# Public Law 111-22/Division B/Title III
## TITLE III—CONTINUUM OF CARE PROGRAM
### SEC. 1301. CONTINUUM OF CARE.

    The McKinney-Vento Homeless Assistance Act is amended—
          (1) by striking the subtitle heading for subtitle C of title IV (42 U.S.C. 11381 et seq.) and inserting the following:
             ``subtitle C—Continuum of Care Program´´; and
          (2) by striking sections 421 and 422 (42 U.S.C. 11381 and 11382) and inserting the following new sections:
          ``SEC. 421. Purposes.
             ``The purposes of this subtitle are—
             ``(1) to promote community-wide commitment to the goal of ending homelessness;
             ``(2) to provide funding for efforts by nonprofit providers and State and local governments to quickly rehouse homeless individuals and families while minimizing the trauma and dislocation caused to individuals, families, and communities by homelessness;
             ``(3) to promote access to, and effective utilization of, mainstream programs described in section 203(a)(7) and programs funded with State or local resources; and
             ``(4) to optimize self-sufficiency among individuals and families experiencing homelessness.
          ``SEC. 422. Continuum of care applications and grants.
             ``(a) Projects.—The Secretary shall award grants, on a competitive basis, and using the selection criteria described in section 427, to carry out eligible activities under this subtitle for projects that meet the program requirements under section 426, either by directly awarding funds to project sponsors or by awarding funds to unified funding agencies.
             ``(b) Notification of Funding Availability.—The Secretary shall release a notification of funding availability for grants awarded under this subtitle for a fiscal year not later than 3 months after the date of the enactment of the appropriate Act making appropriations for the Department of Housing and Urban Development for such fiscal year.
             ``(c) Applications.—
                ``(1) Submission to the secretary.—To be eligible to receive a grant under subsection (a), a project sponsor or unified funding agency in a geographic area shall submit an application to the Secretary at such time and in such manner as the Secretary may require, and containing such information as the Secretary determines necessary—
                   ``(A) to determine compliance with the program requirements and selection criteria under this subtitle; and
                   ``(B) to establish priorities for funding projects in the geographic area.
                ``(2) Announcement of awards.—
                   ``(A) In general.—Except as provided in subparagraph (B), the Secretary shall announce, within 5 months after the last date for the submission of applications described in this subsection for a fiscal year, the grants conditionally awarded under subsection (a) for that fiscal year.
                   ``(B) Transition.—For a period of up to 2 years beginning after the effective date under section 1503 of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, the Secretary shall announce, within 6 months after the last date for the submission of applications described in this subsection for a fiscal year, the grants conditionally awarded under subsection (a) for that fiscal year.
             ``(d) Obligation, distribution, and utilization of funds.—
                ``(1) Requirements for obligation.—
                   ``(A) In general.—Not later than 9 months after the announcement referred to in subsection (c)(2), each recipient or project sponsor shall meet all requirements for the obligation of those funds, including site control, matching funds, and environmental review requirements, except as provided in subparagraphs (B) and (C).
                   ``(B) Acquisition, rehabilitation, or construction.—Not later than 24 months after the announcement referred to in subsection (c)(2), each recipient or project sponsor seeking the obligation of funds for acquisition of housing, rehabilitation of housing, or construction of new housing for a grant announced under subsection (c)(2) shall meet all requirements for the obligation of those funds, including site control, matching funds, and environmental review requirements.
                   ``(C) Extensions.—At the discretion of the Secretary, and in compelling circumstances, the Secretary may extend the date by which a recipient or project sponsor shall meet the requirements described in subparagraphs (A) and (B) if the Secretary determines that compliance with the requirements was delayed due to factors beyond the reasonable control of the recipient or project sponsor. Such factors may include difficulties in obtaining site control for a proposed project, completing the process of obtaining secure financing for the project, obtaining approvals from State or local governments, or completing the technical submission requirements for the project.
                ``(2) Obligation.—Not later than 45 days after a recipient or project sponsor meets the requirements described in paragraph (1), the Secretary shall obligate the funds for the grant involved.
                ``(3) Distribution.—A recipient that receives funds through such a grant—
                   ``(A) shall distribute the funds to project sponsors (in advance of expenditures by the project sponsors); and
                   ``(B) shall distribute the appropriate portion of the funds to a project sponsor not later than 45 days after receiving a request for such distribution from the project sponsor.
