                section 3(b) and any calculations of annual 
                family income, except in the case of medical 
                expenses for a minor.
                  (D) Self-certification.--A public housing 
                agency or owner may determine the net assets of 
                a family, for purposes of this section, based 
                on the amounts reported by the family at the 
                time the agency or owner reviews the family's 
                income.
          (3) Compliance for public housing dwelling units.--
        When recertifying family income with respect to 
        families residing in public housing dwelling units, a 
        public housing agency may, in the discretion of the 
        agency and only pursuant to a policy that is set forth 
        in the public housing agency plan under section 5A for 
        the agency, choose not to enforce the limitation under 
        paragraph (1).
          (4) Authority to delay evictions.--In the case of a 
        family residing in a dwelling unit assisted under this 
        Act who does not comply with the limitation under 
        paragraph (1), the public housing agency or project 
        owner may delay eviction or termination of the family 
        based on such noncompliance for a period of not more 
        than 6 months.

           *       *       *       *       *       *       *


SEC. 23. FAMILY SELF-SUFFICIENCY PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  (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.]
          (1) Section 8 fees.--
                  (A) In general.--The Secretary shall 
                establish a fee under section 8(q) for the 
                costs incurred in administering the self-
                sufficiency program under this section to 
                assist families receiving voucher assistance 
                through section 8(o).
                  (B) Eligibility for fee.--The fee shall 
                provide funding for family self-sufficiency 
                coordinators as follows:
                          (i) Base fee.--A public housing 
                        agency serving 25 or more participants 
                        in the family self-sufficiency program 
                        under this section shall receive a fee 
                        equal to the costs of employing one 
                        full-time family self-sufficiency 
                        coordinator. An agency serving fewer 
                        than 25 such participants shall receive 
                        a prorated fee.
                          (ii) Additional fee.--An agency that 
                        meets minimum performance standards 
                        shall receive an additional fee 
                        sufficient to cover the costs of 
                        employing a second family self-
                        sufficiency coordinator if the agency 
                        has 75 or more participating families, 
                        and a third such coordinator if it has 
                        125 or more participating families.
                          (iii) Previously funded agencies.--An 
                        agency that received funding from the 
                        Department of Housing and Urban 
                        Development for more than three such 
                        coordinators in any of fiscal years 
                        1998 through 2007 shall receive funding 
                        for the highest number of coordinators 
                        funded in a single fiscal year during 
                        that period, provided they meet 
                        applicable size and performance 
                        standards.
                          (iv) Initial year.--For the first 
                        year in which a public housing agency 
                        exercises its right to develop an 
                        family self-sufficiency program for its 
                        residents, it shall be entitled to 
                        funding to cover the costs of up to one 
                        family self-sufficiency coordinator, 
                        based on the size specified in its 
                        action plan for such program.
                          (v) State and regional agencies.--For 
                        purposes of calculating the family 
                        self-sufficiency portion of the 
                        administrative fee under this 
                        subparagraph, each administratively 
                        distinct part of a State or regional 
                        public housing agency shall be treated 
                        as a separate agency.
                          (vi) Determination of number of 
                        coordinators.--In determining whether a 
                        public housing agency meets a specific 
                        threshold for funding pursuant to this 
                        paragraph, the number of participants 
                        being served by the agency in its 
                        family self-sufficiency program shall 
                        be considered to be the average number 
                        of families enrolled in such agency's 
                        program during the course of the most 
                        recent fiscal year for which the 
                        Department of Housing and Urban 
                        Development has data.
                  (C) Proration.--If insufficient funds are 
                available in any fiscal year to fund all of the 
                coordinators authorized under this section, the 
                first priority shall be given to funding one 
                coordinator at each agency with an existing 
                family self-sufficiency program. The remaining 
                funds shall be prorated based on the number of 
                remaining coordinators to which each agency is 
                entitled under this subparagraph.
                  (D) Recapture.--Any fees allocated under this 
                subparagraph by the Secretary in a fiscal year 
                that have not been spent by the end of the 
                subsequent fiscal year shall be recaptured by 
                the Secretary and shall be available for 
                providing additional fees pursuant to 
                subparagraph (B)(ii).
                  (E) Performance standards.--Within six months 
                after the date of the enactment of this 
                paragraph, the Secretary shall publish a 
                proposed rule specifying the performance 
                standards applicable to funding under clauses 
                (ii) and (iii) of subparagraph (B). Such 
                standards shall include requirements applicable 
                to the leveraging of in-kind services and other 
                resources to support the goals of the family 
                self-sufficiency program.
                  (F) Data collection.--Public housing agencies 
                receiving funding under this paragraph shall 
                collect and report to the Secretary, in such 
                manner as the Secretary shall require, 
                information on the performance of their family 
                self-sufficiency programs.
                  (G) Evaluation.-- The Secretary shall conduct 
                a formal and scientific evaluation of the 
                effectiveness of well-run family self-
                sufficiency programs, using random assignment 
                of participants to the extent practicable. Not 
                later than the expiration of the 4-year period 
                beginning upon the enactment of this paragraph, 
                the Secretary shall submit an interim 
                evaluation report to the Congress. Not later 
                than the expiration of the 8-year period 
                beginning upon such enactment, the Secretary 
                shall submit a final evaluation report to the 
                Congress. There is authorized to be 
                appropriated $10,000,000 to carry out the 
                evaluation under this subparagraph.
                  (H) Incentives for innovation and high 
                performance.--The Secretary may reserve up to 
                10 percent of the amounts made available for 
                administrative fees under this paragraph to 
                provide support to or reward family self-
                sufficiency programs that are particularly 
                innovative or highly successful in achieving 
                the goals of the program.

           *       *       *       *       *       *       *


SEC. 36. HOUSING INNOVATION PROGRAM.

  (a) Purpose.--The purpose of the program under this section 
is to provide public housing agencies and the Secretary the 
flexibility to design and evaluate innovative approaches to 
providing housing assistance that--
          (1) increase housing opportunities for low-income 
        families, including preventing homelessness, 
        rehabilitate or replace housing at risk of physical 
        deterioration or obsolescence, and develop additional 
        affordable housing;
          (2) leverage other Federal, State, and local funding 
        sources, including the low-income housing tax credit 
        program, to expand and preserve affordable housing 
        opportunities, including public housing;
          (3) provide financial incentives and other support 
        mechanisms to families to obtain employment and 
        increase earned income;
          (4) test alternative rent-setting policies to 
        determine whether rent determinations can be simplified 
        and administrative cost savings can be realized while 
        protecting extremely low- and very low-income families 
        from increased rent burdens;
          (5) are subject to rigorous evaluation to test the 
        effectiveness of such innovative approaches; and
          (6) are developed with the support of the local 
        community and with the substantial participation of 
        affected residents.
