SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rent Reform and Empowerment Act of 
1995''.

SEC. 2. CEILING RENTS.

    Section 3(a)(2) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(a)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i), by striking ``and approved by 
                the Secretary''; and
                    (B) by striking clause (iii) and inserting the 
                following new clause:
            ``(iii) at the election of such agency, is--
                    ``(I) not less than the average monthly amount of 
                debt service and operating expenses attributable to 
                dwelling units of similar size in public housing 
                projects owned and operated by such agency;
                    ``(II) not less than the reasonable rental value of 
                the unit, as determined by the agency; or
                    ``(III) not less than the local market rent 
                determined by the agency for comparable units of 
                similar size pursuant to the procedures prescribed by 
                the Secretary for determining rent reasonableness under 
                the program for rental certificate assistance under 
                section 8(b).'';
            (2) by redesignating subparagraph (B) as subparagraph (D); 
        and
            (3) by inserting after subparagraph (A) the following new 
        subparagraphs:
    ``(B) Any ceiling rents established by a public housing agency 
pursuant to this paragraph may be adjusted by the agency.
    ``(C)(i) Any ceiling rents established pursuant to subclause (I) or 
(III) of subparagraph (A)(iii) shall take effect at the discretion of 
the public housing agency.
    ``(ii) Any ceiling rents established pursuant to subclause (II) of 
subparagraph (A)(iii) may not take effect before the issuance of 
regulations to carry out such subclause, which shall be issued by the 
Secretary not later than 180 days after the date of the enactment of 
the Rent Reform and Empowerment Act of 1995.
    ``(iii) Before the effectiveness of regulations under clause (ii), 
an agency shall determine the reasonable rental value of unit for 
purposes of subclause (II) of subparagraph (A)(iii) based upon (I) in a 
project of 50 or more units for which such ceiling rents are being 
established, the 95th percentile of rents paid for all units in the 
project, (II) in a group of comparable projects for which such ceiling 
rents are being established that consists of a total of 50 or more 
units, all units in the projects, and (III) in a group of at least 50 
comparable units for which such ceiling rents are being established, 
all units in the group.''.

SEC. 3. EXCLUSIONS FROM ADJUSTED INCOME.

    Section 3(b)(5) of the United States Housing Act of 1937 (42 U.S.C. 
1437a(b)(5)) is amended--
            (1) in subparagraph (C)--
                    (A) by striking ``and'' before ``(ii)''; and
                    (B) by inserting before the semicolon at the end 
                the following; ``; and (iii) to the extent documented 
                by the family, the amount paid by the family for health 
                insurance coverage and any other nonreimbursed out-of-
                pocket medical expenses for any members of the family 
                residing in the household who, at the time, are not 
                receiving or approved to receive any assistance for 
                health care from the Federal Government or any State 
                government, except that this clause shall apply only to 
                families residing in public housing'';
            (2) in subparagraph (E), by inserting before the semicolon 
        at the end the following: ``, except that in the case of a 
        family residing in public housing the amount excluded under 
        this subparagraph shall be 20 percent of the earned income of 
        the family remaining after excluding any amounts pursuant to 
        subparagraph (H)'';
            (3) in subparagraph (F), by striking ``and'' at the end;
            (4) in subparagraph (G), by striking the period at the end 
        and inserting a semicolon; and
            (5) by adding at the end the following new subparagraphs:
            ``(H) in the case of a family residing in public housing, 
        any earned income of any formerly dependent child who is a 
        member of the family residing in the family's dwelling unit 
        during the period beginning on the date of the first 
        redetermination of the rent for and family composition of the 
        family that occurs after the child reaches 18 years of age and 
        ending upon the date of the first such redetermination 
        occurring after he or she reaches 21 years of age, except that, 
        effective during and after the first fiscal year that commences 
        after the expiration of the 4-year period beginning on the date 
        of the enactment of the Rent Reform and Empowerment Act of 
        1995, amounts earned by a child may not be excluded under this 
        subparagraph unless (i) the child is enrolled in and attending 
        high school (or a recognized equivalency program), or has 
        received a high school diploma (or the recognized equivalent 
        thereof), or (ii) the public housing agency has determined that 
        requiring the child to comply with clause (i) would 
        significantly interfere with the sole source of financial 
        support of the family or would otherwise create a significant 
        hardship for the family of the child; and
            ``(I) in the case of 2-parent families with children (as 
        defined by the Secretary by regulation) who reside in public 
        housing, an amount (in addition to any amounts excluded under 
        subparagraphs (E) and (H)) not to exceed 10 percent of any 
        earned income of the family.''.