                ``(4) Expenditure of funds.—The Secretary may establish a date by which funds made available through a grant announced under subsection (c)(2) for a homeless assistance project shall be entirely expended by the recipient or project sponsors involved. The date established under this paragraph shall not occur before the expiration of the 24-month period beginning on the date that funds are obligated for activities described under paragraphs (1) or (2) of section 423(a). The Secretary shall recapture the funds not expended by such date. The Secretary shall reallocate the funds for another homeless assistance and prevention project that meets the requirements of this subtitle to be carried out, if possible and appropriate, in the same geographic area as the area served through the original grant.
             ``(e) Renewal funding for unsuccessful applicants.—The Secretary may renew funding for a specific project previously funded under this subtitle that the Secretary determines meets the purposes of this subtitle, and was included as part of a total application that met the criteria of subsection (c), even if the application was not selected to receive grant assistance. The Secretary may renew the funding for a period of not more than 1 year, and under such conditions as the Secretary determines to be appropriate.
             ``(f) Considerations in determining renewal funding.—When providing renewal funding for leasing, operating costs, or rental assistance for permanent housing, the Secretary shall make adjustments proportional to increases in the fair market rents in the geographic area.
             ``(g) More than 1 application for a geographic area.—If more than 1 collaborative applicant applies for funds for a geographic area, the Secretary shall award funds to the collaborative applicant with the highest score based on the selection criteria set forth in section 427.
             ``(h) Appeals.—
                ``(1) In general.—The Secretary shall establish a timely appeal procedure for grant amounts awarded or denied under this subtitle pursuant to a collaborative application or solo application for funding.
                ``(2) Process.—The Secretary shall ensure that the procedure permits appeals submitted by entities carrying out homeless housing and services projects (including emergency shelters and homelessness prevention programs), and all other applicants under this subtitle.
             ``(i) Solo Applicants.—A solo applicant may submit an application to the Secretary for a grant under subsection (a) and be awarded such grant on the same basis as such grants are awarded to other applicants based on the criteria described in section 427, but only if the Secretary determines that the solo applicant has attempted to participate in the continuum of care process but was not permitted to participate in a reasonable manner. The Secretary may award such grants directly to such applicants in a manner determined to be appropriate by the Secretary.
             ``(j) Flexibility To serve persons defined as homeless under other Federal laws.—
                ``(1) In general.—A collaborative applicant may use not more than 10 percent of funds awarded under this subtitle (continuum of care funding) for any of the types of eligible activities specified in paragraphs (1) through (7) of section 423(a) to serve families with children and youth defined as homeless under other Federal statutes, or homeless families with children and youth defined as homeless under section 103(a)(6), but only if the applicant demonstrates that the use of such funds is of an equal or greater priority or is equally or more cost effective in meeting the overall goals and objectives of the plan submitted under section 427(b)(1)(B), especially with respect to children and unaccompanied youth.
                ``(2) Limitations.—The 10 percent limitation under paragraph (1) shall not apply to collaborative applicants in which the rate of homelessness, as calculated in the most recent point in time count, is less than one-tenth of 1 percent of total population.
                ``(3) Treatment of certain populations.—
                   ``(A) In general.—Notwithstanding section 103(a) and subject to subparagraph (B), funds awarded under this subtitle may be used for eligible activities to serve unaccompanied youth and homeless families and children defined as homeless under section 103(a)(6) only pursuant to paragraph (1) of this subsection and such families and children shall not otherwise be considered as homeless for purposes of this subtitle.
                   ``(B) At risk of homelessness.—Subparagraph (A) may not be construed to prevent any unaccompanied youth and homeless families and children defined as homeless under section 103(a)(6) from qualifying for, and being treated for purposes of this subtitle as, at risk of homelessness or from eligibility for any projects, activities, or services carried out using amounts provided under this subtitle for which individuals or families that are at risk of homelessness are eligible.´´.

### SEC. 1302. ELIGIBLE ACTIVITIES.

    The McKinney-Vento Homeless Assistance Act is amended by striking section 423 (42 U.S.C. 11383) and inserting the following new section:
          ``SEC. 423. Eligible activities.
             ``(a) In General.—Grants awarded under section 422 to qualified applicants shall be used to carry out projects that serve homeless individuals or families that consist of one or more of the following eligible activities:
                ``(1) Construction of new housing units to provide transitional or permanent housing.
                ``(2) Acquisition or rehabilitation of a structure to provide transitional or permanent housing, other than emergency shelter, or to provide supportive services.
                ``(3) Leasing of property, or portions of property, not owned by the recipient or project sponsor involved, for use in providing transitional or permanent housing, or providing supportive services.