  (b) Program Authority.--
          (1) Scope.--The Secretary shall carry out a housing 
        innovation program under this section under which the 
        Secretary may designate not more than 60 public housing 
        agencies to participate, at any one time, in the 
        housing innovation program, in accordance with 
        subsections (c) and (d), except that, in addition to 
        such 60 agencies, the Secretary may designate an 
        additional 20 agencies to participate in the program 
        under the terms of subsection (h).
          (2) Duration.--The Secretary may carry out the 
        housing innovation program under this section only 
        during the 10-year period beginning on the date of the 
        enactment of the Section 8 Voucher Reform Act of 2007.
  (c) Participation of Existing MTW Agencies.--
          (1) Existing mtw agencies.--Subject to the 
        requirements of paragraph (2), all existing MTW 
        agencies shall be designated to participate in the 
        program.
          (2) Conditions of participation.--The Secretary shall 
        approve and transfer into the housing innovation 
        program under this section each existing MTW agency 
        that the Secretary determines is not in default under 
        such agreement and which the Secretary also determines 
        is meeting the goals and objectives of its moving to 
        work plan. Each such agency shall, within two years 
        after the date of the enactment of the Section 8 
        Voucher Reform Act of 2007, make changes to its 
        policies that were implemented before such date of 
        enactment in order to comply with the requirements of 
        this section.
  (d) Additional Agencies.--
          (1) Proposals; selection process.--In addition to 
        agencies participating in the program pursuant to 
        subsection (c), the Secretary shall, within 18 months 
        after such date of enactment, select public housing 
        agencies to participate in the program pursuant to a 
        competitive process that meets the following 
        requirements:
                  (A) Any public housing agency may be selected 
                to participate in the program, except that not 
                more than 5 agencies that are near-troubled 
                under the public housing assessment system and/
                or section 8 management assessment program may 
                be selected, and except that any agency for 
                which the Secretary has hired an alternative 
                management entity for such agency or has taken 
                possession of all or any part of such agency's 
                public housing program shall not be eligible 
                for participation. Any near-troubled public 
                housing agency participating in the program 
                shall remain subject to the requirements of 
                this Act governing tenant rent contributions, 
                eligibility, and continued participation, and 
                may not adopt policies described in subsection 
                (e)(4) (relating to rents and requirements for 
                continued occupation and participation).
                  (B) The process provides, to the extent 
                possible based on eligible agencies submitting 
                applications and taking into account existing 
                MTW agencies participating pursuant to 
                subsection (c), for representation among 
                agencies selected of agencies having various 
                characteristics, including both large and small 
                agencies, agencies serving urban, suburban, and 
                rural areas, and agencies in various 
                geographical regions throughout the United 
                States, and which may include the selection of 
                agencies that only administer the voucher 
                program under section 8(o).
                  (C) Any agency submitting a proposal under 
                this paragraph shall have provided notice to 
                residents and the local community, not later 
                than 30 days before the first of the two public 
                meetings required under subparagraph (D).
                  (D) The agency submitting a proposal shall 
                hold two public meetings to receive comments on 
                the agency's proposed application, on the 
                implications of changes under the proposal, and 
                the possible impact on residents.
                  (E) The process includes criteria for 
                selection, as follows:
                          (i) The extent to which the proposal 
                        generally identifies existing rules and 
                        regulations that impede achievement of 
                        the goals and objectives of the 
                        proposal and an explanation of why 
                        participation in the program is 
                        necessary to achieve such goals and 
                        objectives.
                          (ii) The extent of commitment and 
                        funding for carrying out the proposal 
                        by local government agencies and 
                        nonprofit organizations, including the 
                        provision of additional funding and 
                        other services, and the extent of 
                        support for the proposal by residents, 
                        resident advisory boards, and members 
                        of the local community.
                          (iii) The extent to which the agency 
                        has a successful history of 
                        implementing strategies similar to 
                        those set forth in the agency's 
                        proposal.
                          (iv) Whether the proposal pursues a 
                        priority strategy as specified in 
                        paragraph (2). In the case of any 
                        proposal utilizing a such a priority 
                        strategy, the proposal shall be 
                        evaluated based upon--
                                  (I) the extent to which the 
                                proposal is likely to achieve 
                                the objectives of developing 
                                additional housing dwelling 
                                units affordable to extremely 
                                low-, very low-, and low-income 
                                families, and preserving, 
                                rehabilitating, or modernizing 
                                existing public housing 
                                dwelling units; or
                                  (II) the extent to which the 
                                proposal is likely to achieve 
                                the purposes of moving families 
                                toward economic self-
                                sufficiency and increasing 
                                employment rates and wages of 
                                families without imposing a 
                                significant rent burden on the 
                                lowest income families, as well 
                                as such of the additional 
                                purposes as may be identified 
                                in the proposal, which may 
                                include expanding housing 
                                choices utilizing coordinators 
                                for the family self-sufficiency 
                                program under section 23, 
                                making more effective use of 
                                program funds, and improving 
                                program management.
                          (v) Such other factors as the 
                        Secretary may provide, in consultation 
                        with participating agencies, program 
                        stakeholders, and any entity conducting 
                        evaluations pursuant to subsection (f).
          (2) Priority strategies.--For purposes of paragraph 
        (1)(E)(iv), the following are priority strategies:
                  (A) Development, rehabilitation, and 
                financing.--A strategy of development of 
                additional affordable housing dwelling units 
                and/or a strategy for preservation and physical 
                rehabilitation and modernization of existing 
                public housing dwelling units. Such strategies 
                may include innovative financing proposals, 
                leveraging of non-public housing funds 
                (including the low-income housing tax credit 
                program), and combining of funds for assistance 
                under sections 8 and 9. Each such proposal 
                shall include detailed information about the 
                strategies expected to be employed, an 
                explanation of why participation in the program 
                is necessary to employ such strategies, and 
                numerical goals regarding the number of 
                dwelling units to be developed, preserved, or 
                rehabilitated.
                  (B) Rent reforms.--A strategy to implement 
                rent reforms, which shall be designed to help 
                families increase their earned income through 
                rent and other work incentives, and may also 
                test the effectiveness of achieving 
                administrative cost savings without increased 
                rent burdens for extremely low- and very low-
                income families.
          (3) Contract amendment.--After selecting agencies 
        under this subsection, the Secretary shall promptly 
        amend the applicable annual contributions contracts of 
        such agencies to provide that--
                  (A) subject to subparagraph (B), such 
                agencies may implement any policies and 
                activities that are not inconsistent with this 
                section without specifying such policies and 
                activities in such amendment and without 
                negotiating or entering into any other 
                agreements with the Secretary specifying such 
                policies and activities; and
                  (B) the activities to be implemented by an 
                agency under the program in a given year shall 
                be described in and subject to the requirements 
                of the annual plan under subsection (e)(8). 
