Section 3 Modernization and Improvement Act of 2015

Summary: Section 3 Modernization and Improvement Act of 2015 This bill amends the Housing and Urban Development Act of 1968 to revise the Department of Housing and Urban Development (HUD) program for economic opportunities for low- and very low-income persons. Public and Indian housing agencies that receive HUD development assistance, operating assistance, or modernization grants provided under the program (recipients) must report annually to HUD on their compliance with employment and contracting requirements and on the performance of their contractors and subcontractors. HUD must develop and implement policies and procedures for imposing a series of administrative sanctions, graduated in severity, on recipients and their contractors and subcontractors for noncompliance with this Act or the program's requirements. The HUD rental assistance program is exempted from requirements that:   opportunities for training and employment in connection with a housing rehabilitation, housing construction, or other public construction project be given to low- and very low-income persons residing within the metropolitan area (or nonmetropolitan county) in which the project is located; and contracts awarded for work in connection with such projects be given to businesses providing economic opportunities for such persons in those areas in which the assistance is expended.  HUD shall require that public housing agencies (PHAs) and owners of multifamily properties assisted under the rental assistance program, and their contractors and subcontractors, make their best efforts to give low- and very low-income persons all the training and employment opportunities generated by or in such properties, including opportunities: (1) not involving property construction or rehabilitation; and (2) generated by assistance provided under the program. HUD must also require that such PHAs and owners award work contracts in connection with these properties to businesses that provide economic opportunities for low- and very low-income persons.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Section 3 Modernization and 
Improvement Act of 2015''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) funds administered by the Department of Housing and 
        Urban Development, particularly those intended for housing 
        construction, rehabilitation, repair, modernization, 
        management, self-sufficiency, community development, and other 
        public construction, provide State and local governments, 
        housing providers, and other recipients of this Federal 
        financial assistance with substantial funds for projects and 
        activities that produce significant economic opportunities for 
        the communities where the funds are expended;
            (2) low- and very low-income persons, especially recipients 
        of government assistance for housing, often face barriers to 
        access training, employment, and contracting opportunities 
        resulting from the expenditure of Federal funds in their 
        communities;
            (3) training, employment, and contracting opportunities 
        generated by projects and activities that receive assistance 
        from the Department of Housing and Urban Development offer an 
        effective means of empowering low- and very low-income persons 
        and local businesses that provide training and job 
        opportunities for such persons;
            (4) past Federal efforts to direct training, employment, 
        and contracting opportunities generated by programs 
        administered by the Secretary of Housing and Urban Development 
        to low- and very low-income persons, and businesses that 
        provide training and job opportunities for such persons, have 
        not been fully effective and should be intensified; and
            (5) funding provided to other Federal agencies may also 
        produce significant employment and contracting opportunities 
        for the communities where the funds are expended.

SEC. 3. REPORTING; SANCTIONS FOR NONCOMPLIANCE.

