TITLE-V -- Housing Assistance

subtitle a-public and indian housing

Preferences: The House amendment contained a provision that would
increase from 10 to 30 the percentage of nonpreference families that a
public housing agency may admit for occupancy as units become available.
The Senate bill contained a similar provision except, for the
nonpreference families, it would require the public housing agency to
make units available in accordance with a system of preferences
established by the public housing agency in writing and after public
hearing to respond to local housing needs and priorities which may
include: assisting very low-income families who either reside in
transitional housing assisted under title IV of the McKinney Homeless
Assistance Act, or participate in a program designed to provide public
assistance recipients with greater access to educational and employment
opportunities; assisting families who would have to pay more than 30
percent of their adjusted income for rent; avoiding breakup of families
and preserving and strengthening families and achieving other objectives
identified in cooperation with child welfare agencies and other
appropriate human service agencies; or achieving other objectives of
national housing policy as affirmed by Congress. The Senate provision
also excluded from the preferences for five years any person that had
previously been evicted for drug related criminal activity. The
conference report also contains the Senate requirements for local
preferences with an amendment to include as a permissible local
preference the need to provide adequate housing for family unification
purposes. These preferences were drawn from section 520 of the House
amendment. The conference report contains the Senate provision on the
exclusion for drug-related activities amended to change the exclusion
from 5 years to 3 years and to provide the agency with discretion to
waive such exclusion when family members that clearly were not involved
in the drug related criminal activity and had no knowledge of such
activity or when the circumstances leading to the eviction no longer
exist. The conferees intend that the exclusions be applied so as to
protect uninvolved, innocent family members from the illegal actions of
another member of the family. Further, it is intended that the waiver
for changed circumstances be used to protect innocent family members in
cases of death, divorce or incarceration.

The House amendment contained a provision not included in the Senate
bill that clarified that homeless shelters and transitional housing are
considered substandard housing for purposes of assigning priorities for
Section 8 and public housing assistance. The conference report contains
the House provision.

Public housing agency reform

Performance indicators for public housing agencies: The House amendment
contained a provision that amended the 1937 Housing Act to require the
Secretary to develop and publish standards to be used to assess the
management performance of public housing agencies. Such standards would
enable the Secretary to evaluate the performance of public housing
agencies in at least the following major areas of management operations:
(1) operating expenses relative to revenues; (2) operating reserves
relative to maximum allowable reserves; and (3) compliance of units with
housing quality standards or an equivalent standard, and (4) the
existence of a system for making necessary repairs or replacements. The
Senate bill contained a similar provision except that indicators would
be used to evaluate the performance of public housing agencies in all
major areas of management operations. Specifically, the Senate provision
listed indicators that would be required to be used by the Secretary:
(1) the number and percentage of vacancies; (2) the amount and
percentage of funds obligated to the PHA under Section 14 of the 1937
Housing Act which remain unexpended after 3 years; (3) the proportion
of maintenance work orders outstanding; and (4) the percentage of units
that an agency fails to inspect or ascertain maintenance or
modernization needs within such period of time as the Secretary deems
appropriate (with appropriate adjustments for large and small agencies).
The conference report contains the Senate provision amended (1) to
clarify that performance indicators and the procedures for designating
troubled PHAs will be subject to notice and comment rulemaking and (2)
that at least one indicator includes progress that a PHA has made within
the past three years to reduce the period of time required to complete
maintenance work orders. The Conferees believe that it is important for
HUD to use objective measurements to evaluate PHA performance.

Designation of high performing agency: The House amendment contained a
provision not included in the Senate bill that would require the
Secretary to designate a public housing agency that meets the specified
performance standards to be a high performing agency. The conference
report does not contain the House provision but includes an amendment
to authorize HUD to develop criteria, working with industry groups, to
commend high performing PHAs. The Conferees support the attempt to
provide meaningful reforms for the Nation's Public Housing Authorities
as addressed in the bill. However, the Committee also recognizes that
while "troubled" agencies must be subject to vigorous reform, not all
agencies are troubled and many should be recognized for their
accomplishments and high performance. The House amendment contained a
requirement that the Secretary publish annually in the Federal Register
lists of public housing agencies that have met the specified performance
standards established in the legislation and have been designated "high
performing" agencies. The Senate had no similar provision. The
Conferees believe that HUD should develop some criteria by which it can
recognize "high performing" agencies may be recognized for their
efforts.

Sanction for failure of troubled PHA to meet targets: The House
amendment contained a provision that would require the Secretary to
enter into agreements with troubled PHAs to meet performance targets and
setting forth incentives or sanctions for effective implementation of
those targets, which may include such restrictions on the use of funds
made available under this Act as the Secretary determines to be
appropriate. The Senate bill contained a similar provision except it
would expand restrictions on funds to include those made available under
the Housing and Community Development Act of 1974. The conference report
contains the Senate provision amended to delete the reference to the
1974 Act and to require HUD to include a description of the technical
assistance that it will give to the PHA. The conferees emphasize their
belief that cities need to be more involved in, and held accountable
for, the performance of PHAs in their jurisdictions. The intention
remains that the Secretary has the authority to use his discretion to
enforce cities to monitor the performance of PHAs.

Sanction for substantial default by troubled PHAs in performance: The
Senate bill contained a provision not included in the House amendment
that would permit the Secretary, upon the occurrence of events or
conditions that constituted a substantial default by a PHA with respect
to the covenants or conditions to which the PHA is subject or the
agreement entered into between the Secretary and the agency, (1) to
solicit competitive bids from housing management agents in the
eventuality that these agents may be needed for managing all, or part,
of the housing administered by a public housing agency; and (2) to
petition for the appointment of a receiver (which may be a private
management corporation) of the public housing agency to any district
court of the United States or to any court of the State in which the
real property of the public housing agency is situated, that is
authorized to appoint a receiver for the purposes and powers prescribed
in this subsection. In any proceeding for the appointment of a receiver,
upon a determination that a substantial default has occurred, and
without regard to the availability of alternative remedies, the court
shall appoint a receiver to conduct the affairs of the public housing
agency in a manner consistent with the National Affordable Housing Act
and in accordance with such further terms and conditions as the court
may provide. The court would have the power to grant appropriate
temporary or preliminary relief pending final disposition of the
petition by the Secretary. The appointment of a receiver pursuant to
this subsection could be terminated, upon the petition of any party,
when the court determines that all defaults have been cured and the
housing operated by the PHA will thereafter be operated in accordance
with the covenants and conditions to which the PHA is subject. The
conference report contains the Senate provision. The conferees intend
for HUD to use this authority to move aggressively to improve living
conditions for tenants in severely troubled public housing.

Listing of high performing and troubled PHAs: The House amendment
contained a provision not included in the Senate bill that would require
the Secretary to provide annually each appropriate housing authority of
each State and the chief executive officer of each locality which has
a PHA within its jurisdiction with a listing of the high performance and
troubled public housing agencies in the State. The conference report
does not contain the House provision.

Reports: The Senate bill contains a provision not included in the House
amendment that would require the Secretary to annually submit to the
Congress a report identifying the public housing agencies that have been
designated as troubled describing the agreements that have been entered
into with such agencies under such paragraph, describing the status of
progress under such agreements, and describing any action that has been
taken in accordance with paragraph (3). The conference report contains
the Senate provision with an amendment to require the report to describe
the grounds on which any PHA was designated and continues to be
designated as troubled and also requires a description of the status of
PHAs that were designated as troubled for the purposes of the
modernization program.

Requirement for PHA Training: The House amendment contained a provision
not included in the Senate bill that would require each State, as a
condition for PHAs within the State to receive assistance under this
Act, to establish (not later than 2 years after the date of the
enactment) and enforce standards for a course of study and certification
of executive directors and other officers and members of local,
regional, and State PHAs. The State would provide for completion of the
course and certification before appointment to any position within a PHA
within the State, and shall require any individuals holding such
positions within any PHA on the date of the establishment of such course
and provisions for certification to complete the course and acquire
certification, within 1 year after such establishment. The conference
report does not contain the House provision but is amended to require
the Secretary, within one year of enactment of this Act, to report to
Congress on the practicality and feasibility of establishing standards
for the certification and training of executive directors and other
officers and members of PHAs. If such a course of training is determined
to be practical, the Secretary will develop, in coordination with
industry groups, an appropriate training program.

Project-based accounting systems: The House amendment contains a
provision that would require that contributions contracts provide for
the establishment and maintenance of a system of accounting for rental
collections and costs (including administrative, utility, maintenance,
repair, and other operating costs) on a project basis, which shall (1)
require each public housing agency to publish an annual financial
statement of all its operations, including the financial status of each
individual housing project, and (2) the review of such reports by the
applicable Board of Commissioners or other governing body with respect
to such PHA and by the applicable State housing authority. The Senate
bill contains a similar provision except does not contain requirements
to publish annual financial statements or review of such reports by
others. The conference report contains the Senate provision with an
amendment to exempt PHAs not receiving operating subsidies from these
requirements and to authorize the Secretary to allow PHAs which operate
fewer than 250 units to apply the accounting requirement on an agency
wide basis. The conferees want to encourage local Commissions to review
the results. The Conferees are aware that in some instances of troubled
agencies, there was a breakdown in communication between the agency
itself and the Board of Commissioners which is required to oversee the
operations of the agency and that in at least one instance commissioners
too were unable to obtain copies of HUD's annual audit of the agency.
The Committee recognizes that an integral part of agency oversight is
the analysis of the operations of the agency by HUD through its annual
audit. Therefore, the Committee directs the Secretary to ensure that a
copy of an agencies' annual audit be made available to the Chairman of
the Board of Commissioners of each agency.

Regulation: The House amendment contained a provision that would require
the Secretary to adopt by regulation guidelines to implement the public
housing agency reforms enumerated above. The Senate bill contained a
similar provision but would not require adoption by regulation. The
conference report contains the Senate provision amended to require
notice and comment on rulemaking.

Reduction of operating subsidies: The Senate bill contained a provision
not included in the House amendment that would permit the Secretary to
reduce operating subsidies for public housing units that have been
continuously vacant for 1 year or longer where such vacancies have been
caused by factors within the control of the public housing agency. The
conference report does not contain the Senate provision. The conferees
intend that the elimination of this provision would not be construed to
limit the Secretary's rulemaking authority in this area.

Report on Buffalo Municipal Housing Authority: The Senate bill contained
a provision not included in the House amendment that within 180 days
after the date of enactment, would require the Secretary to transmit to
Congress a report on the operating and efficiency of the Buffalo
Municipal Housing Authority ("the Authority"), using, among other
criteria, the performance indicators set forth in the National
Affordable Housing Act, and giving special attention to the Authority's
desegregation program and to the vacancy rate. For purposes of the
report the Secretary may specifically determine whether to: (A) petition
for the appointment of a receiver for the Authority; or (B) reduce
operating subsidies for the Authority. The conference report contains
the Senate provision.

Criminal activity in public housing

Eviction and termination: The House amendment contained a provision not
included in the Senate bill that would expand circumstances where
administrative grievance procedure will apply to cases of inaction. The
conference report does not contain the house provision. There is no need
for clarification that Section 6(k) guarantees tenants the right to have
grievance hearings with respect to a public housing agency's failure to
act because the Secretary is no longer taking the position that public
housing tenants have no right to have grievance hearings about their
public housing agency's failure to act.

The House amendment contained a provision that would limit a public
housing agency's ability to bypass the current administrative lease and
grievance procedure to those activities that threaten the health or
safety of tenants or employees. In such cases the agency could use an
expedited grievance procedure or bypass the administrative procedures
if state court procedures would provide specified elements of due
process. The House provision also required public housing authorities
to provide relevant documents prior to any hearing or trial. Proposed
rules implementing the section would be required to be published within
60 days of enactment and the existing due process waivers would not be
valid after enactment. The Senate bill contained a similar provision but
would allow bypass when a criminal activity affects health, safety, and
welfare of tenants.

The Senate bill also contained a provision not included in the House
amendment that would allow public housing agencies to bypass grievance
procedure without regard to due process offered in court where eviction
or termination is for "criminal activity, including drug related
criminal activity, that adversely affects the health, safety, and
welfare of public housing tenants" so long as the public housing agency
notifies the tenant of the reasons for eviction or termination.

The conference report contains the House provision with an amendment (1)
to allow public housing agencies to bypass the current administrative
procedure in cases of eviction or termination involving criminal
activity that threatens the health, safety and right to peaceful
enjoyment of other tenants or employees of the public housing agency or
in the case of drug related criminal activity on or near the premises
and (2) to require the Secretary to establish the expedited grievance
procedure through notice and comment rulemaking. This language is
intended to reach criminal activity that seriously endangers other
tenants or PHA employees, while preserving the grievance process for all
other categories of evictions.

The amendment deleted the specified elements of due process set forth
in the House amendment. Such elements will continue to be established
by regulation and the deletion of the specified elements should not be
construed as a determination by the conferees that such elements should
not continue to be part of the regulatory definition of due process. The
conference report does, however, prohibit the regulatory definition of
due process from including a requirement for discovery. Instead, the
conference report requires that the public housing agency must provide
tenants a reasonable opportunity prior to the hearing or trial to
examine any relevant documents, records, or regulations directly related
to the eviction or termination. The elements of due process that would
be required include all the protections specified in the statute for the
grievance procedure which is being replaced, except for the right to
examine documents prior to trial to prepare a defense, which will be
directly granted by the federal statute.