                Upon the enactment of this section, any agency 
                which has participated in the Moving to Work 
                demonstration may, at its option, be subject to 
                the provisions of this paragraph in lieu of any 
                other agreement required by the Secretary for 
                participation in the program.
          (4) Maintaining participation rate.--If, at any time 
        after the initial selection period under paragraph (1), 
        the number of public housing agencies participating in 
        the program under this section is fewer than 40, the 
        Secretary shall promptly solicit applications from and 
        select public housing agencies to participate in the 
        program under the terms and conditions for application 
        and selection provided in this section to increase the 
        number of agencies participating in the program to 40.
  (e) Program Requirements.--
          (1) Program funds.--
                  (A) In general.--To carry out a housing 
                innovation program under this section, the 
                participating agency may use amounts provided 
                to the agency from the Operating Fund under 
                section 9(e), amounts provided to the agency 
                from the Capital Fund under section 9(d), and 
                amounts provided to the agency for voucher 
                assistance under section 8(o). Such program 
                funds may be used for any activities that are 
                authorized by sections 8(o) or 9, or for other 
                activities that are not inconsistent with this 
                section, which shall include, without 
                limitation--
                          (i) providing capital and operating 
                        assistance, and financing for housing 
                        previously developed or operated 
                        pursuant to a contract between the 
                        Secretary and such agency;
                          (ii) the acquisition, new 
                        construction, rehabilitation, 
                        financing, and provision of capital or 
                        operating assistance for low-income 
                        housing (including housing other than 
                        public housing) and related facilities, 
                        which may be for terms exceeding the 
                        term of the program under this section 
                        in order to secure other financing for 
                        such housing;
                          (iii) costs of site acquisition and 
                        improvement, providing utility 
                        services, demolition, planning, and 
                        administration of activities under this 
                        paragraph;
                          (iv) housing counseling for low-
                        income families in connection with 
                        rental or homeownership assistance 
                        provided under the program;
                          (v) safety, security, law 
                        enforcement, and anticrime activities 
                        appropriate to protect and support 
                        families assisted under the program;
                          (vi) tenant-based rental assistance, 
                        which may include the project-basing of 
                        such assistance; and
                          (vii) appropriate and reasonable 
                        financial assistance that is required 
                        to preserve low-income housing 
                        otherwise assisted under programs 
                        administered by the Secretary or under 
                        State or local low-income housing 
                        programs.
                  (B) Combining funds.--Notwithstanding any 
                other provision of law, a participating agency 
                may combine and use program funds for any 
                activities authorized under this section, 
                except that a participating agency may use 
                funds provided for assistance under section 
                8(o) for activities other than those authorized 
                under section 8(o) only if (i) in the calendar 
                year prior to its participation in the program, 
                the agency utilized not less than 95 percent of 
                such funds allocated for that calendar year for 
                such authorized activities or 95 percent of its 
                authorized vouchers, including vouchers ported 
                in to the agency and vouchers ported out; or 
                (ii) after approval to participate in the 
                program, the agency achieves such utilization 
                for a 12-month period. This subparagraph shall 
                not apply to participating agencies approved by 
                the Secretary to combine funds from sections 8 
                and 9 of the Act prior to enactment of this 
                section.
          (2) Use of program funds.--In carrying out the 
        housing innovation program under this section, each 
        participating agency shall continue to assist--
                  (A) not less than substantially the same 
                number of eligible low-income families under 
                the program as it assisted in the base year for 
                the agency; and
                  (B) a comparable mix of families by family 
                size, subject to adjustment to reflect changes 
                in the agency's waiting list, except that the 
                Secretary may approve exceptions to such 
                requirements for up to 3 years based on 
                modernization or redevelopment activities 
                proposed in an annual plan submitted and 
                approved in accordance with paragraph (8).
        Determinations with respect to the number of families 
        served shall be adjusted based on any allocation of 
        additional vouchers under section 8(o) and to reflect 
        any change in the percentage of program funds that a 
        participating agency receives compared to the base 
        year.
          (3) Retained provisions.--Notwithstanding any other 
        provision of this section, families receiving 
        assistance under this section shall retain the same 
        rights of judicial review of agency action as they 
        would otherwise have had if the agency were not 
        participating in the program, and each participating 
        agency shall comply with the following provisions of 
        this Act:
                  (A) Subsections (a)(2)(A) and (b)(1) of 
                section 16 (relating to targeting for new 
                admissions in the public housing and voucher 
                programs).
                  (B) Section 2(b) (relating to tenant 
                representatives on the public housing agency 
                board of directors).
                  (C) Section 3(b)(2) (relating to definitions 
                for the terms ``low-income families'' and 
                ``very low-income families'').
                  (D) Section 5(A)(e) (relating to the 
                formation of and consultation with a resident 
                advisory board).
                  (E) Sections 6(f)(1) and 8(o)(8)(B) (relating 
                to compliance of units assisted with housing 
                quality standards or other codes).
                  (F) Sections 6(c)(3), 6(c)(4)(i), and 
                8(o)(6)(B) (relating to rights of public 
                housing applicants and existing procedural 
                rights for applicants under section 8(o)).
                  (G) Section 6(k) (relating to grievance 
                procedures for public housing tenants) and 
                comparable procedural rights for families 
                assisted under section 8(o).
                  (H) Section 6(l) (relating to public housing 
                lease requirements), except that for units 
                assisted both with program funds and low-income 
                housing tax credits, the initial lease term may 
                be less than 12 months if required to conform 
                lease terms with such tax credit requirements.
                  (I) Section 7 (relating to designation of 
                housing for elderly and disabled households), 
                except that a participating agency may make 
                such designations(at initial designation or 
                upon renewal) for a term of up to 5 years if 
                the agency includes in its annual plan under 
                paragraph (8) an analysis of the impact of such 
                designations on affected households and such 
                designation is subject to the program 
                evaluation. Any participating agency with a 
                designated housing plan that was approved under 
                the moving to work demonstration may continue 
                to operate under the terms of such plan for a 
                term of 5 years (with an option to renew on the 
                same terms for an additional 5 years) if it 
                includes in its annual plan an analysis of the 
                impact of such designations on affected 
                households and is subject to evaluation under 
                subsection (f).
                  (J) Subparagraphs (C) through (E) of section 
                8(o)(7) (relating to lease requirements and 
                eviction protections for families assisted with 
                tenant-based assistance).
                  (K) Subject to paragraph (1)(B) of this 
                subsection, section 8(o)(13)(B) (relating to a 
                percentage limitation on project-based 
                assistance), except that for purposes of this 
                subparagraph such section shall be applied by 
                substituting ``50 percent'' for ``20 percent''.