                ``(4) Provision of rental assistance to provide transitional or permanent housing to eligible persons. The rental assistance may include tenant-based, project-based, or sponsor-based rental assistance. Project-based rental assistance, sponsor-based rental assistance, and operating cost assistance contracts carried out by project sponsors receiving grants under this section may, at the discretion of the applicant and the project sponsor, have an initial term of 15 years, with assistance for the first 5 years paid with funds authorized for appropriation under this Act, and assistance for the remainder of the term treated as a renewal of an expiring contract as provided in section 429. Project-based rental assistance may include rental assistance to preserve existing permanent supportive housing for homeless individuals and families.
                ``(5) Payment of operating costs for housing units assisted under this subtitle or for the preservation of housing that will serve homeless individuals and families and for which another form of assistance is expiring or otherwise no longer available.
                ``(6) Supportive services for individuals and families who are currently homeless, who have been homeless in the prior six months but are currently residing in permanent housing, or who were previously homeless and are currently residing in permanent supportive housing.
                ``(7) Provision of rehousing services, including housing search, mediation or outreach to property owners, credit repair, providing security or utility deposits, rental assistance for a final month at a location, assistance with moving costs, or other activities that—
                   ``(A) are effective at moving homeless individuals and families immediately into housing; or
                   ``(B) may benefit individuals and families who in the prior 6 months have been homeless, but are currently residing in permanent housing.
                ``(8) In the case of a collaborative applicant that is a legal entity, performance of the duties described under section 402(f)(3).
                ``(9) Operation of, participation in, and ensuring consistent participation by project sponsors in, a community-wide homeless management information system.
                ``(10) In the case of a collaborative applicant that is a legal entity, payment of administrative costs related to meeting the requirements described in paragraphs (1) and (2) of section 402(f), for which the collaborative applicant may use not more than 3 percent of the total funds made available in the geographic area under this subtitle for such costs.
                ``(11) In the case of a collaborative applicant that is a unified funding agency under section 402(g), payment of administrative costs related to meeting the requirements of that section, for which the unified funding agency may use not more than 3 percent of the total funds made available in the geographic area under this subtitle for such costs, in addition to funds used under paragraph (10).
                ``(12) Payment of administrative costs to project sponsors, for which each project sponsor may use not more than 10 percent of the total funds made available to that project sponsor through this subtitle for such costs.
             ``(b) Minimum Grant Terms.—The Secretary may impose minimum grant terms of up to 5 years for new projects providing permanent housing.
             ``(c) Use Restrictions.—
                ``(1) Acquisition, rehabilitation, and new construction.—A project that consists of activities described in paragraph (1) or (2) of subsection (a) shall be operated for the purpose specified in the application submitted for the project under section 422 for not less than 15 years.
                ``(2) Other activities.—A project that consists of activities described in any of paragraphs (3) through (12) of subsection (a) shall be operated for the purpose specified in the application submitted for the project under section 422 for the duration of the grant period involved.
                ``(3) Conversion.—If the recipient or project sponsor carrying out a project that provides transitional or permanent housing submits a request to the Secretary to carry out instead a project for the direct benefit of low-income persons, and the Secretary determines that the initial project is no longer needed to provide transitional or permanent housing, the Secretary may approve the project described in the request and authorize the recipient or project sponsor to carry out that project.
             ``(d) Repayment of Assistance and Prevention of Undue Benefits.—
                ``(1) Repayment.—If a recipient or project sponsor receives assistance under section 422 to carry out a project that consists of activities described in paragraph (1) or (2) of subsection (a) and the project ceases to provide transitional or permanent housing—
                   ``(A) earlier than 10 years after operation of the project begins, the Secretary shall require the recipient or project sponsor to repay 100 percent of the assistance; or
                   ``(B) not earlier than 10 years, but earlier than 15 years, after operation of the project begins, the Secretary shall require the recipient or project sponsor to repay 20 percent of the assistance for each of the years in the 15-year period for which the project fails to provide that housing.
                ``(2) Prevention of undue benefits.—Except as provided in paragraph (3), if any property is used for a project that receives assistance under subsection (a) and consists of activities described in paragraph (1) or (2) of subsection (a), and the sale or other disposition of the property occurs before the expiration of the 15-year period beginning on the date that operation of the project begins, the recipient or project sponsor who received the assistance shall comply with such terms and conditions as the Secretary may prescribe to prevent the recipient or project sponsor from unduly benefitting from such sale or disposition.