The conferees also intend that the documents covered by this disclosure
rule be ones the public housing agency would normally maintain in the
tenant's file. The requirement that the public housing agency produce
documents is not intended by the Committee to be construed as a broad
discovery provision. However, public housing agencies should not be
allowed to avoid their duty to disclose documents by maintaining or
placing them in other files, transferring them to the custody of others
or destroying them.

Final regulations implementing these regulations must be promulgated not
later than 180 days after enactment. A conforming amendment was also
added to provide that any such waiver granted before the enactment date
shall remain in effect until the earlier of the effective date of the
final rules implementing the amendments made by this section or 180 days
after the enactment date. It is the conferees intent that when an
individual state waiver is sought, the Secretary should notify affected
tenants in advance and provide them with an opportunity to comment.

The committee also intends that the rights created by this amendment be
enforceable under 42 U.S.C. Section 1983, the implied private right of
action and third party beneficiary doctrines and the Administrative
Procedure Act.

Restriction on reentry: The Senate bill contained a provision not
included in the House amendment that amends the definition of family in
the 1937 Housing Act to provide that any individual or family evicted
from housing assisted under the Act by reason of drug-related criminal
activity is not eligible for a preference under any provision of this
paragraph for 5 years unless the evicted tenant successfully completes
a rehabilitation program approved by the Secretary. The conference
report does not contain the Senate provision.

Lease requirements: The Senate bill contained a provision not included
in the House amendment that amends the prohibited activities under the
lease to prohibit criminal activity that adversely affects the health,
safety, and right to quiet enjoyment of the premises by other tenants
and including drug-related criminal activity, that threatens the health
or safety of, or right to quiet enjoyment of the premises by other
tenants. The conference report contains the Senate provision amended to
read that each public housing agency shall utilize leases which provide
that any criminal activity that threatens the health, safety, or right
to peaceful enjoyment of the premises by other tenants or any
drug-related criminal activity on or near such premises, engaged in by
a public housing tenant, any member of the tenant's household, or any
quest or other person under the tenant's control, shall be cause for
termination of tenancy.

Notice to post office: The Senate bill contained a provision not
contained in the House amendment that would require public housing
agencies to notify the local post office about an evicted tenant, if the
tenant is evicted for engaging in criminal activity including
drug-related criminal activity. The conference report contains the
Senate provision.

Public housing and section 8 assistance regarding foster care children:
The House amendment contained a provision not included in the Senate
bill that would require agencies administering public housing or Section
8 assistance to coordinate with local child welfare agencies in
providing units to: families whose children have been placed or could
be placed in foster care or have children in foster care which have not
been discharged due to housing conditions; and youth who have been
discharged from foster care who cannot return to their family or
extended family and for which adoption is not available. The conference
report contains the House provision with an amendment changing "shall"
to "may" regarding coordination requirements, and subjecting provision
to preference rules.

The House amendment also contained a provision that would amend the
Federal preference rules for housing placement in both the public
housing and Section 8 programs to include families separated due to
substandard housing or lack of housing and youth discharged from foster
care who cannot return to their families and cannot be adopted. This
provision was not included in the conference report as a separate
Federal preference but instead as a permissible local preferences.

Public housing operating subsidy

Authorization: The House amendment contained a provision that authorized
for public housing operating subsidies, $2,145,780,000 for fiscal year
1991 and authorized in each fiscal year, such sums as may be necessary,
to provide each public housing agency with all their eligible funds
under the performance funding system without adjustments for estimated
or unrealized savings. The Senate bill contained a provision that
authorized for public housing operating subsidies, $1,865,000,000 for
FY 1991, $1,940,100,000 for FY 1992, and $2,017,200,000 for FY 1993. The
conference report contains an authorization of $2,000,000,000 for FY
1991 and $2,086,000,000 for FY 1992.

Services and coordinators as eligible cost: The House amendment
contained a provision not included in the Senate bill that authorized
annual contributions to PHAs to include projects with a sufficient
number of frail elderly or handicapped residents, (1) the cost of a
services coordinator within the project which is provided by a federal
agency, public or private department or organization to enable frail
elderly or handicapped residents to live independently and prevent
placement in nursing homes or institutions; (2) not more than 15% of the
expenses for providing services to project residents which may include
meal services, housekeeping and chore assistance, personal care, laundry
assistance, transportation services and health-related services. Exempts
this provision from the performance funding system established in
Section 9(a)(3) of the United States Housing Act of 1937 and defines
frail elderly as the meaning given under Sec. 202(d) of the 1959 Housing
Act. The conference report contains the House provision with an
amendment which restricts services under this section to those not
covered under Congregate Housing Services program. The conferees intend
that the cost of a services coordinator is an eligible cost to be paid
out of public housing operating subsidies but is not required and is not
a separate authorization.

Litigation by PHAs: The House amendment contained a provision not
included in the Senate bill that allowed PHAs to include as an allowable
operating cost the unreimbursed cost of any civil action commenced by
a public housing agency against the Federal Government to ensure proper
implementation of any Federal law relating to public housing. The House
provision also would disapprove the HUD rule entitled "Litigation
Reporting and Related Requirements for Certain Recipients of HUD
Assistance" and published in the Federal Register of October 27, 1988
(53 Fed. Reg. 43610 et seq.). The Secretary of HUD may not publish a
final rule based on such rule and may not otherwise implement the
provisions of such rule. The conference report does not contain the
House provision.

Performance funding system: The Senate bill contains a provision that
is not included in the House amendment that would require HUD, in
determining the PFS utility subsidy, to include a cooling degree day
adjustment factor and requires that the method to include this factor
shall be identical to the method included for the heating degree
adjustment factor. The conference report contains the Senate provision.

Formula allocation for modernization funding for public and Indian
housing

Emergency or natural disaster set-aside: The House amendment contained
a provision not included in the Senate bill that would amend Section
14(k) of the United States Housing Act of 1937 to provide from amounts
approved in appropriation Acts each fiscal year that the Secretary shall
reserve not more than $75 million (including unused amounts reserved
during previous fiscal years), for modernization needs resulting from
natural and other disasters and from emergencies. Amounts provided for
emergencies shall be repaid by agencies from future allocations of
assistance where available. The conference report contains the House
provision with an amendment to make these amendments effective in Fiscal
Year 1992.

Allocation formula: The House amendment contained a provision not
included in the Senate bill that would require the Secretary to allocate
the remaining funds, pursuant to a formula contained in a regulation to
be prescribed by the Secretary. Such formula is to measure the relative
needs of public housing agencies. The conference report contains the
House provision.

Backlog needs: The House amendment contained a provision not included
in the Senate bill that would require the Secretary to allocate half of
the amount allocated under the formula based on the relative backlog
needs of public housing agencies with 500 or more units and for the
aggregate of agencies with fewer than 500 units determined either from
the most recently available, statistically reliable data regarding the
(1) backlog of needed repairs and replacements of existing physical
systems in public housing projects, (2) items that must be added to
projects to meet the modernization standards of the Secretary, and (3)
items that are necessary or highly desirable for the long-term viability
of a project; or if the data are not statistically reliable on the basis
of estimates of the backlog as defined above and objectively measurable
data on public housing agency, community, and project characteristics,
including the average number of bedrooms in the units in a project; the
proportion of units in a project for very large families; the extent to
which units for families are in high-rise elevator projects; the age of
the projects; in the case of a large agency, as determined by the
Secretary, the number of units with 2 or more bedrooms; the cost of
rehabilitating property in the area; for family projects, the extent of
population decline in the locality determined on the basis of the 1970
and 1980 censuses; and other factors the Secretary determines are
appropriate. The conference report contains the House provision with an
amendment to require HUD to subject new or amended criteria to notice
and comment rulemaking.

Past modernization funding: The House amendment contained a provision
not included in the Senate bill that would require that the formula also
take into account amounts previously made available by the Secretary for
modernization and for major reconstruction of obsolete projects, to the
extent determined appropriate by the Secretary. The conference report
contains the House provision.

Accrual needs: The House amendment contained a provision not included
in the Senate bill that would require the Secretary to allocate the
other half of the amount allocated under the formula based on the
relative accrued needs of public housing agencies with 500 or more units
and the aggregate of agencies with fewer than 500 units for the
categories of modernization need determined either where the data are
statistically reliable, on the basis of the needs that are estimated to
have accrued since the date of the last objective measurement of backlog
needs or where the estimates are not statistically reliable on the basis
of estimates of accrued need using the most recently available data on
the backlog, and objectively measurable data on public housing agency,
community, and project characteristics, including the average number of
bedrooms of the units in a project; the proportion of units in a project
for very large families; the age of the projects; the extent to which
the buildings in projects of an agency average fewer than 5 units; the
cost of rehabilitating property in the area; the total number of units
of each agency; and other factors the Secretary determines are
appropriate. The conference report contains the House provision with an
amendment to subject new or amended criteria to notice and comment
rulemaking.

Determination of the number of units: The House amendment contained a
provision not included in the Senate bill that would require the
Secretary, in determining how many units an agency owns or operates and
the relative modernization needs of agencies, to count each existing
unit under the annual contributions contract, with the exception of an
existing unit under the turnkey III and the mutual help programs which
may be counted as less than one unit. Once an agency qualifies to
receive a formula grant it may elect to continue to qualify to receive
a formula grant if it owns or operates at least 400 public housing
units. The conference report contains the House provision.

Impact of demolition/disposition on the formula: The House amendment
contained a provision not included in the Senate bill that would require
the Secretary, where an existing unit under a contract is demolished or
disposed of, to not adjust the amount the agency receives under the
formula unless more than one percent of the units is affected on a
cumulative basis. Whereas more than one percent of the units is
demolished or disposed of, the Secretary would be required to reduce the
formula amount accordingly for the agency over a 3-year period. The
conference report contains the House provision.

Data reliability: The House amendment contained a provision not included
in the Senate bill that would provide the Secretary the discretion to
determine whether the data used to determine the allocation are
statistically reliable. The conference report contains the House
provision.

Application of formula: The House amendment contained a provision that
would stipulate that formula allocation for agencies with fewer than 500
units would be allocated as special purpose modernization. The Senate
bill contained a provision that would stipulate that formula allocation
for PHAs with 500 or more units would be allocated in accordance with
the provisions of the section and current law as amended. The conference
report contains the House provision.

Troubled PHA allocation: The House amendment contained a provision not
included in the Senate bill that, in the case of an agency that the
Secretary designated as a troubled agency on or before June 1, 1990, and
that is still designated as a troubled agency on the date amounts are
allocated under the formula for FY 1991, the Secretary would limit the
total amount of funding to the average amount the agency received during
fiscal years 1988, 1989, and 1990, for modernization activities and for
major reconstruction of obsolete projects, adjusted to take into account
changes in the cost of rehabilitating property, plus 25 percent of the
differences between the average amount and the amount that would be
allocated to the agency if it were not designated a troubled agency. The
conference report contains the House provision with an amendment to (1)
change the application of this subsection to Fiscal Year 1992; (2) alter
the manner in which agencies are designated as troubled by striking the
reference to the June 1, 1990 list and, instead, covering agencies that
the Secretary designates as troubled for purpose of the modernization
program pursuant to regulations published through notice-and-comment
rulemaking; (3) alter the funding that a troubled PHA would receive by
substituting "1989, 1990 and 1991" for "1988, 1989, and 1990"; and
(4) require the Secretary to establish a special rule for PHAs which are
not found to be troubled in the initial designation, but become troubled
in subsequent years. The conferees intend that the Secretary will have
the discretion to determine the percentage amount of funding that is
available for such subsequently troubled PHAs.

Added allocation for troubled PHA by request: The House amendment
contained a provision not included in the Senate bill that would permit
the Secretary to increase a troubled agency's allocation up to an
additional 25 percent of the difference between what the troubled agency
actually receives and what it would have received if it was not
troubled. Such additional increase shall be based on the agency's
progress toward meeting performance standards. In the case of such a
request, the Secretary shall render a decision within 75 days of receipt
of the request. The conference report contains the House provision with
an amendment to allow an increase to the full amount the agency is
entitled.

Reallocation of troubled PHAs' formula allocation: The House amendment
contained a provision not included in the Senate bill that would state
that amounts not available to troubled PHAs would be reallocated to
other public housing agencies that own or operate 500 or more units,
based on their relative needs. For Indian housing authorities, the
amounts would be reallocated to other Indian housing authorities. The
relative needs of agencies would be determined using the formula. The
conference report contains the House provision with an amendment that
requires the Secretary to establish a credit system that will allow a
troubled PHA to accumulate withheld funds for three years and to receive
repayment of withheld funds if such PHA graduates from troubled status.
Repayment of the withheld funds would be reduced over a four year period
after the accumulation period by the following percentages: First year,
10 percent reduction; second year, an additional 20 percent reduction;
third year, an additional 30 percent reduction; and the fourth year, an
additional 40 percent reduction. The conference report also provides
that once an agency has graduated from troubled status, the agency can
reclaim its outstanding credited amounts on an annual basis in amounts
to be determined by the Secretary. The aggregate of such credit payments
for all agencies cannot in any one year exceed 5 percent of the amount
allocated for formula allocation.

Timing for reallocation: The House amendment contained a provision not
included in the Senate bill that stated that any amounts subject to
reallocation either from a troubled PHA or recaptured for cause would
be reallocated by the Secretary in the next fiscal year to other housing
agencies that own or operate 500 or more units, based on their relative
needs. The relative needs of agencies would be measured by the formula.
The conference report contains the House provision.