                  (L) Section 8(o)(13)(E) (relating to resident 
                choice for tenants of units with project-based 
                vouchers), except with respect to--
                          (i) in the case of agencies 
                        participating in the moving to work 
                        demonstration, any housing assistance 
                        payment contract entered into within 2 
                        years after the enactment of this 
                        section;
                          (ii) project-based vouchers that 
                        replace public housing units;
                          (iii) not more than 10 percent of the 
                        vouchers available to the participating 
                        agency upon entering the housing 
                        innovation program under this section; 
                        and
                          (iv) any project-based voucher 
                        program that is subject to evaluation 
                        under subsection (f).
                  (M) Section 8(r) (relating to portability of 
                voucher assistance), except that a 
                participating agency may receive funding for 
                portability obligations under section 8(dd) in 
                the same manner as other public housing 
                agencies.
                  (N) Subsections (a) and (b) of section 12 
                (relating to payment of prevailing wages).
                  (O) Section 18 (relating to demolition and 
                disposition of public housing).
          (4) Rents and requirements for continued occupancy or 
        participation.--
                  (A) Before policy change.--Before adopting 
                any policy pursuant to participation in the 
                housing innovation program under this section 
                that would make a material change to the 
                requirements of this Act regarding tenant rents 
                or contributions, or conditions of continued 
                occupancy or participation, a participating 
                agency shall complete each of the following 
                actions:
                          (i) The agency shall conduct an 
                        impact analysis of the proposed policy 
                        on families the agency is assisting 
                        under the program under this section 
                        and on applicants on the waiting list, 
                        including analysis of the incidence and 
                        severity of rent burdens greater than 
                        30 percent of adjusted income on 
                        households of various sizes and types 
                        and in various income tiers, that would 
                        result, if any, without application of 
                        the hardship provisions. The analysis 
                        with respect to applicants on the 
                        waiting list may be limited to 
                        demographic data provided by the 
                        applicable consolidated plan, 
                        information provided by the Secretary, 
                        and other generally available 
                        information. The proposed policy, 
                        including provisions for addressing 
                        hardship cases and transition 
                        provisions that mitigate the impact of 
                        any rent increases or changes in the 
                        conditions of continued occupancy or 
                        participation, and data from this 
                        analysis shall be made available for 
                        public inspection for at least 60 days 
                        in advance of the public meeting 
                        described in clause (ii).
                          (ii) The agency shall hold a public 
                        meeting regarding the proposed change, 
                        including the hardship provisions, 
                        which may be combined with a public 
                        meeting on the draft annual plan under 
                        paragraph (8) or the annual report 
                        under paragraph (9).
                          (iii) The board of directors or other 
                        similar governing body of the agency 
                        shall approve the change in public 
                        session.
                          (iv) The agency shall obtain approval 
                        from the Secretary of the annual plan 
                        or plan amendment. The Secretary may 
                        approve a plan or amendment containing 
                        a material change to the requirements 
                        of this Act regarding tenant rents or 
                        contributions, or conditions of 
                        continued occupancy or participation, 
                        only if the agency agrees that such 
                        policy may be included as part of the 
                        national evaluation.
                  (B) After policy change.--After adopting a 
                policy described in subparagraph (A), a program 
                agency shall complete each of the following 
                actions:
                          (i) The agency shall provide adequate 
                        notice to residents, which shall 
                        include a description of the changes in 
                        the public housing lease or 
                        participation agreement that may be 
                        required and of the hardship or 
                        transition protections offered.
                          (ii) In the case of any additional 
                        requirements for continued occupancy or 
                        participation, the agency shall execute 
                        a lease addendum or participation 
                        agreement specifying the requirements 
                        applicable to both the resident and the 
                        agency. A resident may bring a civil 
                        action to enforce commitments of the 
                        agency made through the lease addendum 
                        or participation agreement.
                          (iii) The agency shall reassess rent, 
                        subsidy level, and policies on program 
                        participation no less often than every 
                        two years, which shall include 
                        preparing a revised impact analysis, 
                        and make available to the public the 
                        results of such reassessment and impact 
                        analysis. The requirement under this 
                        clause may be met by sufficiently 
                        detailed interim reports, if any, by 
                        the national evaluating entity.
                          (iv) The agency shall include in the 
                        annual report under paragraph (8) 
                        information sufficient to describe any 
                        hardship requests, including the number 
                        and types of requests made, granted, 
                        and denied, the use of transition 
                        rules, and adverse impacts resulting 
                        from changes in rent or continued 
                        occupancy policies, including actions 
                        taken by the agency to mitigate such 
                        impacts and impacts on families no 
                        longer assisted under the program.
                  (C) Applicability to existing mtw agencies.--
                An existing MTW agency that, before the date of 
                the enactment of this section, implemented 
                material changes to the requirements of this 
                Act regarding tenant rents or contributions, or 
                conditions of continued occupancy or 
                participation, as part of the moving to work 
                demonstration shall not be subject to 
                subparagraph (A) with regard to such previously 
                implemented changes, but shall comply with the 
                requirements of subparagraph (B)(ii) and 
                provide the evaluation and impact analysis 
                required by subparagraph (B)(iii) by the end of 
                the second agency fiscal year ending after such 
                date of enactment.
          (5) Prohibition against decrease in program funds.--
        The amount of program funds a participating agency 
        receives shall not be diminished by its participation 
        in the housing innovation program under this section.
          (6) Submission of information.--As part of the annual 
        report required under subsection (g)(2), each 
        participating agency shall submit information annually 
        to the Secretary regarding families assisted under the 
        program of the agency and comply with any other data 
        submissions required by the Secretary for purposes of 
        evaluation of the program under this section.
          (7) Public and resident participation.--Each 
        participating agency shall provide opportunities for 
        resident and public participation in the annual plan 
        under paragraph (8), as follows:
                  (A) Notice to residents.--
                          (i) Notice.--Each year, the agency 
                        shall provide notice to the low-income 
                        families it serves under the programs 
                        authorized by this section as to the 
                        impact of proposed policy changes and 
                        program initiatives and of the schedule 
                        of resident advisory board and public 
                        meetings for the annual plan.
                          (ii) Meeting.--The agency shall hold 
                        at least one meeting with the resident 
                        advisory board (including 
                        representatives of recipients of 
                        assistance under section 8) to review 
                        the annual plan for each year.
                  (B) Public meeting.--With respect to each 
                annual plan, the agency shall hold at least one 
                annual public meeting to obtain comments on the 
                plan, which may be combined with a meeting to 
                review the annual report. In the case of any 
                agency that administers, in the aggregate, more 
                than 15,000 public housing units and vouchers, 
                the agency shall hold additional meetings in 
                locations that promote attendance by residents 
                and other stakeholders.
                  (C) Public availability.--Before adoption of 
                any annual plan, and not less than 30 days 
                before the public meeting required under 
                subparagraph (A)(ii) with respect to the plan, 
                the agency shall make the proposed annual plan 
                available for public inspection. The annual 
                plan shall be made available for public 
                inspection not less than 30 days before 
                approval by the board of directors (or other 
                similar governing body) of the agency and shall 
                remain publicly available.