                ``(3) Exception.—A recipient or project sponsor shall not be required to make the repayments, and comply with the terms and conditions, required under paragraph (1) or (2) if—
                   ``(A) the sale or disposition of the property used for the project results in the use of the property for the direct benefit of very low-income persons;
                   ``(B) all of the proceeds of the sale or disposition are used to provide transitional or permanent housing meeting the requirements of this subtitle;
                   ``(C) project-based rental assistance or operating cost assistance from any Federal program or an equivalent State or local program is no longer made available and the project is meeting applicable performance standards, provided that the portion of the project that had benefitted from such assistance continues to meet the tenant income and rent restrictions for low-income units under section 42(g) of the Internal Revenue Code of 1986; or
                   ``(D) there are no individuals and families in the geographic area who are homeless, in which case the project may serve individuals and families at risk of homelessness.
             ``(e) Staff training.—The Secretary may allow reasonable costs associated with staff training to be included as part of the activities described in subsection (a).
             ``(f) Eligibility for permanent housing.—Any project that receives assistance under subsection (a) and that provides project-based or sponsor-based permanent housing for homeless individuals or families with a disability, including projects that meet the requirements of subsection (a) and subsection (d)(2)(A) of section 428 may also serve individuals who had previously met the requirements for such project prior to moving into a different permanent housing project.
             ``(g) Administration of rental assistance.—Provision of permanent housing rental assistance shall be administered by a State, unit of general local government, or public housing agency.´´.

### SEC. 1303. HIGH PERFORMING COMMUNITIES.

    The McKinney-Vento Homeless Assistance Act is amended by striking section 424 (42 U.S.C. 11384) and inserting the following:
          ``SEC. 424. Incentives for high-performing communities.
             ``(a) Designation as a High-Performing Community.—
                ``(1) In general.—The Secretary shall designate, on an annual basis, which collaborative applicants represent high-performing communities.
                ``(2) Consideration.—In determining whether to designate a collaborative applicant as a high-performing community under paragraph (1), the Secretary shall establish criteria to ensure that the requirements described under paragraphs (1)(B) and (2)(B) of subsection (d) are measured by comparing homeless individuals and families under similar circumstances, in order to encourage projects in the geographic area to serve homeless individuals and families with more severe barriers to housing stability.
                ``(3) 2-year phase in.—In each of the first 2 years after the effective date under section 1503 of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, the Secretary shall designate not more than 10 collaborative applicants as high-performing communities.
                ``(4) Excess of qualified applicants.—If, during the 2-year period described under paragraph (2), more than 10 collaborative applicants could qualify to be designated as high-performing communities, the Secretary shall designate the 10 that have, in the discretion of the Secretary, the best performance based on the criteria described under subsection (d).
                ``(5) Time limit on designation.—The designation of any collaborative applicant as a high-performing community under this subsection shall be effective only for the year in which such designation is made. The Secretary, on an annual basis, may renew any such designation.
             ``(b) Application.—
                ``(1) In general.—A collaborative applicant seeking designation as a high-performing community under subsection (a) shall submit an application to the Secretary at such time, and in such manner as the Secretary may require.
                ``(2) Content of application.—In any application submitted under paragraph (1), a collaborative applicant shall include in such application—
                   ``(A) a report showing how any money received under this subtitle in the preceding year was expended; and
                   ``(B) information that such applicant can meet the requirements described under subsection (d).
                ``(3) Publication of application.—The Secretary shall—
                   ``(A) publish any report or information submitted in an application under this section in the geographic area represented by the collaborative applicant; and
                ``(B) seek comments from the public as to whether the collaborative applicant seeking designation as a high-performing community meets the requirements described under subsection (d).
             ``(c) Use of funds.—Funds awarded under section 422(a) to a project sponsor who is located in a high-performing community may be used—
                ``(1) for any of the eligible activities described in section 423; or
                ``(2) for any of the eligible activities described in paragraphs (4) and (5) of section 415(a).
             ``(d) Definition of high-performing community.—For purposes of this section, the term ‘high-performing community’ means a geographic area that demonstrates through reliable data that all five of the following requirements are met for that geographic area:
                ``(1) Term of homelessness.—The mean length of episodes of homelessness for that geographic area—
                   ``(A) is less than 20 days; or
                   ``(B) for individuals and families in similar circumstances in the preceding year was at least 10 percent less than in the year before.
                ``(2) Families leaving homelessness.—Of individuals and families—
                   ``(A) who leave homelessness, fewer than 5 percent of such individuals and families become homeless again at any time within the next 2 years; or
                   ``(B) in similar circumstances who leave homelessness, the percentage of such individuals and families who become homeless again within the next 2 years has decreased by at least 20 percent from the preceding year.
                ``(3) Community action.—The communities that compose the geographic area have—
                   ``(A) actively encouraged homeless individuals and families to participate in homeless assistance services available in that geographic area; and
                   ``(B) included each homeless individual or family who sought homeless assistance services in the data system used by that community for determining compliance with this subsection.