    Section 3 of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701u) is amended--
            (1) by redesignating subsection (g) as subsection (k); and
            (2) by inserting after subsection (f) the following new 
        subsections:
    ``(g) Reports.--
            ``(1) Recipient reports to hud.--
                    ``(A) Requirement.--Each recipient of assistance 
                referred to in subsection (c) or (d) (in this section 
                referred to as a `recipient') shall report annually to 
                the Secretary on their compliance with the employment 
                and contracting requirements and on their contractors 
                and subcontractors performance. Recipients shall ensure 
                that their contractors and subcontractors provide them 
                with any information necessary to make such reports.
                    ``(B) Information regarding failure to meet 
                employment and contracting requirement.--For any period 
                during which a recipient, or their contractor or 
                subcontractor, did not meet their employment or 
                contracting requirement under subsection (c) or (d), 
                the report shall describe actions that were taken to 
                meet the requirement, including actions taken or that 
                will be taken in future funding opportunities to 
                address the deficiencies in the actions that resulted 
                in failure to meet employment and contracting 
                requirements.
                    ``(C) Monthly reports by subrecipients.--Each 
                recipient shall require any entity that is a 
                subrecipient of such recipient for assistance referred 
                to in subsection (c) or (d) to submit a report to such 
                recipient monthly containing such information as the 
                Secretary shall require to ensure that the recipient 
                can comply with this paragraph.
                    ``(D) Public availability.--Each report pursuant to 
                this paragraph (including reports under subparagraph 
                (C)) shall be made publicly available, in its entirety, 
                not later than 15 business days after the end of the 
                period covered by the report. Such availability shall 
                include posting reports on a publicly accessible 
                website on the World Wide Web and making printed and 
                electronic copies publicly available upon request at no 
                charge.
            ``(2) Annual hud reports to congress.--
                    ``(A) Requirement.--The Secretary shall submit a 
                report annually to the Congress that provides a summary 
                of the information contained in the reports submitted 
                pursuant to paragraph (1). Such annual report shall 
                provide information on the total amount of Federal 
                funds that are subject to this section, by program area 
                and geographical jurisdiction, and the outcomes 
                produced, including specific information on the amount 
                of training, jobs, and contracting opportunities 
                generated by such funds.
                    ``(B) Assessment of noncompliance.--Each report 
                under this paragraph shall include--
                            ``(i) an assessment of any noncompliance by 
                        any recipients with the requirements of this 
                        section, by State;
                            ``(ii) specific recommendations regarding 
                        actions to reduce and eliminate such 
                        noncompliance; and
                            ``(iii) any sanctions imposed pursuant to 
                        subsection (h) for such noncompliance.
                    ``(C) Review of effectiveness.--Each report under 
                this paragraph shall include a review of the 
                effectiveness of the program under this section in 
                providing jobs for low- and very low-income persons, 
                meeting unmet training and job readiness needs in the 
                community, enabling low- and very low-income persons to 
                hold a steady job, providing contracting opportunities 
                for businesses that qualify for priority under 
                paragraphs (1)(B) and (2)(B) of subsection (d), and any 
                recommendations the Secretary determines appropriate 
                regarding the program under this section.
            ``(3) GAO report.--Not later than the expiration of the 
        two-year period beginning on the date of the enactment of the 
        Section 3 Modernization and Improvement Act of 2015, the 
        Comptroller General of the United States shall submit a report 
        to the Congress regarding the implementation of this section 
        (as amended by such Act), that--
                    ``(A) specifically describes the extent of 
                compliance with this section, the amount of funds 
                awarded that were covered by this section, and 
                outcomes; and
                    ``(B) makes recommendations to improve the 
                effectiveness of this section and for when a subsequent 
                such report should be required.
    ``(h) Noncompliance.--
            ``(1) Investigation and determination.--In carrying out 
        this section, the Secretary shall develop and implement 
        procedures to assess compliance with the requirements of this 
        section, to review complaints alleging noncompliance by any 
        recipient or contractor with the requirements of this section, 
        to make determinations as to whether such noncompliance has 
        occurred, and to take such actions as provided in this 
        subsection as the Secretary determines appropriate to ensure 
        compliance and prevent future noncompliance.
            ``(2) Timely assessment.--The procedures required under 
        paragraph (1) shall include measures that ensure that 
        recipients and contractors are in compliance with the 
        requirements of this section during the use of assistance 
        referred to in subsection (c) or (d), including a requirement 
        to report to the Secretary regarding compliance on a monthly 
        basis and a requirement that the Secretary assess compliance by 
        each recipient and contractor not less frequently than once 
        every 3 months.
            ``(3) Sanctions.--
                    ``(A) Establishment.--The Secretary shall develop 
                and implement policies and procedures for imposition of 
                a series of administrative sanctions, graduated in 
                severity, which shall be applied to recipients and 
                their contractors and subcontractors that are 
                determined do not comply with this section or the 
                requirements established under the program under this 
                section.
                    ``(B) Automatic sanctions.--Such sanctions shall 
                include certain measures, or a series of measures, that 
                are applied in all instances of a determination of a 
                failure to comply with certain requirements of this 
                section or with certain requirements established under 
                this program under this section, and shall not be 
                subject to any discretion on the part of the Secretary 
                as to whether to apply such measure or measures.
                    ``(C) Actions.--Such sanctions shall include--
                            ``(i) requiring a recipient to enter into a 
                        compliance agreement with the Secretary is 
                        specifically designed to bring the recipient 
                        into compliance and provide for the creation of 
                        additional employment opportunities and, if 
                        such recipient refuses to enter into such 
                        agreement, recapture by the Secretary, from 
                        amounts provided to the recipient that were 
                        subject to this section, of an amount equal to 
                        the amount that was required under this section 
                        to be used to give low- and very low-income 
                        persons training and employment opportunities 
                        or economic opportunities but was not so used;
                            ``(ii) reduction of future funds from the 
                        Department, including any discretionary funds 
                        available under the Choice Neighborhoods 
                        Initiative under section 24 of the United 
                        States Housing Act of 1937 (42 U.S.C. 1437v) 
                        and the rental assistance demonstration program 
                        (as such term is defined in subsection (e) of 
                        this section);
                            ``(iii) debarment and suspension from, and 
                        limited denial of participation in programs of 
                        the Department; and
                            ``(iv) such other sanctions as the 
                        Secretary determines appropriate to discourage 
                        noncompliance.''.