                  (D) Board approval.--Before submitting an 
                annual plan or annual report to the Secretary, 
                the plan or report, as applicable, shall be 
                approved in a public meeting by the board of 
                directors or other governing body of the 
                agency.
          (8) Annual plan.--
                  (A) Requirement.--For each year that a 
                participating agency participates in the 
                housing innovation program under this section, 
                the agency shall submit to the Secretary, in 
                lieu of all other planning requirements, an 
                annual plan under this paragraph.
                  (B) Contents.--Each annual plan shall include 
                the following information:
                          (i) A list and description of all 
                        program initiatives and generally 
                        applicable policy changes, including 
                        references to affected provisions of 
                        law or the implementing regulations 
                        affected.
                          (ii) A description and comparison of 
                        changes under the housing innovation 
                        program of the agency from the plan for 
                        such program for the preceding year.
                          (iii) A description of property 
                        redevelopment or portfolio 
                        repositioning strategies and proposed 
                        changes in policies or uses of funds 
                        required to implement such strategies.
                          (iv) Documentation of public and 
                        resident participation sufficient to 
                        comply with the requirements under 
                        paragraphs (4) and (7), including a 
                        copy of any recommendations submitted 
                        in writing by the resident advisory 
                        board of the agency and members of the 
                        public, a summary of comments, and a 
                        description of the manner in which the 
                        recommendations were addressed.
                          (v) Certifications by the agency 
                        that--
                                  (I) the annual plan will be 
                                carried out in conformity with 
                                title VI of the Civil Rights 
                                Act of 1964, the Fair Housing 
                                Act, section 504 of the 
                                Rehabilitation Act of 1973, 
                                title II of the Americans with 
                                Disabilities Act of 1990, and 
                                the rules, standards, and 
                                policies in the approved plan;
                                  (II) the agency will 
                                affirmatively further fair 
                                housing; and
                                  (III) the agency has complied 
                                and will continue to comply 
                                with its obligations under the 
                                national evaluation.
                          (vi) A description of the agency's 
                        local asset management strategy for 
                        public housing properties, which shall 
                        be in lieu of any other asset 
                        management, project based management or 
                        accounting, or other system of 
                        allocating resources and costs to 
                        participating agency assets or cost 
                        centers that the Secretary may 
                        otherwise impose under this Act.
                  (C) Changes.--If the agency proposes to make 
                material changes in policies or initiatives in 
                the plan during the year covered by the plan, 
                the agency shall consult with the resident 
                advisory board for the agency established 
                pursuant to section 5A(e) and the public 
                regarding such changes before their adoption.
                  (D) Approval process.--
                          (i) Timing.--The Secretary shall 
                        review and approve or disapprove each 
                        annual plan submitted to the Secretary 
                        within 45 days after such submission.
                          (ii) Standards for disapproval.--The 
                        Secretary may disapprove a plan only 
                        if--
                                  (I) the Secretary reasonably 
                                determines, based on 
                                information contained in the 
                                annual plan or annual report, 
                                that the agency is not in 
                                compliance with the 
                                requirements of this section;
                                  (II) the annual plan or most 
                                recent annual report is not 
                                consistent with other reliable 
                                information available to the 
                                Secretary; or
                                  (III) the annual plan or 
                                annual report or the agency's 
                                activities under the program 
                                are not otherwise in accordance 
                                with applicable law.
                          (iii) Failure to disapprove.--If a 
                        submitted plan is not disapproved 
                        within 45 days after submission, the 
                        plan shall be considered to be approved 
                        for purposes of this section. The 
                        preceding sentence shall not preclude 
                        judicial review regarding such 
                        compliance pursuant to chapter 7 of 
                        title 5, United States Code, or an 
                        action regarding such compliance under 
                        section 1979 of the Revised Statutes of 
                        the United States (42 U.S.C. 1983).
  (f) Evaluation of Performance.--
          (1) In general.--Not later than the expiration of the 
        one-year period that begins upon selection under 
        subsection (d) of at least half of the number of 
        agencies able to participate in the program under this 
        section, the Secretary shall conduct detailed 
        evaluations of all public housing agencies 
        participating in the program under this section--
                  (A) to determine the level of success of each 
                public housing agency in achieving the purposes 
                of the program under subsection (a); and
                  (B) to identify program models that can be 
                replicated by other agencies to achieve such 
                success.
          (2) Reports.--
                  (A) In general.--The Secretary shall submit 
                three reports to the Congress, as provided in 
                subparagraph (B), evaluating the programs of 
                all public housing agencies participating in 
                the program under this section and all agencies 
                participating in the moving to work 
                demonstration. Each such report shall include 
                findings and recommendations for any 
                appropriate legislative action.
                  (B) Timing.--The reports under this paragraph 
                shall include--
                          (i) an initial report, which shall be 
                        submitted before the expiration of the 
                        3-year period beginning on the date of 
                        the enactment of the Section 8 Voucher 
                        Reform Act of 2007;
                          (ii) an interim report, which shall 
                        be submitted before the expiration of 
                        the 5-year period beginning on such 
                        date of enactment; and
                          (iii) a final report, which shall be 
                        submitted before the expiration of the 
                        10-year period beginning on such date 
                        of enactment.
          (3) Evaluating entity.-- The Secretary may contract 
        out the responsibilities under this paragraphs (1) and 
        (2) to an independent entity that is qualified to 
        perform such responsibilities.
          (4) Performance measures.--The Secretary or the 
        evaluating entity, as applicable, shall establish 
        performance measures, which may include--
                  (A) a baseline performance level against 
                which program activities may be evaluated; and
                  (B) performance measures for--
                          (i) increasing housing opportunities 
                        for extremely low-, very low-, and low-
                        income families, replacing or 
                        rehabilitating housing at risk of 
                        physical deterioration or obsolescence, 
                        and developing additional affordable 
                        housing;
                          (ii) leveraging other Federal, State, 
                        and local funding sources, including 
                        the low-income housing tax credit 
                        program, to expand and preserve 
                        affordable housing opportunities, 
                        including public housing;
                          (iii) moving families to self-
                        sufficiency and increasing employment 
                        rates and wages of families without 
                        imposing a significant rent burden on 
                        the families having the lowest incomes;
                          (iv) reducing administrative costs; 
                        and
                          (v) any other performance measures 
                        that the Secretary or evaluating 
                        entity, as applicable, may establish.
  (g) Recordkeeping, Reports, and Audits.--
          (1) Recordkeeping.--Each public housing agency 
        participating in the program under this section shall 
        keep such records as the Secretary may prescribe as 
        reasonably necessary to disclose the amounts and the 
        disposition of amounts under the program, to ensure 
        compliance with the requirements of this section, and 
        to measure performance.