                ``(4) Effectiveness of previous activities.—If recipients in the geographic area have used funding awarded under section 422(a) for eligible activities described under section 415(a) in previous years based on the authority granted under subsection (c), that such activities were effective at reducing the number of individuals and families who became homeless in that community.
                ``(5) Flexibility to serve persons defined as homeless under other Federal laws.—With respect to collaborative applicants exercising the authority under section 422(j) to serve homeless families with children and youth defined as homeless under other Federal statutes, effectiveness in achieving the goals and outcomes identified in subsection 427(b)(1)(F) according to such standards as the Secretary shall promulgate.
             ``(e) Cooperation among entities.—A collaborative applicant designated as a high-performing community under this section shall cooperate with the Secretary in distributing information about successful efforts within the geographic area represented by the collaborative applicant to reduce homelessness.´´.

### SEC. 1304. PROGRAM REQUIREMENTS.

    Section 426 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11386) is amended—
          (1) by striking subsections (a), (b), and (c) and inserting the following:
             ``(a) Site control.—The Secretary shall require that each application include reasonable assurances that the applicant will own or have control of a site for the proposed project not later than the expiration of the 12-month period beginning upon notification of an award for grant assistance, unless the application proposes providing supportive housing assistance under section 423(a)(3) or housing that will eventually be owned or controlled by the families and individuals served. An applicant may obtain ownership or control of a suitable site different from the site specified in the application. If any recipient or project sponsor fails to obtain ownership or control of the site within 12 months after notification of an award for grant assistance, the grant shall be recaptured and reallocated under this subtitle.
             ``(b) Required agreements.—The Secretary may not provide assistance for a proposed project under this subtitle unless the collaborative applicant involved agrees—
                ``(1) to ensure the operation of the project in accordance with the provisions of this subtitle;
                ``(2) to monitor and report to the Secretary the progress of the project;
                ``(3) to ensure, to the maximum extent practicable, that individuals and families experiencing homelessness are involved, through employment, provision of volunteer services, or otherwise, in constructing, rehabilitating, maintaining, and operating facilities for the project and in providing supportive services for the project;
                ``(4) to require certification from all project sponsors that—
                   ``(A) they will maintain the confidentiality of records pertaining to any individual or family provided family violence prevention or treatment services through the project;
                   ``(B) that the address or location of any family violence shelter project assisted under this subtitle will not be made public, except with written authorization of the person responsible for the operation of such project;
                   ``(C) they will establish policies and practices that are consistent with, and do not restrict the exercise of rights provided by, subtitle B of title VII, and other laws relating to the provision of educational and related services to individuals and families experiencing homelessness;
                   ``(D) in the case of programs that provide housing or services to families, they will designate a staff person to be responsible for ensuring that children being served in the program are enrolled in school and connected to appropriate services in the community, including early childhood programs such as Head Start, part C of the Individuals with Disabilities Education Act, and programs authorized under subtitle B of title VII of this Act (42 U.S.C. 11431 et seq.); and
                   ``(E) they will provide data and reports as required by the Secretary pursuant to the Act;
                ``(5) if a collaborative applicant is a unified funding agency under section 402(g) and receives funds under subtitle C to carry out the payment of administrative costs described in section 423(a)(11), to establish such fiscal control and fund accounting procedures as may be necessary to assure the proper disbursal of, and accounting for, such funds in order to ensure that all financial transactions carried out with such funds are conducted, and records maintained, in accordance with generally accepted accounting principles;
                ``(6) to monitor and report to the Secretary the provision of matching funds as required by section 430;
                ``(7) to take the educational needs of children into account when families are placed in emergency or transitional shelter and will, to the maximum extent practicable, place families with children as close as possible to their school of origin so as not to disrupt such children's education; and
                ``(8) to comply with such other terms and conditions as the Secretary may establish to carry out this subtitle in an effective and efficient manner.´´;
          (2) by redesignating subsection (d) as subsection (c);
          (3) in the first sentence of subsection (c) (as so redesignated by paragraph (2) of this subsection), by striking ``recipient´´ and inserting ``recipient or project sponsor´´;
          (4) by striking subsection (e);
          (5) by redesignating subsections (f), (g), and (h), as subsections (d), (e), and (f), respectively;
          (6) in the first sentence of subsection (e) (as so redesignated by paragraph (5) of this section), by striking ``recipient´´ each place it appears and inserting ``recipient or project sponsor´´;
          (7) by striking subsection (i); and
          (8) by redesignating subsection (j) as subsection (g).