Grounds for appeal: The House amendment contained a provision not
included in the Senate bill that would permit a public housing agency
to appeal the amount of its allocation determined under the formula on
the basis of unique circumstances or on the basis that the objectively
measurable data regarding the agency, community, and project
characteristics used in the formula were not correct. The conference
report contains the House provision.

Eligible activities: The House amendment contained a provision not
included in the Senate bill that would permit amounts allocated to a
public housing agency by formula to be used for any eligible
modernization activity, notwithstanding the formula factors. The
conference report contains the House provision.

Modernization for PHAs with fewer than 500 units: The House amendment
contained a provision not included in the Senate bill that would amend
Section 14(d)(4) by deleting the requirement for replacement needs and
planning estimate, operating budget, and financial resources estimate
for public housing agencies with fewer than 500 units. The conference
report contains the House provision.

Special purpose modernization: The House amendment contained a provision
not included in the Senate bill that would limit special purpose
modernization or emergency needs funding especially related to fire
safety standards to public housing agencies with fewer than 500 units.
The conference report contains the House provision.

Special purpose management improvement funds: The House amendment
contained a provision not included in the Senate bill that would provide
for special purpose management modernization improvements which are not
otherwise eligible for PHAs with fewer than 500 units (including Section
8 projects). The conference report contains the House provision.

250 units threshold: The House amendment contained a provision not
included in the Senate bill that would establish a 250-unit threshold
for modernization funds beginning in FY 1992, except that once a housing
authority qualifies for assistance, it may continue to receive a formula
grant if it owns or operates at least 200 units. The conference report
contains the House provision.

Inapplicability to Indian housing: The House amendment contained a
provision not included in the Senate bill that stated that,
notwithstanding the provisions of this subtitle, the formula allocation
would not apply to Indian housing authorities until October 1, 1991. The
conference report does not contain the provision. The conferees believe
that this provision is not necessary as the entire provision will be
implemented starting in Fiscal Year 1992.

Transition rule: The House amendment contained a provision not included
in the Senate bill that stated that any amount that the Secretary has
obligated to a public housing agency in Section 14 of this Act, other
than under a comprehensive plan, would be required to be used for the
purposes for which such amount was provided, or for purposes consistent
with an action plan submitted by the agency and approved by the
Secretary, as the agency determines to be appropriate. The conference
report contains the House provision.

Regulations: The House amendment contained a provision not included in
the Senate bill that would require the Secretary to publish a proposed
rule to implement the formula allocation amendments and shall consult
with the Congress, public housing agencies, and professional
organizations representing public housing agencies before publishing
such rule. The proposed rule shall be published not later than the
expiration of the 60-day period beginning on the date of the enactment
of this Act. The conference report contains the House provision with an
amendment to require the Secretary to publish the proposed allocation
formula in a proposed rule pursuant to notice and comment rulemaking.
The proposed rule would need to outline: (1) the analytic basis for the
formula; (2) the weights assigned to the statutory criteria; (3)
deductions from the formula share for prior years' CIAP or MROP funds;
and (4) any other pertinent information. The Secretary could, at his
discretion, publish alternative formulas, identifying the different
weights which were used in calculating such alternative formulas, and
explaining what policy objectives might be achieved.

Reports: The House amendment contained a provision not included in the
Senate bill that would require an independent evaluation to be presented
to Congress within 3 years after the initial allocation of assistance
by formula. The conference report contains the House provision with
conforming amendments to be made to the PHA reform provisions to require
that HUD annual reports outline the status of PHAs designated as
troubled for purposes of the modernization program amount and specify
the amount of credited funds that have been accumulated by such troubled
PHAs.

Hope for vacant public housing units

The House amendment contained a provison not included in the Senate bill
that would authorize the Secretary to make available financial
assistance in the form of grants to public housing agencies for the
purpose of improving the physical condition of existing vacant units in
low-rent public housing projects for use as residences.

Under the House provision, grants would have been made available for
units in low-rent housing projects that are owned by public housing
agencies; are operated as rental housing projects and assisted under
maintenance and operating contributions contracts; are not assisted
under Section 8; are vacant at the time grants under this section are
received; and meet such other requirements as the Secretary may
prescribe. Both large (more than 500 units) and small public housing
authorities would have been required to explain the extent of, and
reason for, vacancies and develop a plan of action to eliminate
unnecessary vacancies.

The conference report contains the House provision amended as follows:

The conference report establishes within section 14 of the 1937 Housing
Act a program designed to eliminate all excess vacancies within 5 years.
The initiative would apply to agencies with twice the average vacancy
rate or ones designated as troubled.

Such agencies would be required to develop and submit a vacancy
reduction plan for units owned or operated by the agency. The plan would
identify vacant public housing units within the agency's inventory,
explain the reasons for such vacancies and outline the agency's agenda
for addressing such vacancies within the next 5 years. An agency would
identify the extent to which such vacancies are currently being
addressed through existing programs (comprehensive modernization, major
reconstruction) or demolition/disposition actions within the 5-year
period and any vacancies not currently funded under such programs and
not likely to be so funded or approved within 3 years. Finally, the
agency would identify any other vacancies.

A team of HUD and PHA experts would be available to visit each
designated PHA to independently assess the reasons for the agency's high
vacancy rate.  The team would consider any management deficiencies which
might be contributing to the vacancy problem and would recommend a
series of management improvements to cure such deficiencies.  Such
recommendations would be included in an agency's vacancy reduction plan.

HUD Resources: The conference report authorizes $105,000,000 in fiscal
year 1991 and $220,000,000 in fiscal year 1992 for costs of
rehabilitating vacant public housing units, implementing management
improvements, and undertaking any other activities identified in the
plan.

Income eligibility for public housing: The House amendment contained a
provision not included in the Senate bill that would amend the tenant
income restrictions of Section 16(b) of the United States Housing Act
of 1937 to allow PHAs to increase from 5 percent to 25 percent the
number of units that can be leased by lower income families other than
very low income families, but only if the public housing agency
certifies to the Secretary that not more than 25 percent of dwelling
units occupied at the time of certification are leased by such lower
income families. The conference report contains the House provision with
an amendment that amends section 16(b) to raise from 5 percent to 15
percent the number of low income (other than very low income) that can
be placed in dwelling units that become available under contributions
contracts or assistance payments after 1981 and by adding a provision
that limits the number of low income other than very low income persons
in any project to 25 percent. This last restriction does not apply to
any project that exceeds this limit prior to the enactment of this act.

Disposition of scattered-site public housing: The House amendment
contained a provision not included in the Senate bill that would amend
the Section 18 disposition and demolition provisions of the United
States Housing Act of 1937 to provide that in the case of scattered-site
housing of a public housing agency, debt repayment would be required to
be in an amount that bears the same ratio to the total of obligations
as the number of units disposed of bears to the total number of units
of the project at the time of disposition. This provision would be
applicable to any scattered-site housing disposed of after the date of
enactment. The conference report contains the House provision.

Replacement housing

Report: The Senate bill contained a provision not included in the House
amendment that would require the Secretary to transmit to Congress a
report that outlines the commitments the Secretary made during the
preceding year to fund plans for replacement housing and specifies the
budget authority necessary to carry out the commitments. The conference
report contains the Senate provision.

1 for 2 replacement: The Senate bill contained a provision not included
in the House amendment that would amend Section 18(b) to require the
public housing agency to develop a plan to provide one decent, safe,
sanitary, and affordable dwelling unit for every two public housing
units to be demolished or disposed of where the project or portion of
the project to be demolished or disposed of has had a vacancy rate
exceeding 35 percent for the preceding five years; the project is
located within a jurisdiction with a vacancy rate in excess of 10
percent as documented in the most recent housing affordability strategy;
and the project is located in jurisdiction which is severely
economically distressed. The provision would require the PHA to hold a
public hearing, which has been announced, at a time and location which
is convenient for those residents which may be affected by the
demolition/disposition and with accommodation for persons with
disabilities.

The conference report does not contain the Senate provision but contains
an amendment to provide the following: notwithstanding the provisions
of Section 18(b)(3)(A) of the United States Housing Act of 1937, the
Secretary may allow, on a pilot project basis, the use of 5-year Section
8 Existing Certificates as replacement for public housing units proposed
for demolition or disposition in the City of St. Louis, Missouri. All
demolition and disposition applications must meet the other requirements
of existing law, including the one-for-one replacement provision. The
authority under this provision expires on September 30, 1992.

Public housing resident management: The House amendment contained a
provision that would authorize $5,000,000 for FY 1991 for public housing
resident management programs under the CIAP. The Senate bill contained
a provision that would authorize $2,500,000 for each of FY 1991, FY
1992, and FY 1993 for public housing resident management under CIAP. The
conference report contains the House provision with an amendment to
authorize $5,000,000 for FY 1992 as well.

Public housing family investment centers

Purpose: The House amendment contained a provision establishing the
purpose of this subsection as to provide families living in public
housing with better access to educational and employment opportunities
to achieve self-sufficiency and independence by (A) developing
facilities in or near public housing for training and support services
offered under local self-sufficiency programs under this section; (B)
mobilizing public and private resources to expand and improve the
delivery of such services; and (C) providing funding for such essential
training and support services that cannot otherwise be funded. The
Senate bill contained a similar provision except qualifies funding as
transitional funding and adds a fourth purpose which provides better
access to educational and employment opportunities by improving public
housing management's capacity to assess service needs and coordinate
services. The conference report contains the House provision with an
amendment incorporating the fourth purpose in the Senate bill. The
conference report establishes the name of the program as Family
Investment Centers and that it is a stand alone amendment to the 1937
Housing Act, not part of the Family self-sufficiency program or in the
CIAP provisions.

Grant authority: The House amendment contained a provision authorizing
the Secretary to make grants to public housing agencies carrying out
self-sufficiency programs to adapt public housing to help families
participating in the program to gain access to educational and job
opportunities. The Senate bill contained a provision that would amend
Section 14 of the 1937 Act (CIAP) to provide grants. The Secretary could
reserve not more than 5 percent of the amounts available in each fiscal
year to supplement grants awarded to public housing agencies if
increases are required to maintain adequate levels of services to
eligible residents. The conference report contains the House provision
with an amendment removing linkage to the self-sufficiency program and

adding a requirement that grants will only be available to PHAs that can
demonstrate that sufficient supportive services will be available and
adds Senate provisions on 5 percent set-aside. By removing the linkage
to self-sufficiency, the conferees do not intend that this program could
not be used in conjunction with the self-sufficiency program.

Grant uses: The House amendment contained a provision that permits grant
amounts to be used to renovate or convert vacant public housing units
to create common areas, renovate existing common areas, and renovate
facilities near public housing projects in order to accommodate the
provision of supportive services. Not more than 15 percent of the grant
amounts can be used to provide such services. The Senate bill contained
a similar provision except that the funding of services would be
transitional if the PHA demonstrates to the Secretary that (I) the
qualifying services are appropriate; (II) the public housing agency has
tried to find other funding resources; and (III) long-term funding for
the qualifying services will be available from other services, and the
funding can cover the costs of employing service coordinators. The
conference report contains the House provision with an amendment to
remove linkage to self-sufficiency program, to add qualification that
supportive services funding is available only when the supportive
services are appropriate to improve the access of eligible residents to
employment and educational opportunities, and the public housing agency
has made diligent efforts to obtain the services elsewhere and to add
as permissible use the employment of a service coordinator as provided
in the Senate bill minus references to families with children under 10
years of age.

Allocation: The House amendment contained a provision requiring grant
amounts to be allocated among the public housing agencies carrying out
self-sufficiency programs that have submitted applications and have been
selected by the Secretary. The Senate bill contained a similar provision
except that it would include any PHA, not just those in Self-Sufficiency
or Operation Bootstrap programs. The conference report contains the
Senate provision.

Applications: The House amendment contained a provision requiring that
applications for assistance contain: (A) a description of the supportive
services under the local self-sufficiency program that are to be
provided over a 5-year period (or such longer period that the Secretary
determines to be appropriate if assistance is provided for activities
that involve substantial rehabilitation); (B) a firm commitment of
assistance from 1 or more sources ensuring that the supportive services
will be provided for not less than 1 year following the completion of
assisted activities; (C) a description of the public and private
resources that are expected to be made available to provide the
activities and services under the local program, which shall include
evidence of any intention to provide assistance expressed by State and
local governments, private foundations, and other organizations
(including profit and nonprofit organizations); (D) certification from
the appropriate State or local agency (as determined by the Secretary)
that (i) the local self-sufficiency program is well designed to provide
resident families better access to educational and employment
opportunities; and (ii) there is a reasonable likelihood that services
under the program will be funded or provided for the entire period
specified under subparagraph (A); (E) a description of assistance for
which the public housing agency is applying under this subsection; (F)
a copy of the action plan for the local self-sufficiency program of the
public housing agency; and (G) any other information or certifications
that the Secretary determines are necessary or appropriate to achieve
the purposes of this subsection. The Senate bill contained a similar
provision except there are no references to self-sufficiency. The
conference report contains the House provision with an amendment
deleting references to the self-sufficiency program.