          (2) Reports.--In lieu of all other reporting 
        requirements, each such agency participating in the 
        program shall submit to the Secretary an annual report 
        in a form and at a time specified by the Secretary. 
        Each annual report shall include the following 
        information:
                  (A) A description, including an annual 
                consolidated financial report, of the sources 
                and uses of funds of the agency under the 
                program, which shall account separately for 
                funds made available under section 8 and 
                subsections (d) and (e) of section 9, and shall 
                compare the agency's actions under the program 
                with its annual plan for the year.
                  (B) An annual audit that complies with the 
                requirements of Circular A-133 of the Office of 
                Management and Budget, including the OMB 
                Compliance Supplement.
                  (C) A description of each hardship exception 
                requested and granted or denied, and of the use 
                of any transition rules.
                  (D) Documentation of public and resident 
                participation sufficient to comply with the 
                requirements under paragraph (7).
                  (E) A comparison of income and the sizes and 
                types of families assisted by the agency under 
                the program compared to those assisted by the 
                agency in the base year.
                  (F) Every two years, an evaluation of rent 
                policies, subsidy level policies, and policies 
                on program participation.
                  (G) A description of any ongoing local 
                evaluations and the results of any local 
                evaluations completed during the year.
          (3) Access to documents by secretary.--The Secretary 
        shall have access for the purpose of audit and 
        examination to any books, documents, papers, and 
        records that are pertinent to assistance in connection 
        with, and the requirements of, this section.
          (4) Access to documents by the comptroller general.--
        The Comptroller General of the United States, or any of 
        the duly authorized representatives of the Comptroller 
        General, shall have access for the purpose of audit and 
        examination to any books, documents, papers, and 
        records that are pertinent to assistance in connection 
        with, and the requirements of, this section.
          (5) Reports regarding evaluations.--The Secretary 
        shall require each public housing agency participating 
        in the program under this section to submit to the 
        Secretary, as part of the agency's annual report under 
        paragraph (2), such information as the Secretary 
        considers appropriate to permit the Secretary to 
        evaluate (pursuant to subsection (f)) the performance 
        and success of the agency in achieving the purposes of 
        the demonstration.
  (h) Additional Program Agencies.--In participating in the 
program under the terms of this subsection, the public housing 
agencies designated for such participation shall be subject to 
the requirements of this section, and the additional following 
requirements:
          (1) Applicability of certain existing provisions.--
        Such agencies shall be subject to the provisions of--
                  (A) subsections (a) and (b) of section 3; and
                  (B) section 8(o), except for paragraph (11) 
                and except that such agencies shall not be 
                required to comply with any provision of such 
                section 8(o) that pursuant to subsection (e)(3) 
                of this section does not apply to agencies that 
                are subject to such section (e)(3).
          (2) No time limits.--Such agencies may not impose 
        time limits on the term of housing assistance received 
        by families under the program.
          (3) No employment conditions.--Such agencies may not 
        condition the receipt of housing assistance by families 
        under the program on the employment status of one of 
        more family members.
          (4) One-for-one replacement.--
                  (A) Conditions on demolition.--Such agencies 
                may not demolish or dispose of any dwelling 
                unit of public housing operated or administered 
                by such agency (including any uninhabitable 
                unit and any unit previously approved for 
                demolition) except pursuant to a plan for 
                replacement of such units in accordance with, 
                and approved by the Secretary of Housing and 
                Urban Development pursuant to, subparagraph 
                (B).
                  (B) Plan requirements.--The Secretary may not 
                approve a plan that provides for demolition or 
                disposition of any dwelling unit of public 
                housing referred to in subparagraph (A) 
                unless--
                          (i) such plan provides for outreach 
                        to public housing agency residents in 
                        accordance with paragraph (5);
                          (ii) not later than 60 days before 
                        the date of the approval of such plan, 
                        such agency has convened and conducted 
                        a public hearing regarding the 
                        demolition or disposition proposed in 
                        the plan;
                          (iii) such plan provides that for 
                        each such dwelling unit demolished or 
                        disposed of, such public housing agency 
                        will provide an additional dwelling 
                        unit through--
                                  (I) the acquisition or 
                                development of additional 
                                public housing dwelling units; 
                                or
                                  (II) the acquisition, 
                                development, or contracting 
                                (including through project-
                                based assistance) of additional 
                                dwelling units that are subject 
                                to requirements regarding 
                                eligibility for occupancy, 
                                tenant contribution toward 
                                rent, and long-term 
                                affordability restrictions 
                                which are comparable to public 
                                housing units;
                          (iv) such plan provides for a right, 
                        and implementation of such right, to 
                        occupancy of additional dwelling units 
                        provided in accordance with clause 
                        (iii), for households who, as of the 
                        time that dwelling units demolished or 
                        disposed of were vacated to provide for 
                        such demolition or disposition, were 
                        occupying such dwelling units;
                          (v) such plan provides that the 
                        proposed demolition or disposition and 
                        relocation will be carried out in a 
                        manner that affirmatively furthers fair 
                        housing, as described in subsection (e) 
                        of section 808 of the Civil Rights Act 
                        of 1968; and
                          (vi) to the extent that such plan 
                        provides for the provision of 
                        replacement or additional dwelling 
                        units, or redevelopment, in phases over 
                        time, such plan provides that the ratio 
                        of dwelling units described in 
                        subclauses (I) and (II) of clause (iii) 
                        that are provided in any such single 
                        phase to the total number of dwelling 
                        units provided in such phase is not 
                        less than the ratio of the aggregate 
                        number of such dwelling units provided 
                        under the plan to the total number of 
                        dwelling units provided under the plan.
                  (C) Inapplicable provisions.--Subparagraphs 
                (B) and (D) of section 8(o)(13) of the United 
                States Housing Act of 1937 (42 U.S.C. 
                1437f(o)(13)) shall not apply with respect to 
                vouchers used to comply with the requirements 
                of subparagraph (B)(iii) of this paragraph.
                  (D) Monitoring.--The Secretary of Housing and 
                Urban Development shall provide for the 
                appropriate field offices of the Department to 
                monitor and supervise enforcement of this 
                paragraph and plans approved under this 
                paragraph and to consult, regarding such 
                monitoring and enforcement, with resident 
                councils of, and residents of public housing 
                operated or administered by, the agency.
          (5) Comprehensive outreach plan.--No program funds of 
        such agencies may be use to demolish, dispose of, or 
        eliminate any public housing dwelling units except in 
        accordance with a comprehensive outreach plan for such 
        activities, developed by the agency in conjunction with 
        the residents of the public housing agency, as follows:
                  (A) The plan shall be developed by the agency 
                and a resident task force, which may include 
                members of the Resident Council, but may not be 
                limited to such members, and which shall 
                represent all segments of the population of 
                residents of the agency, including single 
                parent-headed households, the elderly, young 
                employed and unemployed adults, teenage youth, 
                and disabled persons.