SEC. 4. EXCLUSION OF EARNED INCOME OF RESIDENTS WHO OBTAIN EMPLOYMENT 
              FROM RENT DETERMINATIONS.

    (a) In General.--Section 3(a) of the United States Housing Act of 
1937 (42 U.S.C. 1437a(a)) is amended--
            (1) in the third sentence of paragraph (1), by striking 
        ``paragraph (2)'' and inserting ``paragraphs (2) and (3)''; and
            (2) by adding at the end the following new paragraph:
    ``(3) Optional Exclusion of Earned Income From Rent Determination 
for Families Previously Unemployed.--Notwithstanding any other 
provision of law, a public housing agency may provide (at the option of 
a public housing agency) that, for all units in public housing 
administered by the agency, the rent payable under subsection (b) for 
any such unit occupied by a family whose income increases as a result 
of employment of a member of the family who was previously unemployed 
for 1 or more years, may not--
            ``(A) be increased as a result of the increased income due 
        to such employment during the period that begins upon the 
        commencement of such employment and ends upon the second annual 
        redetermination of the rent for and family composition of the 
        family occurring thereafter;
            ``(B) during any 12-month period occurring during the 36 
        months succeeding the expiration of the period under 
        subparagraph (A) for the family, be increased due to the 
        continued employment of such family member by more than one-
        third of the difference between (i) the rent being paid by the 
        family upon expiration of such period, and (ii) the amount of 
        rent that the family would pay but for the applicability of 
        this paragraph; and
            ``(C) in any case, exceed the amount determined under 
        paragraph (1) or (2).''.

SEC. 5. EXCLUSION FROM INCOME OF EARNINGS FROM JOB TRAINING AND SELF-
              SUFFICIENCY PROGRAMS.

    Section 3 of the United States Housing Act of 1937 (42 U.S.C. 
1437a) is amended--
            (1) in subsection (b)(4), by inserting before the period at 
        the end the following: ``, and except that the earnings of and 
        benefits to any public housing resident resulting from 
        enrollment and participation in a program providing employment 
        training and supportive services in accordance with the Family 
        Support Act of 1988, section 22 of this Act, the Job Training 
        Partnership Act, subtitle D of title IV of the Cranston-
        Gonzalez National Affordable Housing Act, part F of title IV of 
        the Social Security Act, or any comparable Federal, State, or 
        local law shall not be considered as income for the purposes of 
        determining a limitation on the amount of rent paid by the 
        resident during the period that the resident enrolls and 
        participates in such program''; and
            (2) by striking the undesignated paragraph at the end of 
        subsection (c)(3) (as added by section 515(b) of the Cranston-
        Gonzalez National Affordable Housing Act).

SEC. 6. APPLICABILITY.

    Notwithstanding the amendments made by this Act, any resident of 
public housing participating in the program under the authority 
contained in the undesignated paragraph at the end of section 3(c)(3) 
of the United States Housing Act of 1937 (as added by section 515(b) of 
the Cranston-Gonzalez National Affordable Housing Act (Public Law 101-
625; 104 Stat. 4199)), as such paragraph existed before the date of 
enactment of this Act, shall continue to be governed by such authority.

SEC. 7. PERFORMANCE FUNDING SYSTEM.

    Section 9(a)(3)(B) of the United States Housing Act of 1937 (42 
U.S.C. 1437g(a)(3)(B)) is amended--
            (1) in clause (iv), by striking ``and'' at the end;
            (2) in clause (v), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new clause:
            ``(vi) the amount of any reduced revenue resulting from the 
        exclusion of income of public housing residents pursuant to 
        section 3(b)(5)(E) shall be calculated and included in the 
        amount of the payment received under this section by the public 
        housing agency administering the public housing in which such 
        residents reside;''.

SEC. 8. EFFECTIVE DATE.

    The amendments under this Act shall be made and shall take effect 
on the earlier of--
            (1) the date of the effectiveness of the regulations under 
        section 9; or
            (2) the expiration of the 120-day period beginning on the 
        date of the enactment of this Act.

SEC. 9. REGULATIONS.

    The Secretary shall issue any final regulations necessary to 
implement the amendments made by this Act, which shall take effect not 
later than the expiration of the 120-day period beginning on the date 
of the enactment of this Act. The regulations shall be issued after 
notice and opportunity for public comment in accordance with the 
procedures under section 553 of title 5, United States Code, applicable 
to substantive rules (notwithstanding subsections (a)(2), (b)(B), and 
(d)(3) of such section).
Rent Reform and Empowerment Act of 1995 - Amends the United States Housing Act of 1937 to revise public housing rent determinations.
Rent Reform and Empowerment Act of 1995