Selection: The House amendment contained a provision requiring the
Secretary to establish selection criteria for grants under this
subsection, which shall take into acount: (A) the ability of the public
housing agency or a designated service provider to carry out the local
self-sufficiency program; (B) the need for such program in the public
housing project; (C) the extent to which the envisioned renovation,
conversion, and combination activities are appropriate to facilitate the
provisions of services under the program; (D) the extent to which the
public housing agency has demonstrated that services under the program
will be provided for the required period; (E) the extent to which the
public housing agency has a good record of maintaining and operating
public housing; and (F) any other factors that the Secretary determines
to be appropriate to ensure that amounts made available under this
subsection are used effectively. The Senate bill contained a similar
provision except did not include any references to self-sufficiency. The
conference report contains the House provision with an amendment to
delete any references to self-sufficiency.

Grant requirements: The House amendment contained a provision not
included in the Senate bill that would require the Secretary to ensure
that each public housing agency that receives a grant under this
subsection has the capacity, in the determination of the Secretary, to
(i) carry out the local self-sufficiency program under this section; and
(ii) seek, on a continuous basis, new sources of assistance to ensure
long-term funding for supportive services. The provision would permit
public housing agencies to use amounts received from grants under this
subsection to carry out the requirements of this subsection, and the
Secretary could permit public housing agencies to use existing sources
of funds for such purposes. The conference report does not contain the
House provision. The conference report contains an authorization of
$25,000,000 in fiscal year 1991 and $26,100,000 in fiscal year 1992.

HUD reports: The House amendment contained a provision requiring the
Secretary to submit to the Congress annually, as a part of the report
of the Secretary under Section 8 of the Department of Housing and Urban
Development Act, an evaluation of the effectiveness of activities
carried out with grants under this subsection in such fiscal year. Such
report would summarize the progress reports submitted pursuant to
subparagraph (A). The Senate bill contained a similar provision except
the Secretary would be required to submit an annual report within 120
days after the end of each fiscal year. The conference report contains
the House provision.

Eligibility of Indian housing for CIAP: The House amendment contained
a provision that would allow Indian housing projects to receive
assistance under CIAP. Any assistance provided would have to be in the
form of a single grant for each project. The Senate bill contained a
similar provision but contained no requirement for single grants. The
conference report contains the Senate provision with an amendment to
include a requirement for a single grant for each project.

Public housing early childhood development grants: The House amendment
contained a provision not included in the Senate bill that would
establish public housing early childhood development grants.

The House provision would authorize $4,922,500, in FY 1990 funded out
of the CDBG funding level and $15 million in FY 1991 out of public
housing development funds for the Public Housing Early Childhood
Development Grants program. The House provision would amend the current
"Public Housing Child Care Program" authorized under Section 222 of
the 1983 HURRA Act and rename it as the "Public Housing Early Childhood
Development Grants Program". The House provision would require that
program grants be in amounts sufficient to cover a significant
percentage of the renovation costs or operating expenses of early
childhood development centers. The House provision would require that
program grants be made for a 3-year period and distributed to recipients
over a period determined by HUD.

The conference report contains the House provision with an amendment to
include the name change of the program but would not include other House
provisions and authorizes $15,000,000 in FY 1991 out of public housing
development funds and $15,645,000 in FY 1992.

Indian public housing early childhood development demonstration program

The House amendment contained a provision not included in the Senate
bill to establish an Indian public housing early childhood development
demonstration program.

From amounts appropriated under Section 5(c)(7)(B) of the United States
Housing Act of 1937 for Indian public housing grants in FY 1991, the
Secretary would be required to use $5,000,000 for carrying out an early
childhood development demonstration program in Indian public housing.
The Secretary would make grants to nonprofit organizations for providing
early childhood development service in or near housing owned or operated
by Indian PHAs. The House provision would require the Secretary to carry
out the demonstration program in the same manner as the Public Housing
Early Childhood Demonstration Program. The House provision would require
tribal and geographic diversity in the implementation of the
demonstration. Within 3 years of the enactment of this Act, the
Secretary would be required to prepare and submit to the Congress a
detailed evaluation report of the demonstration program. The report
would have to include any recommendations of the Secretary with respect
to the establishment of a permanent early childhood development program
for Indian housing authorities. The conference report contains the House
provision.

Public housing rent waiver for police officers: The House amendment
contained a provision not included in the Senate bill that would
authorize the Secretary to permit PHAs to allow police officers and
other security personnel to live in public housing units. The Secretary
could waive income eligibility limitations and rent requirements and
could authorize the PHAs to set rent requirements and other terms and
conditions of occupancy for units for such officers and security
personnel, if the Secretary determined that there would be increased
security for public housing tenants, limited loss of income to the
public housing authority, and no significant reduction of units for
eligible families. The conference report contains the House provision
with an amendment to require PHAs to develop, and HUD to approve, a plan
before police officers who are above the eligible income limits are
allowed to live in the units.

Public housing youth sports programs: The House amendment contained a
provision not included in the Senate bill that would require HUD to use
5 percent of the funds from the public housing drug elimination grants
program in each fiscal year to establish and carry out youth sports
programs in public housing projects with substantial drug problems.

The House amendment would authorize program grants to states, local
governments, local park and recreation districts and agencies, public
housing agencies, nonprofit organizations providing youth sports
services programs, and Indian tribes.

The House amendment would require grants to be made only to youth sports
programs which are located on public housing sites that HUD has
determined have a substantial problem regarding the use or sale of
illegal drugs. The House amendment would also require youth sports
programs to be designed and organized so that the program (1) primarily
serves youths from the assisted project, (2) provides positive sports
activities, cultural, recreational or other activities, (3) operates in
conjunction with an organized program or plan designed to eliminate
drugs in the project. The House amendment would authorize grant funds
to be used to: (1) acquire, construct, or rehabilitate community
centers, parks or playgrounds; (2) redesign or modify public spaces in
public housing projects; and (3) provide public service including
program staff.

The conference report contains the House provisions on the public
housing youth sports program.

Public housing one-stop perinatal services demonstration

The House amendment contained a provision not included in the Senate
bill that authorizes such sums as may be necessary for FY 1991 for a HUD
demonstration program to demonstrate the effectiveness of providing
grants to public housing agencies which make one-stop perinatal services
programs available for pregnant women in public housing. HUD would be
required to consult with HHS and other appropriate federal agencies. The
conference report contains the House provision with an amendment to
require the Secretary to conduct demonstrations in no more than 10
public housing projects.

Public housing mixed income new communities strategy demonstration: The
House amendment contained a provision not included in the Senate bill
that would require the Secretary to establish a demonstration program
to demonstrate the effectiveness of promoting the revitalization of
troubled urban communities through the provision of public housing in
socio-economically mixed settings combined with the innovative use of
public housing operating subsidies to stimulate the development of new
affordable housing in such communities. Housing units provided under the
demonstration program would be required to be accompanied by a
comprehensive program of services and incentives. The conference report
contains the House provision.

The House provision would require HUD to carry out the demonstration
program in housing administered by the Housing Authority of the City of
Chicago, in the State of Illinois. HUD would be allowed to carry out the
demonstration program in no more than 3 other public housing agencies.
No more than 15 percent of the total number of public housing units
administered by each participating public housing agency could be used
in the demonstration. Tenants would be protected from involuntary
relocation or displacement under the demonstration program.

The House provision would allow PHAs to utilize Section 9 operating
subsidies in privately owned newly constructed or rehabilitated housing
for the purpose of providing reasonable and necessary operating costs
in connection with the development of additional affordable housing.
Such units would have to be reserved for use for occupancy by very
low-income families. Operating subsidy amounts could be provided for a
unit of housing only after the execution of a lease between the owner
of the housing and a qualifying tenant for 1 corresponding public
housing unit.

Rental terms: Residence in units acquired by the PHA under the
demonstration would be limited to very low-income families that reside,
or have been offered a unit, in public housing and that enter into a
contract participation in the demonstration. Rent for each unit would
be an amount equal to 30 percent of the adjusted income of the resident
family except that the rental charge may not exceed a ceiling rent
determined by the public housing agency in the manner that monthy rent
is determined under Section 3(a)(2)(A) of such Act.

Income mix: The number of the units in each privately developed housing
project that could be leased by a public housing agency would be limited
to not more than 25 percent of the total. The amount of operating
subsidy used in the privately owned projects would have to provide the
same number of units as that amount of subsidy would have provided in
public housing.

Assistance from other entities: The House provision would permit PHAs
to seek the cooperation and receive assistance from State, county, and
local governments and the private sector to develop housing for use
under this demonstration, including (A) donations of land and
write-downs and discounts on land by local governments; (B) abatement
of real estate taxes for specified periods by local, county, or State
governments; (C) assignment of community development block grant funds
and loan guarantees made available under Title I of the Housing and
Community Development Act of 1974; (D) low interest rate financing
through Federal Home Loan Bank programs, State or Federal programs, and
private lenders; (e) low income housing tax credits from State and local
governments; and (F) mortgage revenue bonds from State or local
governments.

Determination of location and number of units: The House provision would
require that PHAs work with the local government to determine the
location of any newly constructed or rehabilitated housing to be
utilized under the demonstration program and number of units to be
developed annually. It would limit the total number of newly constructed
or rehabilitated units for PHAs with not more than 5,000 public housing
units, to 15 percent of the number of units administered by the agency;
for PHAs with more than 5,000 but not more than 25,000 units, to 10
percent of the number of units; and for PHAs with more than 25,000
units, to 4 percent of the number of units.

Existing public housing: To facilitate the establishment of
socio-economically mixed communities within existing public housing
developments, the House provision would require the Secretary to
authorize PHAs to lease units in existing public housing projects, to
lower income families who are not very low-income families,
notwithstanding the income eligibility provisions of the 1937 Housing
Act.

Except as provided below, not more than 25 percent of the units in each
public housing project in the demonstration program could be occupied
by lower income families who are not very low-income families, except
that if a public housing agency has a special need, the Secretary could
increase the percent of lower income families to not more than 50
percent in a public housing project in the demonstration program. The
remainder of the units would be occupied by very low-income families.
Such special need could include the need to ensure the successful
revitalization of troubled public housing through establishing a
socio-economically mixed resident population.

The rent charged any family occupying an existing public housing unit
in this demonstration could not exceed the ceiling rent level normally
determined by the public housing agency. A participating public housing
agency would enter into a lease with each family occupying a public
housing unit in the demonstration for a term of 1 year, renewable upon
expiration for a period not to exceed 7 years. A public housing agency
could extend the period.

A participating public housing agency would be required to enter into
a contract with each family in the demonstration living in the privately
developed housing leased to the agency. Each family in the demonstration
would have to meet the criteria established below. The contract would
be made part of the lease, would set forth the provisions of the
demonstration program, and would specify the resources to be made
available to the participating family and the responsibilities of the
participating family.

Requires each PHA to establish relevent criteria for participation of
families in the demonstration program, including the status and history
of employment of family members; enrollment of the children in the
family in an educational program; family's maintenance history; ability
of adult family members to complete training for long-term employment;
the existence and seriousness of any criminal records of family members;
and the status and history of substance abuse of family members.

Continued residency of families in housing would require compliance with
standards established by the participating public housing agency,
including all members of the family remaining drug-free; no member of
the family engaging in any criminal activity; each child in the family
remaining in an educational program until receipt of a high school
diploma or the equivalent; and family members participating in the
support services and counseling.

The public housing agency would be required to ensure the availability
of supportive services and counseling to the family in accordance with
the terms and conditions of the contract of participation. The public
housing agency would provide for such services and counseling through
its own resources and through coordination with Federal, State, and
local agencies, community-based organizations, and private individuals
and entities, including remedial education; education for completion of
high school; job training and preparation; child care; substance abuse
treatment and counseling; training in homemaking skills and parenting;
family counseling; and financial counseling services emphasizing
planning for homeowership.

Economic advancement of participating families

Employment: The head of the family would be required to be employed on
a full-time basis, and requires the public housing agency to ensure the
provisions of employment counseling.

Rent increases: For the first year of participation rent could not be
increased if earned income increases until such earned income exceeds
80 percent of the median family income for the area.

Escrow savings accounts: Each participating public housing agency would
be required to establish for each participating family an
interest-bearing escrow savings account held by the agency in the
family's name. Requires the PHA to deposit in the account a percentage
of the monthly rent charged the family, which percentage would be
established in the contract of participation and any rent increases
charged because of increases in the earned income of the family.

A participating family could withdraw amounts in the family's escrow
account only upon successfully completing the demonstration program, for
purchase of a home, for contribution toward college tuition, or other
good cause determined by the PHA. A participating family that has
committed violations referred to below would forfeit access to the
escrow account.

Treatment of increased income: Any increase in the earned income of a
participating family could not be considered as income or a resource for
the purpose of the family for benefits, or amount of benefits payable
to the family for benefits, or amount of benefits payable to the family,
under any other Federal law, unless the income of the family equals or
exceeds 80 percent of the median income of the area.

Conclusion of participation, 7-year term: A participating family would
be required to terminate residency not later than 7 years after initial
occupancy. The PHA would be required to extend the period for any family
that requests extension of the period because the family is not prepared
to own a home elsewhere or to secure any other form of private housing;
or for other good cause.

If a participating family is unable to successfully fulfill the
requirements of the demonstration the PHA would be required to offer the
family a comparable public housing unit in a PHA owned project without
regard to Federal preferences or Section 8 assistance subject to
appropriations and notwithstanding any Federal preferences, unless the
family has committed serious or repeated violations of the terms and
conditions of the lease, violations of applicable Federal, State, or
local law or has been exempted from participation for other good cause.

Public housing advisory board: The Senate bill contained a provision
that was not included in the House amendment that would authorize the
creation of a Public Housing Advisory Board to provide advice to the
Assistant Secretary for Public and Indian Housing with respect to the
formulation of general policies and significant regulations governing
public housing. The conference report does not contain the Senate
provision.