                  (B) The votes and agreements regarding the 
                plan shall involve not less than 25 and not 
                more than 35 persons.
                  (C) The plan shall provide for and describe 
                outreach efforts to inform residents of the 
                program under this subsection, including a 
                door-to-door information program, monthly 
                newsletters to each resident household, monthly 
                meetings dedicated solely to every aspect of 
                the proposed development, including 
                redevelopment factors, which shall include the 
                one-for-one replacement requirement under 
                paragraph (5), resident rights to return, the 
                requirements of the program under this 
                subsection, new resident support and community 
                services to be provided, opportunities for 
                participation in architectural design, and 
                employment opportunities for residents, which 
                shall reserve at least 70 percent of the jobs 
                in demolition activities and 50 percent of the 
                jobs in construction activities related to the 
                redevelopment project, including job training, 
                apprenticeships, union membership assistance.
                  (D) The plan shall provide for regularly 
                scheduled monthly meeting updates and a system 
                for filing complaints about any aspect of the 
                redevelopment process.
  (i) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Existing mtw agency.--The term ``existing MTW 
        agency'' means a public housing agency that as of the 
        date of the enactment of the Section 8 Voucher Reform 
        Act of 2007 has an existing agreement with the 
        Secretary pursuant to the moving to work demonstration.
          (2) Base year.--The term ``base year'' means, with 
        respect to a participating agency, the agency fiscal 
        year most recently completed prior to selection and 
        approval for participation in the housing innovation 
        program under this section.
          (3) Moving to work demonstration.--The term ``moving 
        to work demonstration'' means the moving to work 
        demonstration program under section 204 of the 
        Departments of Veterans Affairs and Housing and Urban 
        Development, and Independent Agencies Appropriations 
        Act, 1996 (42 U.S.C. 1437f note).
          (4) Participating agencies.--The term ``participating 
        agencies'' means public housing agencies designated and 
        approved for participation, and participating, in the 
        housing innovation program under this section.
          (5) Program funds.--The term ``program funds'' means, 
        with respect to a participating agency, any amounts 
        that the agency is authorized, pursuant to subsection 
        (e)(1), to use to carry out the housing innovation 
        program under this section of the agency.
          (6) Residents.--The term ``residents'' means, with 
        respect to a public housing agency, tenants of public 
        housing of the agency and participants in the voucher 
        or other housing assistance programs of the agency 
        funded under section 8(o), or tenants of other units 
        owned by the agency and assisted under this section.
  (j) Authorization of Appropriations for Resident Technical 
Assistance.--There is authorized to be appropriated for each of 
fiscal years 2008 through 2012 $10,000,000, for providing 
capacity building and technical assistance to enhance the 
capabilities of low-income families assisted under the program 
under this section to participate in the process for 
establishment of annual plans under this section for 
participating agencies.
  (k) Authorization of Appropriations for Evaluations.--There 
is authorized to be appropriated $15,000,000 to the Department 
of Housing and Urban Development for the purpose of conducting 
the evaluations required under subsection (f)(1).

           *       *       *       *       *       *       *

                              ----------                              


  SECTION 202 OF THE DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND 
  URBAN DEVELOPMENT, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1997

  [Sec. 202. Administrative Fees.--Notwithstanding section 8(q) 
of the United States Housing Act of 1937, as amended--
  [(a) The Secretary shall establish fees for the cost of 
administering the certificate, voucher and moderate 
rehabilitation programs.
          [(1)(A) For fiscal year 1997, the fee for each month 
        for which a dwelling unit is covered by an assistance 
        contract shall be 7.5 percent of the base amount, 
        adjusted as provided herein, in the case of an agency 
        that, on an annual basis, is administering a program of 
        no more than 600 units, and 7 percent of the base 
        amount, adjusted as provided herein, for each 
        additional unit above 600.
          [(B) The base amount shall be the higher of--
                  [(i) the fair market rental for fiscal year 
                1993 for a 2-bedroom existing rental dwelling 
                unit in the market area of the agency; and
                  [(ii) such fair market rental for fiscal year 
                1994, but not more than 103.5 percent of the 
                amount determined under clause (i).
          [(C) The base amount shall be adjusted to reflect 
        changes in the wage data or other objectively 
        measurable data that reflect the costs of administering 
        the program during fiscal year 1996; except that the 
        Secretary may require that the base amount be not less 
        than a minimum amount and not more than a maximum 
        amount.
          [(2) 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 the agencies administering the 
        program, based on changes in wage data or other 
        objectively measurable data that reflect the cost of 
        administering the program, as determined by the 
        Secretary.
          [(3) The Secretary may increase the fee if necessary 
        to reflect higher costs of administering small programs 
        and programs operating over large geographic areas.
          [(4) The Secretary may decrease the fee for PHA-owned 
        units.
  [(b) Beginning in fiscal year 1997 and thereafter, 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 public housing agency, but only in the 
        first year it administers a tenant-based assistance 
        program under the United States Housing Act of 1937 and 
        only if, immediately before the effective date of this 
        Act, it was not administering a tenant-based assistance 
        program under the 1937 Act (as in effect immediately 
        before the effective date of this Act), 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 program; and
          [(3) extraordinary costs approved by the Secretary.]

 ADDITIONAL VIEWS OF HON. SPENCER BACHUS, HON. JUDY BIGGERT, AND HON. 
                              GARY MILLER

    H.R. 1851, the Section 8 Voucher Reform Act of 2007 
(SEVRA), makes a number of important improvements to the 
Section 8 program to reform and simplify regulations for local 
public housing agencies while preserving essential tenant 
protections.
    The Section 8 housing voucher program is the nation's 
largest low-income housing assistance program helping over 2 
million low-income households, elderly and disabled secure 
affordable modest housing in the private market. The program 
has grown to replace public housing as the primary tool for 
subsidizing the housing costs of low-income families. Through 
this program, the Department of Housing and Development (HUD) 
provides portable subsidies to individuals who seek rental 
housing from qualified and approved owners (tenant-based), and 
provides subsidies to private property owners who set aside 
some or all of their units for low-income families (project-
based).
    The Section 8 program began in 1974, primarily as a 
project-based rental assistance program. However, by the mid-
1980s, project-based assistance came under criticism for being 
too costly and for concentrating poor families in high-poverty 
areas. Consequently, in 1983, Congress stopped providing new 
project-based Section 8 contracts and created vouchers as a new 
form of assistance. Today, vouchers are the primary tool of 
assistance provided under Section 8, although over 1 million 
units still receive project-based assistance under their 
original contracts or renewals of those contracts.