SEC. 4. COVERAGE OF RENTAL ASSISTANCE DEMONSTRATION PROPERTIES.

    (a) Employment.--Subsection (c) of section 3 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701u(c)) is amended--
            (1) in paragraph (2), by inserting before the first comma 
        the following: ``(not including the rental assistance 
        demonstration program)''; and
            (2) by adding at the end the following new paragraph:
            ``(3) Rental assistance demonstration program.--
                    ``(A) In general.--The Secretary shall require that 
                public housing agencies and owners of multifamily 
                properties assisted under the rental assistance 
                demonstration program, and their contractors and 
                subcontractors, make their best efforts, consistent 
                with existing Federal, State, and local laws and 
                regulations, to give to low- and very low-income 
                persons all the training and employment opportunities 
                generated by or in such properties, including such 
                opportunities not involving property construction or 
                rehabilitation (which shall include opportunities 
                involving administration, management, service, and 
                maintenance) and including such opportunities generated 
                by assistance provided under the rental assistance 
                demonstration program.
                    ``(B) Priority.--The efforts required under 
                subparagraph (A) shall be directed in the following 
                order of priority:
                            ``(i) To residents of the housing 
                        developments for which the assistance is 
                        expended.
                            ``(ii) To residents of other developments 
                        managed by the public housing agency, if 
                        applicable, that is expending the assistance.
                            ``(iii) To participants in YouthBuild 
                        programs receiving assistance under section 171 
                        of the Workforce Innovation and Opportunity 
                        Act.
                            ``(iv) To other low- and very low-income 
                        persons residing within the metropolitan area 
                        (or nonmetropolitan county) in which the 
                        assistance is expended.''.
    (b) Contracting.--Subsection (d) of section 3 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701u(d)) is amended--
            (1) in paragraph (2), by inserting before the first comma 
        the following: ``(not including the rental assistance 
        demonstration program)''; and
            (2) by adding at the end the following new paragraph:
            ``(3) Rental assistance demonstration program.--
                    ``(A) In general.--The Secretary shall require that 
                public housing agencies and owners of multifamily 
                properties assisted under the rental assistance 
                demonstration program, and their contractors and 
                subcontractors, make their best efforts, consistent 
                with existing Federal, State, and local laws and 
                regulations, to award contracts for work to be 
                performed in connection with such properties, including 
                work that does not involve property construction or 
                rehabilitation (which shall include administration, 
                management, service, and maintenance work) and 
                including work in connection assistance provided under 
                the rental assistance demonstration program, to 
                business concerns that provide economic opportunities 
                for low- and very low-income persons.
                    ``(B) Priority.--The efforts required under 
                subparagraph (A) shall be directed in the following 
                order of priority:
                            ``(i) To business concerns that provide 
                        economic opportunities for residents of the 
                        housing development for which the assistance is 
                        provided.
                            ``(ii) To business concerns that provide 
                        economic opportunities for residents of other 
                        housing developments operated by the public 
                        housing agency, if applicable, that is 
                        providing the assistance.
                            ``(iii) To YouthBuild programs receiving 
                        assistance under section 171 of the Workforce 
                        Innovation and Opportunity Act.
                            ``(iv) To business concerns that provide 
                        economic opportunities for low- and very low-
                        income persons residing within the metropolitan 
                        area (or nonmetropolitan county) in which the 
                        assistance is provided.''.
    (c) Definition.--Subsection (e) of section 3 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701u(e)) is amended by adding 
at the end the following new paragraph:
            ``(3) Rental assistance demonstration program.--The term 
        `rental assistance demonstration program' means the 
        demonstration program of the Secretary of Housing and Urban 
        Development conducted pursuant to the heading `Rental 
        Assistance Demonstration' in title II of the Transportation, 
        Housing and Urban Development, and Related Agencies 
        Appropriations Act, 2012 (division C of Public Law 112-55; 125 
        Stat. 673), as amended.''.