Energy efficiency demonstration

Establishment: The Senate bill contained a provision that was not
included in the House amendment that would require the Secretary to
establish a demonstration program to encourage the use of private energy
service companies in 5 public housing agencies in 5 public housing
projects in order to demonstrate the opportunities for energy cost
reduction. The Senate bill would require the Secretary, not later than
90 days after enactment of this Act, to establish selection criteria for
this demonstration after consultation with representatives of public
housing agencies and energy organizations. The conference report
contains the Senate provision.

Report: The Senate bill contained a provision that was not included in
the House amendment that would, as soon as practicable following one
year after the date of enactment of this Act, require the Secretary to
submit to the Congress a report setting forth the findings and
recommendations of the Secretary as a result of the demonstration and
would require the Secretary to disseminate such report, to the extent
practicable, to other public housing agencies. The conference report
contains the Senate provision.

Funding: The Senate bill contained a provision that was not included in
the House amendment that would provide that of the total amount
appropriated for HUD research and development, $500,000 will be set
aside for Fiscal Year 1991. The conference report does not contain the
Senate provision.

Study of public housing funding system

The Senate bill contained a provision that was not included in the House
amendment that would require the Secretary to carry out a study
assessing one or more revised methods of providing sufficient Federal
funds to public housing agencies for the operation, maintenance and
modernization of public housing. The Secretary would be required to
compare and contrast existing methods of funding in public housing with
those used by the Department in housing assisted under Section 8 of the
United States Housing Act of 1937. In preparing the study, the Secretary
would, in particular, review the results of the study entitled
"Alternative Operating Subsidies Systems for the Public Housing
Program" released by the Department's Office of Policy, Development
and Research in May, 1982 and update such study as may be necessary. The
Secretary would be required to report to the authorizing committees of
Congress within 12 months after the enactment of this Act detailing the
findings of the study. The conference report contains the Senate
provision.

Study of prospective payment system for public housing: The House
amendment contained a provision that was not included in the Senate bill
that would require the Secretary to assess one or more revised methods
of providing Federal housing assistance through local PHAs. In analyzing
such alternatives, the Secretary would examine methods of prospective
payment, including the conversion of PHA operating assistance,
modernization, and other Federal housing assistance to a schedule of
steady and predictable capitated Federal payments to PHA's on behalf of
low income public housing tenants. The Secretary would assess, within
the capitated funding alternative, means of (a) providing for tenant
participation in the release of such capitated payments to PHA's; (b)
providing financial incentives for PHA overall performance and
efficiency; (c) designating certain PHA's as distressed and eligible for
special Federal assistance; (d) differential treatment of PHA's based
on differences in local population demographics, rental housing markets,
and other pertinent factors, and (e) calculating annual inflation-based
increases in capitated Federal payments. Such report would be made to
the authorizing committees of Congress within 12 months after the date
of enactment of this Act. The conference report does not contain the
House provision.

Rental rehabilitation grants: The House amendment contained a provision
that was not included in the Senate bill that would allow for the
coordination between State funds and federal assistance under Section
17 of the 1937 Act in areas with rent control. The conference report
does not contain the House provision.

The Senate bill contained a provision that was not included in the House
amendment that would prohibit any new grants or loans from being made
under the Sec. 17 Rental Rehabilitation program, after October 1, 1990,
except as authorized for a transitional Rental Rehabilitation program
in the HOME program in the Senate bill. The House provision would
authorize $133,000,000 in FY 1991 for the Rental Rehabilitation Grant
program. The conference report contains the Senate provision and has
included this in the HOME program in the conference report.

GAO study of alternatives in public housing: The conference report
contains a provision that requires the Comptroller General to conduct
a study assessing alternative methods of developing public housing
dwelling units, other than under the existing public housing development
program. The study will include an analysis and evaluation of different
methods of financing and structuring a program to develop public housing
and of coordinating such a program with local housing strategies and an
evaluation of the effectiveness of developing public housing units by
coordinating the low-income housing tax credit program with the
development of public housing.

Applicability to Indian housing: The House amendment contained a
provision that was not included in the Senate bill that would apply the
provisions contained in Subtitle A-1937 Housing Act programs to Indian
public housing authorities (IHAs) except it does not apply to Section
504 Public Housing Agency Reform and Section 508 Income Eligibility for
Public Housing to Indian public housing authorities. The conference
report contains the House provision.

subtitle b-low-income rental assistance

Designation of Certificate and Voucher programs: The Senate bill
contained a provision not included in the House amendment that would
amend 8(b) to entitle the subsection providing for Section 8
certificates "Rental Certificates" and amend 8(o) that provides for
Section 8 vouchers to entitle it "Rental Vouchers". The conference
report contains the Senate provision with an amendment to entitle
section 8(b) "Rental Certificates and Other Existing Housing
Programs".

Drug-related rent adjustment: The Senate bill contained a provision not
included in the House amendment that would permit adjustments in
contract rents under Section 8 where the Secretary determines that an
assisted project is located in a community where drug-related criminal
activity is generally prevalent and the project's operating,
maintenance, and capital repair expenses have been substantially
increased primarily as a result of the prevalence of such drug-related
activity. Such adjustments could not exceed the existing fair market
rents established for the areas. The conference report contains the
Senate provision with an amendment to limit rent adjustments to 120
percent of project rents.

Tenant rent contributions under Section 8 certificate program: The
Senate bill contained a provision not included in the House amendment
that would allow tenants receiving tenant based assistance under Section
8 of the 1937 Housing Act to pay more than 30% of income for rent if the
family notifies the local PHA of its interest in a unit renting for an
amount which exceeds the permissible maximum monthly rent established
for the market area, and such agency determines that the rent for the
unit and the rental payments of the family are reasonable, after taking
into account other family expenses. No more than 10% of a PHA's annual
allocation of incremental rental assistance could be used to approve
such excess rentals. The Secretary would submit a report to Congress
that identifies the PHAs that have made such excess rentals and includes
recommendations for such legislative or administrative actions that the
Secretary deems appropriate to correct problems identified in such
reports. The conference report contains the Senate provisions but
includes an amendment to delineate types of expenses to be considered
by PHA in determining what is reasonable rent. The conferees intend that
this section only apply to circumstances where the rents for particular
units are above the Section 8 exception rents.

Preferences

The House amendment contained provisions not included in the Senate bill
that would amend Section 8 to raise the percentage of non preference
families that can receive project based assistance to 30%, but would
retain the 10% limit on tenant based assistance and that would increase
from 10 to 30 the percentage of non preference families that can be
placed in units in Section 8 new construction or substantial
rehabilitation projects built prior to October 1, 1983 and in Section
202 projects. The conference report contains the House provision with
an amendment to require that non-preference tenants be selected
according to a system of local preferences that parallel the preferences
for public housing tenants.

Tenant protections

The Senate bill contained a provision not included in the House
amendment that would add to the lease requirements for project-based
assistance that the lease between the tenant and the owner provide that
the tenant, any member of the tenant's household, or a guest or other
person under the tenant's control shall not engage in criminal activity
that threatens the health, safety, or right to peaceful enjoyment of the
premises by other tenants, or any drug related criminal activity on or
near the premises, and that such criminal activity shall be a cause for
termination of tenancy; and (2) any termination of tenancy shall be
preceded by the owner's provision of written notice to the tenant
specifying the grounds for such action. The conference report contains
the Senate provision.

Revisions to project-based certificate program

The Senate bill contained a provision not included in the House
amendment that would amend the project based assistance provisions of
Section 8 of the 1937 Housing Act to require owners to adopt written
tenant selection procedures that are satisfactory to the Secretary as
consistent with the purpose of improving housing opportunities for very
low-income families; and reasonably related to program eligibility and
an applicant's ability to perform the obligations of the lease. An owner
shall promptly notify in writing any rejected applicant of the grounds
for any rejection. The conference report contains the Senate provision.

The Senate bill contained a provision not included in the House
amendment that would require the Secretary on an annual basis to study
the extent to which the 15% limit on project-based assistance are
exceeded and to report to Congress on the results of that study. The
conference report contains the Senate provision.

The Senate bill contained a provision not included in the House
amendment that would amend Section 8(d)(2)(C) to require PHAs, when
executing a contract for project-based rental assistance, to enter into
a commitment, contingent only upon future appropriations, to extend the
term of the underlying rental assistance contract for such period or
periods as HUD determines is appropriate to achieve long-term
affordability. Owners would be bound to accept such extensions. The
conference report contains the Senate provision.

Section 8 assistance for PHA owned units

The House amendment contained a provision not included in the Senate
bill that would permit public housing authorities to receive Section 8
assistance payments for projects they own. The conference report
contains the House provision with an amendment requiring that such
assistance meet the same program requirements as for other owners and
allows the Secretary to establish initial rents within applicable
limits.

Definitions of participating jurisdiction and drug-related criminal
activity

The Senate bill contained a provision not included in the House
amendment that would add the following definitions to Section 8 of the
1937 Housing Act: "Participating jurisdiction" means a State or unit
of general local government designated by the Secretary to be a
participating jurisdiction under Title II of the NAHA; and
"drug-related criminal activity" means the illegal manufacture, sale,
distribution, use, or possession with intent to manufacture, sell,
distribute, or use, of a controlled substance (as defined in Section 102
of the Controlled Substances Act. The conference report contains the
Senate provision.

Revisions to voucher program

The Senate bill contained a provision not included in the House
amendment that would require that rents in units assisted under Section
8(o) of the 1937 Housing Act (voucher assistance) be reasonable in
comparsion with rents charged for comparable units in the private
unassisted market or assisted under the Section 8 certificate program.
PHAs must assist families who request it in negotiating a reasonable
rent with an owner, and must review all rents for units under
consideration by families receiving voucher assistance to determining
whether the rent requested by an owner is reasonable. The PHA may
disapprove a lease for such unit which is deemed inappropriate. The
Senate bill would require PHAs to obtain in writing, at least annually,
in a written form satisfactory to the Secretary, information on the
percentage of income paid for rent of all families receiving voucher
assistance. If, during any fiscal year, more than 10 percent of the
families assisted under this subsection by a PHA pay more than 30
percent of adjusted income for rent, the local PHA would submit a report
to the Secretary not later than 30 days following the end of the fiscal
year which would establish and contain the public housing agency's
assessment of the reasons for such excessive rent burdens, including any
available evidence that the excessive rent burdens were caused by
problems with the fair market rent established for the area. The
Secretary would be required to make each such report readily available
for public inspection for a period of not less than 3 years, beginning
not less than 30 days following the date on which the report is
submitted to the Secretary. The Secretary would be required to submit
a report to Congress not later than 3 months following the end of a
fiscal year that (I) identified the PHAs that have submitted reports for
such fiscal year as required supra, (II) summarizes and assesses such
reports, and (III) includes recommendations for such legislative or
adminisitrative actions that the Secretary deems appropriate to correct
problems identified in such reports. The conference report contains the
Senate provision with an amendment to tighten PHA reporting requirements
to require that report be based on objective evidence and to limit HUD
report to annually for first two years after enactment and then
biannually thereafter.

Eligiblity of vouchers for use with mobile homes: The House amendment
contained a provision not included in the Senate bill that would
authorize the Secretary to provide voucher assistance to lower income
families who utilize a manufactured home as their principal place of
residence. Assistance could be used for the rental of the real property
on which there is located a manufactured home owned by such family, or
for rental by such family of a manufactured home and the real property
on which it is located. The conference report contains the House
provision.

Portability of certificates and vouchers

Under existing law, a holder of a certificate or voucher can utilize
that certificate or voucher in any contiguous metropolitan statistical
areas (MSA). The limitation to contiguous areas prevented the movement
between MSAs and non-MSAs. The conference report addresses this problem
by including a provision that allows for the movement between such areas
so long as those areas are in the same state.

Renewal of expiring contracts

The Senate bill contained a provision not included in the House
amendment that would require HUD, within 30 days after the beginning of
each fiscal year, to publish in the Federal Register a plan for
reducing, to the extent feasible, year-to-year fluctutations in the
budget authority levels that will be required over the succeeding 5-year
period to renew section 8 expiring rental assistance contracts entered
into since enactment of the 1974 Housing Act. The conference report
contains the Senate provision.

Authorizations: The House amendment contained a provision that would
extend expiring Section 8 contracts by authorizing ($7,735,000,000)
specific budget authority for 5-year section 8 certificates, loan
management assistance and vouchers. The Senate bill would not authorize
a specific amount of budget authority but would authorize HUD to enter
into annual contributions contracts with less than 60 month term to the
extent approved in appropriations acts and included within a HUD plan
on expiring contracts. The conference report contains the House
provision with the understanding that this is a baseline activity.