### SEC. 1305. SELECTION CRITERIA, ALLOCATION AMOUNTS, AND FUNDING.

    The McKinney-Vento Homeless Assistance Act is amended—
          (1) by repealing section 429 (42 U.S.C. 11389); and
          (2) by redesignating sections 427 and 428 (42 U.S.C. 11387, 11388) as sections 432 and 433, respectively; and
          (3) by inserting after section 426 the following new sections:
          ``SEC. 427. Selection criteria.
             ``(a) In general.—The Secretary shall award funds to recipients through a national competition between geographic areas based on criteria established by the Secretary.
             ``(b) Required criteria.—
                ``(1) In general.—The criteria established under subsection (a) shall include—
                   ``(A) the previous performance of the recipient regarding homelessness, including performance related to funds provided under section 412 (except that recipients applying from geographic areas where no funds have been awarded under this subtitle, or under subtitles C, D, E, or F of title IV of this Act, as in effect prior to the date of the enactment of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, shall receive full credit for performance under this subparagraph), measured by criteria that shall be announced by the Secretary, that shall take into account barriers faced by individual homeless people, and that shall include—
                      ``(i) the length of time individuals and families remain homeless;
                      ``(ii) the extent to which individuals and families who leave homelessness experience additional spells of homelessness;
                      ``(iii) the thoroughness of grantees in the geographic area in reaching homeless individuals and families;
                      ``(iv) overall reduction in the number of homeless individuals and families;
                      ``(v) jobs and income growth for homeless individuals and families;
                      ``(vi) success at reducing the number of individuals and families who become homeless;
                      ``(vii) other accomplishments by the recipient related to reducing homelessness; and
                      ``(viii) for collaborative applicants that have exercised the authority under section 422(j) to serve families with children and youth defined as homeless under other Federal statutes, success in achieving the goals and outcomes identified in section 427(b)(1)(F);
                   ``(B) the plan of the recipient, which shall describe—
                      ``(i) how the number of individuals and families who become homeless will be reduced in the community;
                      ``(ii) how the length of time that individuals and families remain homeless will be reduced;
                      ``(iii) how the recipient will collaborate with local education authorities to assist in the identification of individuals and families who become or remain homeless and are informed of their eligibility for services under subtitle B of title VII of this Act (42 U.S.C. 11431 et seq.);
                      ``(iv) the extent to which the recipient will—
                         ``(I) address the needs of all relevant subpopulations;
                         ``(II) incorporate comprehensive strategies for reducing homelessness, including the interventions referred to in section 428(d);
                         ``(III) set quantifiable performance measures;
                         ``(IV) set timelines for completion of specific tasks;
                         ``(V) identify specific funding sources for planned activities; and
                         ``(VI) identify an individual or body responsible for overseeing implementation of specific strategies; and
                      ``(v) whether the recipient proposes to exercise authority to use funds under section 422(j), and if so, how the recipient will achieve the goals and outcomes identified in section 427(b)(1)(F);
                   ``(C) the methodology of the recipient used to determine the priority for funding local projects under section 422(c)(1), including the extent to which the priority-setting process—
                      ``(i) uses periodically collected information and analysis to determine the extent to which each project has resulted in rapid return to permanent housing for those served by the project, taking into account the severity of barriers faced by the people the project serves;
                      ``(ii) considers the full range of opinions from individuals or entities with knowledge of homelessness in the geographic area or an interest in preventing or ending homelessness in the geographic area;
                      ``(iii) is based on objective criteria that have been publicly announced by the recipient; and
                      ``(iv) is open to proposals from entities that have not previously received funds under this subtitle;
                   ``(D) the extent to which the amount of assistance to be provided under this subtitle to the recipient will be supplemented with resources from other public and private sources, including mainstream programs identified by the Government Accountability Office in the two reports described in section 203(a)(7);
                   ``(E) demonstrated coordination by the recipient with the other Federal, State, local, private, and other entities serving individuals and families experiencing homelessness and at risk of homelessness in the planning and operation of projects;
                   ``(F) for collaborative applicants exercising the authority under section 422(j) to serve homeless families with children and youth defined as homeless under other Federal statutes, program goals and outcomes, which shall include—
                      ``(i) preventing homelessness among the subset of such families with children and youth who are at highest risk of becoming homeless, as such term is defined for purposes of this title; or
                      ``(ii) achieving independent living in permanent housing among such families with children and youth, especially those who have a history of doubled-up and other temporary housing situations or are living in a temporary housing situation due to lack of available and appropriate emergency shelter, through the provision of eligible assistance that directly contributes to achieving such results including assistance to address chronic disabilities, chronic physical health or mental health conditions, substance addiction, histories of domestic violence or childhood abuse, or multiple barriers to employment; and
                   ``(G) such other factors as the Secretary determines to be appropriate to carry out this subtitle in an effective and efficient manner.