    Over the years, the cost of the housing choice voucher has 
continued to increase and today consumes over 60 percent of 
HUD's budget. These cost increases can be attributed to a 
number of factors, not the least of which is the structure of 
the benefit. The value of a voucher is calculated as roughly 
the difference between rents in a community and 30 percent of 
participating households' incomes. In recent years, rents have 
been rising faster than incomes, which, along with federal 
policy changes designed to expand household choice and 
alleviate poverty, have driven up the cost of a voucher and 
therefore the cost of the program. This rate of increase, 
combined with an extremely complicated set of laws and rules 
that govern the voucher program, limits the program's 
effectiveness for families, many of whom must wait years to 
receive any help from their local housing authorities. In 
addition, the rising cost of this program has begun to impact 
funding for other key housing programs. In fact, for the first 
time in 2004, HUD programs such as Community Development Block 
Grants (CDBG) and HOME were forced to absorb budget cuts to pay 
for funding the Housing Choice Voucher program.
    In an effort to deal with the rising cost of the Section 8 
voucher program, the Administration has made several different 
reform proposals. In its FY 2004 budget, the Administration 
proposed a state-run block grant model, entitled ``Housing 
Assistance for Needy'' (HANF). The Subcommittee on Housing and 
Community Opportunity held a series of hearings on this 
proposal, but in the end, no legislative action was taken. In 
2005, the Administration proposed a different approach. Instead 
of a block grant to the states, the Administration's Flexible 
Voucher Program (FVP) envisioned a dollar-based grant program 
to be administered by the Public Housing Authorities (PHAs). 
The Flexible Voucher Program was not considered by the 108th 
Congress; however, the Appropriations Committee did include 
provisions in the 2005 Consolidated Appropriations Act moving 
the program from a unit-based program to a dollar-based 
program.
    Prior to 2004, PHAs were funded on a unit-basis. Their 
budgets were determined based on the number of vouchers they 
were allocated to administer at their actual costs. In FY 2004, 
the formula was changed to fund PHAs based on the number of 
vouchers they were expected to lease at a fixed cost. In FY 
2005, the formula was changed again and PHAs were funded based 
on 2004 May-July VMS data, inflated for 2005 and prorated to 96 
percent. In addition, the allocation of funds in FY 2005 was 
based on a three-month period in 2004 (May-July), which may 
have been a low-point for some PHAs' budgets. The result is 
that some PHAs receive more than they can utilize and others 
not enough.
    To address this problem, on February 15, 2007, as part of 
the Continuing Resolution (P.L. 110-5), Congress reverted back 
to a funding formula based on actual costs and utilization. 
H.R. 1851 seeks to codify many of the changes made in the 
Continuing Resolution, and as with any funding formula change, 
there are winners and losers under the newly enacted funding 
mechanism. The fact that the funding formula has been 
repeatedly changed over the last several years has made it 
difficult for PHAs to administer their voucher programs and to 
plan for the future.
    We support a funding formula that will be reasonable, fair 
and predictable. We support a formula that will provide PHAs 
the certainty they need to effectively and efficiently provide 
affordable housing to low-income families. Finally, we support 
a funding formula that includes incentives for agencies to 
improve their performance and to serve the maximum number of 
families in need. While we appreciate the spirit of the funding 
formula provisions included in H.R. 1851, we would like to see 
additional changes to the funding formula section that will 
help move us closer to achieving the above-mentioned goals.
    It is critical to make improvements in the delivery of 
housing assistance to families in need. We believe this can be 
achieved by providing flexibility to local public housing 
authorities (PHAs) while holding them accountable for results. 
Such flexibility would enable PHAs to tailor and manage their 
programs to the needs of the families they serve in the local 
community instead of through a one-size-fits-all approach. This 
is important not only philosophically, but practically, because 
we face a situation of growing waiting lists for Section 8 
vouchers without the resources to serve everyone. We need to 
move current Section 8 recipients to self-sufficiency so that 
we can provide a similar helping hand to those who have 
patiently waited, in some cases for almost ten years, for 
assistance. The answer is not necessarily to increase funding. 
Rather, the answer is to allow PHAs to be innovative with the 
money they have, to be efficient and to help as many people in 
need as possible move through the program.
    Our ultimate aim should not necessarily be to expand this 
program, but instead to reform it to allow PHAs to serve more 
people. While H.R. 1852 does not provide for as much 
flexibility as we believe is needed to achieve this goal, we 
are pleased that the bill increases the number of PHAs allowed 
to enjoy such flexibility under the Moving to Work (MTW) 
program, which has allowed a small group of PHAs to create 
locally based housing programs outside of HUD's one-size-fits-
all regulations. The MTW program has enabled PHAs to create 
jobs for residents, add affordable housing stock, and help 
families build savings. The efforts of PHAs, which include 
incentives to gain employment, mixing of fund sources, relief 
from obsolete regulatory requirements, and effective use of 
funding for development and homeownership, have been successful 
in improving housing stock and serving more families by helping 
recipients achieve self-sufficiency. Currently, only 24 of the 
more than 3,000 PHAs nationwide are able to participate in the 
MTW program.
    H.R. 1852 renames the Moving to Work program as the Housing 
Innovation Program (HIP) and increases the number of PHAs 
allowed to participate. The bill also directs HUD to establish 
performance standards for evaluating HIP agency results, taking 
into account variation in practice according to each local 
design. The evaluation is intended to be limited to assessing 
which policies and programs work under HIP, since having a one-
size-fits-all performance standard system would undermine the 
flexibility of the program. Evaluation standards are tied to 
the specific performance goals set by the local agency. The 
strategies implemented by the PHAs participating in HIP can 
serve as examples of innovative ways to improve the program in 
the future to ensure that our limited federal resources may be 
used to help all of those who need it. With this performance 
evaluation, our goal is to be able to take away best practices 
for reform of the Section 8 program.
    In addition, we are pleased that the bill enhances HUD's 
Family Self-Sufficiency Act (FSS) program by providing housing 
authorities with consistent coordinator funding. Housing 
authorities can then help more individuals move from public 
assistance to being self-sufficient homeowners. The legislation 
also includes performance measures, data collection, and an 
evaluation so that housing authorities are well-equipped and 
encouraged to operate effective FSS programs and can help more 
individuals.
    We are hopeful that the innovation that can be produced 
through HIP and FSS will demonstrate ways to truly reform 
Section 8 so we can serve more people efficiently and help move 
them to self-sufficiency.
    We look forward to working with the Chairs of the Committee 
on Financial Services and the Subcommittee on Housing and 
Community Opportunities to fine-tune the provisions of H.R. 
1851 prior to this legislation being considered on the House 
floor. H.R. 1851 includes improvements that will help make the 
Section 8 program more efficient and effective. By working 
together in a bipartisan manner, we can make this legislation 
better serve low-income families and communities across the 
country.

                                   Spencer Bachus.
                                   Judy Biggert.
                                   Gary G. Miller.

                                  
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