Assistance to promote family unification

The House amendment contained a provision not included in the Senate
bill that would require HUD to provide section 8 certificate assistance
to eligible families identified by local child welfare agencies as
having a lack of adequate housing that is a primary factor in the
imminent placement of a child in foster care or in preventing the
discharge of a child from foster care and reunification with his or her
family. This provision would require HUD to make Section 8 assistance
available to qualifying families and authorizes to be appropriated for
each fiscal year such sums as may be necessary to each individual
entitled to the Section 8 assistance. It would require that these
provisions take effect on October 1, 1990. The conference report
contains the House provision with an amendment to make this a stand
alone program authorized at $35,000,000 for each fiscal year 1991 and
1992. The conference report clarifies that families whose children are
in or at risk or placement in foster care shall qualify under the
existing federal preferences for Section 8 and public housing assistance
as if they were families living in "substandard" housing. In addition,
the bill clarifies that youths who are discharged from foster care and
have no family or extended family to return to are eligible under the
preference afforded to persons who are "involuntarily displaced." The
conference report also establishes a new authorization of Section 8
funds to provide housing certificates to families-who are otherwise
eligible for Section 8-whose children are at imminent risk of placement
in foster care or are prevented from returning from foster care
primarily due to lack of adequate housing. The conferees intend that
funding for this initiative will be separate and above funding for the
existing Section 8 programs.

Family self-sufficiency

The House amendment contained a provision authorizing the HOPE for
Family Self-Sufficiency Program. The purpose of this program is to
coordinate the use of public housing and assistance under Section 8
certificate and voucher programs with public and private resources to
enable families to achieve economic independence and self sufficiency.
The Senate bill contained a similar provision, the Operation Bootstrap
Program which was limited to coordination of Section 8 housing
assistance with other resources and did not include public housing. The
conference report contains the House amendment with an amendment that
retains provisions associated with Section 8 assistance as outlined
below and eliminates references to public housing except that PHAs will
be required to provide coordination services for public housing
residents and any public housing residents that participate will receive
program benefits.

Establishment of program: The House amendment contained a provision
requiring each public housing agency that administers Section 8
certificate of voucher assistance or provides public housing to carry
out a local HOPE for Family Self-Sufficiency program. The program,
subject to availability of supportive services, would include an action
plan providing comprehensive supportive services for the families who
choose to participate. The Secretary must consult with other federal
agencies and provide for cooperative actions and funding agreements with
such agencies. Each public housing agency administering a local program
may employ a service coordinator. The Senate bill contained a similar
provision except that the program would be optional to public housing
agencies until October 1, 1992, when the program becomes mandatory. A
public housing authority participating in the program is required to
take steps to ensure that the number of families participating in the
program is equal to the aggregate number of certificates and vouchers
that may be funded from such additional assistance beginning with FY
1991. The agency must operate the program for that number of families
as long as it has sufficient funding under its certificate programs to
do so.

The conference report contains the House provision with an amendment
that makes the program discretionary for PHAs in FY 1991-1992 and
mandatory beginning in FY 1993, requires that for Section 8 assistance
the number of program participants be no more than the total number of
incremental vouchers and certificates for FY 1991 and FY 1992, and
requires that the program continue so long as there is sufficient
funding to do so. Participation is mandatory for new vouchers and
certificate holders, as well as for PHAs receiving new allocations. The
conferees wish to emphasize that public housing agencies may opt out of
participation in this program if they are able to demonstrate to the
Secretary that local services cannot be made available to additional
recipients of Section 8 rental assistance. If local resources are
already stretched to their limit, oversubscribed, or simply absent, PHAs
should not be penalized for failing to muster local support services
over which they have no direct control. The conferees do not intend that
HUD withhold Section 8 rental assistance or other HUD funds to those
PHAs which opt out of the HOPE for Family Self-Sufficiency program. Such
a policy would penalize those communities and residents least able to
afford support services by denying them other Federal HUD funds, such
as HUD rental assistance. Indeed, it may well be that the PHAs which opt
out and their communities are those most in need of additional rental
assistance as well as other HUD programs.

Contract of participation: The House amendment contained a provision
requiring each participating public housing agency to enter into a
contract with each receiving participating family Section 8 or public
housing assistance who elects to participate in the program. The
contract must specify the resources and supportive services to be made
available and the responsibilities of the participating families. The
Senate bill was similar but did not require a contract and was limited
to participation for only Section 8 tenants. The conference report
contains the House provision with an amendment to require a contract of
participation only with Section 8 recipients and provides a technical
amendment on participating families. In order to receive services,
public housing families would be required to sign such a contract. The
PHA can withdraw vouchers or certificates and services from
non-cooperating families.

Effect of increases in family income: The House amendment contained a
provision requiring that any increase in the earned income of a
participating family not be considered as income or a resource with
respect to any other benefits or program administered by the Secretary
unless the income of the family equals or exceeds 80% of the area median
income. For each participating family, the difference between 30 percent
of income and the amount of rent paid would be place in an interest
bearing escrow account established by the PHA on behalf of the
participating family and could be withdrawn after the family is no
longer a recipient of public assistance for housing. The Senate bill
contains a similar provision except the limitation applies to all
Federal benefit or federally assisted programs based on need. The
conference report contains the Senate provision with an amendment to
phase out escrow accounts as a family's income increases between 50 and
80 percent of median.

Program coordinating committee: The House amendment contained a
provision for membership of the program coordinating committee to
consist of representatives from the public housing agency, the local
government, the local agencies who administer the Job Training
Partnership Act and the Job Opportunities and Basic Skills Training
Program, and other organizations. The Senate bill contains a similar
provision except that delineated membership would be mandatory not
permissive. The conference report contains the House provision.

Allowable public housing agency administrative fees and costs: The House
amendment contained a provision requiring the Secretary to establish a
fee for administering the provision of certificates and vouchers under
this program. The PHA could also receive up to $25 per certificate or
voucher for start-up costs. The Senate bill contained a similar
provision except it would continue the Section 8 administrative fee in
effect June 1, 1990 (8.5%), until the GAO completes its report on
self-sufficiency programs. The Secretary would be required to adopt the
fee recommended by the GAO. The conference report contains the Senate
provision with an amendment retaining start up bonus for certificates
or vouchers of $25.00 (subject to appropriations) and makes the GAO
finding a recommendation that would not require adoption. Instead the
Secretary would be required to adopt a fee once GAO has reported on its
study.

The House amendment contained a provision not included in the Senate
bill requiring the Secretary to provide for the inclusion under the
performance funding system of reasonable and eligible administrative
costs (including the costs of employing a full-time service coordinator)
incurred by public housing agencies carrying out local programs under
this section. An estimate of the administrative costs likely to be
incurred by participating public housing agencies would be included in
the annual budget request for public housing operating assistance.
Authorizes from amounts appropriated for operating subsidies,
$25,000,000 for these administrative costs. The conference report
contains the House provision.

The House amendment contained a provision requiring the Secretary to
reserve for allocation under this subsection not less than 10% of the
Section 8 budget authority available in FY 1991 and each fiscal year
thereafter for certificate and voucher assistance under Section 8. It
would provide for a similar reservation for programs in public housing
development assistance. The Senate bill contained a similar provision
except the reservation of certificate and voucher budget authority is
limited to FY 1991 and 1992. The Senate bill did not contain a provision
for public housing development assistance. The conference report
contains the Senate provision.

On-site facilities: The House amendment contained a provision not
included in the Senate bill allowing each public housing agency to use
common areas or vacant units for the provision of supportive services
under its self-sufficiency program. The conference report does not
contain the House provision.

GAO report: The House amendment contained a provision requiring the GAO
to submit to Congress an interim report and a final report evaluating
the HOPE for Self-Sufficiency Program. This report must be submitted not
later than the expiration of 2 years and 5 years respectively, beginning
on the effective date of the final regulations issued under this
section. The final regulations implementing this section must be filed
within 14 months of enactment and such regulations must become effective
1 year after publication of the final regulations. The Senate bill
contained a similar provision except that the required reports would be
submitted at the expiration of 2 years and 5 years respectively,
beginning on the date of enactment. The conference report contains the
Senate provision.

Applicability to Indian public housing: The House amendment contained
a provision not included in the Senate bill requiring the provisions of
this section to also apply to public housing developed or operated
pursuant to a contract between the Secretary and an Indian housing
authority. The conference report contains the House provision.

Employment of PHA residents: The Senate bill contained a provision not
included in the House amendment requiring each public housing agency to
employ public housing residents to provide services. It would require
wage rates to be the higher of the minimum wage under the Fair Labor
Standards Act of 1938; the State or local minimum wage for the most
nearly comparable covered employment; or the prevailing wage rates for
similar public occupations by the same employer. The conference report
contains the Senate provision.

Treatment of income: The Senate bill contained a provision not included
in the House amendment prohibiting treating the services as income for
the purpose of any other program of State or Federal law. The conference
report contains the Senate provision.

Definitions for this subsection: The Senate bill contained a provision
not included in the House amendment defining "eligble resident" to
mean a person residing in public housing who is a single parent head of
household with 1 or more children under the age of 10; and is
economically disadvantaged within the meaning of sections 4(8)(A) and
(B) of the Job Training Partnership Act. The Conference report does not
contain the Senate provision.

The Senate bill contained a provision not included in the House
amendment defining "qualifying supportive services" to mean new or
significantly expanded services that the Secretary deems essential to
provide families in public housing with better access to educational and
employment opportunities including, but not limited to child care;
employment training and counseling; literacy training; computer skills
training; and assistance in the attainment of certificates of high
school equivalency. Such services could be provided directly by the PHA
or by contract or lease with service providers. The conference report
contains the Senate provision with an amendment adopting the definition
of "supportive services".

Benefits excluded from income: The Senate bill contained a provision not
included in the House amendment amending section 3(a) of the Housing Act
of 1937, to exclude the earnings of and benefits to any public housing
resident resulting from participation in any self-sufficiency program
from income for the purposes of determining rent paid by the resident
during the resident's participation in such program; and the period, not
to exceed 18 months, from the first job acquired by the person after
completion of such program to the date the resident loses employment
without good cause or 18 months, whichever occurs first. The conference
report contains the Senate provision with a technical drafting amendment
relating to Section 14(j) to allow PHA tenants to receive benefits.

The House amendment contained a provision authorizing $25,000,000 in FY
1991, and such sums as may be appropriated in fiscal years 1992 and
1993. The Senate bill contained a provision that would authorize
$50,000,000 for FY 1991, $52,000,000 for FY 1992 and $54,080,000 for FY
1993 for project independence. The conference report contains the House
provision with an amendment to authorize $26,075,000 for FY 1992.

GAO studies on economic self-sufficiency: The Senate bill contained a
provision not included in the House amendment requiring the Comptroller
General to submit to the Congress, not later than 18 months following
the date of enactment of the National Affordable Housing Act, a report
evaluating the policy and administrative implications of requiring State
and local governments to tie the provision of rental assistance under
Section 8 of the United States Housing Act of 1937 to participation in
economic self-sufficiency programs. In addition, in preparing such
report, the Comptroller General shall consider the additional costs to
public housing agencies under such programs and shall recommend a change
in the amount of the administrative fee under Section 8(q) of the United
States Housing Act of 1937 to cover the additional costs of carrying out
the Operation Bootstrap Program.

The Senate bill also contained a provision not included in the House
amendment requiring the Comptroller General to conduct a study, and to
report to the Congress, not later than 12 months after enactment, to
examine how housing policies and social service policies affect
beneficiaries, particularly those receiving public assistance, when such
beneficiaries gain employment and experience a rise in income and to
analyze the extent to which existing housing and other laws create
disincentives to upward income mobility and to recommend any changes to
existing law which would remove such disincentives.

The conference report contains both Senate provisions with an amendment
combining these two studies into one.

Income eligibility for tenancy in new construction units

The House amendment contained a provision not included in the Senate
bill that would require construction and substantial rehabilitation
projects assisted under Section 8 as it existed prior to October 1,
1983, to house lower-income families to the extent assistance was
reserved for such families by Section 8 at the time the contract was
made. The conference report contains the House provision.

Distribution of section 8 certificates

The Senate bill contained a provision not included in the House
amendment that would amend the requirement for formula allocation
adopted in the HUD Reform Act to allow assistance under Section 8(b)(1)
of the United States Housing Act of 1937 to be allocated in a manner
that enables participating jurisdictions to carry out, to the maximum
extent practicable, comprehensive housing affordability strategies
approved in accordance with Section 105 of the NAHA. The conference
report contains the Senate provision with an amendment to clarify that
provision does not affect fair share allocation.

Settlement agreement regarding certain Section 8 assistance

The House amendment contained a provision not included in the Senate
bill that would require HUD to provide 186 Section 8 certificates to the
City of Norfolk, Virginia, in satisfaction of a settlement agreement.
The conference report contains the House provision.

GAO study regarding fair market rent calculation

The House amendment contained a provision that would authorize HUD, upon
request of a PHA, to approve separate fair market rents for areas that
are geographically smaller than a market area and are wholly contained
within such market area if the PHA demonstrates that the alternative
fair market rents proposed accurately reflect rent variations between
such areas and the established market area. The Senate bill contained
a similar provision but did not define "submarket area". The
conference report contains the Senate provision with an amendment to
require GAO to do case studies to examine and report on the geographic
dispersion of certificates and vouchers in market areas and to study how
FMR levels may inflate rents.

Study of Section 8 utilization rates

The House amendment contained a provision not included in the Senate
bill that would require HUD to study the utilization of Section 8
assistance by cities and to report to Congress within 1 year of
enactment on the results of the study. The Senate bill contained a
provision not included in the House amendment that would require the
Secretary to conduct a study of a sample of Section 8 assisted housing
and Section 202 housing to determine the amounts that are contained in
existing residual receipts accounts. The conference report contains both
the House and the Senate provisions.

Feasibility study regarding Indian tribe eligibility for voucher program

The House amendment contained a provision not included in the Senate
bill that would require HUD to study the feasibility and effectiveness
of entering into contracts with Indian housing authorities to provide
voucher assistance. The conference report contains the House provision.