                ``(2) Additional criteria.—In addition to the criteria required under paragraph (1), the criteria established under paragraph (1) shall also include the need within the geographic area for homeless services, determined as follows and under the following conditions:
                   ``(A) Notice.—The Secretary shall inform each collaborative applicant, at a time concurrent with the release of the notice of funding availability for the grants, of the pro rata estimated grant amount under this subtitle for the geographic area represented by the collaborative applicant.
                   ``(B) Amount.—
                      ``(i) Formula.—Such estimated grant amounts shall be determined by a formula, which shall be developed by the Secretary, by regulation, not later than the expiration of the 2-year period beginning upon the date of the enactment of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, that is based upon factors that are appropriate to allocate funds to meet the goals and objectives of this subtitle.
                      ``(ii) Combinations or consortia.—For a collaborative applicant that represents a combination or consortium of cities or counties, the estimated need amount shall be the sum of the estimated need amounts for the cities or counties represented by the collaborative applicant.
                      ``(iii) Authority of Secretary.—Subject to the availability of appropriations, the Secretary shall increase the estimated need amount for a geographic area if necessary to provide 1 year of renewal funding for all expiring contracts entered into under this subtitle for the geographic area.
                ``(3) Homelessness counts.—The Secretary shall not require that communities conduct an actual count of homeless people other than those described in paragraphs (1) through (4) of section 103(a) of this Act (42 U.S.C. 11302(a)).
             ``(c) Adjustments.—The Secretary may adjust the formula described in subsection (b)(2) as necessary—
                ``(1) to ensure that each collaborative applicant has sufficient funding to renew all qualified projects for at least one year; and
                ``(2) to ensure that collaborative applicants are not discouraged from replacing renewal projects with new projects that the collaborative applicant determines will better be able to meet the purposes of this Act.
          ``SEC. 428. Allocation of amounts and incentives for specific eligible activities.
             ``(a) Minimum allocation for permanent housing for homeless individuals and families with disabilities.—
                ``(1) In general.—From the amounts made available to carry out this subtitle for a fiscal year, a portion equal to not less than 30 percent of the sums made available to carry out subtitle B and this subtitle, shall be used for permanent housing for homeless individuals with disabilities and homeless families that include such an individual who is an adult or a minor head of household if no adult is present in the household.
                ``(2) Calculation.—In calculating the portion of the amount described in paragraph (1) that is used for activities that are described in paragraph (1), the Secretary shall not count funds made available to renew contracts for existing projects under section 429.
                ``(3) Adjustment.—The 30 percent figure in paragraph (1) shall be reduced proportionately based on need under section 427(b)(2) in geographic areas for which subsection (e) applies in regard to subsection (d)(2)(A).
                ``(4) Suspension.—The requirement established in paragraph (1) shall be suspended for any year in which funding available for grants under this subtitle after making the allocation established in paragraph (1) would not be sufficient to renew for 1 year all existing grants that would otherwise be fully funded under this subtitle.
                ``(5) Termination.—The requirement established in paragraph (1) shall terminate upon a finding by the Secretary that since the beginning of 2001 at least 150,000 new units of permanent housing for homeless individuals and families with disabilities have been funded under this subtitle.
             ``(b) Set-aside for permanent housing for homeless families with children.—From the amounts made available to carry out this subtitle for a fiscal year, a portion equal to not less than 10 percent of the sums made available to carry out subtitle B and this subtitle for that fiscal year shall be used to provide or secure permanent housing for homeless families with children.
             ``(c) Treatment of Amounts for Permanent or Transitional Housing.—Nothing in this Act may be construed to establish a limit on the amount of funding that an applicant may request under this subtitle for acquisition, construction, or rehabilitation activities for the development of permanent housing or transitional housing.
             ``(d) Incentives for proven strategies.—
                ``(1) In general.—The Secretary shall provide bonuses or other incentives to geographic areas for using funding under this subtitle for activities that have been proven to be effective at reducing homelessness generally, reducing homelessness for a specific subpopulation, or achieving homeless prevention and independent living goals as set forth in section 427(b)(1)(F).