Adjustment of subsidy under voucher program

The Senate bill contained a provision not included in the House
amendment that would amend the provision of Section 8(o) that
establishes the amount of Federal assistance under the voucher program
to allow payments to families that remain in a unit after receiving
voucher assistance. The Senate bill would allow such families to receive
the amount by which the rent for the dwelling unit exceeds 30% of the
family's monthly adjusted income not to exceed the amount of the
standard payment. The conference report does not contain that provision.

Conferees comment on qualifications-based selection procedures

Because of HUD's conflicting guidance, architectural and engineering
("A/E") firms competing for contracts financed through the public
housing and community development block grant ("CDBG") programs are
not being selected according to the procedure, the Qualifications-Based
Selection or "QBS" procedure, that assures the selection of the best
qualified firm. Under QBS, A/E firms compete based on their professional
qualifications and quality of services. A contracting officer selects
the most qualified firm based on the capacity, technical qualifications,
timely performance, accomplishments, reputation and references and then
negotiates a fair and reasonable price for the service. If a fair price
cannot be agreed to with the most highly qualified firm, negotiations
as to price begin with the second best qualified firm.

QBS is the preferred system for selecting A/E services because the
precise scope and range of the design services which are the basis for
any contract price cannot be accurately determined until specific
negotiations begin. Innovative approaches and alternative designs or
methods arise when a client and a design professional develop the
precise scope of a project together. Too often when a scope of work is
developed as part of a price bidding system prior to the selection of
an A/E firm, it is so vague that inaccurate assumptions are made by the
A/E firm responding to the solicitation. Even when a public housing
agency or CDBG grantee has in-house professional design staff
sufficiently skilled to develop a detailed scope of work upon which an
A/E's price bid can be based, the complexity of the contract cannot be
anticipated and the bids often do not accurately reflect the cost. QBS
requires A/E firms to compete based on skills, experience and ability
to perform the required services-not on the illusory economy that a low
bid may seem to provide. Low bids requiring substantial change orders
or resulting in high construction or high life-cycle operating or
maintenance costs are not cost-effective.

While HUD's regulations permit the use of QBS in selecting A/E services,
they also cite two procedures that are less appropriate for the
selection of such services: qualifications-plus-price or small purchase
procedures for contracts under $25,000. In an attempt to clarify its
procedures, HUD has issued conflicting notices, handbooks and letters
that have confused public housing authorities and CDBG grantees. Some
grantees tell A/E firms that HUD prohibits the use of QBS; some believe
they must base their selection solely on the lowest bid; others believe
they must use small purchase procedures that stress price, not quality;
while others explain that notwithstanding state or local requirements
requiring the use of QBS, HUD requires competition based on
qualifications-plus-price.

subtitle c-general provisions and other assistance programs

Lower income housing authorizations

Aggregate budget authority: The House amendment contained a provision
that would provide additional aggregate budget authority (to the extent
approved in Appropriations Acts) for public housing and Section 8
programs authorized under Sec. 5(c) of the 1937 Housing Act of
$16,178,852,000 for FY 1991. The Senate bill contained a provision that
would provide additional aggregate budget authority of $2,826,360,000
for FY 1991, $2,865,748,000 for FY 1992, and $2,809,346,000 for FY 1993
for annual contributions under Section 8, for other Sec. 8 assistance
and for amendments to existing contracts. (This would not include public
housing authorizations referenced below.) The conference report contains
aggregate authorizations of $16,194,000,000 for FY 1991 and $14,709,400
for FY 1992.

Utilization of budget authority

Public housing

Grant authorization: The House amendment contained a provision that
would authorize for public housing grants under Sec. 5(c), $738,122,000
for FY 1991 (of which $514,100,000 in FY 1991 is available for public
housing).

The Senate bill contained a provision that would authorize $92,000,000
for FY 1991, $96,000,000 for FY 1992 and $100,000,000 for FY 1993 under
Sec. 14 of the 1937 Housing Act (CIAP) for public housing major
reconstruction in the form of grants for the substantial redesign,
reconstruction or redevelopment of existing public housing projects or
units.

The conference report authorizes $742,100,000 for FY 1991 (of which
$514,100,000 is available for public housing) and $812,300,000 for FY
1992 (of which $574,500,000 is available for public housing).

Major Reconstruction: The Senate bill contained a provision not included
in the House amendment that would prohibit any new public housing
development grants from being made after October 1, 1990. The conference
report does not contain the Senate provision.

Indian public housing: The House amendment contained a provision that
would authorize, of the total for public housing grants, $224,000,000
for FY 1991 for Indian public housing grants. The Senate bill contained
a provision that would authorize $223,700,000 for FY 1991, $243,088,000
for FY 1992 and $252,770,000 for FY 1993 for Indian public housing
grants. The conference report contains authorizations of $228,000,000
for FY 1991 and $237,800,000 for FY 1992.

CIAP: The House amendment contained a provision that would authorize for
Comprehensive Improvement Assistance Program (CIAP) assistance under
Sec. 14 of the 1937 Housing Act, $2,100,000,000 for FY 1991, including
not more than $100,000,000 for lead-based paint abatement for FY 1991.

The Senate bill contained a provision that would authorize the aggregate
amount of budget authority that may be obligated for CIAP grants is
increased by $2,217,000,000 for FY 1991, $2,306,000,000 for FY 1992, and
$2,398,400,000 for FY 1993.

The conference report contains authorizations of $2,150,000,000 for
CIAP, of which $3 million is specified for the Section 21 transition
associated with the HOPE program for FY 1991 and $2,242,500,000 for FY
1992.

Section 8/202 set-asides: The House amendment contained a provision that
would authorize Section 8 assistance in connection with Section 202
projects, $1,200,000,000 for FY 1991. The Senate bill did not contain
a similar provision but would authorize project rental assistance under
the revised Section 202 financing provisions, to the extent approved in
an appropriations Act and reserves authority aggregating $346,000,000
for FY 1991, $363,000,000 for FY 1992 and $377,520,000 for FY 1993. The
conference report contains authorizations of $1,200,000,000 for FY 1991.

Section 8 certificate/vouchers: The House amendment contained a
provision that would authorize for Section 8 certificates or vouchers,
$1,874,880,000 for FY 1991, of which 1) not more than 50% can be used
for vouchers and 2) not more than 1,000 certificates can be used as
replacement units under the HOPE I Public Housing Homeownership Program.
The Senate bill contained a provision that would authorize under Section
8(b)(1) of the 1987 Housing Act, for incremental rental assistance,
$1,138,800,000 for FY 1991, $1,129,190,000 for FY 1992, and
$1,057,935,000 for FY 1993. Additionally, would authorize $1,104,840,000
for Sec. 8(o) vouchers for FY 1991, $1,124,323,000 for FY 1992 and
$1,114,686,000 for FY 1993. The conference report contains
authorizations for Section 8 certificates of $1,880,000,000 for FY 1991
and $1,960,800,000 for FY 1992, of which not more than 50 percent may
be utilized for voucher assistance.

Section 8 replacement units: The Senate bill contained a provision not
included in the House amendment that would authorize Sec. 8 assistance
for public housing replacement activities, $108,750,000 for FY 1991,
$113,100,000 for FY 1992, and $117,624,000 for FY 1993. The conference
report contains authorizations of $79,100,000 for FY 1991 and
$82,500,000 for FY 1992.

Minimum State share for certain housing programs: The Senate bill
contained a provision not included in the House amendment that would
require that each state receive not less than one-half of 1% of the
aggregate amount of funds available in each fiscal year to carry out the
following housing assistance programs: (1) elderly and handicapped
housing loans under Section 202; (2) public housing modernization under
Section 14 of the 1937 U.S. Housing Act; (3) public housing operating
subsidies under the 1937 U.S. Housing Act; (4) Indian housing
development under the 1937 U.S. Housing Act. The conference report
contains the Senate provision with an amendment to assure that such
minimum state allocations required by this provision are made consistent
with Fair Share allocation requirements under section 213(d) of the
Housing and Community Development Act of 1974.

Section 8 moderate rehabilitation program: The Senate bill contained a
provision not included in the House amendment that would prohibit any
new grants or loans from being made under the Section 8 moderate
rehabilitation program after October 1, 1990, except where funds are
allocated under the single room occupancy program authorized under the
McKinney Homeless Act. The conference report does not contain the Senate
provision. Funding and authorization is provided for Single Room
Occupancy under Homeless Authorizations in the amount of $79,000,000 for
FY 1991 and $82,400,000 for FY 1992.

Program authorization: The House amendment contained a provision that
would authorize $3,309,962,322 of additional budget authority in FY 1991
$10,265,850,000 from the Section 5(c) subsidized housing account for
homeless prevention activities detailed below. The Senate bill contained
a provision that would authorize aggregate Section 8 budget authority
for FYs 1991, 1992 and 1993 (which is cited in Title V, Section 522
Program Authorizations) which is distributed as detailed below.

Section 8 property disposition: The House amendment contained a
provision that would authorize $523,720,000 for FY 1991. The Senate bill
contained a provision that would authorize $324,570,000 for FY 1991,
$343,759,000 for FY 1992, and $357,510,000 for FY 1993. The conference
report contains authorization of $420,000,000 for FY 1991 and
$438,100,000 for FY 1992.

Section 8 loan management: The House amendment contained a provision
that would authorize $179,430,000 for FY 1991. The Senate bill contained
a provision that would authorize $149,400,000 for FY 1991, $155,376,000
for FY 1992, and $161,591,000 for FY 1993. The conference report
contains authorizations of $160,000,000 for FY 1991 and $166,900,000 for
FY 1992.

Expiring contract authorization: The House amendment contained a
provision that would extend expiring Section 8 contracts by authorizing
$7,735,000,000 for FY 1991 for 5-year Section 8 certificates, loan
management assistance and vouchers. The Senate bill contained a
provision that would not authorize specific budget authority for
expiring contracts, but would authorize HUD to enter into annual
contributions contracts with less than 60-month terms to the extent
approved in appropriations Acts and included within a HUD plan on
expiring contracts. The conference report contains authorizations of not
more than $7,735,000 for 5 year Section 8 certificates for FY 1991 and
$7,100,000,000 in FY 1992.

Expiring contracts: The Senate bill contained a provision not included
in the House amendment that requires HUD, within 30 days after the
beginning of each fiscal year, to publish in the Federal Register a plan
for reducing, to the extent feasible, year-to-year fluctuations in the
budget authority levels that will be required over the succeeding 5-year
period to renew Section 8 expiring contracts entered into since the
enactment of the 1974 Housing Act. The conference report contains the
Senate provision.

Section 8 Contract amendments: The House amendment contained a provision
not included in the Senate bill that would authorize $1,620,473,000 for
FY 1991. The conference report contains the House provision with an
amendment to additionally authorize $1,690,200,000 for FY 1992.

Public housing lease adjustments and amendments: The House amendment
contained a provision not included in the Senate bill that would
authorize $20727,000 for FY 1991. The conference report authorizes
$207,300,000 for FY 1991 and $216,100,000 for FY 1992.

Low-income term: The Senate bill contained a provision that was not
included in the House amendment that would amend the United States
Housing Act of 1937 by replacing "lower income families" each place
it appears with "low income families", and "lower income housing"
with "low income housing". The conference report contains the Senate
provision.

Definitions under United States Housing Act of 1937

Family: The House amendment contained a provision not included in the
Senate bill to amend the definition of family in the 1937 Housing Act
to include single persons. This provision does not entitle single
persons to housing units of 2 bedrooms or more. The conference report
contains the House provision.

Income: The House amendment contained a provision not included in the
Senate bill to amend the definition of income so that it excludes from
income, amounts not actually received by the family, for example alimony
and child support payments which are owed but not paid. The conference
report contains the House provision with an amendment to condition this
change on approval in Appropriations Acts.

Adjustment income allowances: The House amendment contained a provision
not included in the Senate bill to amend the definition of adjusted
income for determination of tenant rent contribution in assisted housing
by adjusting the calculation of adjusted income by increasing the
allowance for each dependent from $450 to $550, providing allowances for
medical expense deductions for nonelderly persons, allowing working
families a deduction of 10 percent of earned family income and
permitting an allowance for child support and/or alimony payments not
in excess of the lesser of the legally required payment or $550 for each
individual for whom such payment is made. The conference report contains
the House provision with an amendment to make such income adjustments
subject to approval in Appropriations Acts.

Determination of income limits: The House amendment contained a
provision not included in the Senate bill to require HUD to determine
separate median incomes and income ceilings and limits, for Westchester
County, New York as if it were not within the metropolitan statistical
area (MSA) in which it is located. The provision also requires HUD to
use Westchester County, New York in determining area median incomes,
ceilings and limits for the MSA that Westchester County, New York is
located. The conference report contains the House provision.

Effect of Foster Care Children in Determining Family Size: The Senate
bill contained a provision not included in the House amendment providing
that under both the 1937 Housing Act and the 1949 Housing Act true
temporary absence of a child from home due to placement in foster care
shall not be considered in determining family size. The conference
report contains the Senate provision.

Rental development (HODAG)

Exemption: The House amendment contained a provision that was not
included in the Senate bill that would provide exemption from
commencement of construction requirements under the Section 17 HODAG
program for a Santa Cruz, California project if project construction or
substantial rehabilitation is started within 6 months of the enactment
date. This provision would be subject to approval in Appropriations
Acts. The conference report contains the House provision.

Termination: The Senate bill contained a provision not included in the
House amendment that would prohibit any new grants or loans from being
made under the Sec. 17 Rental Development (HODAG) program after October
1, 1990. The conference report contains the Senate provision.

Public housing and section 8 assistance regarding foster care children

The House amendment contained a provision not included in the Senate
bill that would require agencies administering public housing or Section
8 assistance to coordinate with local child welfare agencies in
providing units to: families whose children have been placed or could
be placed in foster care or have children in foster care which have not
been discharged due to housing conditions; and youth who have been
discharged from foster care who cannot return to their family or
extended family and for which adoption is not available. The conference
report contains the House provision with an amendment changing "shall"
to "may" and subjecting provision to preference rules. The House
amendment contained a provision that would amend the preferences for
housing placement in both the public housing and Section 8 programs to
include families separated due to substandard housing or lack of housing
and youth discharged from foster care who cannot return to their
families and cannot be adopted.

The Senate bill contained a provision that also addressed preferences
but is not specific to foster care situations. It would give preferences
to families who qualify under a system of local preferences established
by the public housing agency in writing and after public hearing to
respond to local housing needs and priorities which may include:
assisting very low-income families who either reside in transitional
housing assisted under title IV of the McKinney Homeless Assistance Act,
or participate in a program designed to provide public assistance
recipients with greater access to educational and employment
opportunities; assisting families who have to pay more than 30 percent
of their adjusted income for rent; avoiding breakup of families and
preserving and strengthening families and achieving other objectives
identified in cooperation with child welfare agencies and other
appropriate human service agencies; or achieving other objectives of
national housing policy as affirmed by Congress. The Senate provision
would also prohibit any individual or family evicted from housing
assisted under the Act by reason of drug-related criminal activity from
having a preference under any provision of this subparagraph for 5 years
unless the evicted tenant successfully completes a rehibilitation
program approved by the Secretary.

The conference report contains the Senate provision with an amendment
to allow as local prefences a preference for families for which
substandard housing or lack of housing is a primary factor in the
imminent placement of a child in foster care or in preventing the
discharge from foster care and the reunification with his or her family,
and a preference for youths being discharged from foster care. The
amendment also reduces the exclusion for drug related activity from 5
to 3 years and authorizes the Secretary to provide for waivers in the
case of uninvolved family members or changed circumstance.

Housing Assistance Plans: The House amendments contained a provision not
included in the Senate bill that local governments, in developing their
housing assistnance plan, would be required to consult with local child
welfare agencies to determine the housing needs of such families and
youth and to include within their HAP, needs and goals relating to such
families and youth. The conference report contains the House provision.

Housing counseling

The House amendment contained a provision that authorized $3,584,000 in
FY 1991 for housing counseling services, authorized $6,700,000 in FY
1991 for emergency homeownership counseling and extended emergency
homeownership counseling until September 30, 1991. The Senate bill
contained a provision that would prohibit any new grants or loans being
made under the Housing Counseling program after October 1, 1990.

The conference report contains the House provision with an amendment to
also authorize $3,700,000 in FY 1992 for the housing counseling services
and $7,000,000 in FY 1992 for emergency homeownership counseling.

The Senate bill contained a provision not included in the House
amendment that required a study by the Secretary, to be submitted to
Congress, on how the use of certified mail to notify mortgagors of the
availability of counseling to which the mortgagor may be entitled would
improve mortgagor participation in various foreclosure prevention
programs. The conference report does not contain the Senate provision.

The House amendment contained a provision not included in the Senate
bill that required the creditor of a loan to notify any eligible
homeowner of the availability of homeownership counseling offered by the
creditor and would also be required to notify the homeowner of either
the availability of homeownership counseling provided by
Secretary-approved non-profit organizations or the toll-free telephone
number established by the Secretary that provides a list of such
non-profit organizations. The conference report contains the House
provision.

Prepurchase and foreclosure prevention counseling demonstration

The House amendment contained a provision not included in the Senate
bill that established a prepurchase and foreclosure prevention
counseling demonstration program to demonstrate the effectiveness of
providing coordinated prepurchase counseling and foreclosure-prevention
counseling to first-time homebuyers and homeowners in avoiding defaults
and foreclosures on FHA insured single family home mortgages. The
conference report contains the House provision and authorizes $350,000
in fiscal year 1991 and $365,000 in fiscal year 1992 for the program.

Flexible subsidy program

The House amendment contained a provision that prohibited the use of the
Flexible Subsidy Fund for activities other than the Fund's designated
purposes. The House provision extended the Section 236 flexible subsidy
program until September 30, 1993, and authorized appropriations for
capital improvements funding under the Flexible Subsidy Fund not to
exceed $50,000,000 for FY 1991, $52,000,000 for FY 1992, and $54,080,000
for FY 1993. The Senate bill contained a provision that extended the
Flexible Subsidy Program until September 30, 1993, and authorize not
more than $50,000,000 for FY 1991, $52,000,000 for FY 1992 and
$54,080,000 for FY 1993. The conference report contains the Senate
provision with an amendment to authorize not more than $50,000,000 for
FY 1991 and not more than $52,200,000 for FY 1992 and to restrict the
uses of flexible subsidy money to those uses for which it is intended.
The conferees intend these authorizations to be in addition to any funds
that will flow into the Fund in the future. The conferees believe that
the Flexible Subsidy Fund is to be used for vitally needed capital
improvements, as well as assisting in the prevention of prepayment.

Streamlined property disposition requirements for unsubsidized
multifamily projects

The House amendment contained a provision not included in the Senate
bill that amended current law governing disposal of non-subsidized
HUD-owned or held property to allow for the use of tenant-based
assistance upon the sale of such property. The conference report
contains the House provision with an amendment to ensure that the right
of first refusal provisions of the 1978 Act are applicable.

Multifamily housing disposition

The House amendment contained a provision not included in the Senate
bill that extended the multifamily housing disposition partnership
demonstration program until September 30, 1991. The conference report
contains the House provision.

Public housing drug elimination grants

Authorizations

Public housing: The House amendment authorized $99,225,000 for FY 1990
and $150,000,000 for FY 1991 for the Public Housing Drug Elimination
Grants Program. The House amendment also established a similar program
for private federally assisted housing and authorized $10,000,000 for
FY 1991 for such program.

The Senate bill authorized $150,000,000 for FY 1991, $156,000,000 for
FY 1992 and $162,240,000 for FY 1993 for the program and would expand
the program to include program grants to private, for-profit and
nonprofit owners of federally assisted housing.

The conference report contains authorizations of $160,000,000 for FY
1991 and $166,900,000 for FY 1992, and authorizes a separate 6.25%
set-aside of program funds for assisted housing projects.

The Senate bill contained a provision not included in the House
amendment that would reauthorize the Public Housing Drug Elimination Act
of 1988, and make several modifications to the program. The conference
report contains the Senate provision which includes such modifications,
the most significant of which are also follows:

(1) The report clarifies that in selecting applications, the Secretary
shall consider the extent to which residents support and participate in
the design and implementation of the activities proposed to be funded
under the application. While this provision essentially codifies
existing regulations, the conferees do not intend to codify the
Secretary's application of the regulatory criteria. The extent of tenant
participation is not to be measured by the formal status of tenant
management, as is currently done, but instead by the extent of interest
and participation of individual tenants.

(2) Both the Senate and House bills included provisions authorizing
grants for the elimination of drug-related crime in housing. However,
the Senate bill included owners of such assisted housing within the
framework of the Public Housing Drug Elimination Act, whereas the House
established a separate $10 million program for federally assisted
housing.

In addition to the selection criteria applicable for public housing, the
Secretary is authorized to establish other criteria for the evaluation
of applications submitted by owners of federally assisted low- income
housing. However, such additional criteria shall be limited to those
that reflect (a) relevant differences between the financial resources
and other characteristics of, on one hand, public housing authorities,
and, on the other hand, owners of federally assisted low income housing,
and (b) relevant differences between the problem of drug-related crime
in public housing and the problem of drug-related crime in federally
assisted, low income housing.

In the case of applications submitted by owners of federally assisted,
low-income housing, the conferees expect that the Secretary will reject
the application of any private owner who has received more than a
reasonable return, as determined by the Secretary, on the project or
projects referred to in the owner's anti-drug plan. The conferees also
expect that the Secretary will give preference to applications from
owners of federally assisted, low income housing who contribute
additional or raise their own resources for the implementation of their
plan.

(3) The report clarifies that all funding decisions must be based
exclusively on the stated criteria included in the law. This is simply
a clarification of existing law. It is included in response to proposed
rules developed by HUD that sought to give the Secretary discretion to
consider factors, such as geographical location and PHA size, other than
those specifically enumerated. The Secretary does not have such
discretion under current law.

(4) Under existing law, grants may be used for "innovative programs
designed to reduce use of drugs in and around public housing projects".
The conference report adopts Senate-passed language that eliminates the
term "innovative". The limitation of such uses to those that are
innovative was appropriate when the program began as a small
demonstration program, but this limitation is now unduly restrictive.

In addition, the conference report clarifies that this category of
eligible activities includes, but is not limited to, drug prevention,
intervention, referral and treatment. Although drug prevention,
intervention, and referral are eligible activities under current
regulations, drug treatment is now excluded (though the Secretary
previously authorized the use of grants for drug treatment purposes).

The conferees are aware that federal, state and other resources are
available to many residents of public housing for the purpose of drug
treatment, and do not intend the Public and Assisted Housing Drug
Elimination Act to substitite for these other resources. However, the
conferees also recognize that funding for drug treatment is limited and
may not be available to many needy public housing and assisted housing
residents. In addition, treatment facilities on the premises of a
housing project may be able to provide treatment to residents more
effectively and economically than residential treatment facilities far
from an addict's home environment. The President's 1989 National Drug
Strategy states that "If drug treatment facilities are to be genuinely
effective, they must be prepared to bring these services to the addict
. . .".

For these reasons, and because effective treatment can help reduce the
incidence of drug-related crime, funding under this provision may be
provided for purposes such as the construction and maintenance of drug
treatment facilities in or around housing projects, and for the hiring
of treatment professionals for the treatment of residents.

The conferees expect the Secretary, after consultation with the
Secretary of Health and Human Services, to impose by regulation
reasonable restrictions on the use of grants under this program for drug
treatment purposes. For example, the Secretary may restrict such uses
to the treatment of residents who would otherwise lack adequate
resources to pay for such treatment. The Secretary also may forbid the
use of grants for the treatment of individual residents at residential
treatment programs not in or around the housing projects.

(5) The conferees have adopted Senate-passed language stating that one
factor in the evaluation of the quality of an application shall be "the
extent to which the plan includes initiatives that can be sustained over
a period of several years."

(6) The conferees have adopted Senate-passed language stating that, in
evaluating the extent of the drug-related crime problem at the housing
projects proposed for funding in an application, the Secretary may
consider whether the projects are located in a high intensity drug
trafficking area designated pursuant to Section 1005 of the Anti-Drug
Abuse Act of 1988. This provision will help ensure that applications
from these areas are treated fairly, and that officials evaluating their
applications appreciate the seriousness of the drug problems in the
housing projects' general environment. However, the provision is not
intended to place at a competitive disadvantage those applicants whose
projects are located in areas that are not so designated, but that
nevertheless have serious drug-related crime problems.

(7) The conferees have included language based on a provision passed by
the Senate that requires the Secretary to routinely audit and monitor
funded programs to ensure that grants are administered properly. To
facilitate this monitoring, the conferees expect that the Secretary will
continue to require grantees to submit regular reports on their
progress, and post-grant reports, as is now required by regulation.

The conferees express concern over the Department's grant process for
FY 1990 under the Drug Free Work Place Act of 1988. The Department
rejected several applications for assistance on technical grounds not
included in the regulations governing the program and then refused to
allow resubmissions of such applications. The conferees urge the
Secretary to adopt procedures for the awarding of grants under this
program in a timely fashion to enable full and fair consideration of all
applications for FY 1992.

Department of Housing and Urban Development Study: The Senate bill
contained a provision that was not included in the House amendment that
would require the Secretary to examine how private nonprofit initiatives
to provide low-income housing development in local communities across
the country have succeeded. The Secretary would place particular
emphasis on how Federal housing policy and tax structures can best
promote local private nonprofit organizations involvement in low-income
housing development. The Secretary would convene individuals, of his
choosing, who have demonstrated an expertise in such private nonprofit
initiatives from across the country and draw on their expertise in
implementing such programs. The study would include the results of, and
suggestions by, such individuals.

The Secretary would be required to report to the Congress of the United
States of America the findings of this study not later than 12 months
after this bill becomes Public Law.

The conference report contains the Senate provision.

Extension of capital assessment study: The conference report contains
a provision not included in the Senate bill or the House amendment that
would extend through March, 1992 the due date on HUD's capital needs
assessment study. This study, to assess the renovation needs of the
country's distressed federally-assisted multifamily housing, along with
a study on the flexible subsidy program, was mandated in the HUD Reform
Act of 1989. The flexible subsidy program study has been completed but
research to support the capital needs assessment study, due to Congress
on December 15, 1990, is still underway. HUD's Office of Policy
Development and Research has assembled a research team of housing
professionals, engineers, architects, appraisers and property management
consultants to undertake this major project. This deadline extension is
intended to allow sufficient time to conduct a thorough, comprehensive
study to include the physical and financial needs of these properties,
the anticipated level of resources needed to remedy the identified
problems, and an assessment of HUD's existing mechanisms to address the
problems.