                ``(2) Rule of construction.—For purposes of this subsection, activities that have been proven to be effective at reducing homelessness generally or reducing homelessness for a specific subpopulation includes—
                   ``(A) permanent supportive housing for chronically homeless individuals and families;
                   ``(B) for homeless families, rapid rehousing services, short-term flexible subsidies to overcome barriers to rehousing, support services concentrating on improving incomes to pay rent, coupled with performance measures emphasizing rapid and permanent rehousing and with leveraging funding from mainstream family service systems such as Temporary Assistance for Needy Families and Child Welfare services; and
                   ``(C) any other activity determined by the Secretary, based on research and after notice and comment to the public, to have been proven effective at reducing homelessness generally, reducing homelessness for a specific subpopulation, or achieving homeless prevention and independent living goals as set forth in section 427(b)(1)(F).
                ``(3) Balance of incentives for proven strategies.—To the extent practicable, in providing bonuses or incentives for proven strategies, the Secretary shall seek to maintain a balance among strategies targeting homeless individuals, families, and other subpopulations. The Secretary shall not implement bonuses or incentives that specifically discourage collaborative applicants from exercising their flexibility to serve families with children and youth defined as homeless under other Federal statutes.
             ``(e) Incentives for successful implementation of proven strategies.—If any geographic area demonstrates that it has fully implemented any of the activities described in subsection (d) for all homeless individuals and families or for all members of subpopulations for whom such activities are targeted, that geographic area shall receive the bonus or incentive provided under subsection (d), but may use such bonus or incentive for any eligible activity under either section 423 or paragraphs (4) and (5) of section 415(a) for homeless people generally or for the relevant subpopulation.
          ``SEC. 429. Renewal funding and terms of assistance for permanent housing.
             ``(a) In general.—Renewal of expiring contracts for leasing, rental assistance, or operating costs for permanent housing contracts may be funded either—
                ``(1) under the appropriations account for this title; or
                ``(2) the section 8 project-based rental assistance account.
             ``(b) Renewals.—The sums made available under subsection (a) shall be available for the renewal of contracts in the case of tenant-based assistance, successive 1-year terms, and in the case of project-based assistance, successive terms of up to 15 years at the discretion of the applicant or project sponsor and subject to the availability of annual appropriations, for rental assistance and housing operation costs associated with permanent housing projects funded under this subtitle, or under subtitle C or F (as in effect on the day before the effective date of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009). The Secretary shall determine whether to renew a contract for such a permanent housing project on the basis of certification by the collaborative applicant for the geographic area that—
                ``(1) there is a demonstrated need for the project; and
                ``(2) the project complies with program requirements and appropriate standards of housing quality and habitability, as determined by the Secretary.
             ``(c) Construction.—Nothing in this section shall be construed as prohibiting the Secretary from renewing contracts under this subtitle in accordance with criteria set forth in a provision of this subtitle other than this section.
          ``SEC. 430. Matching funding.
             ``(a) In general.—A collaborative applicant in a geographic area in which funds are awarded under this subtitle shall specify contributions from any source other than a grant awarded under this subtitle, including renewal funding of projects assisted under subtitles C, D, and F of this title as in effect before the effective date under section 1503 of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009, that shall be made available in the geographic area in an amount equal to not less than 25 percent of the funds provided to recipients in the geographic area, except that grants for leasing shall not be subject to any match requirement.
             ``(b) Limitations on in-kind match.—The cash value of services provided to the residents or clients of a project sponsor by an entity other than the project sponsor may count toward the contributions in subsection (a) only when documented by a memorandum of understanding between the project sponsor and the other entity that such services will be provided.
             ``(c) Countable activities.—The contributions required under subsection (a) may consist of—
                ``(1) funding for any eligible activity described under section 423; and
                ``(2) subject to subsection (b), in-kind provision of services of any eligible activity described under section 423.
          ``SEC. 431. Appeal procedure.
             ``(a) In General.—With respect to funding under this subtitle, if certification of consistency with the consolidated plan pursuant to section 403 is withheld from an applicant who has submitted an application for that certification, such applicant may appeal such decision to the Secretary.
             ``(b) Procedure.—The Secretary shall establish a procedure to process the appeals described in subsection (a).
             ``(c) Determination.—Not later than 45 days after the date of receipt of an appeal described in subsection (a), the Secretary shall determine if certification was unreasonably withheld. If such certification was unreasonably withheld, the Secretary shall review such application and determine if such applicant shall receive funding under this subtitle.´´.

### SEC. 1306. RESEARCH.

    There is authorized to be appropriated $8,000,000, for each of fiscal years 2010 and 2011, for research into the efficacy of interventions for homeless families, to be expended by the Secretary of Housing and Urban Development over the 2 years at 3 different sites to provide services for homeless families and evaluate the effectiveness of such services.